http://repo.lib.jfn.ac.lk/ujrr/handle/123456789/88 2026-06-23T18:29:07Z 2026-06-23T18:29:07Z Neruja, N. Yadhurshini, S. http://repo.lib.jfn.ac.lk/ujrr/handle/123456789/12722 2026-06-19T06:44:19Z 2026-01-01T00:00:00Z

Title: Dynamic Relationship Between Energy Consumption and Economic Growth Incorporating a Structural Break: An Empirical Study of Sri Lanka Authors: Neruja, N.; Yadhurshini, S. Abstract: The interplay of several severe internal and external shocks has posed substantial challenges to the stability of the Sri Lankan economy. Therefore, this study investigates the presence of structural breaks in the relationship between energy consumption and economic growth in Sri Lanka, using annual data from 1990 to 2023. In addition to energy consumption and economic growth, gross fixed capital formation and labour force participation are incorporated as key explanatory variables. The Chow test is applied to identify structural breaks, and the VAR Granger causality test is used to examine the direction of causality between the variables. Also, the ARDL bound test is used to identify the cointegration relationship between energy consumption and economic growth, incorporating structural breaks. The Chow test results indicate the presence of structural breaks in 2004, 2008, 2020, and 2022 periods. These breakpoints align with major economic and environmental shocks, including the 2004 Indian Ocean tsunami, the 2008 global financial crisis, the COVID-19 pandemic, and the recent economic crisis in Sri Lanka. The results of the Zivod-Andrews test indicate that economic growth, energy consumption, and labour force participation are stationary variables in first difference I(1). On the other hand, Gross fixed capital formation is found to be stationary at level I(0). The VAR Granger causality test shows no shortterm causal relationship between energy consumption and economic growth in the absence of structural breaks. However, a short-run unidirectional causal relationship exists when considering structural breaks. The empirical findings show that the variables in the study are cointegrated, indicating the existence of a long-run relationship among them. The ARDL bounds test shows a positive long-run impact of energy consumption on economic growth; this relationship does not hold in the short run. Notably, when structural breaks are considered, energy consumption negatively impacts economic growth in the short run, while its long-term impact becomes statistically insignificant. These findings suggest that external and internal shocks have disrupted the energy growth nexus in Sri Lanka. This study offers new insights for policymakers to account for structural breaks in policy formulation to address the short-run adverse impact of energy consumption on economic growth.

2026-01-01T00:00:00Z Neruja, N. Shalini, M. http://repo.lib.jfn.ac.lk/ujrr/handle/123456789/12721 2026-06-19T06:37:23Z 2026-01-01T00:00:00Z

Title: A Comparative Analysis of E-GARCH and MIDAS Models for Stock Price Prediction in Sri Lanka Authors: Neruja, N.; Shalini, M. Abstract: Stock market price fluctuations, driven by internal and external uncertainties, can undermine investor confidence and complicate investment decision-making. This study compares the forecasting accuracy of the Exponential Generalised Autoregressive Conditional Heteroskedasticity (E-GARCH) and Mixed Data Sampling (MIDAS) models in predicting the All Share Price Index (ASPI) in Sri Lanka. The analysis was conducted using EViews and Python software. Monthly ASPI data and quarterly Standing Lending Facility Rate (SLFR) data, covering January 2018 to December 2024, were obtained from the Colombo Stock Exchange and the Central Bank of Sri Lanka. Stationarity was assessed using the ADF and KPSS tests, and all variables were found to be integrated of order one (I(1)). The E-GARCH model produced a forecasted return of only 0.39%, whereas the MIDAS model predicted an average return of 4.65% for the ASPI from January to December 2025. Notably, the MIDAS forecast aligned with the actual return range of 3% to 5% recorded from January to May 2025, highlighting its practical relevance. Forecast evaluation further confirms this result, as the MIDAS model achieved a low MAPE of 2.30%, with MAE and RMSE below 1%, indicating high predictive accuracy. In contrast, the EGARCH model generated comparatively higher forecast errors, reflecting weaker performance. Overall, the findings demonstrate that the MIDAS model outperforms the E-GARCH model in forecasting ASPI values. These results provide valuable implications for investors, financial analysts, and policymakers by emphasising the advantages of mixed-frequency forecasting in enhancing investor confidence, supporting informed policy decisions, and promoting sustainable economic growth in Sri Lanka.

2026-01-01T00:00:00Z Neruja, N. Gayathiri, B. http://repo.lib.jfn.ac.lk/ujrr/handle/123456789/12720 2026-06-19T06:31:00Z 2026-01-01T00:00:00Z

Title: The Dynamic Relationship between General, Food and Non-food Price Volatility in Sri Lanka Authors: Neruja, N.; Gayathiri, B. Abstract: Price volatility has become a critical macroeconomic challenge in Sri Lanka, as persistent fluctuations in food and non-food prices and exchange rates continue to intensify inflationary pressures and erode household welfare. This study examines the dynamic relationship between food price volatility and general price volatility in Sri Lanka, while explicitly evaluating Walsh’s (2011) three key assumptions, namely that food inflation is sustained, persistent, and has secondround effects. Assessing these assumptions enables the study to determine whether excluding food price from core inflation is appropriate in the Sri Lankan context. The analysis begins with the Pairwise Granger causality test to identify the direction of predictive relationships among the variables. Based on this, the ARDL bounds testing approach and error correction models are employed to capture both long-run and short-run dynamics, using monthly data from January 2014 to May 2025 obtained from the Department of Census and Statistics (DCS) and the Central Bank of Sri Lanka (CBSL). In addition, Impulse Response Functions (IRF) and Variance Decomposition analyses are used to trace the transmission of shocks and to quantify the relative importance of food, non-food, and exchange rate volatility to general price instability over time. The Bai– Perron multiple breakpoint tests identify several structural shifts and confirm a mix of I(0) and I(1) processes, validating the use of the ARDL framework. Empirical results reveal a strong long-run cointegrating relationship between food price volatility and general price volatility, indicating that food price shocks exert a persistent and significant influence on general price volatility. The Impulse Response Function (IRF) and Variance Decomposition analyses further show that food price volatility is the most influential driver of general price fluctuations, accounting for nearly 19% of the variation in the final forecast horizon. Overall, the findings identify food price volatility as the central determinant of price instability in Sri Lanka and provide empirical support for Walsh’s (2011) argument that excluding food from core inflation is inappropriate in economies where food prices are structurally persistent. These findings highlight the need for policies aimed at stabilising food markets, safeguarding vulnerable households, and restructuring core inflation measures to capture true inflationary pressures more accurately.

2026-01-01T00:00:00Z Paul Rohan, J.C. http://repo.lib.jfn.ac.lk/ujrr/handle/123456789/12719 2026-06-17T05:49:54Z 2026-01-01T00:00:00Z

Title: Dignity at Work: Integrating Christian Social Teachings and Sustainable Development Goals in the Labour Landscape of Sri Lanka Authors: Paul Rohan, J.C. Abstract: This article explores the concept of ̳work with dignity ̳ in Sri Lanka through an interdisciplinary integration of Christian Social Teaching (CST) and the United Nations Sustainable Development Goals (SDGs), particularly SDG 8.5, which targets full and productive employment, decent work, and equal pay for all. Drawing on foundational CST encyclicals such as Rerum Novarum (1891), Laborem Exercens (1981), and Fratelli Tutti (2020), it posits work as a divine vocation that affirms human dignity, critiques exploitative systems, and promotes solidarity, subsidiarity, and the common good. In Sri Lanka ̳s labour landscape - marked by colonial legacies, ethnic conflicts, the Covid-19 pandemic, the 2022 economic crisis, and persistent inequities in plantations, garments, and informal sectors - these principles address structural challenges like gender wage gaps (20 - 30%), informal employment (over 60%), and minority discrimination. By synthesising theological ethics with empirical data and International Labour Organization (ILO) frameworks, the analysis identifies convergences between CST ̳s moral imperatives and SDG 8.5 ̳s policy targets, proposing pathways for ethical reforms: community cooperatives for full employment, rights- based protections for decent work, and justice-oriented audits for equal pay. This holistic approach transcends economic metrics, envisioning labour as integral to human flourishing. Ultimately, the integration offers Sri Lanka a transformative agenda, enriching SDG implementation with CST ̳s prophetic vision to foster just, sustainable economies rooted in the inherent worth of every worker.

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