Browsing by Author "Adikari, A.M.P."

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An Empirical Study on Money Demand Function in Sri Lanka: 1993 – 2013
(Faculty of Commerce and Management Studies, University of Kelaniya, 2015) Adikari, A.M.P.
The importance of the demand for money has become a prominent research topic in economics due to its role in monetary policy formulation. Income elasticity and interest elasticity of money demand affect the channels of the monetary policy transmission mechanism. This study investigates the long run demand for money and the short run demand for money. The estimation of a money demand function for M2, using annual data for 1993 to 2013 forms the basis of this investigation. The significant long-run relationships were found between Broad money demand, GDP, inflation rate and interest rate. Therefore, these variables can be taken as determinants of broad money demand in Sri Lanka. The positive elasticity of money demand in respect of GDP reveals that money demand for transaction purposes increases when income increases while the negative elasticity relationship between money demand and the interest rate and inflation rate implies that demand for money declines when interest rates and inflation rates were increase, while interest rate and inflation rate are significant in the long run, it is insignificant in the short run. The empirical findings of this study show that the demand for broad money (M2) in the analyzed period in the Sri Lanka is stable, indicating that on the basis of selected determinants, its long term prediction can be carried out. This study complements the existent economic literature by analyzing the determinants and stability of money demand in the Sri Lanka. Because of, demand for money is stable then money supply is the most suitable monetary policy instrument in Sri Lanka.
Female labor force participation in Sri Lanka
(Faculty of Humanities, University of Kelaniya, Sri Lanka, 2016) Adikari, A.M.P.
Women’s access to employment and resources increase human capital and capabilities in a household as well as in an economy. According to the annual report of Sri Lanka Labor Force Survey in 2014, labor force participation 15years and over was 74.6 for male and 34.7 for female. The relatively low female labor force participation rate in Sri Lanka can be viewed as a puzzle given that the country enjoys high levels of female schooling. But, female labor force participation has not changed much in recent decades and remained stagnant at a rate around 30 to 35 percent of the working age group. Therefore, this study aims to explore why female labour force participation is low in Sri Lanka. Study explains the trends in the labour force participation and educational achievements of females in Sri Lanka and explores the factors behind the low female labour force participation rate, despite having high female education level during last decade. The study mainly utilized secondary data published in the annual and quarterly labour force surveys conducted by Department of Census and Statistics, Sri Lanka. Determinants contributed for the low female participation were examined from a descriptive manner utilizing these secondary data. A number of factors might have contributed to the low female labour force participation despite having high female education in Sri Lanka during the study period. Issues in the education system, higher level of female unemployment, narrowed choices of females in the labour market, wage discriminations and unavailability of child caring facilities are the main reasons behind the low female labour force participation. As a conclusion, it is essential to say that the women’s labour remains a vastly disregarded area and a great deal of more research needs to be done at the national level to provide the necessary information to determine the factors influencing women’s labour supply decision and policy makers should develop appropriate policies to enhance the female participation in the Sri Lankan labour market.
Financial Liberalization Index for Sri Lanka
(Faculty of Social Sciences, University of Kelaniya, Sri Lanka, 2015) Adikari, A.M.P.
Financial liberalization is a process of liberalizing the financial system of an economy by reducing controls in interest rates, financial intermediaries, and markets. Since the mid-1980s, the World Bank and the International Monetary Fund (IMF) started financial liberalization as a basic frame work for developing member countries to accelerate economic growth. Sri Lanka has been involved this process since 1977.This study attempts to establish an index to evaluate the complex process of financial liberalization in Sri Lanka by focusing on important changes in the financial sector. The study has used major policy components of financial liberalization to construct financial liberalization index at a particular time. In order to derive the index, an arbitrary value is assigned to each of the policy variables. Each policy variable can take a value between 0 and1.The value is depending on the implementation phases of the policy. Time series annual data from1977 to 2011 are used to construct the index. The principle Component Method is used as an analysis method. This index is helpful to evaluate the impact of financial liberalization policies on various aspect of the economy. The constructed index shows that financial liberalization has gradually increased from 1997to 2011, though the policies are implemented since 1977 in Sri Lanka.
The Impact of Financial Liberalization on the Sri Lankan Economy:1977-2012
(Research Centre for Social Sciences, Faculty of Social Sciences, University of Kelaniya, Sri Lanka, 2016) Adikari, A.M.P.
This study examines the impact of financial liberalization on the Sri Lankan economy over the time series annual data from 1978 to 2012. The study examines the impact of financial liberalization on selected economic variables: domestic investment, savings, narrow and broad money and economic growth in the Sri Lanka economy. The Ordinary Least Square (OLS) method based on the Vector Auto Regression (VAR) model and the Granger Causality test were conducted to find out the long-term relationship among the variables concerned in the equations developed to test the hypotheses. An index has been constructed using six major components of financial liberalization namely; interest rate deregulation, reserve requirements and credit ceilings, international capital flows, banking sector entry and competition, securities market reforms and banking sector supervision. Principal Components Analysis (PCA) method is used to construct this index and, it is used as a proxy of financial liberalization to examine the impact of financial liberalization on economic growth, savings, investments and money demand in Sri Lanka. The findings result include a confirmation of significant and positive long-term relationship between financial liberalization and economic growth in the Sri Lankan economy i.e., positive impact on national savings and on domestic investment. From the findings of the study, financial liberalization was found to have positively impacted on broad money and negatively impacted on narrow money in Sri Lanka. In terms of policy implications,effective role of the government in providing must play a leading role as a facilitator by providing appropriate legislation to strengthen the financial system, developing institutional setup, strengthening bank supervision allowing market forces to operate in the financial market. Are suggested
The impact of financial liberalization on the Sri Lankan financial economy
(2015) Adikari, A.M.P.