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Purpose – Motivated by the negative effect of external shocks on the domestic economy, this study explores the role of financial sector development in absorbing the effect of external shocks on macroeconomic volatility in Nigeria. Design/methodology/approach – Autoregressive distributed lag and fully modify ordinary least square are used to examine the moderating effect of financial development in the link between external shocks and macroeconomic volatilities in Nigeria between 1986Q1 and 2019Q4. External shock is proxy using oil price shock, and financial development is proxy by domestic credit to the private sector and market capitalisation. At the same time, macroeconomic volatility is proxy by output and inflation volatilities. Macroeconomic volatilities are generated using generalised autoregressive conditional heteroskedasticity (GARCH 1,1). Findings – The results indicate that domestic credit to the private sector significantly reduces output and inflation volatilities in Nigeria in the short and long run. However, market capitalisation promotes macroeconomic volatility. More specifically, financial development indicators play different roles in curtaining macroeconomic volatilities. The results also reveal that external shocks stimulate macroeconomic volatility in Nigeria in the short and long run. Nevertheless, the effects of external shocks on macroeconomic volatilities are reduced when the role of financial development is incorporated. Practical implications – This study, therefore, concludes that strong financial sector development serves as a significant shock absorber in reducing the adverse effect of external shock on the domestic economy. Originality/value – This study contributes to the extant studies by introducing a country-specific analysis into the empirical examination of how financial development can moderate the influence of external shock on macroeconomic volatilities.

The study aims to measure the impact of macro shocks (internal & external) on the Iraqi economy in general and on the agricultural sector in particular, by measuring the impact of some macro variables on the gross domestic product and then the agricultural output through the use of two-stage least squares, as the results of estimating the relationship showed In the long term, all economic variables addressed in this research have significant effects on the gross domestic product through joint integration. The most influential of these variables is government spending, , then the exchange rate rate, taxes, and finally the inflation rate, and when the economic variables deviate in the long term Short from their long-run equilibrium values by one unit for each, 67% of this deviation is corrected per year, meaning that the GDP will take approximately a year and a half to return to its equilibrium value, as the response impulse function analysis showed that when Shocks in some economic variables, their impact appears significantly in the long term, and the study recommends paying attention to the international economic transformations affecting the agricultural sector, through adopting appropriate agricultural policies, and employing the achievements of science and technology in order to use modern agricultural techniques locally, in addition to transferring and settling them, as well as reducing Inflation rates are at low and acceptable levels, The researcher also recommends intensifying studies and scientific research on the agricultural sector to delve deeper into the problems that this sector suffers from and find appropriate solutions to them.

This paper explores the environmental and economic resilience of the regions within the Arctic zone of the Russian Federation (AZRF). We define a region’s environmental and economic resilience as its capacity to withstand external shocks, independently restore the balance between its economy and environment, and transform while maintaining or improving the balance between its environmental and economic systems. The study’s relevance stems from the rapid industrialization of the Russian Arctic in recent years and the constraints on investment in environmental technologies, green production, and management. The study discusses an analysis of macroeconomic, environmental, and economic indicators of the Russian Arctic regions, examining their interrelations during the pandemic crisis and under the pressure of Western sanctions. From 2018 to 2022, the anthropogenic impact on the environment in the Russian Arctic gradually declined, although the situation varied for individual indicators depending on trends in the regional sectors. Regions were identified that lead in environmental and economic resilience as well as those showing increased anthropogenic impact despite declining industrial production. A multidimensional classification of regions in the Russian Arctic was developed based on indicators characterizing the state of the environmental and economic spheres. Clusters of regions with high, low, and limited levels of environmental and economic resilience were identified. The study revealed that the macroeconomic situation in these regions is more dynamic than their environmental and economic conditions. Macroeconomic indicators in the Arctic regions demonstrate different trends during periods of external shocks. Overall, the Russian Arctic economy was sensitive to the 2020 crisis; the 2022 sanctions had a negative impact on economies focused on Western markets, and in 2023, macroeconomic dynamics slowed down across all regions of the Russian Arctic. Further research is necessary to understand the factors influencing the environmental and economic resilience of the Russian Arctic regions under current conditions.

The article presents a review of publications devoted to the approaches to assessing the impact of external shocks on the economy in general and on certain aspects of taxation in particular. It considers both studies that assess this impact by analyzing macroeconomic indicators (less often — budget indicators) and building econometric models (mainly SVAR and VAR models are used in this case), and studies in which various authors propose their own indicators to assess this impact (most often they are either sustainability indicators or stress indicators). Special attention is paid to publications the subject of which is the impact of new challenges on the tax system. A separate block includes publications in which the above issues are considered in relation to the Russian tax system. These are not only scientific articles on the topic, but also documents of international organizations, such as the International Monetary Fund, OECD, World Bank, etc. In addition, the article provides an overview of publications of foreign scientific institutes and research centers. Sanctions imposed on the economy of the Russian Federation are a particular case of an external shock. Thus, a review of publications assessing the impact of new challenges (by the example of sanctions) on the tax system of the Russian Federation is presented. The authors conclude that to assess the impact of new challenges on the tax system it is more advisable to use indicators based on statistical tax reporting.

Human capital plays a vital role in poverty-stricken households' efforts to cope with external shocks. Improving the human capital of poverty-stricken households to help them address external shocks can enhance the sustainability of poverty-stricken household livelihoods and support poverty alleviation. In this study, households with dependent children and older members were selected from questionnaires covering 6,463 poverty-stricken households from 33 poverty alleviation districts and counties in Chongqing municipality, China. Multiple linear regression model and stepwise regression methods were then used to compare the effects of the number of household members supported and the number of those working on the increase in income among poverty-stricken and nonpoverty-stricken households. Finally, the correlations between policy measures, dependent household members and household labor were examined. The results show the following: (1) Policy measures can alleviate the negative impact of a household's dependent population on household income. (2) Poverty-stricken households' access to policy support is closely related to the characteristics of their human capital. The household's dependent members and laborers are effectively protected by safety net and cargo net policies. (3) Policy measures can mitigate the impact of COVID-19 on the income of nonagricultural laborers while increasing the income of agricultural laborers. The findings show that the ability of poverty-stricken households to overcome poverty and deal with external shocks can be increased by revitalizing rural industries, linking the development of rural industries with the income of poverty-stricken households, and rationally using rural labor resources.

The paper presents a cross-country analysis of seven countries in the MENA region and explores the effects of COVID-19 on educational policymaking. The paper uses a quasi-thematic literature review to highlight the emerging themes related to the quality of education during the pandemic. The paper investigates the educational trends in seven MENA region countries and provides descriptive analysis to understand if there were changes from 2016 to 2020. In order to investigate these trends, the study uses the conceptualization of Sustainable Development Goals (SDG 4) “Quality of education.” The analysis is based on the data from the World Bank Development indicators. The paper’s evidence identifies a difference in the level of government expenditure on education within the MENA region. Pre and during COVID-19 provides crucial insights such as all countries increased their government expenditure on education except Egypt and Bahrain. The paper further addresses the contributing factors to the educational gaps in the region, such as digital exclusion, inequality (income and gender), and the government’s budget constraints during the pandemic. This study presents recommendations to bridge these identified gaps in the post-pandemic era.

This paper analyzes the contribution of supply, demand, and labor market shocks, to the evolution of regional production and inflation of manufactured goods in Mexico within the context of the pandemic. Under the identification of a Bayesian Structural Vector Autoregressive (SBVAR) model with zero and sign restrictions, it is found that since 2021, external demand shocks increased their contribution relative to local shocks in explaining the growth of manufactured goods production in all regions except the South; meanwhile, external supply shocks increased their positive contribution in explaining inflationary pressures across all regions. On the other hand, from 2022 onwards, labor supply shocks have contributed to the production and inflation of manufactured goods mainly in the Northern and North-Central regions, while wage bargaining shocks have emerged as drivers of inflationary pressures in all regions.

The Russian economy is operating under severe strains and limitations in foreign trade. The unevenness of economic space, regions’ openness, specialization and industrial efficiency cause differences in both economic growth and the state administration system. The article pioneers and tests a theoretical-methodological approach to assessing shock robustness of single-industry regions in the context of a harsh foreign economic environment and justifies approaches to adjusting regional development policy of the state. In the paper, shock robustness of a region’s economy is viewed as the ability to recover, continue a long-term development trend, and keep the potential for adaptation and structural changes. The research methodology consists of regional economics and management theories, and the theory of shocks. The research methods include regression analysis and time series analysis (the Hurst exponent, the Hodrick–Prescott filter). The empirical base is open data for single-industry regions. The study reveals that single-industry regions differ in shock robustness; there are regions with high susceptibility to foreign trade changes and industrial production volatility (with high foreign trade intensity – Sverdlovsk, Vologda, Chelyabinsk oblasts and Krasnoyarsk Krai) and regions with limited structural adaptation reserves (with low foreign trade intensity – Lipetsk and Murmansk oblasts) that require the adoption of problem-oriented managerial decisions. We systematize strategic avenues for single-industry regions vulnerable to external shocks, namely enhancing diversification and improving the sectoral structure of the economy and exports. The study adds to the understanding of industrial regions’ problem areas and government support measures facilitating their adaptation to instability.

Purpose: is to develop the model for stress testing of the impact of external constraints of Russian regions in the context of foreign economic constraints 2022–2023.Methods: the research is based on the theory of economic dynamics, regional economy and spatial development, the concept of the BANI world; the methodological basis of the study is a scenario approach to the formation of the stress testing model and the algorithm for determining the expected impact based on the machine learning method – the artificial neural network.Results: the study of scientific publications on the research topic, analysis of shock events, post-shock consequences (2006–2022) made it possible to substantiate feasibility of testing and differentiating the response of Russian regions to external constraints, applying the criteria of “shock-resistant” development, classifying economic space and identifying the territory with “shock-resistant” and “non-shockresistant”reactions. The model of regions stress testing has been developed, industrial and sectoral (67.6% importance) and spatial (32.4%) stabilization factors have been identified, areas of vulnerability to the restrictions of 2022-2023 and industrial regions with the potential for “non-shock-resistant” type of reaction have been identified.Conclusions and Relevance: the reaction of regions to external economic shocks (the duration of the decline period and the intensity of recovery growth) is determined by the totality of the production and spatial characteristics of the regions. The results of the study are important for the development of the theory of regional economy; they can be used byfederal and regional executive authorities of the Russian Federation.

with the introduction of the euro as the domestic currency, economies have faced inflationary pressures caused by price convergence towards higher levels. During the last period of significant negative shocks from the environment, by entering the euro area, the negative effects of the likelihood of inflation caused by the introduction of the euro may be absent.

The problem of ensuring the resilience of regional economic systems to shocks and upheavals has become especially urgent in recent years. The conceptual approach that forms its theoretical basis remains vague and inconsistent, primarily due to the complexity and multifaceted nature of this issue. This necessitates further research aimed at deepening the understanding of the regional resilience phenomenon through the formation of a knowledge structure model of this problem field. The purpose of the work is to identify key aspects and current directions for the development of the concept of regional economic resilience based on the method of bibliometric analysis. The methodological basis of the study was the method of bibliometric analysis combined with network analysis methods. The empirical basis of the study consisted of publications on the topic of regional economic resilience downloaded from the international scientometric database Web of Science. The instrumental basis for the analysis included VOSviewer program, version 1.6.20. During the first stage of the study, the author identified the dynamics of research interest in this topic for the period from 1995 to 2023, the most cited authors and their country affiliation. At the second stage, keywords in this subject field were analyzed, which made it possible to determine the most relevant aspects of studying the problem of regional economic resilience. In addition, clusters of keywords that form individual scientific directions within the analyzed issues were visualized. Analysis of the connections of individual keywords made it possible to identify the factors of regional sustainability most often analyzed by researchers (economic specialization/diversification of the regional economy, institutions, entrepreneurship, innovation, and others). The results of the study expand the understanding of the conceptual approach to regional economic resilience by presenting a holistic view of the problem, identifying and summarizing the various approaches of the authors, and presenting the structure of knowledge in this problem field. Economic resilience is seen not only as the ability of an economy to withstand shocks and recover quickly, but also as the ability of an economy to adapt to constant environmental and social changes. Sustainability is the result of the interaction of internal and external key participants in regional economic systems (economic entities, decision makers, representatives of society), in conjunction with the internal structure of the regional economy and regional potential (resources and human capital).

The paper presents a cross-country analysis of 25 low and lower-middle-income countries to investigate the impact of COVID-19 on educational policymaking. The study utilises variables from the Internet Inclusive Index and the Digital Skills Gap Index to explore the relationship between internet access and digital skills gaps in these countries. A descriptive and correlation analysis is conducted to understand trends and associations between the variables from data for the selected countries. The analysis shows a positive correlation between internet domains and digital skills gap scores. The paper also presents insights from low and middle-income countries to understand the challenges and responses to e-learning policy during the Pandemic. The evidence from the analysis suggests that countries with higher scores on internet domains pre-pandemic were in a better position to absorb the external shocks caused by the Pandemic. The paper’s findings highlight the importance of addressing the digital divide and promoting internet inclusivity in these countries to improve their ability to adapt to external shocks and ensure continuity of learning during crises such as the COVID-19 Pandemic.

AbstractWe examined factors that influence farm size sustenance and food consumption status of rural farm households. We used survey data comprising a sample size of 390 households. The study employed quantile and ordered logistic models to estimate the impacts of farm sustenance indicators on farm size cultivated and food consumption, respectively. We found that farm size is influenced positively by input expenditures, household sizes, types of crops, farm credits and subsidies. Besides, lack of farm labour adversely affected farm sizes of some categories of farmers. Besides, increasing farm input expenditures, lack of labour, farm credits and subsidies reduce the food consumption status of the households. We recommend that policymakers consider an integrated approach to farm sustenance and specific segregated attention to the individual categories of food consumption status of farm households. These could be achieved through the provision of farm credits and subsidies among other factors that sustain farm sizes and food consumption of the households.

AbstractThe level of causation and interdependencies among three commodities (cocoa, gold, and Brent crude oil), five banking sector performance indicators (Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL), Return on Equity (ROE), Return on Assets (ROA) and Core Liquid assets to total assets (CLATA)), and three general macroeconomic indicators (Inflation, Exchange rate and Global Economic Policy Uncertainty) are explored in this study. As a result, the wavelet techniques are employed to investigate time-frequency and frequency-dependent nexus in the Ghanaian context. In terms of time-frequency, a mix of negative and positive bi-causality among commodities, banking sector performance indicators, and macroeconomic indicators are found. Outcomes from the wavelet multipleprovide that these variables are highly integrated, with the exchange rate leading in the long-run. Hence, implying that exchange rate in Ghana has a high susceptibility to shocks before the other variables in the study. We advocate Government of Ghana and policy-makers should fine-tune policies that take into account the impact on other economic factors. Policies should be initiated to minimise fluctuations in the exchange rate. To limit the adverse impact of inflation and GEPU, it is required that effective and efficient country-level policies geared towards stability be initiated to resuscitate the economy.

Currently, a common phenomenon in the economy is a global increase in various fluctuations, which are both cyclical and non-cyclical – shock – in nature. The subject of modern discussions is often the discussion of the short-term impact of shocks and the adequacy of the market mechanism to the challenges created by shocks. Overcoming the consequences of the impact of various shocks on the economy, as well as the formation of its shock resistance, is associated by most authors with increased market flexibility, increased government spending and large-scale money emissions – traditional countercyclical tools. At the same time, today exogenous shocks (technological breakthroughs and restrictions, pandemic, sanctions and embargoes) are the most destructive force, which, being outsiders in relation to the economic system, are not sufficiently sensitive to economic countermeasures. Purpose: supplementing the existing methodology for studying economic shocks with new principles and typology, reflecting their connection with structural changes – the key to shock-resistance of the economy. Methods: analysis of the works of Russian and foreign authors in the field of research, generalization of scientific approaches and critical analysis of theoretical positions. The results represent a typology of economic shocks, structured in terms of a number of principles for their study and specification criteria, which form the author's contribution to the development of the methodology for studying non-cyclical phenomena in the economy. Constructive criticism of the existing approaches made it possible to develop a theoretical proposition about the relationship between economic shocks and the structure of the economy, positive changes in which should form the basis of anti-shock regulation. Conclusions. The existing approaches to the analysis of economic shocks adequately describe their impact on economic cycles and are based on the main achievement of the modern market economy – the flexibility of markets and their regulation. At the same time, the strongest exogenous shocks observed today, the impact of which on the transformational Russian economy can become destructive, actualize the search for structural principles to counteract them, which cannot be implemented both without an appropriate theory and methodology, an important part of which is a structurally determined typology of shocks.

This article theoretically and empirically investigates the determinants of inflation in a sample of 83 countries, including countries that adopt an inflation targeting regime (ITR) and countries that do not, for the period 2000 to 2021. The hypothesis that guides the research is that the recent events or shocks in the global economy (the subprime crisis, the “Eurozone” crisis, the COVID-19 pandemic and, more recently, the war in Ukraine, among others) have resulted in supply shocks – exchange rates, food and energy – causing a rise in inflation and bringing recessive effects that may be more pronounced in ITR countries, given the greater institutional rigidity of the regime. The empirical part of the research includes an analysis of the determinants of inflation in the sample of ITR and non-ITR countries, with a focus on variables that represent supply shocks, in addition to a proxy for the existence of global conflicts, the latter being a potential contribution of the research. The main results, despite the differences between developed and developing economies, suggest that the commodity index, exchange rate variations, and global conflicts positively impacted inflation in the analyzed period.

International tourism of today is considered one of the main levers of job creation, generating income and foreign currency and foreign investment. Over the past few years, international tourism has been growing steadily, but at the same time this same growth is threatened by challenges in the form of various external shocks affecting the volatility of tourism. Volatility is described, according to many authors, as an unpredictable measure of the intensity of variations. These variations are associated with unpredictable crisis situations or events commonly referred to as ‘new shocks’ (e.g. terrorism, epidemics, natural disasters, exchange rate volatility, oil price, political (in)stability, wars, and various forms of criminal activities). Such global events have a profound impact on a wide range of political, legal and social dimensions. Tourism is extremely vulnerable to various external and internal shock e. The appearance of exogenous events in destinations changes the characteristics of tourism at the destination level, affecting the tourist demand, but also on the economic situation of the country.

Annually growing public debt of Latin American countries is a source of a consistent increase in regional crisis potential. The COVID-19 pandemic has exacerbated political instability and deepened socio-economic imbalances in the region. The chronic dependence on debt financing increases the region’s vulnerability to external shocks and makes it much more challenging to implement public policies to achieve the UN Sustainable Development Goals. The purpose of the article is to reveal the increasing nature of the debt risks inherent in the Latin American countries, and to propose measures to overcome them. The authors summarize the views of leading Russian and foreign experts on the debt sustainability of the region. Based on the statistical data of international organizations, regional development institutions, as well as analytical materials published by Bloomberg, Fitch, White Case or Deloitte, the authors analyze the approaches to solving the Latin American debt problem. However, considering recent debt dynamics, new public borrowings may cause a deterioration of the regional debt sustainability in the future. This issue reinforces the uncertainty in international investment circles regarding the future solvency of the Latin American region. The situation in the Latin American countries is exacerbated by the uncertainty whether positive rates of economic growth resume in the medium term that have been lost due to volatile global commodity prices. The study examines the prospects for regional economic stabilization in Latin America and the Caribbean, including through the use of new debt financing mechanisms to meet current financial needs and minimize the risks of financial vulnerability.

The unprecedented impact of external shocks on the Russian economy threatens with a long-term recession, the avoidance of which requires the initiation of successive shifts in the technological, reproductive, sectoral, social structure, united by a single imperative of neo-industrial development. At the same time, structural changes in the economies of technologically advanced countries today are moving in line with the post-industrial transformation, the result of which is an increase in labor productivity and added value. In the Russian economy, the protracted deindustrialization requires the formation of a methodology and theory of neo-industrial development based on its own technologies and resources to counteract external shocks. The purpose of the study is to analyze approaches and theoretical provisions to the study of the possibilities of neo-industrial development of the Russian economy in the face of external shocks. Methods: literary review of Russian and foreign publications and materials, comparison and critical analysis of scientific theories. The results represent the structured content of the approach to the study of the neo-industrial transformation of the Russian economy in the context of external shocks, presented in comparison with the metho-dology of post-industrial development; the theories associated with it are criticized. The theoretical provisions of regulated structural shifts of the neo-industrial type, which are necessary to overcome de-industrialization and avoid post-shock recession, are considered. Conclusions. Theories describing the movement of the modern economy from an industrial to a post-industrial type objectively describe structural changes and technological transition in advanced countries, but do not offer forms and institutions to overcome the deindustrialization of the Russian economy due to its specifics. Nevertheless, the methodology of neo-industrial development includes approaches to the theoretical substantiation of the accelerated innovation and technological development necessary for the development of industry in the face of external shocks.

Conditioned upon the negative impact of pandemic restrictions explained by the spread of COVID-19 disease, the global economy is declining, which has led to real risks and threats to the development of the Ukrainian agricultural sector. Identifying these risks and threats, assessing the impact of the spread of the COVID-19 pandemic and the quarantine measures introduced in response to the agricultural sector is an important problem of agricultural policy that requires maximum efforts to solve it. The purpose of the article is to summarise the methodological basis for assessing the impact of restrictive quarantine measures 2020-2021 related to the spread of the COVID-19 pandemic for the agricultural sector of the Ukrainian economy, to substantiate the basis for determining criteria and indicators of impact and to carry out their empirical measurement. Analysis and synthesis, induction and deduction, analogy and comparison are used to generalise the theoretical and methodological aspects of the study. To diagnose the dynamics of economic indicators, economic and statistical methods are used in analytical studies. A number of techniques of abstract-logical tools made it possible to formulate intermediate and final conclusions. Methodological foundations, scientific, methodological and practical approaches to assessing the impact of restrictive quarantine measures 2020-2021 related to the spread of the COVID-19 pandemic for the agricultural sector of the Ukrainian economy have been improved by substantiating the optimal research tools, identifying the most informative indicators and indicators. It is proved that from the standpoint of an integrated approach, all indicators that are a measure of the impact of the spread of COVID-19 and restrictive quarantine measures on the development of the agricultural sector should be considered in accordance with the target segments for assessing changes at the macro and micro levels. In particular: macroeconomic trends in business efficiency; entrepreneurial activity; foreign economic activity; social and labour relations; finance and investment, state support, etc. The analysis showed that the progressive development of agriculture in Ukraine during 2020 explained by quarantine restrictions demonstrated structural, economic and financial effects (results) of a downward nature. Promising areas for further research in this direction should include the development of a set of strategic measures to minimize risks for the agricultural sector of Ukraine during and after the end of the COVID-19 pandemic

Viewed in light of democratic corporatism literature, Lithuania is a deviant case. Although it lacks essential institutional prerequisites deemed important for export success and flexible adaptation to external shocks, the small Baltic country has been among the best performers in the European Union on these dimensions. Lithuania has become very internationally integrated and has managed to quickly adjust to numerous shocks, such as the Russian financial crisis of 1998–99, the Global Financial Crisis of 2008–2009, and the COVID-19 pandemic. In this article, we analyse Lithuania’s export specialization and show how particular institutional elements have supported flexible adaptation and competitiveness improvements: we cover the labour market, state’s involvement in terms of domestic compensation and public goods provision, education and skills, and the role of political legitimacy. Lithuania’s case has implications for the literature on the political economy of small states and the debate regarding the middle-income trap.

In this paper, the extant literature on the impact of external shocks on monetary policy effectiveness with reference to non-WAEMU countries is reviewed. The importance of this literature review is to provide contemporary perspectives to scholars and policymakers on the relevance of the incidence of external shocks to the effectiveness of monetary policy with reference to non-WAEMU countries. The literature reviewed in this study shows that, on the whole, the extent and the degree to which external shocks are transmitted to the domestic economy substantially depend on a plethora of features, namely the absence of exchange rate flexibility; a strong export concentration, especially with respect to commodities; the level of global economic integration; restricted capacities of production; the absence of competitiveness in exports; over-reliance on foreign aid; foreign reserves that are not adequate and capital account openness.

This study aims to substantiate the practicality of establishing a fixed exchange rate (FER) under external shocks to the Azerbaijani economy. Using regression analysis, principal component analysis, and the Granger causality test, we substantiated the inexpediency of a fixed FER for the manat (the national currency) due to: the ineffective fiscal and monetary policy of the state, weak integration into the U.S. economy, distrust of the manat in the population, and the weakness of currency hedging. Artificial retention of a FER will lead to devaluation and chronic economic recession (inflation growth, a decrease in real incomes of the population, a reduction of GDP per capita, and an increase in unemployment). It is substantiated that an increase in public confidence in the national currency should become the basis for the transition to a floating exchange rate (FER) for the manat as it will help to get the actual value of the manat.

External and internal economic shocks can threaten the macroeconomic stability of a small economy. In the currency board regime, there is no role for the Central Bank as a macroeconomic stabilizer in the event of an external or internal shock. In this paper, the research is based on the analysis of eight countries with small economies with currency boards or discretionary monetary policy. The impact and connections between changes in EURIBOR, interest rates, inflation measured by the GDP deflator, money supply and GDP in the period 1997-2015 are analyzed. The paper proves that in countries with a currency board, whose regimes have a harmonized relationship with the European Central Bank and EURIBOR, interest rate shocks are less pronounced. The analysis of the links between EURIBOR, interest rates, money supply, inflation and GDP is not statistically significant in the "experiment" countries. In the control sample of countries with a variable exchange rate, the situation is heterogeneous for individual countries, but statistical significance has been determined in relation to EURIBOR and inflation. We conclude that EURIBOR may be one of the generators of exogenous shocks. In the case of Bosnia and Herzegovina (B&H), there are much more significant internal transmission mechanisms that lead to macroeconomic imbalances. The growth of deposits was preceded by the growth of loans and money supply. This led to a fall in interest rates which the Central Bank of BiH (CBB&H) could not influence due to the currency board. However, the fall in interest rates did not yield the expected results. GDP has shrunk, inflation is falling, while at the same time the high unemployment rate has remained unchanged. The nominal exchange rate of the domestic currency was determined by law, but there was an appreciation of the real exchange rate, which affected the increase in the foreign trade imbalance. The result of the currency board is price stability, nominal exchange rate stability and money supply growth. Negative results are: appreciation of the real exchange rate, faster growth of imports and maintaining a very high unemployment rate. Macroeconomic developments in the BiH economy do not always have the right course that can be expected in mature economies. The achievements and applicability of standard macroeconomic policies are very limited.

The objective of this study is present a systematical proposal that allows to understand the concept of macroeconomic vulnerability (MV), the sources that generate and the mechanisms through which it transmits its effects toward the main macroeconomic aggregates; particularly, in the developing economies. Like this, in contrast to other studies that have focused on the effects that generate the external shocks on financial markets, within of this research what is sought is deep into the caused impact by them from the perspective of the real economy. Inside this exercise, it systematized the main contributions from of Neoestructuralism, where, although there isn’t formal proposal of MV, it was found that there are a number of elements from which a framework of analysis can be configured that allows to understand the economic dynamic of this type of countries.

The study identifies the features of the USD/UAH exchange rate dynamics for the period from January 2014 to May 2020. The main purpose of the empirical analysis is to determine the current trend of the USD/UAH exchange rate (is it random or permanent), indicate the presence of seasonality in foreign exchange rate dynamics and evaluate its sensitivity to external shocks. Three hypotheses are tested using several methods of time series analysis (autocorrelation analysis, ADF, Phillips-Perron and Granger tests), including a trend-season model using a time series of one variable (ARMA), a multifactor VAR-model, impulse functions. The results show that, the movement of the hryvnia exchange rate against the US dollar is a stochastic process. Its trend has a random component and tends to change sharply over time. Moreover, exchange rate fluctuations are seasonal. It depreciates in the first and second quarters, and strengthens in the third and fourth. Some macroeconomic indicators cause a positive or negative reaction of the USD/UAH exchange rate. This indicates that today the Ukrainian foreign exchange market is relatively efficient, but stable, since its reaction to external shocks is short-term, insignificant and tends to fade out. Although the findings are controversial, they support the generally accepted view that the exchange rate formation is a multifactorial process that depends on several macroeconomic factors. However, high volatility and random walk specification indicate that it is almost impossible to predict its future value at this time. AcknowledgmentThe material was prepared within the framework of the scientific research Modeling and Forecasting the Behavior of Financial Markets as an Information Base for Ensuring Financial Stability and Security of the State, No. 0117U003936 (supervisor Alex Plastun).

Currently, the Eurasian Economic Union (EAEU) is at a critical juncture in its development. Five years after the agreement came into force, but there are still serious economic contradictions between the key participants of the Union, as the achieved integration effects are quite ambiguous. Due to unfavourable external conditions, the positive trade effects of the implementation of the EAEU have been very limited. Only Armenia, of all member countries, has benefited most. However, an increase in medium and high value-added products led to positive changes in the commodity structure of mutual trade. For assessing the degree and nature of the impact of the Russian Federation on the economies of the EAEU member countries, we identified and analysed such factors as trade in goods and services, migrant remittances and foreign direct investment from Russia in the period 2011–2018. In general, the reduced remittances from Russia and a decline in mutual trade in goods decreased the significance of the Russian factor in the development of the members of the Union. At the same time, trade in services and direct investments are more sustainable, indicating the high potential for the development of cooperation in these areas. Influenced by changing external factors, such as volatile fuel and raw materials prices, different macroeconomic and geopolitical challenges, the EAEU is unable to ensure sustainable growth in mutual trade. We have identified a variety of aspects hindering the progressive development of the Eurasian integration amid global uncertainty. They include the priority of the national economic interests of the member countries, the remaining structural economic differences, trade barriers and restrictions, the weakening of Russia as an integration driver, as well as increasing competition from the EU and China.

Abstract Background In this paper, we try to shed light on the question whether natural disasters, such as nuclear accidents, have an impact on policy makers’ activity in passing new green energy policies. Disruptive moments like exogenous shocks reinforce society’s disapproval against polluting technologies and should open a window of opportunities to eventually initiate a change toward green energy. Methods Based on the data of 34 OECD countries, we disentangle the effect of disruptive exogenous shocks on countries’ policy activity. Starting with OLS regressions, we run several robustness checks by using a pre-sample mean approach, an ARDL technique called dynamic heterogeneous panel models (DHPM), which allows for the distinction between long- and short-run effects. Results The results corroborate the hypothesis that unexpected, disruptive events have a positive impact on the actual number of renewable energy policies. The fade-out time for shocks is about 7 years, leaving a positive long-term effect. Conclusion Exogenous events such as nuclear disasters act as “focusing event” and seem to offer policy makers a window of opportunities to initiate conducive policy measures toward a cleaner economy. Furthermore, a country’s capacity in green technologies is key to a pervasive diffusion of green technologies.

Peru, as a small and open economy, is prone to external shocks that cause fluctuations in its GDP, and given the high degree of dependence on raw materials, this could be amplified. In relation to this, the present work aims to quantify, through an autoregressive vector model with the incorporation of exogenous variables, how vulnerable the Peruvian economy is to external shocks and how an exacerbation of current trade frictions would affect economic growth.

The main objective of the study was the identification of the key channel of impact of positive and negative external shocks on the Russian banking system for the period from 2000 to 2017. In conducting the study the author used systematic and statistical methods of analysis. Throughout the named period, the banking sector of Russia was always under the influence of one or another external shock: rising and falling oil prices; favorable conditions for obtaining financing on the global capital market; the global financial and economic crisis; the European debt crisis; the tapering of the quantitative easing policy in the USA; sanctions imposed on Russia by the Western countries. In the pre-crisis period, capital inflows became the main channel for the transmission of external shock. In the course of the European debt crisis, problems with attracting external financing became a key channel for the transfer of external shock. During the global crisis and the crisis of 2014–2016 the channels of transmission of external shocks to the banking sector of Russia, despite various causes, were in many ways similar. So, the main channels were the outflow of capital, the restriction of external financing, the collapse of the ruble exchange rate, and the state of confidence in the banking sector.

The unsatisfactory dynamics and high level of volatility of economic processes actualize the problem of ensuring the stable development of regional systems. The economic situation in the Federation largely depends on the state of the manufacturing industry, which is the main branch of Russian regions specialization. The aim of the work is to study the sustainability of the regional economy in the face of shocks in 2014-2015. The research methodology includes an analysis of domestic and foreign literature on the sustainability of the regional economy. A comprehensive analysis of scientific literature has shown that in an unstable economy, the importance of studying the issues of economic resilience increases, i.e. its ability to withstand external shocks, as well as quickly recover in the post-shock period. To identify the impact of external shocks on the dynamics of manufacturing industries, two periods are identified: 2012-2014 and 2016-2018. The analysis was carried out using official data from the Federal State Statistics Service of the Russian Federation. The paper studies the stability of manufacturing industries in the regions of the Central Federal District and the Northwestern Federal District to the impact of shocks. Based on the level of resilience, the regions are divided into three groups. In the regions of the first group, the industrial production index reached the pre-crisis level, the second - exceeded the pre-crisis level, and the third - the dynamics of manufacturing industries worsened. The analysis did not reveal a significant influence of the factors of specialization and innovative activity on the level of shock resistance. Regions with the same specialization showed significantly different levels of shock resistance. In the context of a low level of innovation and investment activity, it is difficult to draw a conclusion about the significant impact of innovation on the adaptation of regions to the conditions of the post-shock economy. At the same time, as the analysis has shown, most regions with higher growth rates of manufacturing industries in the post-crisis period have a positive dynamics of innovation activity. Manufacturing industries in most regions have adapted to the new economic reality. At the same time, the low level of investment and innovation activity does not allow us to conclude that adaptation was accompanied by an increase in the technological level of the industry.

This study aimed to examine the impact of external factors (external grants and aid, external public debt, remittances of Jordanians labor abroad and external shocks) on the efficiency of the monetary policy, which aims at achieving monetary stability through influencing inflation rates in Jordan during the period 1990–2015, by using standard regression equation estimated by the ordinary least squares (OLS). The findings of the study showed a statistically significant impact at 1% of each of the external grants and aid, and remittances of Jordanians labor abroad on the efficiency of monetary policy through targeting inflation rates in Jordan. As to the variables of external public debt and external shocks, the findings showed a weak impact, which was not statistically significant at a reasonable level, on the efficiency of monetary policy. The researchers recommended that decision-makers pay further attention to the vital role of the remittances of the Jordanians labor abroad, which is one of the main bases of the Jordanian economy. This is due to its crucial impact on the Jordanian economy.

The economic development of many countries globally relies heavily on tourism arrivals and spending. Terrorist attacks, political unrest, and other external shocks create disruptions and imbalances that lead to tourism crises with devastating effects on a country’s economy. The paper quantitatively examines the wider economic impacts and welfare effects of a continued decrease in tourism revenues caused by terrorism and political instability on the Kenyan economy. We use a dynamic Computable General Equilibrium model which we calibrate to a 2003 Social Accounting Matrix for Kanya. Our results reveal that a decrease in tourism spending causes a contraction of the economy in the short-term and long-term. Tourism contraction leads to decreased output, prices and wages in urban households, whereas the rural households notice an increase in welfare in the short and medium-term and a decrease in the long-term. Diversification of the tourism product, better branding, crisis management preparations and emphasis on domestic tourism that is less affected by disruption are ways to safeguard tourism in Kenya and beyond.

The article is devoted to the study of the degree of sensitivity of the Russian economy to exogenous shocks from the external environment. Indicators of the dynamics of foreign markets are changes in the global market of raw materials, financial markets of developed countries, and the propensity of foreign investors to risk. The topic of our study is relevant against the background of the current key risks for the world economy and financial system: uncertainty of the global energy market prospects due to the growth of oil production in the united States; normalization of monetary policy by developed countries, which in the future can provoke capital outflow from emerging markets; the threat of global protectionism. The article describes the potential consequences of these events for the world economy and financial system. The study uses statistical data on the real and financial sectors of the Russian economy, as well as foreign markets for the period 2002–2018. The parameters of external market conditions are world trade conditions, the volatility of the global stock and currency markets, the level of business activity in the Eurozone region, and the degree of risk and uncertainty in emerging markets. The research methodology is based on Bayesian structural vector autoregressions. The graphs of the impulse response function allow us to determine the direction of the key parameters of the Russian economy (industry, inflation, exchange rate, and sovereign risk premium) in response to changes in external environment. The contribution of external shocks to the dynamics of macroeconomic indicators is determined on the basis of the decomposition of the error variance of the model endogenous variables forecast. Our analysis confirmed the significant dependence between the dynamics of the key indicators of the Russian economy and the external markets. The author concludes that the inflation targeting regime and the policy of budget rules have a positive impact on the protection of the Russian economy from global risks.

The choice of exchange rate regimes in the countries to take advantage of stabilization policies was quite difficult. After the breakdown of the USSR, the KR among the former member countries in the Central Asia was the first to introduce its national currency on 10th of May 1993. After that time, it has done several adjustments in the exchange rate policy to preserve the value of the som from external shocks. In the study, the effectiveness of the exchange rate policy on GDP and GDP components is examined by using the ARDL model by Pesaran et al. (2001). The estimation results show that the depreciation of som has positive significant short- and long-run effects on GDP growth. However, while it has insignificant effect on most of the GDP component variables in the short-run, it has negative significant long-run effect.

Abstract For a more diversified export structure and a better distribution of domestic income in Cambodia, agriculture and agro-industry have been specified as export potentials. While empirical impact studies within those sectors have been limited, this paper attempts to assess the impacts of the promising export sectors on domestic economy by applying a computable general equilibrium framework. Results show that the increase in export demand for the selected sectors—food–beverage–tobacco, rubber industry, and agriculture—generate favorably on growth, employment, and household welfare, with the contributions of the former two higher than that of the latter, suggesting that priority should be given to agro-processing exports to increase production chain. The findings indicate that in order for the trading sectors to expand the benefits, productivity growth of low-skilled and medium-skilled labor is crucial. The influence of the selected sectors would be greater when the demand disturbance is combined with supply-side efficiency measure to promote the export orientation.

The paper focuses on impediments for efficient implementation of inflation targeting framework in Russia. Different structural and institutional problems of Russian economy and financial system are analyzed, including dependence on fuel sector, impact of external shocks, government-owned banks’ dominance, role of foreign capital on stock market and banking system, low level of trust, financial sanctions etc. Instead of implementing inflation targeting framework the authors offer switch monetary policy goals to crisis management with special focus on set of indicators, including exchange rate, and to supplement monetary policy by some capital account restrictions, macroprudential policy and fiscal policy (in terms of using development banks mechanisms).

One of the promising approaches of macroeconomic modeling and quantitative assessment of the impact of external and internal factors on macroeconomy of a country, which is actively used abroad, is a Bayesian approach to the estimation of vector autoregressions. In this paper we examine Bayesian vector autoregression model (BVAR) to assess the impact of external shocks, such as the price of Brent crude oil, the volatility index VIX and the Shanghai Stock Exchange Composite index, on Russian macroeconomic indicators. The results allow us to estimate the contribution of external factors as a significant in the dynamics of Russia economic variables. This approach can be successfully applied for the analysis of Russian data, which was confirmed by the results presented in the article.

The modern crisis phenomena in the Russian economy had some objective grounds, but they would never get real without the two external shocks that were almost synchronized in time. The first shock is the decline in world oil prices, which is caused, for the Russian economy, by the failure of system analysis and forecasting of the branch markets dynamics. The second shock is the introduction of sectoral, primarily financial, sanctions against Russia. The result of these two shocks, coupled with fundamental institutional conservatism, is the transition of institutional and structural crisis in the Russian economy in the form of a classical cyclical crisis. The inviolability of the management, personnel and ideological (in the sense of economic concepts) foundations of the Russian economy ensures, at least, the protracted nature of the current crisis, due to the limited capacity of the structural compensators to change the economic dynamics without large- scale support of financial market, technological exchange, economic incentives and positive expectations of economic agents

The aim of this paper is to study the pace and role of small states in international economic relations. The main characteristics of small states are a high degree of economic openness, export concentration and high dependence on strategic imports. In addition, their significant features are also indivisibility of overhead costs and diseconomies of scale. There is no single definition of small states since the size is a relative term. In addition to the size of population, sometimes other indicators are used as size criteria such as territory size or gross domestic product. This paper emphasizes the endogenous and macroeconomic characteristics of small states in detail and some small countries’ problems that can be challenging in developing their economies. Furthermore, the concepts of small states’ economic vulnerability and resilience are covered. This paper pays special attention to arguments in favor of regional cooperation among small countries. The final part of the paper is dedicated to the similarities, and also economic differences among the small European states. It also highlights the benefits of small states’ membership into the European Union. Numerous economic benefits for small countries arise from the process of regional integration, especially with regard to strengthening economic resilience, foreign trade, strengthening their bargaining power, joint management of regional public goods, receiving technical assistance and geopolitical aspect.

This paper studies the impact of fiscal policy and external shocks on the sustainability of Serbia’s external position. The key determinants of Serbia's current account balance are identified using model averaging techniques and are compared with estimates obtained for other small open economies (Poland, Georgia, Morocco, Ukraine, and Estonia). The paper uses estimated influences of macrovariables on the current account balance to generate a rich set of possible outcomes for the external position of the country. The results suggest the importance of fiscal policy for the reduction of external imbalances in all countries in our sample. In particular, credible and sustained fiscal adjustment can reduce current account deficit and stabilize Serbia’s external position close to its current level over the medium term. The analysis also warns that lack of success in fiscal consolidation coupled with external shocks may easily push the external position onto an unsustainable path.

The aim of this paper is to investigate the interrelation between the housing sector and macroeconomy in Croatia. It focuses on the housing sector as a source of volatility and studies whether the changes in house prices easily spillover to the rest of the economy. Furthermore, it studies how domestic variables, especially financial conditions, influence house prices. Finally, as Croatia is a small open economy, the responses of housing prices and other domestic variables to external shocks were explored. For the purpose of our research, a five variable structural vector autoregressive (SVAR) model comprising both domestic and foreign variables was used imposing block-exogeneity restrictions and assuming that domestic shocks have no significant impact on foreign variable. The model suggests that the developments in house prices and other domestic variables were mainly caused by external shocks. However, the changes in real estate prices have important influence on domestic variables in Croatia.

This paper studies the economic fluctuations of an open economy such as the French economy. A system of variables containing output, price level, trade balance, real exchange rate and oil prices is analyzed by applying the structural vector autoregressive (SVAR) methodology initiated by Sims (1980). This set of variables allows to evaluate the main sources of impulses of the French economy fluctuations. The results show that five structural shocks are identified using the long-run constraints implemented by Blanchard and Quah (1989). From the SVAR dynamic properties, impulse response functions and variance decomposition, the French economy is shown to be particularly vulnerable to supply and oil price shocks, where these two shocks respectively contribute to 40% and 35% of the economic disturbance. France is also hit by important external shocks which damage its trade balance position. Finally, it is found that shocks related to economic policy (demand shocks) have a quite limited impact on the economic activity.

Este trabalho analisa a manutenção de reservas ótimas precaucionais no país. As distintas medidas de adequação e as simulações produzidas oferecem a mesma inferência sobre a inadequação dos estoques de reservas brasileiras, mantidos em níveis aparentemente excessivos a partir de 2008. O exercício econométrico modelo de correção de erros vetorial (VEC) também não provê muito suporte à afirmação de que acumular níveis altos de reservas seja fortemente significante na determinação do risco-soberano e dos custos de financiamento externo da economia, inclusive não reduzindo a volatilidade da taxa de câmbio. Por sua vez, identificam-se custos fiscais não negligenciáveis derivados da política de esterilização.This paper analyses the maintenance of precautionary reserve holdings in Brazil, investigating three interrelated issues. Using one optimization process, an econometric model of the expected effects of this strategy, and on a cost-benefit analysis, the optimal level for international reserves is estimated. Different adequacy measures and model-based simulations offer the same inference about the inadequacy of the Brazilian reserve holdings, which have been maintained at excessive levels since 2008. Furthermore, the econometric exercise does not provide much support for the claim that accumulating high levels of reserves is highly significant in determining sovereign risk and the nation's external funding costs, as well as showing that reserves do not reduce exchange rate volatility. It seems, otherwise, to be related to a huge fiscal cost associated with the sterilization policy.

Malaysia is one of the most open economies in the world. Structural changes in the economy have largely served to strengthen it's outward orientation. Still Malaysia had to pay a 'price' in the form of vulnerability of its economy to external fluctuations. The article outlines the changing profile of the Malaysian economy, focuses on the transmission of external fluctuations to the domestic economy and discusses the government policy interventions in the wake of uncertain external circumstances. A number of important lessons for other developing countries may be drawn from the Malaysian experience for formulating their own policies and strategies. It shows how the negative effects of economic openness can be minimized through appropriate policy interventions

The 1980s' debt crisis is a landmark in developing economies' growth and stabilization. According to the most quoted empirical articles, external shocks and vicissitudes gave rise to crisis just because of delays in stabilization policies, engendered by internal conflicts and institutional immaturity. I review some of these papers, and find out some problems - in the measurement of shocks and foreign indebtedness, namely - whose corrections lead to opposite results: external shocks and foreign indebtedness explain that crisis regardless of domestic policies. At the same time, the strong correlation of income distribution to terms of trade changes and foreign indebtedness suggest that inequality may have contributed differently to that crisis: either through an economic channel, or through a political channel based on delays in reforms.

This paper develops a general equilibrium model for the Republic of Croatia to evaluate CGE model use in macroeconomic management and forecasting. Since Croatia is a small open country subject to large external shock and growth constraints efficient macroeconomic management framework is fundamental. The lack of data prevents to follow historic economic variables over a longer period of time, which is why CGE models look as possible solution. CGE models use calibration to solve the problem of missing most macroeconomic variables. After developing the model, we use it to run different scenarios for economic policies using a CGE model for Croatia. Results show that CGE model can be an important instrument for policy makers in running macroeconomic policies for small open countries.

This paper studies the economic fluctuations of an open economy such as the French economy. A system of variables containing output, price level, trade balance, real exchange rate and oil prices is analyzed by applying the structural vector autoregressive (SVAR) methodology initiated by Sims (1980). This set of variables allows to evaluate the main sources of impulses of the French economy fluctuations. The results show that five structural shocks are identified using the long-run constraints implemented by Blanchard and Quah (1989). From the SVAR dynamic properties, impulse response functions and variance decomposition, the French economy is shown to be particularly vulnerable to supply and oil price shocks, where these two shocks respectively contribute to 40% and 35% of the economic disturbance. France is also hit by important external shocks which damage its trade balance position. Finally, it is found that shocks related to economic policy (demand shocks) have a quite limited impact on the economic activity.

Un objetivo de este documento es discutir el impacto macroeconómico que un boom (o una caída) de los precios internacionales de las materias primas de exportación tiene sobre una economía pequeña y abierta que opera en un marco de libre movilidad internacional de los capitales. Para el análisis de los efectos de este choque externo real se utiliza un modelo Mundell-Fleming convenientemente adaptado. Se distinguen dos efectos: el cambiario, que perjudica al resto de la economía, y el efecto vía la demanda agregada, que estimula al resto de la economía. Se compara también el impacto macroeconómico de un choque externo real con el de un choque externo financiero (cambios en la tasa de interés internacional) en una economía dolarizada y con tipo de cambio flexible. El otro objetivo de este documento es mostrar que la intervención esterilizada del banco central en el mercado cambiario puede ser una respuesta eficaz frente a los choques externos reales o financieros. Para determinar el impacto de estos distintos choques externos no solo importan las características de la estructura económica, sino también el sistema vigente de políticas monetarias y fiscales y, en particular, la naturaleza del régimen cambiario. -- One goal of this paper is to discussing the macroeconomic impact that an international commodity prices boom has in a small open economy under perfect capital mobility. A Mundell-Fleming model with some adaptations is used for the analysis of this real external shock. There are two effects: the monetary one that is a recessionary impulse, and the one that increases aggregate demand. Also the macroeconomic impact of a real external shock is compared with the effect of a financial external shock (changes in the external rate of interest), in a dollarized economy with a floating exchange rate. The other goal of this paper is to show that central bank sterilized intervention in the foreign exchange market can be an effective policy response to copy with real o financial external shocks. The macroeconomic impact of external shocks depends upon the economic structure, the monetary and fiscal policy mix, and the exchange rate regime.

The Latin American region held up well during the first phase of the international economic crisis started in 2007. During the period of worsening of the crisis, after the collapse of Lehman Brothers, Latin American countries did not know any monetary or financial crisis and experimented a mild recession because the recovery was strong in 2010. This degree of resilience is explained to a large extent by the decrease of financial vulnerability during the phase of growth expansion (2003-2008).However, beyond the common features to the region as a whole, the crisis has exposed a wide range of national situations. The factors that lie behind these differences are related to the magnitude of the unfavourable shocks affecting each economy, the degree of diversification of the external economic relations and the manoeuvring room of each country to implement counter-cyclical measures. This helps to distinguish the cases of Mexico and Venezuela, heavily affected in 2009, compared with those of Bolivia or Brazil, which held up well during the first phase of the international economic crisis. Nevertheless, even the countries whose growth regimes may have mitigated the unfavourable effects of the adverse shocks suffered serious challenges.