We kindly inform you that, as long as the subject affiliation of our 300.000+ articles is in progress, you might get unsufficient or no results on your third level or second level search. In this case, please broaden your search criteria.

25.00 €

INFLUENCE OF THE ECONOMIC CRISIS ON THE FULFILLMENT OF THE TARGET OF STRATEGY EUROPE 2020 IN THE AREA OF RESEARCH AND DEVELOPMENT

Author(s): Emília SPIŠÁKOVÁ / Language(s): English Publication Year: 0

The chapter deals with the influence of the economic crisis on the fulfillment of one of the five targets identified in new European Union strategy called Europe 2020. It points out the fact, that research, development and innovation activities are way out of the economic crisis. There is analyzed and compared the indicator expressing the share of gross domestic expenditure on research and development on GDP in selected countries and also the structure of gross domestic expenditure on research and development. We also described expected trend of the indicator by several functions in six countries.

More...

25.00 €

GROWTH DESIGN AND MONETARY POLICY AFTER THE CRISIS

Author(s): Rustam Jamilov / Language(s): English Publication Year: 0

Despite the indisputable fact that the 2008 Global Financial Crisis, the continuous debt overhang, and the everlasting Eurozone problem, constituted the most substantial economic downturn since the Great Depression, this slowdown has not necessarily been equally destructive for all parts of the world. This chapter proposes a case study of four relatively small and open economies which differ in their respective growth design. In each of the four economies growth has been historically heavily financed either by natural resources, influx of foreign investments, external debt, or exportation. Azerbaijan has been chosen to represent the “resource-driven”, Singapore – “investment-driven”, Hungary – “debt-driven”, and Switzerland –“export-driven” model of economic development. A supposedly very broad narrative converges naturally into just a few main talking points. Narrowly designed economic models leave nations dangerously dependent on their respective key factors of growth. Under systemic negative shocks, the factor of dependence impedes policy making and contributes to multiple structural problems that prevent sustainable recovery. Industrial diversification appears to be the chief differentiating factor for success and at least one of the key solutions to systemic financial crises. Monetary policy often becomes restricted by the path imposed by the choice of the growth design; protection of the growth regime becomes a priority for monetary policy makers, either directly or indirectly. Exchange rate management evolves into a key instrument of monetary policy-making in small open economies under large negative external economic shocks.

More...

25.00 €

THE FORECASTS ACCURACY DURING THE ECONOMIC CRISIS AND STRATEGIES TO IMPROVE IT

Author(s): Marilena Bratu / Language(s): English Publication Year: 0

In crisis periods many malfunctions affect the economic environment. The forecasting process is also influence by the negative evolution of the macroeconomic variables. It is hard to predict the economic behavior of many indicators because of the lack of stability of the economic world. It is clear that the forecasts accuracy decreases during the crisis periods, this phenomenon being seen in the activity of international institutions specialized in providing macroeconomic forecasts for different countries or regions. Therefore, we try to solve this problem, by finding suitable strategies or ways of improving the predictions accuracy during the economic crisis. We will start from the forecasts made by international institutions.

More...

25.00 €

A NEW GLOBAL GOVERNANCE FRAMEWORK FOR THE WORLD IN CRISIS

Author(s): Miroslava Filipović / Language(s): English Publication Year: 0

The current financial crisis saw numerous organizations’ plans to handle international finance and create conditions for strong, sustainable and balanced growth, with G20 at the centre point of this process. The crisis spill-over has clearly demonstrated a rising level of interdependence in the world economy. This chapter aims at evaluating a new global regulatory scheme since the 2008 Washington summit of G20, through reviewing shifts in political responses and changing agendas. Despite of a certain level of success in deliberating and direction setting on issues of global concern, the implementation of the summits’ conclusions has proved uneven, pointing to significant differences of the major actors’ agendas and priorities. From that aspect, the global economy still has to wait for new regulatory arrangements to emerge. Even though, the G20 through its agenda might have a unique opportunity to pool resources, confront views and opinions and press for a higher level of compliance with internationally agreed goals and principles that might induce longer term and beneficial effects for the world economy and finance.

More...

25.00 €

CHALLENGES OF REAL ESTATE SECTOR DEVELOPMENT IN CENTRAL EUROPEAN COUNTRIES IN THE POST-CRISIS PERIOD

Author(s): Koloman Ivanička,Daniela Špirková / Language(s): English Publication Year: 0

The real estate sector represents the important part of the economy, since it creates the preconditions for the economic development. The structural reforms and substantial foreign direct investments in Central and Eastern European countries during the transition period had enabled to develop the booming real estate markets. At first it seemed that the global economic crisis will not have any impact on the region, however at the end of 2008 the situation has reversed dramatically. Since the region is not homogenous and economic fundamentals are distinct in the particular countries, the impact of crisis and the post crisis situation varies throughout the region, which is investigated in this chapter. According to our opinion the future development of the real estate sector in CEE countries will depend on several external factors, such as the results of the introduction of the new banking regulation, the growing role of the private equity funds and the solution of Eurozone crisis. The internal factor such as the healthy public finance and further economic recovery will be important as well.

More...

25.00 €

GLOBALIZATION AND FINANCIAL MARKET CONTAGION: EVIDENCE FROM FINANCIAL CRISIS AND NATURAL DISASTERS

Author(s): Simplice A. Asongu / Language(s): English Publication Year: 0

With financial globalization, investors can gain from diversification if returns from financial markets are stable and not correlated. However with volatility spillovers, increase in cross-market correlations exist as a real-effect and are not taken into account for asset allocation and portfolio composition. This chapter assesses financial contagion from two recent trends in the world economy: the global financial crisis and the 2011 Japanese natural disasters (tsunami, earthquake and nuclear crises).

More...

25.00 €

GLOBALIZATION, FIRM PERFORMANCE AND GROUP AFFILIATION IN EMERGING MARKETS: EVIDENCE FROM TURKEY

Author(s): Ece C. KARADAGLI / Language(s): English Publication Year: 0

Although the process of globalization deeply affects businesses in all aspects, unfortunately, the firm level effects of globalization are highly unexplored in the literature. This research aims to explore how the overall globalization level of a country as well as her economic, her political and her social globalization levels affect the performance of both the group affiliated and the unaffiliated firms, operating in this business environment by using pooled panel analysis. To search for the potential differences that may prevail between the firm performance effects of globalization on the group affiliated firms and on the unaffiliated firms, it focuses on Turkish listed companies for the period 2002-2009. The findings of the study indicate that while globalization improves the stock returns of both the group affiliated and the unaffiliated firms, it deteriorates the operational income of both groups of firms. The findings also imply that although the effects of economic and political globalization do not seem to differentiate much between the group affiliated and the unaffiliated firms, social globalization may be argued to affect the operating incomes and the firm growth rates of group affiliated and unaffiliated firms differently. Last but not least, the findings suggest that the most influential dimension of globalization in terms of its effects on firm performance for Turkish companies seems to be the economic globalization.

More...

25.00 €

2000s: PAINFUL AND TURBULENT DECADE OF DEBT. HOW DID WE END UP IN THIS MESS?

Author(s): Taha Chaiechi / Language(s): English Publication Year: 0

Around the globe observations demonstrate that the countries with expected near- future- inflation, unsustainable ballooning government spending and expected recession head towards a financial crisis unless significant policy transformations take place convincingly and before late. And whilst the recent sharp increase in advanced country sovereign debts has led to serious concerns about fiscal sustainability as well as their broader economic and financial market impacts, research on the relationship between sovereign or public debt and economic growth remains sparse, particularly from an empirical perspective. To avoid another chaotic catastrophe the trends of the sovereign debt and macroeconomic performance of countries needs to be watched closely. The projection of the future patterns based on the past and current trends are imperative since it will provide adequate safety net before another financial calamity arrives. Needless to say if the extent of sovereign debt for a nation is too large to finance and service, bankruptcy is very likely to occur and by then there will be little motivation for other countries to cooperate with the system in finding an immediate solution.

More...

25.00 €

SHOULD SUB-SAHARAN AFRICA OIL EXPORTER COUNTRIES BORROW MORE IN U.S DOLLAR OR EURO TO STABILIZE THEIR BALANCE OF PAYMENTS? AN EMPIRICAL INVESTIGATION

Author(s): Yaya Sissoko,Soloman KONÉ / Language(s): English Publication Year: 0

This chapter investigates the vulnerability of oil exporter countries in Sub-Saharan Africa (SSA) to commodity price, exchange rate, and interest rate uncertainty. Although there are considerable differences among Sub-Saharan Africa nations, they do share a number of common characteristics: heavy dependence on primary commodity exports, heavy reliance on outside aid, large debt burdens, poor infrastructure, and lows level of education (see Husain and Underwood 1991, Claessens and Qian 1993). An alternative to macroeconomic policies is the use of financial hedging instruments to stabilize the balance of payments. The currency composition of a country’s external debt can serve as a hedging instrument against changes in exchange rate, interest rate, and commodity price changes. Commodity price and exchange rate changes affect both exports and imports. Furthermore, if a country has debt obligations in currencies other than its own, then its debt servicing ability will be affected by changes in exchange rate and interest rate. This chapter focuses on how a country can minimize its exposure to commodity price, exchange rate, and interest rate movements by structuring optimally the currency composition of its external debt relative to the costs of servicing the debt. The high historical volatility of currencies and export and import prices has had serious implications for the government budgets of Sub-Saharan countries, their economic stability and social welfare. A recent survey by the World Bank revealed that 70 percent of foreign borrowers in developing countries do not hedge their interest rate or exchange rate exposures. SSA countries are particularly vulnerable because: (1) they have large international borrowing requirements and the resulting external debt is denominated in different currencies; (2) most of the external debt is in obligations with variable interest rates; and (3) their trade in primary commodities is significant. A country can improve the risk characteristics of their balance of payments by holding an adequate level of foreign exchange reserves and borrowing in appropriate currency denominations. The currency composition of its external debt is a policy tool (debt composition is endogenous). This empirical investigation has determined that the US Dollar denominated debt is more attractive and desirable for these countries, given their risk profiles and the important component of oil export earnings.

More...

25.00 €

THE IMPACT OF THE GLOBAL ECONOMIC CRISIS ON THE INDEBTEDNESS OF THE SOUTHEAST EUROPEAN COUNTRIES

Author(s): Ines Kersan-Škabić / Language(s): English Publication Year: 0

The aim is to research the effects of the global economic crisis on the countries of the Southeast Europe, with a special emphasis on the level and sustainability of foreign debt. The level of foreign indebtedness has resulted from structural problems in the SEE’s i.e. internal and external imbalances. They have been faced with: increase in domestic spending (personal and public), higher growth of import than export, uncompetitiveness of domestic production and export, unfavorable production structure that has resulted in a weak recovery after crisis. In comparison with PI(I)GS the research shows that SEE countries are less indebted and they also have a smaller share of public debt in their GDP’s. Econometric analysis indicates the importance of balance of payment disequilibria as determination of foreign debt. Current account deficit, FDI inflows and occurrence of crisis have positive influence on foreign debt, while budget deficit does not have significant impact.

More...

25.00 €

MAIN SOURCES OF FINANCE FOR DEVELOPMENT: RETROSPECTIVE VIEW ON THE EVOLUTION OF PRE-CRISIS IDEAS

Author(s): Mikhail Sherstnev / Language(s): English Publication Year: 0

The chapter provides the overview of the ideas on the sources of finance for development which were widely discussed by international community before the crisis in order to achieve the Millennium Development Goals. This set of ideas remains the starting point for further discussion on the issue and political action in the post-crisis world.

More...

25.00 €

DEBT AND OWNERSHIP

Author(s): Jacek Tittenbrun / Language(s): English Publication Year: 0

While recent economic processes, including those involved in the global crisis have many important financial aspects to them that deserve scrutiny, only one of those phenomena, i.e. debt, could be chosen as the subject of the present study. The aforementioned phenomenon will be considered at two levels, leaving out the question of personal debt, for reasons which will become clear below. The first section brings out what constitutes the crucial underlying mechanism of the debt, and financial crisis in general, which, it will be seen, is closely related to the content of motto to the present chapter. The next two sections illuminate the relevance of the debt problem to the economy and society at large. Whilst, as will be seen, one might point to some voices drawing attention to the presumable dramatic consequences of growing indebtedness apparent in both corporate and public sector, in one key respect those commentaries are wanting; namely, as the subsequent sections will show, those empirical processes have a deep-seated theoretical content that can be brought to light only by theoretical means. The said theoretical framework will constitute the subject of the fourth section of the chapter. All in all, an application of that framework to the topic under consideration should end up in a novel, if not an eye-opening view of not only debt as such, but also related socio-economic relations.

More...

25.00 €

ON THE CO-MOVEMENTS OF EXCHANGE RATES

Author(s): Itir Ozer Imer,Ibrahim Ozkan / Language(s): English Publication Year: 0

The aims of this study are to assess exchange rate co-movements by grouping the currencies based on similarities in their patterns, and to emphasize the importance of the trajectories of exchange rate co￾movements in the exchange rate classification. Hierarchical clustering is performed with some widely used similarity measures along with the longest common subsequence (LCS) algorithm. Weekly series of twenty￾one currencies were used in this study. The results show that; i) LCS performs better than the other measures and it produces comprehensible results, ii) historical and geographical factors play an important role in the co￾movement of currencies. Co-movements (common trajectories) of currencies need to be taken into consideration in studies on exchange rate behavior; since these trajectories usually contain most of the information. This chapter has important implications for the analyses in the research areas of exchange rate regime choice, monetary policy implementation, and the optimum currency areas (OCA) theory.

More...

25.00 €

COLLATERAL COMPOSITION, DIVERSIFICATION RISK, AND SYSTEMICALLY IMPORTANT MERCHANT BANKS

Author(s): Alexis Derviz / Language(s): English Publication Year: 0

We study the impact of collateral diversification by non-financial firms on systemic risk in a generalequilibrium model with standard production functions and mixed debt-equity financing. Systemic risk comes about as soon as firms diversify their collateral by holding claims on a big wholesale (merchant) bank whose asset side includes claims on the same producer set. The merchant bank sector proves to be fragile (has a short distance to default) regardless of competition. In this setting, the policy response consisting in official guarantees for the merchant bank liabilities entails considerable government loss risk. An alternative without the need of public sector involvement is to encourage systemically important merchant banks to introduce a simple bail-in mechanism by restricting their liabilities to contingent convertible bonds. This direction of regulatory policies can be particularly relevant for containment of systemic events in globally leveraged economies serviced by big international banks outside the host country regulatory control.

More...

25.00 €

MARK TO MARKET ACCOUNTING AS A MAGNIFIER OF FINANCIAL CRISES

Author(s): Nemanja Stanišić,Snezana Drago Popovic Avri,Vule Mizdraković,Marina Đenić / Language(s): English Publication Year: 0

The main objective of this chapter is to provide an analysis on whether mark-to-market accounting magnifies financial crises. Even though the results of numerous studies on this topic offer various conclusions, the majority of them conclude that fair value accounting, or mark-to-market accounting, does not cause financial crises. Most studies that had similar conclusions dealt with the 2006-2008 period, whereas we focus our research on period from 1881 to present day. Primarily, we will point out the historical context of the implementation of mark-to-market accounting and consequences it had. We consider the long term relationship between United States (US) GDP and the S&P 500 index values and key historical developments to conclude that implementation of mark-to-market accounting contributes to creating of asset bubbles and assets over estimations. Even though mark-to-market accounting does not cause financial crises, it does magnify fundamental procyclicality which is inherent in efficient markets.

More...

25.00 €

FISCAL POLICY AND EXTERNAL CONSTRAINT IN THE EUROPEAN MONETARY UNION

Author(s): Rosaria Rita Canale / Language(s): English Publication Year: 0

The European policy model was built upon the idea that state intervention has just a destabilizing role. The chapter puts in doubt this conclusion and connects fiscal crises with the balance of payments. A stylized model is presented. Its results are: 1) public expenditure can have positive effects not only on growth but also on deficit and debt if it is not accompanied by an a interest rate increase by the Central Bank; 2) when an external constraint is introduced fiscal policy can have negative effects if it comes with a balance of payment deficit. The same negative effects result from whatever shock causing negative expectation about the future growth of the national economy. The results suggest that to make a currency union work it is necessary to overcome national boundaries.

More...

25.00 €

DETERMINANTS OF FISCAL CONSOLIDATION SUCCESS IN V4 COUNTRIES

Author(s): Radovan Dráb,Lucia Mihokova / Language(s): English Publication Year: 0

The crisis of public finance negatively affected the overall economic development in all EU Member States, and therefore issues related to the regulatory mechanism not only of the financial sector, but the economy as a whole, are more than justified. The focus of fiscal consolidation is to a certain extent a "stumbling block" among the indebted countries. Issues aimed at defining the type of fiscal consolidation, the determination of the specific components of one sided oriented consolidation, and not least the determinants of individual components come into the spotlight. All these issues are important in order to help reduce public debt and to support persistent long-term fiscal balance in the EU. This chapter focuses on the identification and comparison of revenue and expenditure based consolidation, which would substantially contribute to the reduction of public debt in the V4 countries for the period 1996 to 2014.

More...

25.00 €

DEVELOPMENTS IN MODELS OF MAJORITY VOTING OVER FIXED INCOME TAXATIONS

Author(s): Cristian Marius Litan,Paula Curt,Diana Andrada Filip / Language(s): English Publication Year: 0

As public debt becomes an acute problem for western economies, the political debate becomes more and more dominated by issues related to the need of increasing the progressivity of taxation. In order that one better understands the current context, it is necessary, in our view, to become familiar with the literature of the positive theory of income taxation. This literature regards the tax schemes in democratic societies as emerging from majority voting.The aims of this chapter are the following. First, we briefly review the most important results in the above mentioned literature, trying to explain the empirical regularities of taxations. Second, based on previous work, we discuss how standard equilibrium concepts from simple majority voting games in coalitional form (e.g. core,  -core and least core) can be adapted to the general setup of voting over income tax schedules, as well as the conditions under which such adapted concepts are stable. Third, we investigate which are the implications of these concepts, from the perspective of progressivity versus regressivity, for workhorse models of the positive theory of income taxation (e.g. with restricted policy spaces such as quadratic taxation models, piecewise linear taxation models, etc.).Finally, we provide a brief critical evaluation of the extent to which this approach is able to address the difficulties acknowledged by the literature in the field and we draw future lines of investigation (such as possible adaptations of Mas-Colell Bargaining Set to the setup of voting over income tax schedules).

More...

25.00 €

Banking Stability for Financial Stability

Author(s): Vighneswara Swamy / Language(s): English Publication Year: 0

This chapter while emphasizing the importance of the concept of financial stability in wake of recent global financial crisis in particular and other (banking and financial) crises in general attempts to highlight the significance of the soundness of banking sector in emerging economies where banking sector constitutes a lion’s share in the financial system. This study investigates banking stability by structuring a recursive micro panel Vector Auto Regressive (VAR) model and corroborates the significance of the interrelatedness of the bank-specific variables such as; Liquidity, Asset Quality, Capital Adequacy and Profitability. This chapter while underscoring the prominence of financial stability in wake of recent global financial crisis in particular and other (banking and financial) crises in general argues that the soundness of banking sector in banking dominated financial system of emerging economies is of great significance in ensuring financial stability. Further, the chapter offers an in-depth review of literature on financial stability in backdrop of the ongoing definition debate for financial stability. A significant contribution of this study is in establishing that liquidity in the banking dominated financial system is reciprocally related with asset quality, capital adequacy, and profitability of constituent banks by employing a robust panel data drawn from 56 leading banks for a period of 12 years. Another contribution of this study is that, employing the most appropriate key determinants of banking sector soundness, the chapter models a simple and basic axiomatic form of banking stability index (BSI) in the context of an emerging economy banking sector.

More...

25.00 €

The Index of the Financial Safety of a Country: Estimation and Forecast

Author(s): Roman MATKOVSKYY / Language(s): English Publication Year: 0

This chapter proposes an approach to explore and forecast the strength of the financial system of a country against the possibility of financial disturbances appearing based on the construction of the Index of Financial Safety (IFS) for the country with the application mainly to South Africa. Testing the methodology of the IFS is made with the application to Turkey, Germany and the USA. To forecast changes in IFS of South Africa, BVAR models are used. The Markov Chain Monte Carlo (MCMC) and Gibbs sampler technique are used to estimate a Bayesian Vector Autoregressive Model of the IFS.

More...