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Article
Publication date: 5 October 2020

Phuong V. Nguyen

The primary purpose of this paper is to investigate the sources of the business cycle fluctuations in Vietnam. To this end, the author develops a small open economy New…

Abstract

Purpose

The primary purpose of this paper is to investigate the sources of the business cycle fluctuations in Vietnam. To this end, the author develops a small open economy New Keynesian dynamic stochastic general equilibrium (SOE-NK-DSGE) model. Accordingly, this model includes various features, such as habit consumption, staggered price, price indexation, incomplete exchange-rate pass-through (ERPT), the failures of the law of one price (LOOP) and the uncovered interest rate parity. It is then estimated by using the Bayesian technique and Vietnamese data 1999Q1–2017Q1. Based on the estimated model, this paper analyzes the sources of the business cycle fluctuations in this emerging economy. Indeed, this research paper is the first attempt at developing and estimating the SOE-NK-DSGE model with the Bayesian technique for Vietnam.

Design/methodology/approach

A SOE-NK-DSGE model—Bayesian estimation.

Findings

This paper analyzes the sources of the business cycle fluctuations in Vietnam.

Originality/value

This research paper is the first attempt at developing and estimating the SOE-NK-DSGE model with the Bayesian technique for Vietnam.

Details

Journal of Economic Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 2 May 2008

Paul Dettwiler

The purpose of this paper is to conceptualise a dynamic model on the impact on office space and its boundaries of growth firms due to studied factors subject to…

Abstract

Purpose

The purpose of this paper is to conceptualise a dynamic model on the impact on office space and its boundaries of growth firms due to studied factors subject to fluctuations of business cycles.

Design/methodology/approach

Theories are based on a literature study on space relation to business cycles, entrepreneurial theories and the service‐oriented society of today. The data are collected from an extensive study of pre‐classified growth firms from all major business sectors in Sweden during the period 1998‐2003, which is studied as an upturn and a downturn period. The study is related to a questionnaire distributed to entire Sweden of 967 listed firms where the response rate was 40 per cent. Investigated factors are: fluctuations of GDP, outsourcing events of core business, events of mergers and acquisitions (Ms&As), creation of subsidiaries, proportion of office workers and temporary staff in offices.

Findings

The detected significant correlations of the survey give a platform for a model that indicates that opposite but various forces due to business cycles seem to adjust the space after the events of outsourcing or M&A.

Research limitations/implications

The study could fruitfully be developed theoretically with inclusion of a transaction cost theory and economics encompassing the society in general.

Practical implications

Significant correlations that are found could certainly function as an input for the various stakeholders in the provision of office spaces of growth firms during fluctuations of GDP and market growth.

Originality/value

An extensive survey is a base for a conceptualisation of the dynamics of office space related to studied factors.

Details

Journal of Facilities Management, vol. 6 no. 2
Type: Research Article
ISSN: 1472-5967

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Article
Publication date: 4 August 2020

Peterson K. Ozili

This study aims to investigate the relationship between financial inclusion and the business cycle.

Abstract

Purpose

This study aims to investigate the relationship between financial inclusion and the business cycle.

Design/methodology/approach

Regression methodology is used to analyze the association between financial inclusion and the business cycle.

Findings

Using regression estimation, the findings reveal that the level of savings and the number of active formal account ownership are pro-cyclical with fluctuations in the business cycle. Also, savings by adults particularly for women and poor people declines during recessionary periods while the number of active formal account ownership declines for the adult population especially for women during recessionary periods. The findings also reveal that not all indicators of financial inclusion are pro-cyclical with fluctuating business cycles.

Practical implications

The implication of this observed pro-cyclical effect is that individuals and households will exit the formal financial sector during a recession, as banks become unwilling to lend money to individuals and households during bad times and this will lead to financial exclusion and vice versa. Policymakers seeking to increase the level of financial inclusion in their countries should focus on the timing of financial inclusion policies along the business cycle as the findings suggest that it might be more difficult to achieve financial inclusion objectives during recessions or periods of economic downturns.

Originality/value

The current debate on financial inclusion pays little attention to whether financial inclusion is pro-cyclical with the fluctuating business cycle. This study explores the association between financial inclusion and the business cycle.

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Book part
Publication date: 8 March 2011

Bertrand Candelon and Norbert Metiu

This chapter sheds new light on the linkages between stock market fluctuations and business cycles in Asia. It shows that at cyclical frequencies stock markets lead…

Abstract

This chapter sheds new light on the linkages between stock market fluctuations and business cycles in Asia. It shows that at cyclical frequencies stock markets lead business cycles by six months on average. China, Korea, and Taiwan constitute exceptions, as their real and stock market cycles are contemporaneously synchronized. The low level of maturity of these markets offers a potential explanation of this outcome. Furthermore, we find that the linkage also holds during phases of cyclical upswing and downturn, with the exception of China, where the financial market lags behind industrial production during expansions. Finally, for most of the countries (except Thailand and Malaysia), the linkage is also robust to the presence of financial crises.

Details

The Evolving Role of Asia in Global Finance
Type: Book
ISBN: 978-0-85724-745-2

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Book part
Publication date: 13 May 2019

Rosaria Rita Canale and Rajmund Mirdala

The role of money and monetary policy of the central bank in pursuing macroeconomic stability has significantly changed over the period since the end of World War II…

Abstract

The role of money and monetary policy of the central bank in pursuing macroeconomic stability has significantly changed over the period since the end of World War II. Globalization, liberalization, integration, and transition processes generally shaped the crucial milestones of the macroeconomic development and substantial features of economic policy and its framework in Europe. Policy-driven changes together with variety of exogenous shocks significantly affected the key features of macroeconomic environment on the European continent that fashioned the framework and design of monetary policies.

This chapter examines the key basis of the central bank’s monetary policy on its way to pursue and preserve the internal and external stability of the purchasing power of money. Substantial elements of the monetary policy like objectives and strategies are not only generally introduced but also critically discussed according to their accuracy, suitability, and reliability in the changing macroeconomic conditions. Brief overview of the Eurozone common monetary policy milestones and the past Eastern bloc countries’ experience with a variety of exchange rate regimes provides interesting empirical evidence on origins and implications of vital changes in the monetary policy conduction in Europe and the Eurozone.

Details

Fiscal and Monetary Policy in the Eurozone: Theoretical Concepts and Empirical Evidence
Type: Book
ISBN: 978-1-78743-793-7

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Article
Publication date: 14 May 2018

Foluso Abioye Akinsola and Sylvanus Ikhide

This paper aims to examine the relationship between commercial bank lending and business cycle in South Africa. This paper attempts to know whether commercial bank lending…

Abstract

Purpose

This paper aims to examine the relationship between commercial bank lending and business cycle in South Africa. This paper attempts to know whether commercial bank lending in South Africa is procyclical.

Design/methodology/approach

The model assumed that the lending behaviour is related to the business cycle. In this study, vector error correction model (VECM) is used to capture the relationship between bank lending and business cycle to accurately elicit the macroeconomic long-run relationship between business cycle and bank lending, as some banks might slow down bank lending due to some idiosyncratic factors that are not related to the downturn in the economy. This paper uses data from South African Reserve Bank for the period of 1990-2015 using VECM to understand the extent to which business cycle fluctuation can affect credit crunch in the financial system. The Johansen cointegration approach is used to ascertain whether there is indeed a long-run co-movement between credit growth and business cycle.

Findings

Results from the VECM show that there are significant linkages among the variables, especially between credit to gross domestic product (GDP) and business cycle. The influence of business cycle is seen vividly after a period of four to five years, where business cycle explains 20 per cent of the variation in the credit to GDP. South African banks tend to change their lending behaviour during upturns and downturns. This result further confirms the assertion in theory that credit follows business cycle and can amplify credit crunch. The result shows that in the long run, fluctuations in the business cycle can influence the credit growth in South Africa.

Research limitations/implications

The impulse analysis result shows that the impact of business cycle shock is very persistent and lasting. This also demonstrates that the shocks to the business cycle result have a persistent and long-lasting impact on credit. This study finds that commercial bank lending in South Africa is procyclical. It is suggested that the South African economy needs forward-looking policies that will mitigate the flow of credit to the real sector and at the same time ensure financial stability.

Originality/value

Most research papers rarely distinguish between the demand side and supply side of credit procyclicality. This report is presented to develop an econometric model that will examine demand side procyclicality. This study adopts more realistic and novel methods that will help in explaining the relationship between bank lending and business cycle in South Africa, especially after the global financial crisis. This report is presented with a concise and detailed analysis and interpretation.

Details

Journal of Financial Regulation and Compliance, vol. 26 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

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Book part
Publication date: 20 October 2015

Mohammad Shamsuddoha

Contemporary literature reveals that, to date, the poultry livestock sector has not received sufficient research attention. This particular industry suffers from…

Abstract

Contemporary literature reveals that, to date, the poultry livestock sector has not received sufficient research attention. This particular industry suffers from unstructured supply chain practices, lack of awareness of the implications of the sustainability concept and failure to recycle poultry wastes. The current research thus attempts to develop an integrated supply chain model in the context of poultry industry in Bangladesh. The study considers both sustainability and supply chain issues in order to incorporate them in the poultry supply chain. By placing the forward and reverse supply chains in a single framework, existing problems can be resolved to gain economic, social and environmental benefits, which will be more sustainable than the present practices.

The theoretical underpinning of this research is ‘sustainability’ and the ‘supply chain processes’ in order to examine possible improvements in the poultry production process along with waste management. The research adopts the positivist paradigm and ‘design science’ methods with the support of system dynamics (SD) and the case study methods. Initially, a mental model is developed followed by the causal loop diagram based on in-depth interviews, focus group discussions and observation techniques. The causal model helps to understand the linkages between the associated variables for each issue. Finally, the causal loop diagram is transformed into a stock and flow (quantitative) model, which is a prerequisite for SD-based simulation modelling. A decision support system (DSS) is then developed to analyse the complex decision-making process along the supply chains.

The findings reveal that integration of the supply chain can bring economic, social and environmental sustainability along with a structured production process. It is also observed that the poultry industry can apply the model outcomes in the real-life practices with minor adjustments. This present research has both theoretical and practical implications. The proposed model’s unique characteristics in mitigating the existing problems are supported by the sustainability and supply chain theories. As for practical implications, the poultry industry in Bangladesh can follow the proposed supply chain structure (as par the research model) and test various policies via simulation prior to its application. Positive outcomes of the simulation study may provide enough confidence to implement the desired changes within the industry and their supply chain networks.

Details

Sustaining Competitive Advantage Via Business Intelligence, Knowledge Management, and System Dynamics
Type: Book
ISBN: 978-1-78560-707-3

Keywords

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Article
Publication date: 6 August 2020

Todd Kuethe and Todd Hubbs

This study examines the relationship between economic fluctuations and financial distress in the US agricultural sector, which is associated with a large degree of…

Abstract

Purpose

This study examines the relationship between economic fluctuations and financial distress in the US agricultural sector, which is associated with a large degree of financial instability.

Design/methodology/approach

The authors developed a parsimonious model of economic fluctuations in the US agricultural sector. The authors used statistical filter methods to identify the co-movement in cyclical fluctuations in real, cumulative growth rates in farm real estate values, farm sector debt and leverage.

Findings

The proposed model closely approximated the financial evolution of the US agricultural sector between 1960 and 2018. In addition, the authors proved that the proposed model is an early warning indicator of farm loan delinquencies and farm bankruptcies.

Originality/value

This study exploits recent advances in economic theory and empirical macroeconomic modeling to develop a model that is a robust predictor of financial distress in the agricultural sector. Further, the authors demonstrate that the policy interventions following the 1980s farm financial crisis demonstrate the likely long-run economic response to the policies enacted following the 2008 financial crisis.

Details

Agricultural Finance Review, vol. 81 no. 1
Type: Research Article
ISSN: 0002-1466

Keywords

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Article
Publication date: 8 April 2014

Lien Lamey

The aim of this paper is to study the relationship between the popularity of discount stores and the aggregate business cycle: Does discounters' market share go up during…

Abstract

Purpose

The aim of this paper is to study the relationship between the popularity of discount stores and the aggregate business cycle: Does discounters' market share go up during economic contractions and go down during economic expansions? Does the aggregate business cycle contribute to the long-term growth of discounters' success? Does the relationship between discounters and the economy differ across discounter types, namely hard versus soft discounters?

Design/methodology/approach

The study will consider the relationship between discounters' market share and the aggregate economy between 1991 and 2008 for 15 Western European countries. Moreover, aggregated data is provided for the Western European region as a whole, which distinguishes hard from soft discounters' share. Recent time-series techniques are used to disentangle the temporary versus permanent effects of economic contractions on discounters' share.

Findings

The aggregate business cycle induces temporary upward and downward swings in discounters' market share. Moreover, part of the increase in discounters' share during an economic contraction remains beyond the contraction, resulting in a permanent boost in discounters' popularity. Same substantive findings are found for each discount type (i.e. hard and soft).

Practical implications

In economic contraction years the growth rate of both hard and soft discounters accelerates, leaving permanent scars on the performance levels of traditional retailers. Discounters should try to further enhance their increased popularity when the economy turns sour. Traditional retailers, on the other hand, should try to prevent consumers from switching to discounters during contractions. Future research should explore the strategies that are called for in order to do this.

Originality/value

Discounters are the fastest growing grocery format in Europe. Traditional retailers can no longer afford to ignore them. As such, a better understanding of the drivers of this growth is called for. This study highlights one of the potential drivers, namely the economic climate, a driver that is widely discussed in the business press with substantial implications for grocery channel management.

Details

European Journal of Marketing, vol. 48 no. 3/4
Type: Research Article
ISSN: 0309-0566

Keywords

Abstract

Details

Further Documents from F. Taylor Ostrander
Type: Book
ISBN: 978-0-76231-354-9

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