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The US economy is going through a challenging transition, with a lowered GDP growth forecast of 2.3% for 2024. Some sectors, such as housing and manufacturing, are struggling, but this does not necessarily indicate a broader economic downturn. The rise in the unemployment rate is concentrated among younger workers, reducing the risk of a negative cycle. Inflation is expected to remain low, and the Federal Reserve is predicted to cut interest rates. Overall, the short-term growth outlook is moderate, with factors such as household balance sheets and equipment spending supporting the economy. Consumer spending has slowed due to inflation, but this is expected to moderate in the coming months. The job market remains strong, although job gains have slowed, and the unemployment rate may inch higher. The Federal Reserve is considering cutting interest rates, and fiscal policy is expected to remain stable. [Extracted from the article]

The aim of this study is to delve into the intricate the mechanism through which alterations in currency exchange rates give rise to shifts in inflation rates, while taking into careful consideration the country's economic cycle. In order to accomplish this objective, we used a dataset that spanned from 1 January 1999 to 1 July 2023, focusing our analytical lens on three specific geographic areas, namely the Eurozone, the United Kingdom, and Canada. In our pursuit of understanding this complex relationship, we employed the Markov Switching Vector Autoregressive model. Our research outcomes can be succinctly encapsulated as follows: in the initial stages, particularly during phases characterized by robust economic growth, the transmission of exchange rate effects onto inflation levels appeared to exhibit a partial impact across all geographic areas under examination. However, during periods marked by economic downturns, both the United Kingdom and Canada displayed a distinctly more comprehensive transmission of these effects. Moreover, the prevailing projections for the forthcoming time horizon, across all the countries encompassed by our study, strongly indicate the onset of an expansionary phase that is projected to extend over a span of 25 months. Lastly, concerning the implications of unexpected disturbances or shocks, it is noteworthy that the response of exchange rates to inflation induced shocks was neither immediate nor as pronounced as the corresponding reaction of inflation to sudden shifts in exchange rates. [ABSTRACT FROM AUTHOR]

Objective: To analyze how the impulse-response effect of macroeconomic variables impacts on solvency indicators of regulated and unregulated publicly traded companies listed on Brazil, Stock Exchange, Over the Counter (B3). Method: The Autoregressive Vectors with Error Correction (VEC) model was adopted for four lags, using the Cholesky ordering. The analysis period corresponded between the first quarter of 2005 and the third quarter of 2020. The sample data of 137 institutions were treated by 5% winsorization, aggregated based on the weighted average of the sectors. Discussion: The regulated and unregulated segments presented different behavior, being unregulated institutions more impacted by the impulse-response effect compared to the regulated ones, with a tendency of the long-term economic effect in both segments. The model showed that macroeconomic variables have impacted since the first quarter after the observance of the shock, and the effect of the variable itself on the analyzed system does not always respond significantly to explain the longterm effect observed on solvency indicators, and the exchange rate (dollar) is more economically significant for the behavior of indebtedness. Contributions: The research contributes to the definition of a model for the investigation of economic cycles at the institutional level and corroborates with the academy for understanding the macroeconomic effect on accounting information. [ABSTRACT FROM AUTHOR]

Changes in interest rates, inflation, and exchange rates are the main components of macroeconomic risks (financial risks) in projects evaluation. However, the conduct of monetary policy as well as its impact on the economic environment is seldom considered as an important component of macroeconomic risks. In this paper, we offer a simple framework to analyze the conduct of monetary policy. We examine the stabilizing properties of monetary policy, its impact, and the parallels in the monetary policy approaches taken in the Czech Republic, Hungary, and Poland until the pandemic. We provide a simple theoretical background to motivate the main elements of the debate and the choice of policy strategy. We then rationalize the adoption of a form of flexible inflation targeting (FIT). It is characterized by an explicit concern over exchange rates. The empirical evidence, consisting of calibrated and extended Taylor rules, together with local projections estimates, suggests that monetary policy has been practiced with considerable flexibility by all three central banks and has contributed to business cycle stabilization in the region. Most notably, the exchange rate plays an important role in the conduct of monetary policy. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Business Science (JOBS) / İşletme Bilimi Dergisi (JOBS) is the property of Journal of Business Science / Isletme Bilimi Dergisi (JOBS) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

George Tavlas's book, "The Monetarists: The making of the Chicago monetary tradition, 1927–1960," explores the evolution of monetary economics at the University of Chicago during the early to mid-twentieth century. Tavlas argues that the Chicago monetary tradition had a unique policy agenda in the 1930s, including money-financed fiscal deficits, monetary policy rules, 100% reserve requirements for banks, and flexible exchange rates. The book highlights the contributions of various economists, such as Milton Friedman, Henry Simons, and Lloyd Mints, and challenges previous understandings of the Chicago tradition. Tavlas concludes that the Chicago economists focused on combating economic crises and developing policies to manage the velocity of money. The book is recommended for those interested in the history of economic thought and its relevance to contemporary issues. [Extracted from the article]

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examined the effect of exchange rate fluctuation economic factors on financial performance of multinational companies in Nigeria, It specifically examined the effect of nominal exchange rate, real exchange rate, interest rate as well as exchange rate fluctuations on the financial performance of listed multinational oil and gas firms in Nigeria performance of deposit money banks in Nigeria. Secondary sources of data was employed to extract useful information from the Audited Annual Reports of the eight (8) oil and gas firms sampled were selected through purposive sampling technique for the investigation for the periods 2006-2020. The measures of exchange rate fluctuation economic factors comprise of foreign exchange rate fluctuation (FXRF), real exchange rate (REER), nominal exchange rate (NOER interest rate spread (INSR), firm's size (FSIZE), financial leverage (FLV) and business risk (BSR) with financial performance, being dependent variable measured by return on asset (ROA). Both descriptive and inferential statistics. Correlation and regression analysis were used to test the hypothesis. Findings revealed that nominal exchange rate and interest spread rate have positive and statistically significant relationships with return on asset (ß=1.395, pvalue 0,000 and 0.017;p-value 0.000) at the level of 5% level of significant while foreign exchange rate fluctuation, real exchange rate, firm size and financial leverage has a negative and statistically significant association with return on asset (ß=-0.0021, p-value=0.000,-8.01;p-value 0.049,-0.00031;p-value 0.038, and -0.00867;p-value|=0.002) respectively at 5% level of significant. The study concluded that exchange rate fluctuation economic factors have strong statistical relationship with the financial performance of listed oil and gas companies in Nigeria. Based on the findings, the researchers recommends that micro-economic factors such as financial leverage, company size, and business risk should be taken into consideration by the management of Nigerian listed oil and gas businesses when mediating on fluctuations in the country's foreign currency rate. To lessen the severity of exchange rate fluctuations, the appropriate authorities should take proper steps to protect the value of the native currency. Furthermore, oil and gas companies should constantly assess the impact of fluctuations in the nominal exchange rate on their income from upstream and downstream oil exploration activities, and implement strategies to mitigate the negative impact of these fluctuations. [ABSTRACT FROM AUTHOR]

This study investigates macroeconomic trilemma and central bank behaviour in Nigeria. The period of investigation spans the quarterly period of 1981–2017. Upon the data stability condition of Zivot-Andrew unit-root test with structural breaks, the Markov-switching dynamic regression was employed as the technique of analysis. With a validated trilemma hypothesis, the study found that the trilemma constraints hold for the Nigerian economy but at the expense of the autonomy of the monetary authority. Being the policy variable of the Central Bank of Nigeria, the exchange rate was found to follow two regimes of fixed and managed-float regimes. The results also showed that political risk was significantly sensitive to both regimes of exchange rate, while the foreign interest rate and the net export led to exchange rate appreciation under the managed-float regime but depreciation under the fixed regime. The study recommends that the foreign sector be made competitive for proper exchange rate management, while impulses from the political institutions should be put under check. [ABSTRACT FROM AUTHOR]

We assess the relative importance of domestic and foreign disturbances in explaining fluctuations in key macroeconomic variables and find that both types of shocks are equally important. We reach this conclusion within a constructed two-sector open economy DSGE model context, where we isolate the relative contributions of each group of disturbances to post-WWII U.S. business cycles. Our approach is to apply the indirect inference method to test the model's fit against a four-equation VAR(1) of output, real exchange rate, energy use, and consumption. Our main result is that foreign disturbances are pivotal to driving movements in these home variables; accounting for 38% of the variability in aggregate output, 73% of the variation in the real exchange rate, 45% of the variance of energy use, and 84% of the volatility of consumption. Further, foreign disturbances are also identified to be crucial for some other home macroeconomic variables, explaining larger fractions in changes to investment, labour hours, and real interest rate. However, the U.S. economy appears to be resilient to foreign disturbances with respect to certain macroeconomic variables; in particular, exports, imports, real wages, and domestic absorption. [ABSTRACT FROM AUTHOR]

The position of developing countries (DC) in the international financial system is the topic on which Dragoslav Avramović worked throughout his successful scientific career. This paper extends his research towards an empirical analysis of the importance of spillovers from the changes in the monetary policy of the European Central Bank (ECB) on the country risk premium and exchange rate in Serbia over the most intense phase of the Euro crisis (2008-2012). Empirical results suggest that the ECB policy changes during the crisis significantly spilled over to financial markets only in several dimensions. The policies did not have a statistically significant effect on the level of the exchange rate and of the risk premium. However, they had a significant effect on the rise in uncertainty, especially in the case of ECB's foreign exchange liquidity and monetary stimulus measures. Our empirical results imply that the changes in monetary policy in advanced economies can drive uncertainty spillovers across the financial markets, thereby also affecting the business cycle fluctuations in emerging markets (EM). [ABSTRACT FROM AUTHOR]

This study aimed to investigate the impact of people's sentiments toward border crossings on personal vehicle and pedestrian crossings along the US–Mexico border. This study focused on regional factors and employed data derived from Google Trends as a proxy for people's sentiments. Monthly data from the first quarter of 2004 to February 2020 were used. Different regression models were used to address stationarity. After controlling for economic conditions and external events, the primary findings are as follows: first, pedestrian and personal vehicle crossings are sensitive to exchange rate fluctuations. Second, the economic cycle has a slightly higher impact on pedestrians than personal vehicle crossings. Third, an increase in the hostile environment toward immigration in the U.S. may negatively impact pedestrian crossings, especially in Texas. Moreover, a rolling regression was used to examine the impact of people's sentiments on crossings over time. [ABSTRACT FROM AUTHOR]

Copyright of Canadian Journal of Economics is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article investigates the effects of the different exchange rate regimes on business cycles comovement between advanced and emerging countries. We use the Granger Causality test (VAR model) on panel data to examine the causal relationships. Our findings show the existence of a bidirectional causal relationship between output comovement and the exchange rate regimes. We check the robustness of our results by applying Dumitrescu-Hurlin (2012) panel causality test that confirms our findings. Furthermore, the impulse response functions illustrate that business cycles comovement between advanced and emerging economies responds positively and significantly to the exchange rate regimes of these two groups of countries in the short term. However, the positive effect begins to wane before being negative from the third quarter and the fifth quarter for emerging economies and developed economies, respectively. [ABSTRACT FROM AUTHOR]

The article discusses The Cause of the Great Depression: The Decision to Resume the Gold Standard on Prewar Terms, which includes the Great Depression was also special Robert Lucas observes that the Great Depression dealt a serious blow to the idea of the business cycle as a repeated occurrence of the same event, and continues, in some respects, to defy explanation by existing economic analysis.

The effect of temporary and permanent shocks of oil revenues on the concurrence of trade cycles between Iran and selected OECD countries has been investigated using the data series of the period 1985–2019. For this purpose, first, business cycles and temporary and permanent shocks of oil revenues are extracted using Hodrick-Prescott (HP) filter and Blanchard-Quah technique, respectively. Then, the relationship between business cycles and model-independent variables is evaluated by the ARDL method. The results show that the main cause of business cycle fluctuations is temporary shocks to oil revenues, also, government expenditure variables and permanent and temporary shocks to oil revenues in the short and long term have a negative and significant effect on business cycles, and the exchange rate variable has a positive and significant effect on business cycles. Estimation of business cycle synchronization index shows that Belgium, Germany, Greece, Japan, Spain, and Turkey have had business cycles synchronization with Iran. And Germany with a correlation coefficient of 0.42 has the most synchronization of business cycles with Iran. [ABSTRACT FROM AUTHOR]

Since the seventies, all countries of the world have suffered from the effects of sharp fluctuations in the exchange rate of the valuation currencies at the international level, and most of the major countries have adopted a floating exchange rate system under which the exchange rates are characterized by their continuous fluctuations and the consequent effects - negative of course - very important for International institutions have activity, whether it is related to financial or commercial activity alike, which happened in the second half of the seventies of the last century for many industrial enterprises with international activity, which necessitated the necessity of facing exchange rate risks by discovering several techniques to prevent or avoid such risks. The researcher reached a set of conclusions and the following recommendations: 1. The fluctuations in the exchange rate have a decisive effect on the finances of the institution with external relations in its field of activity. 2. The exchange risk management process should be recorded within the general strategy of the institution and the most appropriate technology should be chosen in line with the environment in which it operates. 3. The risk management of foreign exchange fluctuations for international economic institutions is of the utmost importance, especially in light of the current economic situation characterized by sharp monetary fluctuations. 4. The developments that developing countries are going through in the field of foreign trade and investment give rise to the urgent need to implement an exchange rate risk management strategy. [ABSTRACT FROM AUTHOR]

One of the most important economic policy issues, especially in the post-transition countries, is exchange rate regime (ERR), i.e. the question of optimal exchange rate regime that would stimulate economic growth and propagate macroeconomic stability. For small and EU-oriented countries like Bosnia and Herzegovina (B&H), the EU accession processes and character of countries' economic cycle phase are usually highlighted among many factors. The choice of the appropriate exchange rate system is determinated by the specific characteristics of individual countries, time moment and the characteristics of the external shock occurrence. It is generally accepted that monetary instabilities are treated by fixation and real economic shocks by exchange rate fluctuations. An important criterion for assessing the adequacy of the current exchange rate regime is its response to external shocks, such as the Great Recession in 2008. While flexible exchange rate regime is used as an automatic stabilizer, fixed exchange rates place certain restrictions. The process of macroeconomic adjustment in the Baltic States is an example of how large macroeconomic imbalances can be reduced without adjusting the nominal exchange rate and how the currency board can be successfully used as a stage in the euro introduction process. The aim of this paper is to give a comparative overview of the currency board introduction in Bosnia and Herzegovina and the Baltic countries, results achieved and reactions to external shocks (Great Recession in 2008) within this exchange rate arrangement, so conclusions that could be valuable in post-COVID 19 recovery can be drawn. [ABSTRACT FROM AUTHOR]

The fluctuations of economic and financial time series are influenced by various kinds of factors and usually demonstrate strong nonstationary and high complexity. Therefore, accurately forecasting economic and financial time series is always a challenging research topic. In this study, a novel multidecomposition and self-optimizing hybrid approach integrating multiple improved complete ensemble empirical mode decompositions with adaptive noise (ICEEMDANs), whale optimization algorithm (WOA), and random vector functional link (RVFL) neural networks, namely, MICEEMDAN-WOA-RVFL, is developed to predict economic and financial time series. First, we employ ICEEMDAN with random parameters to separate the original time series into a group of comparatively simple subseries multiple times. Second, we construct RVFL networks to individually forecast each subseries. Considering the complex parameter settings of RVFL networks, we utilize WOA to search the optimal parameters for RVFL networks simultaneously. Then, we aggregate the prediction results of individual decomposed subseries as the prediction results of each decomposition, respectively, and finally integrate these prediction results of all the decompositions as the final ensemble prediction results. The proposed MICEEMDAN-WOA-RVFL remarkably outperforms the compared single and ensemble benchmark models in terms of forecasting accuracy and stability, as demonstrated by the experiments conducted using various economic and financial time series, including West Texas Intermediate (WTI) crude oil prices, US dollar/Euro foreign exchange rate (USD/EUR), US industrial production (IP), and Shanghai stock exchange composite index (SSEC). [ABSTRACT FROM AUTHOR]

We propose a "dominant currency paradigm" with three key features: dominant currency pricing, pricing complementarities, and imported inputs in production. We test this paradigm using a new dataset of bilateral price and volume indices for more than 2,500 country pairs that covers 91 percent of world trade, as well as detailed firm-product-country data for Colombian exports and imports. In strong support of the paradigm we find that (i) noncommodities terms-of-trade are uncorrelated with exchange rates; (ii) the dollar exchange rate quantitatively dominates the bilateral exchange rate in price pass-through and trade elasticity regressions, and this effect is increasing in the share of imports invoiced in dollars; (iii) US import volumes are significantly less sensitive to bilateral exchange rates, compared to other countries' imports; (iv) a 1 percent US dollar appreciation against all other currencies predicts a 0.6 percent decline within a year in the volume of total trade between countries in the rest of the world, controlling for the global business cycle. We characterize the transmission of, and spillovers from, monetary policy shocks in this environment. (JEL E52, F14, F31, F44) [ABSTRACT FROM AUTHOR]

International real business cycle (IRBC) models predict a real exchange rate volatility that is much lower than the levels observed in the data. In this paper, we build a two-country IRBC model with both a traded and a non-traded goods sector, and calibrate it to UK-euro area (EA) data. We provide evidence on the existence of a cointegrating relationship between UK and EA traded sector total factor productivity (TFP) by estimating a vector error correction model (VECM). To account for this relationship, we incorporate non-stationary technology shocks in the traded sectors in our model, and show that then the model is able to match the observed volatility of the UK–EA real exchange rate. Our analysis points out that both the presence of non-traded sectors and non-stationary technology shocks are necessary to account for the observed volatility in the real exchange rate. [ABSTRACT FROM AUTHOR]

This article revisits the relationship between the contagion and co-movement of 10 Central and Eastern European (C.E.E.) financial markets in relation to two major Western European capital markets using wavelet-based methodology. Based upon an A.R.D.L. panel model we found that foreign monetary policy, national exchange rate and economic cycle play a key role in both short- and long-term co-movement between capital markets. While a stable economic environment coupled with a strong national currency can reduce the degree of short-term co-movement between capital markets, changes in foreign monetary policy could increase the effect of external shocks. Furthermore, we find that inflation, foreign exchange rate and foreign economic cycle play an important role after longer periods. By ensuring a stable economic environment national authorities can help mitigate the effects of external shocks on national capital markets. [ABSTRACT FROM AUTHOR]

Financial crisis is nothing new in the annals of history of the capitalistic path of economic development; it is a part of the business cycle. The theoretical basis is well entrenched in the concept of 'Keynesian Cross'. The tale of crisis, dating back centuries, has taken a new turn with the call for more globalization--liberalize trade and open up the financial sector. This has made many nations vulnerable to crises that are likely to be repeated, perhaps frequently. Based on recent experience, warning signs can be read from the dollar-centric exchange rate, the mainstay for the stability of the current global financial system. To a careful observer, fatigue in the system cannot be overlooked. [ABSTRACT FROM AUTHOR]

This paper characterizes the integration patterns of international currency unions (such as the CFA Franc Zone). We empirically explore different features of currency unions, and compare them to countries with sovereign monies by examining the criteria for Mundell's concept of an optimum currency area. We find that members of currency unions are more integrated than countries with their own currencies. For instance, we find that currency union members have more trade and less volatile real exchange rates than countries with their own monies; business cycles are more highly synchronized across currency union countries than across countries with sovereign monies. [ABSTRACT FROM AUTHOR]

In this article the author examines global financial crises and outlines various government measures to reduce financial instability and risk. The author suggests the implementation of government control over short-term capital flows and changes to bankruptcy procedures that can be applied to crisis environments. The author presents ten policy points that outline some of the key aspects related to these financial crises and suggests three methodologies aimed at correcting them such as incorporating economic theory into effective economic policy.

The article presents a response to the article "Codetermination and Industrial Adjustment in the German Steel Industry: A Comparative Interpretation," by Kathleen Thelen. The author argues that Thelen's interpretation of the German steel industry is mostly in line with his own except for the fact that her theories do not take market fluctuations into account. This is a problem for the author as he explains that changes in the German and global markets have heavily impacted the German steel industry in the time following the publication of Thelen's article.

This article examines the interrelationships between innovations in monthly industrial production indices in a set of economies during the time period 1963 to 1986, using spectral analysis as the research methodology because it facilitates the study of a world business cycle. This empirical study of multi-country output movements under fixed and flexible exchange is chosen because industrial production indices are subject to stochastic growth. The variances of the monthly growth rates are higher in the flexible exchange rate period than in the fixed exchange rate period, and output movements have been correlated across countries under both exchange rate regimes, producing evidence of a world business cycle.

The article discusses the consistency of the Federal Reserve policy with the political business cycle thesis. Simulations of policies were conducted by means of sequential regressions that permit public anticipation for money growth based on information available at the same time such expectations are formed. The reaction function parameters may change over time. The political business cycle is tested by examining the series of forecast errors these simulations produce and analyzing their relationship to electoral timing considerations. This reaction function approach is difficult because the policy maker's behavior is not always predictable.

This article examines the timing of the collapse of an exchange rate regime and the impact this has on the relative price of traded goods. The authors examine the relationship between a fixed exchange rate, a fixed rate of crawl and a monetary growth rule. They examine several counties that operate on crawling peg rule systems and discuss some of problems associated with these exchange rate systems. They examine how these systems respond to financial crises and the nature of the exchange rules that govern these systems.

The effects of noise on the world, and on our views of the world, are profound. Noise in the sense of a large number of small events is often a causal factor much more powerful than a small number of large events can be. Noise makes trading in financial markets possible, and thus allows us to observe prices for financial assets. Noise causes markets to be somewhat inefficient, but often prevents us from taking advantage of inefficiencies. Noise in the form of uncertainty about future tastes and technology by sector causes business cycles, and makes them highly resistant to improvement through government intervention. Noise in the form of expectations that need not follow rational rules causes inflation to be what it is, at least in the absence of a gold standard or fixed exchange rates. Noise in the form of uncertainty about what relative prices would be with other exchange rates makes us think incorrectly that changes in exchange rates or inflation rates cause changes in trade or investment flows or economic activity. Most generally, noise makes it very difficult to test either practical or academic theories about the way that financial or economic markets work. We are forced to act largely in the dark. [ABSTRACT FROM AUTHOR]

This article analyzes the relationship between exchange rate and international transmission of business cycle in Europe during the Great Depression. Eight small European countries that followed three different types of exchange rate policies are examined. Researchers focused on small countries to highlight the importance of the exchange rate system in the transmission of exogenous foreign business cycle disturbances. Four of the countries (the Netherlands, Belgium, Italy, and Poland) operated on fixed exchange rates with the United States, causing them to suffer a severe contraction in both output and prices similar to that of the United States. It is noted that Spain enjoyed fairly stable output and prices during the Great Depression by maintaining a flexible exchange rate system.

An increase in the household debt to GDP ratio predicts lower GDP growth and higher unemployment in the medium run for an unbalanced panel of 30 countries from 1960 to 2012. Low mortgage spreads are associated with an increase in the household debt to GDP ratio and a decline in subsequent GDP growth, highlighting the importance of credit supply shocks. Economic forecasters systematically over-predict GDP growth at the end of household debt booms, suggesting an important role of flawed expectations formation. The negative relation between the change in household debt to GDP and subsequent output growth is stronger for countries with less flexible exchange rate regimes. We also uncover a global household debt cycle that partly predicts the severity of the global growth slowdown after 2007. Countries with a household debt cycle more correlated with the global household debt cycle experience a sharper decline in growth after an increase in domestic household debt. JEL Codes: D14, E21, E32, E44, E51, G01. [ABSTRACT FROM AUTHOR]

This paper evaluates the effectiveness of fiscal policy by employing a structural panel vector autoregression model with a shock to fiscal spending identified via theoretical robust sign restrictions. Using an annual data set of 120 countries over the period 1960--2014, the results show that fiscal multipliers are larger in advanced economies, when public debt is low, at a high level of financial development, in a financial crisis and during business cycle downturns. Contrary to conventional wisdom, fiscal multipliers are not necessarily smaller in countries that are relatively open to trade and capital flows and operating under flexible exchange rate regimes. The relationship between the size of fiscal multipliers and the three dimensions of openness--trade openness, capital mobility and exchange rate flexibility--hinges on the response of the real exchange rate and the domestic monetary policy pursued. [ABSTRACT FROM AUTHOR]

This empirical study considers the pass-through of key nominal exchange rates and commodity prices to consumer prices in the Commonwealth of Independent States (CIS), taking into account the effect of idiosyncratic and common factors influencing prices. In order to do that, given the relatively short window of available quarterly observations (1999-2014), we choose heterogeneous panel frameworks and control for cross-sectional dependence. The exchange rate passthrough is found to be relatively high and rapid for CIS countries in the case of the nominal effective exchange rate, but not significant for the bilateral rate with the US dollar. We also show that global factors in combination with financial gaps and commodity prices are important. In the case of large rate swings, the exchange rate pass-through of the bilateral rate with the US dollar becomes significant and similar to that of the nominal effective exchange rate. [ABSTRACT FROM AUTHOR]

Although theoretical models consistently predict that government spending shocks should lead to appreciation of the domestic currency, empirical studies have regularly found depreciation. Using daily data on U.S. defense spending (announced and actual payments), the paper documents that the dollar immediately and strongly appreciates after announcements about future government spending. In contrast, actual payments lead to no discernible effect on the exchange rate. It examines the responses of other variables at the daily frequency and explores how the response of the exchange rate to fiscal shocks varies over the business cycle as well as at the zero lower bound and in normal times. [ABSTRACT FROM AUTHOR]

The article presents a study which examined how business cycles in the home country affect outward flows of foreign direct investment (OFDI). Topics discussed include theoretical discussion of the different channels through which business cycles can affect OFDI flows, lagged effects on FDI of explanatory variables, and country subsamples for OFDI.

The article discusses the financial and monetary systems which are designed to improve the effectiveness of real activity and distribution. Topics include the financial crisis encountered by some banks which has decreases its exchange rate and its efficiency of the economy, the cause of financial crisis which was a challenge for practitioners, policymakers and academics and the concepts of the crisis.

We investigate the influence of exchange rate regimes on the foreign exchange exposure of emerging market firms. Using a sample of 1523 firms from 20 countries for the period December 1999 to December 2010, we find that about half of the firms are significantly exposed to exchange rate fluctuations. We find that non-floating exchange rate arrangements are associated with more widespread exposure as well as a greater magnitude of firms' exposure. Cross-sectional analyses suggest that the exchange rate regime is an important determinant of firm-level exchange rate exposure for emerging market firms, and that pegged exchange rate regimes amplify exposure. This result holds after controlling for a wide range of potential determinants of firm-level and country-level foreign exchange exposure. Our findings suggest that exchange rate regime matters at the micro as well as the macro level; non-floating regimes fail to protect firms from exchange rate exposure. [ABSTRACT FROM AUTHOR]

The monetary policy responses are assessed by estimating the Taylor rule reaction functions, which indicate that ASEAN-5 central banks respond to both domestic stability conditions (such as inflation)and external conditions (such as US interest rates). Chapter 7 examines the various ways in which monetary policy frameworks need to be upgraded in response to the "new normal", which is characterized by the normalization of monetary policy in advanced economies, inflationless economic recovery, and low natural rates of interest. These combinations include synergies between monetary and macroprudential policies, and between monetary and fiscal policies. [Extracted from the article]

The paper provides an empirical framework for analyzing the dynamic linkage between Chinese and thirty major stock markets globally. In doing so, we employ the bivariate normal mixture model, a weighted average of two normal distributions that can reveal both the degree and structure of dependence between markets. We show that the level of dependence strengthened since 2004 in general, whereas the contagion effects spread heterogeneously during the global financial crisis. We also examine potential factors that affect the stability of the linkage by capturing regime switching behavior. The results suggest that business cycle synchrony plays a significant role in increasing the instability of dependence between the Chinese and global stock markets, while the impact of asynchrony is negligible. Additionally, we observe increased dependence and unstable structure, associated with the implementation of China's capital market liberalization policies and RMB exchange rate reform. • We analyze the nonlinear linkage between Chinese and global stock markets. • Bivariate normal mixture model is proposed to reveal both the degree and structure of dependence. • The linkage changes over time and across regions. • Business cycle synchrony increases the instability of dependence. • Financial openness and RMB exchange rate reform enhance the degree of dependence and the instability of dependence structure. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We explore how the informational frictions underlying monetary exchange affect international exchange rate dynamics. Our perfectly flexible price model is capable of producing endogenously rigid international relative prices in response to technology and monetary shocks. The model is capable of accounting for the empirical regularities that the real and nominal exchange rates are more volatile than U.S. output, and that the two are positively and perfectly correlated. The model is also consistent with other standard real business cycle facts for the United States. [ABSTRACT FROM AUTHOR]