In social & health sciences, many statistical procedures and estimation techniques rely on the underlying distributional assumption of normality of the data. Non-normality may lead to incorrect statistical inferences. This study evaluates the performance of selected normality tests on the stringency framework for the skewed alternative space. Stringency concept allows us to rank the tests uniquely. Bonett & Seier test (T_w) turns out to be the best statistics for slightly skewed alternatives and the Anderson-Darling (AD), Chen-Shapiro (CS), Shapiro-Wilk (W) and Bispo, Marques, & Pestana, (BCMR) statistics are the best choices for moderately skewed alternative distributions. Maximum loss of Jarque-Bera (JB) and its robust form (RJB), in terms of deviations from the power envelope, is greater than 50% even for large sample sizes which makes them less attractive in testing the hypothesis of normality against the moderately skewed alternatives. On balance, all selected normality tests except T_w and COIN performed exceptionally well against the highly skewed alternative space.

In social sciences, a plethora of studies utilize nominal data to establish the relationship between the variables. This, in turn, requires the correct use of correlation technique. The choice of correlation technique depends upon the underlying assumptions and power of the test of significance. The objective of the research is to explore the best measure of association for nominal data in terms of size, power and bias in estimation. Monte Carlo simulations reveal that the Phi and Pearson correlation statistics performs equally well in terms of size, power, and bias for naturally dichotomous variables. When both variables are artificially dichotomized, the Tetrachoric statistic has an edge in terms of bias to Pearson correlation statistic. If one variable is continuous and other is artificially dichotomized, the Biserial correlation measure turns out to be less biased as compared to Pearson statistic although both statistics exhibit similar power and size properties. If one variable is continuous and other is naturally dichotomized, it is hard to choose between the Point Biserial and Pearson correlation measures. Finally, if one variable is naturally dichotomous and other is artificially dichotomized, correlation coefficient V is compared with Pearson, Phi and Tetrachoric correlation techniques in terms of bias in estimate. The results indicate that the Tetrachoric statistic considerably overestimates the correlation value against non-normal distributions. Pearson and Phi correlation slightly underestimate the correlation value. In contrast, the correlation statistic V perform well.

It is well established in literature that the public debt and economic growth bear positive and non-linear relationship. However, in recent literature, evidence of no causal relationship is found when accounted for endogeneity in case of advanced economies (Panizza & Presbitero, 2014). Chudik, Mohaddes, Pesaran, & Raissi, (2017) analyse the data on forty countries and find no evidence of universally applicable threshold effect in the relationship between debt and growth. These advancements in the debt-growth literature provides the motivation to re-explore the relationship between public debt and economic growth under non-linearity and endogeneity in context of developing economies of South Asia including Pakistan, India, Bangladesh and Sri-Lanka for the period 1980-2014. There exists a significant, positive but nonlinear relationship between the public debt and economic growth for the selected set of developing countries when accounted for endogeneity and non-linearity. The negative association between the public debt and economic growth for SAARC region is found when the debt level is higher than 61% of GDP which is quite lower than developed economies (90% of GDP). Individual threshold levels for debt-to-GDP ratio divulge that Sri Lanka, Pakistan and India need to control their public borrowings as their current debt levels are higher and/or around the respective threshold levels.

Many countries have been facing the problem of bank insolvency across the globe. Asset deterioration is one of the main reasons for insolvency of banks. The objective of the paper is to ascertain the determinants of nonperforming loans (NPLs) in the banking sector of Pakistan for the period 2006-16. Other than the bank specific and macro variables proposed by the literature, the roles of weighted maturity and output gap are for the first time examined. We find significant impact of output gap on NPLs however weighted maturity has insignificant role in shaping the future NPLs. Bank specific drivers of NPLs include bank size and capital adequacy ratio.