Essay Sample on Causal Relationship in the Context of ASEAN

Introduction

This paper explores the causal relationship that exists between economic growth and air transport in the context of ASEAN (Association of Southeast Asian Nations). Economic growth and air transportation services interrelate with each other via a channel of mutual causality relationship which is myriad in nature. Air transport contributes to employment creation in the aviation industry and initiates broader socio-economic assistance which aids in the creation of activities which finally impact on the economy. The existence of the air transportation services increases the cycle time of economic activities as well as the scope in these nations.

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The ASEAN economic activities trigger the demand for passenger travel and freight and this results in the increase in the demand for air transportation services. This generates a causal feedback relationship which brings a correlation analysis between the Gross Domestic Product (GDP) and the amount of air travel in these nations. (Hakim & Merkert, 2016) The GDP and number of air passengers have been increasing steadily in the past thirty years and thus providing a considerable variability in the growth rates in these nations. This showcases the variability between the interaction of economic activities and air transportation. The objective of this research paper is to describe and identify the various mechanisms which influence the causal feedback relationship between air transportation and economic activity. The paper goes on to highlight the significance of the government's in these nations in extrapolating the relationship between economic growth and air transportation. The data that is to be used is the one from the World Bank for the ASEAN countries.

Nowadays, the literature lacks an elaborate comprehensive of elucidating the relationship which exists between economic activity and air transportation since analysis is usually done on a case to case and eventually leaving out some interaction effects between the said variables. There are two crucial types of studies which are usually done to assess the effect of air transportation. The initial ones are the studies which assess the direct, indirect and the influence of employment in the aviation sector. The direct influence is the employment in the aviation industry, and indirect impact is the employment in industries which fall below the aviation supply chain in these nations. The other studies are those that try to evaluate a desirable catalyst which finally impacts on the air transportation. (Hakim & Merkert, 2016) The causal feedback relationship is exhibited from the impact of air transportation which taken to be the total effect on employment and income produced the economic activities and which lies with the existence of air transportation services.

Problem Statement

Air transportation allows an economic activity by giving a connection between the economies in the ASEAN countries. An economy may constitute of a region, country or a particular city depending on the scope of analysis. In this category, an economy comprises of the countries which fall under the ASEAN (Association of Southeastern Asian Nations). The resultant effect on air transportation is the total net income produced from the economic activities and the impact of employment which are subject to the existence of air transportation services. The impact on air transportation is necessitated by the flows of cargos and passengers which occurs in these nations. The aggregate enabling effect on these nations is defined as that generated by cargo and passenger flows between these nations and from other parts of the world. (Saboori & Sulaiman, 2013)

Air Transportation leads to flows which are presumed to be those flows that in a direct way impact these ASEAN countries. The Enabled Flows usually affect a given number of attributes that categorize these nations. These economic attributes comprise of factor conditions, made up of labor, land, infrastructure, and institutions and ultimately the natural resources. Air transportation has dominated in these nations for many years, and therefore the causal relationship between economic activity and air transportation is on a positive trend. The air transportation facilities have been categorized as being on top notch, and this brings out a series of a positive correlation between the two variables under study. Air transportation has allowed easy access of the tourism among these nations since activities in these nations are usually controlled. The paper will try to explain the causal relationship from the economic activities which have been triggered by the availability of air transportation services. The specific research problem is to establish the continued economic progress of this nation and the reason behind the high demand for air transportation as compared to the rest of the world.

Conclusion

The demand for air transportation has been on the rise in these nations as sometimes the demand exceeds the number of airlines operating in the ASEAN countries. This upsurge in demand raises a question on the need for an advanced causal relationship to solve the overrising demand. There could also be the need for more staff to be employed so that the existing gap is properly handled. Employment level will rise these nations will thrive as compared with the rest of the countries across the world.(Saboori & Sulaiman, 2013) The research problem thus focuses on the desire to create a positive causal feedback relationship between economic activity and air transportation when there is the availability of air transportation services.

References

Hakim, M. M., & Merkert, R. (2016). The causal relationship between air transport and economic growth: Empirical evidence from South Asia. Journal of Transport Geography, 56, 120-127.

Saboori, B., & Sulaiman, J. (2013). CO2 emissions, energy consumption and economic growth in Association of Southeast Asian Nations (ASEAN) countries: A cointegration approach. Energy, 55, 813-822.