nep-isf New Economics Papers
on Islamic Finance
Issue of 2021‒11‒01
four papers chosen by
Mohamed Mohamed Tolba Said

  1. Falling Rates and Rising Superstars By Thomas Kroen; Ernest Liu; Atif R. Mian; Amir Sufi
  2. Household Credit as Stimulus? Evidence from Brazil By Gabriel Garber; Atif R. Mian; Jacopo Ponticelli; Amir Sufi
  3. The New Public Management: Emergence and Content By Mohamed Amine Boubnad; Rachid El Hila; Rachid Hajbi; Mohammed Saadi
  4. Relationship between threshold level of inflation and economic growth in Bangladesh- a multivariate quadratic regression analysis. By Asaduzzaman, Md

  1. By: Thomas Kroen; Ernest Liu; Atif R. Mian; Amir Sufi
    Abstract: Do low interest rates contribute to the rise in market concentration? Using data on firm financials and high frequency monetary policy shocks, we find that falling interest rates disproportionately benefit industry leaders, especially when the initial interest rate is already low. Falling rates raise the valuation of industry leaders relative to industry followers and this effect snowballs as the interest rate approaches zero. There are multiple channels through which falling rates disproportionately benefit industry leaders: (i) the cost of borrowing falls more for industry leaders, (ii) industry leaders are able to raise more debt, increase leverage, and buyback more shares, and (iii) capital investment and acquisitions increase more for industry leaders. All three of these effects also snowball as the interest rate approaches zero. The findings provide empirical support to the idea that extremely low interest rates and the rise of superstar firms are connected.
    JEL: E0
    Date: 2021–10
  2. By: Gabriel Garber; Atif R. Mian; Jacopo Ponticelli; Amir Sufi
    Abstract: From 2011 to 2014, the Brazilian government conducted a heavily advertised major credit expansion program through government banks as part of its effort to stimulate the economy. Using administrative data on individual-level borrowing and spending, we find that the program led to a substantial rise in borrowing by government employees, especially those with low financial literacy. We trace the impact of credit stimulus on borrowers' consumption through the 2011-16 business cycle, and find that the credit stimulus resulted in higher consumption volatility and lower average consumption over the cycle. Our results suggest a potential downside of using household credit as stimulus in emerging markets.
    JEL: D12 D14 E21 E32 G21 G28 G53 O16
    Date: 2021–10
  3. By: Mohamed Amine Boubnad (University of Mohammed I - Université Mohammed Premier); Rachid El Hila (University of Mohammed I - Université Mohammed Premier); Rachid Hajbi (University of Mohammed I - Université Mohammed Premier); Mohammed Saadi (University of Mohammed I - Université Mohammed Premier)
    Abstract: This article sets out, in broad outline, the notion of New Public Management (NPM). While it is broadly defined as the transposition of management techniques specific to the private sector to public sector organizations, it would seem that this concept is much deeper and more fleshed out theoretically. We think that it is legitimate to question this concept in a theoretical framework in order to find its foundations and identify its emergence context. Once this context identified, it is necessary to encircle the outlines of NPM so we can assimilate its content. Our work permitted to output three principal findings: Firstly, we can fairly identify its mergence in the process of reflection on public management. Secondly, NPM has solid conceptual foundations. Thirdly, it has principles and values that differentiate it from other currents of public managerial thought. Taken together, we can say that this is a concept with a substantial body of theory that requires study. Of course, a second research work would aim to analyze empirically the NPM concept and its configuration in the Moroccan public administration.
    Abstract: Déclaration de divulgation Les auteurs n'ont pas connaissance de quelconque financement qui pourrait affecter l'objectivité de cette étude. Conflit d'intérêts Les auteurs ne signalent aucun conflit d'intérêts.
    Keywords: New Public Management,Secteur Public,Performance Classification JEL : H11 Type de l'article : Article théorique New Public Management,Public Sector,Performance JEL Classification: H11 Paper type: Theoretical Research
    Date: 2021–09–30
  4. By: Asaduzzaman, Md
    Abstract: The main objective of this study is to empirically examine the relationship between inflation and economic growth in Bangladesh and to investigate the ongoing possible threshold effect. This study draws on diverse tables and charts, correlation matrices, pair-wise Granger Causality tests, ADRL (General to Specific Approach) test, and a quadratic regression equation estimated by OLS using time series annual data covering the sample period from 1980 to 2017. The results demonstrate that the relationship between inflation and GDP growth is non-linear with a subsistence of a breakpoint, which means the inverted U-shape curve. Moreover, the Granger Causality shows that economic growth does granger cause inflation. The empirical result indicates that when the inflation level reaches the threshold level at 7.84 percent then the economic growth is in peak position. This study proposed that the Bangladesh Bank should maintain the precautious and growth-friendly monetary policy structure by keeping inflation targeting below 7.84 percent, or else the growth might be held back.
    Keywords: Threshold Inflation, GDP Growth, Quadratic Regression Model, Bangladesh Economy
    JEL: C1 C15 C3 C32 E0 E5 E52 E58 E6 O4 O42 O47
    Date: 2021–02–02

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