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An economic growth model: Evaluating the interaction of market consumption with GDP growth rate in Afghanistan

Listed author(s):
  • Azimi, Mohammad Naim

In this paper, we argue that the market consumption is one of the major and significant elements of Gross Domestic Product driver in Afghanistan for which the competeting null hypothesis that consumption drives the GDP growth is tested. The statistical analysis based on Semi-long regression economic growth model shows a significant corresponding probability value of 0.000 which shows that consumption drives GDP growth while the coefficient exhibits 0.1534 or 15.34% growth of GDP driven by consumption throughout the period 2001 to 2014. Further statistical analysis obtained from the Breusch-Godfrey and Breusch – Pegan-Godfrey LM tests for investigating the existence of any serial correlation within the series support us to reject the null hypothesis that there is no serial correlation within the series. On the other hand, the Jarque-Bera test of normality shows a p-value of 0.3099 which is significant and further documents that the residuals are random and normally distributed within the series.

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File URL: https://mpra.ub.uni-muenchen.de/69517/1/MPRA_paper_69517.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 69517.

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Date of creation: 06 Jan 2016
Date of revision: 11 Jan 2016
Publication status: Published in ZENITH International Journal of Business Economics & Management Research 2.6(2016): pp. 13-19
Handle: RePEc:pra:mprapa:69517
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  8. Omar Joya & Faruk Khan, 2014. "Afghanistan Economic Update, April 2014," World Bank Other Operational Studies 18633, The World Bank.
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  10. Herwartz, Helmut, 2006. "Testing for random effects in panel data under cross sectional error correlation--A bootstrap approach to the Breusch Pagan test," Computational Statistics & Data Analysis, Elsevier, vol. 50(12), pages 3567-3591, August.
  11. Krausmann, Fridolin & Gingrich, Simone & Eisenmenger, Nina & Erb, Karl-Heinz & Haberl, Helmut & Fischer-Kowalski, Marina, 2009. "Growth in global materials use, GDP and population during the 20th century," Ecological Economics, Elsevier, vol. 68(10), pages 2696-2705, August.
  12. Jarque, Carlos M. & Bera, Anil K., 1980. "Efficient tests for normality, homoscedasticity and serial independence of regression residuals," Economics Letters, Elsevier, vol. 6(3), pages 255-259.
  13. Qaiser Munir & Kasim Mansur, 2009. "Non-Linearity between Inflation Rate and GDP Growth in Malaysia," Economics Bulletin, AccessEcon, vol. 29(3), pages 1555-1569.
  14. Koenker, Roger, 1981. "A note on studentizing a test for heteroscedasticity," Journal of Econometrics, Elsevier, vol. 17(1), pages 107-112, September.
  15. Asad Zaman, 2002. "The Inconsistency of the Breusch-Pagan Test," Econometrics 0205001, EconWPA.
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