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The enduring discourse regarding the effectiveness of interest rate policy in mitigating inflation within developing economies is characterized by the interplay of structural and supply-side determinants. Moreover, extant academic literature fails to resolve the direction of causality between inflation and interest rates. Nevertheless, the prevalent adoption of interest rate-based monetary policies in numerous developing economies raises a fundamental inquiry: What motivates central banks in these nations to consistently espouse this strategy? To address this inquiry, our study leverages wavelet transformation to dissect interest rate and inflation data across a spectrum of frequency scales. This innovative methodology paves the way for a meticulous exploration of the intricate causal interplay between these pivotal macroeconomic variables for twenty-two developing economies using monthly data from 1992 to 2022. Traditional literature on causality tends to focus on short- and long-run timescales, yet our study posits that numerous uncharted time and frequency scales exist between these extremes. These intermediate scales may wield substantial influence over the causal relationship and its direction. Our research thus extends the boundaries of existing causality literature and presents fresh insights into the complexities of monetary policy in developing economies. Traditional wisdom suggests that central banks should raise interest rates to combat inflation. However, our study uncovers a contrasting reality in developing economies. It demonstrates a positive causal link between the policy rate and inflation, where an increase in the central bank's interest rates leads to an upsurge in price levels. Paradoxically, in response to escalating prices, the central bank continues to heighten the policy rate, thereby perpetuating this cyclical pattern. Given this observed positive causal relationship in developing economies, central banks must explore structural and supply-side factors to break this cycle and regain control over inflation. [ABSTRACT FROM AUTHOR]

The perception in pair trading is to recognize that when two stocks move together, their prices will converge to a mean value in the future. However, finding the mean-reverted point at which the value of the pair will converge as well as the optimal boundaries of the trade is not easy, as uncertainty and model misspecifications may lead to losses. To cater to these problems, this study employed a novel entropic approach that utilizes entropy as a penalty function for the misspecification of the model. The use of entropy as a measure of risk in pair trading is a nascent idea, and this study utilized daily data for 64 companies listed on the PSX for the years 2017, 2018, and 2019 to compute their returns based on the entropic approach. The returns to these stocks were then evaluated and compared with the buy and hold strategy. The results show positive and significant returns from pair trading using an entropic approach. The entropic approach seems to have an edge to buy and hold, distance-based, and machine learning approaches in the context of the Pakistani market. [ABSTRACT FROM AUTHOR]

An assessment of debt dynamics and its sustainability is very important in formalizing prudent and effective macroeconomic policies especially for the economies with weak macroeconomic fundamentals and alarming debt levels. Keeping in view the recent debt escalation in Pakistan, this study aims to explore the important factors that influence the public debt dynamics in case of Pakistan and to evaluate its sustainability. This study applies the debt dynamic approach for empirical assessment of drivers of changing debt levels and analysis of public debt sustainability. Furthermore, ARDL approach is utilized to study the short- and long-run debt dynamics using historic data from 1975 to 2021. This study is distinct from already existing work on debt assessment in Pakistan as it examines both important dimensions of public debt (determinants & stability) by employing the novel dynamic debt modelling approach and using most recent data. The study finds a positive and significant impact of fiscal deficit, exchange rate depreciation and interest rate on public debt in Pakistan. The debt sustainability analysis also reveals the instability of public debt for the entire study period except for few years. The regression results corroborate with the findings from stability analysis, and the main driving forces for increasing the debt burden of the country are found to be the fiscal indiscipline along with the rising cost on account of ER depreciation and higher interest rates. [ABSTRACT FROM AUTHOR]

In social sciences, a plethora of studies utilize nominal data to establish the relationship between the variables. This, in turn, requires the correct use of correlation technique. The choice of correlation technique depends upon the underlying assumptions and power of the test of significance. The objective of the research is to explore the best measure of association for nominal data in terms of size, power and bias in estimation. Monte Carlo simulations reveal that the Phi and Pearson correlation statistics performs equally well in terms of size, power, and bias for naturally dichotomous variables. When both variables are artificially dichotomized, the Tetrachoric statistic has an edge in terms of bias to Pearson correlation statistic. If one variable is continuous and other is artificially dichotomized, the Biserial correlation measure turns out to be less biased as compared to Pearson statistic although both statistics exhibit similar power and size properties. If one variable is continuous and other is naturally dichotomized, it is hard to choose between the Point Biserial and Pearson correlation measures. Finally, if one variable is naturally dichotomous and other is artificially dichotomized, correlation coefficient V is compared with Pearson, Phi and Tetrachoric correlation techniques in terms of bias in estimate. The results indicate that the Tetrachoric statistic considerably overestimates the correlation value against non-normal distributions. Pearson and Phi correlation slightly underestimate the correlation value. In contrast, the correlation statistic V perform well. [ABSTRACT FROM AUTHOR]

Comparison of normality tests based on absolute or average powers are bound to give ambiguous results, since these statistics critically depend upon the alternative distribution which cannot be specified. A test which is optimal against a certain type of alternatives may perform poorly against other alternative distributions. Thus, an invariant benchmark is proposed in the recent normality literature by computing Neyman-Pearson tests against each alternative distribution. However, the computational cost of this benchmark is significantly high, therefore, this study proposes an alternative approach for computing the benchmark. The proposed min-max approach reduces the calculation cost in terms of computing and estimating the Neyman-Pearson tests against each alternative distribution. An extensive simulation study is conducted to evaluate the selected normality tests using the proposed methodology. The proposed min-max method produces similar results in comparison with the benchmark based on Neyman-Pearson tests but at a low computational cost. [ABSTRACT FROM AUTHOR]

Graph theory is a subdivision of discrete mathematics. In graph theory, a graph is made up of vertices connected through edges. Topological indices are numerical parameters or descriptors of graph. Topological index tells the symmetry of compound and helps us to compare those mathematical values, with boiling point, melting point, density, viscosity, hydrophobic surface area, polarity, etc., of that compound. In the present research paper, degree-based topological indices of Zeolite Socony Mobil-5 are calculated. Names of those topological indices are Randić index, first Zagreb index, general sum connectivity index, hyper-Zagreb index, geometric index, ABC index, etc. [ABSTRACT FROM AUTHOR]

The first author's name is spelled incorrectly. The correct name is: Sundas. The correct citation is: Sundas, Naveed S, Islam TU (2022) An empirical investigation of determinants & sustainability of public debt in Pakistan. PLoS ONE 17(9): e0275266. https://doi.org/10.1371/journal.pone.0275266By Sundas, Samina Naveed and Tanweer Ul IslamReported by Author; Author [Extracted from the article]

Many parametric statistical inferential procedures in finite samples depend crucially on the underlying normal distribution assumption. Dozens of normality tests are available in the literature to test the hypothesis of normality. Availability of such a large number of normality tests has generated a large number of simulation studies to find a best test but no one arrived at a definite answer as all depends critically on the alternative distributions which cannot be specified. A new framework, based on stringency concept, is devised to evaluate the performance of the existing normality tests. Mixture of t-distributions is used to generate the alternative space. The LR-tests, based on Neyman–Pearson Lemma, have been computed to construct a power envelope for calculating the stringencies of the selected normality tests. While evaluating the stringencies, Anderson–Darling (AD) statistic turns out to be the best normality test. [ABSTRACT FROM AUTHOR]

Consumer Confidence Index (CCI) plays an important role through providing decision makers and economic forecasters with required information about present and future economic condition. These indices play a unique role in determining public policies as well as business decisions. Consumer confidence index defines the degree of optimism on the current state of the economy that consumers are expressing through their activities of saving and spending which lead to economic growth of the country. Positive changes in consumer confidence should lead to the economic growth while negative changes impede the economic growth of the countries. This study is an attempt to empirically evaluate the link between the CCI and economic growth of the selected European countries: United Kingdom, Germany, France, Denmark and Netherland. Panel co-integration procedures are applied to establish the long run relationship between the CCI and economic growth for the period of 1996 (1)-2012 (4). Empirical results show the existence of the long run relationship between consumer confidence and economic growth. [ABSTRACT FROM AUTHOR]

In social and health sciences, many statistical procedures and estimation techniques rely on the underlying distributional assumption of normality of the data. Non-normality may lead to incorrect statistical inferences. This study evaluates the performance of selected normality tests within the stringency framework for skewed alternative space. The stringency concept allows us to rank the tests uniquely. The Bonett and Seier test (Tw) turns out to represent the best statistics for slightly skewed alternatives and the Anderson–Darling (AD); Chen–Shapiro (CS); Shapiro–Wilk (W); and Bispo, Marques, and Pestana (BCMR) statistics are the best choices for moderately skewed alternative distributions. The maximum loss of Jarque–Bera (JB) and its robust form (RJB), in terms of deviations from the power envelope, is greater than 50%, even for large sample sizes, which makes them less attractive in testing the hypothesis of normality against the moderately skewed alternatives. On balance, all selected normality tests except Tw and Daniele Coin's COIN-test performed exceptionally well against the highly skewed alternative space. [ABSTRACT FROM AUTHOR]