Brazil impeachment battle will do short-term damage

2015 ◽  
Keyword(s):  
Financial Markets ◽  
First Year ◽  
Real Economy ◽  
Short Term ◽  
Content Type ◽  
The Real ◽  
The Government ◽  
Legal Grounds ◽  
Deep Recession ◽  
Foregone Conclusion

Significance This comes near the end of a tremendously challenging first year of Rousseff's second term, marked by collapsing popularity, mass protests and deep recession. However, impeachment is far from a foregone conclusion. The legal grounds are unclear and the government seems more likely than not to have enough congressional support to stave off the process. Indeed, the timing could increase the odds that Rousseff will complete her term. Impacts Financial markets will be especially volatile in the coming months. At best, a recovery in the real economy will not start before late 2016 or even 2017. Nevertheless, impeachment turbulence could gradually lead to more stable politics.

Dynamic lag structure of deposits and loans interest rates and business cycles formation

2017 ◽  
Vol 25 (2) ◽  
pp. 114-132
Author(s):  
Bijan Bidabad ◽  
Abul Hassan
Keyword(s):  
Interest Rate ◽  
Business Cycles ◽  
Interest Rates ◽  
Banking System ◽  
Real Economy ◽  
Short Term ◽  
Structural Dynamic ◽  
Content Type ◽  
The Real

Purpose This paper aims to study the structural dynamic behaviour of the depositors, banks and investors and the role of banks in the business cycles. The authors test the hypothesis: do banks’ behaviour make oscillations in the economy via interest rate? Design/methodology/approach The authors dichotomized banking activities into two markets: deposit and loan. The first market forms deposit interest rate, and the second market forms credit interest rate. The authors show that these two types of interest rates have non-synchronized structures, and that is why money sector fluctuation starts. As a result, the fluctuation is transferred to the real economy through saving and investment functions. Findings The empirical results show that in the USA, the banking system creates fluctuations in money and real economy, as well as through interest rates. Short-term interest rates had complex roots in their characteristic, while medium and long-term interest rates, though they were second-order difference equations, had real characteristic roots. However, short-term interest rates are the source of oscillation and form the business cycles. Research limitations/implications The authors tested the hypothesis for USA economy, while it needs to be tested for other economies as well. Practical implications The results show that though the source of fluctuations in the real economy comes from short-term interest rates, medium- and long-term interest rates dampen real economy fluctuations and also work as economic stabilisers. Originality/value Regarding the applied method, the topic is new.

Russia to survive but not thrive on current sanctions

2018 ◽  
Keyword(s):  
Real Economy ◽  
Content Type ◽  
The Real ◽  
Russian Economy ◽  
The Government ◽  
Trickle Down

Significance The government insists it can ride out broader US and EU sanctions dating from 2014, a view supported by the Standard & Poor's (S&P) rating agency's July assessment that the Russian economy is strong enough to withstand new sanctions. Impacts While its food import ban will continue, Russia's ability to hit back with further counter-sanctions is limited. Sectoral sanctions against banks will trickle down to the real economy, impeding its expansion. Pro-Western, liberal voices will be marginalised as long as sanctions are in place.

U.S. Financial Markets Growth and the Real Economy

2013 ◽  
Author(s):  
Claire Y. C. Liang ◽  
David McLean ◽  
Mengxin Zhao
Keyword(s):  
Financial Markets ◽  
Real Economy ◽  
The Real

Florida voters react to Biden's Caribbean policy

2021 ◽  
Keyword(s):  
Disaster Relief ◽  
Electoral Politics ◽  
The State ◽  
Pivotal Role ◽  
Economic Recovery ◽  
Short Term ◽  
Content Type ◽  
Family Connections ◽  
The Caribbean ◽  
The Government

Significance Many areas of the Caribbean have trade, investment and family connections with communities in Florida. As the state now plays a pivotal role in US electoral politics, crises in the region can take on added political importance for parts of Florida’s electorate. Impacts Forecasts of short-term economic recovery for Florida remain highly uncertain given the continuing impact of the pandemic. Clashing interests across the Caribbean may demand greater coordination of US policy than the government can currently offer. Healthcare and disaster relief capabilities within the state are severely overstretched and could be overwhelmed by a new crisis.

Indonesia’s new investment ministry faces headwinds

2021 ◽  
Keyword(s):  
Central Bank ◽  
Foreign Investment ◽  
Short Term ◽  
Sovereign Wealth Fund ◽  
Content Type ◽  
Speed Up ◽  
The Government ◽  
Roll Out

Significance The government hopes greater domestic and foreign investment can help turn around the pandemic-hit economy. The governor of Bank Indonesia (BI), the central bank, last week said GDP should grow by 4.6% in 2021, compared with last year’s 2.1% contraction. Impacts Indonesia will count on private vaccination, whereby companies buy state-procured jabs for their staff, to help speed up its roll-out. The Indonesia Investment Authority, a new sovereign wealth fund, will prioritise attracting more investment into the infrastructure sector. Singapore will continue to be Indonesia’s largest source of FDI in the short term.

Dynamic interactions between stock markets and the real economy

2016 ◽  
Vol 11 (4) ◽  
pp. 715-746 ◽  
Author(s):  
Nikiforos T. Laopodis ◽  
Andreas Papastamou
Keyword(s):  
Economic Development ◽  
Stock Market ◽  
Methodological Approach ◽  
Financial System ◽  
Cointegration Analysis ◽  
Policy Implications ◽  
Real Economy ◽  
Dynamic Interactions ◽  
Content Type ◽  
The Real

Purpose The purpose of this paper is to re-examine the relationship between a country’s aggregate stock market and general economic development for 14 emerging economies for the period from 1995 to 2014. Design/methodology/approach The methodological approach of the paper is multifold. First, the authors use cointegration analysis to determine the simple dynamics among the variables. Second, the authors utilize vector autoregression analysis to study the dynamics among the variables for the 14 countries. Third, the authors employ panel analysis to determine common variations among the variables and across countries. Findings When examining the linkage between the stock market and economic development, proxied by gross domestic product growth or with gross fixed capital formation growth, the authors did not find a meaningful relationship between them. However, when the authors included additional control variables strong, dynamic interactions between the two magnitudes surfaced. Specifically, it was found that the stock market is positively and robustly correlated with contemporaneous and future real economic development and, thus, it directly contributed to a country’s economic development either through the production of goods and services or the accumulation of real capital. Thus, it can be inferred that the stock market alone is not capable of boosting economic development in these countries unless being part of a comprehensive financial system (which includes banks) as well as investment in real capital. Research limitations/implications The policy implications are clear. Government authorities must recognize that the stock market alone is not a driver of economic development and that a sound, efficient financial system (which includes banks) must be present in order to contribute and foster economic development. Originality/value The study is original in the sense that it examines various financial and economic variables to determine the degree of (or dynamic interactions among) the stock market and the real economy for each and all emerging markets in the sample.

scholarly journals Financial Markets, the Real Economy, and Self-fulfilling Uncertainties

2018 ◽  
Author(s):  
Jess Benhabib ◽  
Xuewen Liu ◽  
Pengfei Wang
Keyword(s):  
Financial Markets ◽  
Real Economy ◽  
The Real

Norway’s new government will favour continuity

2021 ◽  
Keyword(s):  
Financial Markets ◽  
Climate Policy ◽  
Energy Prices ◽  
Sovereign Wealth Fund ◽  
Content Type ◽  
The Core ◽  
Eu Membership ◽  
The Government

Significance The Labour, Centre and Socialist Left parties together hold a majority of parliamentary seats. Labour and Centre seem certain to form the core of the government; they might rule as a minority if they cannot bridge disagreements with the more radical Socialist Left over tax and climate policy. Impacts The election represents the best result for anti-EEA parties since Norway’s 1994 vote to reject EU membership. A sustained downturn in global financial markets could reduce the spending resources of Norway’s huge sovereign wealth fund. European demand for Norwegian gas will increase amid rising energy prices across Europe, partially caused by reduced production.

Real effects of real estate: evidence from unemployment rates

2020 ◽  
Vol 37 (4) ◽  
pp. 605-623
Author(s):  
Can Dogan ◽  
John Can Topuz
Keyword(s):  
Real Estate ◽  
Housing Prices ◽  
Real Economy ◽  
Residential Real Estate ◽  
Content Type ◽  
Unemployment Rates ◽  
The Real ◽  
Real Estate Price ◽  
Real Effects ◽  
Real Estate Prices

Purpose This paper aims to investigate the relationship between residential real estate prices and unemployment rates at the Metropolitan Statistical Area (MSA) level. Design/methodology/approach This paper uses a long time-series of MSA-level quarterly data from 1990 to 2018. It uses an instrumental variable approach to estimate the effects of residential real estate prices on unemployment rates using the geography-based land constraints measure of Saiz (2010) as the instrument. Findings The results show that changes in residential real estate prices do not have a causal effect on unemployment rates in the same quarter. However, it takes 9-12 months for an increase (decrease) in real estate prices to decrease (increase) unemployment rates. This effect is significant during both pre- and post-financial crisis periods and robust to control for the economic characteristics of MSAs. Research limitations/implications This paper contributes to the emerging literature that studies the real effects of real estate. Particularly, the methodology and the findings can be used to investigate causal relationships between housing prices and small business development or economic growth. The findings are also of interest to policymakers and practitioners as they illustrate how and when real estate price shocks propagate to the real economy through unemployment rates. Practical implications This study’s findings have important implications for academics, policymakers and investors as they provide evidence of a snowball effect associated with shocks to real estate prices: increasing (decreasing) unemployment rates following a decrease (increase) in real estate prices exacerbates the real estate price movements and their economic consequences. Originality/value This paper analyzes a significantly longer period, from 1990 to 2018, than the existing literature. Additionally, it uses the MSA-level land unavailability measure of Saiz (2010) as an instrument to explore the effects of residential real estate prices on unemployment rates and when those effects are observed in the real economy.

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