nep-cwa New Economics Papers
on Central and Western Asia
Issue of 2021‒11‒08
53 papers chosen by
Avinash Vats
  1. Inflation Regimes and Hyperinflation. A Post-Keynesian/Structuralist typology By Sébastien Charles; Eduardo Bastian; Jonathan Marie
  2. Taxation of Multinationals: Design and Quantification By Sébastien Laffitte; Julien Martin; Mathieu Parenti; Baptiste Souillard; Farid Toubal
  3. Gold is Old: Noble Metal in Indian Economy through Ages By Deodhar, Satish Y.
  4. Studying Information Acquisition in the Field: A Practical Guide and Review By Francesco Capozza; Ingar Haaland; Christopher Roth; Johannes Wohlfart
  5. Motives for economic migration: a review By Kerstin Mitterbacher
  6. Factors Affecting Consumer Buying Behavior in E-Commerce Business during Outbreak of Covid-19: A Case Study on Top E-Commerce Websites By Jawaid, Muhammad Hassan; Karim, Emadul
  7. EU fiscal rules: reform considerations By Olga Francová; Ermal Hitaj; John Goossen; Robert Kraemer; Andreja Lenarčič; Georgios Palaiodimos
  8. FinTech Lending By Tobias Berg; Andreas Fuster; Manju Puri
  9. Energy exchange among heterogeneous prosumers under price uncertainty By Davide Bazzana; Michele Colturato; Roberto Savona
  10. Microeconomic impacts of COVID-19 pandemic: A Review Analysis and Policy Recommendations By Publishers, KMF; Rahman Tisha, Tajrin
  11. Financial Frictions and International Trade By David Kohn; Fernando Leibovici; Michal Szkup
  12. Economic Impact of Lentil Cultivation on Marginal and Small Farm Households in Eastern India By Chatterjee, Soumitra; Dhehibi, Boubaker; Karak, Sabyasachi; Hazra, Soumavho; Nath, Rajib; Sarker, Ashutosh
  13. Plugging into Global Value Chains of the Software Industry: The Experiences of India By Shaopeng Huang; Jai Asundi; Yuqing Xing
  14. Sustainability, Trust and Blockchain Applications: Best Practices and Fintech Prospects By Ahmet Faruk Aysan; Fouad Bergigui
  15. FinTech adoption and household risk-taking By Hong, Claire Yurong; Lu, Xiaomeng; Pan, Jun
  16. Economic Policies of GCC Countries in the Era of Low Oil Prices and Their Policy Implications for Korea By Lee, Kwon Hyung; Son, Sung Hyun; Jang, Yun Hee; Ryou, Kwang Ho
  17. Dividend Momentum and Stock Return Predictability: A Bayesian Approach By Juan Antolín-Díaz; Ivan Petrella; Juan F. Rubio-Ramírez
  18. Tank Rehabilitation Strategies: Prioritizing Investment Options - Study from Southern India By Mohan, Balasubramanian; Suhasini, Korabandi; Seema, Seema; Vijayakumari, R; Vasudev, Nandala; Sunandini, Gurajapuprema
  19. Labelling and Information Schemes for the Circular Economy By Frithjof Laubinger; Peter Börkey
  20. Macroeconomic transformation of capitalism - How to achieve politically determined growth rates? By Herr, Hansjörg
  21. Intellectual Property Rights, Technology Transfer and International Trade By Ana Maria Santacreu
  22. The macroeconomic implications of zero growth: A post-Keynesian approach By Hein, Eckhard; Jimenez, Valeria
  23. Firms’ Inflation Expectations: New Evidence from France By Frédérique Savignac; Erwan Gautier; Yuriy Gorodnichenko; Olivier Coibion
  24. A Real-Business-Cycle model with robots: Lessons for Bulgaria By Vasilev, Aleksandar
  25. Growth drivers in emerging capitalist economies before and after the Global Financial Crisis By Jungmann, Benjamin
  26. Big techs in finance: on the new nexus between data privacy and competition By Frederic Boissay; Torsten Ehlers; Leonardo Gambacorta; Hyun Song Shin
  27. Structural Breaks in Interactive Effects Panels and the Stock Market Reaction to COVID-19 By Yiannis Karavias; Paresh Narayan; Joakim Westerlund
  28. The global transmission of U.S. monetary policy By Riccardo Degasperi; Seokki Simon Hong; Giovanni Ricco
  29. Keynes's Treatise on Probability at 100 Years: Its Most Enduring Message By Carlo Zappia
  30. The Formation of Risk Preferences Through Small-Scale Events By Silvia Angerer; E. Glenn Dutcher; Daniela Glätzle-Rützler; Philipp Lergetporer; Matthias Sutter
  31. A Sufficient Statistics Approach for Welfare Analysis of Oligopolistic Third-Degree Price Discrimination By Takanori ADACHI; Michal FABINGER
  32. The euro in the world By Gergely Hudecz; Edmund Moshammer; Alexander Raabe; Gong Cheng
  33. Estimation Of Threshold Distributions For Market Participation By Mattia Guerini; Patrick Musso; Lionel Nesta
  34. Empirical Investigation of a Sufficient Statistic for Monetary Shocks By Fernando Alvarez; Andrea Ferrara; Erwan Gautier; Hervé Le Bihan; Francesco Lippi
  35. CORPORATE SOCIAL RESPONSIBILITY, GIFT EXCHANGE, RELATIONAL SKILLS AND CORPORATE PERFORMANCE By Leonardo Becchetti; Sara Mancini; Nazaria Solferino
  36. Income inequality and monetary policy in the Euro Area By Jérôme Creel; Mehdi El Herradi
  37. Expectations Concordance and Stock Market Volatility: Knightian Uncertainty in the Year of the Pandemic By Roman Frydman; Nicholas Mangee
  38. COVID-19 and Local Market Power in Credit Markets By Thiago Christiano Silva; Sergio Rubens Stancato de Souza; Solange Maria Guerra
  39. Economic Impact of Free Trade Agreements on the EU Agri-Food Sector. By Ferrari, Emanuele; Chatzopoulos, Thomas; Domínguez, Ignacio Pérez; Boulanger, Pierre; Boysen-Urban, Kirsten; Himics, Mihaly; M'barek, Robert; Redondo, Marina Pinilla
  40. Corporate Transactions in Hard-to-Value Stocks By Ben-David, Itzhak; Kim, Byungwook; Moussawi, Hala; Roulstone, Darren T.
  41. An agent-based model of trickle-up growth and income inequality By Elisa Palagi; Mauro Napoletano; Andrea Roventini; Jean-Luc Gaffard
  42. Growth, Wages and Unemployment - The Economic Impact of Refugee Migration on Europe: A Synthetic Control Analysis By Karaarslan, Can
  43. Dating business cycles in France: a reference chronology By Antonin Aviat; Frédérique Bec; Claude Diebolt; Catherine Doz; Denis Ferrand; Laurent Ferrara; Eric Heyer; Valérie Mignon; Pierre-Alain Pionnier
  44. Liquidity Regulation and Bank Risk By Foly Ananou; Dimitris Chronopoulos; Amine Tarazi; John Wilson
  45. Employer Engagement: Lessons for Employment Programs from the COVID-19 Pandemic By Jacqueline Kauff
  46. Market Power and Inequality: a model of the Brazilian economy By Pedro Cavalcanti Gonçalves Ferreira
  47. The impact of trust in the developing sector of microinsurance in South Africa By Mathithibane, Mpho Steve
  48. Financial flows, macro-prudential policies, capital restrictions and institutions: what do gravity equations tell us? By Jean-Charles Bricongne; Antoine Cosson; Albane Garnier-Sauveplane; Rémy Lecat; Irena Peresa; Yuliya Vanzhulova
  49. Risky Financial Collateral, Firm Heterogeneity, and the Impact of Eligibility Requirements By Matthias Kaldorf; Florian Wicknig
  50. What Motivates Commercial Small-Scale Farmers to Collaborate? Modelling the Intention to Join a Producer Organisation By Baeuml, Theresa; Möllers, Judith; Dufhues, Thomas; Wolz, Axel; Traikova, Diana
  51. On Time-Varying VAR models: Estimation, Testing and Impulse Response Analysis By Yayi Yan; Jiti Gao; Bin Peng
  52. Bayesian local projections By Silvia Miranda-Agrippino; Giovanni Ricco
  53. Inferring Inequality: Testing for Median-Preserving Spreads in Ordinal Data By Ramses H. Abul Naga; Christopher Stapenhurstz; Gaston Yalonetzky
  1. By: Sébastien Charles (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis); Eduardo Bastian; Jonathan Marie (CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - USPC - Université Sorbonne Paris Cité - UP13 - Université Paris 13)
    Abstract: The article proposes a typology of inflation regimes that can be applied to any kind of economy based on the Post-Keynesian and structuralist literature. We identify three separate regimes: the low, moderate, and high inflation regimes. Hyperinflation is also defined and described. Each regime presents different characteristics. We identify the key role played by the distributive conflict between workers and capitalists in all the regimes, the role played by the indexation of wages on domestic prices in the moderate and high inflation regimes, and the specific roles played by the widespread indexation on a short term basis in the high inflation regime. Hyperinflation is explained by selffulfilling prophecies about exchange rate variations and by the rejection of the domestic currency. Our analysis underlines the fact that the current fear of inflation is largely groundless.
    Keywords: Inflation,Hyperinflation,Post-Keynesian analysis,Structuralist analysis
    Date: 2021–10–03
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03363240&r=
  2. By: Sébastien Laffitte (CEPS - Centre d'Economie de l'ENS Paris-Saclay - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay - Université Paris-Saclay); Julien Martin (CEPR - Center for Economic Policy Research - CEPR); Mathieu Parenti (ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles); Baptiste Souillard (ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles); Farid Toubal (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CEPR - Center for Economic Policy Research - CEPR, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Minimum corporate taxation is the second Pillar of the reforms of international corporate taxation. It is a simple and powerful tool that could curb profit shifting towards low or no tax jurisdictions. Its implementation would allow France to tax the profits that French headquarters have shifted to tax havens, but also to reduce the erosion of its tax base. We estimate the French corporate income tax (CIT) revenues would increase by almost 6 billion euros in the short run after the implementation of an effective minimum tax rate of 15% and by 8 billion euros at a rate of 21%. CIT gains may vary substantially depending on the scope of the tax base, the possibility of headquarters' inversion, and whether it includes domestic corporations or not. CIT gains are relatively higher in France than in Germany or the United States. The expected gains are substantially larger than those to be expected from the implementation of the first Pillar of the reform in its version proposed by the US in April 2021, which opens up rights to tax the 100 largest corporations in the world according to their sales' destination. According to our estimates, Pillar One would bring in about 900 million euros for France.
    Keywords: Tax rate,multinational corporation,reform
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03361513&r=
  3. By: Deodhar, Satish Y.
    Abstract: For millennia, gold is considered auspicious in India and consumers have a fascination for possessing gold, gold jewellery, and gold coins. In this paper I document the sacredness associated with gold, the ancient Indian references to gold jewellery, availability and technology of extracting gold in those times, minting of gold coins and its function as a medium of exchange and store of value, and accumulation of gold stock due to favourable trade with the Occident in the common era. I draw attention to Indian obsession with gold in modern times, when none is produced domestically and it contributing negatively to India’s external account. The gargantuan stock of about 24,245 tonnes of gold in India has to be considered as accumulated hoardings and not accumulated savings. Along with increasing the propensity of flow of savings going into financial markets and not in physical gold; suggestions are made to popularize and improve implementation of gold monetization scheme (GMS). This will re-channel idle stock of gold into financial markets and reduce deficit on the external account.
    Date: 2021–11–02
    URL: http://d.repec.org/n?u=RePEc:iim:iimawp:14664&r=
  4. By: Francesco Capozza (Erasmus University Rotterdam); Ingar Haaland (University of Bergen and CESifo); Christopher Roth (University of Cologne); Johannes Wohlfart (Department of Economics and CEBI, University of Copenhagen)
    Abstract: We review the emerging literature on information acquisition in field settings. We first document an increase in studies on information acquisition and review relevant studies in different subfields of economics, including macroeconomics, political economy, labor economics, health economics, and finance. We next provide an overview of empirical techniques to measure information acquisition and discuss the advantages and disadvantages of different methods. We then discuss how one can design studies to test the predictions of different theories of information acquisition. We conclude by highlighting possible directions for future research.
    Keywords: information acquisition, willingness to pay, click data, experimental design, beliefs, surveys
    JEL: C90 D83 D91
    Date: 2021–10–28
    URL: http://d.repec.org/n?u=RePEc:kud:kucebi:2115&r=
  5. By: Kerstin Mitterbacher (Institute of Banking and Finance, University of Graz)
    Abstract: The present paper sheds light on the motives of economic migrants---an aspect that has not been discussed at a general level so far. Previous work has only focused on specific fields of interest and used different terminologies, hence impeding comparison and the synthesis of findings across studies. Derived from theoretical, empirical, and analytical research outcomes, the paper concludes that economic migrants’ movements are influenced by the socio-demographic factors of ‘age’ and ‘education’ and are motivated by both the economic motives of ‘expected income’ and ‘employment’ and the economic-related motives of ‘corruption’, ‘amenities’ and ‘happiness’. Furthermore, these motives reveal a typical profile of economic migrants: a typical economic migrant is characterized by being of working age, highly educated and male, and by wishing to migrate to developed countries to achieve a fulfilling life.
    Date: 2021–10–22
    URL: http://d.repec.org/n?u=RePEc:grz:wpsses:2021-07&r=
  6. By: Jawaid, Muhammad Hassan; Karim, Emadul
    Abstract: This research was conducted to investigate the factors that have affected the consumer buying behavior in ecommerce business, especially during COVID-19. This research was conducted via quantitative analysis, and 200 participants were recruited for analysis. The statistical tests that were conducted in this research included demographics via frequency analysis, Cronbach’s Alpha test for the questionnaire reliability, correlation analysis to test the strength of the relationship in between variables, and regression analysis for finding the impact of consumer behavior on the dependent variables of social media campaigns, television commercials, e-paper advertisements, and word of mouth marketing. In this context, the research found that social media campaigns and television commercials had no significant impact on the consumer buying behavior, whereas e-paper advertisements and word of mouth marketing had significant impact on the buying behavior of consumers during COVID-19. Based on the findings of this research, it was recommended that e-commerce businesses must upload the articles on social media regarding the product or services that are offered by the business so that the customer attains a complete understanding of the products or services, which will attract the customers and will influence the purchasing behavior of the customers positively.
    Keywords: Ecommerce, COVID-19, Consumer Buying Behavior, Social Media Campaign, Television Commercials, E-paper Advertisement, and Word of Mouth.
    JEL: D12 L81 M3 M31
    Date: 2021–11–01
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:110476&r=
  7. By: Olga Francová (ESM); Ermal Hitaj (ESM); John Goossen (ESM); Robert Kraemer (ESM); Andreja Lenarčič (IMF); Georgios Palaiodimos (Bank of Greece)
    Abstract: This paper discusses the EU fiscal framework reform. It reviews the EU fiscal governance history and reforms, and identifies key challenges. It then takes stock of reform proposals made so far, and finally formulates a reform idea that reconciles the post-pandemic macroeconomic context with existing contributions by leading economists and institutions.
    Date: 2021–10–25
    URL: http://d.repec.org/n?u=RePEc:stm:dpaper:17&r=
  8. By: Tobias Berg (Frankfurt School of Finance & Management); Andreas Fuster (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute; Centre for Economic Policy Research (CEPR)); Manju Puri (Duke University - Fuqua School of Business; NBER)
    Abstract: In this paper, we review the growing literature on FinTech lending – the provision of credit facilitated by technology that improves the customer-lender interaction or lenders’ screening and monitoring of borrowers. FinTech lending has grown rapidly, though in developed economies like the U.S. it still only accounts for a small share of total credit. An increase in convenience and speed appears to have been more central to FinTech lending’s growth than improved screening or monitoring, though there is certainly potential for the latter, as is the case for increased financial inclusion. The COVID 19 pandemic has shown potential vulnerabilities of FinTech lenders, although in certain segments they have displayed rapid growth.
    Keywords: FinTech, lending, COVID-19
    JEL: G21 G23 G51
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:chf:rpseri:rp2172&r=
  9. By: Davide Bazzana (Fondazione Eni Enrico Mattei); Michele Colturato (University of Pavia); Roberto Savona (University of Brescia)
    Abstract: We model the learning process of market traders during the unprecedented COVID-19 event. We introduce a behavioral heterogeneous agents’ model with bounded rationality by including a correction mechanism through representativeness (Gennaioli et al., 2015). To inspect the market crash induced by the pandemic, we calibrate the STOXX Europe 600 Index, when stock markets suffered from the greatest single-day percentage drop ever. Once the extreme event materializes, agents tend to be more sensitive to all positive and negative news, subsequently moving on to close-to-rational. We find that the deflation mechanism of less representative news seems to disappear after the extreme event.
    Keywords: Agent-Based Model, Representativeness, Unprecedented Events
    JEL: G11 G12 G14 C63
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2021.26&r=
  10. By: Publishers, KMF; Rahman Tisha, Tajrin
    Abstract: Covid-19 has activated a global shock comparable to World War II. Worldwide lockdown, closed borders, regional trade, accelerated regionalism, and mitigated policies have resulted in a massive loss in the global economy. For some economists, the economic shock produced by the imposed lockdown is more costly than the pandemic itself. The progression of this contagion and its economic consequences are still highly unclear. They are also making it difficult for policymakers to design an appropriate microeconomic policy response. According to some estimates, each additional month of crisis costs around 2-5 percent of global GDP, and the GDP suffers a hit of about 3-6 percent, depending on the country's structure. As the pandemic is spreading fast, breathing issues are flattering more prevalent. We presume that the individual firm liquidity & preservation of the economic network are two further issues. Individual firms seem valued components of the economic cycle, and their absence will significantly impact the economy and the state. In contrast, banks may be reluctant to lend operating cash to firms. The current global crisis is unlike any other in a century, and it has caused financial volatility, which has led to the lockdown. It pledges on by the possible economic health consequences of mitigation strategies, such as the collapse of tourism, small business, the energy industry, rising oil prices, significant increases in unemployment, and increasing government debt. Predicting a solution for this pandemic is hard to define. Still, this study implies that if we ensure deceit in all sectors, inventive design planning on economic projects, if all the world leaders trumped up better determination, the microeconomic effects would be better off.
    Keywords: Accelerated regionalism, mitigated politics, breathing issue, firm liquidity, collapse
    JEL: D1 D2 D3 D4
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:110441&r=
  11. By: David Kohn; Fernando Leibovici; Michal Szkup
    Abstract: This paper reviews recent studies on the impact of financial frictions on international trade. We first present evidence on the relation between measures of access to external finance and export decisions. We then present an analytical framework to analyze the impact of financial frictions on firms' export decisions. Finally, we review recent applications of this framework to investigate the impact of financial frictions on international trade dynamics across firms, industries, and in the aggregate. We discuss related empirical, theoretical, and quantitative studies throughout.
    Keywords: financial frictions; international trade; credit constraints; export decisions
    JEL: F1 F4
    Date: 2021–07–08
    URL: http://d.repec.org/n?u=RePEc:fip:fedlwp:93275&r=
  12. By: Chatterjee, Soumitra; Dhehibi, Boubaker; Karak, Sabyasachi; Hazra, Soumavho; Nath, Rajib; Sarker, Ashutosh
    Keywords: Crop Production/Industries, Consumer/Household Economics
    Date: 2021–08
    URL: http://d.repec.org/n?u=RePEc:ags:iaae21:314951&r=
  13. By: Shaopeng Huang (Research Institute for Global Value Chains, University of International Business and Economics, Beijing, China); Jai Asundi (Center for Study of Science, Technology and Policy (CSTEP), Bengaluru, India); Yuqing Xing (National Graduate Institute for Policy Studies, Tokyo, Japan)
    Abstract: The rise of the software service industry has been the most impressive achievements of the Indian economy in the last few decades. The success story of Indian software service industry is essentially a story of plugging into the GVC by taking up part of the mostly labour-intensive, low value-added tasks outsourced /offshored by lead firms from the developed country. With a view to expand our understanding of GVCs beyond manufacturing, we analyse in this paper the software services industry in India in the context of GVCs. By examining the organization of software value chains, the endowment profile and sources of comparative advantage of India, the relations between foreign (lead) firms and indigenous firm, and the role of Indian governments, this paper try to pin down India’s particular position in the global value chains and its upgrading status, and to demonstrate the structural barriers and future challenges if Indian firms are to upgrade further their positon in the GVC.
    Keywords: GVCs, software; Indian software industry, upgrading
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:ngi:dpaper:21-04&r=
  14. By: Ahmet Faruk Aysan (HBKU - Hamad Bin Khalifa University); Fouad Bergigui
    Abstract: Since the adoption of the SDGs in 2015, it has been a 5-year journey of trial and error experimentations all over the world to come up with innovative solutions beyond business-as-usual and get the job done. In this paper, we assess blockchain-backed solutions beyond the hype. While the technology has a promising potential to trigger disruptive innovations to fulfill the SGDs, it is not mature yet with many gaps in terms of approaches and tools to develop blockchain use cases, monitor and evaluate blockchain experiments, mitigate associated risks and ethical considerations while managing changes within organizations leading blockchain-powered platforms. It is only by filing these gaps that blockchain can deliver its promises and may be effectively used as an SDG accelerator. Islamic finance can play a key role in shaping the transition towards a more circular economy. One promising way of doing so, is by scaling-up the use of blockchainenabled solutions in the practices of circular economy and Islamic finance. As the technology is still getting mature, more innovative and applied research is needed to capitalize on the lessons learned within various geographies and across a wide range of economic, social, and environmental spectrums.
    Keywords: Blockchain,SDGs,innovation,Islamic finance,circular economy
    Date: 2021–10–05
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03364964&r=
  15. By: Hong, Claire Yurong; Lu, Xiaomeng; Pan, Jun
    Abstract: Using a unique FinTech data containing monthly individual-level consumption, investments, and payments, we examine how FinTech can lower investment barriers and improve risk-taking. Seizing on the rapid expansion of offline usages of Alipay in China, we measure individuals’ FinTech adoption by the speed and intensity with which they adopt the new technology. Our hypothesis is that individuals with high FinTech adoption, through repeated usages of the Alipay app, would build familiarity and trust, reducing the psychological barriers against investing in risky assets. Measuring risk-taking by individuals’ mutual-fund investments on the FinTech platform, we find that higher FinTech adoption results in higher participation and more risk-taking. Using the distance to Hangzhou as an instrument variable to capture the exogenous variation in FinTech adoption yields results of similar economic and statistical significance. Focusing on the welfare-improving aspect of FinTech inclusion, we find that individuals with high risk tolerance, hence more risk-taking capacity, and those living in under-banked cities stand to benefit more from the advent of FinTech.
    JEL: G11 G50
    Date: 2021–10–25
    URL: http://d.repec.org/n?u=RePEc:bof:bofitp:2021_014&r=
  16. By: Lee, Kwon Hyung (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Son, Sung Hyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Jang, Yun Hee (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Ryou, Kwang Ho (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP))
    Abstract: Over the past several decades, the six member countries of the Gulf Cooperation Council (GCC) have implemented economic policies for industrial diversification to lessen severe dependence on the oil industry. Such policy efforts have been driven by their awareness of macro-economic and structural risks from heavy volatilities in international oil markets in terms of fiscal and trade sectors. For instance, the drop in international oil prices reduces export performance in the oil and natural gas sectors, which in turn results in a decline in the stability of fiscal revenue. The recent trends of low oil prices since 2014, as well as high unemployment rates, have strengthened the policy regime for industrial diversification and job creation supported by mid- to long-term economic plans of the GCC countries. This report reviews what has been emphasized in the areas of industrial, employment, trade and investment policies. We then derive implications for Korean companies and policymakers for sustainable cooperation between Korea and the Middle East.
    Keywords: GCC; Gulf Cooperation Council; oil price; economic policy; Korea;
    Date: 2021–02–09
    URL: http://d.repec.org/n?u=RePEc:ris:kiepwe:2021_003&r=
  17. By: Juan Antolín-Díaz; Ivan Petrella; Juan F. Rubio-Ramírez
    Abstract: A long tradition in macro-finance studies the joint dynamics of aggregate stock returns and dividends using vector autoregressions (VARs), imposing the cross-equation restrictions implied by the Campbell-Shiller (CS) identity to sharpen inference. We take a Bayesian perspective and develop methods to draw from any posterior distribution of a VAR that encodes a priori skepticism about large amounts of return predictability while imposing the CS restrictions. In doing so, we show how a common empirical practice of omitting dividend growth from the system amounts to imposing the extra restriction that dividend growth is not persistent. We highlight that persistence in dividend growth induces a previously overlooked channel for return predictability, which we label “dividend momentum.” Compared to estimation based on OLS, our restricted informative prior leads to a much more moderate, but still significant, degree of return predictability, with forecasts that are helpful out-of-sample and realistic asset allocation prescriptions with Sharpe ratios that out-perform common benchmarks.
    Date: 2021–11
    URL: http://d.repec.org/n?u=RePEc:fda:fdaddt:2021-14&r=
  18. By: Mohan, Balasubramanian; Suhasini, Korabandi; Seema, Seema; Vijayakumari, R; Vasudev, Nandala; Sunandini, Gurajapuprema
    Keywords: Agricultural Finance
    Date: 2021–08
    URL: http://d.repec.org/n?u=RePEc:ags:iaae21:315256&r=
  19. By: Frithjof Laubinger (OECD); Peter Börkey (OECD)
    Abstract: Circular Economy Labels and Information Schemes (CELIS) compose the group of labels, certifications, standards of information schemes that fully or partially address one or more resource efficiency or circular economy elements. CELIS can play an important role in fostering circular economy activities. They can empower market actors to distinguish and discriminate products based on environmental performance, which stimulates market development and innovation in resource efficient products and services. Information systems also enable better supply chain management and allow firms to identify environmental impacts and risks in their supply chains.This paper provides an overview of the current CELIS landscape, assesses the drivers and barriers to a greater uptake of business-to-business information systems, and identifies circular economy aspects that are underdeveloped in the existing consumer labels landscape.
    Keywords: circular economy, information policy approaches, natural resources, resource efficiency, sustainable consumption
    JEL: O14 Q53 Q56 Q58 D82 L15
    Date: 2021–11–04
    URL: http://d.repec.org/n?u=RePEc:oec:envaaa:183-en&r=
  20. By: Herr, Hansjörg
    Abstract: An economy with a stable medium-term growth rate of zero - or any other politically determined growth rate - needs new regulations and institutions to realise this target. Such an economy would look very different compared with the existing type of capitalism we have today in the Global North. In the existing capitalist system, investment demand as well as autonomous demand elements like government demand, export demand or autonomous consumption demand drive the dynamic of GDP and the whole economic system. In a zero growth economy the different demand aggregates are determined by economic policy including heavy intervention in income and wealth distribution and the direction of technological development. Whether such an alternative system is understood as a version of highly regulated capitalism or as a new system is a question of taste.
    Keywords: Transformation of capitalism,economic systems,zero growth
    JEL: B20 B52 P41
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:zbw:ipewps:1702021&r=
  21. By: Ana Maria Santacreu
    Abstract: I study the short- and long-term effects of regional trade agreements (RTA) with strict intellectual property (IP) provisions. An empirical analysis using gravity methods suggests that regions signing these agreements share more technology in the form of technology licensing following the year of enforcement. I set up a multi-country model with endogenous productivity through innovation and adoption to quantify the effect of such agreements on innovation, growth and welfare. Adopters pay royalties to innovators for the use of their technology; the model allows for various degrees of IP rights enforcement ranging from pure imitation to perfect enforcement of IP rights. An improvement of IP protection in exchange for market access increases welfare, growth and innovation in the world. Developed countries benefit from a higher return to innovation and a lower home trade share, accruing welfare gains both in the short and long term. Developing countries are impacted through three channels: (i) internal IP reforms increase the return to domestic innovators, (ii) lower trade costs increase profits from exports, and (ii) higher royalty payments reduce the return to adopters. A counterfactual exercise shows that while the first two forces dominate in the long run, there are short-term losses from a lower return to adoption.
    Keywords: Technology Licensing; Regional Trade Agreements; Intellectual Property Rights
    JEL: F12 O33 O41 O47
    Date: 2021–07–20
    URL: http://d.repec.org/n?u=RePEc:fip:fedlwp:93276&r=
  22. By: Hein, Eckhard; Jimenez, Valeria
    Abstract: This paper tries to clarify some important aspects around the zero-growth discussion. Starting from an accounting perspective, we analyse the implications of zero growth and clarify the stability conditions of such an economy. This is complemented with a monetary circuit approach - which, like any model, has to respect the national income and financial accounting conventions. The latter allows us to show that a stationary economy, i.e an economy with zero net investment, is compatible with positive profits and interest rates. It is also argued that a stationary economy does not generate systemic financial instability, in the sense of rising or falling financial assets- or financial liabilities-income ratios, if the financial balances of each macroeconomic sector are zero. In order to analyse the dynamic stability of such an economy, we make use of an autonomous demand-led growth model driven by government expenditures. We show that a stable stationary state with zero growth, positive profits, and a positive interest rate is possible. However, the stable adjustment of government expenditure-capital and government debt-capital ratios to their long-run equilibrium values requires specific maxima for the propensity to consume out wealth and for the rate of interest, assuming a balanced government budget and zero retained earnings of the firm sector.
    Keywords: Ecological macroeconomics,post-Keynesian economics,stationary-state economics,growth imperative
    JEL: Q01 O44 P10
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:zbw:ipewps:1692021&r=
  23. By: Frédérique Savignac; Erwan Gautier; Yuriy Gorodnichenko; Olivier Coibion
    Abstract: Using a new survey of firms’ inflation expectations in France, we provide novel evidence about the measurement and formation of inflation expectations on the part of firms. First, French firms report inflation expectations with a smaller, but still positive, bias than households and display less disagreement. Second, we characterize the extent and manner in which the wording of questions matters for the measurement of firms’ inflation expectations. Third, we document whether and how the position of the respondent within the firm affects the provided responses. Fourth, because our survey measures firms’ expectations about aggregate and firm-level wage growth along with their inflation expectations, we are able to show that expectations about wages are even more condensed than firms’ inflation expectations and almost completely uncorrelated with them, indicating that firms perceive little link between price and wage inflation. Finally, an experimental treatment indicates that an exogenous change in firms’ inflation expectations has no effect on their aggregate wage expectations.
    Keywords: Inflation Expectations, Firms, Survey, Wages.
    JEL: E3 E4 E5
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:bfr:banfra:840&r=
  24. By: Vasilev, Aleksandar
    Abstract: Robots are introduced into a real-business-cycle setup augmented with a detailed government sector. Robots are modeled as an imperfect substitute for labor services. The model is calibrated to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2020). The quantitative importance of the presence of robots in the economy is investigated for business cycle fluctuations in Bulgaria. In the presence of robots, wages increase, but employment falls after a technology shock. However, for plausible parameter values, the effect is predicted to be quite small.
    Keywords: business cycles,robots
    JEL: E32 E24
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:zbw:esprep:243348&r=
  25. By: Jungmann, Benjamin
    Abstract: This paper contributes to the ongoing growth models (GMs) debate by investigating the growth drivers of emerging capitalist economies (ECEs) in the periods before (2000-2008) and after (2009-2019) the Global Financial Crisis (GFC). By drawing mostly on post-Keynesian economics, six growth drivers are considered: Finance, i.e., household debt; changes in income distribution; price and non-price competitiveness, as well as commodity prices; and finally, fiscal policy. By conducting crosscountry simple and multiple linear regressions to explain the growth of 19 ECEs in both periods, we find that post-GFC growth was driven by non-price factors while price competitiveness played a role in neither period. Likewise, commodity prices did not drive growth either. In terms of distribution, our results indicate that cross-country growth was driven by rising income inequality in both periods; however, this relation lacks significance. In the post-crisis period, growth was associated with rising profit shares. While this relation also lacks significance, it has to be assessed against various possibilities for seemingly profit-led growth. Finally, with household debt accelerating and fiscal policy becoming more expansionary after the crisis, our results indicate a potentially more prominent role for these factors in driving post-crisis growth, however, this finding lacks robustness. We argue that the sparse robust findings result from ECEs' heterogeneity, particularly in terms of their growth models and subordinated financialization.
    Keywords: growth model,growth driver,financialization,emerging capitalist economies,post-Keynesian economics
    JEL: E11 E12 E65 F62 F65
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:zbw:ipewps:1722021&r=
  26. By: Frederic Boissay; Torsten Ehlers; Leonardo Gambacorta; Hyun Song Shin
    Abstract: The business model of big techs rests on enabling direct interactions among a large number of users on digital platforms, such as in e-commerce, search and social media. An essential by-product is their large stock of user data, which they use to offer a wide range of services and exploit natural network effects, generating further user activity. Increased user activity completes the circle, as it generates yet more data. Building on the self-reinforcing nature of the data- network-activities loop, some big techs have ventured into financial services, including payments, money management, insurance and lending. The entry of big techs into finance promises efficiency gains and greater financial inclusion. At the same time, it introduces new risks associated with market power and data privacy. The nature of the new trade-off between efficiency and privacy will depend on societal preferences, and will vary across jurisdictions. This increases the need to coordinate policies both at the domestic and international level.
    JEL: E51 G23 O31
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:bis:biswps:970&r=
  27. By: Yiannis Karavias (University of Birmingham); Paresh Narayan (Monash University); Joakim Westerlund (Lund University; Deakin University)
    Abstract: Dealing with structural breaks is an important step in most, if not all, empirical economic research. This is particularly true in panel data comprised of many cross-sectional units, such as individuals, firms or countries, which are all affected by major events. The COVID-19 pandemic has affected most sectors of the global economy, and there is by now plenty of evidence to support this. The impact on stock markets is, however, still unclear. The fact that most markets seem to have partly recovered while the pandemic is still ongoing suggests that the relationship between stock returns and COVID-19 has been subject to structural change. It is therefore important to know if a structural break has occurred and, if it has, to infer the date of the break. In the present paper we take this last observation as a source of motivation to develop a new break detection toolbox that is applicable to different sized panels, easy to implement and robust to general forms of unobserved heterogeneity. The toolbox, which is the first of its kind, includes a test for structural change, a break date estimator, and a break date confidence interval. Application to a panel covering 61 countries from January 3 to September 25, 2020, leads to the detection of a structural break that is dated to the first week of April. The effect of COVID-19 is negative before the break and zero thereafter, implying that while markets did react, the reaction was short-lived. A possible explanation for this is the quantitative easing programs announced by central banks all over the world in the second half of March.
    Date: 2021–11
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2111.03035&r=
  28. By: Riccardo Degasperi; Seokki Simon Hong; Giovanni Ricco (Departement of Economics - University of Warwick - University of Warwick [Coventry])
    Abstract: We quantify global US monetary policy spillovers by employing a high-frequency identification and big data techniques, in conjunction with a large harmonised dataset covering 30 economies. We report three novel stylised facts. First, a US monetary policy tightening has large contractionary effects onto both advanced and emerging economies. Second, flexible exchange rates cannot fully insulate domestic economies, due to movements in risk premia that limit central banks' ability to control the yield curve. Third, financial channels dominate over demand and exchange rate channels in the transmission to real variables, while the transmission via oil and commodity prices determines nominal spillovers.
    Keywords: monetary policy,trilemma,exchange rates,monetary policy spillovers
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03373749&r=
  29. By: Carlo Zappia (Università degli Studi di Siena)
    Abstract: On the occasion of the assessment of the enduring influence of Keynes's Treatise on Probability at 100 years, this paper focuses on its relevance for decision theory. The paper places emphasis on Keynes's introduction of the epistemic notion of probabilities that often are non-numerical, as a theoretical object intended to replace frequency probabilities. The paper argues that, as non-numerical probabilities make it possible to deal with uncertainty as if individuals were endowed with interval-valued probabilities, Keynes's 1921 critique of contemporary frequency probability theory turns out to be relevant also with regard to the yet to be established subjective probability theory. Although non-numerical probabilities were used by Keynes to criticize the contemporary application of probability to conduct, it must be acknowledged that, still today, they may constitute an appropriate tool for decision-making when confronting uncertainty, as he hinted at in his late 1930s correspondence with Hugh Townshend.
    Keywords: probability, uncertainty, decision-making
    JEL: B21 B31 D81
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:gre:wpaper:2021-36&r=
  30. By: Silvia Angerer (UMIT – Private University for Health Sciences, Medical Informatics and Technology); E. Glenn Dutcher (Ohio University); Daniela Glätzle-Rützler (University of Innsbruck); Philipp Lergetporer (Ohio University); Matthias Sutter (Max Planck Institute for Research on Collective Goods, University of Cologne, University of Innsbruck, IZA, and CESifo)
    Abstract: Large, macroeconomic shocks in the past have been shown to influence economic decisions in the present. We study in an experiment with 743 subjects whether small-scale, seemingly negligible, events also affect the formation of risk preferences. In line with a reinforcement learning model, we find that subjects who won a random lottery took significantly more risk in a second lottery almost a year later. The same pattern emerges in another experiment with 136 subjects where the second lottery was played more than three years after the first lottery. So, small-scale, random, events affect the formation of risk preferences significantly.
    Keywords: Reinforcement learning, risk preferences, preference formation, experiment
    JEL: C91 D01 D83
    Date: 2021–08–23
    URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2021_16&r=
  31. By: Takanori ADACHI; Michal FABINGER
    Abstract: This paper proposes a sufficient statistics approach to welfare analysis of third-degree price discrimination in differentiated oligopoly. Specifically, our sufficient conditions for price discrimination to increase or decrease aggregate output, social welfare, and con-sumer surplus simply entail a cross-market comparison of multiplications of two or three of the sufficient statistics—pass-through, conduct, and profit margin—that are functions of first-order and second-order elasticities of the firm’s demand. Notably, these results are derived under a general class of demand, and can be readily be extended to accom-modate heterogeneous firms. These features suggest that our approach has potential for conducting welfare analysis without a full specification of an oligopoly model.
    Keywords: Third-Degree Price Discrimination; Oligopoly; Sufficient Statistics.
    JEL: D43 L11 L13
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:kue:epaper:e-21-005&r=
  32. By: Gergely Hudecz (ESM); Edmund Moshammer (ESM); Alexander Raabe (ESM); Gong Cheng (ESM)
    Abstract: The question of whether the international monetary and financial system is, or should be, moving toward a more ’multipolar’ character has received much attention in recent years. The euro is the second most important global currency, and the euro area’s economic weight lays a solid foundation for its greater role on financial markets. A stronger international role would benefit not only the euro area but also the global financial system. This paper therefore focuses on the main drivers of the euro’s international role and the policies to support it. The ongoing reforms in the European Economic and Monetary Union can support the common currency on the international scene, and there is scope for further policies that strengthen the role of the euro on international capital markets.
    Date: 2021–03–18
    URL: http://d.repec.org/n?u=RePEc:stm:dpaper:16&r=
  33. By: Mattia Guerini (SSSUP - Scuola Universitaria Superiore Sant'Anna [Pisa], OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Patrick Musso (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Lionel Nesta (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    Abstract: We develop a new method to estimate the parameters of threshold distributions for market participation based upon an agent-specific attribute and its decision outcome. This method requires few behavioral assumptions, is not data demanding, and can adapt to various parametric distributions. Monte Carlo simulations show that the algorithm successfully recovers three different parametric distributions and is resilient to assumption violations. An application to export decisions by French firms shows that threshold distributions are generally right-skewed. We then reveal the asymmetric effects of past policies over different quantiles of the threshold distributions.
    Keywords: Parametric distributions of thresholds,Maximum likelihood estimation,Fixed costs,Export decision
    Date: 2020–05–04
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03389192&r=
  34. By: Fernando Alvarez; Andrea Ferrara; Erwan Gautier; Hervé Le Bihan; Francesco Lippi
    Abstract: In a broad class of sticky price models the non-neutrality of nominal shocks is encoded by a simple sufficient statistic: the ratio of the kurtosis of the size-distribution of price changes over the frequency of price changes. We test this theoretical prediction using data for a large number of firms representative of the French economy. We use the micro data to measure the cross sectional moments, including kurtosis and frequency, for about 120 PPI industries and 220 CPI categories. We use a Factor Augmented VAR to measure the sectoral responses to a monetary shock, as summarized by the cumulative impulse response of sectoral prices (CIRP), under three alternative identification schemes. The estimated CIRP correlates with the kurtosis and the frequency consistently with the prediction of the theory - i.e. they enter the relationship as a ratio. The analysis also shows that other moments not suggested by the theory, such as the mean, standard deviation and skewness of the size-distribution of price changes, are not correlated with the CIRP. Several robustness checks are explored.
    Keywords: Impulse Response Function, Monetary Shocks, Sticky Prices, Sufficient Statistic.
    JEL: E31 E52
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:bfr:banfra:839&r=
  35. By: Leonardo Becchetti (Dipartimento di Economia e Finanza, Università di Roma Tor Vergata); Sara Mancini (Dipartimento di Economia e Finanza, Università di Roma Tor Vergata); Nazaria Solferino (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: Based on results of the different fields of the game theoretic literature on strategic interactions and social dilemmas, gift exchange and procedural utility, we argue that corporate social responsibility and relational skills i) with other firms; ii) between employers and workers iii) among workers and iv) with stakeholders are associated to positive effects on productivity. We test our research hypothesis on a large representative sample of Italian firms including the universe of medium and large companies and accounting for 91.3 percent of domestic employees. We find that companies with higher relational skills report significantly higher value added per worker after controlling for relevant concurring factors. More specifically, the identified significant skill related components are: i) corporate policies considering strategic workers’ wellbeing; ii) team working attitudes considered as priority soft skills when hiring workers; iii) initiatives in favour of the productive network operating in the same local area and iv) involvement of stakeholders in CSR projects.
    Keywords: relational skills, corporate productivity, gift exchange, team working
    JEL: L22 L25 L14 J53
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:clb:wpaper:202106&r=
  36. By: Jérôme Creel (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Mehdi El Herradi (Université Bordeaux Montaigne)
    Abstract: This paper examines the distributional implications of monetary policy, either standard, non-standard or both, on income inequality in 10 Euro Area countries over the period 2000-2015. We use three different indicators of income inequality in a Panel VAR setting in order to estimate IRFs of inequality to a monetary policy shock. The identification of monetary shocks follows a one-step procedure and relies only on country-specific determinants of income distribution. Results suggest that: (i) the distributional effects of ECB's monetary policy have been modest and (ii) mainly driven in times of conventional monetary policy measures, especially in countries with a high level of market inequalities, while, overall, (iii) standard and non-standard monetary policies do not significantly differ in terms of impact on income inequality. Results are robust to alternative data sources either for income distribution or for non-standard monetary policies.
    Keywords: Euro Area,Monetary policy,Income distribution,Panel VAR
    Date: 2020–06–01
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03389183&r=
  37. By: Roman Frydman (New York University); Nicholas Mangee (Georgia Southern University)
    Abstract: This study introduces a novel index based on expectations concordance for explaining stock-price volatility when historically unique events cause unforeseeable change and Knightian uncertainty in the process driving outcomes. Expectations concordance measures the degree to which non-repetitive events are associated with directionally similar expectations of future returns. Narrative analytics of daily news reports allow for assessment of bullish versus bearish views in the stock market. Increases in expectations concordance across all KU events leads to reinforcing effects and an increase in stock market volatility. Lower expectations concordance produces a stabilizing effect wherein the offsetting views reduce market volatility. The empirical findings hold for ex post and ex ante measures of volatility and for OLS and GARCH estimates.
    Keywords: expectations concordance, narrative analytics, volatility, Knightian uncertainty
    JEL: D81 D84 G12 G14
    Date: 2021–09–05
    URL: http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp164&r=
  38. By: Thiago Christiano Silva; Sergio Rubens Stancato de Souza; Solange Maria Guerra
    Abstract: This paper investigates how COVID-19 affected the local market power of Brazilian credit markets. We first propose a novel methodology to estimate bank market power at the local level. We design a data-intensive method for computing a local Lerner index by developing heuristics to allocate national-level bank inputs, products, and costs to each branch locality using data from many sources. We then explore the exogenous variation in COVID-19 prevalence across Brazilian localities to analyze how the pandemic influenced local market power through the effective price and marginal cost channels. Despite reducing the economic activity substantially in more affected localities, COVID-19 did not significantly impact the effective price channel: bank branches offset the decrease in credit income by reducing credit concessions. However, bank branches more affected by COVID-19 experienced increased marginal costs as they could not rapidly adjust their cost factors in response to the decrease in credit concessions. Consequently, COVID-19 reduced banks’ local market power via the marginal cost channel. However, banks that spent more in IT before the COVID-19 outbreak suffered less replacing more easily local borrowers with remote ones. We then design a bank-specific measure of exposure to COVID-19 to examine how the pandemic affected different banks within the same locality. Banks more exposed to COVID-19 increased their local market power mainly via the effective price channel, which operated through a negative supply shock and not increased credit income. The paper provides new insights as to how crises can affect local market power in non-trivial ways.
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:bcb:wpaper:558&r=
  39. By: Ferrari, Emanuele; Chatzopoulos, Thomas; Domínguez, Ignacio Pérez; Boulanger, Pierre; Boysen-Urban, Kirsten; Himics, Mihaly; M'barek, Robert; Redondo, Marina Pinilla
    Keywords: International Relations/Trade, Agribusiness
    Date: 2021–08
    URL: http://d.repec.org/n?u=RePEc:ags:iaae21:315030&r=
  40. By: Ben-David, Itzhak (Ohio State University and NBER); Kim, Byungwook (Ohio State University); Moussawi, Hala (Stanford Graduate School of Business); Roulstone, Darren T. (Ohio State University)
    Abstract: Hard-to-value stocks provide opportunities for managers to exploit their informational advantage through trading on their firms' and their own personal accounts. In contrast to the prediction that such transactions reflect private information about future events, they are contrarian and heavily depend on past returns. Corporate transactions in hard-to-value stocks outperform those in easy-to-value stocks in the early part of our sample, but this difference disappears after 2002, coinciding with a general decline in the profitability of stock market anomalies. Our evidence is consistent with managers' perception of mispricing, rather than private information, being a key motivator of their transactions.
    JEL: G12 G14 G23 G32
    Date: 2021–09
    URL: http://d.repec.org/n?u=RePEc:ecl:ohidic:2021-16&r=
  41. By: Elisa Palagi; Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Andrea Roventini (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Jean-Luc Gaffard (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    Abstract: We build an agent-based model to study how coordination failures, credit constraints and unequal access to investment opportunities affect inequality and aggregate income dynamics. The economy is populated by households who can invest in alternative projects associated with different productivity growth rates. Access to investment projects also depends on credit availability. The income of each house- hold is determined by the output of the project but also by aggregate demand conditions. We show that aggregate dynamics is affected by income distribution. Moreover, we show that the model features a trickle-up growth dynamics. Redistribution towards poorer households raises aggregate demand and is beneficial for the income growth of all agents in the economy. Extensive numerical simulations show that our model is able to reproduce several stylized facts concerning income inequality and social mobility. Finally, we test the impact of redistributive fiscal policies, showing that fiscal policies facilitating access to investment opportunities by poor households have the largest impact in terms of raising long-run aggregate income and decreasing income inequality. Moreover, policy timing is important: fiscal policies that are implemented too late may have no significant effects on inequality.
    Keywords: income inequality,social mobility,credit constraints,coordination failures,effective demand,trickle-up growth,fiscal policy
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03373193&r=
  42. By: Karaarslan, Can
    Abstract: During the year 2015 almost 1.4 million refugees arrived in Europe (eurostat, 2020). Germany was with 1.1 million individuals the major destination (Statista, 2018). A huge political divide occurred over this influx. While welcoming scenes dominated the media in the advent of the so called 'refugee crisis', criticism over the 'We'll-make-it policy' by Angela Merkel increased also among Christian Democrats.1A sudden human influx of such size into a society might not only have political, cultural and social impacts, but may also lead to economic disruptions. Human beings embody consumers as well as labour force. A significant increase in population might thus cause an increase in demand for commodities and in labour supply, which ceteris paribus simultaneously lead to increasing GDP and decreasing wages. Previous literature utilized quasi-natural experiments which can be exploited in social sciences for the detection of causal relations and the usage of methods, not applicable otherwise. The present paper applies the synthetic control methodology to wages, unemployment and economic growth in Germany in order to measure the causal impact of the 2015- refugee influx on these economic key elements. No impact on either of the economic factors has been found. European Union labour market and welfare policies are concerned with the protection of European citizens from disruptive processes. Falling wages and increasing unemployment, as well as decreasing production and consumption embody highly disruptive political potential. Thus, the findings concerning the impact of refugee migration into the European Union might influence EU-policies in the prospect of increased migration to Europe in the upcoming century due climate change and new crises. The remainder of the article is organized as follows: The lessons from the key literature concerning quasi- natural experiments and the impact of migration on wages, unemployment and economic growth are provided in section 2. Section 3 comprises the theoretical framework concerning the differences between refugees and economic migrants. Section 4 introduces the estimation strategy, while section 5 presents data and descriptive statistics. Section 6 shows the simulation results, followed by the concluding discussion in section 7.
    Keywords: Economic Impact,Refugee Migration
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:zbw:ouwpmm:51&r=
  43. By: Antonin Aviat; Frédérique Bec; Claude Diebolt; Catherine Doz; Denis Ferrand; Laurent Ferrara; Eric Heyer (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Valérie Mignon; Pierre-Alain Pionnier
    Abstract: This paper proposes a reference quarterly dating for periods of expansion and recession in France since 1970, carried out by the Dating Committee of the French Economic Association (AFSE). The methodology used is based on two pillars: (i) econometric estimations from various key data to identify candidate periods, and (ii) a narrative approach that describes the economic background that prevailed at that time to finalize the dating chronology. Starting from 1970, the committee has identified four economic recession periods: the two oil shocks 1974-75 and 1980, the investment cycle of 1992-93, and the Great Recession 2008-09 spawned by the Global Financial Crisis. The peak before the Covid-19 recession has been dated to the last quarter of 2019.
    Keywords: business cycles,French economy,dating,narrative approach,econometric modeling
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03373425&r=
  44. By: Foly Ananou (LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges); Dimitris Chronopoulos (University of St Andrews, Centre for Responsible Banking & Finance, Gateway Building, St Andrews, Fife KY16 9RJ, UK); Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges); John Wilson (University of St Andrews, Centre for Responsible Banking & Finance, Gateway Building, St Andrews, Fife KY16 9RJ, UK)
    Abstract: In this paper, we investigate the impact of liquidity requirements on bank risk. We take advantage of the implementation of the Liquidity Balance Rule (LBR) in the Netherlands in 2003 and analyze its impact on bank default risk. The LBR was imposed on Dutch banks only and did not apply to other banks operating elsewhere within the Eurozone. Using this differential regulatory treatment to overcome identification concerns, we find that following the introduction of the LBR, the risk of Dutch banks declined relatively to counterparts not affected by the rule. Concomitantly, despite the lower cost of funding driven by the LBR, the profitability of Dutch banks decreased in comparison with other banks in Europe, as a result of a decrease in income accruing from interest-bearing activities. Our findings also indicate that relatively to unaffected banks, Dutch banks might not have actively tried to offset their loss in interest income by increasing interest rates of loans. However, better financing conditions allowed Dutch banks to increase the shares of deposits and capital on the liability side of their balance sheets.
    Keywords: Banking,liquidity regulation,Netherlands,propensity score matching,quasi-natural experiment,risk,stability
    Date: 2021–10–05
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03366418&r=
  45. By: Jacqueline Kauff
    Abstract: This brief describes the experiences of six employment programs participating in the Next Generation of Enhanced Employment Strategies (NextGen) Project and presents key takeaways from their efforts to maintain and develop new connections with employers during the COVID-19 pandemic.
    Keywords: pandemic, workforce, employer, engagement, economic self-sufficiency, well-being; barriers
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:ab53205e701549cb8f281957aaaf328a&r=
  46. By: Pedro Cavalcanti Gonçalves Ferreira
    Abstract: This paper attempts to draw some lines regarding the interplay between market concentration and income inequality in the Brazilian economy. Our goal is to uncover some of the mechanisms by which market power influences macroeconomic aggregates and, consequently, indicators such as the share of the income appropriated by the richest and the Country's Gini index. For this purpose, we have first conducted an empirical estimation using a PVAR approach with data from Brazilian states. We found that the markup shock is positively related to inequality. Moreover, that result is robust to changes in the model specification or different Cholesky ordering. Second, we built a dynamic general equilibrium model and calibrated it to reproduce the Brazilian economy. The model has three representative agents and heterogeneity in asset market participation and labor supply/skills. Additionally, firms exhibit endogenous oligopolistic and oligopsonistic (in the labor market) behavior. In response to unexpected markup shocks, the model showed a regressive dynamic, transferring income from the bottom to the top of the distribution. Nevertheless, its effects on economic growth may be positive in the short term, due to the increased investment in creating new companies. The disturbances in the TFP reduce inequality on impact, which is due to the countercyclical behavior of the markup. Instead, when we allow the TFP shock to be correlated with the markup, this effect is reversed, with the largest share of income being appropriated by the wealthiest. Finally, it is noteworthy that the labor supply elasticities partially determine the behavior of income distribution between poor and middle-class households.
    Keywords: market power, inequality, markup, general equilibrium, antitrust policy, income distribution, Brazil.
    Date: 2021–11
    URL: http://d.repec.org/n?u=RePEc:ise:remwps:wp02012021&r=
  47. By: Mathithibane, Mpho Steve
    Abstract: The aim of this paper is to investigates the influence of trust on insurance penetration in the developing Microinsurance sector of South Africa. Legacy issues and deeply rooted structural and institutional frailties have resulted in substandard levels of financial inclusion for low-income earners in the country. This segment of consumers is highly vulnerable to social, economic and as the covid-19 pandemic has proved, health shocks. Microinsurance has often been touted as a solution to improve resilience and turn the tide of significant adverse economic outcomes for the low-income segment. This paper explores the role of trust as a key construct for business success in the microinsurance sector. The study findings indicate that creation of trust and reassurance that claims will be honored when liability occurs are the main elements valued by prospective and existing microinsurance consumers. These findings contribute to advancing knowledge within the microinsurance segment, in particular, key traits needed in constructing a successful insurance programme as well as the messaging and serving element that needs to be placed at the forefront of product design and marketing in order to build trust.
    Keywords: Microinsurance, low-income market, South Africa
    JEL: D18 G22
    Date: 2021–10–28
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:110406&r=
  48. By: Jean-Charles Bricongne; Antoine Cosson; Albane Garnier-Sauveplane; Rémy Lecat; Irena Peresa; Yuliya Vanzhulova
    Abstract: This paper analyzes the impact on financial flows of institutional factors promoting financial integration such as European integration or trying to tame them such as capital control or macro-prudential policies. We use a detailed database of bilateral financial assets and construct gravity models, for foreign direct investment, portfolio flows and other investments. Capital control policies have limited and disparate effects, being particularly effective through restrictions on inward flows for destination countries. The impacts of macro-prudential measures are complex, with macro-prudential measures in the origin country financial sector having a positive impact on outward capital flows and macroprudential measures in destination countries having a negative impact on inward capital flows. European integration has played a positive role on financial flows. We also emphasize the benefits of cooperation between the origin and destination countries, both for capital control and macro-prudential measures.
    Keywords: Gravity Equation, International Financial Assets and Flows, Macro-Prudential Measures, Restrictions to Financial Flows, European Integration
    JEL: F38 G15
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:bfr:banfra:842&r=
  49. By: Matthias Kaldorf (University of Cologne, Center for Macroeconomic Research); Florian Wicknig (University of Cologne, Center for Macroeconomic Research)
    Abstract: This paper studies how collateral premia affect the supply and quality of bonds issued by non-financial firms. Banks increase demand for bonds eligible as collateral, to which eligible firms respond by increasing their debt issuance and default risk. We characterize firm responses and aggregate collateral supply in a heterogeneous firm model with collat-eral premia and endogenous default risk. Using a calibration to euro area data, we study the impact of collateral easing, consistent with the ECB’s policy during the 2008 financial crisis and evaluate the quantitative relevance of firm responses. We find that firm responses substantially deteriorate collateral quality and dampen the total increase in collateral sup-ply. Our analysis suggests that an eligibility covenant conditioning eligibility on leverage and current default risk, is a potentially powerful instrument to mitigate the adverse impact of eligibility requirements on collateral quality while maintaining a high level of collateral supply.
    Keywords: Eligibility Premia, Corporate Bonds, Firm Heterogeneity, Collateral Policy
    JEL: E44 E58 G12 G32 G33
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:ajk:ajkdps:123&r=
  50. By: Baeuml, Theresa; Möllers, Judith; Dufhues, Thomas; Wolz, Axel; Traikova, Diana
    Keywords: Consumer/Household Economics
    Date: 2021–08
    URL: http://d.repec.org/n?u=RePEc:ags:iaae21:315034&r=
  51. By: Yayi Yan; Jiti Gao; Bin Peng
    Abstract: Vector autoregressive (VAR) models are widely used in practical studies, e.g., forecasting, modelling policy transmission mechanism, and measuring connection of economic agents. To better capture the dynamics, this paper introduces a new class of time-varying VAR models in which the coefficients and covariance matrix of the error innovations are allowed to change smoothly over time. Accordingly, we establish a set of theories, including the impulse responses analyses subject to both of the short-run timing and the long-run restrictions, an information criterion to select the optimal lag, and a Wald-type test to determine the constant coefficients. Simulation studies are conducted to evaluate the theoretical findings. Finally, we demonstrate the empirical relevance and usefulness of the proposed methods through an application to the transmission mechanism of U.S. monetary policy.
    Keywords: multivariate dynamic time series, time-varying impulse response, testing for parameter stability
    JEL: C14 C32 E52
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:msh:ebswps:2021-17&r=
  52. By: Silvia Miranda-Agrippino; Giovanni Ricco (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    Abstract: We propose a Bayesian approach to Local Projections that optimally addresses the empirical bias-variance tradeoff inherent in the choice between VARs and LPs. Bayesian Local Projections (BLP) regularise the LP regression models by using informative priors, thus estimating impulse response functions potentially better able to capture the properties of the data as compared to iterative VARs. In doing so, BLP preserve the flexibility of LPs to empirical model misspecification while retaining a degree of estimation uncertainty comparable to a Bayesian VAR with standard macroeconomic priors. As a regularised direct forecast, this framework is also a valuable alternative to BVARs for multivariate out-of-sample projections.
    Keywords: local projections,VARs,bayesian techniques,impulse response functions,direct forecasting
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03373574&r=
  53. By: Ramses H. Abul Naga (Departamento de Teoría e Historia Económica, Universidad de Málaga; Business School, University of Aberdeen; and Pan African Scientific Research Council.); Christopher Stapenhurstz (University of Edinburgh); Gaston Yalonetzky (University of Leeds)
    Abstract: The median-preserving spread (MPS) ordering for ordinal variables (Allison and Foster, 2004) has become ubiquitous in the inequality literature. However, the literature lacks an explicit frequentist method for inferring whether an ordered multinomial distribution G is more unequal than F according to the MPS criterion. We devise formal statistical tests of the hypothesis that G is not an MPS of F. Rejection of this hypothesis enables the conclusion that G is robustly more unequal than F. Using Monte Carlo simulations and novel graphical techniques, we fi nd that the choice between Z and Likelihood Ratio test statistics does not have a large impact on the properties of the tests, but that the method of inference does: bootstrap inference has generally better size and power properties than asymptotic inference. We illustrate the usefulness of our tests with three applications: (i) happiness inequality in the United States, (ii) self-assessed health in Europe and (iii) sanitation ladders in Pakistan.
    Keywords: inequality measurement; hypothesis testing; median preserving spread; ordinal data
    Date: 2021–10
    URL: http://d.repec.org/n?u=RePEc:mal:wpaper:2021-1&r=
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