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This study aims to explore potential paradigm shift in how “global economies” react to adverse macroeconomic conditions from key dominant economies such as the US and the Chinese economies. This is done by examining how economic activities within key economies around the world react to, or are impacted by, modeled adverse macroeconomic condition emanating from the Chinese and the US economies.

To verify potential paradigm shift in how external macroeconomic uncertainty impacts “global” industrial productivity and overall gross domestic product (GDP) growth within selected economies, this study opts for seemingly unrelated regression (SUR) model. Adoption of this method has been influenced by the potential for correlated error terms between modeled adverse macroeconomic condition, industrial productivity and GDP growth variables being tested in a two-equation system.

Empirical results based on SUR analysis find no evidence of this potential paradigm shift within the time frame examined in the study. Estimated results suggest that notwithstanding the recent growth surge of the Chinese economy, macroeconomic happenings within the US economy still exert significantly more influence on key economies around the world. For instance, this study finds that macroeconomic uncertainty associated with the US economy significantly constrains both industrial productivity and overall GDP growth within most of the economies tested, whereas the same condition emanating from the Chinese economy seems to rather have a weak positive impact on the same macroeconomic variables.

Research results are strictly limited to the focus time frame for this study; it is likely that expanded data involving more years beyond what was analyzed in this study could yield different results.

This study is an original research based on data from a reputable US federal institution.

Following Ang and Piazzesi’s (2003) study, the authors use an affine term structure model to study the relevance of macroeconomic (domestic and foreign) factors for Peru’s sovereign yield curve in the period from November 2005 to December 2015. The paper aims to discuss this issue.

Risk premia are modeled as time-varying and depend on both observable and unobservable factors; and the authors estimate a vector autoregressive model considering no-arbitrage assumptions.

The authors find evidence that macro factors help to improve the fit of the model and explain a substantial amount of variation in bond yields. However, their influence is very sensitive to the specification model. Variance decompositions show that macro factors explain a significant share of the movements at the short and middle segments of the yield curve (up to 50 percent), while unobservable factors are the main drivers for most of the movements at the long end of the yield curve (up to 80 percent). Furthermore, the authors find that international markets are relevant for the determination of the risk premium in the short term. Higher uncertainty in international markets increases bond yields, although this effect vanishes quickly. Finally, the authors find that no-arbitrage restrictions with the incorporation of macro factors improve forecasts.

To the authors’ knowledge this is the first application of this type of models using data from an emerging country such as Peru.

The study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).

Data for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.

Reported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.

For policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.

The approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.

This study aims to analyze how mixes of COVID-19 policy responses are shaping the context in which companies will compete in the following years, defining how the crisis might impact firms’ ability to keep their commitments to sustainable practices.

European country-performance data for the years 2019 and 2020 were grouped into indicators of macro sustainability, then cross-analyzed against the policies adopted during the period (also grouped based on their impacts on sustainability pillars), using correlations, factor analysis and clustering.

The influence of traditional sustainability determinants was reframed according to the novel context shaped by the policy responses to the pandemic crisis. The social and digitalization aspects gained the most relevance and appeared interconnected, with digitalization of employment attaining overall more traction. Moreover, changes in the leadership within sustainability domains were observed for each identified country-cluster, due to newly implemented emergency policies. In fact, environmental innovation, digitalization and social support policies appeared to be the main variables to be impacted by the intensity of the policy efforts.

Businesses monitoring the developments of sustainability policies closely, will observe novel trends in technological applications.

Policymakers and researchers may gauge the efficacy of policies against the COVID-19 crisis in the domain of sustainable development and resilience.

This paper provides a cross-analysis of quantitative macroeconomic and quantified policy responses to the 2020 pandemic crisis, linking each indicator to the pillars of sustainability that were relevant for companies between the crucial pandemic outbreak years 2019 and 2020.

The three-sector framework (relating to agriculture, manufacturing and services) is one of the major concepts for studying the long-run change of the economic structure. This paper aims to discuss the system-theoretical classification of the structural change in the three-sector framework and, in particular, its predictability by the Poincaré–Bendixson theory.

This study compares the assumptions of the Poincaré–Bendixson theory to the typical axioms of structural change modeling, the empirical evidence on the geometrical properties of structural change trajectories and the methodological arguments referring to the laws of structural change.

The findings support the assumption that the structural change phenomenon is representable by a dynamical system that is predictable by the Poincaré–Bendixson theory. This result implies, among others, that in the long run, structural change is either transitory or cyclical and can be used in further geometrical/topological long-run structural change modeling and prediction.

Although widespread in mathematics, geometrical/topological modeling methods have not been used in modeling and prediction of long-run structural change, despite the fact that they seem to be predestined for this purpose owing to their global, system-theoretical nature, allowing for a reduction of ideology content of predictions and greater robustness of results.

After a seven-year period of being stuck in the zero lower bound (ZLB) range, the target rate was raised by 25 basis points on December 16, 2015. Prior to the rate hike, the important issues that the Federal Reserve dealt with were the magnitude, timing, and the information conveyed by a first-time rate hike from the ZLB period. The purpose of this paper is to use the data from the ZLB period and simulate the impact of an increase in the proxies for the federal funds rate: effective federal funds rate and shadow rate, and measure the impact on the resulting changes in credit default swap (CDS) spreads across 11 industries. Increases in both proxies predict a significant decrease in CDS spreads which is indicative of an economic recovery. This prediction is confirmed by the announcement effect of the actual rate increase on December 16, 2015 and the three subsequent rate increases.

In the absence of target rate changes in the ZLB environment, the authors use a recursive vector autoregressive (VAR) model to simulate the rate increases in proxies for target federal rate and predict the impact on the economy by observing the reaction in CDS spreads and stock returns across 11 industries.

The impulse response indicates that an increase of one standard deviation in the effective rate (approximately 25 basis points) results in a statistically significant decrease in the spreads of CDS contracts in 8 of the 11 sectors studied in this research. Similar results obtain for an increase in shadow rate thus providing a robustness check. These results suggest a rate increase from the ZLB period and the resulting dynamics captured in the VAR system is indicative of an economic recovery.

Prior studies have used the event study methodology to evaluate the impact of rate changes on credit spreads. The ZLB environment does not contain data on target rate changes and renders the event study methodology as ineffective. This paper is the first to simulate the implications of a first-time rate increase from the ZLB environment in the context of a recursive VAR model. The results are very helpful to the Federal Reserve of countries experiencing a ZLB environment such as Japan and Europe.

This paper aims to examine the effects of adding non-tradable sector and trade in intermediate goods sector and their impact on the “Backus-Smith” (BS) puzzle and the features of the non-tradable output. Conventional international real business cycle models show that the real exchange rate and the terms of trade are positively correlated to the relative consumption movement between the home and foreign economies when there is a total factor productivity shock, whereas the correlation in the data is negative. The author develops a two-country, dynamic, stochastic and general equilibrium (DSGE) model with staggered price setting in the non-tradable sector and international trade in intermediate goods sector because of product differentiation in a high-asset market frictions situation.

In this paper, DGSE simulation and calibration are performed using Matlab with Dynare.

When the world economy has positive country-specific productivity shock, the benchmark model with non-tradable sector and intermediate goods sector successfully solves the BS puzzle and is able to match several features of the data. The dynamic responses to productivity shock show that integrating product differentiation is necessary to generate a more volatile and counter-cyclical non-tradable output.

The paper investigates the effects of incorporating non-tradable sector and trade in interemediate goods sector to standard two-country DSGE model through simulation and calibration.

Asset pricing dynamics in a multi-asset framework when investors’ trading exhibits the disposition effect is studied. The purpose of this paper is to explore asset pricing dynamics and the switching behavior among multiple assets.

The dynamics of complex financial markets can be best explored by following agent-based modeling approach. The artificial financial market is populated with traders following two heterogeneous trading strategies: the technical and the fundamental trading rules. By simulation, the switching behavior among multiple assets is investigated.

The proposed framework can explain important stylized facts in financial time series, such as random walk price dynamics, bubbles and crashes, fat-tailed return distributions, absence of autocorrelation in raw returns, persistent long memory of volatility, excess volatility, volatility clustering and power-law tails. In addition, asset returns possess fractal structure and self-similarity features; though the switching behavior is only allowed among the asset markets.

The model demonstrates stylized facts of most real financial markets. Thereafter, the proposed model can serve as a testbed for policy makers, scholars and investors.

To the best of knowledge, no research has been conducted to introduce the disposition effect to a multi-asset agent-based model.

To answer the following research questions: (1) What is the tax burden, on average, as a percentage of the generated revenues of companies in BiH? (2) Are there differences in the load level in relation to: (a) company size, (b) company location, (c) company age, (d) hiring of tax advisors and other external consultants on CIT issues and (e) company business activity.

In order to answer the research questions asked, quantitative analysis of primary data purposefully collected for this research will be used. The empirical part of the paper relies on the collection of primary data through survey using the method of stratified random sampling from the population of SMEs enterprises registered in BiH focusing only on FBIH and the RS. Regression analysis (OLS model) was used to estimate results.

Average share of tax compliance costs in SME revenues is 8.3%. Tax compliance costs are regressive, dependent on company age, location and business activity as well as on whether companies hire external consultants.

The chosen research method is a telephone survey, with the aim of encouraging respondents to give answers to the questions asked, using experienced interviewers from the market research agency. However, the use of this method is not without limitations, and they refer to the time-limited duration of telephone interviews that require shorter questions, and pre-prepared answer options to make it easier for respondents to give answers. One of the challenges is the fact that most respondents do not want to talk to strangers over the phone and answer unknown numbers. This risk was especially pronounced because the topic of the research is related to CIT, so many respondents expressed doubts about the purpose of the question, refusing to provide accurate data. This risk was mitigated by asking questions to include certain scales in terms of income, number of employees and gross wages, to make respondents feel free to share this type of sensitive data with interviewers.

First, the analysis of this paper showed that specific, identified factors contribute to, or directly affect, the level of the tax compliance costs of corporate income tax in BiH. Second, there is currently no comprehensive analysis of the tax burden in BiH in the literature that would quantify the tax compliance costs, both at the BiH level and at the entity level. Based on the aforementioned, it is necessary to design a fiscal policy in such a way as to eliminate or, in cases where this is not possible, reduce the tax burden on the private sector in general. Based on the data collected in this research, fiscal policy should pay special attention to the tax treatment of start-ups, small and medium-sized enterprises and enterprises operating in services and other sectors by introducing tax incentives that will be of a general nature and that will be applicable to multiple activities and categories of enterprises, in order to eliminate the current negative effects of existing incentives aimed at predefined categories. Finally, it would be necessary to consider the possibility of closer and more extensive harmonization of entity tax laws, in accordance with international practices and accounting standards - in order to reduce the difference in burden primarily between entities, which would facilitate foreign investors and contribute to increased competitiveness in the domestic, regional and ultimately the global market. It would be desirable to use harmonization as a tool in support of promoting the competitiveness of the country in order to attract and maintain the level of foreign direct investment.

There is currently no comprehensive analysis of the tax burden in BiH in the literature that would quantify the tax compliance costs, both at the BiH level and at the entity level.

The purpose of this paper is to survey literature on macroeconomic nonlinear dynamics.

The paper identifies five influential types of models where the possible generation of endogenous cycles and chaotic motion arises. First, the frameworks that make use of the one‐hump logistic type equation; second, the models inspired on the growth literature of the 1940s; third, intertemporal utility maximization problems with increasing returns; fourth, models that can be represented as piecewise dynamic maps; and, fifth, bounded rationality – heterogeneous expectations setups.

The attention will be mainly focused on the theme of business cycles; an interpretation of the deterministic real business cycle model with increasing returns is proposed and a graphical analysis of the underlying system shows that strange attractors are observable for specific sets of parameter values.

The study of endogenous cycles in macroeconomic literature has important implications for policy: if fluctuations are due to deterministic reasons this may imply that by manipulating policy parameters governments may be able to change the qualitative nature of the economy's dynamics.

The paper gives a comprehensive view of nonlinear dynamics in macroeconomics. It shows that various relevant subjects might be addressed in this kind of models, e.g. economic growth, asset pricing, business cycles, consumption decisions, among others.