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The purpose of this study is to provide empirical evidence on the impact of deviations from the long-run sustainable real exchange rate (RER) equilibrium on real economic growth rate applying panel autoregressive distributed lag model (ARDL) (Pooled Mean Group, Mean Group and Dynamic Fixed Effects estimators) in a dynamic heterogeneous panel setting and panel NARDL for the largest database covering 104 countries during 1995–2022 period developed by Couharde et al. (2017).

The EQCHANGE database makes available not only the equilibrium RER but also misalignments according to the Behavioral Equilibrium Exchange Rate approach for each country. One of the main objectives is to examine whether undervaluation or overvaluation RER can imply different responses on economic performance trying to differentiate between short and long run effects. Additionally, the authors consider the World Bank (WB)’s income classifications to compare the asymmetries attending to high-income, upper-middle-income, lower-middle-income and low-income levels.

Applying the panel ARDL technique, the results suggest that the RER misalignments have a negative but not significant effect on the short-run, nevertheless a negative and highly significant impact on real economic growth rate is detected on the long-run. Considering the panel NARDL, the asymmetric relationship between RER misalignment and economic growth rate is supported considering all countries in the long-run (in the short-term is not significant). In the long run is detected that undervaluation can promote economic growth rate, rather than overvaluation which can harm the economic performance. Additionally, the WB and the International Monetary Fund (IMF) income’s classifications have been applied and the long-run symmetry test is strongly rejected regardless of income group.

To the best of the author knowledge, this is the first time the non-linear panel ARDL methodology has been applied for analyzing the impact of deviations from the long-run sustainable RER equilibrium on real economic growth. This allows us to see the asymmetric effect not seen before. The panel ARDL estimation can efficiently performed regardless of the integration level of the variables, additionally, it is consistent even in the presence of endogeneity. Besides, another advantage of this method is that it is possible to reflect not only the short but also the long-run dynamics. Moreover, this analysis offers a comparison between linear panel ARDL and non-linear to compare the advantages from the former. Additionally, this study covers the largest database, in particular, 104 countries during the 1995–2022 period implemented with the Couharde et al. (2017) EQCHANGE database. Finally, it is compared the asymmetries attending to different income classifications.

This study aims to introduce an education sector which transforms a part of unskilled labour into new skilled labour, and then show how the level of output of educational service is determined in the short-run equilibrium along with the level of output of two production sectors. This study also introduces intertemporal dynamics into the model assuming that all factor endowments grow over time, and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.

This study considers a three sector open economy model to analyse the long-run economic effects of the anti-immigration policy adopted in the destination country on the general equilibrium of the source country.

If the education sector in the source country is more skilled labour intensive than the advanced production sector, then this anti-immigration policy would raise the capital unskilled labour ratio, skilled labour–unskilled labour ratio and the balanced endogenous growth rate in the new long-run equilibrium but would lower the gross rate of creation of new skilled labour there.

The authors want to analyse the effect of anti-immigration policy adopted in the destination country on the long-run balanced growth rate in the source country. The dynamic growth effect of anti-immigration policy cannot be studied in a static short-run equilibrium model, the authors also introduce intertemporal dynamics into the model assuming that all factor endowments grow over time and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.

We model the interaction between a profit-maximizing firm and an activist using an infinite-horizon dynamic stochastic game. The firm enhances its reputation through “self-regulation”: voluntary provision of an abatement activity that reduces a negative externality. We show that in equilibrium the externality-reducing activity is subject to decreasing marginal returns, which can cause the firm to “coast on its reputation,” that is, decrease the level of externality-reducing activity as its reputation grows. The activist, which benefits from increases in the externality-reducing activity, can take two types of action that can harm the firm’s reputation: criticism, which can impair the firm’s reputation on the margin, and confrontation, which can trigger a crisis that may severely damage the firm’s reputation. The activist changes the reputational dynamics of the game by tending to keep the firm in reputational states in which it is highly motivated to invest in externality-reducing activity. Criticism and confrontational activity are shown to be imperfect substitutes. The more patient the activist or the more passionate it is about externality reduction, the more likely it is to rely on confrontation. The more patient the firm and the more important corporate citizenship is to firm’s brand equity, the more likely that it will be targeted by an activist that relies on confrontation.

A serious problem in the pandemic days is that in this period many firms face difficulties with remaining on the market. It causes that the entrepreneurs do not undertake activities which could result in introducing innovations. In this context, the authors examine new mechanisms which lead competitive economy to the long-run equilibrium under the assumption that producers are change-averse.

The results have the form of theorems with rigorous proofs and provide the ideas on the way of developing the economic policy in respect of firms in the pandemic days.

As a result, the authors justify that in some cases it is worth leading an economic sector or a whole economy to the long-run equilibrium state.

The authors show that there exists a mechanism in the sense of Hurwicz which transforms the economy into an economic system being in the long-run equilibrium as well as the authors determine optimal mechanisms, under the criterion of distance minimization, in some subsets of the mechanisms designed.

This work aims to empirically investigate the effects of financial development on crop productivity of India.

Time series data such as crop production index, International Monetary Fund’s (IMF) financial development index, gross domestic product (GDP) per capita, arable land, rural population, trade openness and physical capital from 1980 to 2020 was used. The autoregressive distributed lag (ARDL) bounds testing approach of cointegration was used to determine the long-run equilibrium relationship between the selected time series. Also, ARDL long- and short-run coefficients were estimated to examine the effects of selected variables on crop productivity. Furthermore, to establish the robustness of results, long-run estimators such as fully modified least squares and the dynamic least squares were also used. Finally, using the vector error-correction model, causality between the selected time series was examined.

The ARDL cointegration test confirmed the existence of long-run equilibrium relationship among agricultural productivity, financial development, capital formation, GDP per capita, arable land, rural population and trade openness. The estimated long-run elasticities from all the three techniques and the short-run elasticities of ARDL have consistently suggested that the elasticity of financial development is higher (1.55% and 1.40%, respectively) in explaining the crop productivity of India. The short-run causality estimates indicated the presence of positive bidirectional causality between crop productivity and financial development and seven positive unidirectional causal relationships between the selected variables.

Agricultural credit being an important non-land input and essential for overall growth and sustenance of agricultural sector, the policymakers should ensure the overall development of its financial sector which will reduce the intermediation, informational and other transactional costs associated with agricultural credit. This will possibly result in timely availability and access to adequate and low-cost credit from institutional sources.

Though extensive research is available on the effects of financial development on economic growth, limited research is available concerning the impact of financial development on crop productivity, especially for an emerging economy like India. For India, predominantly studies have investigated the impact of farm credit on crop productivity but have not exclusively examined the effects of financial development on agricultural productivity. Therefore, this study not only adds to the empirical literature but also provides new evidence on the nexus between financial development and crop productivity by examining the effects of financial development on crop productivity using the composite financial development index developed by the IMF using the ARDL bounds test for cointegration and other econometric estimators.

Due to the complicated nature of houses, the driving factors of the residential construction output can be investigated from different perspectives of interests. However, little research has provided an insight of the trend of the residential construction output from a cross-disciplinary perspective. The purpose of this paper is to identify the long-run equilibrium types of residential construction output, including external equilibrium, solo-market equilibrium and dual-market equilibrium.

A vector error correction model is applied into longitudinal data in the eight Australian states and territories to overview the regional variations of the residential construction output.

The empirical results show that the equilibrium of regional residential construction outputs in New South Wales and Victoria are determined by the external factors; the equilibrium in Western Australia is dominated by the construction market; and the equilibriums in the other five states and territories are influenced by both construction and house markets.

The simplified approach may overlook the detailed explanation of the external factors, such as regional population, economy, policy and so forth. Given this limitation, future studies can introduce the correspondingly variables as per research interests.

Implementing the existing research into residential construction output and house supply, this research provides a simplified approach that demonstrates the linkage between construction and real estate sectors to identify the long-run equilibriums across regions. The underlying research sheds light in delivering inter-disciplinary research into the residential construction output.

The present essay re-examines the scope of Sraffa’s critique of Marshall’s supply curves that the former developed in his 1925 and 1926 articles showing that neoclassical supply curves derived from non-proportional returns are not robust both in the short and in the long run. After examining what a short-run and a long-run equilibrium means both for the original Sraffa’s articles and for Marshall’s pioneer contribution, the chapter discusses the common procedure in conventional economics to introduce the limitations to the growth of the firm. The argument of the chapter will be based on the 1920s articles as well as on the ‘Lectures on Advanced Theory of Value’ delivered in 1928–1931 by Sraffa at Cambridge University, now publicly available online by the Wren library, Trinity College, Cambridge. For short-run analysis, it must be assumed that the number of firms is fixed. This assumption entails serious problems with regards to the notions of competition and competitive behaviour. For long-run analysis, the sources of increasing costs are problems of management and control. However, this idea is untenable both on logical and empirical grounds. We argue that contemporary mainstream microeconomic treatment of costs and supply in the context of perfect competition still presents several problems. These problems, rather than being superficial, lie at the root of the supply and demand approach of value and distribution.

The purpose of this paper is to examine the structure and dynamics of Singapore's Central Area office market. A long-run equilibrium relationship is tested and a short-run adjustment error correction model are estimated, incorporating appropriate serial error correction. The long-run equation is estimated for office rent, with office employment and available stock.

With the vector error correction model (VECM), the lagged rent, available stock, office employment, vacancy and occupied stock (OS) can impact the rental adjustment process. Equilibrium rent on the whole reacts positively to lagged rents, available stock, office employment, OS and negatively to vacancy rates (VC). Past levels of positive change in VC and rental growth can have negative effects on current OS.

While good economic conditions signaled by increases in rents increase the supply of new stock (available space), higher rents and VC dampen the long-term occupied space (space absorption) in accordance with economic theory. Available stock can be forecasted by past rent and absorption levels owing to the developer's profit-driven nature.

An understanding of the interaction between the macroeconomic variables and the Central Area office market is useful to domestic and foreign investors and developers, who then can better evaluate their decision making in commercial real estate investment and development projects.

It is implicit that the Singapore Central Area office market requires at least a year before any rental increase can potentially dampen the space demanded. Firms are attracted to locate there owing to agglomeration economies and they are willing to pay premium office rents in conjunction with office space intensification in the Central Area. Newly built space is positively affected by past rents. Urban Redevelopment Authority and private real estate developers should be wary of excess office sector vacancies by avoiding over supply, even though an increase in the supply of office space in the Central Area can have a positive impact on office rent in the longer term. Most of the office space development would tend to meet the demand in the long run. Rental stickiness is exemplified as rental changes are affected by lagged rent.

Policy makers are better enabled to stabilize the office sectors of the real estate market if so required.

The paper adopts the VECM and validated by empirical evidence, to investigate the long-run equilibrium relationship and short-term corrections underlying the dynamics of the Singapore Central office market. Delay in the restoration of equilibrium in real estate markets is attributed to factors like lease terms and supply lags.

The authors provide a way to represent spatial and temporal equilibria in terms of error correction models in a panel setting. This requires potentially two different processes for spatial or network dynamics, both of which can be expressed in terms of spatial weights matrices. The first captures strong cross-sectional dependence, so that a spatial difference, suitably defined, is weakly cross-section dependent (granular) but can be non-stationary. The second is a conventional weights matrix that captures short-run spatio-temporal dynamics as stationary and granular processes. In large samples, cross-section averages serve the first purpose and the authors propose the mean group, common correlated effects estimator together with multiple testing of cross-correlations to provide the short-run spatial weights. The authors apply this model to the 324 local authorities of England, and show that our approach is useful for modeling weak and strong cross-section dependence, together with partial adjustments to two long-run equilibrium relationships and short-run spatio-temporal dynamics. This exercise provides new insights on the (spatial) long-run relationship between house prices and income in the UK.

This paper tests public budgeting as a long-run and short-run process; political decision makers strive to head toward budgetary balance over the long run but are constrained in the short run and follow incremental decision-making. First, the budget equilibrium theory is stated and is used to explain the relationship between revenues and expenditures. Second, the interaction between expenditures and revenues is tested with a vector error correction model for Canada, UK and the US, using annual time series data between 1948 and 2000. The results show that, in the long-run, revenues are the driving force behind the budget in Canada; in the UK expenditures force the budget toward balance. In the short-run, incrementalism occurs in both of these countries. The most interesting finding is for the United States where on-budget revenues and expenditures both push the budget toward balance over the longrun but there is no incrementalism in the process in the short-run. This, of course, is contrary to much of the existing literature.