200,791 results on '"Monetary policy"'
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2. Monetary Policy and Bond Prices with Drifting Equilibrium Rates.
- Author
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Favero, Carlo A., Melone, Alessandro, and Tamoni, Andrea
- Subjects
GOVERNMENT securities ,MONETARY policy ,BOND prices ,RATE of return on government securities ,MATURITY (Finance) - Abstract
We study the drift and cyclical components in U.S. Treasury bonds. We find that bond yields are drifting because they reflect the drift in monetary policy rates. Empirically, modeling the monetary policy drift using demographics and productivity trends, plus long-term inflation expectations, leads to cyclical deviations of bond prices from their drift that predict bond returns in- and out-of-sample. These bond cycles can be interpreted as term premia or/and temporary deviations from rational expectations in a behavioral framework. Through the lens of our model, we detect a significant role of the latter in determining the cyclical properties of yields with short maturities. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
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3. Fiscal policy and the monetary transmission mechanism
- Author
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Caramp, Nicolas and Silva, Dejanir H
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Economics ,Econometrics ,Economic Theory ,Monetary policy ,Fiscal backing ,Monetary -fiscal coordination ,Wealth effect ,Applied economics ,Economic theory - Published
- 2023
4. Exchange Rate Dynamics and Monetary Spillovers with Imperfect Financial Markets.
- Author
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Akinci, Özge and Queralto, Albert
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FINANCIAL markets ,INTEREST rates ,EMERGING markets ,MONETARY policy ,INTERNATIONAL markets - Abstract
We develop a quantitative model with imperfections in domestic and international financial markets that generates strong effects of U.S. monetary policy on emerging markets (EMs). Financial imperfections prevent arbitrage both between local EM lending and borrowing rates, and between local-currency and dollar borrowing rates. An adverse feedback effect between financial health and external conditions amplifies the domestic "financial accelerator," leading to large cross-border spillovers of U.S. monetary policy shocks. The model implies a link between uncovered interest parity violations and local credit spreads, a prediction we show the data strongly supports. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
5. Identifying the Effects of Macroeconomic Attention Through Foreign Investor Distraction.
- Author
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Marmora, Paul
- Subjects
FOREIGN investments ,FINANCIAL market reaction ,FINANCIAL risk ,MONETARY policy ,INTEREST rates ,STOCK exchanges & current events ,EMERGING markets ,ANNOUNCEMENTS ,STOCK prices ,SECURITIES trading volume ,DISTRACTION ,ATTENTION ,INSTRUMENTAL variables (Statistics) - Abstract
While the causal impact of limited attention to macroeconomic news is difficult to detect, this article proposes one solution: exploiting when foreign investors are "distracted" by risk factors in their home markets. I demonstrate that financial activity in the average foreign investor's home market decreases foreign attention paid to 21 emerging economies, measured using Google search volume for economy-specific financial terms that emanate from outside each economy's border. Exploiting this effect using an instrumental variables approach, I find that an exogenous increase in foreign attention preceding a scheduled monetary policy rate announcement raises preannouncement stock returns and announcement day turnover. [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
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6. Inflation Expectations in Czechia: Measurement and Determinants
- Author
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Koňařík, Vojtěch, author, Kučerová, Zuzana, author, and Pakši, Daniel, author
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- 2024
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7. Dilemma of the Czech National Bank: Factors of Adverse Macroeconomic Development in Czechia
- Author
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Rozmahel, Petr, author and Litzman, Marek, author
- Published
- 2024
- Full Text
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8. Financial Crises and the Transmission of Monetary Policy to Consumer Credit Markets.
- Author
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Indarte, Sasha
- Subjects
FINANCIAL crises ,MONETARY policy ,CONSUMER credit ,DEBTOR & creditor ,CREDIT unions ,ECONOMIC shock ,CAPITAL losses - Abstract
How does creditor health affect the pass-through of monetary policy to households? Using data on the universe of U.S. credit unions, I document that creditor asset losses increase the sensitivity of consumer credit to monetary policy. Identification exploits plausibly exogenous variation in asset losses and high-frequency identification of monetary policy shocks. Weaker lenders can respond more if they face financial frictions that easing alleviates. The estimates imply constraints on monetary policy become more costly in financial crises featuring creditor asset losses and that an additional benefit of monetary easing is that it weakens the causal, contractionary effect of asset losses. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online [ABSTRACT FROM AUTHOR]
- Published
- 2023
- Full Text
- View/download PDF
9. Monetary Policy, Business Liquidity and Survival: Evidence from the Refinancing Channel.
- Author
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Liu, Haoyang, Parker, Dean, and Ramcharan, Rodney
- Subjects
REFINANCING ,MONETARY policy ,SMALL business ,SMALL business finance ,LIQUIDITY (Economics) ,SUPPLY & demand ,ECONOMETRIC models of monetary policy ,FINANCE - Abstract
We study the impact of the refinancing channel of monetary policy on very small and medium-sized businesses. Using data covering the near universe of these businesses, we find that increased household refinancing reduces the probability that a business exits or exhausts its debt capacity in the calendar year, as well as 6 years after the first exposure. It also helps younger businesses maintain credit relationships. Financial factors, like business liquidity, as well as local demand dependence, amplify these effects, especially for very small businesses. These results suggest that the refinancing channel of monetary policy can have large long-run effects on local economies. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]
- Published
- 2023
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10. Economic analysis for impact of some monetary policy variables on the value of agricultural output in Iraq using VECM model.
- Author
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Madlul, Najlaa S., Mustafa, Munther S., and Rahim, Firas I.
- Subjects
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VALUE (Economics) , *ECONOMIC impact , *MONETARY policy , *AGRICULTURE , *INTEREST rates , *VECTOR error-correction models , *COINTEGRATION - Abstract
The research aims to analysis the impact of some economic policy variables on the value of agricultural resultant in Iraq for the period (2004-2020) using quarterly time series. The independent variables were used (foreign exchange window FC, narrow money supply M1, equilibrium exchange rate CE, interest rate imposed on agricultural loans R, value of agricultural imports M, while the value of agricultural output Y was adopted as the dependent variable. The researcher used the modern methodology to analyze the chains The temporal data from unit root test, Johansson co-integration test and using error correction vector model (VECM), shock measurement using IRF and DC variance components analysis with the introduction of all available standard tests to judge the quality of the model and its free from standard problems, the results indicated that all The variables had significant trace on the value of agricultural resultant, with the exception of the foreign currency sale window variable, where the results showed that it had no significant trace on the value of agricultural resultant because its impact was mention on the value of agricultural resultant, as well as the error correction value of the parameter C1 was negative, significant and smaller than The one, which amounted to (-0.10), mention that the speed is somewhat slow to the equilibrium state of adjusting the system. T is so normal in this model, that is because it excludes the general trend of the variables, and the focus here is on the value of F, which appeared significant 7.69, which mention the significance of the model as a whole. The researcher recommended the necessity of having a strategy to confront the development of the agricultural sector in Iraq by creating a revolution that focuses on the technical and technical aspects and works on the strategy of introducing modern means of production to the agricultural sector. The market mechanism, in addition to working to reduce agricultural imports, which was the largest proportion of dumping the Iraqi market with foreign products, as well research recommends increasing agricultural investments by reducing interest rates imposed on agricultural loans. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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11. Communicating financial stability in monetary policy reports: a text-mining experiment in postcommunist countries
- Author
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Kurowski, Łukasz and Smaga, Paweł
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- 2024
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12. Raising interest rates was the wrong medicine
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Nersisyan, Yeva and Wray, L. Randall
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- 2024
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13. Food in the Macroeconomy: The Whole is More Than the Sum of its Parts
- Author
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Masters, William A., Finaret, Amelia B., Barrett, Christopher B., Series Editor, Masters, William A., and Finaret, Amelia B.
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- 2024
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14. Sensitivity Analysis of Taylor Curve Estimation: A Comparison of GARCH and Stochastic Volatility Models
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Kavřík, Dominik and Gartner, William C., editor
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- 2024
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15. Introduction
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Baglioni, Angelo and Baglioni, Angelo
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- 2024
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16. The Challenges of New Central Banks Crypto-Currencies: CDBC
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Chenguel, Mohamed Bechir, Kacprzyk, Janusz, Series Editor, Gomide, Fernando, Advisory Editor, Kaynak, Okyay, Advisory Editor, Liu, Derong, Advisory Editor, Pedrycz, Witold, Advisory Editor, Polycarpou, Marios M., Advisory Editor, Rudas, Imre J., Advisory Editor, Wang, Jun, Advisory Editor, Alareeni, Bahaaeddin, editor, and Hamdan, Allam, editor
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- 2024
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17. Monetary Policy Regulation and Macroeconomic Fluctuations—Empirical Research Based on VAR Model
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Liu, Xiaochen, Qin, Xuezheng, Series Editor, Yuan, Chunhui, Series Editor, Li, Xiaolong, Series Editor, and Kent, John, editor
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- 2024
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18. The Impact of Continuous Fed Rate Hikes on the Chinese Economy
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An, Shuhui, Appolloni, Andrea, Series Editor, Caracciolo, Francesco, Series Editor, Ding, Zhuoqi, Series Editor, Gogas, Periklis, Series Editor, Huang, Gordon, Series Editor, Nartea, Gilbert, Series Editor, Ngo, Thanh, Series Editor, Striełkowski, Wadim, Series Editor, Cao, Feng-xia, editor, Singh, Satya Narayan, editor, Jusoh, Ahmad, editor, and Mishra, Deepanjali, editor
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- 2024
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19. Monetary Policy, COVID-19 and Bitcoin: The Tales of 3 Countries
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Auzairy, Noor Azryani, Ibrahimy, Ahmad Ibn, Abdul Karim, Zulkefly, editor, Abdul Rahim, Ruzita, editor, Wong, Wai Yan, editor, and Zakaria, Siti Farah Dilla, editor
- Published
- 2024
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20. Research on the Impact of Monetary Policy on the Economic Cycle and Its Control Strategies
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Su, Chuanan, Appolloni, Andrea, Series Editor, Caracciolo, Francesco, Series Editor, Ding, Zhuoqi, Series Editor, Gogas, Periklis, Series Editor, Huang, Gordon, Series Editor, Nartea, Gilbert, Series Editor, Ngo, Thanh, Series Editor, Striełkowski, Wadim, Series Editor, Balli, Faruk, editor, Au Yong, Hui Nee, editor, Ali Qalati, Sikandar, editor, and Zeng, Ziqiang, editor
- Published
- 2024
- Full Text
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21. The Impact of the Covid Pandemic on China’s Real Estate Market
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Li, Jiaxuan, Appolloni, Andrea, Series Editor, Caracciolo, Francesco, Series Editor, Ding, Zhuoqi, Series Editor, Gogas, Periklis, Series Editor, Huang, Gordon, Series Editor, Nartea, Gilbert, Series Editor, Ngo, Thanh, Series Editor, Striełkowski, Wadim, Series Editor, Tehseen, Shehnaz, editor, Ahmad, Mohd Naseem Niaz, editor, and Afroz, Rafia, editor
- Published
- 2024
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22. Study on the Impact of Australia’s Monetary Policy on the Foreign Exchange Market
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Chen, Xianming, Appolloni, Andrea, Series Editor, Caracciolo, Francesco, Series Editor, Ding, Zhuoqi, Series Editor, Gogas, Periklis, Series Editor, Huang, Gordon, Series Editor, Nartea, Gilbert, Series Editor, Ngo, Thanh, Series Editor, Striełkowski, Wadim, Series Editor, Tehseen, Shehnaz, editor, Ahmad, Mohd Naseem Niaz, editor, and Afroz, Rafia, editor
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- 2024
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23. ENDING THE FED: Abolishing the Federal Reserve would entail some short-term pain, but the longer the Fed is allowed to exist, the worse the long-term damage will be
- Author
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Bonta, Steve
- Subjects
United States. Federal Reserve Board ,Monetary policy ,General interest ,News, opinion and commentary - Abstract
The Federal Reserve has been with us for more than a century, and the gold standard in the United States was abandoned, for all intents and purposes, in the 1930s. [...]
- Published
- 2024
24. MONETARY POLICY
- Author
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Beggs, Mike
- Subjects
Monetary policy ,Central banks ,Economics ,Political science ,Regional focus/area studies ,International economic relations ,Economic policy - Abstract
Monetary policy differs from other aspects of economic and social policy because it is not directly under the control of the federal government: it is managed by the Reserve Bank [...]
- Published
- 2024
25. Money Supply, Inflation and Dollarization: An Analysis on Türkiye Using Fourier Models
- Author
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Serhat Alpağut
- Subjects
inflation ,dollarization ,money supply ,monetary policy ,fourier adl ,enflasyon ,dolarizasyon ,para arzı ,para politikası ,Political science ,Economics as a science ,HB71-74 - Abstract
This study examines the impact of inflation and money supply on dollarization. Especially in recent years, the rapid rise of the exchange rate and inflation in Türkiye has put the phenomenon of dollarization back on the agenda. The study covers the period 2012Q4-2023Q4. The study first applies the Fourier ADL cointegration test, which allows for soft breaks. As a result of the test, it was found that the variables have a long run relationship. In the short run, only budget revenue has a positive effect on dollarization. In the long run, the exchange rate, exports, money supply, and deposit rates have a positive effect, while inflation has a negative effect. The study also applied the Fourier-Toda-Yamamoto causality test. As a result of the test, bidirectional causality was found between exchange rate, inflation and money supply variables and dollarization. The striking result of the study is that inflation has a negative impact on dollarization. This result, which is consistent with some studies in the literature, is attributed to the money supply. Although the demand for foreign exchange increases because the money supply is higher than inflation, the dollarization index decreases. This explanation can explain the negative relationship.
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- 2024
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26. Inflation Dynamics in Burundi: Challenges and Potential Solutions
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Deogratius Wenceslaus Kimolo, Nicholas Odhiambo, and Sheilla Nyasha
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price level ,inflation ,burundi ,monetary policy ,deflation ,policy objectives ,policy designs and consistency ,policy coordination ,formal and informal sectors ,shadow economy ,institutional arrangements ,Electronic computers. Computer science ,QA75.5-76.95 ,Economic theory. Demography ,HB1-3840 ,Economics as a science ,HB71-74 - Abstract
This study provides a comprehensive analysis of inflation dynamics in Burundi, a country facing long-standing political and economic challenges. Through exploratory review of literature, it examines inflation trends, policy measures, and challenges, while offering potential solutions to combat high inflation in Burundi. Findings reveal periods of high and low inflation influenced by economic and political factors. Despite policy efforts, the country continues to experience volatile and high inflation levels, impacting the economy and citizens negatively. Key challenges include political instability, weak institutions, and external shocks. The study recommends sustained implementation and monitoring of policies promoting financial sector development, enhancing access to finance, and addressing corruption. These measures are vital for achieving stability and prosperity. The study also emphasizes the importance of evidence-based approaches to inflation control. In addition, the study underscores the significance of ongoing policy efforts in achieving economic stability and prosperity in Burundi amidst inflation challenges.
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- 2024
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27. Central bank communication in unconventional times: Some evidence from a textual analysis of the National Bank of Poland communication during the COVID-crisis
- Author
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Voloshchenko-Holda Lada and Niedziółka Paweł
- Subjects
central bank communication ,textual analysis ,financial stability ,price stability ,monetary policy ,attention to inflation ,e52 ,e58 ,Economics as a science ,HB71-74 - Abstract
The article analyses the communication of the National Bank of Poland (NBP) one year after the announcement of the crisis response package adopted after the outbreak of the COVID pandemic. It presents the perspective of a central bank that first entered unconventional monetary ground during the COVID-crisis. The analysis aims to answer the question of what message about monetary policy objectives may have been conveyed in communication with regard to possible interpretations of the response actions by economic agents. Misinterpretations of policy actions at the time, fuelled by the increased attention to inflation, could later contribute to higher inflation persistence. The article presents findings based on the innovative use of MAXQDA Pro 2022 solutions for textual analysis of central bank’s communication. It points to three inconsistencies in the NBP’s communication that could potentially lead to misinterpretation of the NBP’s policy actions in response to the crisis and thus affect the formation of expectations.
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- 2024
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28. Infrastructural power, institutional karma, and existential choices
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Saule T. Omarova
- Subjects
Central banking ,finance ,monetary policy ,CBDC ,Finance ,HG1-9999 - Abstract
Leon Wansleben’s new book, The Rise of Central Banks: State Power in Financial Capitalism, tells an intricately complex story of the world’s most influential central banks successfully harnessing the forces of financial globalization to build their institutional power as the principal managers of their national economies. The book argues that, regardless of central banks’ rationales and rationalizations, the resulting expansion of global money markets has failed to generate the intended macroeconomic and societal benefits. Instead, as became evident in the post-2008 era, the world’s most powerful central banks are now structurally dependent on the increasingly self-referential markets for financial assets. While the book’s narrative is focused on inflation targeting and other monetary policy innovations since the 1970s, it raises much broader questions and invites further reflection on the nonlinear dynamics of power in today’s financial markets and the uncertain future of central banks.
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- 2024
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29. Applause, puzzlement, worry
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Paul Tucker
- Subjects
central banks ,neoliberalism ,monetary policy ,politics ,Finance ,HG1-9999 - Abstract
In this commentary, I argue that Leon Wansleben’s focus on financial plumbing as a source of central banks’ epistemic and instrumental power will be met by the profession with a mixture of relief, incredulity, and worry. More importantly, I maintain that central bankers’ relationship with finance varies according to whether or not they are independent from elected government, an under researched area. All this works as a point of departure for remarks, drawing on my own memories, on central banking’s relationship with neoliberalism in monetary policy, monetary operations, and banking. Finally, I urge that Wansleben’s method be applied to anti-trust and the micro-economic regulation of utility services.
- Published
- 2024
- Full Text
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30. Theoretical substantiation of the factors for developing the banking system in the Russian Federation
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O. A. Sinichenko
- Subjects
development factors ,banking system ,commercial bank ,bank of russia ,monetary policy ,national economy ,deterministic factor analysis ,Social sciences (General) ,H1-99 - Abstract
Relevance. The banking system is a key structure in a market economy. The definition of a «banking system» affects all aspects of its functioning: organizational, legal, and institutional. The banking system can function effectively only if a number of principles are fulfilled that justify the organization of effective monetary circulation that meets the needs of the economy and its expanded reproduction. The national banking system exists in the economic environment of the State in which it operates. Therefore, the study of the banking system of the Russian Federation involves considering it not separately, but together with a set of factors influencing it. Aim. To substantiate the factors of developing the banking system in the Russian Federation through segmentation at the level of the macroenvironment (external indirect impact) and microenvironment (internal direct impact). Methods. General scientific methods of cognition, including comparativism, segmentation, generalization, synthesis, detailing. Tasks. In order to achieve this aim, the segmentation of the factors for developing the banking system in the Russian Federation was carried out, indicating the specifics of the impact. The authors have considered the eterministic analysis models that can be applied to quantify the degree of impact. Results. The factors influencing the banking system can be conditionally divided into internal and external ones. Internal factors have a direct impact on the banking sector development, external factors may indirectly influence it, but this in no way reduces the degree of possible impact. The factors were grouped according to the following criteria: economic, social, man-made, managerial, professional, political, and competitive. It is quite difficult to assess the influence of one or another factor, first of all, for the reason that all the analyzed indicators must be expressed quantitatively. There is also a question about the degree of influence of one or another factor, which should be expressed in terms of coefficients, that is, in any case, there may be a subjectivity of assessment in the calculation, which makes the calculations ambiguous and possibly erroneous. It is advisable to assess the impact of the studied factors using deterministic factor models that will generate a model for the banking system development and formulate strategies for the development of the banking sector and the country economy. Conclusions. The necessity of structuring the factors of banking system development was justified in order to further evaluate them through a deterministic factor analysis in order to bring the results obtained to numerical values.
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- 2024
- Full Text
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31. Revisiting the monetary transmission mechanism via banking from the perspective of credit creation
- Author
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Hua Zhong, Zijian Feng, Zifan Wang, and Yougui Wang
- Subjects
monetary policy ,monetary transmission channels ,credit creation ,bank regulation ,loanable funds market ,Economic growth, development, planning ,HD72-88 ,Economic theory. Demography ,HB1-3840 - Abstract
Many transmission channels of monetary policy have been proposed to enrich and deepen the understanding of its mechanisms. However, some channels have not been clarified, particularly for those unconventional quantitative policies implemented after 2008 financial crisis. In this paper, we develop a unified model of a credit economy where bank regulations and decisions and loanable funds market are placed at a central position, while stocks and flows are incorporated with each other to formulate banks' credit creation and circulation. We find that bank regulations can induce some new channels of monetary transmission by imposing credit constraints, including the new bank capital channel, the credit supply channel, the new bank balance sheet channel, and the new bank risk-taking channel. Comparing these channels with the traditional ones, we underscore the impact of bank regulations on monetary transmission. As aggregate demand can be decomposed into two monetary flows generated by money circulation and bank lending respectively, the direct channels of monetary transmission to aggregate demand can be renewed as follows: the money channel, the narrow money circulation channel, the new bank lending channel, and the repayment channel. In addition, based on the relevant data from the United States, we have conducted vector autoregressive (VAR) impulse response analysis to confirm the effectiveness of some direct channels. Our work not only aids in revisiting the monetary transmission from a credit view but also facilitates the assessment of efficiency of monetary policy.
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- 2024
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32. Public investment as a growth driver for a commodity-exporting economy: Sizing up the fiscal-monetary involvement
- Author
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Serhii Shvets
- Subjects
public investment ,commodity cycles ,fiscal policy ,monetary policy ,fiscal-monetary interaction ,dsge modeling ,Economic growth, development, planning ,HD72-88 ,Economic theory. Demography ,HB1-3840 - Abstract
The study presents a solution to maximize public investment as a growth driver for commodity-exporting economies. The solution is to compensate for the low efficiency of public investment by drawing on internal and external factors within an active fiscal and monetary policy framework. For this, the paper introduces a quantitative model that implements a golden rule of public finance in a resource boom backed by a sovereign wealth fund under an active monetary policy stance. The modeling results show that mobilizing windfall resource revenues to finance increased public investment can limit a crowding-out effect through proper resource allocation and change the sectoral structure in favor of the final goods sector. As confirmed by the sensitivity analysis, the low efficiency of public investment can be partially offset by a less restrictive monetary policy response to fiscal dominance, but this leads to excessive volatility in financial indicators. However, if the public debt burden is an issue due to a more robust fiscal dominance regime, a higher tax rate on exported raw materials can be used to maintain sustainability. By developing a policy goals domain, the paper initiates a discussion that can direct policy recommendations toward a promising growth path by maximizing the public investment driver in the complex policy environment of fiscal-monetary interaction.
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- 2024
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33. FLUJOS BRUTOS DE CAPITAL DE PORTAFOLIO DE NO RESIDENTES Y RESIDENTES Y EL ROL DE LA POLÍTICA MONETARIA
- Author
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Melo-Velandia, Luis Fernando, Rincon Castro, Hernán, and Toro Cordoba, Jorge Hernán
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- 2024
- Full Text
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34. Are Central Bankers Virtuous?
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McKinley, Vern
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United Kingdom. Bank of England ,Princeton University Press ,Bankers ,Monetary policy ,Book publishing ,Business ,Government ,Law - Abstract
Virtuous Bankers: A Day in the Life of the Eighteenth-Century Bank of England By Anne L. Murphy 288 pp.; Princeton University Press, 2023 Central banks have received mixed reviews from [...]
- Published
- 2024
35. Reintegrating Money into Monetary Policy.
- Author
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Ambler, Steve
- Subjects
- *
MONETARY policy , *CENTRAL banking industry , *PRICE inflation , *ECONOMIC policy - Abstract
Monetary aggregates now play no role in the Bank of Canada's monetary policy analysis or in its communication to the public. This article shows that ignoring monetary aggregates is justifiable when the central bank is on average hitting its target, when inflation is stable, and when inflation expectations are well anchored. In this case, the inflation target itself is the only reliable predictor of inflation at a suitable horizon. However, in periods of high inflation such as we have experienced since 2021, money contains information about the evolution of inflation that is dangerous to ignore. Nevertheless, care needs to be exercised in interpreting this information, because the velocity of circulation of money is endogenous to expectations about the permanence of monetary shocks. Note from the editors: The first volume of Canadian Public Policy/Analyse de politiques was published in 1975, making this the 50th volume. To commemorate, we have organized a series of lectures which are published in this special issue. Professor Ambler gave this lecture at the meetings of the Canadian Economics Association in Winnipeg in June 2023. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
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36. 'Facilitating the transition to net zero' and institutional change in the Bank of England: Perceptions of the environmental mandate and its policy implications within the British state.
- Author
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Jackson, James and Bailey, Daniel
- Subjects
- *
GEOGRAPHICAL perception , *PRICE regulation , *FINANCIAL security , *MONETARY policy , *DISCOURSE analysis , *INSTITUTIONAL environment - Abstract
The role of central banks in perpetuating and tackling the economic patterns associated with climate change has increasingly been subject to academic and political attention. The Bank of England is no exception, having received a new mandate to 'facilitate the transition to net zero' in March 2021. This follows the Bank's utilisation of its monetary tools to repeatedly stabilise the economic status quo since 2008, despite its ecological consequences. This article reveals the perceptions within the British state of the new mandate and the forms of institutional change demanded by it, based on a series of elite interviews with Treasury officials and other UK monetary policy experts, as well as a discourse analysis of Bank publications and speeches. We find that Bank actors lobbied for the new mandate to legitimise its development of climate risk assessments and licence internal dialogue on the implications of its monetary policy. But the mandate is perceived to be in immediate conflict with, and subservient to, the Bank's primary structural objective of maintaining price and financial stability, due to the potentially destabilising effects of private capital realignment during a net zero transition. Institutional change within the Bank is thus limited to extending its pre-existing function of mitigating risks to financial stability rather than facilitating decarbonisation through market-shaping governance of the financial sector. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
37. Time-varying comparison of the effectiveness of China's price- and quantity-based monetary policy tools: an empirical analysis based on the TVP-FA-S-VAR model.
- Author
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Liu, Dayu, Song, Yang, and Chen, Dekai
- Subjects
- *
INTEREST rates , *REAL economy , *TAYLOR'S rule , *AUTOREGRESSIVE models , *MONETARY policy , *MONEY supply , *INTERVENTION (Federal government) - Abstract
In order to compare the effectiveness of China's price- and quantity-based monetary policy tools over time, we develop a structural vector autoregressive model with time-varying parameter and factor augmentation (TVP-FA-S-VAR model) to analyze the response of output gap to monetary policy shocks. We find that price-based regulation becomes increasingly effective as China's interest rate liberalization proceeds, while the effects of broad money supply on output have been diminishing. Additionally, as it becomes harder to measure the effectiveness of quantity-based regulation, China's central bank has been more prudent to rely on quantitative intermediaries. Moreover, as much as 40% residual information of the Taylor rule will be omitted using price-based intermediaries, while factor augmentation fails to increase the explanatory power of quantitative intermediaries significantly. The correlation between quantitative intermediaries and the real economy has been weakening, so that the quantity-based monetary policy tools are no longer suitable for government intervention in China. We develop a structural vector autoregressive model with time-varying parameter and factor augmentation (TVP-FA-S-VAR model) to analyze the response of output gap to monetary policy shocks. We find that price-based regulation becomes increasingly effective as China's interest rate liberalization proceeds, while the effects of broad money supply on output have been diminishing. China's central bank has been more prudent to rely on quantitative intermediaries. As much as 40% residual information of the Taylor rule will be omitted using price-based intermediaries, while factor augmentation fails to increase the explanatory power of quantitative intermediaries significantly. The correlation between quantitative intermediaries and the real economy has been weakening, so that the quantity-based monetary policy tools are no longer suitable for government intervention in China. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
38. Conflict Inflation and the Role of Monetary Policy.
- Author
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Clavijo-Cortes, Pedro
- Abstract
The aim of this study is twofold: on the one hand, to provide evidence of the positive association between the inflation rate and the labor share in the US; on the other, to show that monetary policy slows inflation by depressing the labor share. With the help of Bayesian econometrics, the paper shows evidence of a conflict Phillips curve. Furthermore, a structural vector autoregressive model reveals the detrimental effects of interest rate hikes on the labor share. Together, these results mean the monetary policy of administered interest rates resolves the class conflict in favor of capital to control inflation. Scrutiny of the US monetary policy development and a model of a controlled predator-prey system prepare the way for the empirical sections. Finally, the paper concludes that controlling the distributive conflict matters for impinging on inflation and that the Fed might follow alternative monetary rules to cease being the third party participating in the distributive conflict. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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39. From theory to practice: Monetary policy transmission and bank risk dynamics.
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Zhang, Zheng, Clovis, Joel, Moffatt, Peter, and Wang, Wenxue
- Subjects
- *
BANKING policy , *MONETARY theory , *MONETARY policy , *FINANCIAL crises , *THEORY-practice relationship , *ELASTIC waves - Abstract
This paper investigates the relationship between monetary policy and bank risk-taking by introducing a model wherein banks expend a level of costly monitoring effort to select low-risk projects, thereby reducing the risk associated with the loans they grant. The impact of monetary policy on bank risk-taking is examined through both theoretical models and empirical analysis. The paper compares theoretical models with different assumptions, revealing an unambiguous negative effect without the assumption of limited liability for banks, and an ambiguous effect with the assumption of limited liability for banks, influenced by the equity ratio. The empirical model employs unique quarterly data comprising balance sheet information for top-listed banks in the U.S. banking system from 2000 to 2017. The findings indicate that low-interest rates contribute to an increase in bank risk-taking. Moreover, this effect is more pronounced after the financial crisis and weaker before the crisis. Additionally, the impact is evident for undercapitalized banks and more substantial for those financed with a higher proportion of equity. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
40. MACROECONOMÍA Y POBREZA: UNA REVISIÓN EMPÍRICA PARA MÉXICO 2005-2022.
- Author
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Mesac Moreno Calva, Marco Antonio and Cruz Marcelo, José Nabor
- Abstract
The article analyzes the relationship between macroeconomics and (labor) poverty between 2005 and 2022. Three scenarios were considered: 1) income, inflation, interest rate and labor poverty, while scenarios 2) and 3) considered labor income and inflation of lines of poverty and extreme poverty in relation to income, respectively. An impulse response function and its cointegrating relationship are estimated for each scenario. The results suggest that the interest rate does indeed have an impact on poverty: a monetary policy that prioritizes low and stable inflation corresponds to a lower poverty rate, as well as higher income. Finally, it is concluded that inflation is detrimental to poverty. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
41. The Last Mile.
- Author
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Schnabel, Isabel
- Subjects
- *
MONETARY policy , *FEDERAL Reserve banks , *PRICE deflation , *SERVICE industries , *FOOD prices , *CALORIC content of foods , *INTEREST rates , *UNEMPLOYMENT insurance - Abstract
This article is based on the Homer Jones Memorial Lecture delivered at the Federal Reserve Bank of St. Louis, November 2, 2023. Headline inflation in the euro area declined rapidly to 2.9% in October 2023 from its peak of 10.6% one year earlier. The bulk of this large drop reflected the substantial decline in the contributions from energy and food inflation. Once these base effects reverse, continued disinflation relies critically on monetary policy succeeding in reducing underlying inflation in a steady and timely manner. The last mile is about this change in the disinflation process. Large uncertainty around the appropriate calibration and effective transmission of monetary policy, together with the risk of new supply-side shocks pulling inflation away from our target once again, makes this part of the disinflation process the most difficult. In particular, monetary policy transmission may be weaker, or less direct, than in the past, given the share of less-interest-rate-sensitive services industries in total activity has increased steadily in the euro area and globally over the past few decades. In addition, persistent worker shortages have muted the transmission through the labor market, with unemployment at record low levels despite the sharp increase in interest rates. So, although progress on inflation so far is encouraging, the disinflation process during the last mile will be more uncertain, slower, and bumpier. Continued vigilance is therefore needed. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
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42. A Note on the Real Effects of Interest Rate Policy and Its Impact on Inflation.
- Author
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Pivetti, Massimo
- Subjects
- *
CAPITAL controls , *INCOME distribution , *PRICE inflation , *BANK capital , *CENTRAL banking industry , *CAPITAL movements , *INTEREST rates - Abstract
The interest rate is viewed in this note as a monetary phenomenon, subject to a wide range of policy objectives and constraints, which contributes to determine activity levels principally through its effects on income distribution. The impact of interest-rate policy on inflation is also analysed, both in the light of the fact that the rate of interest constitutes a component of normal production costs and of the repercussions of its changes on employment. The note finally discusses the implications of the arguments put forward for the status of the central bank and capital control. [ABSTRACT FROM AUTHOR]
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- 2024
- Full Text
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43. 'Independence' of Central Banks and the Political Economy of Monetary Policy.
- Author
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Qanas, Jalal and Sawyer, Malcolm
- Subjects
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MONETARY policy , *CENTRAL banking industry , *CLIMATE change , *BANKING industry , *INFLATION targeting , *FISCAL policy - Abstract
The notion of an 'independent' central bank has dominated monetary policy debates for the past three decades. The arguments for the political independence of central banks are closely related to the adoption of 'inflation targeting'. The arguments for an independent central bank are based on the 'credibility' of the 'conservative' central bank in comparison to government decision making. The independence of a central bank has been a matter of independence from government but not independence from the grip of the 'new consensus in macroeconomics' nor from the interests of the banking and financial sector. That independence has also supported a lack of co-ordination between monetary and fiscal policies, diminishing the effectiveness of macroeconomic policies. In addition, there remain doubts about the effectiveness of 'inflation targeting' on the achievement of low inflation. The policy mandates of central banks have begun to shift towards financial stability and paying attention to issues of inequality and the climate emergency. [ABSTRACT FROM AUTHOR]
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- 2024
- Full Text
- View/download PDF
44. A Political Economy of Fiscal Space: Political Structures, Bond Markets, and Monetary Accommodation of Government Spending Potential in the Core and Periphery.
- Author
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Eichacker, Nina
- Subjects
- *
BOND market , *CORE & periphery (Economic theory) , *FINANCIAL crises , *PUBLIC debts , *FISCAL policy , *FEDERAL government - Abstract
In times of economic crisis, academics, policy-makers, and pundits often debate the correct level and best use of government debt. This paper argues structural political and economic factors grant core economies more fiscal space than peripheral economies. While the federal governments of the US, Germany, and other core economies may easily issue and sell debt in private markets, smaller economies, both municipalities within countries, and countries in the global periphery, are more vulnerable to demand fluctuations. All economies may benefit from explicit commitments by monetary authorities to resume their historic roles as governments' banks, especially during crises. By highlighting present political constraints, monetary structures, and market factors that may inhibit governments' successful placement of bonds, this paper deepens present debate about the potential feasibility of functional finance to facilitate fiscal activity, even in unprecedented times. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
45. The Taylor Rule and its Aftermath: An Interpretation Along Classical-Keynesian Lines.
- Author
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Levrero, Enrico Sergio
- Subjects
- *
INFLATION targeting , *INTEREST rates , *TAYLOR'S rule , *INCOME distribution , *MONETARY policy , *CENTRAL banking industry , *PRICE inflation - Abstract
The aim of this paper is to assess to what extent the Taylor rule can be considered an appropriate representation of the tendency of central banks to react to inflation. After an overview of the origin and use of the Taylor rule, the paper stresses some difficulties in its implementation and the limits of its interpretation by the New Consensus models. Specifically, the inherent difficulties stemming from the notion and estimates of a benchmark interest rate determined by 'productivity and thrift' are pointed out. We then move on to advance an alternative interpretation of the Taylor rule along Classical-Keynesian lines. In this context, inflation is fuelled by conflicting claims on income distribution and the rule will be interpreted, as it is in actual fact, as a flexible and non-mechanical benchmark for monetary policies which will be seen to affect the division of product between wages and profits. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
46. The Political Benefits of 'Unconventional' Monetary Policies in Times of Crisis.
- Author
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Rossi, Sergio
- Subjects
- *
GLOBAL Financial Crisis, 2008-2009 , *INCOME distribution , *WEALTH distribution , *ECONOMIC systems , *MONETARY policy , *ECONOMIC impact , *BANKING policy - Abstract
Since the global financial crisis burst in 2008, central bankers have been at centre stage in addressing its negative consequences across the economic systems of many countries. This has been further noticed in the aftermath of the pandemic crisis that erupted at the beginning of 2020 at global level, when a number of governments did intervene also in a rather 'unconventional' way to support economic activity through public spending. In both circumstances, central bankers have been in a position to satisfy private interests of the relevant stakeholders even though this has been affecting both income and wealth distribution against the common good. This paper investigates the political benefits that these 'unconventional' policy interventions have elicited in advanced economies to point out the political and distributional consequences of them, suggesting an alternative monetary policy stance that considers climate-related issues. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
47. Interest and Profit: An Empirical Assessment of the Monetary Theory of Distribution for the Euro Area.
- Author
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Gahn, Santiago José
- Subjects
- *
MONETARY theory , *EUROZONE , *INTEREST rates , *MONETARY policy , *INCOME distribution , *YIELD curve (Finance) , *MONETARY unions - Abstract
Several authors, especially those who share a Classical–Keynesian point of view, argue that the interest rate determines the rate of profit in the long run. Considering the eleven founding economies of the euro area, I find that, adjusted for the rate of growth of gross national income, there is a positive long-term relationship between the real interest rate and the net rate of profit. The results are confirmed even when I estimate a model with nominal interest rates, inflation, and a yield curve. These results imply that the European Central Bank (ECB), when deciding monetary policy, is not neutral in determining income distribution. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
48. Monetary policy and nonperforming loan ratios in a monetary union; a counterfactual study.
- Author
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Napari, Ayuba, Ozcan, Rasim, and Khan, Asad Ul Islam
- Subjects
- *
MONETARY unions , *MONETARY policy , *NONPERFORMING loans , *BUSINESS cycles , *COUNTERFACTUALS (Logic) , *ECONOMIC structure , *FINANCIAL security - Abstract
Purpose: For close to two decades, the West African Monetary Zone (WAMZ) has been preparing to launch a second monetary union within the ECOWAS region. This study aims to determine the impact such a unionised monetary regime will have on financial stability as represented by the nonperforming loan ratios of Ghana in a counterfactual framework. Design/methodology/approach: This study models nonperforming loan ratios as dependent on the monetary policy rate and the business cycle. The study then used historical data to estimate the parameters of the nonperforming loan ratio response function using an Autoregressive Distributed Lag (ARDL) approach. The estimated parameters are further used to estimate the impact of several counterfactual unionised monetary policy rates on the nonperforming loan ratios and its volatility of Ghana. As robustness check, the Least Absolute Shrinkage Selection Operator (LASSO) regression is also used to estimate the nonperforming loan ratios response function and to predict nonperforming loans under the counterfactual unionised monetary policy rates. Findings: The results of the counterfactual study reveals that the apparent cost of monetary unification is much less than supposed with a monetary union likely to dampen volatility in non-performing loans in Ghana. As such, the WAMZ members should increase the pace towards monetary unification. Originality/value: The paper contributes to the existing literature by explicitly modelling nonperforming loan ratios as dependent on monetary policy and the business cycle. The study also settles the debate on the financial stability cost of a monetary union due to the nonalignment of business cycles and economic structures. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
49. Asymmetric effects of monetary policy on non-bank financial intermediation (NBFI) assets: a panel quantile regression approach.
- Author
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Isayev, Mugabil, Irani, Farid, and Attarzadeh, Amirreza
- Subjects
- *
QUANTILE regression , *INTERMEDIATION (Finance) , *FINANCIAL policy , *MONETARY policy , *PANEL analysis , *CAPITAL requirements - Abstract
Purpose: The purpose of this paper is to fill the momentous gap by explicitly investigating the asymmetric effects of monetary policy (MP) on non-bank financial intermediation (NBFI) assets. Design/methodology/approach: The authors utilized panel data from 29 countries for the period of 2012–2020 and used the quantile regression estimation. In addition to simultaneous quantile regression (SQR), the authors also employ quantile regression with clustered data (Parente and Silva, 2016) and the generalized quantile regression (GQR) method (Powell, 2020). Findings: The empirical results show a significant heterogeneous impact of MP. While there is a positive relationship between MP and NBFI assets ("waterbed effect") at lower quantiles of NBFI assets, at middle and higher quantiles, MP has a negative impact on NBFI assets ("search for yield" effect). The authors further find that negative impact strengthens as the quantile levels of NBFI assets rise from mid to high. Findings also reveal that "procyclicality" (except higher quantile) and "institutional demand" hypotheses hold. However, regarding "regulatory arbitrage," mixed results are observed indicating the impact of Basel III requirements. Originality/value: Previous empirical studies have concentrated on either the Dynamic Stochastic General Equilibrium (DSGE) framework or conditional mean regression approaches and delivered mixed findings of the MP effects on NBFI. The current paper takes a step toward dealing with this issue by deploying quantile regression methodology, which shows the impact of MP on NBFI at different conditional distributions (quantiles) of NBFI assets instead of just NBFI's conditional mean distribution. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
50. Hybrid SV‐GARCH, t‐GARCH and Markov‐switching covariance structures in VEC models—Which is better from a predictive perspective?
- Author
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Pajor, Anna, Wróblewska, Justyna, Kwiatkowski, Łukasz, and Osiewalski, Jacek
- Subjects
- *
INTEREST rates , *INTEGRAL transforms , *MONETARY policy , *FORECASTING , *HETEROSCEDASTICITY , *ECONOMIC forecasting , *COINTEGRATION - Abstract
Summary: We compare predictive performance of a multitude of alternative Bayesian vector autoregression (VAR) models allowing for cointegration and time‐varying conditional covariances, described by different multivariate stochastic volatility (MSV) models, including their hybrids with multivariate GARCH processes (MSV‐MGARCH), as well as t‐GARCH and Markov‐switching structures. The forecast accuracy is evaluated mainly through predictive Bayes factors, but energy scores and the probability integral transform are also used. Two empirical studies, for the US and Polish economies, are based on a small model of monetary policy comprising inflation, unemployment and interest rate. The results indicate that capturing conditional heteroskedasticity by some MSV‐MGARCH specifications contributes the most to the forecasting power of the VAR/VEC model. [ABSTRACT FROM AUTHOR]
- Published
- 2024
- Full Text
- View/download PDF
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