Social benefit expenditures and stagflation: evidence from the United States

Figures & data

Figure 1. Economic growth, inflation rate and unemployment rate (1950–2014).

Table 1. Results of the bounds F-tests.

	Case I	Case III	Case V
F(EGR/LGSP)	0.95451	8.9706***	8.4331**
F(IFR/LGSP):	7.3803***	7.3563**	10.4541***
F(UER/LGSP):	12.9440***	4.1189	1.2923
Lower I(0)–upper I(1)
1% level:	4.81–6.02	6.84–7.84	8.74–9.63
5% level:	3.15–4.11	4.94–5.73	6.56–7.30
10% level:	2.44–3.28	4.04–4.78	5.59–6.26

Notes: **denotes significance at the (α = 0.05) level; and ***denotes significance at the (α = 0.01) level. Asymptotic critical values are obtained from Pesaran, Shin, and Smith (2001): Table CI(i) Case I, no intercept and no trend; Table CI(iii) Case III, unrestricted intercept and no trend; and Table CI(V) Case V, unrestricted intercept and unrestricted trend.

Table 2. The ARDL long-run relationships (EGR and LGSP).

The ARDL long-run relationship (dependent variable EGR):
Regressor	Coefficient	Standard Error	T-Ratio[Prob]
LGSP	−0.64379	0.13243	−4.8614[0.000]
INPT	8.7374	0.94754	9.2211[0.000]

Note: The results were calculated using the Microfit 5.0 software, which was developed by professors Pesaran, M. H. and Pesaran, B.@ Oxford University Press.

Table 3. The long- and short-run ARDL relationships (IFR and LGSP).

Regressor	Coefficient	Standard error	T-Ratio[Prob]
The ARDL long-run relationship (dependent variable IFR):
LGSP	5.087	1.7985	2.8285[0.006]
INPT	−11.9187	4.1936	−2.8421[0.006]
TREND	−0.43765	0.16999	−2.5746[0.013]
The ARDL short-run relationship or the Error Correction Model (dependent variable dIFR):
dLGSP	15.0758	4.9689	3.0341[0.004]
dTREND	−0.20378	0.10023	−2.0331[0.047]
ecm(−1)	−0.46562	0.1075	−4.3314[0.000]
Additional temporary variables:
dIFR = IFR-IFR(−1)
dLGSP = LGSP-LGSP(−1)
dTREND = TREND-TREND(−1)
ecm = IFR −5.0870*LGSP + 11.9187*INPT + 0.43765*TREND
(F-Stat. F = 6.8009[0.001])

Note: The results were calculated using the Microfit 5.0 software, which was developed by professors Pesaran, M. H. and Pesaran, B. @ Oxford University Press.

Table 4. The long- and short-run ARDL relationships (UER and LGSP).

Regressor	Coefficient	Standard error	T-Ratio[Prob]
The ARDL long-run relationship (dependent variable UER):
LGSP	0.48022	0.14582	3.2931[0.002]
The ARDL short-run relationship or the Error Correction Model (dependent variable dUER):
dUER1	0.19388	0.093444	2.0749[0.042]
dLGSP	10.4951	1.5079	6.9599[0.000]
ecm(−1)	−0.25703	0.05662	−4.5396[0.000]
Additional temporary variables:
dUER = UER-UER(−1)
dUER1 = UER(−1)-UER(−2)
dLGSP = LGSP-LGSP(−1)
ecm = UER −0.48022*LGSP
(F-Stat. F = 30.2888[0.000])

Note: The results were calculated using the Microfit 5.0 software, which was developed by professors Pesaran, M. H. and Pesaran, B. @ Oxford University Press.

Figure 2. CUSUM and CUSUMSQ values.

Pesaran, M. H., Y. Shin, and R. J. Smith. 2001. “Bounds Testing Approaches to the Analysis of Level Relationships.” Journal of Applied Econometrics 16 (3): 289–326. doi:10.1002/jae.616.

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