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The paper argues that Lucas (1972. 'Expectations and the Neutrality of Money.' Journal of Economic Theory 4 (2): 103–124) played a significant role in changing Friedman's theoretical propositions of the 1970s, and that his restatement of Friedman's (1968b. Dollars and Deficits. Inflation, Monetary Policy and the Balance of Payments. Englewood Cliffs: Prentice-Hall International) address on monetarism helped Friedman refine his argument, regarding both theory and policy-making, in a consistent manner. First, the adoption of the rational expectations hypothesis eventually led to a confrontation with Friedman, whose own approach to probability, based on subjective uncertainty, originated in his early joint work with Savage. Second, Lucas' modelling of the aggregate supply function undermined Friedman's earlier approach to the interrelationships between prices and quantities, but also helped remind Friedman of his Marshallian lineage. Lastly, Lucas's monetary cycle theory, based on an extraction signal problem that was quickly criticized and abandoned, compelled Friedman to give a firmer theoretical foundation to his monetary policy rule based on a constant rate of growth in money supply, thanks to his earlier approach of subjective uncertainty and personal probability. [ABSTRACT FROM AUTHOR]

The paper examines whether certain macrofinancial indicators can be used for early detection of recessions. Analysing a sample of small open economies from Central and Eastern European Union, we first identify the most important indicators used for early detection of recessions, and then test the validity of the selection by using the signal method and multivariate probit regressions. Our results imply that the most effective predictors of upcoming recessions are the slope of the yield curve, current account balance to GDP ratio, real estate price index, self-financing ratio of commercial banks, nominal effective exchange rate, global exports and LIBOR rate. Using the Mann-Whitney U Test, we also find that foreign indicators emit earlier signals of incoming recessions in analysed countries than domestic ones. This type of research is important because of the various stakeholders that base their decisions on the signals provided by these indicators. Primarily, these are various government agencies that participate in monetary and fiscal policy making. Early warning of an impending recession allows economic policy makers to take corrective action to avoid a recession or to significantly mitigate its effects, while unreliable indicators may lead to adoption of unnecessary measures with adverse effects on the economy. [ABSTRACT FROM AUTHOR]

Collective intentional actions are intentional actions of more than one individual. These actions come in many forms. Some are pursued spontaneously by strangers in face-to-face situations, others are performed by highly coordinated groups of individuals that know each other very well, others are actions in which the participating individuals, widely spread in space and time, act in organized ways. Current accounts of collective intentional action have privileged one or other kind of case, leaving out the study of other cases. This paper seeks to remedy this situation by offering a methodological framework that allows to study, both conceptually and empirically, all the variety of cases of collective intentional actions. It first presents the standard accounts of collective intentional action and argues that they fail in capturing all the cases that arguably count as cases of this kind. It then puts forward a multidimensional and paradigmatic (MAP) methodology for the study of collective intentional actions. It is shown how this methodology offers a unified, overarching, characterization of collective intentional actions. In conclusion, the paper compares the different methodologies and shows how the MAP methodology can inform the interdisciplinary study of collective intentional action. [ABSTRACT FROM AUTHOR]

Stewardship is a concept that has historically underpinned the practice of accounting, with a focus on the stewardship of financial resources. As times change, so too do the elements of organisational performance that might be subject to stewardship demands. Critically for this paper, a roadmap for organisational stewardship in the Anthropocene is developed. In brief, the Anthropocene is a term used to describe how human actions drive earth systems functioning, generating effects (for example) on the climate system as well as on the diversity of living creatures. Given these effects, an enlarged understanding of stewardship emerges that focuses on corporate purpose that takes account of wider than financial ambitions and effects as well as on governance processes that can support a broader perspective. The paper also highlights that achieving stewardship for 'wicked problems' that emerge from complex adaptive systems (with emergent elements and tipping points) might be best addressed by coalitions of organisations collaborating to achieve systems effects. Such an approach also suggests that accounting data gathering and tracing of organisational impact will require greater spatial capabilities than have previously been the case. Accounting for stewardship in the Anthropocene, therefore, represents a significant advance to current accounting practice. [ABSTRACT FROM AUTHOR]

This paper traces R.G. Hawtrey's main contributions to the theory of the lender of last resort (LLR), both national and international (ILLR). This theory is a continuation of one of the traditions of the classical period, started by Henry Thornton, which differs in important points from that of Walter Bagehot. In their treatment of the classical concepts the authors partly depart from the interpretation of Thomas M. Humphrey, who considers that Thornton and Bagehot have basically the same approach about LLR. Hawtrey renewed Thonton's views and extended the concepts to new problems, including the ILLR. Hawtrey built a model of LLR in a dynamic macroeconomic model that includes the Cambridge market for cash balance and introduces the bases of a theory of ILLR, describing the sequence of twin crisis, exchange and banking crisis, thus explaining the difficulties for an ILLR to act on the currency market without taking the risks involved, in a situation completely different to the one faced on the money market by the national LLR. [ABSTRACT FROM AUTHOR]

This paper reviews the empirical literature on the determinants and decision usefulness of goodwill reporting. We structure our discussion around five guiding questions that reflect longstanding policy issues: recognition, initial and subsequent measurement, disclosure, and the role of governance and monitoring. In addition to summarizing the findings, we assess the validity of the evidence. Our review indicates that goodwill amounts, on average, are associated with the underlying economics of the combining firms but are also shaped by managerial incentives and institutional context. Empirical research does not allow us to conclude whether current goodwill accounting rules provide for an optimal degree of discretion. Nonetheless, our analysis yields a number of policy implications and research suggestions. In addition to pointing out new research questions that could be addressed by further archival research, we advocate reproduction studies to test the generalizability of existing findings across contexts, and we encourage standard setters to initiate quasi-experiments to generate causal evidence and to render policymaking more accountable. We further suggest that researchers make more use of behavioral theories and non-archival methods to elucidate the motives and interactions of decision-makers in goodwill accounting. [ABSTRACT FROM AUTHOR]

Public sector or government accounting has been the subject of many research endeavors. However, scholars have repeatedly criticized the lack of a consistent and well-defined theoretical basis for international research. So far, most researchers have drawn from various streams of theoretical perspectives with often unsatisfactory results. The goal of this paper is to put forward the International Public Sector Accounting Standards Board's (IPSASB) Conceptual Framework as a point of reference for establishing a better-fitting theoretical basis for public sector accrual accounting research. This paper aims at stimulating the wider scientific debate on public sector accrual accounting research, building on the recent discussion about the lack of a solid theoretical basis for this research stream. The ever-increasing global diffusion of accrual accounting, and the subsequent increased implementation of International Public Sector Accounting Standards (IPSASs) has directed more attention to the broader political and social implications of accrual accounting. These developments are of practical relevance, since the evaluation of public sector accounting reform projects often faces difficulties, due to the lack of an appropriate theoretical basis. [ABSTRACT FROM AUTHOR]

The question whether there are virtual objects grows more salient, as virtual reality (VR) technology becomes commercially viable. Arguments for realism about virtual objects rely on virtual causation. This paper argues that current accounts of virtual causation (both realist and irrealist) are inadequate – realists oversimplify the relation between virtual objects, virtual events, and their digital counterparts, while irrealists conflate virtual objects with their on-screen representations. Once these issues are rectified, it becomes clear that virtual causation is illusory, because the presumed structure of causal interactions between virtual objects does not map onto the structure of causal interactions between underlying computational objects and processes. Thus, the key realist contention that the causal interactions between virtual objects reveal their identity with the underlying computational objects and processes (digital objects) cannot be sustained. I conclude that an appropriate understanding of virtual causation favours irrealism about virtual objects. [ABSTRACT FROM AUTHOR]

This paper deals with global imbalances as an increasingly important issue in our age. While the literature establishes that current accounts are inversely related to the ratio of income to consumption inequality in OECD, our study finds that this relationship is reversed in Asia. That ratio has much to do with various schemes of consumption smoothing, which are affected by policy interventions to alleviate the effects of rising income inequality. Different policies may generate opposite outcomes. In OECD, policy encourages consumer credit and deficit spending among low-income people so that consumption inequality is kept artificially low, leading up to a current account deficit. In Asia, policy promotes output growth via high savings with no well-developed smoothing schemes designed to help poor households, so that consumption inequality moves in line with income inequality, with excess savings recycled into a current account surplus. Hence, any reduction in global imbalances requires both regions to adjust their policies for mitigating income inequality and optimizing smoothing schemes. [ABSTRACT FROM AUTHOR]

In the onset and aftermath of the Eurozone crisis, why did the currency area stick to policies suppressing domestic spending and forcing up saving? And why could some countries uphold these policies easier than others? This paper explores how individual Eurozone members' ease of suppressing spending was linked to the policy choices of their trading partners. It finds that beyond domestic ideological preferences, sectoral interests or distributive politics, Europe's austerity bias was bolstered by a convenient external option: positive external demand shocks from China and the United States alleviated the employment costs of weakened home markets. The analysis of balance-of-payments and employment statistics is nested in a case comparison framework: it draws a parallel between Germany and Ireland and finds that, compared to their surplus and deficit country groups, these perceived 'success cases' of austerity were aided by their better position to benefit from foreign demand boosts through favourable export product mixes and established ties to faster-growing partners. Reliance on global demand, however, was only possible because of the regional nature of the shock; such boosts are absent in case of more widespread demand collapses like the Global Financial Crisis or the economic fallout in the wake of COVID-19. [ABSTRACT FROM AUTHOR]

Over the past two decades, economists have turned their attention to exploring the role of gender in the macroeconomy. This paper reviews the salient findings of that literature. Research shows that gender gaps in education, health, unpaid labor, employment, and wages have economy-wide consequences and influence the rate of growth. The effects are transmitted via both the supply side of the economy – principally through labor productivity – and the demand side – through business spending, exports, saving, and the balance of payments. In turn, a broad array of macro-level policies, including fiscal, monetary, and trade policies have differential effects by gender that, if unheeded, can undermine macro-policy goals. Their impact depends on the structure of the economy and the gender division of labor in paid and unpaid work. This survey makes clear that incorporation of gender into macro models improves the relevance of macroeconomic theory and can yield better policy results. [ABSTRACT FROM AUTHOR]

The purpose of this study is to analyze the determinant of economic growth in the region of East African countries from 2002 to 2018. In order to investigate empirically the key determinants of economic growth in East African countries, this study used a dynamic panel model. To improve efficiency, Generalized Moments Method (GMM) estimators are used. Based on panel data from the East African countries during the 2002–2018 period, this study, therefore, estimated the determinants of economic growth in the region. The result suggests that government expense, government revenue, volume of imports and exports of goods and services significantly contribute to the economic growth of the countries. However, the consumer price index, current account balance, gross government debt, and foreign direct investment lead to negative economic growth. The paper has three policy implications; first, promoting open trade and ensuring peace and stability in the region is a paramount policy to enhance the economic growth of the region. East African Countries should move forward in creating stability regionally and internally within the countries. Second, countries in East Africa are recommended to strengthen and sustain their policies on government expenses, government revenue and revise their policies on government debt, inflation and current account balance. Major reforms are required in foreign direct investment and general government debt within the region. Third, to address obstacles in trade, climate change and the tax collection system, political and economic integration is fundamental to the region and to making the region competitive in the international trade arena. [ABSTRACT FROM AUTHOR]

This paper explores the possibilities of employing machine learning (ML) methods and new data sources in management accounting (MA) research. A review of current accounting and related research reveals that ML methods in MA are still in their infancy. However, a review of recently published ML research from related fields reveals several new opportunities to utilize ML in MA research. We suggest that the most promising areas to employ ML methods in MA research lie in (1) the exploitation of the rich potential of various textual data sources; (2) the quantification of qualitative and unstructured data to create new measures; (3) the creation of better estimates and predictions; and (4) the use of explainable AI to interpret ML models in detail. ML methods can play a crucial role in MA research by creating, developing, and refining theories through induction and abduction, as well as by providing tools for interventionist studies. [ABSTRACT FROM AUTHOR]

This paper analyzes the efficacy and skepticism surrounding the economic stimulus package announced by the Indian authorities in response to the Covid-19 pandemic in 2020. While the end of the pandemic is yet to be on the horizon, countries across the world have been undertaking economic stimulus packages of varied nature, depth, and quantum. A scrutiny of these packages show that India has been cautious in formulating policy measures and balancing inter-temporal objectives. The disaggregated economic stimulus package in India belies the justification of it being an adequate stimulus in managing the mammoth crisis, especially when the authorities had resorted to more deferred spending measures while the need of the hour was direct fiscal spending. Specifically, this study argues that the causes behind the fiscal conservativeness might be linked to India's twin deficits in the fiscal and current account fronts, along with the fear of a potential capital flight and a possible adverse response by the foreign investors. [ABSTRACT FROM AUTHOR]

Over the last decade or so, several researchers have considered the predictive processing framework (PPF) to be a useful perspective from which to shed some much-needed light on the mechanisms behind psychosis. Most approaches to psychosis within PPF come down to the idea of the "atypical" brain generating inaccurate hypotheses that the "typical" brain does not generate, either due to a systematic top-down processing bias or more general precision weighting breakdown. Strong at explaining common individual symptoms of psychosis, such approaches face some issues when we look at a more general clinical picture. In this paper, we propose an update on the current accounts of psychosis based on the realization that a neurotypical brain constantly generates non-actual, de-coupled, counterfactual hypotheses as part of healthy cognition. We suggest that what is going on in psychosis, at least in some cases, is not so much a generation of erroneous hypotheses, but rather an inability to correctly use the counterfactual ones. This updated view casts "accurate" cognition as more fragile and delicate, but also closes the gap between psychosis and typical cognition. [ABSTRACT FROM AUTHOR]

The aim of this paper is to explain what it means that bodily expressions are perceivable per se, as Direct Perception (DP) accounts seem to assume. They claim that we have direct access to the mentality of others through the perception of their expressions (§§1-2). And yet, a few issues might render DP's grounds unsteady (§3). To avoid such risk, a more detailed account of how bodily expressions are perceivable can be of help. Our goal is not that of proposing an alternative to the current accounts of DP, but to explore an element of the latter that has been taken for granted: the perceptibility of expressions per se. Our thesis is that bodily expressions are a subset of gestalt structures. To account for this, we deal with what gestalts are (§4.1) and we investigate whether their features can be found in bodily expressions (§4.2). If bodily expressions are a subset of gestalt structures, then they are directly perceived and not inferred from their elements. We claim that conceiving bodily expressions as gestalt structures can give a steadier ground to DP's accounts. [ABSTRACT FROM AUTHOR]

As part of conceptualizing a form of capitalism specific to the African continent, this paper offers an institutional study of the development of regulatory institutions in Africa, suggested by and suggestive to current theoretical accounts of regulation and its relationship to capitalism. Recent scholarship has sketched a vision of regulatory capitalism that has much traction in the now-emerged discipline of governance but less in that of economics. That vision depends upon functioning regulatory institutions and effective enforcement strategies. Drawing from both disciplines and from the varieties of capitalism literature, this paper examines how and to what extent the African continent can be characterized as a regulatory region. One of the processes by which Africa has become a regulatory region is the founding of public regulatory agencies. Another is the growth and spread of firms and practices associated with regulatory capitalism. Reflective of these processes, attention at both national and regional levels within Africa to the establishment and operation of competition regimes, to complementary regulatory regimes (with attention here to the telecommunications and public procurement fields), and to the rise and significance of African regional economic communities provides evidence for envisioning Africa as a regulatory region. This evidence suggests that the exploration of a distinctively African variety of regulatory capitalism is warranted. [ABSTRACT FROM AUTHOR]

Both financial market deregulation and global external imbalance feature prominently among the potential causes of the 2008 global financial crisis, but they have been largely examined separately. In this paper, we take a different angle and investigate the relationship between financial market regulation and current account imbalances, an area for which limited empirical evidence exists. Using a large data set that includes 66 developed and emerging and other developing countries and a fixed effects identification strategy. We find robust and consistent evidence that countries employing significant repressive financial policies are more likely to run current account surpluses. Specifically, interest rate controls, state ownership in the banking sector and capital account controls are the main policies contributing to external imbalances. Analysis of possible mechanisms confirm that financial repression mainly affects external imbalances through its effect on industrial structure. Furthermore, financial repression has a larger effect on the current account in East Asia than the rest of the world. [ABSTRACT FROM AUTHOR]

With the connivance of Parliament, was the Bank of England's over issue of banknotes inflationary? The inflation stemmed from military subsidy and Peninsula campaign payments, as well as food imports, far in excess of Britain's export earnings to cover these capital transfers (particularly when crimped by the Continental Blockade), and not merely from domestic credit over issue. Neither domestic money creation nor the fiscal theory of the price level best explains the imbalance in Britain's international accounts during the Napoleonic Wars. This deficit stemmed from domestic production shortfalls in essentials (above all food production) and contractual obligations such as military spending/subsidies relative to the pound's international purchasing power which emanated from the ability of Britain to sell exports and replace imports with domestic output (raise food production internally). These types of highly inelastic transactions tended to operate independently of domestic money creation, fiscal policy (taxes) or price developments (inflation). This article tracks England's bullion debate, which concerned whether gold prices rose (and hence sterling's exchange rate fell) because military capital transfers overwhelmed the balance of payments, or because the Bank of England over issued paper money after the gold cover was removed in 1797. The issues herein are not antiquated because the primary issues in monetary debates for two centuries have concerned the cause of inflation and deflation, and whether the domestic money supply or the balance of payments is responsible. Determining actual causation is critical for the proper solution: monetary deflation, or domestic and international restructuring of trade and investment. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between currency internationalization and economic structure. It argues that the hierarchical and asymmetric architecture of the international monetary system imposes a 'survival constraint' upon non-center countries that obliges them to generate net inflows of the international center currency to finance their payment commitments. It outlines why management of this constraint has historically been associated with a development approach that prioritizes exports and investment over domestic consumption and illustrates how this development approach creates economic structure subject to path dependence and network effects, which perpetuates the role of non-center countries as users of the international currency and the role of the center country as supplier of the international currency. On this basis, it is argued that currency internationalization cannot be pursued in isolation from broader economic policy, but rather requires economic structural change, political mediation and accommodative balance of payments management. Specifically, raising the international profile of the Chinese renminbi would require rebalancing of the Chinese economy towards domestic demand, whereas the status of the US dollar is intimately intertwined with the international openness of the US economy. [ABSTRACT FROM AUTHOR]

The accumulation regime of Latin American countries is characterized by a structural heterogeneity that gives rise to constant balance-of-payment problems. The need to finance trade deficits can lead to an unstable financing path as foreign investment and external indebtedness generate new foreign currency requirements in the medium term due to profit remittance, interest payment and the reversal of these flows when profit possibilities are extinguished, thus originating continuous and growing dollar outflows. From a Minsky-inspired analytical perspective, the aims of this paper are to analyze the financial fragility of the peripheral economies as one further characteristic of the problems of external restriction and to discuss that a development strategy should contemplate not only a productive but also a financial program. We propose an analysis of the degree of financial instability through indicators obtained from the balance of payments statistics. We analyze the cases of Argentina and Brazil to identify some stylized facts about financial instability in these countries over the past four decades. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the spillovers of uncertainty from the United States (US) on Gross Domestic Product (GDP) in a large panel of 50 advanced and emerging economies. We allow the response of GDP in each country to vary according to its exchange rate regime, trade openness, and a vulnerability index (based on current account, foreign reserves, inflation, and external debt). We observe large heterogeneity in the response of advanced and emerging economies to uncertainty surprises of the US. In response to an increase in US uncertainty, GDP in foreign economies drops slightly more, as it does in the US. In addition we find that, for advanced economies the exchange rate regime and financial vulnerability account for a large portion of the contraction in activity. In emerging economies, however, the responses do not depend on the exchange rate regime, but are larger when trade openness is high and weakness in the financial system is high. [ABSTRACT FROM AUTHOR]

The paper proposes a post-Keynesian analysis of the Eurozone crisis and contrasts interpretations inspired by New Keynesian, New Classical, and Marxist theories. We analyze the role different paradigms attribute to current account imbalances, fiscal policy and monetary policy. Remarkably, opposing views on the relative importance of cost and demand developments in explaining current account imbalances can be found in both heterodox and orthodox economics. Regarding the assessment of fiscal and monetary policy there is a clearer polarization, with heterodox analysis regarding austerity as unhelpful and large parts of orthodox economics endorsing it. We conclude that there is a weak mapping between post-Keynesian, New Classical, New Keynesian and Marxist theories and different economic policy strategies for the Euro area, which we label Keynesian New Deal, European Orthodoxy, Moderate Reform and Progressive Exit respectively. [ABSTRACT FROM AUTHOR]

Since the early 2000s German net exports have grown persistently, generating huge current account surpluses. These surpluses have added to current account imbalances within and outside the European Monetary Union (EMU). Contributing to the economic policy debate of whether it is foreign demand or 'world-beating' price competitiveness driving German exports, the paper investigates econometrically the determinants of German intra- and extra-EMU exports for 1995 to 2014. The long-term relationship between exports, foreign activity and the real effective exchange rate is estimated in an error correction framework. The results show that German exports are sensitive to foreign activity. Germany has benefited from growth of trading partners and high income elasticities of demand for exports, indicating non-price competitiveness. With regard to exchange rate effects, we do not detect a significant impact of the real exchange rate on intra-EMU exports. However, our estimations provide a stable relationship between the real exchange rate and extra-EMU exports. We calculate that the real exchange rate explains 12% to 17% of export growth. Moreover, taking into account quantity and price effects caused by changes in the real exchange rate, we observe contrary effects on real and nominal exports. [ABSTRACT FROM AUTHOR]

The integration of small states into the international financial system has constrained their ability to enact the traditional macroeconomic tools of fiscal and monetary policy. As systems of mortgage credit are tightly integrated into global capital markets and influence flows of capital between states, this paper uses Denmark as a case study to explore whether domestic mortgage sector reforms have been used to build financial capacity to compensate for the loss of economic policy autonomy. The results of this analysis suggest that the Danish government has actively used mortgage credit to meet three specific macroeconomic objectives since the 1980s: (1) mortgage credit was restricted in the 1980s to resolve Denmark's persistent balance of payments problem; (2) liberalisations of mortgage credit in the 1990s and 2000s allowed the Danish government to stimulate the economy via privatised/house-price Keynesianism and reduce their sovereign debt burden; and (3) mortgage credit has been used as a form of privatised monetary policy, allowing Denmark to break-free from the 'iron-cage' of the Mundell-Fleming trilemma. It is in these specific ways that the Danish government has used mortgage reforms to achieve macroeconomic policy autonomy and navigate economic challenges whilst adhering to the constraints of the international financial system. [ABSTRACT FROM AUTHOR]

Large inflows of foreign money into a country can appreciate its domestic currency, which can adversely affect its current account balance. South Asian countries receive a significant amount of foreign currency as remittances. In this paper, we examine the Dutch disease effect of remittances in five South Asian countries, namely Bangladesh, India, Nepal, Pakistan and Sri Lanka using panel data from 1975 to 2014. Panel cointegration test provides evidence of the long-run relationship between remittances and the real exchange rate. The Fully Modified Ordinary Least Squares Method (FMOLS) is used to estimate the impact of remittances on real exchange rates. The findings suggest that remittances do appreciate the real exchange rate in South Asia. Pesaran, Shin, and Smith ([1999]. Pooled Mean Group Estimation of Dynamic Heterogeneous Panels. Journal of the American Statistical Association, 94, 621–634) Pool Mean Group (PMG) estimation technique is used to check the robustness of the findings. The PMG test results confirm the findings from the FMOLS. [ABSTRACT FROM AUTHOR]

The following paper is a review essay of Daniel Larsen's Plotting for Peace. It begins with a brief overview of the book, which highlights its seminal insights on the financial quandaries of the Anglo-American international trade relationship during the First World War, and their galvanising effect on British strategy and American peace mediation symbolised by the House-Grey memorandum. It then traces the wide-ranging historiographical significance of Larsen's placement of British strategy in the context of the balance of payments. Finally, the review offers some general criticisms of the book. In particular, the shortcomings of its American diplomatic and political history. [ABSTRACT FROM AUTHOR]

The paper presents a simple Stock-Flow Consistent open economy model with flexible exchange rates. It can reproduce the same dynamics and results of the flexible exchange rates 'benchmark' model by Godley and Lavoie [2007b. Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth. London, UK: Palgrave MacMillan]. The latter is considered the 'centre of gravity' of SFC open economy literature. Yet the new model uses only one-third of the equations of the original one and features a different mechanism of determination of the exchange rate. Its small size and its flexibility make the model suitable both for didactic purposes and for extensions with further building blocks to address a variety of research topics. [ABSTRACT FROM AUTHOR]

The global financial cycle (GFCy), driven by international monetary conditions and global risk perceptions, is a major driver of capital flows to and out of emerging and developing economies (EDEs), reflected in external indebtedness. This paper analyzes the impact of the GFCy on the economic performance of EDEs borrowing in international markets. Rising external borrowing generates appreciating pressures on the exchange rate and lowers the cost of external borrowing. The overall impact of these reinforcing effects acts over investment, debt servicing and the current account balance. We conduct simulation exercises which show that rising external debt coupled with lax external financial conditions have a detrimental impact on economic activity and creates inflationary pressures through the effect of financial costs and the reaction of nominal wage demands. We show that capital control measures increase the degrees of freedom of monetary authorities. [ABSTRACT FROM AUTHOR]

The UK economy has long been associated with a weak balance of payments, reflecting an underlying growth model reliant on private household consumption. A deficit in goods trade, chiefly with the EU, has been offset by surpluses in services trade and foreign investment earnings. The Single Market provided wider markets for the UK, but did not fundamentally alter Britain's structural weaknesses. The Brexit vote took place against the background of Britain running its largest peacetime current account deficit. Financing Britain's external position represents a key challenge post-Brexit. Post-Brexit models for Britain partially address this. Any emergent model will critically depend on the nature of the Brexit deal with the EU, not least in terms of the impact on financial services and on supply chains. This paper sets out the recent evolution of the UK's current account position, particularly in relation to the EU. It then highlights particular areas of potential disruption from Brexit and sketches out scenarios of possible evolution of the Britain's external position in response to this. [ABSTRACT FROM AUTHOR]

This paper uses a global computable general equilibrium model, global trade analysis project and a value-to-volume conversion to arrive at quantitative estimates of the new seaborne cargo volumes resulting from a free trade agreement between Taiwan and China, namely, the Economic Cooperation Framework Agreement (ECFA). The approach is designed to model asymmetric impacts of tariff removal and economy-wide interactions caused by the ECFA arriving at estimation in cargo value flows. Then a scientific approach is developed to convert the estimated cargo value flows into volume flows. The analysis concludes that in terms of total trade value, the ECFA liberalisation would induce a trade creation effect across the Strait of more than US$ 30 billions. There is an increase of US$ 26.04 billions in exports to China, which is much higher than imports from China (US$ 4.67 billions). Regarding the converted trade volume, the exports of uncontainerisable and containerisable cargo to China increase by 0.37 and 5.12 million tons (0.43 million TEUs), respectively. The increases in imports from China are relatively minor at 0.19 and 0.75 million tons (0.06 million TEUs) of uncontainerisable and containerisable cargo. Policy implications and suggestions for shipping and port industry are provided accordingly. [ABSTRACT FROM AUTHOR]

In this paper, we evaluate the French balance-of-payments constrained growth rate and we compare it with the effective growth rate. Empirically, we show that France is experiencing, simultaneously to its European integration, a substantial increase in the income elasticity of demand for imports and a collapse in the growth rate of its exports. Within the balance-of-payments constrained growth approach, this twofold negative effect is a major obstacle to true economic recovery and full employment. [ABSTRACT FROM AUTHOR]

The centralised orchestration technique is often a bad idea for massive parallelism applications if we want to achieve a scalable solution. In this paper for this purpose, the choreography approach is undertaken and some adaptive methods and software tools of distributed implementation are proposed to enhance computation parallelism applied to the optimisation of a class of block-recursive algorithms. A new formal model of distribution and coordination of the tasks in a computing cluster as asynchronous reactive processes with message-passing represented with an actor model and choreography of actors is developed. Also, a new scheme of data placement in a multiprocessor cluster based on prioritisation of block-recursive operations is developed to reduce idling time, data movement time. Adaptive adjustment of the data placement in a cluster at run time to account for current cluster load is developed and an auto-tuning of the actor placement in a cluster based on previous statistics for optimisation is implemented. The experiments show that the choreography of actors allows to remove the central coordinating element, to avoid hard dependencies between cluster nodes, and to achieve a better degree of the parallel applications' scalability. [ABSTRACT FROM AUTHOR]

Recently, Fausten and Brooks offered (what they refer to as) an 'impressionistic view' of the temporal evolution of Australia's balancing item, which is a measure of the accuracy of the balance of payments accounts. They claim that the balancing item 'has been increasing in magnitude and volatility, violating with increasing frequency internationally agreed acceptability criteria for smallness'. In the present paper it is shown that Fausten and Brooks' results derive from data that incorporates excessively a dynamically asymmetric concentration of revisions and is therefore unsuitable for statistical analysis. This paper develops, and empirically evaluates, a model of the process of revisions of balance of payments data. This model illustrates that dynamically inconsistent time series of the balancing item, such as that employed by Fausten and Brooks, are bound to generate an artificial impression that it follows an 'explosive' time trend. Subsequently, it is illustrated that when alternative, dynamically consistent editions of the balancing item data for the same period as that examined by Fausten and Brooks are employed, their results are reversed. Indeed, the findings here contradict diametrically the conclusions of these authors by suggesting that the decline in the frequency of balancing item 'violations' observed in the latter portion of the relevant time period is unparalleled in the history of the balance of payments accounts. [ABSTRACT FROM AUTHOR]

The paper reports estimates of import and export functions for five technological sectors in 14 developed European countries. These functions have never before been estimated for developed countries adopting a technological classification of sectors. The paper compares estimates of income elasticities found using vector error-correction models employing aggregate deflators, with estimates found using cross-product panels employing product-specific quality-adjusted price indexes recently calculated by Feenstra and Romalis. The results indicate that the income elasticities of imports and exports are higher for medium- and high-tech manufactures, which suggests the importance of moving from the production of simple goods to the production of goods with high technological content. The estimates also suggest that the Multi-Sectoral Thirlwall’s Law holds for the countries analysed, while comparing the estimates revealed that cross-product panels with quality-adjusted prices generate considerably more robust results. The investigation reveals that using a more recent time period generates estimates of income elasticities of demand for primary products and resource-based manufactures that tend to be higher than the estimates found by studies that have used longer time periods, while the opposite holds for low-, medium-, and high-tech manufactures. [ABSTRACT FROM PUBLISHER]

Twin deficits hypothesis postulates that there is a strong positive linear relationship between a country's budget deficit and its current account deficit. This paper empirically investigates the existence of this relationship in five South Asian Association for Regional Cooperation (SAARC) countries using time-series data for the period 1980–2012. The paper uses cointegration analysis, error correction modeling and Granger causality test under a vector autoregression framework. The results show that the direction of causality for the SAARC countries is mixed. The findings confirm that budget deficit causes current account deficit for Pakistan and Sri Lanka, whereas the reverse is true for India and Nepal. The direction of causality is found to be unidirectional from current account deficit to budget deficit in the short run for Bangladesh. [ABSTRACT FROM AUTHOR]

Wolfgang Stützel was a prominent German economist who coined a very special terminology in national accounting and in international economics. Therefore, it can be said that his contributions to economics got lost in translation. Especially, the Balances Mechanics approach and the paradox of competition are his biggest achievements in economic theory, but he never received international recognition. The objective of this paper is to pay tribute to his work by applying his analytical frameworks to the balance of payments crisis in the Eurozone and to the distributional impacts of austerity policy. [ABSTRACT FROM AUTHOR]

This paper enquires the dynamics of current account and capital account in Sri Lanka for the period 2001:Q1 to 2016:Q1 and also examines the role of some policy variables such as exchange rate and interest rate in this dynamics. Estimated autoregressive distributed lag (ARDL) bound testing approach to cointegration followed by error correction representation of the ARDL model have found that current account is caused by capital account and exchange rate, where capital account causes to produce a deficit in current account. In the dynamic adjustment of current account due to exchange rate, an evidence of J-curve phenomenon is noticed. Capital account is neither caused by current account nor by exchange rate but interest rate has a positive impact on it. Robustness of these findings is testified by the vector autoregression model, Wald test of Granger causality followed by an impulse response analysis and a variance decomposition analysis. These analyses, in addition, establish a negative impact of interest rate on current account. With the best of knowledge this is the first study that reveals the dynamics of current and capital account of Sri Lanka. Such a dynamics is critical from the policy perspective. Policy makers should caution before capital account liberalization. [ABSTRACT FROM AUTHOR]

This paper focuses on the role of the macroeconomic outlook in explaining the returns volatility from 1998 to 2018 in Morocco. Our findings show that the inclusion of low-frequency macroeconomic information can improve the explaining ability, particularly for the long-term variance component. Information in some indicators which represent forward-looking variables (i.e. international economic situation, interest rates, exchange rates and inflation) seem to take into account the current economic situation, and remain useful in the Moroccan stock market development. Nevertheless, the historical realized volatility exceeds all models with macro-finance data in terms of explaining the long-term volatility. Therefore, it is noteworthy that investors and decision makers are considered to be more affected by the stock results, namely the past returns performance and the historical volatility. In general, modeling the long-term volatility component has a great potential and is very useful for portfolio selection, hedging decisions and macroeconomic risk management. [ABSTRACT FROM AUTHOR]

This paper studies the impact of a country's public debt on its twin deficits. Using panel data of five South Asian countries characterized by acute twin deficits and a high debt-to-GDP ratio for 1980–2018, we find no evidence that the budget balance wields a statistically significant impact on the current account. When the relationship between fiscal and current account deficits is conditioned on public debt levels, we find a statistically significant non-linear twin deficits relationship. For low-to-moderate debt countries with debt ratios between 46.21% and 65.80% of GDP a fiscal deficit, increase leads to a lower current account deficit. For high debt countries (i.e. debt-to-GDP ratio is above 65.80%), a rising fiscal deficit results in a larger current account deficit. Maintaining a sustainable debt-to-GDP ratio of 65.80% or lower is crucial for reducing both fiscal deficits and current account imbalances. [ABSTRACT FROM AUTHOR]

Creative services have become an important, but understudied, part of global trade. This paper presents new evidence on the transformation, geography and industrial relatedness of creative service exports in the UK, using the Inquiry in International Trade in Services (ITIS) database. Creative services exports have grown over the past decade, but there are pronounced patterns of geographical specialization in the export of creative and non-creative services. We develop a measure of relatedness between exports of creative and non-creative services and of manufacturing goods. We argue that creative services are economically significant because of their interrelationship with other local sectors. [ABSTRACT FROM AUTHOR]

From Asian experiences in financial crises of 1997–08 and 2007–09, this study finds that higher income inequality can worsen current account imbalances and exacerbate external vulnerability. Capital flows, volatile though they are, are the effect, not the cause, of variations in economic fundamentals. We show that credit-based growth with the aid of foreign financing is prone to financial fragility while export-oriented growth on the basis of domestic saving is good for financial stability. Given the rising international political tensions, our result suggests that Asian emerging markets should reduce inequality and boost demand to achieve sustainable credit and balanced growth. By doing so, Asia can effectively help alleviate global imbalances and lower financial risk. [ABSTRACT FROM AUTHOR]

The integration of eurozone financial markets since the advent of the euro in 1999 has been the center of attention in policy debates and academic research. We analyze the bank assets of monetary financial institutions in Germany vis-à-vis nonresidents. The financial institutions of the eurozone countries have tended to invest in assets of other eurozone countries substantially more since the introduction of the euro. The euro effect is especially stronger in the weaker eurozone economies than in the stronger eurozone economies. Furthermore, the impact of the euro has been even greater in securities than in loans. In this paper, we use Bundesbank balance-of-payment statistics to analyze the euro’s effects on the asset portfolios of German banks vis-à-vis nonresidents. [ABSTRACT FROM PUBLISHER]

This paper seeks to determine Nigeria's long-run growth path using a multi-sectoral version of the balance of payment constrained growth model from 1981 to 2016. It particularly contends that the actual growth of an economy is highly connected to sectoral differences in elasticities of income of tradable goods produced in the economy. The autoregressive distributed lag model (ARDL) approach is employed to obtain the required elasticities for the determination of the equilibrium growth rate. In line with research expectations, the first outcome of the study reveals that while, machinery and equipment turned out with the highest income elasticity; animal, fats and vegetable products was the lowest. This suggests that transition from primary production to the production of products of hi-tech products is necessary for growth. Second, high reliance on intermediate imports with high income elasticity could harm growth in the long run. [ABSTRACT FROM AUTHOR]

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In this paper, it is tested whether intermediate consumption of knowledge-intensive business services (KIBS) in the economy and technology advancement in the KIBS sector (measured by R&D expenditures) affect the international competitiveness of a country's KIBS sector. First, the definition of KIBS trade, in light of the available data from the balance of payments statistics, is presented. Then, using a panel data set from the EU countries over the period 2000–2009, a panel cointegration approach to estimating the model is adopted. The empirical study shows that among the old EU countries only those with high income are competitive in KIBS exports. Estimation results demonstrate that their competitiveness in KIBS exports is positively determined by domestic and imported KIBS intensity in the economy, as well as by the KIBS sector's technology advancement. The new EU countries usually were not competitive in KIBS exports, and those which were successful in this field seem to have derived their success mainly from international outsourcing rather than from building their own capacities. Their competitiveness in KIBS exports was positively determined by the KIBS sector's endowment in human capital, or via domestic KIBS intensity in the economy together with lower labour costs. [ABSTRACT FROM PUBLISHER]

This study investigates the nexus between India's current and capital accounts using threshold cointegration and asymmetric error-correction approaches. The results validate the threshold cointegration between the current account (CA) and India's capital account (KA). The asymmetric error correction-based results support the unidirectional Granger causality from KA to CA. Further, results reveal that KA's cumulative sum of positive and negative deviation substantially impacts the CA. Finally, results of equilibrium adjustment path asymmetric effect from CA to KA suggest that KA reverts to equilibrium in the short run when CA decreases. [ABSTRACT FROM AUTHOR]

While inflow of remittances through informal channels are widely discussed in terms of their opportunity cost for the recipient country and likely instrument of illegal activities, the size of such inflows is indeterminate. Pakistan is on the forefront of global efforts to curb hawala transactions yet no consistent estimates are available. This study attempts to use an indirect macroeconomic approach to estimate hawala transactions from United State of America (USA), United Kingdom (UK), and Saudi Arabia (KSA) for the period 2010Q3 to 2019Q2. These three countries host around 50 percent of Pakistani emigrants and account for almost 55 percent of total remittances received in Q1FY20. Our estimates show that hawala transactions have significantly declined in Pakistan as percentage of official remittances from all three countries. This demonstrates that the enhanced monitoring, regulations and various policy measures by the Government of Pakistan have proved instrumental in reducing hawala transactions over time. [ABSTRACT FROM AUTHOR]

The paper characterizes the main determinants of the medium-term current account balance for oil-exporting countries using dynamic panel estimation techniques. It includes a large number of oil-exporting countries and extends the specifications commonly used in the literature to include an oil wealth variable as well as a proxy for the degree of maturity in oil production. The results reveal that factors that matter in determining the equilibrium current account balance of oil-exporting counties are fiscal balance, oil balance, oil wealth, age dependency, economic growth, and degree of oil production-related imports. [ABSTRACT FROM AUTHOR]

This paper aims to illustrate how an equilibrium exchange rate of the Yuan would contribute to China's achievement of non-inflationary full employment – defined as internal balance by James Meade in 1951, as well as the balance of international payments. In terms of Meade's model, China currently has both excess demand and a payments surplus, so that it would benefit from revaluation, which helps curb internal inflation and the external foreign surplus simultaneously. For China, specifically, revaluation would support combating price increases and facilitate a shift of resources into consumption and raising living standards. The paper also examines three common reasons advanced by groups in favor of avoiding appreciation of the RMB, finding none of them theoretically or empirically convincing. The pursuit of both growth/employment and price stability objectives makes China unable to afford having an undervalued exchange rate. [ABSTRACT FROM PUBLISHER]