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Three small Baltic economies of Estonia, Latvia and Lithuania have undergone extreme economical system change from the planned economy to the market one. The institutional infrastructure have been reorganized and all three countries joined the EU and Euro area. We aim to answer which channels of economic integration are of the largest importance for the small open European economies. We showed that all three countries could be treated as one region due to development, institutional and economic similarities. Secondly, we explore whether the trade or common currency is the main channel for the business cycle synchronization across the region of three small Baltic economies. The business cycle synchronization and trade intensity (TI) between the Baltic States and their main trading partners before and after joining the EU have been investigated as an example of an ex-post case for the small economies. We have observed a large increase in TI with the trading partners from EMU and EU countries, irrespective of the TI calculation method. The analysis of business cycle synchronization of the Baltic States with their main trading partners is captured by the correlations of the cyclical component of GDP series, using the quarterly real and de-trended GDP growth data from 1995 Q1 to 2019 Q4. The panel model has indicated an important empirical feature that the common currency strongly and significantly impacted the business cycle synchronization whilst the bilateral trade intensity between the Baltic States and their main trading partners have a significant negative effect on the business cycle synchronization when controlling for time effects. The Granger causality test confirmed that the most robust impulses to the Baltic States are coming from EU trading partners. [ABSTRACT FROM AUTHOR]

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

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

While flexible exchange rates are commonly regarded as shock absorbers, heterodox views suggest that they can play a pro-cyclical role in emerging markets. This article provides theoretical and empirical support for this view. Drawing on post-Keynesian and structuralist theories, we propose a simple model in which flexible exchange rates in conjunction with external shocks become endogenous drivers of boom-bust cycles, once financial effects from foreign-currency debt are accounted for. We present empirical evidence for regular cycles in nominal US-dollar exchange rates in several emerging markets that are closely aligned with cycles in economic activity. An econometric analysis suggests the presence of a cyclical interaction mechanism between exchange rates and output, in line with the theoretical model, in Chile, South Africa, and partly the Philippines. Further evidence indicates that such exchange rate cycles cannot exclusively be attributed to external factors, such as commodity prices, US monetary policy or the global financial cycle. We therefore argue that exchange rate cycles in emerging markets are driven by the interplay of external shocks and endogenous cycle mechanisms. [ABSTRACT FROM AUTHOR]

Why do firms demand antidumping protectionism? Contemporary literature highlights a plethora of causal mechanisms within the data-generating process, including retaliatory motives, exchange rate appreciations, business cycles, and deindustrialization. I argue that countries that are economically integrated into global markets should be associated with less demand for antidumping trade remedies. In particular, countries with higher levels of trade and financial flows should receive fewer petitions for antidumping trade remedies from firms overall, ceteris paribus. I test this theoretical argument with a series of de facto globalization indicators collected from thirty-three countries between 1978 and 2022, finding support for these arguments. [ABSTRACT FROM AUTHOR]

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

The dynamics of exchange rates play a pivotal role in shaping the economic landscape of nations, influencing key indicators such as trade balances, foreign direct investment, and overall economic performance. This research delves into the specific case of Pakistan, aiming to comprehensively analyze the impact of exchange rate fluctuations on the country's economic framework. The objective of this study is to focus on evaluating the relationship between exchange rate fluctuations and crucial economic indicators, including GDP growth, inflation rates, FDI, CPI, and trade balances. Additionally, we examine the influence of currency volatility on export and import competitiveness, shedding light on the implications for Pakistan's trade dynamics. Methodologically, this study employs a rigorous analysis of historical exchange rate movements in Pakistan, identifying trends and pivotal events that have shaped the country's currency valuations by using correlation, regression and others. Lastly, this study provides insightful recommendations for policymakers to navigate challenges and capitalize on opportunities in shaping Pakistan's economic policies. [ABSTRACT FROM AUTHOR]

The objective of this research is to explain the price of urban land in Greater Concepción, through macroeconomic variables associated with the respective economic cycles at both the national, regional and local levels. The Greater Concepción conurbation, Chile, experienced expansive and recessive economic cycles in the period 1992-2002, the latter associated with the Asian crisis that affected it starting in 1997. After analytical and econometric work, it is concluded that the variations of the price of urban land in Greater Concepción during these periods are associated with variations in macroeconomic variables related to economic growth in an expansive cycle to which the real exchange rate is added in the event that a recessive cycle is also experienced. [ABSTRACT FROM AUTHOR]

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

This paper studies the role of banks in the transmission of commodity price shocks in emerging economies when they have access at external debt nominated in a foreign currency to finance their credit operations. Using a SVAR model for six Latin American countries, we find that a positive commodity price shock generates a credit and output expansion up to 46% higher in the presence of banks' balance sheets effects compared with a model when this mechanism is not considered. We also show that the inclusion of financial system variables in the model improves its capacity to replicate the trajectory and volatility of the business cycle. These findings reinforce the necessity to explicitly include the role of the financial system in the explanation of credit and business cycles of emerging economies in the presence of price shocks, contrary to current literature practice. Moreover, it underlines the importance of recent literature studying the effects of financial globalization and potential economic policies (exchange rate policy, macroprudential policy and/or capital controls) to soften the macroeconomic impact of these types of shocks. [ABSTRACT FROM AUTHOR]

A monthly frequency metropolitan business cycle downturn likelihood equation is estimated for Ciudad Juarez. The binary index of economic conditions is based upon monthly IMMEX export oriented manufacturing employment. A dynamic probit methodology is used for parameter estimation. Continuous explanatory variables include a 1-year minus 1-month Mexico interest rate spread, a 2015 = 100 weighted real exchange rate index, and a 10-year minus 3-month USA interest rate spread. Parameter estimation results confirm the various hypotheses examined. However, model simulation outcomes are less favorable with the results indicating that accurate forecasting of the post-2010 business cycles may require additional refinement to the index. [ABSTRACT FROM AUTHOR]

Output response to discretionary fiscal policy is a key aspect of examining various theories, findings of empirical studies and delivering guidance to policymakers. This study analyses the output response to unanticipated fiscal spending shocks under several structural economic characteristic factors, including business cycle states, debt burden, openness of the economy, exchange rate regimes and political governance regime, using annual data from 40 countries in SSA spanning from 2000 to 2019 in a panel threshold vector auto‐regression model. The findings indicate that fiscal spending multipliers have much larger effects on output in times of recession, in economies operating under lower trade openness, a fixed exchange rate, low‐debt burden, restricted capital mobility, less financial development and a democratic governance regime. Based on the results, the discretionary countercyclical fiscal policy and optimal fiscal policy action are recommended. Moreover, in order to have effective fiscal policy must target hand‐to‐mouth consumers (non‐Ricardian consumers) and firms with limited liquidity, concentrating on social services and social protection to increase short‐term demand. Likewise, A proper fiscal monetary policy mix should be considered with other structural measures to maximising the positive effects of the fiscal expansion. [ABSTRACT FROM AUTHOR]

Real exchange rate (RER) misalignment, which is the deviation between the actual real exchange rate from its equilibrium, occurs frequently among developing countries. Studies have shown that RER misalignment may have negative economic implications, such as a decline in economic growth, exports, and export diversification and an increased risk of currency crises and political instability. Using quarterly data for 22 sample countries from 1990 to 2018, this paper investigates the impact of RER misalignment on business cycles in the Asia‐Pacific by employing a panel vector autoregression involving consumer price index (CPI) inflation, output gap, short‐term interest rates, and RER misalignment. We find that RER overvaluation may reduce CPI inflation and short‐term interest rates. We also find that the Asia‐Pacific region is highly heterogeneous in that the output gaps of some countries, particularly from the Southeast Asian region, are more susceptible to RER misalignment shocks. [ABSTRACT FROM AUTHOR]

Copyright of Economy & Market Communication Review / Casopis za Ekonomiju i Trzisne Komunikacije is the property of Pan-European University Apeiron 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 a book for specialists, especially those interested in the development of the monetary theories and policies that have emanated from economists at the University of Chicago since the late 1920s. Two core hypotheses or assumptions of the Chicago framework from the 1920s onwards were that (1) the business cycle was caused by autonomous shifts in velocity (or an unstable demand for money) and (2) that the banking system itself was inherently unstable. At this time Friedman assumed, as did other Chicago School economists, that velocity was unstable. [Extracted from the article]

This study analyses the impact of the oil price shocks (demand, supply, and risk) on the exchange rates of a unique group of developed and emerging economies that comprise the ASEAN +3 countries. We combine a novel approach to decomposing the oil price shocks at a higher (daily) frequency with the dynamic network connected approach to analyse the connectedness of the oil shocks and exchange rates from January 2006 to July 2020, enabling us to cover various phases of the business cycle in these economies. Our results show that demand and risk shocks are the main contributors to the connectedness. We document that the Singapore dollar and the Malaysian Ringgit are the main transmitters of shocks in the ASEAN +3 group, whereas the role of the Chinese yuan and the Japanese yen is rather limited despite the bigger size of these two economies. Our results have important policy implications for investors, regulators, and policymakers. [ABSTRACT FROM AUTHOR]

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

This paper studies the effects of global shocks, relative to domestic shocks (productivity, mark-up, and demand shocks), in accounting for US business cycle fluctuations. We do this by developing and estimating a two-sector open economy dynamic stochastic general equilibrium model that features several real frictions and structural shocks. The central finding from the estimated model is that global shocks are the main driver of movements in many US macroeconomic aggregates. Particularly, we find that they explain around 40% of the variations in our main variables of interest—output and real exchange rate. This important quantitative contribution is achieved by using indirect inference estimation techniques to test the model. We identify exogenous world demand, oil price shocks, preference for exported energy-intensive goods, and the price of imported energy-intensive goods as the global shocks most prominent in causing the largest variations in economic outcomes. By contrast, foreign interest rates and preference for aggregate exported goods are found to be bystanders. [ABSTRACT FROM AUTHOR]

The paper proposes a chronology for the Egyptian economy by detecting phases of expansions and recessions during the period (2002–2019). It examines the cyclical behavior of variables that are considered potentially useful in measuring or predicting aggregate economic activity. To do so, we combine the National Bureau of Economic Research (NBER) approach together with time series analysis techniques to select the variables best suitable to play the role of coincident and leading indicators. This methodology is found to be the most appropriate when there is no well-established reference chronology as a benchmark for the cyclical analysis, which is the case of Egypt. As a result, two composite indexes are constructed: 1) the composite index of coincident economic indicators (CEI), which can be considered an adequate measure for the Egyptian business cycle; 2) the composite index of leading economic indicators (LEI) that shows good performance in anticipating aggregate economic activity in Egypt. Moreover, the empirical results indicate that total employment, consumption, and investment move coincidently with the reference cycle, while exchange rate and interest rate variables lead the reference cycle and have strong predictive power for economic activity in Egypt. [ABSTRACT FROM AUTHOR]

This paper examines the role of monetary‐policy uncertainty (MPU) in driving business cycles in emerging economies. We employ a Bayesian vector autoregression model with stochastic volatility as the mean for different emerging economies. We find that MPU works as a crucial driver of business cycles in emerging economies. First, we show that an MPU shock can trigger instability in emerging economies by provoking risk/volatility in both financial and exchange‐rate markets. Second, an MPU shock can lead to a decline in both output growth and capital inflows in emerging economies. Our empirical results suggest that the central banks of emerging economies should attempt to improve transparency in their monetary policy‐making by increasing the effectiveness of public communication and forward guidance. [ABSTRACT FROM AUTHOR]

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

Purpose: The literature mostly investigates the impact of trade and financial integration on business cycle synchronization. The author differs by focusing on the real effective exchange rate as the target variable in the North American Free Trade Agreement (NAFTA) region. In particular, the author investigates synchronization by analyzing the short- and long-run dynamics of the real effective exchange rates of Canada, Mexico and the US for 2008–2019. Design/methodology/approach: The author first employs stationarity and cointegration tests to specify and estimate the long-run equilibrium relation between the real effective exchange rates of Canada, Mexico and the US. The author then specifies and estimates an error-correction model for each real effective exchange rate in order to investigate whether the adjustment in eliminating disequilibrium is asymmetric. Findings: The results indicate that the real effective exchange rates of Canada, Mexico and the US are cointegrated with only one long-run equilibrium relation. Canada's real effective exchange rate responds symmetrically to eliminate both negative and positive disequilibrium with a similar speed of adjustment. However, the response of Mexico's real effective exchange rate is asymmetric, as it responds to eliminate only positive disequilibrium. The US real effective exchange rate does not respond to disequilibrium, perhaps because it has a large economy with much stronger competition beyond the NAFTA region than both Canada and Mexico. Originality/value: This is the first study that investigates real effective exchange rate synchronization in the NAFTA region. [ABSTRACT FROM AUTHOR]

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

This paper evaluates the viability of a monetary union or optimum currency area (OCA) in East and South-East Asia. Previous studies have mainly focused on a single aspect of integration, which has led to contrary findings. We adopt several alternative approaches that cover fiscal, output, and price aspects to accomplish the objective. As the synchronization of business cycle is a key prerequisite for forming an OCA, we test the level of business cycle synchronization among the countries of this region. The results of synchronization testing appear favorable, thus, strengthening the argument for forming a monetary union. Our analysis also shows that the regional shock is a dominating factor determining output movements in these countries. Next, we use a generalized purchasing power parity (G-PPP) procedure to test the long-run interrelationship among bilateral real exchange rates. Our findings based on bilateral real exchange rates indicate that the vital macroeconomic variables that determine real exchange rates, such as trade, finance, and price movements, are highly associated in the region. We also find that the short-run adjustment speed is sufficiently large for most exchange rates, barring a few. Consequently, we show that most economies in the region are sufficiently integrated to form a monetary union at any time. [ABSTRACT FROM AUTHOR]

This paper focuses on the spillover dynamics of shocks originating in China during the last two decades. More specifically, the paper compares the effects of a shock to China's GDP and exchange rate using early 2000s trade patterns with those of two decades later. We use a global vector autoregressive (GVAR) model as it allows to consider trade interactions as well as financial linkages through interest rates, stock prices, and exchange rates. Our results indicate that the shock spillovers from China have become more pronounced over the past two decades. While the world has become more exposed to China's economy, it has become more susceptible to Chinese economic shocks. This paper contributes to the literature by evaluating the dynamics of China's spillover effects and highlights the structural changes in trade between major global trade players. [ABSTRACT FROM AUTHOR]

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

In a series of 18 chapters focusing on concepts prominent within this tradition, the book ultimately provides a more realistic point of access for understanding the evolution of international financial markets in recent decades and the implications for emerging economies. I Emerging Economies and the Global Financial System: Post-Keynesian Analysis i provides a comprehensive new insight into the practice and theory of the contemporary integration of emerging economies into the world economy. It is hard to see how many emerging economy governments might be able at will to "avoid current account deficits and foreign debt", as the authors recommend - or that such commonplaces constitute useful advice. [Extracted from the article]

This paper explores the relationship between real exchange rate (RER) misalignments and economic fundamentals with respect to the exchange rate regime choice. In a first step, using the technical inefficiency model, we measure RER misalignments and, more specifically, RER overvaluation. In a second step, we assess the effects of the main economic indicators and the choice of a country's exchange rate regime on RER overvaluation. Our empirical findings, based on nonlinear specifications and impulse response functions of Panel Vector Auto Regression (PVAR) estimations, reveal that for developing countries, and during the expansion and peak phases of the business cycle, the floating exchange rate regime may be used as a policy tool to contain the pressure in the exchange rate, and so limit overvaluation. Our findings also reveal that in the context of fixed and intermediate exchange rate regimes, an expansionary monetary policy is an effective tool to stabilize exchange rate fluctuations and mitigate overvaluation. • We estimate exchange rate misalignment by using a semi-parametric approach based on a technical inefficiency model. This approach allows us to address the well-known puzzle that fundamental variables provide little help in predicting changes in exchange rate models. •By means of an impulse response function estimation of the PVAR model, we evaluate the response of both overvaluation and economic fundamentals to different shocks. •Our empirical findings reveal that economic and monetary expansions appear to be associated with lower overvaluations. However, our evaluation of the impact of an increase in growth rate with respect to exchange regimes leads us to conclude that the more flexible the currency regime, the lower the misalignment. [ABSTRACT FROM AUTHOR]

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

Some macroeconomic dimensions like the economic business cycle, the exchange rate movements when the degree of country openness is significant, or the level of inflation are often considered to explain measured-inflation dynamics. However, inflation volatility may also be affected by statistical agencies methodological changes. This paper explores both potential explanations in a panel data for 100 United States CPI-U subcategories. Using both unconditional and conditional variances, we find that crucial changes in how agencies consider quality adjustment in products, together with the macroeconomic variables help to understand CPI volatility over time, both in the short-run and in the long-run. [ABSTRACT FROM AUTHOR]

This paper studies the effect of seven types of exchange rate regimes on business cycle synchronization, by using a new dataset on bilateral de-facto exchange rate regimes for the 1973-2016 period. Using the extreme bounds analysis (EBA) methodology, we find that the exchange rate regime is a robust determinant of business cycle synchronization. We find that, compared to country pairs with freely floating arrangements, (i) the correlation coefficient measuring business cycle synchronization is higher by approximately 0.07-0.12 points in countries with no separate legal tenders; (ii) the effect does not always linearly decrease with increasing exchange rate regime flexibility, since the effects of crawling pegs and crawling bands turn out to be insignificant, whereas that of moving bands as a more flexible type of exchange rate regime is positive and significant; and (iii) the effect is stronger for countries with a high degree of financial openness and good institutional quality. The second finding suggests that the role of intermediate exchange rate regimes is more complicated than previously recognized in the literature and deserves more attention. In addition, we find that (iv) the positive effect of interest is more prominent for countries from the high-income group, in contrast to the occasionally negative effect of some regimes for other country pairs, and that (v) specialization and fiscal policy integration are factors that influence the effect of exchange rate regimes on business cycle synchronization. [ABSTRACT FROM AUTHOR]

According to standard theoretical frameworks such as Real Business Cycle (RBC's) models or new-Keynesian theories, the real exchange rate should appreciate in response to an increase in government spending. However, the empirical literature finds mixed results. We offer an answer to this puzzle by analyzing the impact of the composition of the fiscal deficit. Using a dynamic stochastic general equilibrium model with a government and an external sector, we quantify the differential impact on the real exchange rate generated by an increase in public consumption expenditure, public investment, and tax reduction. We calibrate and simulate the model for Argentina and find that the fiscal deficit originated in tax reduction can improve the real exchange rate. In contrast, one generated by an increase in spending deteriorates the real exchange rate. In particular, this depreciation is more significant when the spending is directed toward public consumption than when used for public investment. We argue that quantifying these different effects on the exchange rate within a dynamic stochastic general equilibrium framework is an essential exercise of political economy for highly dollarized emerging economies that exhibit higher inflation pass-through. [ABSTRACT FROM AUTHOR]

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

Workers' remittances declined sharply as the COVID‐19 pandemic spread in the first half of 2020, rebounding in the second half. This paper analyses the impact of containment and economic support measures on remittances sent to Latin America during 2019–2020 using a gravity model estimated with the Poisson pseudo‐maximum likelihood estimator (PPML). Results show that containment measures in receiving countries mainly explain the fall in remittance flows, whereas the effect of economic support measures is not robust. Among the traditional explanatory factors, the business cycle and the real exchange rate in receiving countries explain the subsequent recovery of remittances. [ABSTRACT FROM AUTHOR]

Copyright of Quarterly Journal of Economic Growth & Development Research is the property of Payame Noor University 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 aim of this paper was to test the hypothesis of business cycle convergence in member countries of the Economic Community of West African States (ECOWAS) engaged in a monetary union process. We applied the concepts of beta‐convergence and sigma‐convergence to business cycles in the region in the period 1990–2018. Two analytical approaches suggested that during this period, the hypothesis of the convergence of business cycles cannot be rejected. The study highlighted the positive effect of trade intensity on the convergence of member countries' business cycles, in line with the theory of the endogeneity of optimum currency area criteria. These results imply that the initial asymmetric nature of the business cycles of ECOWAS countries does not represent an economic obstacle to the creation of a monetary union in the zone. This cyclical convergence is likely to accelerate with the intensification of trade resulting from the newly created union owing to deeper financial integration and the elimination of transaction costs and uncertainty associated with exchange rate volatility. [ABSTRACT FROM AUTHOR]

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

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