Journal Articles and Book Chapters

This paper examines the influence of financial sector reform on macroeconomic stability in 14 SSA countries by employing a traditional panel, dynamic panel framework, and causality tests on data from 2000 to 2021. It explores whether income groupings of the sampled countries in line with the World Bank classification matter for the outcomes of the analysis. The results suggest that financial reform policies can both induce and prevent economic instability. They increase instability in the lower-middle and upper-middle-income countries, as seen in the overall estimated dynamic panel models, but they reduce it in low-income economies. The static panel models produced similar results. It has also been shown that the rent from natural resources had uniformly damaging effects on the macroeconomic stability of all income groups in SSA, effectively confirming the “resource curse” thesis. Yet, the findings of the panel as a whole contradicted this, suggesting that revenue from natural resources can effectively play a role in stabilizing macroeconomic conditions. The results also suggest the existence of what can be called “a human capital-misery trap”, in which higher human capital development can lead to macroeconomic instability. Inflation was found to have a detrimental effect, and the impact of government interventions appeared to be mixed. This paper emphasizes the need for robust financial reforms and comprehensive policy measures in Sub-Saharan Africa (SSA), aiming to enhance the effectiveness, competitiveness, and stability of the financial sector and the broader economic landscape, which will require prudent management of natural resources.

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While tourism is considered an engine of economic growth and development, macroeconomic crises, such as high inflation, can negatively impact the sector. However, monetary policy (MP) can play a significant role in mitigating the effects of inflation on tourism. This study aims to explore the moderating role of MP in the inflation–tourism demand nexus in South Africa.

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This study investigates the impact of human capital development and technological innovation on environmental sustainability in Malaysia, as part of the Malaysian commitment to Sustainable Development Goal 13 (Climate Action). Using Autoregressive Distributed Lag (ARDL) model and time series data covering the period 1990-2022, the analysis explores the dynamic relationship between CO2 emissions and major macroeconomic variables, namely economic growth, energy consumption, technological innovation, trade openness, foreign direct investment (FDI), quality of governance, education, and GINI coefficient. The empirical findings reveals that technological innovation and human capital development significantly contribute to long-run decline in CO2 emission, hence emphasis their role in ensuring a sustainable low-carbon economy. On the other hand, FDI correlates with higher emissions, which gives relevance to pollution haven hypothesis in the Malaysian case. The study emphasis the need to invest in green technology, incorporate sustainability in the education system and tightening environmental standards in the foreign investments. Such policy steps are necessary to ensure that economic progress is no longer linked to environmental degradation and accelerate Malaysia’s transition towards a climate-resilient future.

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This study revisits the long-standing debate on the guns-versus-butter phenomenon, that spending on military activity crowds out non-military expenditure. By focusing on Africa, we conjecture the crowding-out effect of military expenditure on health expenditure beyond government health expenditure, but also private and out-of-pocket health expenditure, and health outcomes. The empirical analysis based on the dynamic two-step system generalized method of moments reveals that omitting institutional quality measures biases the estimated crowding-out effects of military expenditure. After the inclusion, the results indicate that a 10 % increase in military expenditure leads to a 0.40 % decline in government health expenditure, accompanied by 0.01 % and 0.30 % increases in private and out-of-pocket health expenditure, respectively. Regarding health outcomes, the same increase in military expenditure results in a 0.20 % rise in maternal mortality, while infant mortality and life expectancy decline by 0.09 % and 0.01 %, respectively. Further analysis reveals that including the interaction term of military expenditure and institutional quality only reverses the crowding-out effect on government health expenditure and not on private and out-of-pocket health expenditure. For health outcomes, the favorable effect of the interaction term is only evident in reducing infant and maternal mortality rates. We offer policy recommendations to improve fiscal spending on the health sector in Africa as a paramount measure to improve human capital development and provide areas for further empirical contributions.

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The recent rise in geopolitical fragmentation and trade tensions has raised concerns about the resilience of the international role of the euro. Thus, this study examines how geopolitical risk shocks associated with U.S.–China trade tensions and the Russian–Ukrainian conflict influence the international hegemony of the euro as well as the institutional foundations of monetary unification in the Eurozone. The results from machine learning techniques and Bayesian model averaging show that these geopolitical tensions have weakened the international position of the euro. In addition, this study observes that the concurrent presence of the trade war and the persistence of the conflict amplifies these adverse effects on the euro. However, the findings also show that inertia in the historical use of the euro appears to mitigate the adverse impact of these shocks. Further analysis also indicates that Euro Area public debt levels and the legacy of the sovereign debt crisis act as structural constraints to the resilience of the eurozone. This study suggests that strengthening fiscal sustainability, deepening monetary and financial integration, and improving policy coordination among Eurozone members can be potent tools for enhancing the stability and international role of the euro under rising geopolitical uncertainty

This Article was written by Jamilu Iliyasu

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