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• We innovatively introduce the stock-flow consistent method into a computable general equilibrium framework, providing a detailed depiction of fund flows in the economy. • This framework integrates the real and virtual economies, enabling analysis of the mutual impacts between climate goal achievement and the financial system. • The impact of implementing transition finance in China on both the macroeconomy and the low-carbon transformation of high-carbon industries is evaluated. • Precision support from transition finance for energy system capital investments in high-carbon industries can reduce the economic costs of achieving China's climate goals. • The research findings will offer insights into policy design in China's transition finance and the development pathway of green finance in similar countries. Low-carbon transition in carbon-intensive industries is crucial for achieving climate targets. However, it's challenging for enterprises and projects in these industries to access the necessary funding for their transition within the existing financial system. In this context, transition finance supports the low-carbon transition of carbon-intensive industries, injecting momentum into achieving carbon neutrality goals. However, the precise impact of transition finance on the macroeconomy remains uncertain, and the effective strategies for its implementation to effectively advance national climate objectives are still unclear. This study integrates the stock-flow consistent method into a computable general equilibrium model to evaluate the macroeconomic impact of transition finance supporting China's climate goals. Results indicate that promoting investment in energy systems capital within carbon-intensive industries through transition finance can reduce the economic cost of achieving carbon reduction targets in China, with a reduction ranging from 0.02 % to 0.26 %. Additionally, transition finance optimizes the energy structure in the short term, mitigates the exit of high-carbon industries, and lessens the impact of climate targets on these enterprises. However, implementing transitional financing requires enhanced information disclosure and strict regulation of fund flows to mitigate potential credit risks. The research findings provide valuable insights into China's transition finance policy formulation and serve as a reference for other regions seeking financial support to achieve climate targets. [ABSTRACT FROM AUTHOR]

Various social science literatures suggest that the general character of macroeconomic models reflects their assumptive base. A more specialist literature in the Weintraub-Boumans-Morgan tradition shows how the mathematics of those models moulds together logical implications of particular starting assumptions, insights from generally accepted theoretical propositions, and professionalised common-sense about how the world works. I go one step further in arguing that a process of narrative moulding operates in tandem with this mathematical moulding. A naming strategy provides the mathematical properties of macroeconomic models with economic labels to create the feeling that they are something more than a merely mathematical structure. A storytelling strategy then informs policy-makers of where the solution to the system of equations positions the outer limits of both political desirability and political possibility. Future dedicated research programmes into the narrative dimensions of macroeconomic models can be expected to shed further light on how theory models can masquerade as policy models and substitute models as surrogate models. [ABSTRACT FROM AUTHOR]

We estimate a New Keynesian model incorporating two notable features: bounded rationality and the zero lower bound on the nominal interest rate. Our Bayesian estimation of a nonlinear model shows that the model with bounded rationality better fits the U.S. data than its rational expectations counterpart, and that both households and firms exhibit a substantial degree of bounded rationality. Moreover, we demonstrate that bounded rationality expands a parameter region in which the model can be estimated and weakens the power of forward guidance. [ABSTRACT FROM AUTHOR]

Transitioning to a circular economy (CE) can contribute to the achievement of long‐term climate targets. A comprehensive evaluation of CE strategies requires a macro‐level approach that integrates environmental, social, and economic goals. Policy support, behavioral changes, innovation, and new business models play key roles in this transition. Additionally, understanding the potential synergies, benefits, and trade‐offs associated with these strategies is essential for their effective implementation. This paper proposes a novel approach, using macroeconomic modeling, industrial ecology, and behavioral concepts to evaluate the impacts of CE strategies on socioeconomic and climate systems. As an application, the paper investigates the environmental and economic effects in Japan of increasing the extended producer responsibility (EPR) fee on energy‐using durable goods. We show that increasing the fee makes households substitute conventional goods for circular services. Also, while increasing EPR fees for energy‐using durable goods may decrease the materials needed to produce and operate these goods, the overall impact on sustainability goals is rather low. [ABSTRACT FROM AUTHOR]

This study analyzed the impact of macroeconomic variables (manufacturing, real exchange rate, government expenditure, and gross fixed capital formation) on GDP growth in Ghana. Utilizing secondary data from the World Development Indicators of the World Bank (1991–2021), we employed a hierarchical Bayesian linear model with interaction effects to assess these relationships. The results indicate that the real exchange rate, manufacturing, and government expenditure have a positive influence on GDP growth, while gross fixed capital formation exhibits a moderately negative effect. To enhance economic growth, it is crucial to optimize capital investments, bolster export competitiveness through targeted policies, and invest in manufacturing innovation. These findings offer actionable insights for policymakers aiming to stimulate economic growth in Ghana. [ABSTRACT FROM AUTHOR]

Is the importance of technology shocks in accounting for the fluctuations in output and hours sensitive to the measure of output? Using a vector autoregression, we empirically investigate the contribution of technological shocks to economic fluctuations when output is defined in consumption units, as commonly used in many macroeconomic models, and when output is tabulated according to the Divisia index in the U.S. National Income and Product Accounts (NIPAs). Based on a standard neoclassical growth framework that allows for a mapping of theory into any desired measure of output, we establish that the same restrictions may be used to identify technology shocks in a vector autoregression model regardless of the measure of output. However, our estimation reveals that while the combination of both investment-specific technology shocks and neutral technology shocks accounts for a large portion of the business cycle variability of hours and output, the choice of the measure of output via the use of the associated deflator greatly affects the amplification of the shocks in the responses and the variability of the responses in output and hours. [ABSTRACT FROM AUTHOR]

This paper investigates the role of credit market sentiment and investor beliefs in credit cycle dynamics and their transmission to businesscycle fluctuations. Using U.S. data from 1968 to 2014, we find that credit market sentiment is indeed able to detect asymmetries in a small‐scale macroeconomic model. An unexpected credit market sentiment shock has different impacts in an optimistic and pessimistic credit market environment. While an unexpected movement in the optimistic regime leads to a rather muted impact on output and credit, we find a significant negative impact on these variables in the pessimistic regime. The findings highlight the relevance of expectation formation mechanisms as a source of macroeconomic instability. [ABSTRACT FROM AUTHOR]

We propose an approach to measuring the state of the economy via textual analysis of business news. From the full text of 800,000 Wall Street Journal articles for 1984 to 2017, we estimate a topic model that summarizes business news into interpretable topical themes and quantifies the proportion of news attention allocated to each theme over time. News attention closely tracks a wide range of economic activities and can forecast aggregate stock market returns. A text‐augmented vector autoregression demonstrates the large incremental role of news text in forecasting macroeconomic dynamics. We retrieve the narratives that underlie these improvements in market and business cycle forecasts. [ABSTRACT FROM AUTHOR]

External shocks have a notable influence on the macroeconomic fluctuations of emerging economies. However, there is limited theoretical and empirical evidence on how dependence on a single commodity export affects the transmission of external shocks in these economies. This study uses data from 1998 to 2019 to estimate a Bayesian Vector Autoregressive (BVAR) model for the economies of Ethiopia, Morocco, Nigeria, and South Africa, focusing on the price of their leading export commodities. The study examines the relationship between fluctuations in export commodity prices and economic activity over time. Most of the findings are consistent with the theoretical framework and empirical evidence on emerging economies, which typically react to external shocks, although the responses vary across economies. The study shows that a shock to export commodity prices induces a more pronounced output response in low-income economies with lower shock-absorbing capacity. Export commodity prices are identified as a crucial transmission channel of external shocks to emerging market economies, highlighting the importance of paying distinct attention to this sector in macroeconomic modeling. The results are robust to different prior specifications and choices of lag lengths for exogenous variables. [ABSTRACT FROM AUTHOR]

Health care spending has grown significantly in the US, and is a major cause of rising federal deficits. Official projections find that low economic growth and aging of the population will lead to a modest continuation of this situation, but they miss that labor shortages have a particular impact on inefficient sectors, raising the cost of health care. We develop a unified macroeconomic model to address this shortcoming, with key variables—particularly in the health care sector and interest rates—endogenously determined. We find that the current fiscal trajectory of the US is unsustainable, with future deficits and debt well beyond both historical norms and official projections. Policy steps, focusing on reducing health care spending, increasing capital, and fiscal retrenchment, can lead to sustainable fiscal conditions and raise living standards that will otherwise fall. [ABSTRACT FROM AUTHOR]

Purpose: This paper seeks to explore the sensitivity of these parameters and their impact on fiscal policy outcomes. We use the existing literature to establish possible ranges for each parameter, and we examine how changes within these ranges can alter the outcomes of fiscal policy. In this way, we aim to highlight the importance of these parameters in the formulation and evaluation of fiscal policy. Design/methodology/approach: The role of fiscal policy, its effects and multipliers continues to be a subject of intense debate in macroeconomics. Despite adopting a New Keynesian approach within a macroeconomic model, the reactions of macroeconomic variables to fiscal shocks can vary across different contexts and theoretical frameworks. This paper aims to investigate these diverse reactions by conducting a sensitivity analysis of parameters. Specifically, the study examines how key variables respond to fiscal shocks under different parameter settings. By analyzing the behavioral dynamics of these variables, this research contributes to the ongoing discussion on fiscal policy. The findings offer valuable insights to enrich the understanding of the complex relationship between fiscal shocks and macroeconomic outcomes, thus facilitating informed policy debates. Findings: This paper aims to investigate key elements of New Keynesian Dynamic Stochastic General Equilibrium (DSGE) models. The focus is on the calibration of parameters and their impact on macroeconomic variables, such as output and inflation. The study also examines how different parameter settings affect the response of monetary policy to fiscal measures. In conclusion, this study has relied on theoretical exploration and a comprehensive review of existing literature. The parameters and their relationships have been analyzed within a robust theoretical framework, offering valuable insights for further research on how these factors influence model forecasts and inform policy recommendations derived from New Keynesian DSGE models. Moving forward, it is recommended that future work includes empirical analyses to test the reliability and effectiveness of parameter calibrations in real-world conditions. This will contribute to enhancing the accuracy and relevance of DSGE models for economic policy decision-making. Originality/value: This study is motivated by the aim to provide a deeper understanding of the roles macroeconomic model parameters play concerning responses to expansionary fiscal policies and the subsequent reactions of monetary authorities. Comprehensive reviews that encompass this breadth of relationships within a single text are rare in the literature, making this work a valuable contribution to stimulating discussions on macroeconomic policies. [ABSTRACT FROM AUTHOR]

Remittance has recently become an essential capital inflow, particularly for developing economies. This has generated much research interest in understanding how remittances affect developing economies. There are, however, limited studies on remittances' influence on trade. The study extends the existing body of knowledge by assessing whether the impact of remittances on trade depends on the size of inflows. As far as we know, the existing literature has not addressed this. The study period spans from 1990 to 2018, covering 32 sub-Saharan countries. Using an endogenous dynamic panel threshold model, the results reveal that although remittance deteriorates trade balance, the rate of deterioration diminishes after an estimated threshold of 2.35 per cent of remittances as a share of GDP. The results imply that when received in small amounts (below 2.35 per cent of GDP), remittances tend to stimulate consumption, leading to increased imports. However, when received in large quantities (above 2.35 per cent of GDP), remittances boost domestic investments leading to rising exports. The results are robust to alternate estimation techniques and measurement of remittances. Based on the findings, we recommend that policymakers in SSA integrate the volume of remittances received in their macroeconomic modelling frameworks. [ABSTRACT FROM AUTHOR]

Climate change engendered by carbon emissions has become a major threat to human life and the world economy. Many of early studies corroborate that carbon tax and subsidy are effective policy tools to alleviate climate change. Most of them, however, use closed-economy models with a single firm to analyze the effects of these two policies. This paper explores the effects of carbon tax, subsidy and foreign carbon emissions on economic activities in an open macroeconomic model that features low- and high-carbon firms. The main findings suggest that carbon tax, subsidy and foreign carbon emissions all deliver heterogeneous outcomes by largely affecting high-carbon firms. The shortage of national income due to weak economic activities leads the economy to issue more international bonds. The takeaway from all the analyses is that government should introduce various carbon taxes that are geared towards target firms with different carbon emissions and adopt optimal means to manage national debt. [ABSTRACT FROM AUTHOR]

Promoting financial stability is one of the main priorities for the governments of countries seeking to achieve sustainable economic growth. The article aims to assess and model the impact of macroeconomic factors on the financial stability of the Russian Federation in the period 2010-2030 using ADF, OLS, VAR, ARCH, VECM and other techniques. In addition, the linear causal relationship between a group of 6 macroeconomic indicators and the financial stability of the Russian Federation was studied. The results of this research show that Russia's financial stability depends mainly on exports of crude oil and natural gas, price stability, volume of government debt, deficits and surpluses of the state's budget, exchange rate stabilization of national currency, and effectiveness of the banking system. Additionally, events taking place in Eastern Europe, the Middle East and the African continent may negatively affect Russia's financial security if it fails to take the necessary preventive measures. [ABSTRACT FROM AUTHOR]

We adopt a pandemic-macroeconomic model to simulate the macroeconomic impact of COVID-19 on various occupations under both laissez-faire and government lockdown scenarios. We integrate a SIR model of virus transmission into a simplified neoclassical model and categorize occupations into two groups based on their ability to work remotely. Subsequently, we assess the shock impact of the pandemic on GDP, consumption, and working hours of flexible and rigid occupations. We find that these three variables declined during the pandemic, yet the consumption varied among individuals with different health status. The labour market experienced a recession, with workers in flexible occupations experiencing a relatively milder impact compared to those in rigid occupations. A larger proportion of remote work mitigated the recessionary effects, although it accentuated the disparities between occupations' income and working hours. The implementation of lockdown policies detrimentally affects welfare, similar to the pandemic itself, but the impact on flexible and rigid occupations differs from that in a laissez-faire scenario. [ABSTRACT FROM AUTHOR]

Copyright of Environmental & Social Management Journal / Revista de Gestão Social e Ambiental is the property of Environmental & Social Management Journal 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.)

Via a forward SDE solution $ (k_t, t\geq 0) $ that captures money supply dynamics, a macroeconomic model known as the monetary model generates a backward exchange rate process $ (y_t, t\geq 0) $. For any $ t\geq 0 $, $ y_t=k_t+\alpha^{-1}\mu_t $ where $ (\mu_t, t\geq 0) $ is a backward process and $ \alpha>0 $ is a constant. Thus, $ (y_t, t\geq 0) $ does not satisfy a conventional BSDE. Our paper proves $ (y_t, t\geq 0) $ is a continuous semimartingale when restrictions on the SDE for $ (k_t, t\geq 0) $ capture anti-inflationary initiatives. This new result in economic dynamics does not require the filtration to be the Brownian filtration. [ABSTRACT FROM AUTHOR]

In this study, we construct heterogeneous agent general equilibrium models to investigate the relative importance of labor endowment in driving structural transformation. We aim to explore the following question: beyond the demand-side and supply-side structural transformation driving forces extensively studied in the existing literature, does labor, as a crucial endowment, play a pivotal role in facilitating structural transformation and the energy economy? In contrast to the prevalent partial equilibrium analyses, our study employs a general equilibrium framework to conduct a policy evaluation of college expansion, a significant policy that has altered the labor endowment structure in China. Our approach begins with developing a multi-sector model that integrates a nested CES production function and incorporates workers with different skill levels to assess the macroeconomic impact of college expansion on structural transformation. We calibrate the base model to reflect labor allocations across sectors and skill levels using the simulated method of moments (SMM), ensuring that the model-generated data align closely with actual labor allocation data. Utilizing this calibrated model, we perform counterfactual experiments to assess the impact and relative importance of the college expansion policy. Our counterfactual analysis demonstrates that the policy has resulted in an average decrease of 7.7% in labor allocation in the agricultural sector, alongside an average increase of 8.9% in the industry sector and 28.7% in the services sector. These results highlight the significant, yet often overlooked, contribution of labor in endowment-driven structural transformation. Furthermore, we extend the base model by constructing an industry-level heterogeneous agent general equilibrium model, enabling us to pinpoint which industries have developed as a result of the college expansion policy and recalibrate it at the industry level. This approach allows us to analyze the impact of changes in labor endowment on the energy economy. Counterfactual experiments conducted show that the college expansion policy has prompted a labor shift from industries with low energy efficiency and high pollution to high-end services. This macroeconomic pattern of structural transformation suggests that the college expansion policy has facilitated a transition toward a low-carbon economy by reducing dependency on high energy-consuming industries and promoting high-end services. [ABSTRACT FROM AUTHOR]

Much contemporary economic policy analysis deploys demographic projections. To explore their macroeconomic significance, this article draws on documentary evidence from two case studies: (1) the World Bank's Human Capital Index and (2) European Union models of population ageing within debt sustainability analysis. Combining constructivist and Foucauldian insights, we develop a threefold argument about the constitutive effects of quantified demographic futures on macroeconomic policy analysis. First, the World Bank's and the European Union's respective demographic futures mobilise urgency for contingent policy choices with reference to expected future 'gaps'. Second, they build credibility for contested bodies of expertise on the basis of long-term population forecasts. Third, they delineate agency such that the effects of structural inter-dependencies between economies are rendered as national-level policy risks. These findings demonstrate how quantified demographic futures circumscribe national policy space, mediate the politics of macroeconomic ideas and contribute to the depoliticisation of economic policymaking. [ABSTRACT FROM AUTHOR]

Copyright of Revista Foco (Interdisciplinary Studies Journal) is the property of Revista Foco 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.)

A review of the economic literature on export-led growth models shows that relevant studies mostly do not analyse the export structure. The economic complexity index (ECI), developed by Hausman and Hidalgo in 2011, claims to measure the uniqueness of a country's export products, in other words, the structure of the export products. In the study, to contribute to the literature about export-led growth, ECI is used in panel regression models with various macroeconomic variables for 101 countries over the period 1995-2020. To achieve homogeneous country groups, the double layered club convergence technique is used to form sub-clubs with similar characteristics. Empirical analyses are then applied separately for each sub-clubs and for the full panel. The contribution of the study to the literature is expected on three unique features: i) the analysis of a double-layer club convergence to ensure homogeneous distribution of countries, ii) the linear panel regression, and iii) panel threshold regression analyses which includes macroeconomic variables belonging to 101 countries and comparison of findings of panel regression estimations applied to all panel and clubs. The export-led growth hypothesis is supported in the analyses. About the effect of ECI on economic growth there are contradictory findings for clubs and no significant effect of ECI on growth is found for all panel. Panel threshold regression analysis of the full panel, however, reveales that ECI effects growth through leading to an increase in exports. The threshold value for ECI is determined to be 0.3949. Also, where ECI is higher than the threshold value, it is observed that as ECI increases, effect of exports on economic growth increases. [ABSTRACT FROM AUTHOR]

This article develops a macroeconomic model of interaction between the real sector and the financial sector, and explores the conditions that make the economy vulnerable to sudden collapse as a result of finance-led growth. It extends the Kaleckian framework of the link between profit and investment in a modern financialized economy with some specific features of shadow banking and articulates the underlying dynamics that render the economy systemically fragile and vulnerable to abrupt crashes. We elaborate on this link through a stock-flow consistent accounting framework and study the dynamics through two interacting forces of the shadow banking sector: profit-seeking and liquidity preference. The article formally articulates the dynamics through the framework of 'cusp catastrophe' and identifies some early warning signs of potential financial collapse. [ABSTRACT FROM AUTHOR]

This study examined the relationship between GDP growth and different macroeconomic variables including foreign direct investment, gross fixed capital formation, government expenditure on education, consumption expenditure, GDP per person employed, exchange rate, market capitalization, and inflation in case of MENA and developed countries. Furthermore, it tried exploring the mediating role of the share market in the relationship between economic development and various macroeconomic variables MENA & developed countries. The study has used panel data from the period of 2002-2021. The data has been taken from multiple sources i.e. World Development Indicators (WDI) by The World Bank, International Financial Statistics (IFS), several economic surveys of respective countries and Central Bank's publications. The study reveals mixed order of integration among variables. Consumption expenditure is stationary in both panels, while expenditure on education is non-stationary. Real effective exchange rate is stationary under both panels, while GDP per employed persons is nonstationary. GDP growth rate, inflation, and market capitalization are stationary for both developed and Mena countries. However, gross fixed capital formation is stationary at first difference. The correlation matrix results show a weak correlation between consumption expenditure and educational expenditure, with a 9 percent negative correlation. For Mena countries, the study found a negative association between consumption expenditure and educational expenditure, with a 23% correlation. Real effective exchange rate is negatively associated with foreign direct investment, GDP per employed person, gross fixed capital formation, inflation, and market capitalization. For developed countries, the coefficient of FDI increases GDP growth rate by 97%, while gross fixed capital formation decreases GDP growth rate by 10.2 units due to 1 unit increase in gross fixed capital formation. Consumption expenditures increase GDP growth rate by 2% due to 1 unit increase, while inflation increases it by 5.9 units. Exchange rate is also positively related with GDP growth rate, with a 1% increase in exchange rate boosting it by 29%. The study found partial mediation of market capitalization in developed countries and uni-directional causality in Mena countries. [ABSTRACT FROM AUTHOR]

This paper explores the intricate relationship between macroeconomic indicators and imperfect competition in Sierra Leone, employing a prototype of an imperfect competition structural model within the New Keynesian framework. The model incorporates nominal and real rigidities, as well as market failures. Results indicate that Sierra Leone's imperfectly competitive market introduces inefficiencies, leading to a muted initial impact of productivity shocks on macroeconomic variables. Wages and real interest rates exhibit moderated adjustments due to deviations from perfect competition ideals, dampening the effects on investment, consumption, and output. Policy and transition functions reveal a lasting influence of past capital accumulation and external shocks on aggregate output. The analysis exposes inertia in investment decisions and strategic actions of dominant firms. Steady-state results affirm a stable equilibrium in Sierra Leone, and eigenvalues exceeding unity underscore the model's ability to capture anticipatory behavior in imperfect market competition. The correlation matrix highlights profound connections between economic activity, wages, and capital's role in growth. Theoretical moments demonstrate economic indicator variability, emphasizing dominant firms' influence on capital allocation and policy measures' role in stabilizing interest rates and labor markets. The covariance matrix of exogenous shocks underscores external influences' persistence and correlated impacts on Sierra Leone's economy. These findings stress the importance of tailored policy responses to address market imperfections, advocating for measures to promote competition, labor market flexibility, dynamic investment, and stabilization of interest rates and labor markets. [ABSTRACT FROM AUTHOR]

In this paper, we address the effects of two fiscal policy delays on the dynamical analysis of macroeconomics. First, a time gap between the accrual of taxes and their payment is considered. Second, the time spent between the purchasing decisions and the actual expenditure is also taken into consideration. Since both these delays are significant in controlling macroeconomic conditions, this paper incorporates aforementioned delays into the IS–LM model. At first, a mathematical model is developed using delayed differential equations. Then a unique steady state solution is obtained. Around the equilibrium point, linear stability analysis is done. Also, the occurance of Hopf bifurcation is observed when delay crosses a critical point and switches in stability are also detected. Properties of Hopf bifurcation using center manifold theorem are discussed. Lastly, numerical simulations are run to verify our analysis. In this work, we considered a case study to perform simulation wherein GDP of India for last ten years is recorded for estimating some parameters. In different investment scenarios, numerical simulations corroborate the analytical findings of the model. Furthermore, rigorous analysis shows that adding the right mix of delays can help in maintaining/ regaining the stability after periods of instability, or even gaining stability in the long run. [ABSTRACT FROM AUTHOR]

This study explores the impact of unconventional monetary policy on Morocco's economy during the Covid-19 pandemic. We used a hybrid model combining a financial dynamic stochastic general equilibrium (DSGE) model with a standard epidemiology model, enabling us to consider both economic and epidemiological factors. Our results indicate that unconventional monetary policy cannot fully mitigate the adverse effects of a pandemic, except for an exogenous increase in Central Bank claims. We also found that Morocco's high inflation is partly due to Bank Al-Maghrib's unconventional monetary measures in response to the pandemic. Our research underscores the importance of monetary authorities balancing the benefits and risks of unconventional monetary policy. While it can stimulate the economy during crises, it should be used judiciously to avoid long-term negative effects. Incorporating epidemiological factors into macroeconomic models is crucial for understanding the intricate interplay between the economy and public health crises. [ABSTRACT FROM AUTHOR]

In some classes of macroeconomic models with financial frictions, an adverse financial shock successfully explains a decrease in real activity but simultaneously induces a stock price boom. The latter theoretical result is not consistent with data from actual financial crises. This study aims to provide a theoretical explanation for both prolonged recessions and stock price declines. I develop a simple macroeconomic model featuring a banking sector, financial frictions, and R&D-based endogenous growth. Both the analytical and numerical investigations show that endogenous R&D investment and a shock hindering banks' financial intermediary function can be key to generating both a prolonged recession and a drop in firms' stock prices. [ABSTRACT FROM AUTHOR]

Following the development of a value of vaccination (VoV) framework for health technology assessment/cost-effectiveness analysis (HTA/CEA), and identification of three vaccination benefits for near-term inclusion in HTA/CEA, this final paper provides decision makers with methods and examples to consider benefits of health systems strengthening (HSS), equity, and macroeconomic gains. Expert working groups, targeted literature reviews, and case studies were used. Opportunity cost methods were applied for HSS benefits of rotavirus vaccination. Vaccination, with HSS benefits included, reduced the incremental cost-effectiveness ratio (ICER) by 1.4–50.5% (to GBP 11,552–GBP 23,016) depending on alternative conditions considered. Distributional CEA was applied for health equity benefits of meningococcal vaccination. Nearly 80% of prevented cases were among the three most deprived groups. Vaccination, with equity benefits included, reduced the ICER by 22–56% (to GBP 7014–GBP 12,460), depending on equity parameters. Macroeconomic models may inform HTA deliberative processes (e.g., disease impact on the labour force and the wider economy), or macroeconomic outcomes may be assessed for individuals in CEAs (e.g., impact on non-health consumption, leisure time, and income). These case studies show how to assess broader vaccination benefits in current HTA/CEA, providing decision makers with more accurate and complete VoV assessments. More work is needed to refine inputs and methods, especially for macroeconomic gains. [ABSTRACT FROM AUTHOR]

After the financial crisis of 2008, many economists expressed dissatisfaction with the state of macroeconomics. They criticised deficiencies in the dominant dynamic stochastic general equilibrium modelling approach and conceptions of good macroeconomic research behind that dominance. This paper argues that there is a deeper problem in macroeconomics, which remains unaddressed. I connect existing literature critical of the institutions of macroeconomics and of economics in general to the institutional preconditions of effective criticism outlined by the philosopher Helen Longino. I find that as an epistemic community, macroeconomics does not function in a way that adequately supports critical evaluation of established beliefs, norms and practices. This failure may partly explain why many views on macroeconomic modelling, the tenability of which economists questioned after the crisis, were able to persist for so long. My analysis gives additional support to several recent proposals for institutional reforms in economics. [ABSTRACT FROM AUTHOR]

We model permanent and transitory changes of the predictive density of U.S. GDP growth. A substantial increase in downside risk to U.S. economic growth emerges over the last 30 years, associated with the long-run growth slowdown started in the early 2000s. Conditional skewness moves procyclically, implying negatively skewed predictive densities ahead and during recessions, often anticipated by deteriorating financial conditions. Conversely, positively skewed distributions characterize expansions. The modeling framework ensures robustness to tail events, allows for both dense or sparse predictor designs, and delivers competitive out-of-sample (point, density and tail) forecasts, improving upon standard benchmarks. [ABSTRACT FROM AUTHOR]

Copyright of Economic Series of the Bulletin of the L.N. Gumilyov ENU is the property of L.N. Gumilyov Eurasian National 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.)

We analyze how trust affects the transmission of negative demand and supply shocks using a behavioral macroeconomic model. We define trust to have two dimensions: trust in the central bank's inflation target and trust in the central bank's capacity to stabilize the business cycle. We find, first, that when large negative shocks occur, the subsequent trajectories taken by output gap and inflation typically coalesce around a good and a bad trajectory. Second, these good and bad trajectories are correlated with movements in trust. In the bad trajectories, trust collapses, and in the good trajectories, it is not affected. This feature is stronger when a negative supply shock occurs than in the case of a negative demand shock. Third, initial conditions, in particular the initial state of inflation and output expectations, matter. Unfavorable initial expectations drive the economy into a bad trajectory, and favorable initial expectations produce good trajectories. Fourth, we analyze the sensitivity of our results with respect to the size of the shocks. Fifth, we derive implications of our results for our capacity of making forecasts about the effects of large demand and supply shocks. [ABSTRACT FROM AUTHOR]

The benefits of energy efficiency are recognized in multiple socio-economic spheres. Still, the quantitative impact on macroeconomic performance is not fully understood, as modeling tools are not thermodynamically consistent—failing to explicitly include the useful stage of energy flows and/or thermodynamic efficiencies in primary–final–useful energy transformations. Misspecification in the link between energy use and the economy underplays the role of energy use and efficiency in economic growth. In this work, we develop and implement the Macroeconometric Resource Consumption model for Portugal (MARCO-PT), 1960–2014. Based on the post-Keynesian framework developed for the United Kingdom (MARCO-UK), our model explicitly includes thermodynamic energy efficiency, extending the analysis to the useful stage of energy flows. The model's stochastic equations are econometrically estimated. The historical influence of key variables—namely thermodynamic energy efficiency—on economic output is assessed through counterfactual simulations and computation of year-by-year output elasticities. The MARCO-PT model adequately describes the historical behavior of endogenous variables. Although its influence has decreased over time, thermodynamic efficiency has consistently been the major contributor to economic growth between 1960–2014, with an average output elasticity of 0.46. Total useful exergy is also a major contributing factor, with an average output elasticity of 0.29. Both have a higher influence than capital, labor, or other energy variables (final energy, prices). An adequate integration of thermodynamic efficiency is thus crucial for macroeconomic models. [ABSTRACT FROM AUTHOR]

Randomized control trials (RCTs) are recognized as the preferred tool of analysis in modern development economics literature/research and policy evaluation. This may lead to methodologies, including case studies, tabular analysis, simple regressions, taking a back seat. This survey explores the implications of such a methodological hierarchy and the implications of preoccupation with a particular evidence/methodology for research and policy. Similar developments in macroeconomic modelling are also discussed. Major advantages and limitations of RCTs and the attempts to address them are highlighted. The article argues that preoccupation with a methodology can sometimes lead to important inquiries for research and policy getting side-lined on methodological considerations. This leads to inferences favouring a particular technique/methodology or issue. Focusing solely on methodologies that emphasize quantifying the 'effect' may not be appropriate to address all questions relevant to development. As policies involve multiple and conflicting social concerns, methodological pluralism may be preferable. [ABSTRACT FROM AUTHOR]

On the occasion of the centennial of his mentor Alvin Hansen, Paul Samuelson published in 1988 a modified version of his seminal 1939 multiplier-accelerator model to address aspects of Hansen's secular stagnation hypothesis. The "Keynes-Hansen-Samuelson" model (or KHS, as he called it) was built to analyse the effects of population growth on the economy's trajectory. Several changes were then made. Instead of difference equations and a tight accelerator, as in his 1939 model, Samuelson deployed differential equations and a flexible accelerator to produce a nonlinear limit cycle. Despite Samuelson's strong claims for the analytical contributions of his 1988 paper, it has – in contrast with the 1939 model – received only scant attention by macroeconomists and historians of economics alike. Samuelson's 1988 paper was his last published macroeconomic model, based on his long-established tradition of non-optimising macro-dynamics. Our paper provides a close reading of that article and some analytical results that shed new light on the formal aspects of Samuelson's 1988 model. We also discuss how it historically links up with business cycle models advanced by John Hicks, Nicholas Kaldor, Roy Harrod and Richard Goodwin and examine how far Samuelson's use of the term secular stagnation differs from Larry Summers's recent reconstruction of it. [ABSTRACT FROM AUTHOR]

The calculation of multipliers is the core of impact analysis with input–output (IO) models. Given this focus of IO modeling on the multiplier, it is remarkable that IO analysis has not contributed to the recent macroeconomic debate on fiscal multiplier heterogeneity. This heterogeneity stems from differences in consumption reactions to income shocks and from downward wage rigidity. Both features are absent in most IO models. In this paper, a macroeconomic IO model with a wage function is set up, where at high unemployment rates, downward wage rigidity allows for large real income and multiplier effects. At full employment, demand shocks mainly induce price adjustments. The model reveals GDP multiplier heterogeneity in line with the recent macroeconomic literature, ranging from 0.3 (boom) to 1.4 (recession). The GDP multiplier result of the standard type II model even outperforms the multiplier in the recession case and therefore is most probably biased. [ABSTRACT FROM AUTHOR]

Purpose: This study evaluated the effect of macroeconomic factors on residential real estate (RE) investment returns in the cities of Abuja and Lagos, Nigeria, with a view to guiding RE investors and researchers. Design/methodology/approach: A survey research design was employed using a questionnaire to collect RE transaction data from 2008 to 2022 from estate surveying and valuation firms in the study areas. Rental and capital value data collected were used to construct rental and capital value indices and total returns on investment. The macroeconomic data used were retrieved from the archives of the Central Bank of Nigeria (CBN). Granger causality (GC) and multiple regression models were adopted to evaluate the effect of selected macroeconomic variables on residential RE investment returns in the study areas. Findings: The study found a progressive upward movement in rental and capital values of residential RE investment in the study areas within the study period. Total and risk-adjusted returns on investment were equally positive within the study period. Only the inflation rate, unemployment rate and real gross domestic product (GDP) per capita were found to be the major determinants of residential RE investment returns in the study areas within the study period. Research limitations/implications: The secrecy associated with property transaction information/data by RE practitioners in the study areas posed a challenge. Property transaction data were not adequately kept in a way for easier access and retrieval in many of the estate firms and agent offices. Consequently, there was a lack of data that spanned the study period in some of the sampled estate firms or agent offices. This data collection challenge was, however, overcome by the excess time spent retrieving the required data for this study to ensure that the findings appropriately answer the research questions. Practical implications: Inflation and GDP per capita have been found to be significant factors that influence residential RE investment performance in the study areas. Therefore, investors should pay attention to these identified macroeconomic factors for residential RE investment in the study areas whilst making investment decisions in order to mitigate a possible loss of income or return. The government should formulate and implement economic policies that would address the current high unemployment and inflation rates in Nigeria at large. Originality/value: This study has extended and further enriched the existing body of knowledge in the field of RE investment analysis in Nigeria. To the best of the authors' knowledge, this study is the first to adopt the Cornish Fisher value-at-risk and modified Sharpe ratio models to analyse risk and risk-adjusted returns on residential RE investment, respectively, in Nigeria. It has therefore redirected the focus of RE researchers and practitioners to a more objective approach to RE investment performance analysis in Nigeria. [ABSTRACT FROM AUTHOR]

The object of research is a list of the main factors of influence of the foreign economic sphere on the level of economic security. The effective development of the national economy largely depends on the state and level of economic security of the country in the conditions of strengthening globalization and integration processes. An adequate level of economic security is the basis for the development of socio-economic systems of any level, stability in society in general. Therefore, assessment and analysis of factors affecting economic security at different levels (countries, businesses, enterprises and organizations) is an important direction of the analytical work of specialists. For its implementation, analysts need a methodology – to determine the goal and interests, the main influencing factors and principles, to choose methodological and analytical tools. In the scientific works of economists, the methodology, level, and indicators are given as separate aspects of the formation and management of the economic security of the state. Without denying the significant contribution of these developments, the conducted research sets out the systematization of factors influencing the state of the macroeconomic environment. The study of factors influencing the macroeconomic sphere on the level of economic security of the country is based on the use of indicators calculated from available statistical data. The last twenty years, which showed an increase in world GDP almost twofold (from 51.39 trillion USD in 2000 to 101.12 trillion USD in 2020), are characterized by the loss of opportunities for the Ukrainian economy to be present on the world stage a market where competition is intensifying and carried out at a new technological level. The work defines the national economic interests of Ukraine in the global socio-economic space, the directions of the realization of the national interests of Ukraine, the dynamics of indicators of the development of the macroeconomic sphere. This made it possible to form a list of the main influential factors of the macroeconomic sphere, which directly shape the level of economic security of the state. The results of the research can be useful for the formation or adaptation of development strategies of countries with similar conditions and economies, such as Georgia, Moldova, which also have conflicts with Russia and seek to join the European Union. [ABSTRACT FROM AUTHOR]

The imperfect coordination of expectations and actions is a central theme running through Keynes's General Theory. Incorporating this theme into mainstream macroeconomics, however, has proved to be a difficult endeavour. In particular, attempts to accommodate coordination failures within Dynamic Stochastic General Equilibrium (DSGE) models through multiple equilibria and "dynamic" indeterminacy, while promising in the 1990s, were gradually abandoned in the 2000s. Since then, the "New Keynesian" framework has come to dominate macroeconomic modelling. And since the coordination of agents is not at issue in this latter framework, mainstream macroeconomics has seemed to leave the coordination theme out of its focus, if not its scope. In this paper, we challenge this perception and argue that the coordination theme is actually alive and well. We especially present two recent research programmes which, while belonging to the DSGE paradigm, give pride of place to coordination failures and share a common objective: providing, within the class of DSGE models, an alternative to the New Keynesian framework that would involve the most important ideas emerging from Keynes's General Theory. [ABSTRACT FROM AUTHOR]

This work takes inspiration from four theoretical strands: recent developments in ecological macroeconomics; the Schumpeterian framework of evolutionary economics that emphasises the entrepreneurial role of the State; the stock-flow consistent approach to macroeconomic modelling; and the supermultiplier model. Building upon these approaches, we develop a formal model that reproduces key interactions between the economy, the financial sector, the ecosystem and the society. We test and assess the effects of several fiscal policies. We find that, in principle, mission-oriented innovation policies are the most effective option in supporting innovation and growth, while reducing income inequality. However, lacking a 'green' and progressive taxation system, they are unlikely to reverse the current trend in atmospheric temperature. [ABSTRACT FROM AUTHOR]

The Covid-19 pandemic has spawned a crisis whose dimensions encompass the domains of health and the economy. The latter is on account of the use of non-pharmaceutical interventions such as lockdowns in order to deal with a highly contagious disease. Though some vaccines have emerged, lockdowns of varying degrees are still required since geographical coverage of vaccines is uneven, the protection afforded by vaccines is only for a finite period of time and new variants may escape existing vaccines. This provides the context within which economic policy could intervene. Monetary policy is either unavailable or ineffective, especially when the neoliberal project is hegemonic. Therefore, the specific policy instrument that tends to be utilised is fiscal policy wherein it is postulated that the government tries to achieve a target degree of capacity utilisation. It is demonstrated within the framework of a heterodox macroeconomic model that considerations involving macroeconomic stability (and political economy more generally) may cause this target to be below what is warranted by public health requirements. The paper concludes with some suggestions for future work in this research direction. [ABSTRACT FROM AUTHOR]

This article presents a complete macroeconomic (SFC) model to study income and wealth distribution in an open economy. We argue that exchange rates and the stock of foreign debt play a major role in shaping inequality across and within countries. Using the 'relative income hypothesis', we show that debt-financed consumption of low-income households can affect both total income and the disposable income of high-income households in the medium run. In addition, while higher inequality is detrimental to the domestic economy, it can benefit trading partners. [ABSTRACT FROM AUTHOR]

With inflation on the rise in recent years, there has been an important debate on price increases and their impact on different areas of the economy, politics, and society. This article analyzes different methods of statistical measurement of price increases at different stages of production and consumption, as well as inflation. It exemplifies, in particular, with cases from the United States and the Netherlands. It also points out some shortcomings in the methods applied, especially in neoclassical macroeconomic models. [ABSTRACT FROM AUTHOR]

During economic crises, diversifying industrial production emerges as a critical strategy to address societal challenges. The Product Space, a graph representing industrial knowledge proximity, acts as a valuable tool for recommending diversified product offerings. These recommendations rely on the edges of the graph to identify suitable products. They can be improved by grouping similar products together, which results in more precise suggestions. Unlike the topology, the textual data in nodes of the Product Space graph are typically unutilized in graph clustering methods. In this context, we propose a novel approach for economic graph learning that incorporates learning node data alongside network topology. By applying this method to the Product Space dataset, we demonstrate how recommendations have been improved by presenting real-life applications. Our research employing a graph neural network demonstrates superior performance compared to methods like Louvain and I-Louvain. Our contribution introduces a node data-based deep graph clustering graph neural network that significantly advances the macroeconomic literature and addresses the imperative of diversifying industrial production. We discuss both the advantages and limitations of deep graph learning models in economics, laying the groundwork for future research. [ABSTRACT FROM AUTHOR]

We use a DSGE model with financial frictions and with macroprudential limits on both banks and mortgage borrowers, in the form of capital requirements and maximum debt‐service ratios. We then examine: (i) the impact of different combinations of macroprudential limits on key macroeconomic aggregates; (ii) their interaction with each other and with monetary policy; and (iii) their effects on the volatility of key macroeconomic variables and on welfare. We find that capital requirements on banks are the optimal tool when faced with a financial shock, as they nullify the effects of financial frictions and reduce the effects of the shock on the real economy. Instead, limits on mortgage debt‐service ratios are optimal following a housing demand shock, as they disconnect the housing market from the real economy, reducing the volatility of inflation. Hence, no policy on its own is sufficient to deal with a wide range of shocks. [ABSTRACT FROM AUTHOR]

This paper examines the impact of the cost of labor on macroeconomic imbalances within the eurozone. For this purpose, we construct a three-country Stock-Flow Consistent (SFC) macroeconomic model in an open economy including the eurozone and the rest of the world. We show that internal devaluation is not effective as an economic policy for getting the eurozone economies to converge. Cutting labor costs cannot kick-start economic activity through a rebound in exports of those countries that do so. Instead, it involves the risk of locking their economies concerned into low-wage production activities. The fall in unemployment it entails is the consequence, then, of a downturn in labor productivity. In contradistinction, we defend the idea that the introduction of a new wage rule making monetary wages dependent on productivity gains and on the target for inflation set by the European Central Bank, together with a budgetary stimulation policy, would be conducive to initiating convergence among European economies. In particular, it would produce a convergence in living conditions by improving labor productivity but it would also bring production structures closer together. [ABSTRACT FROM AUTHOR]

Excuse doctrine presents one of the great enigmas of contract law. Excuse allows courts to release parties from their contractual obligations. It thus stands in sharp contrast to the basic principles of contract law and adds signifcant uncertainty to contract adjudication. This Article offers a crucial missing perspective on the doctrine of excuse: the view from a macroeconomic lens. Macroeconomics offers a new justifcation for the law of excuse and new ways of understanding the doctrine’s mysteries, creating Excuse 2.0. We offer a simple macroeconomic model of excuse doctrine, highlighting the role the doctrine plays under conditions of economic crisis and potential recession. Our analysis illustrates a counterintuitive advantage of excuse doctrine, suggesting that the legal uncertainty surrounding the doctrine can induce loss-sharing between contractual parties, thus minimizing the costs of long-term economic instability. In the COVID crisis, for example, excuse doctrine facilitated an extraordinary wave of contractual renegotiation and loss sharing—without triggering excessive litigation. We discuss the interpretive and normative implications of our analysis and highlight its signifcance for contemporary policy debates in the wake of the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]