scholarly journals THE FALLACY OF FISCAL DISCIPLINE

2018 ◽  
Vol 24 (1) ◽  
pp. 55-68 ◽  
Author(s):  
Paolo Canofari ◽  
Alessandro Piergallini ◽  
Giovanni Piersanti
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Real Interest Rate ◽  
Policy Implications ◽  
Flow Variable ◽  
Fiscal Discipline ◽  
Transversality Conditions ◽  
Sustainability Index ◽  
Endogenous Growth Model ◽  
Debt Policy

Fiscal discipline is commonly evaluated on the basis of the debt–gross domestic product ratio, which exhibits a stock variable measured relative to a flow variable. This way of monitoring debt solvency is arguably not consistent with transversality conditions obtained from optimizing macroeconomic frameworks. In this paper, we consider a wealth-based sustainability index of government debt policy derived from a baseline endogenous growth model. We calculate the index from 1999 onward for countries in which the after-growth real interest rate is positive, consistently with the theoretical setup. Results are radically different from common wisdom. We show that the fiscal position is sustainable for both Germany and Italy, and strongly unsustainable for both Japan and France. Policy implications of our findings are discussed.

Impacts of Real Depreciation and Appreciation on Aggregate Output in Taiwan

2018 ◽  
Vol 65 (1) ◽  
pp. 123-130
Author(s):  
Yu Hsing
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Stock Price ◽  
Real Interest Rate ◽  
Jel Classification ◽  
Oil Price ◽  
Real Gross Domestic Product ◽  
Real Gdp ◽  
Expected Inflation ◽  
Deficit Spending

Extending the IS-MP-AS model, this article finds that real depreciation helped to raise real gross domestic product (GDP) during 1999.Q1-2010.Q2 whereas real appreciation helped to increase real GDP during 2010.Q3-2016.Q4. In addition, a lower world real interest rate, a higher stock price, a higher real oil price or a lower expected inflation would increase real GDP. More deficit spending as a percent of GDP does not affect real GDP.JEL Classification: F41, E62

scholarly journals Retail Space for Rent! Macroeconomic Determinants of Shopping Complex Occupancy Rate

2021 ◽  
Vol 21 (1) ◽  
pp. 268-284
Author(s):  
Shan-Shan Goh ◽  
Tuck-Cheong Tang ◽  
Alex Hou-Hong Ng
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Open Economy ◽  
Inflation Rate ◽  
Positive Impact ◽  
Small Open Economy ◽  
Policy Implications ◽  
Occupancy Rate ◽  
Causality Tests ◽  
Macroeconomic Determinants

This study proposes anad hoc equationwhich isapplied to estimatethe impactsof macroeconomic variableson occupancy rate of shopping complex. Thecandidatemacroeconomic determinantsare interest rate, inflation rate, share priceand Gross Domestic Product (GDP), whileasupply-sidevariable, total spaceis included.Using quarterly databetween 1992and 2015 froma small open economy-Malaysia, this study findsthat interest rate,and GDP both havea positive impact on shopping complex’s occupancy rate, and total space of shopping complex shows anegative sign.The non-causality tests offer that inflation rate indirectlycauses the occupancy rate of shopping complex. This study highlights somerelevant policy implications.

scholarly journals THE IMPACT OF MACROECONOMIC DETERMINANTS ON COMMERCIAL BANK PROFITABILITY IN CENTRAL AND SOUTHEASTERN EUROPEAN COUNTRIES

TEME ◽  
2021 ◽  
pp. 1391
Author(s):  
Branimir M. Kalaš ◽  
Vera Mirović ◽  
Nada Milenković ◽  
Jelena Andrašić
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Real Interest Rate ◽  
Panel Study ◽  
Random Effect ◽  
Random Effect Model ◽  
European Countries ◽  
Domestic Product ◽  
Bank Profitability ◽  
The Impact

The purpose of this paper is to investigate the impact of macroeconomic variables on bank profitability indicators in Central and Southeastern European countries (CESE). The research sample includes 13 countries of CESE countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Hungary, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia and Slovenia, for the period 2008-2015. The core idea is to empirically evaluate the impact of the main macro indicators, such as gross domestic product, inflation and the real interest rate on bank profitability and their potential relationship. The subject of this paper applies a two-step model: model 1 includes return on asset (ROA), while model 2 includes return on equity (ROE) as the dependent variable. On the other hand, independent variables are gross domestic product (GDP), inflation (INF) and real interest rate (RIR). The results of the panel study indicate that there is a significant effect of GDP and INF on bank profitability indicators in selected countries. Namely, the 1% increase in GDP and INF rise ROA for 0.47% and 0.48%, where inflation has a greater influence on ROA and ROE compared to GDP. The results of the random effect model show that the 1% increase in GDP and INF raise ROE for 0.49% and 0.42%. Likewise, real interest rate has no significant effect on ROA and ROE in selected countries. Based on empirical findings, policymakers should focus on rapid economic growth with controlled inflation that will enhance bank profitability in Central and Southeastern European countries.

Revisiting real interest rate parity in Central and Eastern European countries: The Sequential Panel Selection Method

2014 ◽  
Vol 64 (2) ◽  
pp. 181-196 ◽  
Author(s):  
Hsu-Ling Chang
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Real Interest Rate ◽  
Selection Method ◽  
Policy Implications ◽  
Eastern European ◽  
Interest Rate Parity ◽  
Real Interest Rate Parity ◽  
Rate Parity ◽  
Eastern European Countries

This study uses the Sequential Panel Selection Method (SPSM) proposed by Chortareas and Kapetanios (2009) to investigate the non-stationarity properties of real interest rates in 12 Central and Eastern European (CEE) countries. We are thereby able to test the validity of real interest rate parity (RIRP) among these countries. The SPSM can be used to decompose a panel of real interest rate series into two groups: a group of stationary series and a group of non-stationary series. We identify the stationary processes in the panel and demonstrate that RIRP holds for 10 of the 12 countries studied. Our findings show that real interest rate convergence among these 10 countries exhibits non-linear mean reversion toward RIRP equilibrium. The results have important policy implications for the CEE countries studied.

scholarly journals The Relationship of Interest Rate, Exchange Rate, GDP and FDI with Respect to Chinese Economy

2019 ◽  
Vol 8 (11S2) ◽  
pp. 273-277
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Exchange Rates ◽  
Real Interest Rate ◽  
Emerging Market ◽  
Chinese Economy ◽  
Domestic Product ◽  
The Future ◽  
Trading Partners ◽  
The Impact

Economic growth can be described as the boom in purchasing power of a country in offering the economic goals of its population. China is the major emerging market in Asia. Late 1970's China has gone through major economic reform, which leads them to the fastest developing country in the world. In this article, the Analyzer attempted to become aware of the impact of FDI, Real Interest Rate, Exchange rates and Gross Domestic Product (GDP) with respect to each other. Chinese GDP is greater than 10% over 30 years constantly. The researcher attempted to find the scope of the future boom of China and the global economic system, taken into consideration the current financial slowdown of China, the new economic interdependence between China and its trading partners created a variety of problems and so raised many issues that require further study the future of Chinese economy, also studied the china’s success story by comparing FDI, real interest rate, exchange rates and Gross Domestic Product for different developing countries to drive their economies by means of following Chinese model.

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