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This contribution examines Sismondi's money, banking and credit theories and explores his public debt analysis (1803–1838) to connect the instability of market economy with his vision of the social contract. A detailed analysis is offered of the evolution in Sismondi's opinion on the nature of money and the banking system, and the part it plays in his trade cycle theory. Sismondi's monetary thought is then contextualised with a discussion of his policy-mix in relation to the Napoleonic war financing in Continental Europe. Connections with the upcoming flood of literature in England on the bullion controversy are also offered. Remarks are then suggested on the progressive emergence of an "art of public borrowing" according to which the people who provide the money also control the government. Finally, some reflections are proposed on the explicit connection established by Sismondi between budget deficits, the (ab-)use of inconvertible paper money and the partial collapse of the social contract initiated by banks and the governments using it. The entrenched instability of a market economy (discussed in an earlier article) is reinforced by the banking/credit system that works along similar line than any wealth-producing firm. Hence, thanks to the financial system, wealth does grow faster but at the expense of social justice. [ABSTRACT FROM AUTHOR]

For the Nordic paper industry the years 2001–2007 were a culmination point as to paper production and deliveries. The study uses plant level empirical time series data from these years from one large integrated Finnish paper mill. The research data covers complete customer data and cost components, and a major supplier for European paper markets. The case company worked actively with a customer base and concentrated on the most profitable markets. However, some unprofitable deliveries, which still covered the variable and fixed costs, also supported the operation of the mill and the continuing of the 24/7 shift. The results indicate that even with matured and bulky products like paper, it is still possible to operate on the basis of separated pricing, some bargaining power, and customized focus. In this respect, the markets do not seem to follow the economic theory expectation entirely, that is, for such a mature and bulky product market price differentiation should not be possible. However, to utilize this, it requires up-to-date information system concerning internal cost accounting, together with an emphasis on the management to have an active role with the customer base. [ABSTRACT FROM AUTHOR]

In a 2019 article published in this journal, Kyer and Maggs examined the frequency and characteristics of double-dip recessions and multi-dip recessions for 21 countries during the 1960:1 to 2014:4 period. A review of Kyer and Maggs generated a number of questions about a particular feature of their business cycle dating methodology. Specifically, they determined that a recession ends once real gross domestic product returns to or exceeds the previous peak level of real gross domestic product. To demonstrate the impact this nontraditional feature of their methodology has on their results and conclusions, this paper repeats their analysis where, in contrast to Kyer and Maggs, it is assumed that a recession ends once the economy reaches the trough quarter in a business cycle. The application of this more traditional feature of business cycle dating methodology to the same countries and sample period yields results that do not support their conclusions about either the frequency of double-dip recessions or the number of countries in their sample that experienced multi-dip recessions. This paper first shows that double-dip recessions represent just 7.2% of all recessions and, therefore, are not as common as Kyer and Maggs reported. Second, only five of the 21 countries experienced recessions with two or more additional dips in economic activity over the entire sample period. Finally, only six countries experienced a multi-dip recession during the Great Recession. [ABSTRACT FROM AUTHOR]

This editorial summarizes the papers published in issue 16(3) (2021) in order to raise the bar in applied spatial economic research and highlight new trends and knowledge. The first paper analyses the economic consequences of the rise and spread of the Covid-19 virus in the Brazilian state of São Paulo. The second paper presents a multi-regional generalized RAS technique to update input–output tables. The third paper investigates which European Union regions are most likely to be exposed to external shocks and which are more resilient. The fourth paper proposes a new neighbourhood inequality index for cities. The fifth paper analyses productivity and profitability using a sophisticated hierarchical model applied to a huge data set of individual firms. The sixth paper contains an empirical analysis on the choice of the national capital city location among 80 potential candidates in China over a period of 2240 years. The seventh paper explains political ideology at the municipality level in Switzerland based on 312 federal referendums between 1981 and 2017. The eighth paper examines the driving forces of business cycle synchronization among the 49 US states. [ABSTRACT FROM AUTHOR]

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This article explores the controversial topic of inward foreign direct investment (FDI) and its impact on emerging, developing, and underdeveloped economies. The authors highlight that while some studies show positive effects of FDI on economic growth, others fail to find such a relationship. The article presents six papers that delve into various aspects of FDI, including its effects on economic diversification, technology transfer, innovation, global value chains, and cultural distance. The findings suggest that the relationship between FDI and economic growth is complex and context-dependent. The article concludes by suggesting future research avenues, including the role of government corruption, the interaction between FDI and human capital, and the differentiation of FDI types. [Extracted from the article]

In this paper, we study the transmission and effectiveness of the public expenditure shock across business cycle phases in the Indian economy. The empirical results suggest that the deflationary impact of the public expenditure shock and the subsequent accommodative response of interest rates exhibit a countercyclical public expenditure multiplier during the contraction period. Moreover, the large and significant negative impact of the public expenditure shock on inflation and the interest rate has resulted in a larger public expenditure multiplier during a supply-side recession than a demand-side recession. Based on empirical evidence, we suggest that policymakers consider the presence of nonlinearities in the transmission and effectiveness of the public expenditure shock while taking fiscal policy measures. [ABSTRACT FROM AUTHOR]

Finally, in the last decade of the twentieth century, the other classes of derivatives were introduced: credit derivatives, catastrophe derivatives, weather derivatives and property derivatives. The development of the theory and practice of risk management is closely related to the emergence of different risks. The rules proposed by the Basel Committee initially covered credit risk, but then grew to include market risk, operational risk and liquidity risk. This refers in particular to equity derivatives, currency derivatives, interest rate derivatives and commodity derivatives in the form of options, futures, forwards and swaps. [Extracted from the article]

This paper seeks to provide a comprehensive analysis of the monetary theory of Jean-Baptiste Say with respect to the Austrian School. Reference is given to the historical context and methodology utilized by Say in his Treatise before pivoting to an examination of his writings on money and banking. Thorough documentation and analysis are undertaken on Say's views of the emergence and nature of money, monetary phenomena, the role of the state, and banking practices. Lastly, critiques of Say's Law are addressed within the context of Say's monetary theory in addition to various business cycle theories. Ultimately, this paper seeks to explain that while Say was not a complete Austrian, a comprehensive study of his monetary theory illuminates meaningful contributions and insights that reveal the Austrian School as the intellectual heir of Say's work. [ABSTRACT FROM AUTHOR]

The main objective of the present paper is to provide the reasons behind the rise and fall of resources for innovation policies in Brazil between 1999 and 2016. The paper also intends to provide a broad map of the financial relations between funding sources and financial agents in the Brazilian National System of Innovation (NSI). In order to do that, the paper uses mixed methods: a historical approach to cover the motivations of the political economy; principles of network analyses to map the institutional relations between funding sources and financial agents; and economic theory to understand the determinants of the cash flows that finance science, technology and innovation (STI) policies. The institutional arrangement of the Brazilian NSI led the financial cycle to rely, on a general level, on GDP dynamism; the strategy of selected public bodies; on the federal budget decision process; and on the external economic cycle. Between 2003 and 2014, political struggles led to economic policies that favoured GDP growth and public spending, while the opposite occurred from 2015 onwards. In general, institutions were not equipped to protect the financial resources from the political changes of the mid-2010s. [ABSTRACT FROM AUTHOR]

The paper investigates the relationship between inflation and unemployment in the South African setting, encompassing a comprehensive analysis of historical, theoretical, and empirical evidence. Existing literature surveys demonstrate that several studies have been conducted in multiple countries to ascertain the correlation between inflation and unemployment. The review incorporated the postulations of many economic schools of thought as they are applied to South Africa. The Phillips Curve was examined in accordance with the research purpose. The process involves gathering secondary data from reputable sources such as Statistics South Africa, the South African Reserve Bank, and other reliable secondary sources to analyse this relationship. The findings are presented using linear regression, tables, and figures. The study utilised annual inflation and unemployment data in South Africa spanning from 2000 to 2022 to elucidate the correlation between inflation and unemployment. The study discovered that the link was nonlinear and did not exhibit any meaningful association or correlation. [ABSTRACT FROM AUTHOR]

In previous papers [Spear and Young (2014, 2015)], we surveyed the origins, evolution, and dissemination of optimal growth, two-sector and turnpike models up to the early 1970s. Regarding subsequent developments in growth theory, a number of prominent observers, such as Fischer (1988), Stern (1991), and McCallum (1996), maintained that after significant progress in the 1950s and 1960s, economic growth theory “received relatively little attention for almost two decades” [Fischer (1988, p. 329)], and that “by the late 1960s early 1970s, research on the theory of growth more or less stopped” [Stern (1991, p. 259)]. Stern went on to say “the latter half of the 1980s saw a rekindling of growth theory, particularly in the work of Romer . . . and Lucas” (1991, p. 259), that is to say, in the form of “endogenous growth” models. McCallum, for his part, wrote (1996, p. 41), “After a long period of quiescence, growth economics has in the last decade (1986–1995) become an extremely active area of research.” Moreover, Brock and Mirman's (1972b) paper was the sole “extension” of Ramsey–Cass–Koopmans to a “stochastic environment” mentioned by McCallum (1996, 49). [ABSTRACT FROM AUTHOR]

Regarding the growth of startups that don't fail within five years of launching, the book chapter notes that, on average, firms that are 1 to 2 years old grow almost by three times as much (12 percent) as firms that are 3 to 4 years old. Secular Decline in U.S. Business Dynamism: Aggregate Impacts of Startups Startups comprise only a small portion of the total number of firms. February 2023, No. 23-06 Startups come in all shapes and sizes. In their counterfactual exercise (holding the economy's startup rate and firm age distribution constant at their 1980 values), the paper's authors find that aggregate productivity over the period 1980 to 2014 could have been 3.1 percent higher. [Extracted from the article]

With the occurrence of the global financial crisis in 2008, the U.S. unconventional monetary policy affected the Chinese market. Based on a monthly data sample from 2008M1 to 2015M12, in this paper we identify U.S. and Chinese monetary policy shocks by using a structural vector autoregression (SVAR) model with multi-external instrumental variables along with principal component analysis (PCA) combined with high-frequency financial market data. The empirical results show that the unconventional monetary policies had a negative effect on China's inflation and output due to the signal effect, and China's stock and commodity markets increased in the short term. During the same period, China's monetary policy had a greater impact on the domestic economy and financial markets. The conclusion of this paper provides a significant reference for relevant departments to make decisions amidst the new wave of unconventional U.S. monetary policies due to the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

The current situation of the Romanian economy must be understood beginning from the analysis of the main measures of fiscal-budgetary policy applied over the last years by the public authority. In general, the Romanian fiscal policy (before and after accession) was procyclical. However, we continue by presenting some of its characteristics for the past years when we underwent the last ascending phase of the economic cycle. Actually, Romania's GDP exceeded constantly the potential level, and the demand surplus became predominant, generating inflationary pressures. Maintaining the expansionist level of the fiscal policy, in the conditions of a positive deviation of GDP, as of 2017, and opting-out regarding the structural deficit target contributed to affecting the stability of public finances, on short-and medium-term. Romania entered into an extremely difficult economic context, generated by the pandemic, with an extremely narrow fiscal space which limited a lot the possibilities of combating the effects of the pandemic. In this paper we analyzed a period limited to the year 2020, because we consider this time as marking the end of an economic cycle in a period of peace and economic calm, as another is about to begin based on the new realities. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to estimate a statistical model of the country risk determination as represented by the country price earnings ratio (PE) to identify potentially mispriced countries. It uses the gross domestic product (GDP) growth rate and a dummy indicator for market-related events (i.e. financial crises), both approximating the business cycle. The model is used to compare a major Asian country's (i.e. Japan) risk with Western countries' risk. Design/methodology/approach: The model used finance variables such as the systemic, non-diversifiable, risk and foreign direct investments to characterize any country risk. A random effects model with panel data estimated the effects of macroeconomic and financial variables on PE. The simultaneity problem was checked using two stage least squares and some lagged independent variables. Findings: The results explained to investors the country risk contributing factors: PE was positively correlated with variables that may increase dividends and market risk premia similar to GDP growth rates and total risk and negatively correlated with variables that increase market risk, namely, nominal risk-free interest rates and financial crises. Japan's PE seemed to exceed most of the Western countries considered here, implying lower risks, lower interest rates and higher growth in the major Asian country Japan. Originality/value: This paper focuses on the effectiveness of country risk measures in predicting periods of intense instability, similar to financial crises. This study contributes a model to measure market risk premium, using PE (or inversely, the earnings yield) as a proxy variable. Investors can use this risk measure in picking less risky stocks to include in their portfolio, calling for liberalizing Asian countries' financial markets to improve their stock market capitalization. [ABSTRACT FROM AUTHOR]

Purpose: The literature mostly investigates the business cycle transmission of the United Kingdom (UK) and France as a part of a wider group (e.g. European Exchange Rate Mechanism or G7), despite their historical links and regional significance. Thus, herein paper aims to analyse the inter-dependence of these economies and how a shock from one of them affects the other for the data since 1978 to 2019. Design/methodology/approach: In this paper, first, preliminary statistics were calculated in order to describe the historical relationship between these countries. The econometric part estimates the vector auto-regression model (VAR) to assess the inter-dependence of the economies. VAR model allows further to inspect the impulse response functions that shows the shock dynamics from one country to another. In order to verify if a shock from one of the economies is important to another, the study uses granger causality test. Findings: The study establishes a strong link between these countries. A business cycle is transmitted significantly between the economies of France and UK, with a single standard deviation shock from France resulting in a long term effect of 0.4% change in gross domestic product (GDP) of UK and 1% vice versa. Additionally changes in GDP of both of the countries significantly Granger-cause change to GDP of the corresponding economy. Originality/value: This is the first empirical study investigating the business cycle transmission between France and UK and providing a quantitative assessment of their inter-dependence. [ABSTRACT FROM AUTHOR]