Table 7 Fiscal and Monetary policy interaction effects on the service sector performance.

Speed of adjustment

ARDL (1 0 0 0 0 0 0)

 ECT

− 0.432***

(0.152)

− 0.345**

(0.159)

− 0.445***

(0.071)

− 0.397***

(0.077)

Longrun

 ln Capital

0.557***

(0.080)

0.005

(0.125)

− 0.428*

(0.205)

0.676**

(0.254)

 ln Labour

− 0.226***

(0.047)

− 0.014

(0.103)

0.775*

(0.319)

− 0.572**

(0.194)

 Growth

0.002

(0.002)

0.015**

(0.007)

0.017

(0.002)

− 0.003

(0.009)

 Inflation

− 0.002**

(0.001)

− 0.003*

(0.001)

− 0.000

(0.001)

0.001

(0.003)

 ln Undervaluation

3.414**

(1.396)

7.878***

(1.815)

0.191*

(0.064)

0.808**

(0.767)

 lnFP

1.325***

(0.354)

0.352**

(0.227)

 ln Undervaluation * lnFP

− 1.314**

(0.510)

− 1.015**

(0.985)

 lnMP

2.092***

(0.520)

1.479**

(0.209)

 ln Undervaluation * lnMP

− 2.448***

(0.658)

− 1.300**

(0.666)

Shortrun

 ln Capital

− 0.109***

(0.021)

− 0.036

(0.104)

− 0.428*

(0.122)

− 0.537*

(0.206)

 ln Labour

0.056

(0.349)

− 0.237*

(0.139)

0.775*

(0.306)

− 1.028*

(0.514)

 Growth

− 0.002

(0.002)

− 0.004*

(0.002)

− 0.017

(0.002)

− 0.002*

(0.004)

 Inflation

0.001

(0.001)

− 0.000

(0.001)

− 0.000

(0.003)

− 0.001

(0.001)

 ln Undervaluation

− 0.362

(1.410)

− 7.120

(8.199)

− 0.352

(1.091)

− 0.789

(0.711)

 ln Undervaluation * lnFP

− 0.165

(0.486)

− 0.340

(0.338)

 lnFP

0.067

(0.543)

0.522

(0.425)

 ln Undervaluation * lnMP

− 1.880

(2.016)

− 1.128

(0.360)

 lnMP

2.339

(2.561)

1.040

(0.138)

Constant

− 0.292***

(0.105)

− 0.995**

(0.448)

− 0.766

(0.735)

1.305*

(0.677)

Observations

104

104

104

104

Diagnostic tests

 Hausman test (χ²)

7.17

[0.411]

7.81

[0.349]

− 

− 

− 

− 

 Wooldridge Autocorrelation test

24.729 [0.1561]

20.925 [0.1960]

 Normality test

2.19 [0.3346]

1.32 [0.5173]

 Heteroskedasticity test

25.09 [0.0110]

21.41 [0.091]