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Book part
Publication date: 29 February 2008

Jennifer L. Castle and David F. Hendry

Structural models' inflation forecasts are often inferior to those of naïve devices. This chapter theoretically and empirically assesses this for UK annual and quarterly…

Abstract

Structural models' inflation forecasts are often inferior to those of naïve devices. This chapter theoretically and empirically assesses this for UK annual and quarterly inflation, using the theoretical framework in Clements and Hendry (1998, 1999). Forecasts from equilibrium-correction mechanisms, built by automatic model selection, are compared to various robust devices. Forecast-error taxonomies for aggregated and time-disaggregated information reveal that the impacts of structural breaks are identical between these, helping to interpret the empirical findings. Forecast failures in structural models are driven by their deterministic terms, confirming location shifts as a pernicious cause thereof, and explaining the success of robust devices.

Details

Forecasting in the Presence of Structural Breaks and Model Uncertainty
Type: Book
ISBN: 978-1-84950-540-6

Article
Publication date: 1 January 1980

Roberta A. Scull and Barbara S. Kavanaugh

Bobbie Scull's bibliography of federal government bibliographies was begun in 1971 as an annual informational publication primarily intended for the faculty at Louisiana…

Abstract

Bobbie Scull's bibliography of federal government bibliographies was begun in 1971 as an annual informational publication primarily intended for the faculty at Louisiana State University. Later she distributed it to libraries all over the state of Louisiana. In 1973 RSR began to publish these lists on an annual basis. This is the fourth such appearance. In the meantime these bibliographies were cumulated and published in two volumes: Bibliography of U.S. Government Bibliographies 1968–73 and 1974–76. (Pierian Press, 1975, 1979). RSR is proud to continue the annual supplements which are now computer produced at LSU. Although this supplement appears in Volume 8:1 (1980) in the future they will appear in the final issue of the year.

Details

Reference Services Review, vol. 8 no. 1
Type: Research Article
ISSN: 0090-7324

Book part
Publication date: 13 May 2019

Amit Majumder, Megnath Routh and Dipayan Singha

One of the noteworthy developments in the world economy is the cryptocurrency in general and the bitcoin in particular. Although several types of cryptocurrency are in…

Abstract

One of the noteworthy developments in the world economy is the cryptocurrency in general and the bitcoin in particular. Although several types of cryptocurrency are in operation in the current digital economy, the most prevalent is the bitcoin, which was launched formally in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. The value of bitcoin has increased to such an extend that it reached 19.7 billion US dollars by January 2, 2018 (Statista, 2018). As the bitcoin price touches a new high day by day, various terrorist organizations are using this cryptocurrency to anonymously finance their grotesque terrorist activities around the world by bypassing the surveillance mechanism of the banking system of the respective countries. Against this backdrop, this chapter aims to understand the mechanism of cryptocurrencies in general and the bitcoin in particular. Finally, it also endeavors to identify the trend of the bitcoin economy and its impact on nefarious activities in general and terrorism financing in particular. It has been revealed from the study that cryptocurrency economy has become so popular across the world that it has created an alternative virtual economy devoid of regulations from a specific country or a group of countries. By using vector error correction model (VECM), it had been observed that there exists a statistically significant long-run association between terrorist incidences and bitcoin transaction/circulation in the panel of 12 countries for 2010–2016. However, there is a huge concern over its way of operation and its unholy nexus with terrorism financing.

Details

The Impact of Global Terrorism on Economic and Political Development
Type: Book
ISBN: 978-1-78769-919-9

Keywords

Book part
Publication date: 1 March 2021

Ashima Goyal and Prashant Parab

The authors model heterogeneity of inflation expectations across Indian households using the Inflation Expectations Survey of Households data set. Using Carroll-type…

Abstract

The authors model heterogeneity of inflation expectations across Indian households using the Inflation Expectations Survey of Households data set. Using Carroll-type epidemiological models and pooled cross sectional analyses, the authors find that women, homemakers, older people and Tier 2 and 3 city dwellers tend to have higher inflation expectations compared to their counterparts. In the epidemiological model-based analysis, these very cohorts display higher speed of adjustment to news. Overall higher relative adjustment speeds point to the significance of central bank communications.

Book part
Publication date: 1 July 2015

George A. Waters

This chapter examines a class of interest rate rules that respond to public expectations and to lagged variables. Varying levels of commitment correspond to varying…

Abstract

This chapter examines a class of interest rate rules that respond to public expectations and to lagged variables. Varying levels of commitment correspond to varying degrees of response to lagged output and targeting of the price level. If the response rises (unintentionally) above the optimal level, the outcome deteriorates severely. Hence, the optimal level of commitment is sensitive to the method of expectations formation and partial commitment is the robust, optimal policy. The policymaker should adjust the price level toward a target, but complete adjustment is neither necessary nor desirable.

Details

Monetary Policy in the Context of the Financial Crisis: New Challenges and Lessons
Type: Book
ISBN: 978-1-78441-779-6

Keywords

Article
Publication date: 6 August 2021

Aneeka Kanwal

This paper aims to present a simple behavioural explanation of the prohibition of speculation in Islamic finance.

Abstract

Purpose

This paper aims to present a simple behavioural explanation of the prohibition of speculation in Islamic finance.

Design/methodology/approach

This paper proposes a theoretical model that describes how investors from low income strata of the society may be prone to make sub-optimal decisions when they compare their outcome from a speculative trading activity to that of the counterparty to the trade and perceive inequity to exist.

Findings

When individuals from low income strata of the society compare their current situation with the average income of the society, they perceive themselves to be in a loss. This creates a loss frame within which they then evaluate all future outcomes. When such individuals invest in speculative trading activities and incur a loss, they compare their outcome from the trade to that of the counterparty to the trade. As speculative trades are a zero sum game, the counterparty makes an equivalent gain from the trade. Thus, the comparison leads to a perception of inequity. This perception of inequity is aggravated by the loss frame within which the investor is operating. The aggravated inequity aversion may then motivate the investor to make further sub-optimal decisions like repeated speculative trading activities. The Islamic prohibition on speculative trading activities may serve to protect low income investors from entering into such cycles of sub-optimal decisions.

Originality/value

This paper offers a unique explanation of why day trading and short selling may be prohibited in Islamic capital markets.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 15 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 28 June 2021

Dimitrios Anastasiou and Stelios Giannoulakis

This study investigates which expectation formation mechanism governs Eurozone firms regarding their expectations on external finance availability.

Abstract

Purpose

This study investigates which expectation formation mechanism governs Eurozone firms regarding their expectations on external finance availability.

Design/methodology/approach

In this study, we link consecutive surveys from the Survey on the Access to Finance of Enterprises to bring new evidence on how non-financial corporations shape their expectations on external finance availability.

Findings

In line with the past literature, we demonstrate that the data reject the Rational Expectations hypothesis, and we find evidence in favor of the Adaptive Expectation mechanism.

Originality/value

This is the first study studying firms' expectations of external finance availability, implementing survey data of firms' expectations from the SAFE database on a country level. The formation of firm expectations is vital in directing policymakers in designing appropriate monetary policies, as both the employment and inflation targets of central banks around the world are highly dependent on the firm-level decision process.

Details

Journal of Economic Studies, vol. 49 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 9 October 2017

Jörgen Hellström, Rickard Olsson and Oscar Stålnacke

The purpose of this paper is to measure individual investors’ expectations of risk and return and to evaluate different expectation measures.

Abstract

Purpose

The purpose of this paper is to measure individual investors’ expectations of risk and return and to evaluate different expectation measures.

Design/methodology/approach

The authors measure individual investors’ expectations of risk and return regarding an index fund and two stocks using survey data on a random sample of individual investors in Sweden. The survey contains three different return and four different risk expectation measures. To evaluate the different expectation measures, three different evaluation perspectives are considered.

Findings

The risk expectations obtained from the different measures are positively correlated across respondents, but their average magnitudes differ considerably across measures. The return expectations are also positively correlated, and their magnitudes also differ, but to a lesser extent. Consequently, the same individual can express risk expectations that either underestimate or overestimate the forward risk, depending on the measure that is used. The variations in the expectations mainly relate to differences in the responses to the questions underlying the different measures, rather than to the methods used to obtain the expectations. The results from the evaluation of the measures indicate that the expectation measure proposed by Dominitz and Manski (2011) is the only measure for which it is possible to distinguish between individuals’ expectations, using all three of the evaluation perspectives.

Originality/value

This is, to the best of the authors’ knowledge, the first paper that evaluates different survey measures of individual investors’ expectations of risk and return.

Details

Review of Behavioral Finance, vol. 9 no. 3
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 7 August 2017

Rexford Abaidoo

This study aims to examine short- and long-run effects of specific macroeconomic conditions on risk premium estimates on lending.

Abstract

Purpose

This study aims to examine short- and long-run effects of specific macroeconomic conditions on risk premium estimates on lending.

Design/methodology/approach

Empirical estimates are based on error correction and autoregressive distributed lag models.

Findings

The results suggest that, in the short run, inflation expectations, recession expectations and actual inflationary conditions tend to have a significant impact on risk premium estimates; in the long run, however, only inflation expectations and recession expectations are significant in risk premium estimates on lending.

Originality/value

This study examines how specific conditions of uncertainty and expectations influence variability in risk premium estimates on lending in the US economy.

Article
Publication date: 8 November 2018

Bryan C. McCannon

The purpose of this paper is to explore the impact that minimum quality standards have on product quality when entrepreneurial innovation is considered.

Abstract

Purpose

The purpose of this paper is to explore the impact that minimum quality standards have on product quality when entrepreneurial innovation is considered.

Design/methodology/approach

The author develops a game-theoretic model. It is a standard vertical product differentiation model, but incorporates a minimum quality standard and uncertain entrepreneurial innovation.

Findings

While the minimum quality standard increases the expected quality of the low-quality product, under reasonable circumstances the expected quality of the high-quality good decreases. Thus, average quality can decrease with regulation intended to increase product quality.

Research limitations/implications

Past research on minimum quality standards does not consider its impact on entrepreneurial effort when their innovation investments lead to uncertain outcomes.

Practical implications

Minimum quality standard regulation can have counterproductive impacts if the impact on entrepreneurs is not considered. The regulation can disincentivize entrepreneurs leading to lower quality products.

Social implications

Regulation can be welfare reducing.

Originality/value

This paper is the first to incorporate entrepreneurial innovation into a product quality model to explore the impact of minimum quality standard regulation.

Details

Journal of Entrepreneurship and Public Policy, vol. 8 no. 2
Type: Research Article
ISSN: 2045-2101

Keywords

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