scholarly journals Budget deficits, money growth and inflation: empirical evidence from Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hoang Van Khieu
Keyword(s):  
Interest Rates ◽  
Empirical Evidence ◽  
Money Growth ◽  
Budget Deficits ◽  
Monetary Policies ◽  
Content Type ◽  
High Inflation ◽  
Endogenous Variables ◽  
The Interest Rate ◽  
Positive Shock

PurposeThis paper aims to uncover the nexus between budget deficits, money growth and inflation in Vietnam in the period 1995–2012.Design/methodology/approachThe paper uses a structural vector auto-regressive model of five endogenous variables including inflation, real GDP growth, budget deficit growth, money growth and the interest rate.FindingsIt is found that inflation rose in response to positive shocks to money growth and that budget deficits had no significant impact on money growth and therefore inflation. This empirical evidence supports the hypothesis that fiscal and monetary policies were relatively independent. Money growth significantly decreased in response to a positive shock to inflation; interest rates had no significant effect on inflation but considerably increased in response to positive inflation shocks. This implies that the monetary base was more effective than interest rates in fighting inflation.Originality/valueThis paper sheds light into understanding the link between budget deficits, money growth and inflation in Vietnam during the high-inflation period 1995–2012. The finding supports the hypothesis that fiscal and monetary policies were relatively independent over the period.

Hungarian economy will face post-election challenges

2018 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Fourth Quarter ◽  
Output Gap ◽  
Gdp Growth ◽  
Regional Economies ◽  
Budget Deficits ◽  
Monetary Policies ◽  
Content Type ◽  
Low Levels

Subject The next government's economic prospects. Significance If, as is likely, the Fidesz party wins a third term in office in April, it will look to capitalise upon the upturn in GDP growth in 2017. After stronger-than-expected growth acceleration in the fourth quarter, which is likely to have closed Hungary's output gap, Fidesz may favour loose fiscal and monetary policies to support the economy after the election. Impacts The central bank is expected to hold interest rates at historically low levels well into 2019. GDP is likely to grow as fast in 2018 as in 2017, as Hungary consolidates its position as one of the fastest-growing regional economies. If Fidesz keeps fiscal and monetary policies loose for longer than expected next year, larger budget deficits are likely.

scholarly journals The US shale oil production, market forces and the US export ban

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ilayda Taneri ◽  
Nukhet Dogan ◽  
M. Hakan Berument
Keyword(s):  
New York ◽  
Interest Rates ◽  
Empirical Evidence ◽  
Oil Production ◽  
Shale Oil ◽  
The Novel ◽  
Content Type ◽  
Dynamic Relationship ◽  
The Us ◽  
Positive Shock

Purpose The purpose of this paper is to use the novel data from the primary vision to determine the main financial and economic drivers of this revolutionary shale oil production and how these drivers changed after 2016 when the US removed its oil-exporting ban. Design/methodology/approach In this paper, the authors use the vector autoregressive model to assess the dynamic relationships among the Frac Count (FSCN) from the primary vision and the set of financial/macro-economic variables and how this dynamic relationship is altered with the effects of the US export ban before and after the lifting of the export ban. Findings The empirical evidence reveals that a positive shock to New York Mercantile Exchange, Standard and Poor’s 500, rig count, West Texas Intermediate or the US ending oil stocks increase the FSCN but higher interest rates and oil production decrease the FSCN. After the US became one of the major oil producers, it removed its crude export ban in December 2015. The empirical evidence suggests that the shale oil industry gets more integrated with the financial system and becomes more efficient in its production process in the post-2016 era after the export ban was removed. Originality/value The purpose of this paper is to use the novel data from the primary vision to determine the main financial and economic drivers of this revolutionary shale oil production and how these drivers changed after 2016 when the US removed its oil-exporting ban.

scholarly journals Spillovers of US Conventional and Unconventional Monetary Policies to Russian Financial Markets

2018 ◽  
Vol 10 (2) ◽  
pp. 14 ◽  
Author(s):  
Shigeki Ono
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Stock Prices ◽  
Monetary Policy Shocks ◽  
Federal Funds Rate ◽  
Monetary Policies ◽  
Endogenous Variables ◽  
Policy Shocks ◽  
Monetary Policy Shock

This paper investigates the spillovers of US conventional and unconventional monetary policies to Russian financial markets using VAR-X models. Impulse responses to an exogenous Federal Funds rate shock are assessed for all the endogenous variables. The empirical results show that both conventional and unconventional tightening monetary policy shocks decrease stock prices whereas an easing monetary policy shock does not increase stock prices. Moreover, the results suggest that an unconventional tightening monetary policy shock increases Russian interest rates and decreases oil prices, implying reduced liquidity in international financial markets.

The effect of FDI on domestic investment and economic growth case of three Maghreb countries

2019 ◽  
Vol 61 (1) ◽  
pp. 91-105 ◽  
Author(s):  
Walid Ali ◽  
Ali Mna
Keyword(s):  
Economic Growth ◽  
World Bank ◽  
Design Methodology ◽  
Domestic Investment ◽  
Content Type ◽  
The World Bank ◽  
Endogenous Variables ◽  
The Interest Rate ◽  
Investment Growth

PurposeThe purpose of this study is to show how foreign direct investment (FDI) affects domestic investment and economic growth. This study empirically examines this question in the case of three developing countries (Tunisia, Algeria and Morocco).Design/methodology/approachUsing the GMM estimator technique, the authors constructed a system with simultaneous equations by three endogenous variables: economic growth (GDP), FDI and domestic investment (DI).FindingsThe study was a nuance, its results, at the role of investment–growth relationship, are of paramount importance though subtle and slightly different.Originality/valueThe authors used data from international institutions such as the IMF, UNCTAD, OECD and the World Bank for macroeconomic aggregates. However, the interest rate variables are derived from the central banks of the three countries in the sample. The analysis covers the period from 1980 to 2014.

Central bank action will drive global equity markets

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Equity Markets ◽  
Economic Data ◽  
Equity Prices ◽  
Monetary Policies ◽  
Content Type ◽  
Market Sentiment ◽  
The Us ◽  
Us Monetary Policy

Significance This volatility is driven by expectations of further monetary stimulus in response to a slowing economy. Despite persistent concerns about the fallout from the anticipated tightening in US monetary policy and many country-specific risks, such as the standoff between Greece and its creditors, equity market sentiment remains supported by accommodative monetary policies worldwide and expectations of the US monetary policy tightening being gradual. Impacts Market volatility could increase further, as better-than-expected economic data in the euro-area vies with weaker-than-anticipated US data. Decoupling of surging equity prices and weak economic fundamentals threatens the rally's sustainability, increasing scope for volatility. This decoupling is most pronounced in China, where weak economic data prompt buying of equities in anticipation of stimulus measures. The greatest risk in equity markets is uncertainty surrounding US interest rates and their impact on emerging markets.

scholarly journals Economic Growth, Inflation, and Monetary Policy in Pakistan: Preliminary Empirical Estimates

2005 ◽  
Vol 44 (4II) ◽  
pp. 961-974 ◽  
Author(s):  
Ahmed M. Khalid
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Interest Rates ◽  
Global Market ◽  
Sustainable Growth ◽  
Budget Deficits ◽  
Fiscal Discipline ◽  
Policy Regime ◽  
Macroeconomic Imbalances ◽  
High Inflation

The recent increase in financial market volatility and the increased surge within developing world to become part of the global market have posed several challenges for policy-makers in the emerging markets to decide on a policy regime— monetary or exchange rate—that suits their needs and could also provide stability to the financial system. In view of the macroeconomic characteristics of these emerging economies, the choice of an appropriate policy becomes important to achieve certain targets such as sizeable domestic and foreign investment, reduced reliance on external borrowings, fiscal discipline, etc. These would require both price and exchange rate stability and country’s ability to deal with external shocks to maintain and achieve sustainable economic growth. Pakistan is no different and until recently had a history of macroeconomic imbalances with extremely high foreign (as well as domestic) debt, high budget and current account deficits, extremely low international reserves, high inflation, high nominal interest rates and low economic growth. The average economic growth over 40 years is around 4 percent. The main focus of any policy has been to achieve a sustainable growth pattern. However, due to a number of macroeconomic imbalances such as high budget deficits, extremely high indebtedness, low savings and investment rates, lack of fiscal discipline, undeveloped financial markets, unstable exchange rates along with high population growth and huge defence expenditure made this task almost impossible. Some of these macroeconomic imbalances contributed to episodes of high inflation and unemployment that the country experienced during most of the period since independence.

Yen surge to question global monetary easing's effects

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Central Banks ◽  
Recent Improvement ◽  
German Government ◽  
Monetary Policies ◽  
Government Bonds ◽  
Content Type ◽  
Negative Interest Rates ◽  
The Us ◽  
Fiscal Support

Significance Despite aggressive easing by both the Bank of Japan (BoJ) and the ECB, including negative interest rates, the lowering of expectations over the scale and pace of rate hikes by the US Federal Reserve (Fed) has negated their attempts to weaken their currencies and thus boost export-driven growth. This is heightening concern that ultra-loose monetary policies have passed the point where they can revive growth and inflation. Impacts Despite the recent improvement due to the oil price rebound since mid-February, sentiment towards EM currencies will remain fragile. The still strong demand for 'safe-haven' assets, such as German government bonds and gold, implies investors will remain cautious. Negative deposit rates will further undermine banks' earnings, amid persistent concerns about capital levels. Central banks will reach the limits of their capacity to promote growth without fiscal support from governments.

Rising intra-firm corporate debt poses stability risks

2019 ◽  
Keyword(s):  
Interest Rates ◽  
Emerging Economies ◽  
Student Loan ◽  
Monetary Policies ◽  
Content Type ◽  
Credit Booms ◽  
Emerging Nations ◽  
Advanced Economies ◽  
Low Interest Rates ◽  
Structured Financial Products

Subject Global debt risks. Significance Global indebtedness is slowly declining -- down to 234% of GDP in 2018, after rising from 202% of GDP in 2008 to peak at 245% of GDP in 2017. The drop is consistent across the household, corporate and government sectors in both advanced and emerging economies. Ultra-low interest rates and abundant liquidity provided by unconventional monetary policies drove the increase in advanced economies. Expansionary domestic policies, subdued inflation and liquidity from advanced economies searching for yield encouraged emerging economies' indebtedness. Impacts Research shows that only 33% of credit booms end in crisis, but deleveraging in most major economies will nonetheless dampen growth. High-risk structured financial products and lending by ‘shadow’ non-bank channels has surged, raising the risk of panic in a downturn. Global average household debt is moderate, but pockets of risk include nations with booming property prices or student loan markets. In low-to-lower-mid-income emerging nations, exchange rate risk is very high as 80% of cross-border loans are dollar-denominated. Fears about China risk masking other nations; debt-to-GDP in other emerging economies is growing faster than advanced nations' debts.

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