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We derive a measure of aggregate systemic risk, designated CATFIN, that complements bank-specific systemic risk measures by forecasting macroeconomic downturns six months into the future using out-of-sample tests conducted with U.S., European, and Asian bank data. Consistent with bank “specialness,” the CATFIN of both large and small banks forecasts macroeconomic declines, whereas a similarly defined measure for both nonfinancial firms and simulated “fake banks” has no marginal predictive ability. High levels of systemic risk in the banking sector impact the macroeconomy through aggregate lending activity. A conditional asset pricing model shows that CATFIN is priced for financial and nonfinancial firms. [ABSTRACT FROM PUBLISHER]

In the literature, it has been suggested that political budget cycles are context-conditional, i.e., do not occur in all countries or under all circumstances. What about the underlying economic conditions? It has already has been shown that recessionary expectations reinforce the political budget cycle. This paper argues theoretically that opportunistic policymakers expecting a recession during an election year allow the primary deficit to increase even more when the stock of debt is very high, but reduce the deficit by more during an expected boom (in an election year). For the empirical estimation we use panel data from Portuguese municipalities. Plots of average marginal effects for election years show that differences between high- and low-debt municipalities become more pronounced in stronger expected recessions as well as booms; the stronger effect on the deficit in high-debt municipalities is caused by changes on both the revenue and the expenditure side. A whole armada of robustness tests (non-linear effects, alternative specifications of excessive debt and forecasts, various methods to account for time effects and clustering, several sample restrictions) confirms our results. [ABSTRACT FROM AUTHOR]

Overview: Global growth resilient to trade slowdown ▀ It seems increasingly clear that the manufacturing‐ and trade‐driven soft patch in late‐2018 is extending into this year. But we still think that global recession risks remain low and see no reason to make any notable shifts to our outlook for the global economy this year. We continue to forecast that GDP growth will slow from 3.0% in 2018 to 2.7% this year, with a similar outcome seen in 2020.▀ Various indicators show that trade volumes slowed sharply at end‐2018 and survey indicators for January suggest that the situation has not improved since then (see Chart). The main reason for this weakness has been China, where imports ended the year on a very weak note and we expect a further slowdown in Q1.▀ We have lowered our forecast of Chinese imports in 2019 by around 1.5pp in response. However, we expect a bounce back in Q2 and beyond; reflecting this, Chinese import growth over the year as whole is still expected to be notably stronger than in the 2015/16 soft patch. In a similar vein, while global trade growth is expected to slow sharply from 4.6% to 3.3% this year (down from 3.6% last month), it should still be stronger than in 2012–16, providing a solid backdrop for exporters.▀ Meanwhile, financial markets have rebounded sharply from the December sell‐off due to renewed optimism regarding US and China trade talks and a more dovish Fed. We now expect the Fed to leave rates on hold until at least Q3 and hike rates only once this year. This, along with lower government bond yields and weaker inflation, is also likely to reduce the need for monetary tightening elsewhere, particularly in emerging markets (EMs), helping to support global growth later in the year.▀ Overall, we still see global GDP growth softening in H1, but with a modest rebound in H2 as Chinese growth stabilises and EMs and European growth regain momentum. Sharper slowdowns in China and global trade and financial‐market weakness remain key concerns for the 2020 outlook. But the risk of inflation‐induced policy tightening is still low and the odds of a renewed flare‐up in trade tensions have ebbed lately. [ABSTRACT FROM AUTHOR]

Banks sometimes respond to deterioration in the quality of their placements by extending loan repayment periods to borrowers in default and hiding the actual quality of placements, hoping that difficulties of borrowers are only temporary. This practice is termed evergreening or zombie lending. Due to a prolonged recession and stagnation coupled with relatively high share of non-performing loans, such practice may be occurring in Europe nowadays. We use data for Croatia, a country that fought recession for several years, to study the existence of zombie lending practice. We analyse credit supply to individual enterprises in Croatia at the beginning and in the midst of the recent crisis and determine to what extent zombie lending is present and how lending behaviour changed during the crisis period. Results of the estimated regressions indicate that there is evidence that some of the loans being prolonged are the result of zombie lending practices. This implies that policymakers should be aware of the possibility of such a relationship between banks and firms, as well as of its impact, and should try to minimise it. [ABSTRACT FROM AUTHOR]

In the context of the growth slowdown in China, it is important to accurately forecast the future economic trend to guide policy-makers the direction of adjusting their current economic policies. In this paper, we intend to predict Beijing's tertiary industry, whose datasets are small, irregular and non-stationary, leading to a difficulty of building an accurate prediction model. To this end, we present an improved grey model, named PRGM(1,1), which extends the grey prediction model by integrating two techniques, i.e., the particle swarm optimization algorithm for parameter optimization and the exponential preprocessing method for data cleaning. The experimental results show that PRGM(1,1) outperforms other variants of the grey prediction model in predicting Beijing's tertiary industry, and is viable to do reasonable prediction over short and fluctuated economic data sequences. In addition, we employ PRGM(1,1) in the economic prediction of Beijing's tertiary industry in the next five years, and conclude that the growth rate will decelerate. Our prediction result seems to be in line with the economic slowdown in China this year. [ABSTRACT FROM AUTHOR]

Anthropogenic impact on CO 2 levels was studied in the Bear Chamber of the Výpustek Cave, a show cave in the Moravian Karst (Czech Republic), during a period of active ventilation and enhanced attendance. The study showed that the natural CO 2 levels were controlled by (i) the natural CO 2 influxes from soils/epikarst (up to ∼5.64 × 10 −2 mol s −1 ); and, (ii) the advective CO 2 fluxes out of cave atmosphere (up to 4.66 × 10 −2 mol s −1 ). During visitor presence, the anthropogenic CO 2 flux into the chamber reached up to ∼0.13 mol s −1 and exceeded all other CO 2 fluxes. The reachable anthropogenic steady states at sufficient duration of stay (up to 2.65 × 10 −1 mol m −3 ) could exceed the natural CO 2 levels by factor of more than nine based on the number of visitors. Recession analysis of anthropogenic pulses showed that intervals between individual visitor groups would have to be up to ∼6 h long if the cave environment has to return to natural conditions. As such pauses between individual tours are hardly realizable, a risk analysis was conducted to find the consequences of breaking natural conditions. It showed that the condition under which dripwater becomes aggressive to calcite (i.e., the point when P CO2 in cave atmosphere exceeds the hypothetical CO 2 concentrations in epikarst that has participated on the water formation, P CO2(H) = 10 −1.56 ) is potentially reachable under extreme conditions only (enormous visitor stay period and visitor number). In case of condensed water, however, any increase in CO 2 concentration will cause an increase of water aggressiveness to calcite. Therefore, in the periods and sites of enhanced condensation, it is important to strive for preservation of natural conditions. [ABSTRACT FROM AUTHOR]

This paper aims at implementing appropriate methodological approaches for a preliminary assessment of fuel poverty in Greece and analyzing in quantitative terms the potential impact of fuel poverty on public health. As regards the assessment of fuel poverty in Greece, both subjective and objective approaches have been implemented, utilizing primary data from existing surveys undertaken by National Statistical Authority, while the health impacts attributed to fuel poverty were quantified through statistical analysis. The implementation of objective approaches showed that around 20–25% of Greek households were in fuel poverty in 2013, while with subjective measures this percentage reaches to 29.5%, twice as in 2010. Furthermore, the regression models developed showed that the increased levels of fuel poverty observed after 2010 have had significant negative impacts on public health. Specifically, 1–2.7% of deaths recorded annually in Greece as well as the 2.7–7.4% of cardiovascular diseases and the 3.1–8.5% of respiratory infections treated by the Greek hospitals are attributed to fuel poverty. Taking into consideration that more than 60% of Greek households do not have adequate insulation, the development of ambitious energy saving programs for residential buildings could build synergies between climate change mitigation and fuel poverty alleviation. [ABSTRACT FROM AUTHOR]

In this paper, we replicate the main results of previous research showing that the use of the yield spread in a probit model can predict recessions better than the Survey of Professional Forecasters. We investigate the robustness of their results in several ways: extending the sample to include the 2007-09 recession, changing the starting date of the sample, using rolling windows of data instead of just an expanding sample, and using alternative measures of the 'actual' value of real output. Our results show that the Rudebusch-Williams findings are robust in all dimensions. Copyright © 2015 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

In the wake of the UK Brexit vote, forecasters have rushed to downgrade their growth forecasts for the UK, with some now expecting a recession. Using the Oxford Economics' Global Economic Model, we examine how likely a recession is by looking at the shocks the UK economy faces and the policy responses. We conclude that while a sharp slowdown is likely - in line with our own new forecasts - a recession is unlikely., Many UK forecasters are now predicting a recession in 2017, even though 'stand-alone' recessions in industrial countries are rare. Our forecast is less downbeat. The UK faces a series of negative shocks including to consumers and business confidence, but growth will be supported by the weaker sterling and likely policy responses., Using the Oxford Economics' Global Economic Model, we show that to shift our baseline forecast of growth of 1.1% next year to zero would require a very severe negative confidence shock. Our new baseline already assumes a shock equivalent to one-third of that seen in the global financial crisis (GFC). All else being equal, the shock would have to be around two-thirds of that in the GFC to cut GDP growth to zero in 2017., Our new baseline also does not incorporate all the possible policy levers the UK can employ. We currently assume the Bank Rate drops to zero, but if a 'rescue package' of £75 billion of QE and a fiscal stimulus equal to 1% of GDP was also added, then the shock to confidence needed to get zero GDP growth would have to be similar to that seen in the GFC. We do not consider this likely given the scale of financial stress and credit restriction that occurred globally at the time of the GFC. [ABSTRACT FROM AUTHOR]

The global financial crisis and the high associated costs have revived the academic and policy interest in "early warning indicators" of crises. This paper provides empirical evidence on the usefulness of a new set of vulnerability indicators, proposed in a companion paper (Röhn et al., 2015), in predicting severe recessions and crises in OECD countries. To evaluate the usefulness of the indicators the signalling approach is employed, which takes into account policy makers' preferences between missing crises and false alarms. Our empirical evidence shows that the majority of indicators would have helped to predict severe recessions in OECD economies between 1970 and 2014. In the domestic areas, indicators that measure asset market imbalances (real house and equity prices, house price-to-income and house price-to-rent ratios), perform consistently well both in and out-ofsample. Domestic credit related variables appear particularly useful in signalling upcoming banking crises and in predicting the global financial crisis out-of-sample. Indicators of global risks consistently outperform domestic indicators in terms of their usefulness, highlighting the importance of taking international developments into account when assessing a country's vulnerabilities. The good performance of the global indicators is however subject to a caveat: they are particularly suited to pick up recessions that affect a large number of countries simultaneously, such as the global financial crisis in 2008/09. The results are broadly robust to different definitions of costly events, different forecasting horizons and different time and country samples. [ABSTRACT FROM AUTHOR]

Using a modified yield curve with the US LIBOR substituting for 3-month US Treasury rates on the short end, I find that an when an inversion or flattening of this yield curve occurs, it is a strong predictor of future recessions in the US economy, especially at time horizons of 6 quarters. The signal weakens at a time horizon of 1 year. Controlling for short-end adjustments does not improve the forecasting ability of this yield curve. [ABSTRACT FROM AUTHOR]

We investigate whether there is information useful for identifying U.S. business cycle phases contained in subnational measures of economic activity. Using a probit model to forecast the National Bureau of Economic Research expansion and recession classification, we assess the incremental information content of state-level employment growth over a commonly used set of national-level predictors. As state-level data adds a large number of predictors to the model, we employ a Bayesian model averaging procedure to construct forecasts. Based on a variety of forecast evaluation metrics, we find that including state-level employment growth substantially improves nowcasts and very short-horizon forecasts of the business cycle phase. The gains in forecast accuracy are concentrated during months of national recession. [ABSTRACT FROM AUTHOR]

This paper is based on a presentation given by the authors at the Sustainable Brands Conference in San Diego, 2012. It builds upon best-practice retailing examples spanning developed markets such as the UK and USA, as well as developing markets such as Brazil, Peru, Turkey, South Africa and China. The authors share their collective experience drawing from their current work and global studies. The paper showcases success stories of retail leadership guided by a conscientious commitment to purpose over profit. The authors present an inspiring range of examples and describe the different ways that 'retailing with purpose' can manifest itself and make a meaningful social difference. From retailers, retail developers, and retailing as a practice, the paper illustrates how concepts such as 'place-making', community and employee culture building and sustainable business practices are essential for the value of retail to evolve beyond price or promotion. Many of the examples in this paper have not only survived the recession, but actually thrived while competitors have competed on price, promotions and cutbacks. Moreover, they sustained growth, made innovative offerings, and grew customer base and loyalty. They are proof that a business strategy driven by purpose over profit can ultimately be the most effective and enduring form of innovation and success at retail. [ABSTRACT FROM AUTHOR]

All relevant sources indicate high resistance of tourism as an economic sector, even during the global financial crisis, which is also reflected in the BiH economy. Institute of Economics of School of Economics in Sarajevo has published a number of research projects on this topic, Institute of Economics, University of Banja Luka made the Tourism Development Strategy of the Republic of Srpska, BiH municipalities sites are flooded with local strategies, the big cake (at least as far as the development of projects in the Balkans) is held by the New York Horvat. And electronic and print media in recent days, as in all previous election periods, have shown continually "our" smiling political candidates talking on BiH tourism industry (and agriculture) as well as development opportunities of almost every local community). Unfortunately, most of these studies, projects and promises has no practical use. One example, where "some concrete work and building is done" is Andricgrad, a project of the Government of the Republic of Srpska, the municipality of Višegrad and our famous film director Emir Kusturica. That iss why we have chosen this example for an economic analysis that could be of practical use to other stakeholders. [ABSTRACT FROM AUTHOR]

To state that the EU's existence would be threatened by a euro break-up does not tell us what form this existential threat would take. In any scenario, the actions and reactions of the centre will be critical. [ABSTRACT FROM AUTHOR]

El artículo discurre sobre recesiones en las empresas, incluyendo sus orígenes y maneras de aprender mediante cases anteriores para gestionar bajo la recesión más eficazmente. Se describe el error de no prestar atención a la recesión creciente hasta que la compañía entra su "espiral de la muerte," así como métodos diagnósticos para identificar la recesión.