Igbinedion University Journal of Economics and Development Studies (IUJEDS), Vol 1 Issue 2, January 2022
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index. The results disclosed an indication of a positive relationship between the global fear index and commodity price returns. This result confirms that commodity returns upsurges as COVID-19 related fear rises.
Udmale et al. (2020) carried out a study on global food security in the context of COVID-19: A scenario based exploratory analysis. The study recognised the foremost players in the world food equilibrium and probable implications of COVID-19 on the cereal supply in the globe and Sustainable Development Goal (SDG) - 2 (zero hunger). The study showed that four developing countries from Asia, fifteen from Africa, six from Oceania and ten from Latin America are the key countries that are prone to changes in food supply shocks. The study came to the conclusion that the present COVID-19 pandemic may probably cause temporary food insecurity across such susceptible countries. In addition, the pandemic’s impact may lengthen as a joint effect on food security and upturn poverty, slowdown the economy and impede food access and supply, beyond 2020.
All Continent reported cases of coronavirus. In Africa, Egypt was the first to confirmed covid-19 case on 14 of February, 2020. China is the leading commercial partner for African countries and this accounted for the fast importation of the disease fast spread.
Joint external evaluation and SPAR metrics were both designed to quantify every country’s functional capability, without accounting for any indirect factors that might compromise the control of developing plagues, like environmental, demographic, political conditions and socioeconomic. Also infectious disease account factors for these and inform epidemic risk index, developed by the EU joint research centre in partnership with World Health Organization to report different effect combined of every country’s widespread transmission risk, vulnerability, infrastructure, capacity and coping. Egypt, Algeria, and South Africa were the countries at highest importation risk from China, with moderate to high SPAR capacity scores (87, 76, and 62, respectively) and IDVI (53, 49, and 69, respectively (UNDP 2020). Hitherto, there is no treatment option or vaccine for this viral disease that arose suddenly. In general, with this information, there is no effective treatment to treat coronavirus (COVID-19) infection. SARS-CoV and MERS-CoV particles are being tested for coronavirus in vitro and human based trials (Giordano et al 2020)
At the end of November 2020, Nigeria has recorded over 61,000 cases of the coronavirus infections. This same trend of spread has been observed and recorded in most of the Sub Sahara Africa. The virus keeps spreading day and night, though the minister of health in Nigeria, Dr Osagie Ehanire, announced various non-pharmaceutical approach and safety measures to the diseases (NCDC, 2020). The surge of the coronavirus pandemic has been aggravated by the spike of the second wave which continued unabated with high fatality and severity. This calls for concern to all and sundry.
Igbinedion University Journal of Economics and Development Studies (IUJEDS), Vol 1 Issue 2, January 2022
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each unit of capital. It is important to note that capital in this context is not subjected to the principle of diminishing returns as capital is made up of both human and physical capital. Although human or knowledge capital exhibits increasing returns to scale; the physical capital which is in the form of plant and equipment exhibits decreasing returns to scale. Todaro (2012) derived the mathematical equivalence of the endogenous growth model. However, it was simplified further by the researchers as follows:
Yt= F (Kt, Lt) 1
In the model, each industry exhibits constant returns to scale, however, the economy-wide capital stock; Kß enables the entire economy to exhibit increasing returns to scale.
Yi= AKiα Li 1-α Kß 2
By symmetric assumption across industries Y= AKα+ß L1-α 3
Differentiating (1) wrt time, we have 𝒀̇= 𝝏𝒀𝝏𝑲 ˖ 𝝏𝑲
𝝏𝒕 + 𝝏𝒀
𝝏𝑳 ˖ 𝝏𝑳
𝝏𝒕4
From (3) 𝝏𝒀𝝏𝑲=A(α+ß)Kα+ß-1 ˖L1-α 5
𝝏𝒀
𝝏𝑳 =A(1-α )Kα+ß˖L1—α--1 6
Connecting (4), (5), (6) together, produce relation (7) 𝑌̇ =A(α+ß)Kα+ß-1 ˖L1-α ˖ 𝜕𝐾
𝜕𝑡 + A(1-α )Kα+ß˖L1—α--1 ˖ 𝜕𝐿
𝜕𝑡 (7) 𝑌̇ =A(α+ß)Kα+ß ˖𝝏𝑲/𝝏𝒕𝑲 ˖ L1-α + A(1-α )Kα+ß˖L1—α ˖ 𝜕𝐿/𝜕𝑡𝐿 (8) Factor out Y= AKα+ß˖L1-α in (3) from (8)
𝑌̇ = AKα+ß ˖ L1-α[(α+ß)˖𝝏𝑲/𝝏𝒕𝑲 +(1-α ) ˖ 𝜕𝐿/𝜕𝑡𝐿 ] (9) Replace Y in (9)
𝑌̇ = Y [(α+ß)˖𝝏𝑲/𝝏𝒕𝑲 +(1-α ) ˖ 𝜕𝐿/𝜕𝑡𝐿 ] (10) Divide through (10) by Y
𝒀
𝒀̇ =(α+ß) ˖ 𝝏𝑲/𝝏𝒕𝑲 + (1-α ) ˖ 𝝏𝑳/𝝏𝒕𝑳 (11)
Recall that𝝏𝑲/𝝏𝒕 = 𝑲̇ and 𝝏𝑳/𝝏𝒕 = 𝑳̇
Therefore 𝒀𝒀̇ =(α+ß) ˖ 𝑲̇𝑲 + (1-α) ˖ 𝑳̇̇𝑳(12)
Recall that at steady state, K/K =Y/Y = sA, and 𝑳̇̇𝑳= 𝒏, thus 𝒀𝒀̇ =𝑲̇𝑲= g
Igbinedion University Journal of Economics and Development Studies (IUJEDS), Vol 1 Issue 2, January 2022
53 By substituting into 12, we have
g= (α+ß) ˖ g + (1-α) ˖ n g− (α+ß) ˖ g = (1-α) ˖ n g( 1− (α+ß)) = (1-α)n g =( 𝟏− (𝜶+ß)) (𝟏−𝜶)𝒏
g = (𝟏−𝜶)𝒏
( 𝟏− 𝜶−ß)) ; 13subtract the growth rate of labour force from (13) g − n =( 𝟏− 𝜶−ß)) (𝟏−𝜶)𝒏 – 𝒏by L.C.M
g – n =( 𝟏− 𝜶−ß) ß𝒏 14
Equation 14 suggests that the growth rate of per capita income will rise perpetually as driven by forces (capital and knowledge based contributions to output) within the model.
It will be developed upon to capture governmental presence. Recall that government revenue is generally classified as a fiscal variable. Fiscal policy has persistently been used to influence economic activities in many developing and developed countries. Fiscal policy can influence private investment and in turn the performance of an economy through three main channels. These channels are essentially fiscal policy variables, namely: public investment, government deficits and cost of capital. These policy variables are cleverly modified and incorporated in the model specification section.
Given the availability of panel data in the study, we do some important modifications and adjustments of the endogenous growth model as developed by Romer (1994). For instance, we incorporated the federal revenue, the capital stock and labour employment and contribution to national output. Hence, from equation 1, we present a functional equation specified below:
Yi = f (RSi, KSi, LESi,) 15
Where, Yi is real gross domestic product. RSiis revenue allocation. KSi is capital stock.
LESi labour employment. The econometric specification is shown below as:
Yit = π1 + π2RSit + π3KSit + π4LESit + Uit 16 i = 1, 2, 3, 4, 5, 6,…17
t = 1, 2, 3,… ,12
Where i, denotes the cross section identifier for country and t, denotes the time identifier for each month. In the model, the maximum of N-cross sectional observations is 17, while a maximum of T time periods is 12. Since each country has same number of time series (i.e., 12 months) observations, then the only recommendable technique to be adopted for the study is the balanced panel. The assumptions that the independent variables are non-stochastic and that the error term Uitis E(Uit) ~ N (0, σ2) are valid in the study.
Introducing the control variable such as the household welfare (HHW) which was captured by private consumption per capita, equation 16 becomes:
Igbinedion University Journal of Economics and Development Studies (IUJEDS), Vol 1 Issue 2, January 2022
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Yit = π1 + π2RSit + π3KSit + π4LESit + π5HHWit + Uit 17
The main econometric analysis will involve the Generalized Method of Moments (GMM) technique with preliminary analyses which include: trend analysis, descriptive statistics, Augmented Dickey-Fuller and Phillips Peron (PP) unit roots test and Granger Causality test (Ohiomu & Ogbeide-Osaretin, 2020).