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1 – 10 of 195Nan Li and Liu Yuanchun
The purpose of this paper is to summarize different methods of constructing the financial conditions index (FCI) and analyze current studies on constructing FCI for China. Due to…
Abstract
Purpose
The purpose of this paper is to summarize different methods of constructing the financial conditions index (FCI) and analyze current studies on constructing FCI for China. Due to shifts of China’s financial mechanisms in the post-crisis era, conventional ways of FCI construction have their limitations.
Design/methodology/approach
The paper suggests improvements in two aspects, i.e. using time-varying weights and introducing non-financial variables. In the empirical study, the author first develops an FCI with fixed weights for comparison, constructs a post-crisis FCI based on time-varying parameter vector autoregressive model and finally examines the FCI with time-varying weights concerning its explanatory and predictive power for inflation.
Findings
Results suggest that the FCI with time-varying weights performs better than one with fixed weights and the former better reflects China’s financial conditions. Furthermore, introduction of credit availability improves the FCI.
Originality/value
FCI constructed in this paper goes ahead of inflation by about 11 months, and it has strong explanatory and predictive power for inflation. Constructing an appropriate FCI is important for improving the effectiveness and predictive power of the post-crisis monetary policy and foe achieving both economic and financial stability.
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This study aims to analyze the contagious effects of economic policy uncertainties in the USA on the economies of its important trading partners, such as Japan, Canada, Mexico and…
Abstract
Purpose
This study aims to analyze the contagious effects of economic policy uncertainties in the USA on the economies of its important trading partners, such as Japan, Canada, Mexico and the Eurozone.
Design/methodology/approach
In the study using the uncertainty index created by Baker et al. (2016), the interaction between variables was analyzed with structural VAR (SVAR) models.
Findings
According to the results obtained from the analysis, economic policy uncertainties in the USA had significant effects on the economies of its high-volume trading partners. The internal debt crisis experienced in the Eurozone after the 2008 crisis caused the European Central Bank to respond to the economic policy uncertainties in the USA with contractionary monetary policies, unlike other countries. In addition to these results, Mexico, which has a more fragile economic structure than other countries in the analysis, was more impacted by increasing uncertainties, as expected.
Originality/value
The present study aimed to bring a new perspective to the literature by evaluating the contagiousness of local uncertainty in the globalizing world and the monetary policies implemented as a precaution against this situation on an empirical plane.
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The 1997-98 financial crisis has had a profound effect on how East Asian economies the role of the IMF and its strategic interests relative to those of the United States in the…
Abstract
The 1997-98 financial crisis has had a profound effect on how East Asian economies the role of the IMF and its strategic interests relative to those of the United States in the international financial regime. It has prompted them to create a regional mechanism for financial and monetary cooperation, ranging from deeper policy dialogue and surveillance, to a system of financial cooperation, and common exchange rate arrangements. This paper analyses the economic and strategic motivations behind this and outlines recent developments in financial cooperation in East Asia to provide possible directions for the future.
A network of bilateral swap arrangements under the Chiang Mai Initiative(CMI) needs stronger policy dialogue and surveillance to develop into a regional financing facility, a sort of East Asian IMF. The facility plays a role as an regional lender of last resort, providing short-term funds to a member country facing a temporary liquidity shortage and for market intervention to stabilize foreign exchange rate. East Asian countries need to achieve regional exchange rate stability. In the long run, the region may develop a common currency arrangement, but it cannot be expected in the very near future because there is no convergence of macroeconomic conditions, economic structure and systems. A realistic approach would be for East Asian developing countries to adopt a currency basket system to minimize the impact of dollar/yen exchange rate volatility on their economies. Strong political will and a vision for regional integration will be required to introduce it.
Thang Ngoc Doan, Dong Phu Do and Dat Van Luong
This paper analyzes the effects of the monetary stance on the media's favorable (or otherwise) attitude to the State Bank of Vietnam's (SBV) monetary policy using monthly data…
Abstract
Purpose
This paper analyzes the effects of the monetary stance on the media's favorable (or otherwise) attitude to the State Bank of Vietnam's (SBV) monetary policy using monthly data from 2011 to 2021. Monetary stance is a multivariate index based on the growth rates of money supply and domestic credit. A large set of articles published in five Vietnam daily newspapers are utilized to construct a view of the media's favorableness to the monetary policy.
Design/methodology/approach
This paper uses hand-collected data from 211 articles published in five newspapers from December 2011 to September 2021 in order to examine the relationship between the monetary stance and the media's favorableness to monetary policy. Following the studies of He and Pauwels (2008) and Xiong (2012), the authors constructed a multivariate stance index to capture most of the important changes in the SBV's monetary policy stance.
Findings
The study's main findings are that a change in monetary stance from easing to neutral/tightening, or from neutral to tightening, is greatly appreciated by the media. The study's findings are robust, especially in terms of alternative measures of the media's favorableness and monetary policy variables.
Research limitations/implications
These findings have important policy implications for implementing SBV's monetary policy.
Originality/value
The main contribution of this paper is that the authors are the first to study the nexus of multivariate monetary stance and the media's favorableness to a central bank's non-inflation-targeting mandate. In particular, the study’s findings confirm that the SBV's multivariate monetary stance affects the media's favorableness, whereas the effect of inflation is statistically insignificant.
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The purpose of this study is to analyze commercial bank-level data to examine a credit channel of the monetary policy transmission mechanism in emerging economies, such as South…
Abstract
Purpose
The purpose of this study is to analyze commercial bank-level data to examine a credit channel of the monetary policy transmission mechanism in emerging economies, such as South Africa from BRICS countries. Among the important questions that central banks, economists and policymakers have raised in this area are: Do bank characteristics and macroeconomic variables influence credit supply in South Africa? Do bank characteristics and macroeconomic variables interact to influence credit supply in South Africa?
Design/methodology/approach
Static panel data with pooled OLS, a random effect model and the fixed-effect model are used for data analysis. Using a sample of 50 commercial banks from South Africa over 10 years from 2009 to 2018. The statistical software Stata is utilized for data analysis.
Findings
The conclusion of this study shows that in South Africa, the loan amount has a strong and positive macroeconomic variable inflation effect. The outcomes of the study also revealed that in South Africa, there is a strong but negative association between interaction macroeconomic variables inflation and bank characteristic liquidity ratio on the loan amount.
Originality/value
The authors contribute to the existing literature by identifying the key determinants of monetary policy transmission channels through credit in South Africa and, furthermore, through a country-level data analysis and disaggregation at the commercial bank level, as well as economic conditions.
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Idris Abdullahi Abdulqadir, Soo Y. Chua and Saidatulakmal Mohd
The purpose of this paper is to investigate the optimal inflation targets for an appropriate exchange rate policy in 15 major oil exporting countries in Sub-Saharan African (SSA).
Abstract
Purpose
The purpose of this paper is to investigate the optimal inflation targets for an appropriate exchange rate policy in 15 major oil exporting countries in Sub-Saharan African (SSA).
Design/methodology/approach
Dynamic heterogeneous panel threshold techniques are used via threshold-effect test and threshold regression. This procedure is achieved through a grid search and bootstrapping replications method to stimulate the asymptotic distribution of the likelihood ratio test of the null hypothesis on no-threshold as against the alternative hypothesis. The p-values validate the threshold estimates.
Findings
Findings revealed that the optimal inflation target has a turning point and its impact on the real exchange rate is up to a threshold level of 14.47 per cent. Furthermore, the inflation rate above the threshold level overwhelmingly revealed its effect on real exchange regimes.
Research limitations/implications
It would have been a good idea to investigate optimal inflation targets for all African countries but due to inadequate data the selection criteria was narrowed to oil-exporting countries in Sub-Saharan Africa.
Practical implications
Inflation targeting beyond the threshold level would have serious implications on the monetary policy.
Originality/value
To the best of the knowledge, this is the first study to look at optimal inflation targets for 15 major oil exporting countries in general and SSA countries in particular. The findings provide a critical analysis of an inflation regime for a typical oil-producing country that oil exports being their source of revenue.
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This paper investigates the effect of economic policy uncertainty on value of cash before and after the global financial crisis.
Abstract
Purpose
This paper investigates the effect of economic policy uncertainty on value of cash before and after the global financial crisis.
Design/methodology/approach
We investigate the relationship between economic policy uncertainty and value of excess cash based on the valuation model of Fama and French (1998). Baker et al. (2016) news-based index (BBD index) is employed to calculate measures of economic policy uncertainty. Our research sample includes 103,474 observations from 11,000 firms across 19 countries over the period 2004–2016.
Findings
We find that economic policy uncertainty is negatively “positively” related to value of cash in the pre-crisis “post-crisis” period. Moreover, we also document that the positive effect of economic policy uncertainty in the post-crisis period is stronger in financially constrained firms.
Originality/value
While prior studies find a relationship between economic policy uncertainty and cash levels or the effect of firm-level uncertainty on value of cash, this paper shows how economic policy uncertainty as an institutional environment factor affects value of cash. Moreover, it documents that economic policy uncertainty has opposite effects on value of cash before and after the global financial crisis.
研究目的
本研究旨在探討經濟政策不確定性在全球金融危機之前及之後對現金價值的影響。
研究設計/方法/理念
我們基於法馬及佛倫奇(1998) (Fama and French (1998)) 的估值模型,來探討經濟政策不確定性與過剩現金價值的關係。我們採用了貝克等人(2016) (Baker et al. (2016)) 以新聞訊息為基礎的指數 (BBD指數) 、來計算經濟政策不確定性的程度。我們的研究樣本包括橫跨19個國家、涵蓋期為2004年至2016年、取自11,000間公司之103,474個觀察。
研究結果
我們發現經濟政策不確定性與現金價值在危機前時期成負相關,在危機後時期則成正相關。而且,我們也記錄了在危機後時期經濟政策不確定性的正面影響於財務受限的公司會較大的情況。
原創性/價值
過去的研究發現了經濟政策不確定性與現金水平之間存有關係、及企業層面的不確定性對現金價值的影響。唯本研究顯示了經濟政策不確定性作為一機構環境因素,如何影響現金價值;同時,亦記錄了經濟政策不確定性在全球金融危機之前及之後對現金價值會有相反影響的情況。
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Riccardo Mussari, Denita Cepiku and Daniela Sorrentino
Acknowledging fiscal crises as critical junctures for policy makers, this paper investigates how the recent fiscal crisis has affected the paradigmatic approach to the design of…
Abstract
Purpose
Acknowledging fiscal crises as critical junctures for policy makers, this paper investigates how the recent fiscal crisis has affected the paradigmatic approach to the design of an ongoing governmental accounting (GA) reform.
Design/methodology/approach
This paper analyses the Italian GA harmonization as a peculiar instance of an ongoing GA reform at the crisis outbreak. A longitudinal narrative analysis of official documents is complemented with semi-structured interviews with key policy makers and participant observations.
Findings
The fiscal crisis is found to play an indirect role in the Italian GA reform, which, promoting centralization of competencies in the fields of GA, determines the intensification of the approach adopted before the crisis outbreak.
Research limitations/implications
This paper extends the knowledge on the nature of post-crisis reforms by highlighting how fiscal crises can work as catalysts for paradigmatic approaches to ongoing GA reforms. This paper analyses the designing of a GA reform, whereas the long-term adaptations and outcomes of the reform are not taken into consideration.
Practical implications
The tight link between GA and financial management issues featuring the current paradigmatic approaches to reforms suggests the need to design GA reforms consistently with fiscal and financial management policies.
Originality/value
Whereas the extant literature on the nature of post-crisis reforms analyses the latter as responses to the former, this paper enlarges the knowledge on the topic by focusing on a peculiar instance of a GA reform that was ongoing at the crisis outbreak.
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The purpose of this study is to provide down-to-earth macroeconomic policy implications from the up-to-date estimates of the trade system in the OECD countries. Understanding on…
Abstract
The purpose of this study is to provide down-to-earth macroeconomic policy implications from the up-to-date estimates of the trade system in the OECD countries. Understanding on the linkages between the world trade mechanism and the macroeconomy is of utmost importance for the post-crisis managements of the world economy, the major points regarding the macroeconomic policy implications are as follows.
(1) For the majority of the OECD countries, fiscal expansion is likely to encourage the world trade when it is designed in the way to increase private consumption, in fact, only in a few countries fiscal expansion can increase the world trade volumes in its own right.
(2) Currency depreciation might be an attractive policy option for improving trade balances in the cases of the 9 OECD countries.
(3) There is a clear evidence of pricing-to-market with cross-country diversity, implying that import or domestic price robustness from the external forces.
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The purpose of this paper is to provide insight into the on-going COVID-19 pandemic and its potential influence on tourist behaviour in the short- to medium-term. While the…
Abstract
Purpose
The purpose of this paper is to provide insight into the on-going COVID-19 pandemic and its potential influence on tourist behaviour in the short- to medium-term. While the influence of the pandemic on tourist’s perceived risk and its impact on their future travel behaviour is understandably yet to be established, the present paper discusses the potential nexus. Additionally, this paper provides tourism practitioners with some recommendations for mitigating the effect of potential heightened perceived risk on travel and tourism decision-making post the COVID-19 crisis.
Design/methodology/approach
The present paper synthesises contemporary academic literature on perceived risk and post-crisis tourism with emerging information associated with the unfolding COVID-19 crisis.
Findings
This paper draws empirical evidence from studies related to previous health crises and their impact on tourism, as well as tourist behaviour. By discussing previous studies within the context of the on-going COVID-19, it is possible to anticipate the influence that perceived risk associated with the pandemic may have on the post-crisis behaviour of tourists. Also, short-term measures to mitigate the effects of risk on tourism are posited to guide practitioners in the future recovery of the sector.
Research limitations/implications
The COVID-19 pandemic is an unprecedented and on-going crisis for the global tourism industry. Hence, the present paper serves as a primer to a broader discussion within the tourism discourse and provides theoretical direction for future tourism research.
Practical implications
Key to the recovery of the global tourism industry will be encouraging both domestic and international tourism activity. However, while the impact of the COVID-19 crisis on tourist behaviour is yet to be substantiated, previous research predicts a situation of heightened perceived risk and the potential cognitive dissonance that may negatively influence tourist decision-making. To mitigate this potential effect, governance, augmented immigration policy, destination media profiling, recovery marketing and domestic tourism will be critical interventions.
Originality/value
This paper is one of the first to discuss the potential influence of the COVID-19 pandemic on the post-crisis decision-making process of tourists and their conative behaviour. As a primer to further empirical research, this paper sets a pertinent research agenda for academic inquiry within an evolving and increasingly uncertain global tourism market.
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