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This thesis is a systematic attempt to investigate two conjectures about the distribution of company rates of profit: that it should be log-normal (Gibrat 1931), and that it should be gamma distributed (Farjoun and Machover 1983). A large set of company accounts data is analysed, and partial support found for Gibrat and for a generalised version of Farjoun and Machover. The analysis includes a demonstration of different empirical distributions for different profit rate measures, a demonstration of power law tails in all measures of the profit rate, and a demonstration of size effects (differences in tail weights) in financial ratios. Annual variation in the overall skewness and kurtosis of profit rate distributions is shown to be dominated by variation in the power law tails. <i>L</i>-moments, a recent innovation in robust methods to deal with extreme values, are used in conjunction with a size-weighted sampling scheme to identify possible models for distributions of the profit rate at the capital level. Farjoun and Machover derive their hypothesis from a particular conception of the process of capitalist competition. A rival conception, that of Glick (1985), is tested using company accounts data and shown to be vulnerable to criticism concerning the scope of its data set, the test statistic employed, and its choice of profit rate measure. More fundamentally, it is also dependent on doubtful premises about the within-industry distribution of profit rates, as L-moment analysis demonstrates.

This thesis attempts to investigate, theoretically and empirically, whether financial development (bank development and stock market development) has led to economic growth in Bangladesh, and it explores the important factors behind the evolution of the financial system itself. The literature survey in Chapter 2 argues that finance enhances growth while banks and stock markets are complementary in development; however the application to low-income countries is unclear. After reviewing financial sector policy and institutional background in Bangladesh in Chapter 3, a combination of various theoretical insights into one structural framework is proposed in Chapter 4. Our empirical findings for Bangladesh in Model l using the ARDL cointegration method are as follows. Both banks (quasi-money/GDP) and the stock market (number oflisted companies) have enhanced physical capital accumulation from 1980 to 2005. Using the same cointegration technique, growth in GDP per capita is found to lead to growth in banks (private-credit/GDP ratio). And there is a cointegrating relationship between banks and the stock market which indicates that debt and equity are complementary. The main message from Chapter 6 is that the finance-growth nexus can be shown to operate in the case of Bangladesh where banks are the main providers of finance. The key policy implication of Model l is that overall financial development (banks and stock markets) can lead to economic growth, while feedback effects promote further financial activity. We then identify and assess relationships that operate within the stock market itself. Model 2A begins the analysis of the stock market infrastructure by relating the number of listed shares to the value of traded shares or turnover (market liquidity). Empirical results in Chapter 7 for Bangladesh using the ARDL approach show support for cointegration from 1990Ql to 2005Q4. Model 2B then investigates the relationship between trading activity and price volatility on the stock exchange. Using a GARCH framework and Granger Causality tests, empirical results in Chapter 8 indicate that trading volume and particularly trading value carry predictive power for price volatility with daily data from 1995 to 2007. The overall conclusion in Chapter 9 is that to understand the finance-growth nexus in Bangladesh it is necessary to appreciate the essential role played by banks as well as the forces behind the stock market. The encompassing framework presented here along with its reinforcing and constrained features points to a growth-promoting and sustainable fmancial structure for central bank regulators to target.

M.Comm. / The aim of this study is the econometric improvement of the stochastic equations of an econometric model with specific reference made to the explanation and incorporation of stationarity and cointegration testing. The study is based on an existing macroeconometric forecasting model. The focus of the study is not on the improvement of the specification of individual equations per se, but rather on the econometric improvement thereof, therefore changes to the specification of individual equations have only been made in cases where test results strongly recommended it. The RAU-model had previously been exposed to neither structural stability-, stationarity-, nor cointegration testing and therefore both the explanation and implementation of these tests have been included in the study. It is, however, important to note that the main purpose of both stationarity and co-integration testing is not to substitute nonstationary data with data which is proven to be stationary, but rather to identify nonstationary and non-cointegrationary data for future improvement and enhancement of the RAU model. Following the completion of the abovementioned tests, parameters have been estimated for the individual equations of the three sectors of the RAU-model (i.e. the Real-, Balance of payments-, and the Monetary sectors). Thereafter the results have been evaluated on the basis of the economic-, statistic-, and econometric evaluation criteria. In cases where econometric inconsistencies arose from the violation of the assumptions underlying the econometric tests, appropriate transformation processes have been applied in an attempt to resolve the problem. Thereafter, tests have been carried out to determine the forecasting ability of the model as well as to compare the model results with the a priori results. In general, the aim of the study, to econometrically improve the stochastic equations of the RAU model, has been achieved on the basis of overall better regression- and evaluation results that have been obtained. Following the completion of the study, a new approach to econometric modelbuilding, which makes provision for the inclusion of both stationarity- and cointegration testing, is proposed.

This thesis explored two key aspects of growth, namely the role of financial development and external financial liberalization. In the case of financial development, it evaluated in chapter 4, how far the financial reforms implemented since 1977 was successful in increasing the level of savings and investment as postulated in the McKinnon -Shaw hypothesis. It employed an Autoregressive Distributed Lag approach (ARDL) to evaluate the impact of the interest rates on savings as well as on investment. In the case of savings, the modelling involved an unrestricted error correction model (ECM), a long-run level model and a short- run restricted ECM. To assess the impact of interest rates and savings on investment, a long-run differenced ARDL model was performed. Our empirical research confirmed that there was a positive effect from financial liberalization, both on savings and investment. In the case of external financial liberalization, it investigated in chapter 5, the contribution of outward looking policies on per capita economic growth. We employed a multiple linear regression model using OLS approach and regressed the per capita economic growth, as a dependent variable on some key explanatory variables including FDI inflows, bank credit to private sector and trade openness. We found evidence in support of our hypothesis that outward-oriented policies stood favourably in contributing for economic growth. We finally examined in chapter 6, further scope for greater external openness to contribute towards faster economic growth and development of Sri Lanka’s economy. Our conclusion in this respect is that unless Sri Lanka adapts several policy measures to streamline its macroeconomic environment and gradually build up adequate external reserves, it would not be desirable for the country to consider rapid opening up of its capital account in the current setting. The overall finding of this study is that there was a positive impact of financial liberalization on savings and investment, as well as of external openness on economic growth.

This thesis is concerned with the question of whether recently joining member countries are converging on European Union norms for per capita GDP. In par-ticular, we focus on the "convergence debate" that has developed within growth theory. In order to find an answer, we look for a testing framework that is coherent with mainstream theoretical models and we investgate why such convergence may have happened. Firstly, we employ a variety of approaches to test whether economies actually reach a steady state as a consequence of catching-up and we argue that, if this condition is not satisfied, convergence may not happen at all in the long run[sup]1. Secondly, we investigate the role of trade openness, motivated by the failure of early theoretical models to recognize its effects on growth. Again, we give particular attention to the the long-run and the supply-side of our economies. Empirical results suggest that there is evidence of catching up in the period under investigation, but no conclusive indication of long-run convergence. We also observe little signs the latter was caused by intra-EU trade openness which, in turn, helped growth. These findings are evidence that EU policies were effective in the short-run. Therefore, the EU should continue its long-run effort of guiding new members' convergence towards a common steady state. In particular, targeting foreign direct investments, as suggested by the existing literature, may be more effective than focusing on the integration of the EU goods market. Finally, the Solow-Swan growth theory proved a reasonable tool to understand convergence in the enlarged EU, with no compelling need to open the model to trade or endogenize technological progress. [sup]1This conclusion wouid invalidate the predictions of the neoclassical growth model.

This research used psychological well-being data on thousands of people across several countries in the Middle East and North Africa (MENA) between the period of 2000 and 2013. It begins with data on the reported well-being levels of thousands of individuals in MENA and relates these data to the macroeconomic variables in each country. The macroeconomics variables to be analysed are the unemployment rate, GDP per capita and the inflation rate. With regards to the reported well-being levels, a random sample of people who live in some selected MENA countries were interviewed each year by the World Value Survey (WVS) and are asked many self-reported questions. Two kinds of questions are used in this thesis. The first is 'all things considered, how satisfied are you weuth your life as a whole?' where answers ranked from 1 being dissatisfied till 10 being satisfied. The second question is 'Taking all things together, would you say you are 1-not at all happy, 2-not very happy, 3-quite happy or 4-very happy'. Ordered probit equations are estimated in an attempt to relate the macroeconomics conditions with individual's happiness or satisfaction by measuring the real cost of unemployment on the population and measuring the effects of GDP changes in a country on the people living in that country. A further analysis to estimate the objective well-being situation in MENA countries and compare it or supplement it to the subjective happiness approach. Building on Sen's capability approach and taking into account factors such as life expectancy, inequality and corruption levels with the individual's happiness from self-reported surveys for the same set of countries in MENA. Two independent variables are the equality opinion question and the financial satisfaction question from the WVS. The first question is: 'Incomes should be made more equal?', where 1 means you agree completely and 10 means you don't. The other question is: 'How satisfied are you with the financial situation of your household?', where '1' means you are completely dissatisfied on this scale, and '10' means you are completely satisfied. The main goal of this thesis is to arrive with a quality of life assessment of the situation in the MENA region by combining a subjective approach presented by self-reported surveys with an objective approach that includes many social indicators.