This study examines the asymmetric effects of fiscal policy on economic growth in Uganda using annual data from 1983 to 2020 obtained from the Uganda Revenue Authority and the World Bank. Employing the Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests, the results reveal a mixture of I(0) and I(1) variables, justifying the use of the NARDL bounds testing approach to cointegration. The findings confirm a long-run cointegrating relationship among the variables and demonstrate significant asymmetric effects of fiscal policy, particularly government expenditure and tax revenue on economic growth in the long run, while short-run asymmetry is mainly observed in tax revenue, with overall fiscal responses appearing symmetric. These results imply that positive and negative fiscal shocks have differing impacts on growth over time, leading to the recommendation that fiscal policy be strategically directed toward productive investments, improved private sector support, and the creation of an enabling environment to accelerate sustainable economic growth and facilitate the attainment of middle-income status.
Applied Economics and Finance (AEF) would like to acknowledge the following reviewers for their assistance with peer review of manuscripts for this issue. Many authors, regardless of whether AEF publishes their work, appreciate the helpful feedback provided by the reviewers. Their comments and suggestions were of great help to the authors in improving the quality of their papers. Each of the reviewers listed below returned at least one review for this issue.Reviewers for Volume 13, Number 1 Erdal Gumus, Eskisehir Osmangazi University, TurkeyGetamesay Bekele Meshesha, Ethiopian Civil Service University, EthiopiaIgor Matyushenko, School of Foreign Economic Relations and Touristic Business, UkraineInam Ullah, Allama Iqbal Open University , PakistanLucas Rentschler, Utah State University, USALuis Alberiko Gil-Alana, University of Navarra, SpainMarcos Roberto Vasconcelos, Universidade Estadual de Maringá – Programa de Pós-graduação em Ciências Econômicas (Maringá State University – Postgraduate Program in Economic Sciences), BrazilPayal Chadha, University of Wales Prifysgol Cymru, KuwaitSaudin TERZIC, University Vitez, Bosnia and HerzegovinaShaoshu LI, Cornell University , USASzabolcs Blazsek, Mercer University, Macon, GuatemalaWolday D. Abrha, University of Tennessee at Chattanooga, USA Nikki GibbsEditorial AssistantOn behalf of,The Editorial Board of Applied Economics and FinanceRedfame Publishing9450 SW Gemini Dr. #99416Beaverton, OR 97008, USAURL: http://aef.redfame.com
This study examines the relationship between investor sentiment and stock market volatility in the West African Economic and Monetary Union (WAEMU) using data from the West African Regional Stock Exchange (BRVM). Based on daily data spanning the period 2010–2022, five volatility models are estimated and compared: Generalized Autoregressive Conditional Heteroskedasticity [GARCH(1,1)], Exponential Generalized Autoregressive Conditional Heteroskedasticity [EGARCH(1,1)], Asymmetric Power ARCH [APARCH(1,1)], Fractionally Integrated Generalized Autoregressive Conditional Heteroskedasticity [FIGARCH(1,d,1)] and the RiskMetrics model. The empirical results indicate a high degree of volatility persistence, pronounced asymmetric effects, and the presence of long-memory dynamics in BRVM stock returns. Among the competing specifications, the EGARCH model with an asymmetric Student’s t distribution provides the best overall performance in terms of model fit and forecasting accuracy. Furthermore, the inclusion of an investor sentiment index leads to an improvement in volatility forecasts, highlighting the relevance of behavioral factors in explaining market risk dynamics. These findings suggest that investor sentiment plays an important role in volatility dynamics in emerging African stock markets, while also underscoring the need for caution in interpreting sentiment-based measures due to potential methodological limitations.
Strategic supply chains have become a central concern for economic policy as geopolitical fragmentation, export controls, and industrial subsidies reshape global trade. This study evaluates how recent U.S. trade and industrial policies have affected the effective availability of semiconductor inputs—a critical determinant of productivity, innovation, and economic resilience. Using detailed bilateral trade data from UN Comtrade (2020–2024), the paper constructs a CES-based import aggregator that adjusts observed trade flows for tariffs, export controls, and geopolitical risk. The empirical results show that while nominal semiconductor imports recovered after the pandemic, policy-adjusted effective availability experienced significant volatility following the introduction of import controls and targeted tariffs. Dependence on East Asian suppliers—particularly Japan, South Korea, and the Netherlands—remains structurally high, especially for advanced equipment and lithography inputs. However, diversification toward allied and regional partners partially offset policy-induced access constraints by 2024. The findings highlight three applied insights. First, industrial policy can stabilize supply access without full reshoring when substitution elasticities are sufficiently high. Second, targeted restrictions impose short-run costs on effective availability but may accelerate long-run diversification. Third, resilience depends more on supplier substitutability and policy coordination than on import volume alone. These results inform ongoing debates on industrial policy effectiveness, strategic trade management, and supply-chain resilience in advanced and emerging economies.
This study develops a hybrid Bayesian modeling framework to estimate the probability of large-scale foreign divestment from U.S. Treasury securities and to assess the stability of the U.S. dollar’s reserve-currency status. The model integrates a Mixture Density Network (MDN) with Hamiltonian Monte Carlo (HMC) sampling to approximate the conditional distribution of reserve holdings given observed macroeconomic fundamentals and an inferred latent variable representing geopolitical alignment. Principal component analysis and hierarchical regularization are applied to ensure parsimony and mitigate overfitting in a small-sample environment. The empirical hazard rate is defined as the annual probability of a 10 percent contraction in foreign U.S. Treasury holdings—a threshold consistent with historical reserve reallocations during the sterling’s decline and central-bank portfolio adjustment behavior. Results indicate an estimated 6–12 percent annual probability at a 95 percent confidence interval, implying that a 10 percent drawdown could occur roughly once every 8–16 years under current macro-financial conditions. While Gaussian mixture components likely understate extreme tail risks, the findings highlight the resilience of U.S. reserve status and suggest that any future transition would be gradual, multi-decade, and contingent on structural geopolitical realignments rather than cyclical shocks.
This study analyzes the impact of real exchange rate devaluations on the trade balance of Brazilian states by major economic categories (capital goods, intermediate goods, consumer goods, and fuels and lubricants), testing the J-Curve hypothesis and the Marshall-Lerner Condition. A panel autoregressive distributed lag (PARDL) model was applied to annual data from 26 Brazilian states (2000–2020), using Driscoll and Kraay's (1998) robust covariance correction to address cross-sectional and temporal dependence. This correction is robust to general forms of cross-sectional (spatial) or temporal dependence, typically present in data of this nature. The results suggest that real exchange rate devaluations have negative impacts on the trade balance across all sectors analyzed in the short term, followed by a positive and elastic long-term impact in most categories - except for fuels and lubricants, where there is evidence only of the initial phase of the J-curve phenomenon.
The study assesses performance of horticulture exports in Tanzania, while identifying potentials and challenges for growth, largely employing interview and desk review approaches. The findings indicate that horticulture is one of the fastest growing agriculture sub-sectors, with an average growth rate of 4.9 percent in the past eight years to 2019. The share of horticulture to total agricultural/traditional exports has been increasing over time as well, reaching 33.5 percent in 2020, while employment in the sub-sector is estimated at 4.5 million people.The achievements notwithstanding, about 90 percent of the horticultural produce is consumed locally, probably pointing to potential for increasing exports. Horticulture exports continue to exhibit volatility, mainly driven by fruits, which accounted for about 77.2 percent of the output during 2013 to 2019. Exporters largely rely on foreign agents in reaching final consumers, which constrains market diversification due to prior contracts. Other challenges facing the sub sector include high reliance on rain-fed agriculture, low quality seeds, disease and pest attacks, prolonged transportation process, inadequate quality storage facilities at product collection centres and export exit points, multiple taxes, and difficulties in accessing long-term credit.Potentials exist for boosting horticulture export growth. This mainly depends on the extent to which challenges facing the sub sector are addressed, and exporters tap into available opportunities including improving policy, strategic and institutional support; improving transport logistics; unutilized arable land; and growing demand for horticulture products worldwide. To increasing further horticulture exports growth, the study recommends the need for:Scaling up the efforts to attract more cargo flights and improving storage facilities (park houses) at the export exit ports as well as enhancing ease cargo clearance processes. The government’s move to acquire a cargo plane and upgrade facilities at the major international airports can contribute in addressing this challenge; Facilitating direct access to foreign market by Tanzanian exporters; this role can partly be performed by the Tanzania’s embassies abroad; Encouraging production of high value products such as avocado, cloves, black pepper, and cardamom; Promoting product certification and branding to market ‘destination Tanzania’ for the horticulture products; Encouraging and supporting exporters to tap into regional markets by fast tracking improvement of road and air connectivity to the potential markets and providing on time the relevant trade information; Increasing awareness to potential farmers and traders on export procedures and ensure timely availability of market information as a way of attracting new investments in the subsector; and Ensuring that land reserved for investors also benefits the horticulture subsector. Efforts could also be directed at enhancing irrigation systems, timely availability of high yield seeds and pesticides, and extension services to not only increase production for exports but also improve products quality. Some production incentives may be provided to attract the growing micro, small and medium enterprises in the subsector, partly under contract farming to benefit from the more established companies. Such incentives may be in the form of subsidies, tax reliefs, and access to affordable loans as done in other peer countries.
Sub-Saharan Africa (SSA) faces existential threats from climate change, with its agriculture sector, the backbone of most economies and livelihoods, disproportionately vulnerable. Despite widespread recognition of the need for climate-resilient agriculture (CRA) policies and numerous initiatives, implementation failures remain pervasive. This paper argues that these failures are fundamentally rooted in the complex political economy of the region. Utilising a political economy framework, it analyses how power dynamics, institutional weaknesses, competing interests, rent-seeking, colonial legacies, and donor influence systematically undermine the formulation and execution of effective CRA policies. The analysis highlights the misalignment between formal policy objectives and the incentives and capacities of key actors, including political elites, bureaucracies, smallholders, traditional authorities, and international donors. The findings illustrate common pitfalls. The paper concludes that addressing CRA policy failures requires confronting these deep-seated political economy constraints through context-specific governance reforms, enhanced accountability mechanisms, and more politically informed donor engagement.
The growth in the number of individual investors in B3, rising from 700,000 to 6.2 million between 2018 and 2022, has increased the demand for knowledge about effective financial strategies. In this context, diversification, a key concept in financial theory, stands out as a fundamental strategy for mitigating risks and ensuring more stable returns. This study examines the impact of diversification and the Efficient Market Hypothesis (EMH) on equity investments in Brazil using data from "Google Finance". Random portfolios were constructed and evaluated over different time horizons (2, 5, and 10 years), comparing them to the Ibovespa and Ifix indices. The results indicate that increasing the number of assets in a portfolio reduces risk without compromising expected returns, demonstrating the effectiveness of diversification in optimizing the risk-return trade-off. This finding suggests that investors who choose not to diversify their portfolios are exposed to non-compensated market risks, reinforcing the importance of diversification as a strategy to maximize return potential while minimizing associated risks.
Ghana’s cities continue to face persistent disorder despite decades of decentralization and reform. This study explores the structural and behavioral roots of urban dysfunction through a political economy and systems lens. It introduces the Multi-Actor Urban Disorder (MAUD) framework to model how fragmented authority, institutional overload, and civic noncompliance interact to produce chaos. Two additional tools, the Urban Governance Accountability Matrix (UGAM) and the Governance Load Index (GLI)—support the analysis by mapping accountability gaps and institutional stress. Simulation results show that partial or delayed reforms fail to reverse decay. Only early, coordinated, and high-intensity interventions that align mandates with capacity and build cross-actor accountability can stabilize the system. The findings offer a replicable model for diagnosing governance fragility and guiding reforms in rapidly urbanizing yet institutionally fragile sub-Saharan contexts.
This study examines the factors that determine airfare pricing on the route from Denver (DEN) to Los Angeles (LAX), including the return trip. This is a pair of cities with distinct economic backgrounds. We analyze a dynamic panel dataset spanning 22 years from 2002 to 2023 to examine how various firm-level, industry-level, and macroeconomic indicators affect airfare. The country's major carriers, Delta Airlines and Southwest Airlines, employ a unique pricing strategy that enhances fare competitiveness on this route, as evidenced by the influence of HHI (i.e., Herfindahl-Hirschman Index). Although this market is an oligopoly and conventional wisdom suggests that higher concentration would lead to higher prices, we observe this effect only partially. We also observe evidence of unique characteristics of airlines.
The Tamale Central Constituency, a key political and commercial hub in Ghana’s Northern Region, is preparing for a parliamentary primary of the National Democratic Congress (NDC) following the passing of its sitting Member of Parliament (MP) on August 6, 2025. Several aspirants, including Dr. Abdul Rashid Abdul Rahaman, Prof. Alidu Seidu, Dr. Seidu Fiter, Lawyer Abdul Hanan Gundadow, Lawyer Abdul Rauf, Hajia Shamima Yakubu, and Alhassan Osman Gomda, have emerged as potential contenders for the September 6, 2025, internal primary election. This paper analyses delegate preferences, perceptions of candidate strength, and the factors likely to influence delegate choice. A survey of 344 delegates was conducted to determine support levels for aspirants and the factors likely to influence their choice. The findings suggest that delegate decision-making is structured around three latent dimensions, and these are loyalty and service (grassroots embeddedness, party service), campaign resources (financial/logistical support), and charisma and appeal (youth appeal, communication). While grassroots embeddedness remains critical, the role of financial capacity and youth appeal cannot be discounted. Interestingly, public speaking ability, often emphasised in media campaigns, was statistically insignificant, reflecting that internal party elections rely more on patron-client networks than on rhetorical skills. In conclusion, the findings highlight the political economy of delegate decision-making in the Tamale Central constituency and suggest that an aspirant who integrates grassroots engagement, party loyalty, and campaign capacity is best positioned to secure the nomination. Based on this conclusion, the paper argues for a transparent internal primary election and merit-based selection to strengthen the NDC’s competitiveness in the Tamale Central constituency.
Climate change presents significant risks to the global economy and financial markets through both physical and transition channels. This study examines the transmission of climate-related risks, measured by two news-based indicators—the Physical Risk Index (PRI) and the Transition Risk Index (TRI)—to equity markets. Using the Diebold–Yilmaz and Baruník–Křehlík connectedness frameworks, we analyze three representative equity benchmarks: the S&P 500 (SP500), the iShares ESG MSCI KLD 400 Index (DSI), and the iShares Global Clean Energy Index (ICLN). The empirical results show three main findings. First, both the PRI and TRI have relatively weak spillover effects on equity markets but display strong mutual interactions, indicating interdependence between physical and transition risk dimensions. Second, return spillovers are more prominent in the short term, while volatility spillovers dominate over longer horizons, reflecting structural asymmetry in risk transmission. Third, major global shocks—including the 2011 Libyan conflict, the COVID-19 pandemic, and U.S. tariff shocks in 2018 and 2025—increase both return and volatility spillovers. Overall, the findings indicate that volatility is the primary channel for long-term transmission of climate-related uncertainty. Climate-related news, although not yet fully integrated into equity market dynamics, is increasingly relevant for financial stability and the broader energy transition. Therefore, incorporating climate risk considerations into financial market analysis and policy design is necessary.
This study aims to verify the effects of corruption (CPI), economic freedom (EF), and the interaction between these two variables (CPI×EF) on the growth of Total Factor Productivity (TFP) in middle and high-income countries from 1995 to 2019, using a two-step system GMM method for panel data. The results show that reduced perceived corruption and greater economic freedom are positively associated with TFP growth. However, the interaction term has a negative coefficient associated with TFP, suggesting that in countries with high levels of corruption and low economic freedom, which is often found in middle-income countries, implementing anti-corruption policies along with incentives for economic liberalization is a factor of great relevance to achieve higher productivity gains.
In this study, we examine a p-hub location problem where the objective function encompasses regular transportation costs, fixed expenses, and congestion costs associated with hubs. We demonstrate that the model for this problem is a convex mixed integer programming problem. To solve the problem, we introduce a multi-cut cutting-plane method and compare its performance to the existing single cut version method. Our findings show that the multi-cut method outperforms the single-cut method in terms of the time required to reach a solution. The results of numerical experiments conducted to support this comparison are also presented.
This methodological note aims to present a brief yet comprehensive step-by-step guide for estimating Dynamic Stochastic General Equilibrium (DSGE) models and its recent trends. The first chapter introduces DSGE models to achieve this, discussing their theoretical foundations, historical evolution, and main applications. The second chapter explores the relationship between DSGE models and semi-structural models, highlighting their differences and complementarities in macroeconomic analysis. The third chapter presents the theoretical foundations for constructing these models, detailing the behavior of economic agents, general equilibrium mechanisms, and the modeling of stochastic shocks. The fourth chapter provides examples of the application of DSGE models in monetary and fiscal policy, analyzing the influence of different economic policy rules on macroeconomic behavior. Finally, the fifth chapter outlines the limitations of using DSGE models, including theoretical criticisms, difficulties in modeling economic crises, and challenges in parameter estimation. Thus, we aim to contribute to researchers, market professionals, and students who intend to use these models in their work.
This study reexamines the relationship between public investment and private investment in Brazil from January 2007 to February 2023, with a focus on the asymmetries observed during periods of elevated public debt. The findings indicate that the effects of public investment—whether substitution (crowding-out) or complementarity (crowding-in) with private investment—are contingent upon the prevailing economic conditions. Specifically, in contexts of high public debt, crowding-out effects tend to dominate. The analysis underscores the importance of aligning public investment programs with the country’s fiscal and debt dynamics. Failure to do so may undermine their effectiveness, given the asymmetric nature of these interactions.
The objective of this paper is to assess the degree of independence of African Central Banks over the period 1990 to 2019. To achieve this objective, we rely on statutory and real central bank indicators developed by (Dumiter & Sorina, 2011). The results show that the degree of political and legal independence is relatively higher in countries with a fixed exchange rate regime (Bank of Central African States (BCAS) and Central Bank of West African States (CBWAS) countries). The index of Central Bank governance and the conduct of monetary policy, on the other hand, is higher in countries with flexible exchange rate regimes. A clear improvement in Central Bank transparency and accountability in monetary policy was revealed in the Central Banks of Botswana, Malawi, Zambia and the CBWAS.
As investors become more involved in financial markets, the “rational person” assumption of traditional finance theory is facing challenges. And the rise of behavioral finance has made investor sentiment the central topic of research. This article seeks to explore how investor sentiment influences stock returns and systematically examine this issue from three different perspectives: firstly, analyze the multidimensional factors that affect investor sentiment, including individual level, stock level, and environmental level; secondly, we will analyze investor sentiment’s impacts on stock returns, including positive and negative effects, short-term and long-term effects, the impact of different market environments and stocks; finally, various methods for measuring investor sentiment are summarized, including directly or indirectly related index indicators, composite index indicators, and media or text data index indicators. Building on the summarized research conclusions, this article highlights directions for future research. The objective is to conduct an in-depth analysis of the long-term impact mechanisms of investor sentiment and to investigate effective methods for utilizing sentiment indicators to enhance the accuracy of market forecasting.
This paper investigates whether the surge in private capital inflows Latin America and the Caribbean (LAC) has experienced in recent decades has also been accompanied by a significant outflow of profits and interest payments to foreign companies and their respective governments. It documents that there has been a massive reverse transfer of resources from the region to the developed countries of the world, particularly during the 2015-2023 period. The amounts transferred are not only large in absolute terms, but also relative to regional gross domestic product (GDP) and gross fixed capital formation (GFCF) for several countries of the region, including Chile and Mexico. This represents foregone opportunities for domestic investment in physical and human capital and may further undermine the already strained capacity of the region to generate future income and employment opportunities for its growing population. It is beyond the scope of this short paper to address the important question of whether the financial and technological (managerial) knowhow foreign capital ostensibly brings to the region is enough to offset the negative effects emanating from the unprecedented reverse transfer of resources in recent decades. The paper is organized as follows. The first section focuses on the surge in Net Foreign Direct Investment (FDI) during the 1990-2022 period. This is followed by a discussion of the unprecedented reverse transfers the region experienced during the period, particularly 2015-2023. The third section presents results for a labor productivity growth (error correction) equation for Mexico during the 1970-2020 period and the estimates suggest that, once remittances of profits are deducted, the impact of the growth rate in the net foreign capital stock per worker on labor productivity growth is diminished significantly, ceteris paribus. The last section is the conclusion.
