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This paper discusses the scope for international macroprudential policy coordination in a financially integrated world economy. It begins with a review of the transmission channels associated with, and the empirical evidence on, financial spillovers and spillbacks. Limitations of the existing literature are also identified. The potential gains associated with cross-border macroprudential coordination, dwelling on both recent analytical contributions and quantitative studies based on multi-country models with financial frictions, are then evaluated. The issue of whether coordination of macroprudential policies simultaneously requires some degree of monetary policy coordination is also discussed. The analysis focuses on the potential for policy coordination between major advanced economies and a group identified as systemically-important middle-income countries (SMICs). Next, practical ways to promote international macroprudential policy coordination are considered. Following a discussion of Basel III's Principle of reciprocity and ways to improve it, the paper advocates a further strengthening of the current statistical, empirical and analytical work conducted by international financial institutions to evaluate, and raise awareness of, the gains from international coordination of macroprudential policies. [ABSTRACT FROM AUTHOR]

The COVID-19 has impacted the social economy of various provinces in China to varying degrees. How to quickly restore the social economy has become the most concerned issue of the Party, the country and all sectors of society. This paper combines the entropy weight method and TOPSIS method-technique for order performance by similarity to ideal solution, taking the financial policy transmission mechanism as the theoretical basis, and selects the data of 29 provinces in China to obtain the contribution of finance in the socio-economic resilience under the pandemic situation. The empirical analysis results show that the weights of financial policy, pandemic situation and financial basis are different. It can be clearly seen from the weight data that the financial basis is crucial to the socio-economic resilience. Although the COVID-19 pandemic will cause huge losses to the whole society and will also seriously hinder the socio-economic recovery, the effective implementation of financial policies and the good trend of the pandemic situation have a significant promoting effect on the socio-economic recovery. [ABSTRACT FROM AUTHOR]

This paper develops an estimated New Keynesian model of a commodity-exporting economy for an integrated policy framework, integrating the full range of policies used in practice and featuring a range of nominal and real rigidities, macro-financial linkages, and transmission channels of external shocks. We jointly examine the optimal conduct of conventional and unconventional monetary policies, macroprudential policy, foreign exchange intervention, capital flow management, and fiscal policy based on the model. The policy analysis framework is applied empirically to Mongolia, a small open and developing economy highly dependent on imports and commodity exports. We find that an eclectic policy mix improves policy trade-offs and a lack of cooperation among policy authorities may result in conflicting policies, hence suboptimal results for overall economic stability. Our optimal policy analysis shows that policy mix adjustments should differ depending on the type of shocks and the policy objectives. The results suggest that the policy analysis framework can help policymakers choose their policy mix adjustments to deal with external shocks in an integrated and optimal way. [ABSTRACT FROM AUTHOR]

In this paper, we first show the importance of financial inclusion for poor households for the economy. We also study the impact of the social planner financial policy that helps offset entrepreneurs' credit risk exposure and guarantee greater inclusion. We estimate one-country GIMF-DSGE model with financial accelerator based on Ivory Coast's economy, which is a developing country where financial inclusion for households and businesses still remains a major challenge for policy makers. First, in response to monetary, technology and investment demand shocks, poor households' consumption rises. This results in an increase in total consumption and output. Further, the quantitative magnitudes of these aggregates are higher when poor households have access to credit. Second, while the planner policy is zero in normal times, it rises during the financial crisis. Further, the macroprudential policy works to reduce the external finance premium. As a result, bank credit and investment increase. Without monitoring, entrepreneurs are subject to risk, whereas introducing the regulation mitigates their credit risk exposure, as leverage declines. Lastly, regulation usefully complements monetary policy and is realized to be welfare improving. [ABSTRACT FROM AUTHOR]

This paper combines the Cobb-Douglas (CD)with the method of Data Envelopment Analysis and Analytic Hierarchy Process(DEA-AHP) and applies it to the input efficiency evaluation of fiscal and taxation policies. Based on the input of the number of fiscal policy items and the output model design of transformation and upgrading, the overall efficiency of fiscal policy is calculated by the method of Data Envelopment Analysis and Analytic Hierarchy Process. It turns out that the overall efficiency of fiscal and taxation policies is 0.397, and the efficiency of pure policy factors is 0.616. There is a difference in input efficiency between preferential tax policies and fiscal subsidy policies. Tax preferential policy has insufficient investment, and financial subsidy has investment redundancy. Furthermore, the absolute value of tax incentives and financial subsidies are introduced into the CD Function to calculate the contribution rate, and the government and enterprise factors that are not effective in the efficiency of fiscal and taxation policies are attempted to be separated. As a result, it is found that the contribution rate of financial subsidies is weakly negatively correlated. It shows that the conversion rate of enterprises to the financial subsidy policy is low, and the tax preference policy has a better conversion rate. The results of the study reveal that the scope and intensity of tax optimization needs to be increased at the government level, and the utilization of fiscal subsidy policies needs to be improved at the enterprise level. The government should reduce financial subsidies and establish a universal tax preferential policy system. [ABSTRACT FROM AUTHOR]

The quake of the financial crisis has restored macroprudential policy as an apparent policy paradigm to minimize financial risk; however to a great extent, its impact depends on different externalities including country governance. Therefore, this paper aims to explore the joint impact of macroprudential policies (MPPs) and quality of country governance (CG) on financial risk (FR) for a panel of 124 countries covering the period 2000–2017. To attain this objective, we use directed acyclic graph to decide our model, construct indices for FR and governance by principal component analysis, investigate the impact of CG and MPPs at different quantiles of FR and explore their nonlinear relationship by panel threshold model. Besides, we also apply two-stage least squares (2SLS) and system GMM to address the endogeneity of the estimation. Our results show that both CG and MPPs are effective to minimize financial exposures and their effectiveness increases with higher FR, though after certain level, governance moderates the effect of MPPs on FR. Overall, we find MPPs are more effective in emerging economies and in normal time, whereas during crisis they are found less effective. Our findings are robust to alternative measures of risk and control variables and different econometric tests, which could be useful for policy makers to formulate MPPs, minimize financial risk and to maintain financial stability. [ABSTRACT FROM AUTHOR]

In the presence of lenders' wrong perception of collateral quality, haircuts help to reduce the excessive financing costs due to the gap between lenders' perceived and actual risk. We study the credit cycles driven by the dynamic interaction between the terms of the collateralized loan contracts and lenders' beliefs. Risky loans are more sensitive to collateral quality information than safe loans because defaults reveal the information about collateral quality. Endogenously determined information revelation can explain the increases in haircuts during the recent financial crisis and the positive relationship between the long quiet period and the impact of the crisis. The asymmetry between boom and bust dynamics can explain the difference in the opacity of collateralized loan contracts, the asymmetric impacts of revealed good and bad news, and can help to predict financial crises. A macroprudential policy of setting a minimum haircut can reduce output fluctuation, and a policy combining a minimum haircut and a collateral insurance can both stabilize the economy and further improve social welfare. [ABSTRACT FROM AUTHOR]

This research examines the impact of personal norms, perceived value, perceived behavioural control, financial incentive policies, and subjective norms on the behavioural intention to adopt electric vehicles (eVehicles) in India. This study further validates the impact of actual use on sustainability dimensions, namely perceived environmental, social, and economic impacts. Data were gathered using a self-administered questionnaire from EV users in India. The sample comprised 487 respondents who used eVehicles. Structural equation modelling (SEM) was applied to assess and validate the hypothesized relationships. The results indicate that personal norms positively impacted behavioural intention to adopt eVehicles. However, the financial incentive policy is insignificant. Because of the intricate relationships between diverse socio-psychological components allied with the purchase of eVehicles, this study validates norm activation theory (NAM) and theory of planned behaviour (TPB) as theoretical undertakings to arrive at a holistic model. [ABSTRACT FROM AUTHOR]

Online reviews of a firm may come from diverse sources including real customers, competitors, and the firm itself. Review manipulation by posting fake negative reviews about competitors or fake positive reviews oneself has major impacts on product sales and firm reputation. This study aims to answer the question of whose reviews are most valuable for predicting a firm's default risk. To uncover the value of manipulated and authentic reviews in firm default risk prediction, we conduct an empirical analysis using unique weekly panel data from a third-party portal of online peer-to-peer lending platforms in China. The results indicate that firm default probability increases with the number of manipulated positive reviews in the short term but decreases with the number of manipulated positive reviews posted over the long term. In addition, the signaling role of manipulated positive reviews is stronger when the peer-to-peer lending platform experiences more intense pressure such as downturn of business performance, stricter financial regulation policies, or aggressive attacks from competitors. Manipulated negative reviews are harmful for peer-to-peer lending platforms, which will increase the probability of platform default. Finally, authentic positive reviews are positively associated with default due to the overconfidence effect in the online lending context, and the authentic negative reviews in the short term work as a significant signal for fraud risk. [ABSTRACT FROM AUTHOR]

Even though China has mapped out different policies targeting the mitigation of its environmental degradation, the country still occupies the 1st position in the ranking of carbon emissions due to excessive utilization of non-renewable energy sources in its domestic economic activities. From a theoretical and empirical point of view, factors like economic growth, financial development, export diversification, technological innovation, and renewable energy can be considered to play a vital role in environmental quality. Therefore, this study exposes the environmental performance of China amidst export diversification, financial development, innovation, and clean energy use. Due to the non-availability of data, the annual data of China are converted to quarterly data from 1995Q1 to 2018Q4, and autoregressive distributed lag-(ARDL) and Granger causality approaches are adopted in this study for quantitative and insightful analysis. The findings from both approaches expose the environmental implications of the selected variables (renewable energy, financial development, technological innovation, and export diversification) to China's sustainable development. ARDL approach has confirmed the inverted U-shaped link between financial development and emissions of carbon for China, a negative link between renewables, technologies, and carbon emissions, and a direct association exists between the diversification of export, economic growth, and emissions of carbon. This pattern points toward mitigating environmental dilapidation with renewable energy, technology, and financial development. The Granger causality output lends support to the ARDL findings; hence, a policy initiative that will promote the renewable energy sector and technological innovation through financial programs is advised. [ABSTRACT FROM AUTHOR]

Introduces four symposium papers on the topics of union money, political action, and government regulation of unions in the United States. How Congress has legislated union compliance with minimal democratic operating procedures, imposed fiduciary responsibilities on union officers and mandated the public disclosure of extensive information on union finances; The nexus between union democracy and political democracy; Controversy over the adequacy of government regulation of union finances.

This study investigates the impact of macroprudential policies on ecological footprint (EF) in the top 11 largest countries. This study uses country-level panel data from these countries, covering the period from 1992 to 2020. Findings indicate that macroprudential policies alleviates ecological footprint in the sample. Macroprudential policies primarily reduce the ecological footprint before medium quantile (50%) while the environmental benefits of the policies end in the later quantiles. Moreover, environmental policy stringency (EPS) amplifies the positive influence of macroprudential policies on environmental sustainability. Estimate results stay the same with basic regression results in the post-global financial crisis (GFC) period while the impact is positive in the pre-GFC period. Finally, other robust tests validate the findings reported in basic regression model. This study suggests that governments should customize various types of macroprudential policies while also considering environmental concerns. The achievement of a sustainable environment can be facilitated by the combined effects of macroprudential policies and EPS. [ABSTRACT FROM AUTHOR]

This study examined the interconnectedness and volatility correlation between cryptocurrency and traditional financial markets in the five largest African countries, addressing concerns about potential spillover effects, especially the high volatility and lack of regulation in the cryptocurrency market. The study employed both diagonal BEKK-GARCH and DCC-GARCH to analyze the existence of spillover effects and correlation between both markets. A daily time series dataset from January 1, 2017, to December 31, 2021, was employed to analyze the contagion effect. Our findings reveal a significant spillover effect from cryptocurrency to the African traditional financial market; however, the percentage spillover effect is still low but growing. Specifically, evidence is insufficient to suggest a spillover effect from cryptocurrency to Egypt and Morocco's financial markets, at least in the short run. Evidence in South Africa, Nigeria, and Kenya indicates a moderate but growing spillover effect from cryptocurrency to the financial market. Similarly, we found no evidence of a spillover effect from the African financial market to the cryptocurrency market. The conditional correlation result from the DCC-GARCH revealed a positive low to moderate correlation between cryptocurrency volatility and the African financial market. Specifically, the DCC-GARCH revealed a greater integration in both markets, especially in the long run. The findings have policy implications for financial regulators concerning the dynamics of both markets and for investors interested in portfolio diversification within the two markets. [ABSTRACT FROM AUTHOR]

The study examines the effect of bank recapitalization and dividend policies on the financial sustainability of rural and community banks (RCBs) in Ghana. Data from 135 RCBs from 2011 to 2020 revealed an average financial sustainability index of 0.525 over the past decade, suggesting that RCBs can finance their operations and liabilities without diminishing shareholder value. Recapitalization and dividend payouts positively impact financial sustainability, with well-capitalized, highly pay-out RCBs showing faster improvements in sustainability compared to those with retention policy. This highlights the importance of RCBs bolstering their capital base, even when not mandated by regulators, to enhance financial sustainability. Furthermore, adopting a relaxed pay-out policy can signal operational efficiency and sustainability to shareholders. [ABSTRACT FROM AUTHOR]

The cryptocurrency market is a complex and rapidly evolving financial landscape in which understanding the inter- and intra-asset dependencies among key financial variables, such as return and liquidity, is crucial. In this study, we analyze daily return and liquidity data for six major cryptocurrencies, namely Bitcoin, Ethereum, Ripple, Binance Coin, Litecoin, and Dogecoin, spanning the period from June 3, 2020, to November 30, 2022. Liquidity is estimated using three low-frequency proxies: the Amihud ratio and the Abdi and Ranaldo (AR) and Corwin and Schultz (CS) estimators. To account for autoregressive and persistent effects, we apply the autoregressive integrated moving average-generalized autoregressive conditional heteroscedasticity (ARIMA-GARCH) model and subsequently utilize the copula method to examine the interdependent relationships between the return on and liquidity of the six cryptocurrencies. Our analysis reveals strong cross-asset lower-tail dependence in return and significant cross-asset upper-tail dependence in illiquidity measures, with more pronounced dependence observed in specific cryptocurrency pairs, primarily involving Bitcoin, Ethereum, and Litecoin. We also observe that returns tend to be higher when liquidity is lower in the cryptocurrency market. Our findings have significant implications for portfolio diversification, asset allocation, risk management, and trading strategy development for investors and traders, as well as regulatory policy-making for regulators. This study contributes to a deeper understanding of the cryptocurrency marketplace and can help inform investment decision making and regulatory policies in this emerging financial domain. [ABSTRACT FROM AUTHOR]

In the developing world, vulnerable communities often lack access to regular income sources to cope with unforeseen events. Recent advancements in financial technology have enabled microcredit to be delivered via digital platforms. Although digital credit may quicken remote access to consumer credit without the need for collateral, little is known about its contribution to the welfare of underserved communities. This study examines the effects of local digital lending development on deprivation and explores the implications of these effects on rural inhabitants. The results show a negative association between local digital lending development and food deprivation on one hand and health deprivation on the other. The evidence suggests that local digital lending development can reduce the probability of food and health deprivation. Furthermore, the evidence reveals that inhabitants of rural communities benefit more from digital lending development. This study recommends the decentralization of financial inclusion policies as a pathway to promote digital lending at the local level. [ABSTRACT FROM AUTHOR]

Economic Policy Uncertainty (EPU) research has grown in importance in today's highly volatile and interconnected economy. This work investigates the relationship between EPU and Financial Stability (FS) (i.e., Z-scores and non-performing loans (NPL)) with the mediating variable of governance quality through a 23-country panel data from 2005 to 2019. The System Generalized Method of Moment (SYS-GMM) is adopted to address the issue of endogeneity, which is common in panel data regression. The two-stage Sequential of the Linear Panel Data Model (SELPDM) was also used to test the robustness of the results. According to the findings, EPU has a significant negative effect on financial stability (measured by the Z-score) and a significant positive effect on financial stability in the banking industry of most developed economies (proxied by NPL). We also discovered that good governance can be used to mitigate the negative effects of EPU on financial stability; however, this influence varies depending on region, bank, and market structure, and it was significantly greater during the global financial crisis. Finally, this study can help financial managers and policymakers develop appropriate policies to understand how banks respond to EPU. [ABSTRACT FROM AUTHOR]

We construct recurrence plots (RPs) and conduct recurrence quantification analysis (RQA) to investigate the dynamic properties of the new Center for Financial Stability (CFS) Divisia monetary aggregates for the United States. In this study, we use the latest vintage of Divisia aggregates, maintained within CFS. We use monthly data, from January 1967 to December 2020, which is a sample period that includes the extreme economic events of the 2007–2009 global financial crisis. We then make comparisons between narrow and broad Divisia money measures and find evidence of a nonlinear but reserved possible chaotic explanation of their origin. The application of RPs to broad Divisia monetary aggregates encompasses an additional drift structure around the global financial crisis in 2008. Applying the moving window RQA to the growth rates of narrow and broad Divisia monetary aggregates, we identify periods of changes in data-generating processes and associate such changes to monetary policy regimes and financial innovations that occurred during those times. [ABSTRACT FROM AUTHOR]

The Basel III regulation explicitly prescribes the use of Hodrick–Prescott filters to estimate credit cycles and calibrate countercyclical capital buffers. However, the filter has been found to suffer from large ex-post revisions, raising concerns on its fitness for policy use. To investigate this problem, we study credit cycles in a panel of 26 countries between 1971 and 2018. We reach two conclusions. The bad news is that the limitations of the one-side HP filter are serious and pervasive. The good news is that they can be easily mitigated. The filtering errors are persistent and hence predictable. This can be exploited to construct real-time estimates of the cycle that are less subject to ex-post revisions, forecast financial crises more reliably, and stimulate the build-up of bank capital before a crisis. [ABSTRACT FROM AUTHOR]

Few studies have investigated agricultural carbon emissions peaks, especially from the financial development perspective. This study focuses on the effects of financial scale and efficiency to achieve an agricultural carbon emissions peak in China's Henan Province. Using an extended STIRPAT model and scenario analysis, we find: (1) with the inverted U-shaped influence mechanism of rural financial scale and incorporating rural financial efficiency, agricultural carbon emissions in Henan will peak at 14.17 million tons in 2040, 12.50 million tons in 2034, and 11.73 million tons in 2023 under the baseline low-carbon, moderately accelerated low-carbon, and stringent low-carbon development scenarios; (2) without financial efficiency improvements, carbon emissions will peak five years, three years, and six years later, and the peak value will increase 0.97 million tons, 0.65 million tons, and 0.30 million tons. Therefore, agricultural carbon emissions will peak earlier with continuous and strong financial policy adjustment to facilitate financial development. We also find that agricultural carbon absorption exceeds emissions, achieving carbon neutrality. The policy implication is that financial development matters to sustainable agricultural development. Developing countries could learn from the financial development experience (i.e., gradual financial reform and a stable financial environment) in Henan and China in general. [ABSTRACT FROM AUTHOR]

I study a college-admissions model with two need-blind colleges and heterogeneous students. In a game in which colleges can choose a financial aid policy and either binding, nonbinding, or no early admissions, a unique equilibrium outcome exists. In equilibrium, the more prestigious and wealthier college is more selective, has a more generous financial aid policy, and offers nonbinding early admissions, whereas the other college offers a binding program. Compared to the counterfactual in which only regular admissions are offered, early admissions make the more prestigious college worse off, the other college better off, and students, in the aggregate, better off. [ABSTRACT FROM AUTHOR]

We study the effects of the adoption of macroprudential policies on income inequality in former transition economies over the period 2002–2014. In general, this adoption leads to rising income inequality; however, the effect depends on the degree of domestic financial development and globalization: for low levels of openness and financial development, they increase inequality. Instead, some macroprudential measures may result in lower income inequality, provided the adopting economy is sufficiently open and has a developed/unrestricted financial system. Our results suggest that reduction in income inequality can be promoted together with financial stabilization and the avoidance of systemic risks. [ABSTRACT FROM AUTHOR]

Import competition has had an enormous impact on the US economy. This paper looks at whether such competition has increased the risk of US firms and is a factor that can partly explain the Fa ma-French disappearing dividends phenomenon. We show that firms facing more import competition do face more uncertainty in their future performance, and are less likely to pay a dividend. Important penetration through a risk channel has significant explanatory power, even after we include a variety of controls suggested in the literature, as well as Herfindahl index that controls for market power. Further, we can explain a significant part of the disappearing dividends phenomenon. Finally, we also find evidence that import competition contributes to the substitution of share repurchases for cash dividends. We are the first to document the impact that increased import competition and “globalization” have had on the dividend policy of US firms. [ABSTRACT FROM AUTHOR]

This study analyses the implications of Jeffery–Lindley's paradox and Global Financial Crisis (GFC) for the operational aspect of macroeconomic policy coordination for financial stability. Using a Bayesian Vector Auto-regressive model and data from Jan 1985 to June 2016, our key findings suggest that the claim of macroeconomic policy interaction, interdependence and significance of coordinated policy operations for the financial stability holds its ground. The argument in the support for policy coordination for financial stability was found to be robust against the Jeffreys–Lindley's paradox and in the Post-GFC era. A profound practical, operational and philosophical implication of this study is the positive aspects of Jeffreys–Lindley's paradox and the possibility of employing the Frequentist and Bayesian estimation techniques as complementing rather competing frameworks. [ABSTRACT FROM AUTHOR]

The complicated economic behavior of entities in a population can be modeled as a Gibbs random field (GRF). Even with simple GRF models, which restrict direct statistical interactions with a small number of neighbors of an entity, real life economic and financial activities may be effectively described. A computer simulator is developed to run empirical experiments to assess different coupling structures and parameters of the presented model; it is possible to test many economic and financial models and policies in terms of their transient and steady-state consequences. [ABSTRACT FROM AUTHOR]