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on Monetary Economics |
| By: | Sikiru, Adeyemi Abidemi; Salisu, Afees A. |
| Abstract: | Informed by the recent run of rising and persistent inflation in Nigeria, which puts headline and food inflation at 28.2% and 32.8%, respectively, and its attendant consequences on macroeconomic performance, this study makes a case for inflation targeting as an alternative monetary policy framework to achieve the principal goal of monetary policy - price stability. We highlight from the literature and empirically explore relevant criteria that could ensure a smooth transition of the Central Bank of Nigeria to an inflation-targeting institution. First, we suggest either of the following bands for (headline) inflation targeting: 10.56-13.14%, 13.46-14.70%, or 10.90-16.47%, while the Bank can also keep a close watch on food inflation. Second, we propose some well-thought-out econometric models that the Bank can adopt to forecast inflation and determine the optimal policy rate to steer the economy. Third, we recommend legal ways of entrenching the central bank's autonomy through granting the power of appointment, dismissal, and accountability in the legislature rather than the executive to strengthen the central bank's independence. Lastly, we inform that the inflation targeting framework can be enhanced by involving the public through the periodic publication of reports, discussions at town hall meetings, and defence of the monetary policy operation with the legislature. |
| Keywords: | Inflation targeting, monetary policy, Central bank, Forecasting, Nigeria |
| JEL: | E17 E31 E52 E58 N17 |
| Date: | 2025–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123528 |
| By: | Haselmann, Rainer; Heider, Florian; Pelizzon, Loriana; Weber, Michael |
| Abstract: | Monetary policy in the euro area faces significant challenges due to the evolving economic landscape marked by the return of inflation, financial instability risks, and the consequences of unconventional monetary policy (UMP) to the operational framework of monetary policy. This article evaluates these key challenges in the context of the European Central Bank's (ECB) mandate and its broader implications. It highlights the unprecedented resurgence of inflation, which has complicated monetary policy decisions and revealed gaps in understanding household inflation expectations. Financial stability, now integral to the ECB's mandate, is strained by trade-offs between short-term and long-term stability, particularly under high-interest rate environments. Finally, UMP has disrupted traditional financial mechanisms and increased dependency on the central bank's liquidity operations. |
| Keywords: | Monetary Policy, Inflation, Financial Stability, Balance Sheet |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safepl:310334 |
| By: | Olena Kostyshyna; Isabelle Salle; Hung Truong |
| Abstract: | We analyze micro-level data from the Canadian Survey of Consumer Expectations through the lens of a heterogeneous-expectations model to study the state-dependent risk of inflation expectations unanchoring in low- and high-inflation environments. In our model, agents are either trend-chasing or mean-reverting forecasters of inflation. We interpret the degree of mean reversion in inflation expectations as a measure of anchoring, which varies over time with the share of agents using each approach. We find that during the post-pandemic inflation spike, trend-chasing expectations surged, resulting in a heightened risk of unanchoring expectations and entrenching above-target inflation. Furthermore, forming trend-chasing inflation expectations is associated with higher expectations for other key economic variables — such as interest rates, wages, and house prices — and a restraint in household spending. We provide additional new insights into household expectation formation, documenting that forecasting behaviors, attention, and noise in beliefs vary across socio-demographic groups and correlate with views about monetary policy. |
| Keywords: | Inflation and prices |
| JEL: | E70 E31 D84 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:25-5 |
| By: | Zabi Tarshi; Gitanjali Kumar |
| Abstract: | Changes in the term premium can reflect uncertainty about inflation, growth and monetary policy. Understanding the key factors that influence the term premium is important when central banks make decisions about monetary policy. In this paper, we derive the real term premium from the nominal term premium in Canada. |
| Keywords: | Financial markets; Interest rates; Econometric and statistical methods; Monetary policy and uncertainty |
| JEL: | C5 C58 E4 E43 E47 G1 G12 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsan:25-3 |
| By: | Zhesheng Qiu; Yicheng Wang; Le Xu; Francesco Zanetti |
| Abstract: | This paper studies the design of monetary policy in small open economies with domestic and cross-border production networks and nominal rigidities. The monetary policy that closes the domestic output gap is nearly optimal and is implemented by stabilizing the aggregate inflation index that weights sectoral inflation according to the sector’s roles as a supplier of inputs and a net exporter of products within the international production networks. To close the output gap, monetary policy should assign large weights to inflation in sectors with small direct or indirect (i.e., via the downstream sectors) import shares and failing to account for the cross-border production networks overemphasizes inflation in sectors that export intensively directly and indirectly (i.e., via the downstream sectors). We validate our theoretical results using the World Input-Output Database and show that the monetary policy that closes the output gap outperforms alternative policies that abstract from the openness of the economy or the input-output linkages. |
| Keywords: | production networks, small open economy, monetary policy |
| JEL: | C67 E52 F41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11613 |
| By: | Buda, G; Carvalho, V. M.; Corsetti, G; Duarte, J. B.; Hansen, S.; Moura, A. S.; Ortiz, Ã .; Rodrigo, T.; Rodríguez Mora, J. V.; Alves da Silva, G. |
| Abstract: | We examine the transmission of monetary policy shocks to the macroeconomy at high frequency. To do this, we build daily consumption and investment aggregates using bank transaction records and leverage administrative data for measures of daily gross output and employment for Spain. We show that variables typically regarded as "slow moving", such as consumption and output, respond significantly within weeks. In contrast, the responses of aggregate employment and consumer prices are slow and peak at long lags. Disaggregating by sector, consumption category and supply-chain distance to final demand, we find that fast adjustment is led by downstream sectors tied to final consumption—in particular luxuries and durables—and that the response of upstream sectors is slower but more persistent. Finally, we find that time aggregation to the quarterly frequency alters the identification of monetary policy transmission, shifting significant responses to longer lags, whereas weekly or monthly aggregation preserves daily-frequency results. |
| Keywords: | Event-study, Monetary Policy, Economic Activity, High-Frequency Data, Local Projections |
| JEL: | E31 E43 E44 E52 E58 |
| Date: | 2025–02–11 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2504 |
| By: | Giuseppe Pagano Giorgianni; Valeria Patella |
| Abstract: | Disagreement in inflation expectations amplifies inflation and lowers unemployment when beliefs are systematically upward-biased. Using the 1-year-ahead inflation forecast microdata from the Michigan Survey of Consumers, we employ a NK-Phillips curve framework and compute local projections on the contribution of inflation beliefs' distributions to inflation, in response to a belief distortion shock. They reveal that higher expected inflation leads firms to overreact by raising prices, when the shock is less informative and expectations are more dispersed. Hence, a weak consensus prompts confident, sentiment-driven expectations, and firms' expansionary behaviors, reducing unemployment and sustaining production. Conversely, a strong and more informative consensus about future inflationary outcomes fosters contractionary adjustments, increasing unemployment, and easing the labor market. |
| Keywords: | Inflation; Belief Formation; Heterogeneous Agents; Survey Expectation Microdata; NK Phillips Curve; Functional Data Analysis; Local Projections |
| JEL: | E31 C22 D84 C32 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp256 |
| By: | Vedanta Dhamija; Ricardo Nunes; Roshni Tara |
| Abstract: | Housing is a closely monitored and prominent sector for households. We find that households tend to overweight house price expectations when forming inflation expectations with a coefficient of 25–45 percent, significantly above the weight of house prices in the inflation index. We first use two datasets, a multitude of controls, and an instrumental variable approach to address endogeneity. We then use a second strategy based on household heterogeneity. As expected, we find a significant effect of cognitive abilities and whether households moved house recently. We model this household behavior in a two-sector New Keynesian model with an overweighted and a non-overweighted sector and show that overweighted sectors are disproportionately more important for monetary policy. |
| Date: | 2025–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:wpaper:1069 |
| By: | Shunsuke Haba (Bank of Japan); Yuichiro Ito (Bank of Japan); Yoshiyasu Kasai (Bank of Japan) |
| Abstract: | This paper examines the impact of the introduction of the negative interest rate policy (NIRP) on interest rate formation and lending in Japan through literature reviews and empirical analyses. Previous studies indicated that NIRP had the effect of lowering the effective lower bound on nominal interest rates and encouraging search for yield behavior among investors, pushing down not only short-term interest rates but also long-term interest rates. Analyzing data from Japan and the euro area, we find that NIRP had a significant downward effect on interest rates for longer maturities in addition to the short-term interest rates. Next, with regard to the impact on lending, previous studies suggested that the introduction of NIRP could create accommodative financial conditions and increase lending as with conventional monetary policy that guides short-term interest rates, while it could impede the financial intermediation function by deteriorating the profitability of financial institutions ("reversal interest rate" mechanism). In this regard, analyzing data on Japanese financial institutions, we find no evidence that even financial institutions with a larger amount of deposits relative to total assets, whose earnings are likely to be affected by NIRP, experienced a declining trend in lending after the introduction of the policy. This result may have been influenced by factors such as the introduction of the three-tier system for current accounts at the Bank of Japan that eased the contractionary impact on financial institutions' earnings and maintained their risk-taking capacity. |
| Keywords: | Negative interest rate policy; Yield curve; Reversal interest rate; Lending |
| JEL: | C23 E43 E44 E52 G21 |
| URL: | https://d.repec.org/n?u=RePEc:boj:bojwps:wp25e01 |
| By: | Balazs Istvan Horvath (Magyar Nemzeti Bank (the Central Bank of Hungary)); Pal Peter Kolozsi (Magyar Nemzeti Bank (the Central Bank of Hungary)); Marton Varga (Magyar Nemzeti Bank (the Central Bank of Hungary)); Eszter Baranyai (Magyar Nemzeti Bank (the Central Bank of Hungary)); Kristof Lehmann (Magyar Nemzeti Bank (the Central Bank of Hungary)); Adam Banai (Magyar Nemzeti Bank (the Central Bank of Hungary)); Gabor Neszvada (Magyar Nemzeti Bank (the Central Bank of Hungary)) |
| Abstract: | Central banks can play a key role in the change in finance needed for the green transition, but green central bank measures may also have an impact on the general public’s trust in the institution. Trust, in turn, is crucial for central banks to successfully conduct monetary policy. The objective of our study is to examine how this trust may change in response to green central bank measures in Hungary, using an independently conducted survey of 1, 000 adults. Our results indicate that there is potential for some increase and a limited risk of a decrease in trust as a result of green measures. Although most respondents indicated that their trust in the central bank would not change if it took pro-environmental measures, over one third of respondents thought their trust would increase (37 per cent), while the share of those indicating a decline in trust was low (6 per cent). The majority supports the active involvement of the Central Bank of Hungary in the fight against climate change, but only as long as this does not pose risks to the inflation target and the stability of the banking system. We also find that Hungarians tend to worry about climate change and, accordingly, they consider the central bank’s role in environmental sustainability important, but have little knowledge about the tasks of central banks. |
| Keywords: | green transition, public confidence, central bank, monetary policy |
| JEL: | E58 E61 Q54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mnb:opaper:2025/153 |
| By: | Andreeva, Desislava; Samarina, Anna; Faria, Lara Sousa |
| Abstract: | This paper explores the impact of the regulatory leverage ratio (LR) on banks’ demand for reserves and thus the pricing of overnight liquidity in the euro area money markets. We use daily transaction-level money market data during the period between January 2017 - February 2023 and examine the two major overnight money market segments – the unsecured and the secured one, distinguishing between over-the-counter (OTC) and CCP-cleared trades for the latter. We find a significant positive link between a bank’s LR and the spread between its money market borrowing rate and the DFR. Banks with a higher LR offer deposits at higher interest rates, thereby reducing the markdown vis-à-vis the DFR. The impact of the LR dampens during the period in which central bank reserves did not count towards the LR exposure measure (or the denominator of the ratio). It is stronger for G-SIBs, who need to comply with a G-SIB LR add-on on top of the minimum requirement applicable to all euro area banks. Moreover, the impact is weaker for CCP-cleared transactions compared to OTC trades, likely reflecting the possibility to net bilateral exposures if cleared via CCPs, which effectively allows banks to finance the respective gross money market exposures with a smaller share of Tier 1 capital. JEL Classification: G12, G21, G28 |
| Keywords: | bank balance sheet constraints, leverage ratio, money markets, €STR |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253016 |
| By: | Hilde C. Bjornland; Leif Brubakk; Nicolo Maffei-Faccioli |
| Abstract: | This paper examines the structural determinants of real exchange rates, emphasizing the persistent low-frequency movements that traditional models, such as Purchasing Power Parity (PPP) and Uncovered Interest Parity (UIP), often fail to capture. Building on well-established theoretical exchange rate models, we propose a structural VAR model with common trends, enabling a clear distinction between transitory and long-term effects of structural shocks. Estimated using Bayesian techniques and applied to Canada and Norway — two resource-rich economies — the model reveals that productivity shifts and commodity market trends significantly influence domestic activity and the real exchange rate in both countries. Importantly, the model also avoids the delayed overshooting puzzle commonly associated with recursive VARs in response to monetary policy shocks. Instead, it generates exchange rate dynamics consistent with the UIP hypothesis, characterized by immediate appreciation followed by a gradual depreciation to equilibrium. |
| Keywords: | real exchange rates, long-run equilibrium, productivity differentials, resource movement, Bayesian Time-Series Analysis |
| JEL: | C32 F41 O47 Q3 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-10 |
| By: | Jose Mauricio Gomez Julian |
| Abstract: | This research studies the relation between money and prices and its practical implications analyzing quarterly data from United States (1959-2022), Canada (1961-2022), United Kingdom (1986-2022), and Brazil (1996-2022). The historical, logical, and econometric consistency of the logical core of the two main theories of money is analyzed using objective bayesian and frequentist machine learning models, bayesian regularized artificial neural networks, and ensemble learning. It is concluded that money is not neutral at any time horizon and that, despite money is ultimately subordinated to prices, there is a reciprocal influence over time between money and prices which constitute a complex system. Non-neutrality is transmitted through aggregate demand and is based on the exchange value of money as a monetary unit. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.14623 |
| By: | Francesco Zanetti; Zhesheng Qiu; Yicheng Wang; Le Xu |
| Abstract: | This paper investigates the design of monetary policy in small open economies with domestic and cross-border input-output linkages and nominal rigidities. Aggregate distortions are proportional to the aggregate output gap, which can be expressed as a weighted average of sectoral markup wedges that encapsulate the inefficiency in each sector. Monetary policy can close the output gap and offset the sectoral distortions by stabilizing the aggregate index of inflation that weights inflation in each sector based on the degree of nominal rigidities and the centrality of the sector as a supplier of inputs and a net exporter of products within the international production networks. To close the output gap, monetary policy should assign larger weights to inflation in sectors with small direct or indirect (via the downstream sectors) import shares, and failing to account for the cross-border production networks overemphasizes the inflation in sectors that export intensively directly and indirectly (via the downstream sectors), generating quantitatively significant welfare losses that rise with the degree of openness of the economy. We derive the closed-form solution for the optimal monetary policy that minimizes the welfare losses up to the second-order approximation and show that the OG policy generates welfare losses quantitatively close to the optimal policy and, therefore, is nearly optimal. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:25-004e |
| By: | Alejandro Gurrola Luna (HSBC Mexico); Stephen McKnight (El Colegio de Mexico) |
| Abstract: | We analyze how bounded rationality affects the equilibrium determinacy properties of forecast-based interest-rate rules in a behavioural New Keynesian model with limited asset market participation (LAMP). We show that the key policy prescriptions of rational expectation models do not carry over to behavioural frameworks with myopic agents. In high participation economies, the Taylor principle is more likely to induce indeterminacy when bounded rationality is introduced following the cognitive discounting approach of Gabaix (2020). Indeterminacy arises from a discounting channel and the problem is exacerbated under flexible prices and nominal illusion. In contrast, cognitive discounting plays a stabilizing role in LAMP economies, where passive policy is no longer required to prevent indeterminacy, and determinacy can potentially be restored under the Taylor principle. We investigate how our results depend on the timing of the interest-rate rule, alternative forms of bounded rationality, and the presence of a cost-channel of monetary policy. |
| Keywords: | Bounded rationality, Cognitive discounting, Equilibrium determinacy, Limited asset markets participation, Taylor principle, Monetary policy |
| JEL: | E31 E32 E44 E52 E71 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:emx:ceedoc:2025-02 |
| By: | Kubitza, Christian; Sigaux, Jean-David; Vandeweyer, Quentin |
| Abstract: | We study the implications of deviations from covered interest rate parity for international capital flows using novel data covering euro-area derivatives and securities holdings. Consistent with a dynamic model of currency risk hedging, we document that investors’ holdings of USD bonds decrease following a widening in the USD-EUR cross-currency basis (CCB). This effect is driven by investors with larger FX rollover risk and hedging mandates, and it is robust to instrumenting the CCB. These shifts in bond demand significantly affect bond prices. Our findings shed light on a new determinant of international capital flows with important consequences for financial stability. JEL Classification: F21, F31, G11, G21, G22, G23, E44 |
| Keywords: | currency hedging, derivatives, foreign exchange, FX swap, institutional investors |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253017 |
| By: | Meijers, Huub (RS: GSBE MORSE, RS: GSBE other - not theme-related research, Macro, International & Labour Economics, Mt Economic Research Inst on Innov/Techn); Muysken, Joan (RS: GSBE other - not theme-related research, Macro, International & Labour Economics, RS: GSBE - MACIMIDE) |
| Abstract: | This paper argues that interest rate policy is a wrong tool to reduce inflation for two reasons. First, it ignores the causes of inflation, which started with bottlenecks in the economy, energy price shocks and some important sectors raising their profit markups. Second the financial fragility of the economy poses a serious risk, which should be solved first. We elaborate these points for the Dutch economy. This economy is characterised by several stylised facts which constitute a highly interdependent framework: (1) households with positive savings, large pension claims and a huge mortgage debt; (2) firms with large positive savings and large financial claims abroad; (3) a large financial sector with assets mainly invested in mortgages and abroad; (4) a large balance of trade surplus; (5) a Central Bank owning a large stock of Dutch government bonds; and (6) a government with modest negative savings and a moderate debt. The various interdependencies and imbalances are not sufficiently recognised in most debates on economic policy. The risks they imply for a financial crisis are also relevant for many other developed countries. In the paper we use an open economy stock-flow consistent model with a well-developed financial sector. Next to the banking sector we distinguish a pension fund which invests to a large extent abroad. Firms invest a considerable part of their retained earnings abroad in financial assets. We also introduce an inflationary process, based on conflict inflation, which allows for external inflation shocks. The model recognises the balance sheets and portfolios of financial assets of the six sectors in the model – the prices of these assets are explicitly modelled. The financial flows leading to wealth changes are analysed and both wealth effects and transmission channels for the impact of monetary policy play an important role. We estimate the model, using quarterly stock-flow consistent data for the Dutch economy. This enables us to reproduce the stylised facts presented above. From simulations with our model we show (a) why a price (and wage) policy is much more effective to reduce inflation than an interest rate policy (which mainly supresses economic growth); (b) how the vulnerability of the financial sector is aggravated by interest rate policy, and therefore can be used to blackmail central banks to reduce the interest rate. |
| JEL: | E44 B50 E60 G21 G32 O23 |
| Date: | 2024–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2024030 |
| By: | Roberto Bonfatti; Adam Brzezinski; K. Kivanc Karaman; Nuno Palma |
| Abstract: | Monetary capacity refers to the maximum level of monetization attainable by a state, given scarcity of commodity money and the need to finance public expenditure by taxing money. We develop a model showing that monetary and fiscal capacity are complements in imperfectly monetized economies. A positive shock to fiscal capacity implies lower expected seignorage and thereby increases monetary capacity. Simultaneously, a positive shock to monetary capacity increases the efficiency of taxation, and hence the incentive to invest in fiscal capacity. We take this model to the data by exploiting an exogenous shock to Europe’s monetary capacity: the inflow of precious metals from the Americas (1550-1790). Our causal estimates indicate that increases in monetary capacity led to gradual and persistent increases in fiscal capacity in England, France and Spain. A historical overview of Europe and China from antiquity to the early-modern period confirms that monetary and fiscal capacity co-evolved in the long run. |
| Keywords: | monetary capacity, fiscal capacity, monetization, inflation, taxation, quantity theory of money, monetary non-neutrality |
| JEL: | E50 E60 H21 N10 O11 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:man:allwps:0007 |
| By: | Gulnara Nolan; Jonathan Hambur; Philip Vermeulen |
| Abstract: | We use administrative and survey evidence from Australia to provide several new empirical facts about how monetary policy affect investment. First, we demonstrate that contractionary policy affects both the intensive and extensive margins of investment, with the latter particularly important for small and young firms, suggesting quadratic adjustment costs do not accurately capture firm-level dynamics. Second, we show that firms’ actual and expected investment respond at the same time. This suggests that models of myopia may be more realistic way of incorporating slow aggregate investment responses into models. It also suggests that the user cost channel may be less important than other channels, as user costs would adjust immediately following the policy change. Finally, we show that firms that claim to be financially constrained, a more direct measure of constraints than previously used in the literature, are more responsive to monetary policy, and that more most the difference comes through the extensive margin. Moreover, contractionary policy leads to an increase in the share of constrained firms. |
| Keywords: | investment, monetary policy, financial constraints |
| JEL: | E22 E52 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-09 |
| By: | Cristiano Cantore; Edoardo Leonardi |
| Abstract: | How does the monetary and fiscal policy mix alter households' saving incentives? To answer these questions, we build a heterogenous agents New Keynesian model where three different types of agents can save in assets with different liquidity profiles to insure against idiosyncratic risk. Policy mixes affect saving incentives differently according to their effect on the liquidity premium -- the return difference between less liquid assets and public debt. We derive an intuitive analytical expression linking the liquidity premium with consumption differentials amongst different types of agents. This underscores the presence of a transmission mechanism through which the interaction of monetary and fiscal policy shapes economic stability via its effect on the portfolio choice of private agents. We call it the 'self-insurance demand channel', which moves the liquidity premium in the opposite direction to the standard 'policy-driven supply channel'. Our analysis thus reveals the presence of two competing forces driving the liquidity premium. We show that the relative strength of the two is tightly linked to the policy mix in place and the type of business cycle shock hitting the economy. This implies that to stabilize the economy, monetary policy should consider the impact of the 'self-insurance' on the liquidity premium. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.17458 |
| By: | Aliaksandr Zaretski |
| Abstract: | I characterize optimal government policy in a sticky-price economy with different types of consumers and endogenous financial constraints in the banking and entrepreneurial sectors. The competitive equilibrium allocation is constrained inefficient due to a pecuniary externality implicit in the collateral constraint and other externalities arising from consumer type heterogeneity. These externalities can be corrected with appropriate fiscal instruments. Independently of the availability of such instruments, optimal monetary policy aims to achieve price stability in the long run and approximate price stability in the short run, as in the conventional New Keynesian environment. Compared to the competitive equilibrium, the constrained efficient allocation significantly improves between-agent risk sharing, approaching the unconstrained Pareto optimum and leading to sizable welfare gains. Such an allocation has lower leverage in the banking and entrepreneurial sectors and is less prone to the boom-bust financial crises and zero-lower-bound episodes observed occasionally in the decentralized economy. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.16575 |
| By: | Patrick Joel Turkson (Methodist University Ghana); Joseph Gyamfi Yeboah (Methodist University Ghana); Doris Anim Yeboah (Ghana Christian University College); Paul Quaisie Eleke-Aboagye (Methodist University Ghana) |
| Abstract: | The study examined mobile money fraud by highlighting the differences in consumer profiles using selected variables (gender, age, educational level, financial status, and knowledge of mobile money fraud). Data was collected from selected parts of the Greater Accra Region and the Eastern Region of Ghana over the period of three months. A convenience sampling technique was employed to select a total of 408 respondents, which constituted the sample size of the study. A 100% response rate was attained. Descriptive statistics, comparing means, and the ANOVA test were employed to analyze the data collected. SPSS version 26 was the statistical tool used for the analysis. The study revealed that males, individuals aged 18–25, those with no formal education, those with poor financial status, and those unaware of mobile money fraud become easy targets for mobile money fraudsters in Ghana. The study concluded that differences in gender, age, educational level, financial status and knowledge of mobile money fraud influence mobile money fraud in Ghana. |
| Keywords: | Mobile money fraud, age, gender, financial status, educational level, Ghana |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0452 |
| By: | Ren\'e A\"id; Maria Arduca; Sara Biagini; Luca Taschini |
| Abstract: | We provide a theoretical framework to examine how carbon pricing policies influence inflation and to estimate the policy-driven impact on goods prices from achieving net-zero emissions. Firms control emissions by adjusting production, abating, or purchasing permits, and these strategies determine emissions reductions that affect the consumer price index. We first examine an emissions-regulated economy, solving the market equilibrium under any dynamic allocation of allowances set by the regulator. Next, we analyze a regulator balancing emission reduction and inflation targets, identifying the optimal allocation when accounting for both environmental and inflationary concerns. By adjusting penalties for deviations from these targets, we demonstrate how regulatory priorities shape equilibrium outcomes. Under reasonable model parameterisation, even when considerable emphasis is placed on maintaining inflation at acceptable levels or grant lower priority to emissions reduction targets, the costs associated with emission deviations still exceed any savings from marginally lower inflation. Emission reduction goals should remain the primary focus for policymakers. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.16953 |
| By: | Thibaut Duprey; Victoria Fernandes; Kerem Tuzcuoglu; Ruhani Walia |
| Abstract: | We introduce a history of macroprudential policy (MPP) events in Canada since the 1980s. We document the short-run effects of MPP announcements on market-based measures of systemic risk and find that MPPs can influence the market’s perception of large banks’ resilience. |
| Keywords: | Financial system regulation and policies; Financial stability; Financial institutions; Econometric and statistical methods |
| JEL: | E58 G21 G28 G32 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocsan:25-4 |
| By: | Kang , Jong Woo (Asian Development Bank); Cabaero , Carlos (Asian Development Bank) |
| Abstract: | Foreign exchange (FX) trading volume is a key factor in exchange rate volatility. Given the important role of volatility in economic growth and stability, this paper investigates the dynamic nature of exchange trading volume on exchange rate volatility using hourly high-frequency data. The estimation results from ordinary least squares, fixed effects and the general autoregressive conditional heteroskedasticity model point to a significant impact of third-party foreign exchange trade volumes on the FX volatilities of original currency pairs. The United States dollar (USD), as the dominant currency, exerts sizeable effect through this third-party channel and the magnitude of the foreign exchange trading volume turns out to be a crucial factor to this effect. However, third-party currency pairs without USD linkages also exert non-negligible impact, calling for renewed attention to the effectiveness of regional financial cooperation in mitigating exchange rate volatility as compared with major foreign exchange trading partners, not only through direct transaction mechanisms but through third party currency channels. |
| Keywords: | FX volatility; third party channel; GARCH model |
| JEL: | F31 G15 G18 |
| Date: | 2025–02–06 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0768 |