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The disconnect between the exchange rate and its macroeconomic fundamentals has been extensively discussed in the literature. It nonetheless continues to pose theoretical and empirical challenges in the literature. This study examines the relationship between the exchange rate and its fundamentals. This study used the monetary model of exchange rate determination developed in the 1970s. The study used the TAR to estimate the exchange change rate behaviour in response to variations in monetary variables. We found that the exchange rates respond to the interest rate differential, consistent with the predictions of the monetary model of exchange rate determination. Furthermore, in all the regimes, the sizes of coefficients are different, which shows that the exchange rate behaviour is non-linear (asymmetric). While the impact of the interest rate differential in regime 1 and 2 leads to exchange rates appreciating although in regime 2 the results are insignificant, this occurs when the exchange rates fluctuate below 0.87 percentage points. In regime 3, on average, a marginal increase in interest rate deferential leads to an exchange rate depreciation. In some instances, the exchange rates respond to the monetary variables' changes in line with the predictions of the monetary theory of exchange rate determination. An increase in interest rates in some instances leads to an improvement in the value of the exchange rate. However, the conditions are not constant—they vary depending on the state of exchange rate fluctuation. [ABSTRACT FROM AUTHOR]

The aim of this paper is to develop a model of the real equilibrium CZK/EUR exchange rate with all relevant explanatory variables. Emphasis will be placed on examining the longest possible time horizon, with a period of real convergence, but also economic stagnation. The model is based on the theoretical BEER approach using a cointegration or error correction model that distinguishes between short-term and long-term relationships. The results show that the Czech koruna strengthens when the productivity differential, terms of trade differential or gross fixed capital formation increase, while the koruna weakens when the VIX index representing global risk aversion increases. For the real interest rate differential, the hypothesis that the koruna strengthens in the short run during the improvement but weakens in the long run probably due to the country's risk premium, was confirmed. Moreover, it turned out that the start of the European Central Bank's quantitative easing led to strengthening of the Czech koruna, while the start of the CNB's foreign exchange interventions in 2013 led to weakening of the Czech koruna. [ABSTRACT FROM AUTHOR]

This study examines how the independence of monetary policy changes in situations where the interest rate differential between domestic and foreign rates inverts, utilizing the trilemma indices. For analysis, this paper uses the trilemma indices developed by Kim et al. (2017) to analyze the relationship between the monetary policy independence index and the other two trilemma indices, namely the capital account openness index and the exchange rate stability index, across 45 countries from 2002 to 2018. The analysis reveals that the trilemma's validity is contingent. In particular, no statistically significant negative correlation was found between the monetary policy independence index and exchange rate stability index during periods of interest rate differential inversion. A positive correlation emerges between exchange rate stability and the independence of monetary policy, particularly when the inverted interest rate differential exceeds a certain threshold. This situation, where the exchange rate remains stable despite low domestic interest rates, implies that the central bank is effectively managing monetary policy to appropriately respond to economic conditions, which is reflected in the monetary policy independence index. [ABSTRACT FROM AUTHOR]

This study advances the understanding of the Preferred Habitat Model's capacity to shed light on the inter-market transfer of mean returns and the diffusion of price volatility in Pakistani investment markets. It examines the extent to which returns in one market exert a systematic influence on returns across others under the potential sway of interest rate policy shifts, USD exchange rate volatility, and domestic inflation trends. Employing a methodological arsenal that includes the GARCH process, enhanced by Dynamic Conditional Correlations (DCC), as well as the Markov Switching Model, this research assesses the propagation of mean returns and volatility across markets. The analysis uncovers significant linkages between monetary policy and stock market indices, underscoring the profound impact of monetary policy on cross-market performance transmission. These insights are pivotal for regulators overseeing the nuanced interaction between monetary policy and market performance. They are crucial for local and international investors interested in developing economies, especially in Pakistan's markets. [ABSTRACT FROM AUTHOR]

Copyright of International Economics / Economia Internazionale is the property of Camera di Commercio di Genova 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.)

Purpose: The discussion on international migration has become a significant part of globalization and a topical issue in international relations, especially in developing economies which mostly relies on migrant remittances. The purpose of the study is to examine whether financial market development (equity market development and banking sector development) really drives migrant remittance flow in Sub-Saharan Africa (SSA). Design/methodology/approach: The study employs the dynamic heterogeneous panel data approach-the pool mean group (PMG) and the mean group (MG) techniques in analyzing the model based on data obtained from 27 SSA countries covering the period 2000–2020. Findings: The findings of the study revealed that financial market development (equity market development and banking sector development) is a key driver of migrant remittances flows in the SSA region. In addition, the study revealed that the following macroeconomic variables such as real interest rate, unemployment rate, global growth, emigration, and economic growth are also determinants of migrant remittances flows in the SSA region. Originality/value: The reviewed empirical literature revealed that several studies documents that the macroeconomic determinants of migrant remittances include inflation, GDP, interest rate, exchange rate, population growth, financial sector development and unemployment rate. Most of these studies fail to capture both equity market development and robust banking sector development (financial market development) as critical drivers of migrant remittances flow in SSA. Also, this study uses a robust measure of equity market development and banking sector development, unlike previous studies. Peer review: The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0361 [ABSTRACT FROM AUTHOR]

The document provides information on the Delphi method and its application in scientific research. It explains that the Delphi method is a qualitative technique used to obtain consensus from a group of experts on a specific problem. The method has been used in various fields such as defense, health, tourism, education, and business. The document also briefly discusses the methodological foundations of Delphi, including the selection and composition of the panel of experts, the iterative process in rounds, and criteria for consensus and stability. Additionally, the document provides data on economic and financial indicators in Mexico, such as the National Consumer Price Index, the Exchange rate, the IPC (Mexican Stock Exchange), and interest rates and investment units. The data spans from 2013 to 2024 and can be useful for researchers studying the economic situation in Mexico. The document also references various sources that discuss the Delphi method and its applications in different fields. [Extracted from the article]

The article states that the Federal Reserve is considering keeping interest rates high for a longer period of time due to concerns about inflation and the labor market. Factors such as tightening financial market conditions and rising oil prices could also delay rate cuts. The article mentions an increase in the forecast for GDP growth this year, but notes signs of economic softening in some states. The focus of the Federal Reserve is on inflation and the composition of job growth, with an expected slight increase in the unemployment rate. This information is valuable for library patrons researching employment trends and forecasts. [Extracted from the article]

This empirical study investigates Sierra Leone's monetary policy transmission channels using a VAR model from 2011Q1 to 2021Q4, emphasising the interest rate, exchange rate, and credit channels. Rigorous pre-estimation tests and variable transformations were applied to enhance result robustness and credibility. The research evaluates the impact of recent monetary policy and financial sector reforms in Sierra Leone and unveils insights into the dynamics of each of the three transmission channels. Notably, the interest rate channel revealed a delayed and transitory impact of policy rate changes on inflation and economic activity. The exchange rate channel underscored the importance of exchange rate stability in managing inflation, particularly in an importdependent economy. Furthermore, the credit channel highlighted the challenges of private sector credit expansion amidst substantial government borrowing, urging a balanced approach. Overall, the study contributes to a better understanding of Sierra Leone's monetary policy transmission channels, emphasizing the positive influence of recent institutional, operational, and legal reforms adopted by the Bank of Sierra Leone. More precisely, it presents the need to strengthen the interest rate, credit and exchange rate channels for more effective policy transmission. A key policy recommendation is for the Bank of Sierra Leone to continue its reform agenda, with a focus on enhancing these channels to better achieve its policy objectives. [ABSTRACT FROM AUTHOR]

We used the Markov switching regression model to establish a relationship between the conditional stock market returns and macroeconomic volatilities. Monthly data from thirteen (13) African stock markets and macroeconomic variables (exchange rate, inflation, interest rate, money supply, and crude oil price) from 2003 to 2022 were employed. We confirmed the existence of two distinct regimes: An economic expansion or a "tranquil" state with less volatility and an economic decline or a "crisis" state with high volatility. Our findings indicated that macroeconomic variables significantly affect both expansion and crisis periods. However, the estimated coefficients were more significant in a tranquil than in a crisis state. The findings of the study were consistent with macroeconomic theory and pointed out policy implications. [ABSTRACT FROM AUTHOR]

The UK's economic outlook is positive, with GDP growth forecasted to be 1.1% in 2024 and 2% in 2025. The new government, led by the opposition Labour party, is expected to implement the planned fiscal consolidation, which will have a significant impact on the pace of economic recovery. The Monetary Policy Committee is considering a rate cut in August, with further cuts expected in November. The housing market is expected to have a soft landing, and fiscal policy will tighten, although the impact of the new measures is smaller than the previous government's plans. The government's plans for planning system reform may provide a boost to economic growth. [Extracted from the article]

The core objective of this article is to explore the viability of uncovered interest parity and to reconnoiter major determinants of domestic interest rates of the Pakistan and China economies. It is imperative to study the interest rate parity that assistances to comprehend that exactly how exchange rate and domestic interest rate influence foreign interest rate of two economies in emerging trends in international trade. The World Development Indicators is main source of data gathering, and it ranges from 1980 to 2023 for the analysis of both models. This study considers two models, Engle–Granger causality has been applied in Model 1, to analyze the uncovered interest parity, and findings indicate that the exchange rate of each country has no effect on the interest rate of the other country. However, Model 2 investigates the main determinants of domestic interest rate and their long-run associations for Pakistan and China. To capture the long-run association, ARDL estimation technique has been deployed, and findings show the long-run relations and co-integration among the policy variables of both countries. In Pakistan, consumer price index and exchange rate hold positive linking with the domestic interest rate; however, output level is adversely correlated. The error correction term is 91%, confirming the rapidity of equilibrium adjustment when a shock occurs. Regarding the Chinese economy, consumer price index and exchange rate have a negative impact on China domestic interest rate. The results of the error correction model indicate an 80% speed of convergence in the long run. This study suggests that improvement in productivity and exchange rate may assist both economies to experience steady exchange rate and interest rate. [ABSTRACT FROM AUTHOR]

This study investigates the factors influencing food inflation in Turkey, employing both endogenous and exogenous models and integrating major literature findings. Utilizing monthly data from February 2007 to November 2023, standardized for analysis, it explores the relationship between food inflation and various determinants through classical and Bayesian methods. The analysis reveals that increases in the real effective exchange rate, money supply (M1), Turkish and Federal Reserve interest rates, and the food and beverage price index contribute to rising food inflation. Conversely, higher oil prices have a statistically significant negative effect on food inflation. The most influential variables, determined by their inclusion probabilities in the model, are the money supply, Federal Reserve interest rate, real effective exchange rate, and Turkish interest rate. These findings underscore their importance in understanding and analyzing changes in Turkey's food inflation. [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Economics, Business & Politics (UEIP) is the property of International Journal of Economics, Business & Politics 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 investigates the asymmetric effects of economic policy uncertainty (EPU) on food security in Nigeria, utilizing annual time series data from 1970 to 2021. The study used descriptive statistics, unit root tests, the nonlinear autoregressive distributed lag (NARDL) model and its associated Bounds tests to analyze the data. The analysis reveals that adult population, environmental degradation, exchange rate uncertainty (EXRU), financial deepening, food security (FS), government expenditure in agriculture uncertainty (GEAU), inflation, and interest rate uncertainty (INRU) exhibit positive mean values over the period, with varying degrees of volatility. Cointegration tests indicate a long-term relationship between EPU variables (GEAU, INRU, and EXRU) and food security. The study finds that cumulative positive and negative EPU variables have significant effects on food security in the short run. Specifically, negative GEAU, positive INRU, positive and negative EXRU have significant effects in the short run. In the long run, negative GEAU, positive and negative EXRU have significant effects on food security. Additionally, the research highlights asymmetric effects, showing that the influence of GEAU and EXRU on food security differs in the short- and long-run. The study underscores the importance of increased government expenditure on agriculture, control of exchange rate and interest rate uncertainty, and the reduction in economic policy uncertainty to mitigate risks in the agricultural sector and enhance food security. Recommendations include strategies to stabilize exchange rates to safeguard food supply and overall food security. [ABSTRACT FROM AUTHOR]

This paper econometrically models the dynamics of Indian rupee (INR) swap yields based on key macroeconomic factors using the autoregressive distributive lag (ARDL) approach. It examines whether the short-term interest rate has a decisive influence on long-term INR swap yields after controlling for other factors, such as core inflation, the growth of industrial production, the logarithm of the equity price index, and the logarithm of the INR exchange rate. The estimated models show that the short-term interest rate has an important influence on swap yields. This implies that the Reserve Bank of India (RBI) can sway borrowing and lending rates not just on Indian government bonds but also INR-denominated private-market financial instruments, such as swaps and swaptions. [ABSTRACT FROM AUTHOR]

This study shows that demand for money is a function not only of interest rate, real exchange rate, and personal consumption but also of fiscal variables like deficit, debt, and foreign-financed debt. It is stable over the short and long run. This study also covers the investigation of policy invariance of money demand, an important issue ignored so far in the existing literature on the demand for money in the United States. It was found that the behavior of agents in the money market changes as the real exchange rate, consumption, and interest rate change. Namely, agents in the money market are forward-looking, and their expectations are formed rationally. This also means that even though the parameters of money demand are stable, according to the stability test results, they can be unstable, as agents adapt their behavior based on any change in the exchange rate, consumption, and/or interest rate. In other words, the contemporaneous real exchange and interest rate variables are not superexogenous in demand for M1, and the contemporaneous consumption is not superexogenous in demand for M2. [ABSTRACT FROM AUTHOR]

Purpose This study examines the influence of macroeconomic variables on stock market performance in Indonesia and Japan from 2013 to 2023. Drawing upon the Efficient Market Hypothesis (EMH), we investigate how key factors such as interest rates, inflation, exchange rates, and economic events impact stock returns. Design/methodology/approach We examine the connections between these characteristics and stock market performance in two different markets using regression analysis and EMH as the theoretical framework. In order to find patterns and trends, we analyse data spanning a decade. Findings Interest rates strongly affect Indonesian stocks due to their influence on investor sentiment. In Japan, trade agreements have a significant positive impact on stock returns. However, stock returns in both countries are weakly connected to inflation, currency rates, and other economic and political factors. The global economy remains a key external factor for both markets. Research limitations/implications This study has some restrictions, such as data limitations and EMH framework-related presumptions. In the future, research may focus on longer-term effects, behavioural aspects, and sector-specific analysis to further our comprehension of these intricate interactions. Originality/value This research advances our understanding of market behaviour under various economic conditions by analysing the interaction of macroeconomic variables and stock market dynamics in two distinct economies. [ABSTRACT FROM AUTHOR]

Change in stock prices and development of the market vary depending on decisions made by investors. Decisions made by investors are determined by corporate performance, the country's economic situation, political developments and changes in macroeconomic factors. In this study, the relationship between stock prices of airlines and macroeconomic variables was analyzed. To accomplish this, daily macroeconomic data of 14 airlines covering the years 2009-2018 were analyzed by Toda Yomamato and Hatemi-J asymmetric causality tests, and macroeconomic factors (Brent oil price, dollar exchange rate and interest rate) determining stock prices were identified. According to the results of the Toda and Yomamato causality test, it was found that there was a significant relationship among variables of the dollar exchange rate, the price of oil and stock prices of airlines. Except for one airline, there was no significant relationship between interest rate and stock price. According to the results of the Hatemi-J asymmetric causality test, it was found that there were significant relationships among variables of the dollar exchange rate, oil price, interest rate, and airline stock prices. In light of these findings, innovation and adoption of alternative fuel technology by the aviation industry and airlines can be a successful alternative to oil price risk. Results on exchange rate and interest rate changes indicate that airlines and related governments should focus on policies that increase growth of the aviation industry. [ABSTRACT FROM AUTHOR]

The main goal of this work is to develop an empirical investigation on the occurrence of a sanitary crisis with data of cases and deaths of Covid-19, and their possible impact on the exchange rate volatility for the BRICS with daily data from February 20, 2020, to February 28, 2022, using ARDL, FMOLS and DOLS models. The results indicate that increases in the number of confirmed cases and deaths are associated with lower levels of exchange rate volatility, indicating that monetary and fiscal policies were inefficient in the context of a generalized health crisis in directing capital flows, and since the Covid-19 crisis is a global one, during the period of analysis there was a relative exchange rate stability, in other words, a lower exchange rate volatility. [ABSTRACT FROM AUTHOR]

This research aims to determine the effect of the global COVID-19 pandemic on the exchange rate, where the microstructure approach will be used, which uses long and short positions in the futures market. Weekly data will be available during the period 2010-2023. A negative relationship has been found between the exchange rate and the net positions, as well as a positive relationship between the exchange rate and the interest rate differential between Mexico and the United States, as indicates the existing literature. The main finding has been the presence of structural change in the relationship due to the COVID-19 pandemic. Therefore, it is concluded that the microstructure approach is an adequate model to explain exchange rate fluctuations in the short-term, where the relationship has suffered a structural change due to the pandemic. [ABSTRACT FROM AUTHOR]

The objective of the study is to evaluate the main determinants of the Colombian gross portfolio inflows and outflows from non-resident and resident investors and to study the role of the interest rate of the domestic monetary policy. The conceptual framework is the standard portfolio model augmented with variables that measure push and pull factors and macroeconomic surprises. The regression model is an autoregressive vector with exogenous variables or VAR-X and the information is of monthly frequency for the period 2011 to 2020. The main results indicate that the policy interest rate does not turn out to be a statistically significant determinant of gross portfolio flows from non-resident and resident investors with the statistics used and during the analyzed period. In addition, the estimates show important differences in the responses to other domestic and foreign macroeconomic shocks. Finally, there seems to be to some degree a substitution between portfolio capital outflows from non-residents and capital inflows from residents. This means that the movements of some investors cushion the exchange rate, balance of payments, and probably financial and macroeconomic effects of the others. [ABSTRACT FROM AUTHOR]

This paper aims to study the safe haven attribute of the Japanese yen under domestic and U.S. economic and policy uncertainty (EPU). Because of the existence of structural changes, a bootstrap rolling window subsample causality test is used to enhance the credibility of the results. The empirical results confirm that the exchange rate returns (RER) and Japanese EPU are correlated in specific periods when major economic or political events occur. In most crisis periods, the Japanese EPU has positive effects on RER, and the yen appreciates when the EPU is increasing. In addition, the RER of the yen and U.S. EPU are both negatively and positively connected. This finding confirms the hedging function of the yen in certain periods. The reason for this relationship is that Japan's low interest rates make the yen the primary funding currency in speculative carrying trade strategies, and thus, it tends to appreciate during crisis periods regardless of the origins of the EPU shocks. Therefore, the yen can be held as a safe haven currency unless the government intervenes artificially. [ABSTRACT FROM AUTHOR]

Purpose -- This study aims to investigate the influence of macroeconomic factors, including economic growth, inflation, the rupiah exchange rate, and interest rates, as well as corporate financial performance indicators such as leverage and profitability, on the stock returns of Indonesian Property and Real Estate Sub-Sector companies. Method -- The research data consists of annual data obtained from the Indonesia Stock Exchange, the Indonesia Central Bureau of Statistics, and Bank Indonesia for the period from 2017 to 2021. The research population comprises 36 Property and Real Estate companies listed on the Indonesia Stock Exchange. Out of these, 28 companies meet the sample requirements. The analysis employs panel data regression to examine the data. Result -- The results indicate that inflation and exchange rates have a negative and statistically significant impact on stock returns. On the other hand, economic growth, interest rates, return on equity, and the debt-to-equity ratio exhibit a positive influence on stock returns, although these effects are not statistically significant. Contribution -- This study's distinctive contribution is its focused analysis of the Property and Real Estate Sub-Sector in Indonesia. It stands out by exploring the intricate relationship between macroeconomic factors and financial performance variables concerning the stock returns of companies within this sub-sector. This nuanced approach provides valuable insights into a specific industry within the Indonesian market, shedding light on previously unexplored dynamics and contributing to a deeper understanding of how these factors affect stock returns in this context. [ABSTRACT FROM AUTHOR]

The recent multidimensional crisis has harmed the global economy because countries are currently integrated. In this study, we examine the spillover effect of the United States (US) interest rate on the output gap of ASEAN+3 countries using the dynamic spatial Durbin model from 2010 to 2020. After controlling for various institutional variables, this analysis further examines the effect of the exchange rate and the COVID-19 pandemic on the output gap. This model captures the spatial interactions and short- and long-term effects of interest rate monetary policies. The findings indicate a negative spillover effect of the US central bank interest rate on ASEAN+3 countries' output gap. The result had significant direct and indirect short-term effects. Additionally, exchange rates negatively affect the output gap. The output gap decreased because of the COVID-19 pandemic. This study is expected to be useful for monetary authorities in developing the best monetary policy for economic recovery. [ABSTRACT FROM AUTHOR]

Developing nations have the task of effectively managing their external debt. The government is urged to comprehend the decisive component in managing its external debt, despite the varying viewpoints among economists. In addition, the world sees the need for institutional quality to optimize its economic policy. Institutional quality shows accountability, stability, effectiveness, quality, law, and trust. Our research examines the determinant factors of external debt and discusses the policy to manage external debt. We regress the inflation rate, exchange rate, interest rate, trade openness, and institutional quality on external debt. This study also uses moderated regression analysis to examine the interaction between institutional quality and macroeconomic indicators on external debt. We selected 52 samples from five ASEAN developing countries from 2008 to 2019. The first study found that the inflation rate, interest rate, and institutional quality have a negative impact on external debt, while the exchange rate and trade openness have a positive impact on external debt. Next, we were surprised that institutional quality could not moderate the relationship between the inflation rate, exchange rate, and interest rate on external debt. Further, it only moderated the relationship between trade openness and external debt. In the end, we discuss the external debt determinants from the selected ASEAN developing countries with the theories. [ABSTRACT FROM AUTHOR]

This paper discusses some of the important insights from behavioral finance for international monetary and financial analysis. A broad approach to behavioral finance is advocated which includes analysis of the effects of uncertainty, perverse incentives, and complexity economics as well as the cognitive biases focused on in the initial contributions to behavioral finance. It offers reasons why capital mobility is often not perfect and expectations are sometimes not rational. Correctly interpreted it is not a wholesale attack on efficient market theory but rather argues that markets can behave differently at different times, being efficient sometimes and subject to destabilize or insufficiently stabilizing speculation at others and focuses on the conditions that make different types of behavior more likely. It helps provide insights into issues such as currency crisis, the effects of official intervention in foreign exchange markets, the international monetary trilemma, capital flow surges and reversals, the discipline effects of fixed exchange rates and international financial markets and why uncovered interest rate parity often does not hold. [ABSTRACT FROM AUTHOR]

It is widely known that in the exchange rate market there are three factors influential to determine the currency exchange rate between the related countries in theory; i.e., the interest rate, inflation, and expectation on the exchange rate. This paper aims to find how the exchange rate between U.S. dollar and Japanese Yen, both of which are widely recognized as major currencies in the international financial market, are affected by the four key variables selected here in this paper related to these three factors under the recent inflationary economic environment; i.e., interest rate yield of the two year treasury bond, inflation rate, and the two moving average of the exchange rate to be considered as rational expectation on the movement of the exchange rate. As result it is our discovery that the selected predicator variables have been influential to the daily volatility and monthly movement of the exchange rate of the Japanese Yen/US $ with evidence the two different models of the regression analysis are able to show the exchange rate are significantly correlated with these four key variables and strongly affected by them. Also, over 30-month study period, the interest rate parity or the purchasing power parity did not hold because of the strong US dollar and the continuous increase in interest rate yield during the rapid inflation in the US economy. [ABSTRACT FROM AUTHOR]

According to the article, Japan's economic outlook has been revised upwards for inflation and the policy rate. The Spring Negotiation results have led to higher wage settlements, which are expected to increase inflation to 1.8% by 2027. GDP growth for 2024 is forecasted to be 0.5%. The Bank of Japan (BoJ) has ended its negative interest rate policy and is projected to start raising its policy rate next spring. The pace of rate hikes is uncertain, but there is a possibility of a first rate hike in the second half of 2024. The 10-year JGB rate is expected to gradually rise towards 1.5% in the coming years. Changes in the BoJ's policy outlook will have a modest impact on growth. The outlook for the Japanese yen has been downgraded due to the strength of the US dollar. [Extracted from the article]

We estimate the determinants (terms of trade, tradable to non-tradable price differentials, interest rate differentials, forward exchange rate and risk premium) of the Mexican bilateral real exchange rate (q) for the short and long run by using an Autoregressive Distributed Lag model (ARDL, Pesaran and Shin et al. (2001)) for Mexico (2001.01–2022.12). The inclusion of commercial and financial variables and finding empirical evidence of cointegration only for 2009.01–2022.12 are the main contributions. Our results indicate no cointegrating relationship either for the entire sample, or for 2001.01–2008.12. This finding has to do with the increasing international financialization process, after the 2008–2009 Great Financial Crisis. Using a double log model we find that: a) there is a strong short-run autoregressive effect of q of up to 4 lags (0.75), b) that the Balassa-Samuelson Effect is the largest in the model (-0.27 and -1.11 for short and long terms), c) the next most important factor is the terms of trade (-0.126 and -0.51, respectively), d) there are considerable, although lesser, effects of financial variables: forward exchange rate (0.0155 and 0.063, respectively) and risk-premium (0.009 and 0.036, respectively), e) there is a clear long-term trend of real depreciation expressed by the trend of 0.0020, which suggests that the PPP hypothesis applies. [ABSTRACT FROM AUTHOR]

Purpose: This study investigates the monetary policy responses of emerging market inflation targeters to financial factors both before and after the 2008 global financial crisis (GFC). Methodology: Taylor rules, augmented with the nominal exchange rate, the exchange market pressure index, and the U.S. federal funds effective rate, are analyzed by using the augmented mean group (AMG) panel estimator for 12 emerging market economies (EMEs) that adopted an inflation targeting regime. The sample is divided into two periods around the GFC: 2002Q1-2007Q4 and 2010Q1-2019Q4. Results: Inflation significantly and positively impacted interest rate settings during both periods. The panel AMG results indicate that the EMEs' responses to financial variables only had a significant effect during the post-crisis period, while the federal funds effective rate had the most impact among the financial variables. The country-specific results indicate that some central banks also reacted to financial variables before the GFC. Conclusion: Inflation played an important role in policy rate decisions for both periods despite the slightly decreasing weight in interest rate settings after the GFC due to the increasing influence of financial variables. Although financial variables were important in setting interest rates during both periods, the EMEs' post-GFC monetary policies focused more on financial stability. Furthermore, their monetary policies became more compatible with external financial conditions after the GFC. [ABSTRACT FROM AUTHOR]

The purpose of the paper is to observe and analyze how the dynamics of macroeconomic factors impact the evolution of the Bucharest Stock Exchange (BVB) during the latest crisis (Covid-19 pandemic and the Ukrainian war), through the lens of various market stock indices (BET, BetPlus, BET-FI and BETNG). After the monthly values of both the macroeconomic factors (inflation rate, unemployment rate, RONEURO exchange rates, industrial production index, average salary, money supply, interest rate and oil price) and Bucharest Stock Exchange indices were collected, during the period January 2020-June 2023, the descriptive statistics was used to describe all the observed data (mean value, standard deviation, minimum/maximum value). Finally, the multiple regression was used to see exactly how the Romanian stock market indices are influenced by any changes of macroeconomic factors. [ABSTRACT FROM AUTHOR]

Copyright of Jurnal Ilmu Ekonomi Terapan is the property of Universitas Airlangga 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.)

The study assesses the macroeconomic fundamentals of ASEAN+3+3 countries in light of exogenous shocks from the U.S. and Chinese exchange rates. The research also delves into the impacts of the Asian Financial Crisis (AFC) and the Global Financial Crisis (GFC) on selected macroeconomic variables. The exogenous shocks/crises cause deterioration in the exchange rate and, via trade and financial channels, fetch immediate fluctuations in the foreign demand for domestic goods, ultimately resulting in the volatility of output, interest rate and prices. The findings reveal that these shocks have a profound impact on macroeconomic fundamentals, but the repercussions of U.S. shocks wane over time for a majority of the countries. Intriguingly, in the aftermath of the AFC and GFC, the ramifications of the Chinese economy intensified across various metrics and nations. In a nutshell, the study signifies that ASEAN+3+3 countries under an open economy framework are sensitive to the changes in the exchange rate of major international currencies, i.e., the U.S. dollar and Yuan. [ABSTRACT FROM AUTHOR]

Understanding the structure and properties of production networks is essential to identify the transmission channels from monetary shocks. While growingly studied, this literature keeps displaying critical caveats from which the investigation of G-7 economies is not spared. To fill this gap, this paper applies a version of Time-Varying Parameters Bayesian Vector-Autoregressions models (TVP-VAR) and investigates the responses of production networks (upstream and downstream dynamics) to endogeneous monetary shocks on key macro-level indicators (GDP, GDP deflator, exchange rate, short-term and long-term interest rates). Two distinct time-lengths are considered: a test (i.e., 2000–2014) and a treated period (i.e., 2007–2009,"the Great Recession"). Prior, key statistical conditions are checked using a stepwise stationary testing framework including the Kwiatkowski–Phillips–Schmidt–Shin (Kapetanios et al. in J Economet 112(2):359–379, 2003—KPSS) and panel Breitung (Nonstationary panels, panel cointegration, and dynamic panels. Emerald Group Publishing Limited, London, 2001) unit root tests; followed by the Pesaran (General diagnostic tests for cross section dependence in panels, 2004) Cross-sectional Dependence (CD) test; and the Im–Pesaran–Shin (Im et al. in J Economet 115(1):53–74, 2003—IPS) test for unit root in the presence of heterogenous slope coefficients. Panel Auto-Regressive Distributed Lag Mean Group estimates (PARDL-MG) offer interesting short- and long-run monetary shocks-production networks response functions, stratified by country and sector. Findings clearly indicate that upstreamness forces dominated downstremness dynamics during the period 2000–2014, whereas the financial sector ermeges as the clear transmission channel through which monetary shocks affected the productive economy during the Great Recession. In general, we conclude that the prioduction structure influences the transmission of monetary shocks in the G-7 economies. Adequate policy implications are supplied, along with a methodological note on the forecasting potential of TVP-VAR methodologies when dealing with series exhibiting structural breaks. Highlights: Understanding the structure and properties of production networks is essential to identify the transmission channels of monetary shocks. This paper employs a version of Time-Varying Parameters Bayesian Vector-Autoregressions (TVP-VAR) to investigate the responses of production networks (upstream and downstream dynamics) to endogeneous monetary shocks on key macro indicators (GDP, GDP deflator, exchange rate, short-term and long-term interest rates), over two distinct time-lengths: a test (i.e., 2000-2014) and a treated period (i.e., 2007-2009, "the Great Recession"). Findings clearly indicate that upstreamness forces dominated downstremness dynamics over the period 2000-2014, whereas the financial sector ermeges as the clear transmission channel through which monetary shocks affected the productive economy during the Great Recession. In general, we conclude that the prioduction structure influences the transmission of monetary shocks in the G-7 economies. Adequate policy implications are supplied, along with a discussion on the forecasting potential of TVP-VAR methodologies when dealing with structural breaks and crisis time periods. [ABSTRACT FROM AUTHOR]

Currency exchange rates are one of the most important determinants of international commercial and financial market activity. Inflation rates, a recent problem in many developed countries, and interest rates are commonly accepted theoretical determinants of changes in exchange rates, yet published research contains many puzzles regarding the relation between interest, inflation, and exchange rates. This article evaluates interest, inflation, and exchange rates relations between the U.S. and eight developed economies to determine whether higher-than-expected inflation has an effect on the short-run stability of these relations. This study applies both time-series and panel tests including differences-in-differences estimation and finds that exchange rates react differently in the short-run when inflation rates increase beyond inflation policy targets. [ABSTRACT FROM AUTHOR]

We develop a model in which specialized bond investors must absorb shocks to the supply and demand for long-term bonds in two currencies. Since long-term bonds and foreign exchange are both exposed to unexpected movements in short-term interest rates, a shift in the supply of long-term bonds in one currency influences the foreign exchange rate between the two currencies, as well as bond term premia in both currencies. Our model matches several important empirical patterns, including the comovement between exchange rates and term premia, and the finding that central banks' quantitative easing policies affect exchange rates. An extension of our model links spot exchange rates to the persistent deviations from covered interest rate parity that have emerged since 2008. [ABSTRACT FROM AUTHOR]

This study investigated the impact of monetary policy channels on the real sector performance in selected sub-Saharan African countries. This study covers the period 1990 to 2020. The broad objective of the study was to examine the impact of monetary policy transmission channels on the real sectors of selected sub-Saharan African countries within the period, 1990–2020. Using the system generalized method of moments (sys-GMMs) amidst other pre-estimation and post-estimation tests, it was discovered that credit and exchange rate channels positively drove agricultural productivity, while interest rate channel exerted a negatively significant influence. Conversely, credit and exchange rate channels were found to negatively affect manufacturing, while interest rate channels had no significant impact on the manufacturing sector. Given the overwhelming impact of monetary policy channels on both the agricultural and manufacturing sectors of the SSA economies, it is recommended that effective monetary policy framework be put in place to continually create positive transmission effect on the real and productive sectors of the economy. [ABSTRACT FROM AUTHOR]

The Southern African Customs Union is the oldest customs union in the world and the member states form a currency union with the South African Rand being the regional currency anchor. Therefore, currency movements amongst SACU member are dependent on the developments on the Rand which, in turn, can affect stock market development in the region. We examine the time-frequency relationship between exchange rates and stock market returns in SACU countries using continuous wavelet transforms. Our empirical analysis is two-staged. Firstly, we employ wavelet power spectrum to examine the time-frequency properties of the individual series. Secondly, we use wavelet coherence analysis and phase dynamics to examine the synchronization between the variables in a time-frequency space. Our findings show stronger (weaker) exchange rate-stock returns relations are found during periods of higher (lower) inflation whereas we observe a stronger (weaker) relationship during periods of lower interest rate environment. Moreover, we find more significant long-run relationships for countries with more independent monetary policy (South Africa and Botswana) whereas these relations are more prominent over the short-run for countries with pegged exchange rates (Eswatini and Namibia). We also observe that periods of oil and currency shocks impact the exchange rate-stock returns relationship in SACU countries with pegged exchange rates (Eswatini and Namibia). Our findings bear important implications for different stakeholders. For instance, this study has implications for exchange rate policy as it addresses the issue of whether the exchange rate can be used to improve market performance or exchange rate developments spillover into the stock market. Furthermore, corporate managers and stock market participants would be interested in our findings as it identifies periods of market inefficiency when exchange rates can be used to beat the stock market. [ABSTRACT FROM AUTHOR]

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According to the article, the US economy is expected to experience a slowdown due to tight monetary and fiscal policies, as well as other factors such as the United Auto Workers strike and the resumption of student loan repayments. GDP growth is projected to be 2% in 2023 and 0.2% in 2024. Uncertainty surrounding the outlook for the US is high, with volatile oil prices adding to the uncertainty. The Federal Reserve is expected to keep interest rates steady, although there is a possibility of a rate hike in November. Overall, the article suggests that the US economy is facing risks and challenges that may impact its growth. [Extracted from the article]

The article1 presents some risks of external debt in Romania generated by its structure and characteristics. Given the rise in the share of short-term external debt, the associated risks increase, among which there is the augmentation in the volatility of the exchange rate of the national currency, the advance in the probability of a currency crisis and the vulnerability to interest rate fluctuations. The author calculates specific indicators from the economic literature in order to attain the paper’s objectives, namely, to see what the situation of Romania’s indebtedness is and if there is a vulnerability to an external debt crisis. In addition, other indicators are used to assess the debt characteristics of an economy. The values of the calculated indicators show that two shocks have been felt during the analysed period; the first is the economic-financial crisis triggered in 2008, and the other is the COVID19 pandemic. The results show that Romania is vulnerable to the outburst of a foreign debt crisis, with a risk of having problems regarding debt repayment. The methodology used joins the empirical analysis of statistical data and their interpretation, with the identification of correlations. [ABSTRACT FROM AUTHOR]

This study accounts for the nexus between financial development and intra-trade relationships using nine Regional Comprehensive Economic Partnership (RCEP) countries with the extraction of data from secondary sources spanning between 1990 and 2021. The following are the conclusions drawn from the study: exchange rate, interest rate and inflation rate, which are critical macroeconomic variables, represent unfavourable factors that suppress the intra-trade relationships within the RCEP region. In light of the above, this study recommends that any time the policymakers in RCEP countries desire better intra-trade relationships within RCEP countries, they should implement a unified monetary policy that will stimulate interest rate, exchange rate and inflation rate in such a way that the intra-trade relationships will be enhanced among the RCEP countries. [ABSTRACT FROM AUTHOR]

The vagaries of the macro-economic variables make business environment unpredictable and this often portends mammoth implications for various businesses, especially, a critical business such as banking, which the successive governments within the fourth Republic have strived to jealously protect. Therefore, in this study, the impact of macroeconomic factors on the performance of Nigerian banks from 1999 to 2021 was assessed. Data for the study's time period came from the World Bank reports as well as the Statistical Bulletins of the CBN and SEC. To evaluate the data, an ARDL (Autoregressive Distributed Lag) model was employed. Findings showed that, in the long run, lending interest rates had a negative and statistically insignificant impact on the performance of Nigerian banks with a coefficient of -0.0422 (p-value = 0.3860 > 0.05), in contrast to the unemployment rate, which had a negative but statistically significant impact with a coefficient of -0.0534 (p-value = 0.0012 > 0.05); furthermore, gross domestic savings in Nigeria maintained positive and strong relationship with banks performance in the long run with coefficient 0.7970 (p-value=0.0002<0.05). Moreover, finding showed that GDP Per capital income insignificantly stimulated the performance of the banks with coefficient 0.3038 (p-value=0.0963>0.05) while exchange rate was found to be positively and significantly associated with the performance of the banks with coefficient 0.8073 (pvalue= 0.0334<0.05). In addition, the variables converged in the long run at a speed of 151% with a statistically significant p-value =0.0034<0.05; the Heteroscedasticity test and the Autocorrelation test respectively revealed that the model residuals were Homoscedastic and uncorrelated. Sequel to these findings, the study concluded that while lending interest rate and unemployment rate impeded banks' performance, gross domestic savings, GDP per capital income and exchange rate facilitated banks' performance in Nigeria. Accordingly, it was suggested that government should create jobs via industrialization that is matched with locally available inputs, especially in the areas of agriculture so as to firmly address the galloping unemployment rate that is impeding banks performance in the fourth Republic of Nigeria. [ABSTRACT FROM AUTHOR]

The low level of domestic capital formation experienced in most developing economies coupled with the desire for sustainable economic growth has necessitated the need to seek assistance in the form of foreign direct investment (FDI) to bridge the savings-investment gap. This study, therefore, examined the impact of FDI and domestic capital formation on the economic growth of Nigeria. Data were sourced from CBN statistical bulletin from 1986-2021 using Autoregressive distributed lag coupled with Granger causality tests. The result showed that domestic capital formation has an insignificant positive impact on economic growth while FDI revealed an insignificant negative relationship. Exchange rate, interest rate, and inflation rate showed an insignificant negative relationship with the economic growth of Nigeria. It was therefore recommended that governments at various levels should create an enabling environment conducive to domestic capital formation and investment process bearing in mind the stability of macroeconomic variables in the country. More so, Nigerian government should look inward, rely less on foreign direct investment and develop the country's infrastructure facility to aid investment. [ABSTRACT FROM AUTHOR]

The highest rate of inflation was observed as countries faced increasing prices for food and energy, primarily due to supply disruptions caused by the COVID-19 pandemic and the war in Ukraine. In such challenging times, interest rate-based monetary policy remains an important issue for fighting inflation. From a policy perspective, central banks all over the globe tighten their monetary policy stance to cool inflation. Arguably, Turkey opted for an ultra-lose monetary policy via very low interest rates in response to high inflation. Drawing on the Turkish experience, we tackle the evolution of the Turkish central bank's operations in the face of high inflation, providing further details on how ultra-loose monetary policy implementation can be extremely challenging in a highly inflationary economy. We extend the existing body of literature by employing the time-varying Granger causality model proposed by Shi et al. (J Time Ser Anal 39:966–987,2018; J Financ Econom 18:158–180, 2020). Using monthly data (2005:01 to 2022:01), we examine the links between interest rates, inflation, and exchange rates to detect possible changes across various time horizons. The major finding of this study explores the significant episodes of causality by detecting the origination date of causality starting from 2018 toward 2021. This finding confirms that August 2018 and its repercussions on the sharp currency depreciation and high Turkish inflation are pivotal moments to understand the nature of Turkey's economic growth model and the impact of monetary policy in the ongoing economic crisis that hit Turkey harder. Our results reveal that a poorly managed country's interest rate decisions can be disastrous for the exchange rate movements and inflation dynamics, whereas the conclusion is that there are limits to what central banks can do. [ABSTRACT FROM AUTHOR]

This paper aims to examine the determinants of the exchange rate based on the portfolio balance model. Using the Autoregressive Distributed Lag Model (ARDL), we empirically evaluate the effect of private net foreign assets and the traditional factors affecting the exchange rate dynamics in Mexico from 1990-2019. The main results suggest that: i) the portfolio approach constitutes a consistent system to explain the behavior of the exchange rate; ii) an increase in economic activity and interest rate differentials triggers an appreciation of the exchange rate; iii) an increase in the inflation gap and private net foreign assets causes a depreciation. [ABSTRACT FROM AUTHOR]

This article aims to study the effectiveness and symmetry of the transmission of monetary policy in Algeria through the channels of interest rates, credit, and exchange rates in both the short and long term, using the Nonlinear Autoregressive Distributed Lag (NARDL) method. The study of asymmetric effects of monetary policy channels on both output and prices stability is of paramount value for monetary policy analysis and implementation. The results have shown that the transmission of monetary policy in Algeria exhibits an asymmetric nature, except for the effect of bank lending interest rates on real gross domestic product and inflation and that the traditional interest rate channel is the most effective in transmitting the effects of monetary policy to real gross domestic product, while positive variations in credit volume are most effective in the long term, and negative changes in the exchange rate are the most efficient in the short-term concerning the transmission to inflation. [ABSTRACT FROM AUTHOR]

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Copyright of Panorama Económico is the property of Universidad de Cartagena 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.)