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The COVID-19 pandemic, which has been running for more than a year, has become a global shock. Many sectors are affected, including tourism. The tourism community becomes a vulnerable group when the tourism closure rules are enforced. One of their efforts to remain resilient during the covid pandemic is to optimize the agricultural resources they have. The objectives of this study are: (1) Identifying groups of tourism actors who are vulnerable due to the COVID-19 pandemic and (2) Analyzing agriculture-based resilience strategies carried out by the community in order to be able to withstand economic shocks. This research uses a qualitative approach with a case study research design. The research location is in the village of Gubugklakah as one of the buffer villages in the Bromo Tengger Semeru area. Data was collected by means of in-depth interviews with research informants who are tourism actors. Data analysis uses the interactive model of Miles and Huberman. Meanwhile, the validity of the data is done by triangulation of sources and methods. The results of the study show that many tourism actors are vulnerable during the covid pandemic, namely: homestay managers, transportation service managers (jeeps), tour guides, culinary entrepreneurs, citrus picking agrotourism farmers, and so on. The strategy used by the tourism community in dealing with the pandemic is to re-manage agriculture. This is because before becoming a tourist village, the community relied on the agricultural sector, especially horticulture. Land management is carried out not only on private land, but also on Perhutani land (Komplangan) so as to increase their productivity. In addition, the culture of the local community which is still strong with the nature of mutual cooperation is able to help each other to face the crisis together. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic began at the end of 2019 in.Wuhan, China, spreading rapidly to all parts of the world. This virus was detected in Indonesia in February 2020, and then the government began to make social restriction policies in March 2020. All countries in the world experienced a fairly severe economic shock. The limited mobility of people impacts decreasing all forms of activities that require face-to-face contacts, such as tourism, transportation, hospitality, etc. It causes a decrease in economic growth which can be measured by the size of the gross regional domestic product. This analysis uses Gross Regional Domestic Product (GRDP) data as a Y variable, general allocation funds (X1), profit-sharing funds (X2), open unemployment rate (X3), labor force participation rate (X4), and the number of industries (X5). It will be analyzed using spatial regression. There are several spatial regressions such as Spatial Autoregressive (SAR) and Spatial Error Model (SEM), Spatial Durbin Model (SDM) and Spatial Durbin Error Model (SDEM). The SDM and SDEM are special cases of SAR and SEM. SDM involves spatial effects on independent and dependent variables, while SDEM involves spatial effects on dependent variable and error. So, we will analyzed using SDM and SDEM. From the results, SDEM is the best method used for the data, and all variables used are significant. The predicted GRDP values of districts/cities in East Java are classified into five classes. There are eight regencies/cities included in the class with declining GRDP due to the COVID-19 pandemic, namely Ngawi Regency, Bangkalan Regency, Pamekasan Regency, Blitar City, Probolinggo City, Pasuruan City, Mojokerto City, and Batu City. [ABSTRACT FROM AUTHOR]

In this decade, manufacturing companies are facing events that disrupt delicate balances and experiencing tangible challenges that cannot be deferred. Among these, the acceleration of technological transformation to follow the introduction of Industry 4.0, the difficulty in sourcing raw materials and accessing different markets due first to the COVID 19 pandemic and more recently to geopolitical tensions and conflicts. In this scenario, traditional supply chain models need to transform into digital supply chains (DSCs), where functional silos are broken down to enable end-toend visibility, agility, collaboration, and resilience to such shocks. The literature on the subject is still immature and many concepts are still vague and undefined. In this regard, this article aims to answer the following questions: (i) What are the main research areas within the topic? (ii) What is the development trajectory of the topic? (iii) What are the main digital technologies that can support DSC capabilities? (iv) What can be its research agenda? For this purpose, this paper aims at reviewing the existing scientific production on DSCs, combining a systematic review with bibliometric tools. The resulting framework can serve as a preliminary guide for companies facing the challenges listed above and can open up future research that can validate the results empirically. [ABSTRACT FROM AUTHOR]

Servant and authentic leadership styles have been known to elicit positive outcomes in all organizational levels, but are they adequate for the challenges presented by the VUCA world? In today’s business dynamics, it is exigent for Start-ups to adopt complex leadership traits to face the stiff competition. In this descriptive study, 586 employees working in STEM start-ups ranging from manufacturing, engineering and technology are chosen to understand the impact of authentic-servant leadership style on the employees’ burnout while the trust in supervisor is studied in a mediating role. The cohesiveness of authentic and servant leadership constructs is tested using Canonical Correlation. The empirical evidence shows that authentic servant leaders in a start-up would help reduce employees’ burnout experienced in their workplace. In times of uncertainty, when the leader is authentic while giving importance to the employees’ psychological well-being, in his or her transactions with the employees, it would go a long way in boosting their morale. This study is one of the first to identify the effectiveness of combining these two leadership styles and it contributes to the annals of leadership research in studying the triage of factors namely employee burnout, trust in supervisor and authentic-servant leadership in a start-up climate. The author concludes by charting out a detailed future agenda for attuning authentic-servant leadership practices towards sustainability of start-ups. [ABSTRACT FROM AUTHOR]

In this paper we propose a three-step approach to estimate dynamic effects of active (ALMP) and passive labour market policy (PLMP) spending shocks on labour market outcomes and GDP. In the first step, we estimate common and country-specific static factors using a hierarchical principal components analysis. In the second step, we specify country-specific semistructural factor-augmented vector autoregression (FAVAR) models with a non-modelled exogenous common component, and recursively identify LMP spending shocks. In the third step, we apply a local projections (LP) estimator on a panel of 15 EU countries during the period from 2001 to 2017. The third step enables us to compute linear (business cycle independent) and non-linear (business cycle dependent) effects of FAVAR identified LMP spending shocks on labour market outcomes and GDP. Our results show that ALMP spending shocks have positive mid- to long-run effects on labour market outcomes and growth. These positive effects are more pronounced in the long-run and during expansionary phases. On the contrary, PLMP spending shocks have negative mid- to long-run effects on labour market outcomes and growth with negative effects being more pronounced in the mid-run and during recessionary phases. However, during recessionary periods, positive PLMP spending shocks seem to act countercyclically in the short run. [ABSTRACT FROM AUTHOR]

Financial and trade liberalization of European post-transition was accompanied with substantial current account deficit with long term persistence. This paper aims to examine sustainability of international trade flows for three ex-Yugoslav countries, namely Croatia, Slovenia and Serbia. Sustainability of international trade flows is an indicator of overall of macroeconomic stability in a country. Sample countries are still at different level of integration. Slovenia is a member of European Monetary Union (EMU), Croatia is member of European Union (EU) and on its path to EMU while Serbia is still in negotiation process towards membership in EU. Besides insights in country specific dynamics in current account and its sustainability the paper provides comparison among the countries. Contemporary literature suggests various approaches to examine sustainability of international trade flow. International trade flow for the countries of interest was previously considered. However, results always depend on data selection as well as on followed empirical approach. While considering previous findings this paper aims to make step ahead and illustrates persistence of endogenous shocks in international trade flows for the sample countries. Following unit root tests and quantile unit root test on a quarterly data sample from 1996q1 to 2020q2 on imports and exports the paper brings persistence of endogenous shocks in trade flows sustainability. The research results point out sustainable international trade flows with deterministic trend towards equilibrium. Persistence of endogenous shocks in all of the considered countries was analysed depending on sign and magnitude of endogenous shock. The research results point out asymmetries effects of endogenous shocks depending on its sign and magnitude. Empirical results from this paper rejected hypothesis of persistence in current account for the considered sample countries. However, negative endogenous shocks show tendency to persist longer in comparison to positive shocks. Dynamics of current account exhibited mean reverting property with linear deterministic trend. [ABSTRACT FROM AUTHOR]

The world has been pursuing an alternative form of the stock market for quite some time because of chronic financial crises endured repeatedly over the past few decades and a failure to protect investor rights as a result so that the interests of all relevant stakeholders can be safeguarded. In line with devout Muslims' point of view, because of certain unsatisfactory clauses from the Islamic law point known as Shariah, the modern type of stock market limits a Muslim to making investments in the market. Thus, the stakeholders need to create and introduce a new stock market product to attract the Muslim society investing their money in stock, namely the Islamic stock market. The Islamic stock market is the same as the conventional stock market; the difference between two types of the stock market is the shares traded on the Islamic stock market under Islamic principles. Every activity in the Islamic stock market does not contain the elements of gharar, usury, maisir, and risywah. The present paper will provide a brief overview of the Islamic stock market literature collected from various sources and produce a summary of the results and conclusions based on the findings. A mini-review of the Islamic stock market is done by reading and analysing 14 journal articles. This article is summarised in two tables below. The first table contains information about journal articles regarding the title, author, publisher, and publication year. The second table includes the journal article's contents, including the research objectives, findings, and recommendations. This study's findings are the Islamic stock market applies principles according to Islamic rules and avoids usury. The Islamic stock market is also more resilient to financial crises or economic shocks than conventional stock markets. We also found that the Islamic stock market tends to be integrated and to minimise risk can diversify. Finally, most Islamic stock markets have a causal relationship between the stock market. [ABSTRACT FROM AUTHOR]

The basics of studying financial literacy are important for any generation. Representatives of Generation Z, who were chosen as the target audience, are particularly in need of this knowledge today. We offer a training sprint game in the field of finance "Shock Economy" with elements of internal development. For the purity of the experiment, the game was tested on an optional course of studying finance for non-economists when forming an individual learning trajectory by students of the Ural Federal University (Russia). The authors have developed a dynamic and exciting self-development game for reaction and adaptation to changes in the development of financial literacy. The basis of the game concept is the ability to adapt to new conditions and successfully respond to existing game rules, which implies modification, here and now in a limited time. The authors developed a flexible game model with illustrative elements, which were created using graphic editors. The advantage of the game is a steady concentration of attention on obtaining and consolidating the necessary competencies during training. Although the target audience for the game being developed was Generation Z, for the completeness of the experiment, the authors conducted this game with students over 30 years old teachers and teaching and support staff. An experiment to study the behavioral characteristics of each group participating in game training showed that the proposed game may be of interest to the creators and moderators of game practices. Since it is universal and can be adapted to different topics, depending on the requests, and can help in motivating learning. [ABSTRACT FROM AUTHOR]

Standard actuarial theory of multiple life insurance traditionally postulates independence for the remaining lifetimes mainly due to computational convenience rather than realism. In this paper, we propose a general common shock model for modelling dependent coupled lives and apply it to a life insurance model. Under the model, we derive the computational formula for the impact of stochastic dependence on the pricings of insurance policies involving multiple lives which are subject to common shocks. [ABSTRACT FROM AUTHOR]

Empirical evidence and models of firm dynamics ascribe an important job creation role to new businesses and a particular sensitivity of young firms to economic shocks. Studying the role of entrepreneurs and new businesses in the economy's response to economic shocks is diffcult due to the complicated causal connections between economic growth and firm entry. The recent revolution in shale oil and gas extraction|which created rapid, large gains in economic activity in areas possessing certain geological characteristics|presents a unique opportunity to study the response of firms|both new and existing|to an expansion of economic conditions. Using a diff-in-diff research design, we show that establishment entry accounts for most of the employment growth in shale regions. New firms and new establishments of existing firms account for about a quarter and three quarters of the increased annual aggregate growth rates, respec- tively, relative to plausible counterfactuals; cumulatively, establishments that opened after the shale boom began account for three quarters of total net employment gains from 2007 to 2014, and new firms comprise the majority of the cumulative growth from new establishments. These results have important implications for theories of firm dynamics. [ABSTRACT FROM AUTHOR]

This paper analyzes business cycle spillovers and synchronization in the old member states of the European Union. Business cycle spillovers and synchronization are important for the European Union and especially for the Eurozone to avoid asymmetric shocks and problems to the common monetary policy. Using Diebold-Yilmaz spillover index methodology over the sample from 1975 to 2018, we show that business cycle spillovers increased sharply during the period from 2009 to 2015 that coincides with the Great Recession and the sovereign debt crisis in the Eurozone. There is no single country that transmits the majority of shocks, but instead, most of the countries have a nontrivial share in shock transmission. Nevertheless, Italy, France, UK, Belgium, Sweden, Luxembourg, and the Netherlands are the biggest net transmitters of shocks. Our results indicate that business cycle spillovers between the old EU member states are complex. Each member state is typically exposed to business cycle shocks of more than a few other member states. Business cycle spillovers are also related to the level of business cycle synchronization. First, we observe that positive spillovers are related to negative output gaps, e.g., they are high during recessions and low during periods of economic growth. Second, spillover shocks are typically symmetric and affect almost all analyzed countries in the same way. Spillovers are found to be positively correlated with business cycle synchronization, especially after the Great Recession and the sovereign debt crisis in the Eurozone. That finding is important for monetary policy in the Eurozone because synchronized shocks and business cycles make the conduct of monetary policy easier. The main conclusion is that the old member states of the EU are highly integrated and exposed to business cycle shocks from other EU members. [ABSTRACT FROM AUTHOR]

In 2012, the United Nations (UN) Conference on Sustainable Development launched the organization's Sustainable Development Goals (SDGs) while also placing a spotlight on the specific vulnerabilities and characteristics of Small Island Developing States (SIDS). In particular, it brought to the fore, their small size, remoteness, limited range in natural resources and export base, and their susceptibility to external economic shocks, and global climate change. For SIDS, sustainable development has always been key to their continued stability. However, these vulnerabilities have come to define the world's perspective of the islands, at once viewing them as unable to escape those limitations yet expected to advance at the global economic and political level. This is all while on the receiving end of the negative effects of global climate change that they have little control over. [ABSTRACT FROM AUTHOR]

The goal of this paper is to determine if the euro area (EA) accession and membership had a significant impact on the product market integration in the EA countries. The paper employs LM and RALS-LM unit root tests with two breaks on the seasonally adjusted monthly Harmonized Index of Consumer Prices (HICP), from 1996:01 to 2017:05. We find EAaccession related breaks in most of the EA11 countries, but, apart from Malta, no such breaks for the later-EA-joiners. However, EA formation had a significant impact on both EA and non- EA countries at that time. We also find greater product market integration and less adverse effects after negative shocks in the EA member countries. However, based on unit root analysis, we find that EA membership in not a sufficient condition for product market integration and integration is not necessarily related to being an EA member. [ABSTRACT FROM AUTHOR]

The paper addresses the question of whether developing countries possess any built-in mechanism that can cope with external terms-of-trade (TOT) shocks. Using a two-sector, fullemployment general equilibrium model with endogenous labor market distortion theoretically it shows that such countries possess an inherent shock-absorbing mechanism that stems from their peculiar institutional characteristics and can lessen the gravity of detrimental welfare consequence of exogenous TOT movements. This result has been found to be empirically valid based on a panel dataset of 13 countries from 2000-2012. Our analyses lead to recommendation of an important policy that should be adhered to preserve this in-built system. [ABSTRACT FROM AUTHOR]

Innovation activities cover a range of related but distinctive activities and functions such as R&D and marketing efforts. Generally, these functions are considered to contribute to competitive advantages and firm performance. However, it is not as obvious which activities and (related) capabilities and resources are the essential ones and which are rather beneficial than necessary for producing competitive advantage - sustainable and temporary - and in what kind of combinations. It is not always clear either how this relates to being able to respond to exogenous shocks, or to the ability to initiate change by executing an organization's own strategy. These issues are relevant, however, considering that not all organizations are equally well-equipped to acquire, develop, and utilize needed resources and capabilities, but that they may face more or less severe trade-offs. In this study, a qualitative, case-based approach in the context of internationalizing SMEs is taken to examine these issues. [ABSTRACT FROM AUTHOR]

Exhaustible natural assets play an extremely important role in Russia's national economy. Russia is one of the world's leading producers of oil and natural gas and is also a top exporter of metals such as steel and primary aluminum. Russia's commoditybased economy is vulnerable to endogenous and exogenous economic shocks and crisis. It is demonstrated that extraction of fuel and non-fuel mineral resources in 1995-2015 follows economic booms and downturns, although not strictly in the same way. Since the collapse of the Soviet Union and general decrease of Russia's economy, an extraction, domestic usage and export of mineral resources decreased too. After the beginning of the restoration of economy in the midst 1990-ties, the production of the majority of mineral resources began to grow. Russia's economy had averaged 7% growth during 1998-2008 as oil prices rose rapidly. Since then a moderate decrease in mineral production was registered because of the world financial crisis. The period of stagnation was short and in 2009-2010 the revival of the mineral industry of Russia began again. A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a new long recession from 2012 to 2015. Consequences of this downturn for the mineral industry are examined in the article. Commodity-based economy is characterized by significant environmental impact that follows boom and bust economic cycles. Such key features of Russia's economy as the efficient use of natural resources, reduction of pollution, and low carbon emissions are considered. To study the existence of "decoupling" effect, changes in resources consumption and environmental pressure are compared with the rate of GDP growth. [ABSTRACT FROM AUTHOR]

Oil price can have influential effects on inflation as oil is used as the main source in many productions. In this paper, we perform comparative analyses on studying the impacts of oil price shocks on determining the domestic inflation in two groups of countries, i.e. oil importing versus oil exporting countries. In particular, we look into the effects of oil supply and oil demand shocks on determining the domestic inflation. A structural vector autoregressive model is used in analyzing the effects of orthogonalized shocks on inflation. A Blanchard-Quah identification is applied on the long-run impact matrix. We focus the analyses on ten oil importing and ten oil exporting countries respectively. The data ranging from 1973M1 onwards till 2015M1. Our results detect interaction effects among variables. We also observe that oil supply shock is more influential in explaining CPI inflation compared to oil demand shocks. Oil supply shock can be a determinant to inflation in oil importing countries but oil demand has very limited explanatory power on explaining inflation in most countries. Inflation in the main oil exporting countries does not respond to neither oil supply shock nor oil demand shock. The results reveal that oil dependency may determine the magnitude impact of oil supply and oil demand shocks on inflation. [ABSTRACT FROM AUTHOR]

The priority assessment for protection of population, economy and environment from natural and technological hazards is the vital issue facing countries worldwide. The objective of this work was to realize quantitative risk analysis for the Ural Federal District, which is one of the most industrialized and urbanized regions of Russia. As the first step to the quantitative risk analysis natural and technological hazards were identified. Literature data and unpublished data of various specialized organizations on average annual frequency of accidents and their consequences in numerical units were used. Quantitative risk assessment was carried out for natural hazards (meteorological hazards, floods, forest fires, infection diseases), technological hazards (industrial fires and explosions, ejection of toxic substances, transport and high-pressure pipe-line accidents), and environmental hazards (cancer risk from ambient air pollution). The influence of economic shocks and crisis of the last decade on the frequency and consequences of technological accidents was examined. For comparison the most widespread social and behavioral risk were considered. [ABSTRACT FROM AUTHOR]

The basis of meeting any needs is a human economic activity. Thus, the integrity of the complex development is carried out through forming and utilizing ideas resulting in a non-decreasing growth rate in the end. Both life cycles of technologies and products are able to meet the needs. The process continuity implies that the flow of life cycles of different products and technologies is a function that increases by parameter corresponding to the degree of meeting the needs. It is obvious that the actual change of life cycles of technologies and products results from the struggle between "new" and "old" technologies and products for meeting the needs. The article considers possibilities of planning work out, introducing and implementing new technologies during the periods of economic instability based on simulation modelling. [ABSTRACT FROM AUTHOR]

In this paper we consider health and demographic consequences of 1998 and 2008 economic crises for the Russian Federation in tote and for seven Federal Districts, estimate the impact of the recessions on Russians regions and their ability to recover. Regional resilience is defined in terms of a region's ability to withstand or overcome a recessionary event in the wider economy. We consider only health and demographic aspects of the problem and capture resilience to economic shocks in terms of the response of such indicators as life expectancy at birth, infant mortality rates, age-specific and case-specific death rates, birth rates and age-specific fertility rates, marriage and divorce data. Resilience is estimated separately for each of these resilience components. Data on dynamics of above-mentioned indicators for the Russian Federation in tote and for eight Federal Districts for the period 1995-2011 were considered. Our interpretation is that resilience as a concept captures both resistance to the shock and recovery from it. We apply resistance indexes and recovery indexes for semi-quantitative description of regional resilience in comparison with the national one. Combinations of resistance and recovery indexes allow to divide Federal Districts into four types in accordance with their ability to withstand shock or recover from it: from least resilient (weak resistance and weak recoverability) to most resilient (good resistance and good recoverability). It was found that regional resilience is not some fixed attribute or capacity. Recessions differ in their likely causes and thus different regional reactions might be expected. It is difficult now to identify key factors that determine regional resilience. A number of factors affect the vulnerability of regions to recessionary shocks, their resistance to the shocks and their adaptability and recoverability. [ABSTRACT FROM AUTHOR]

Romania's accession to the European Union meant the free access of its agri-food products on the European Single market, without tariff barriers or export quotas, as well as a better access on the international markets. At the same time, it meant the free access on the Romanian market of competitor products coming from the other member states. After a two-year period of adaptation to the new „rules of the game", and the overcome of the economic crisis shock manifested in 2009, the agri-food exports increased significantly, at a faster pace than the imports, so as the agri-food trade balance deficit, after reaching a peak in 2008, diminished continuously until it turned to surplus in 2013 and 2014, just to go back to a slight deficit again in 2015. The paper is analyzing the evolution of agri-food exports and imports, with focus on latest export developments, in terms of value, product composition and geographical orientation of the trade flows. [ABSTRACT FROM AUTHOR]

Alzheimer's disease is the sixth leading cause of death in the U.S. Epidemiological theory suggests that factors interact over the life course to affect late-onset Alzheimer's risk. I view the Great Depression as a natural experiment to study whether early-life exposure to macroeconomic shock is directly associated with late-life cognitive function (Critical Period Model), combines with other disadvantages over the life course (Cumulative Inequality), and/or influences risky behaviors (Social Trajectory). Using growth curve models to analyze the Health and Retirement Survey and U.S. Census Bureau historical data, I find evidence for Critical Period and Cumulative Inequality Models in that early exposure to the Great Depression is directly associated with cognition, and disadvantage accumulates over the life course, affecting baseline cognition and trajectories of decline. There is little evidence cohort behavioral risk factors drive cognitive differences. Complicating the cognitive reserve hypothesis, mechanisms of resilience are not limited to education. (148). [ABSTRACT FROM AUTHOR]

Time series modelling and subsequent risk estimation is difficult but important activity of any financial institution. Financial time series are characterized by volatility clustering and heavy-tailed distributions of returns. Both these characteristics have a great influence for risk estimation. Especially when modelling more-dimensional probability distribution, the shocks in terms of extreme losses (or returns) in particular risk drivers are usually more correlated than the losses (returns) closer to the mean. In this paper we focus on the GARCH-copula models. The copula functions are the tool which allows us to model the dependence among individual risk drivers. Student probability distribution and various copula functions are assumed in the paper. On the other hand, GARCH model allows depicting the volatility clustering. These joined models are backtested on chosen dataset and the exceptions (i.e. their quantity and distribution in time) are statistically tested by Kupiec and Christoffersen tests. [ABSTRACT FROM AUTHOR]

This paper aims to analyze the selected Czech, Hungarian and Polish currencies, through the statistical characteristics of Swiss franc and euro as well as the ECB's monetary policy to indicate shocks on these markets between 2002 and 2013. Contagions can be defined as increased comovements during crisis times - the selected time series were studied with two different approaches to identify extreme periods. Abundance of monetary easing decisions can be used as a viable sign for market misbehavior next to the low probability property of extreme exchange rate fluctuations. Common movements were calculated by dynamic conditional correlations (DCC GARCH). Current paper compared these concepts, furthermore presented the patterns of contagions between the selected currencies. Contagion still appeared, but the well-known pre crisis convergence of Czech Koruna, Hungarian Forint and Polish Zloty decayed under the era of the Euro crises, causing enormous economic damage for the new member states. [ABSTRACT FROM AUTHOR]

The aim of this paper is to examine the effect of oil price development on the selected securities traded in the Prague Stock Exchange. Although, there are many studies, which examine the impact of oil price, most of these studies focused on Western markets or important and large emerging markets. The Czech Republic belongs rather to the marginal countries in terms of economic significance. Further, the PSE is characterized by several specific features. The applied models are based on the linear dependence between an equity risk premium and the systematic risk and the development of oil price. The influence of the oil price development is examined from two perspectives. First, the impact of oil prices was analyzed without any decomposition. Afterwards, the oil prices in USD and the exchange rate were examined separately. It was found out that the exchange rate has a more significant impact on the equity excess return than the price of oil. Further, the effect of demand and supply shocks of oil was analyzed. The results confirmed with the exception of NWR, that the demand shocks are a significant price factors for the examined stocks. In the case of NWR supply shocks were significant for the price process as well. [ABSTRACT FROM AUTHOR]

The severe turbulence initiated by the subprime crisis in the United States and the dramatic shock on the financial system produced by the collapse of Lehman Brothers stimulated a careful consideration on the weaknesses of regulatory schemes. All main international supervisory bodies were involved in a critical review of the architecture of controls, in order to understand what went wrong and what need to be changed. One important outcome of this analysis was the decision to identify a group of global systemically important financial institutions (G-SIFI), in order to put them under special supervision. The idea is quite simple: if a bank or another type of financial institution is so big and interconnected that its failure has the potential to disrupt the financial system at a global level, then the probability of such a failure has to be reduced by imposing extra capital requirements and reinforced monitoring. The criteria to identify the G-SIFI were fixed by the Basel Committee on Banking Supervision and first applied on November 2011, when the Financial Stability Board published a list of 29 global systemically important banks (G-SIB). Given that the 29 G-SIB will have to comply with reinforced capital requirement and are subject to a special monitoring by supervisory authorities, their reliability should in principle be reinforced. Our research question is the following: has the financial markets recognized a special status to the G-SIB compared to other major banks? Has the market perceived a reduced risk and requested a reduced yield of return? In simpler words: does the inclusion in the group of G-SIB make any difference for international investors? And, strictly related to this question, do international investors believe in the effectiveness of the new supervisory framework applied to the major players in the financial world? [ABSTRACT FROM AUTHOR]

This study sets out to discover similarities regarding the efficiency of financial institutions within the CEE countries. Similarities are also required within SEE countries that are not EU members to understand better their financial development. We apply cluster analysis techniques for the period 2003-2010 in order to see the trend of homogeneity of these countries. The results show that Bulgaria, the Czech Republic and Slovakia are more integrated countries, while Hungary and Poland have fewer similarities by comparison with the other countries. Croatia, Macedonia, Bosnia and Herzegovina have greater similarities with the other CEE countries that are EU member states than with Serbia, Albania and Montenegro, which are usually classified in a separate group. Therefore, because of their position we included Greece in the cluster analysis of the SEE countries that are not members of the EU. This inclusion clarified the position of Albania, which seemed to have many more similarities with this country. Furthermore, it seems even more obvious that Macedonia and Bosnia and Herzegovina are included in the same group, while Serbia is again at some distance from the other countries. Such differences appear to be maintained during the period under consideration, leaving scope for further integration. [ABSTRACT FROM AUTHOR]

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We hypothesise that standard structural monetary macroeconomic models do not adequately account for the importance of cross-country financial spillover channels in the data. We derive and test predictions from this hypothesis using a database of monetary policy shock estimates from more than 100 macro models in the literature. Consistent with our hypothesis we find that standard structural macroeconomic models produce cross-country correlated monetary policy shock estimates. Moreover, consistent with our hypothesis, we find that the magnitude of the cross-country correlation in monetary policy shock estimates from structural macroeconomic models is stronger for country pairs that are more financially integrated with global and US financial markets. Our findings imply that accounting for powerful financial spillover channels in structural macroeconomic models is critical in order to unravel the domestic find international effects of monetary policy. A salient feature of the global economy since the 1990s has been the dramatic rise of financial globalisation. Whether measured by capital flows or indicators reflecting the extent of legal capital account restrictions, economies' financial markets have been exhibiting an increasing degree of interdependence. As a result, the global economy has become subject to large cross-country spillovers through financial channels. At the same time, important advances in structural monetary macroeconomic modelling have been achieved over the last two decades. In particular, New Keynesian (NK) DSGE models have been established as the standard monetary macroeconomic model. However, despite progress in structural macroeconomic modelling (e.g. financial frictions, NOEM) many, in particular medium-scale, models used for the analysis of monetary policy still do not routinely account for crosscountry financial spillover channels. In this paper we argue that structural models that do not adequately account for financial spillover channels are prone to providing misleading descriptions of the role of domestic and foreign monetary policy shocks. We test our hypothesis in a metastudy-like fashion. More specifically, we explore the interrelations between estimates of monetary policy shock time series from 100 macroeconomic models, including NK DSGE models, empirical reduced-form models, approaches based on financial market expectations and the narrative approach. We document that there is a significant, positive cross-country correlation between monetary policy shock time series, in particular for monetary policy shock time series obtained from NK DSGE models, and that this correlation is likely to stem from a common US component. Moreover, spillover estimates based on these monetary policy shock time series suggest domestic monetary policy affects the rest of the world by the same magnitude for spillover-sending economies that are rather different in terms of their systemic importance in the global economy. We claim that these surprising and counter-intuitive results stem from the failure to adequately account for the dramatic degree of financial globalisation and the importance of financial spillover channels in the data, resulting in the estimates of monetary policy shocks obtained from the NK DSGE models being convolutions of the true domestic and US monetary policy shocks. We run regressions that analyse the determinants of the cross-country correlations between the monetary policy shock estimates in our database. Our regression results show that the cross-country correlation between monetary policy shock estimates in our database is indeed higher for economies which are more strongly integrated in global financial markets, and for economies which are more strongly integrated bilaterally with US financial markets. The results from this paper imply that the modelling of powerful financial spillover channels in structural monetary macroeconomic models needs be taken more seriously and to become standard. Standard macroeconomic models without such elements might compromise the likelihood-based estimation of these models and provide severely misleading results regarding spillovers, historical decompositions and estimation of parameters as they are based on a convolution of the true domestic and foreign monetary policy shocks. [ABSTRACT FROM AUTHOR]