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1 – 10 of over 90000The global financial crisis of 2008 emphasized the need for monetary policy authorities to have a more comprehensive view of the conditions prevailing in the economy before…
Abstract
Purpose
The global financial crisis of 2008 emphasized the need for monetary policy authorities to have a more comprehensive view of the conditions prevailing in the economy before deciding their policy stance. The purpose of this paper is to outline the construction of a financial conditions index (FCI) and investigate the possible co-integrating relationship between the economic growth and FCI.
Design/methodology/approach
The study employs the PCA methodology, with appropriate augmentations to handle the unbalanced panel data-sets and constructs a FCI for India. It tests the growth-predicting power of FCI by applying the auto regressive distributed lags approach to co-integration and verifies if the FCI is co-integrated with real GDP growth. It also discusses construction of a financial development index (FDI) which tracks the financial markets through M3, market capitalization and credit amount to residents.
Findings
The constructed FCI has a quarterly frequency and is available starting 1998q2. The long-run coefficient of FCI while predicting the real GDP growth is significant at 10 percent. The results confirm that a more-broader index FCI outperforms a narrower index FDI in growth prediction.
Research limitations/implications
By showing that FCI is a better growth predictor than FDI, the study establishes the importance of including the foreign exchange markets, bond markets and stock markets while summarizing the conditions in the economy. The authors hope that the FCI would be helpful to the monetary authorities in their policy decisions.
Originality/value
The paper adds to the few existing studies studies dealing with FCI for Indian economy and constructs a more comprehensive index which tracks multiple markets simultaneously. It also fills the gap in literature by evaluating the correlating relationship between FCI and economic growth.
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Barry T. Hirsch and Julia Manzella
Economists and sociologists have proposed arguments for why there can exist wage penalties for work involving helping and caring for others, penalties borne disproportionately by…
Abstract
Economists and sociologists have proposed arguments for why there can exist wage penalties for work involving helping and caring for others, penalties borne disproportionately by women. Evidence on wage penalties is neither abundant nor compelling. We examine wage differentials associated with caring jobs using multiple years of Current Population Survey (CPS) earnings files matched to O*NET job descriptors that provide continuous measures of “assisting & caring” and “concern” for others across all occupations. This approach differs from prior studies that assume occupations either do or do not require a high level of caring. Cross-section and longitudinal analyses are used to examine wage differences associated with the level of caring, conditioned on worker, location, and job attributes. Wage level estimates suggest substantive caring penalties, particularly among men. Longitudinal estimates based on wage changes among job switchers indicate smaller wage penalties, our preferred estimate being a 2% wage penalty resulting from a one standard deviation increase in our caring index. We find little difference in caring wage gaps across the earnings distribution. Measuring mean levels of caring across the U.S. labor market over nearly thirty years, we find a steady upward trend, but overall changes are small and there is no evidence of convergence between women and men.
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Esko K. Juuso and Sulo Lahdelma
The purpose of this paper is to develop a comprehensive approach to efficiently integrate maintenance and operation by combining process and condition monitoring data with…
Abstract
Purpose
The purpose of this paper is to develop a comprehensive approach to efficiently integrate maintenance and operation by combining process and condition monitoring data with performance measures.
Design/methodology/approach
Intelligent stress, condition and health indicators have been developed for control and condition monitoring by combining generalised moments and norms with efficient nonlinear scaling. The data analysis resulting nonlinear scaling functions can also be used to handle performance measures used for management. The generalised norms provide limits for an advanced statistical process control.
Findings
The data‐driven analysis methodology demonstrates that management‐oriented indicators can be presented in the same scale as intelligent condition and stress indices. Control, condition monitoring, maintenance and performance monitoring are represented as interactive feedback loops.
Practical implications
Performance analysis can be based on real‐time information by using various stress, condition and health indices as inputs. Similar approaches can be used for outputs: quality indices, harmonised indices, key performance indicators, process capability indices and overall equipment effectiveness. Since consistent linguistic explanations based on nonlinear scaling are available for all these indices, the analysis can be further deepened with LE modelling. Efficient monitoring with intelligent indices provides a good basis for control and condition‐based maintenance and performance monitoring.
Originality/value
The paper extends the nonlinear scaling methodology and linguistic equations to intelligent performance measures. The methodology provides a consistent way to also represent all information with linguistic terms.
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Hedi Ben Haddad, Sohale Altamimi, Imed Mezghani and Imed Medhioub
This study seeks to build a financial uncertainty index for Saudi Arabia. This index serves as a leading indicator of Saudi economic activity and helps to describe economic…
Abstract
Purpose
This study seeks to build a financial uncertainty index for Saudi Arabia. This index serves as a leading indicator of Saudi economic activity and helps to describe economic fluctuations and forecast economic trends.
Design/methodology/approach
This study adopts an extension of the Jurado et al. (2015) procedure by combining financial uncertainty factors with their net spillover effects on GDP and inflation to construct an aggregate financial uncertainty index. The authors consider 13 monthly financial variables for Saudi Arabia from January 2010 to June 2021.
Findings
The empirical results show that the constructed financial uncertainty estimates are good leading indicators of economic activity. The robustness analysis suggests that the authors’ proposed financial uncertainty estimators outperform the alternative estimates used by other existing approaches to estimate the financial conditions index.
Originality/value
To the best of the authors’ knowledge, this is the first attempt at constructing a financial uncertainty index for Saudi Arabia. This study extends the empirical literature, from which the authors propose a novel conceptual framework for building a financial uncertainty index by combining the approach of Jurado et al. (2015) and the time-varying connectedness network approach proposed by Antonakakis et al. (2020)
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The purpose of the paper is to gauge the usefulness of the Monetary Condition Index (MCI) and Financial Condition Index (FCI) for the conduct of monetary policy in Malaysia.
Abstract
Purpose
The purpose of the paper is to gauge the usefulness of the Monetary Condition Index (MCI) and Financial Condition Index (FCI) for the conduct of monetary policy in Malaysia.
Design/methodology/approach
The MCI is constructed as the weighted sum of changes in the exchange rate and interest rate from their levels in a chosen base year. The weights are obtained by summing up the coefficients on the lags variables from estimating the determinants of backward‐looking aggregate demand.
Findings
The paper finds that the movement inflation induces the movement in either interest rate or exchange rate. The result also indicates that the interest rate channel is found to be more powerful than the exchange rate channel. The method in determining the weights for each policy component of the index however indicates some degree of instability due to some external shock affected the exchange rate or the domestic short‐term interest rate.
Originality/value
In a small open economy with deregulated markets, it is crucial to assess the combined effect of interest rate and exchange rate on monetary conditions and the conduct of monetary policy. Despite the index ability to explain monetary conditions in Malaysia, the estimate of MCI and FCI should be used cautiously. The index does not offer a precise signal on the state of monetary condition in Malaysia.
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Kirsten Thompson, Renee Van Eyden and Rangan Gupta
The purpose of this study is to construct a financial conditions index (FCI) for the South African economy to enable the gauging of financial conditions and to better understand…
Abstract
Purpose
The purpose of this study is to construct a financial conditions index (FCI) for the South African economy to enable the gauging of financial conditions and to better understand the macro-financial linkages in the country. The global financial crisis that began in 2007-2008 demonstrated how severe the impact of financial markets’ stress on real economic activity can be. In the wake of the financial crisis, policy-makers and decision-makers across the world identified the critical need for a better understanding of financial conditions, and more importantly, their impact on the real economy.
Design/methodology/approach
The FCI is constructed using monthly data over the period 1966 to 2011, and is based on a set of 16 financial variables, which include variables that define the state of international financial markets, asset prices, interest rate spreads, stock market yields and volatility, bond market volatility and monetary aggregates. The authors explore different methodologies for constructing the FCI, including full sample and rolling-window principal components analysis. Furthermore, the authors investigate whether it is beneficial to purge the FCI of the real effects of inflation, economic growth and interest rates, and evaluate the performance of our constructed FCIs by comparing their ability to pick up turning points in the South African business cycle, and by running in-sample causality (forecast) tests.
Findings
The authors find that the estimated FCIs are good predictors of economic activity; with the rolling-window FCI being the “best” performing index. Causality tests indicate that this FCI is a good in-sample predictor of industrial production growth and the Treasury Bill rate, but a weak predictor of inflation.
Practical implications
The authors find that the resulting FCI can act as an “early warning system”. This, in turn, may serve to indicate that monetary policy should take broader financial conditions into account.
Originality/value
This study offers three main contributions to the existing literature on financial conditions in South Africa: the authors construct an FCI over a sample period that is three decades longer than existing indices, the FCI of this paper comprises a wider coverage of financial variables than others and the authors make use of rolling-window estimation techniques that allow them to account for parameter instability and to capture the real-time constraints faced by a policymaker.
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Hadi Shams Esfandabadi, Mohsen Ghamary Asl, Zahra Shams Esfandabadi, Sneha Gautam and Meisam Ranjbari
This research aims to monitor vegetation indices to assess drought in paddy rice fields in Mazandaran, Iran, and propose the best index to predict rice yield.
Abstract
Purpose
This research aims to monitor vegetation indices to assess drought in paddy rice fields in Mazandaran, Iran, and propose the best index to predict rice yield.
Design/methodology/approach
A three-step methodology is applied. First, the paddy rice fields are mapped by using three satellite-based datasets, namely SRTM DEM, Landsat8 TOA and MYD11A2. Second, the maps of indices are extracted using MODIS. And finally, the trend of indices over rice-growing seasons is extracted and compared with the rice yield data.
Findings
Rice paddies maps and vegetation indices maps are provided. Vegetation Health Index (VHI) combining average Temperature Condition Index (TCI) and minimum Vegetation Condition Index (VCI), and also VHI combining TCImin and VCImin are found to be the most proper indices to predict rice yield.
Practical implications
The results serve as a guideline for policy-makers and practitioners in the agro-food industry to (1) support sustainable agriculture and food safety in terms of rice production; (2) help balance the supply and demand sides of the rice market and move towards SDG2; (3) use yield prediction in the rice supply chain management, pricing and trade flows management; and (4) assess drought risk in index-based insurances.
Originality/value
This study, as one of the first research assessing and mapping vegetation indices for rice paddies in northern Iran, particularly contributes to (1) extracting the map of paddy rice fields in Mazandaran Province by using satellite-based data on cloud-computing technology in the Google Earth Engine platform; (2) providing the map of VCI and TCI for the period 2010–2019 based on MODIS data and (3) specifying the best index to describe rice yield through proposing different calculation methods for VHI.
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Salvatore Capasso, Oreste Napolitano and Ana Laura Viveros Jiménez
The idea of this study is to provide a solid Financial Condition Index (FCI) that allows the monetary transmission policy to be monitored in a country which in recent decades has…
Abstract
Purpose
The idea of this study is to provide a solid Financial Condition Index (FCI) that allows the monetary transmission policy to be monitored in a country which in recent decades has suffered from major financial and monetary crises.
Design/methodology/approach
The authors construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime. Using monthly data from 1995 to 2017, the authors estimate FCIs with two different methodologies and build the index by taking into account the mechanism of transmission of monetary policy and incorporating the most relevant financial variables.
Findings
This study’s results show that, likewise for developing countries as Mexico, an FCI could be a useful tool for managing monetary policy in reducing macroeconomic fluctuations.
Originality/value
Apart from building a predictor of possible financial stress, the authors construct an FCI for a central bank that pursues inflation targeting and to analyse the role of financial asset prices in formulating monetary policy.
Highlights
We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime.
The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR).
FCI could become a new target for monetary policy within a hybrid inflation-targeting framework.
FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment.
We construct three FCIs for Mexico to analyse the role of financial asset prices in formulating monetary policy under an inflation-targeting regime.
The FCIs are based on (1) a vector autoregression model (VAR); (2) an autoregressive distributed lag model (ARDL) and (3) a factor-augmented vector autoregression model (FAVAR).
FCI could become a new target for monetary policy within a hybrid inflation-targeting framework.
FCI could be a good tool for managing monetary policy in developing countries with a low-inflation environment.
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Davide Antonioli, Massimiliano Mazzanti and Paolo Pini
This paper seeks to examine the relationships between working conditions, innovation activities and industrial relations in two local production systems located in the northern…
Abstract
Purpose
This paper seeks to examine the relationships between working conditions, innovation activities and industrial relations in two local production systems located in the northern Italy, exploiting data collected through ad‐hoc surveys in 2004 and 2006.
Design/methodology/approach
The paper follows a recent stream of literature, which is still quite scanty, that addresses the issue of the implication for workers derived from the introduction of organizational changes. This topic is addressed and extended, taking into consideration both the role of firm level industrial relations and the role of other innovation activities that may influence working conditions.
Findings
The results seem to support the position maintained by the advocates of organizational changes. Job empowerment is spurred by the form of organizational changes usually defined as high performance workplace practices. However, such typology of changes in the organization does not seem to be linked with positive trends in safety/security and stress. At the same time the positive role of cooperative industrial relations on the working condition emerges, also as complementary elements to innovation activities.
Originality/value
This work confirms some relevant empirical results obtained in international literature about the linkages between organizational changes and working conditions. At the same time it provides an original perspective of analysis taking into account other influencing factors of workers' well being: good quality industrial relations at firm level and innovation activities such as technological innovation and ICT.
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W.L. Tse, Albert T.P. So, W.L. Chan and Ida K.Y. Mak
To examine the role of predicted mean vote (PMV) in air‐conditioned environments by conducting a thermal comfort study.
Abstract
Purpose
To examine the role of predicted mean vote (PMV) in air‐conditioned environments by conducting a thermal comfort study.
Design/methodology/approach
A formal statistical approach was adopted for the credibility of the study. Thermal measurements and questionnaire filling were carried out in commercial offices to collect the required data. Statistical analysis on the collected data and logical reasoning were then employed to derive the conclusions.
Findings
Provide an evidence to support PMV to be an appropriate thermal comfort index in air‐conditioned environments. Guarantee high productivity of occupants by using PMV in air‐conditioning control.
Research limitations/implications
Future research work should be carried out to investigate any significant relationship between improvement in PMV and the profits gained by occupants inside an air‐conditioned space. With such relationship, it is possible to develop an intelligent air‐conditioning control to yield the most cost‐effective thermal environments for commercial offices.
Practical implications
Air‐conditioning engineers are highly recommended to employ PMV to assess the thermal comfort environment in air‐conditioned offices.
Originality/value
This paper highlights the importance aspect on choosing a thermal comfort index for comfort assessment in air‐conditioned offices. The index itself should not consider adaptive actions. Otherwise, the productivity of occupants would be severely deteriorated. It is well known that PMV is the thermal comfort index that can fulfill this requirement.
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