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Article
Publication date: 5 September 2016

Magda Kandil

Using data for a sample of advanced and developing countries, this paper aims to study the responses of monetary growth and the growth of government spending to external…

Abstract

Purpose

Using data for a sample of advanced and developing countries, this paper aims to study the responses of monetary growth and the growth of government spending to external spillovers, namely, the growth of exports and imports, movement in the real effective exchange rate and the change in the oil price. The objective is to study movements in domestic policy variables in open economies that are vulnerable to trade and commodity price shocks.

Design/methodology/approach

The analysis evaluates correlations between the responses of the policy variables to external spillovers. Further, the analysis studies the effects of indicators of economic performance on domestic policy responses to various shifts across countries.

Findings

Higher variability of real and nominal growth increases the fiscal policy response to external spillovers with an aim to stem further variability. Monetary policies appear to be more responsive to trend price inflation with an aim to stem further inflationary pressures. Fiscal policy’s reaction to trend price inflation aims at striking a balance between countering potential inflationary pressures, as well as recessionary conditions attributed to the various spillovers.

Originality/value

Overall, the evidence points to the importance of trade and commodity price shifts to the design of domestic policies. Further indicators of economic performance differentiate the degree of policy responses to trade and commodity price developments with a goal to stem inflationary pressures and reduce aggregate uncertainty.

Details

International Journal of Development Issues, vol. 15 no. 3
Type: Research Article
ISSN: 1446-8956

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Article
Publication date: 23 November 2020

Nazneen Ahmad and Sandeep Kumar Rangaraju

This paper investigates the impact of a monetary policy shock on the production of a sample of 312 industries in manufacturing, mining and utilities in the United States…

Abstract

Purpose

This paper investigates the impact of a monetary policy shock on the production of a sample of 312 industries in manufacturing, mining and utilities in the United States using a factor-augmented vector autoregression (FAVAR) model.

Design/methodology/approach

The authors use a FAVAR model that builds on Bernanke et al. (2005) and Boivin et al. (2009). The main assumption in this model is that the dynamics of a large set of macro variables are captured by some observed and unobserved common factors. The unobserved factors are extracted from a large set of macroeconomic data. The key advantage of using this model is that it allows extracting the impulse responses of a wide range of macroeconomic variables to structural shocks in the federal funds rate.

Findings

The results indicate that industries exhibit differential responses to an unanticipated monetary policy tightening. In general, manufacturing industries appear to be more sensitive compared to mining, and utility industries and durable manufacturing industries are found to be more sensitive than those within nondurable and other manufacturing industries to a monetary policy shock. While all industries respond to the policy shock, most of the responses are reversed between 12 and 22 months.

Research limitations/implications

The implication of our results is that monetary policy can be used to impact most US industries for four years and beyond. The existence of disparate responses across industries underscores the difficulty of implementing a monetary policy that will generate the same impact across industries. As the effects of the policy are distinct, policymakers may want to attend to the unique impacts and implement industry-specific policy.

Practical implications

The study is important in the context of the current challenges in the US economy caused by the spread of coronavirus. For example, to tackle the current pandemic, the researchers are trying to come up with cures for COVID-19. A considerable response of the chemical industry that provides materials to pharmaceutical and medicine manufacturing to the monetary policy shock implies that an expansionary monetary policy may facilitate an invention and adequate supply of the cure later on. The same policy may not effectively stimulate production in apparel or leather product industries that are being hard hit by the pandemic.

Originality/value

The study contributes to the literature in broadly two aspects. First, to the best of our knowledge, this is the first paper that investigates the impact of a monetary policy shock on a sample of 312 industries in manufacturing, mining and utilities in the US. Second, to identify structural shocks and investigate the effects of monetary policy shocks on economic activity, the authors diverge from the literature's traditional approach, i.e. the vector autoregression (VAR) method and use a FAVAR method. The FAVAR provides a comprehensive description of the impact of a monetary policy innovation on different industries.

Details

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

Keywords

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Abstract

Details

New Directions in Macromodelling
Type: Book
ISBN: 978-1-84950-830-8

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Article
Publication date: 18 May 2021

Ansgar Belke and Pascal Goemans

The purpose of this paper is to investigate whether the macroeconomic effects of government spending shocks vary with the degree of macroeconomic uncertainty.

Abstract

Purpose

The purpose of this paper is to investigate whether the macroeconomic effects of government spending shocks vary with the degree of macroeconomic uncertainty.

Design/methodology/approach

The authors use quarterly US data from 1960 to 2017 and employ the Self-Exciting Interacted VAR (SEIVAR) to compute nonlinear generalized impulse response functions (GIRFs) to an orthogonalized government spending shock during tranquil and in uncertain times. The parsimonious design of the SEIVAR enables us to focus on extreme deciles of the uncertainty distribution and to control for the financing side of the government budget, monetary policy, financial frictions and consumer confidence.

Findings

Fiscal spending has positive output effects in tranquil times, but is contractionary during times of heightened macroeconomic uncertainty. The results indicate an important role of the endogenous response of macroeconomic uncertainty. Investigating different government spending purposes, only increases in research and development expenditures reduce uncertainty and boost output during uncertain times.

Originality/value

The authors contribute to the literature in using a method which allows to control for a large set of confounding factors and accounts for the uncertainty response.

Details

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

Keywords

Content available
Article
Publication date: 25 January 2021

Fahimeh Allahi, Amirreza Fateh, Roberto Revetria and Roberto Cianci

The COVID-19 pandemic is a new crisis in the world that caused many restrictions, from personal life to social and business. In this situation, the most vulnerable groups…

Abstract

Purpose

The COVID-19 pandemic is a new crisis in the world that caused many restrictions, from personal life to social and business. In this situation, the most vulnerable groups such as refugees who are living in the camps are faced with more serious problems. Therefore, a system dynamic approach has been developed to evaluate the effect of applying different scenarios to find out the best response to COVID-19 to improve refugees’ health and education.

Design/methodology/approach

The interaction of several health and education factors during an epidemic crisis among refugees leads to behavioral responses that consequently make the crisis control a complex problem. This research has developed an SD model based on the SIER model that responds to the public health and education system of Syrian refugees in Turkey affected by the COVID-19 virus and considered three policies of isolation, social distance/hygiene behavior and financial aid using the available data from various references.

Findings

The findings from the SD simulation results of applying three different policies identify that public health and education systems can increase much more by implementing the policy of social distance/hygiene behavior, and it has a significant impact on the control of the epidemic in comparison with the other two responses.

Originality/value

This paper contributes to humanitarian organizations, governments and refugees by discussing useful insights. Implementing the policy of social distance and hygiene behavior policies would help in a sharp reduction of death in refugees group. and public financial support has improved distance education during this pandemic.

Details

Journal of Humanitarian Logistics and Supply Chain Management, vol. 11 no. 2
Type: Research Article
ISSN: 2042-6747

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Article
Publication date: 1 December 1996

Keller Mark McGue and Tom Barker

Examines a questionnaire returned by 188 Alabama police and sheriffs’ departments with regard to pursuit issues. Considers variables such as department size, current policy

Abstract

Examines a questionnaire returned by 188 Alabama police and sheriffs’ departments with regard to pursuit issues. Considers variables such as department size, current policy, officer judgment, forcible stop techniques and training. Finds that 80 per cent of these departments had an emergency response policy. Clearly shows that a majority of the respondents think their department’s policy is somewhat restrictive. Cautions that policy may not always be followed in practice. Finds that there is a comprehensive effort to promote safety for officers and all involved, notably in the fact that only 44 per cent of the responding departments allow the use of forcible stop techniques.

Details

American Journal of Police, vol. 15 no. 4
Type: Research Article
ISSN: 0735-8547

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Article
Publication date: 11 May 2012

Ndahiriwe Kasaï and Ruthira Naraidoo

The purpose of this paper is to investigate how the South African Reserve Bank (SARB) sets monetary policy rate.

Abstract

Purpose

The purpose of this paper is to investigate how the South African Reserve Bank (SARB) sets monetary policy rate.

Design/methodology/approach

Given the controversial debate on whether central banks should target asset prices for economic stability, the authors analyse whether the SARB policy‐makers pay close attention to asset and financial markets in its policy decisions in the context of both linear and nonlinear Taylor type rule models of monetary policy.

Findings

The main findings are that the nonlinear Taylor rule provides the best description of in‐sample SARB interest rate setting behaviour as the financial crisis unfolds. The SARB policy‐makers pay close attention to the financial conditions index when setting interest rates. The SARB's response of monetary policy to inflation is greater during business cycle recessions with not much weight on output and seems to place high importance on inflationary pressures of output during boom periods. The 2007‐2009 financial crisis witnesses an overall decreased reaction to inflation, output and financial conditions amidst increased economic uncertainty.

Originality/value

This paper introduces a financial condition index into a Taylor monetary policy rule and examines whether nonlinear models can provide additional information over a linear model.

Details

Journal of Economic Studies, vol. 39 no. 2
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 9 March 2015

Peter Mark Halladay and Charlene Harrington

– The purpose of this paper is to compare two scandals related to the care of individuals with intellectual and developmental disabilities (I/DD) in the USA and the UK.

Abstract

Purpose

The purpose of this paper is to compare two scandals related to the care of individuals with intellectual and developmental disabilities (I/DD) in the USA and the UK.

Design/methodology/approach

A descriptive case study methodology was used to conduct an in-depth qualitative analysis of the two scandals to examine the process of scandal development, and to survey the policy response against policy trends and theories of abuse in each case. The two cases were systematically analysed against a theoretical framework derived from Bonnie and Wallace (2003) theoretical framework for understanding abuse based on its sociocultural context, the social embeddedness of organisations providing care, and the individual level characteristics and interactions of subjects and carers.

Findings

In both cases the process of scandal construction was comparable, and each case offered confirmatory support to extant theories of abuse, and to wider policy trends within I/DD.

Research limitations/implications

The study examines only the short-term policy responses to the scandals in two countries, based on published material only.

Originality/value

This paper contributes an international comparison of the similarities and differences in the social construction of scandal and the policy responses to abuse and neglect of a vulnerable population using systematic analytical frameworks.

Details

International Journal of Sociology and Social Policy, vol. 35 no. 1/2
Type: Research Article
ISSN: 0144-333X

Keywords

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Abstract

Details

Central Bank Policy: Theory and Practice
Type: Book
ISBN: 978-1-78973-751-6

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Book part
Publication date: 28 April 2016

Peter J. Boettke and Liya Palagashvili

During times of economic crises, the public policy response is to abandon basic economic thinking and engage in “emergency economic” policies. We explore how the current…

Abstract

During times of economic crises, the public policy response is to abandon basic economic thinking and engage in “emergency economic” policies. We explore how the current financial crisis was in part caused by previous emergency economic measures. We then investigate the theoretical limitations of emergency economic responses. We argue that these responses fail to take into consideration the practical conditions of politics, thereby making them unsuitable to remedy the problems of a crisis. Lastly, we provide a preliminary analysis of the consequences resulting from emergency economic policies initiated in response to the 2008 financial crisis.

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