Herrera will maintain Mexico’s economic policy

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Economic Policy ◽  
Interest Rates ◽  
Content Type ◽  
High Profile ◽  
The Government ◽  
Undue Pressure

Significance Urzua’s abrupt departure is the most high-profile that AMLO has experienced in his seven months in office. Impacts The peso will be volatile for some time but a tight monetary policy should avert any long-term depreciation due to Urzua’s resignation. His resignation deprives the government of an individual trusted by the markets to contain the government’s most statist members. Herrera is known to favour lower interest rates, but there is no expectation that he will put undue pressure on the Bank of Mexico.

Monetary easing may quicken in Brazil this year

2017 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Recession ◽  
Government Debt ◽  
Domestic Demand ◽  
Private Debt ◽  
Content Type ◽  
Positive Effects ◽  
The Government

Significance At its first meeting of 2017, on January 10-11, the COPOM reduced the benchmark Selic interest rate to 13%. The 75-basis-point (bp) rate cut decision, the largest in nearly five years, accelerated the monetary easing cycle that started in October 2016. Economic recession has been relieving inflationary pressures and opening room for more intense cuts in interest rates. Impacts Further reductions of interest rates may contribute to controlling government debt. Private debt renegotiations at lower interest rates may facilitate a recovery in domestic demand and output. Any positive effects of monetary policy on activity may help contain popular dissatisfaction with the government.

El Chapo arrest will not improve Mexican security

2016 ◽  
Keyword(s):  
Organised Crime ◽  
Content Type ◽  
Drug Trafficker ◽  
Media Attention ◽  
Maximum Security ◽  
High Profile ◽  
The Government

Subject The recapture of the world's most-wanted drug trafficker. Significance On January 8, federal police detained fugitive drug trafficker Joaquin 'El Chapo' Guzman Loera, following his high-profile escape from the maximum-security Altiplano prison on July 11. Both his escape and his recapture have generated considerable media attention, and could have ramifications for organised crime, the government of President Enrique Pena Nieto and US-Mexican relations. Impacts Another escape, though possible, is extremely unlikely. El Chapo's extradition may not take place until after the end of Pena Nieto's term. Any popularity increase for Pena Nieto resulting from the recapture will be short lived. While the Sinaloa cartel is relatively cohesive, it may splinter in the medium-to-long term.

Russian policy toolkit mixes rate rises and price caps

2021 ◽  
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Oil Prices ◽  
Target Level ◽  
Content Type ◽  
Price Controls ◽  
Interest Income ◽  
Personal Savings ◽  
The Government

Significance This is high enough to worry the Central Bank of Russia (CBR): inflation has hovered around 4%, the bank's target level, for the last four years. The CBR has responded with monetary tightening, and the government with price controls on food and some exported commodities. Impacts Rising domestic interest rates and higher global oil prices will support the ruble. Elevated inflationary expectations will discourage long-term investment and personal savings. Higher interest rates will improve banks' net interest income and support banking profitability in 2021.

scholarly journals Macroeconomic impacts of fiscal shocks on the Moroccan economy: a disaggregated SVAR analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Youssef Alami ◽  
Issam El Idrissi ◽  
Ahmed Bousselhami ◽  
Radouane Raouf ◽  
Hassane Boujettou
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Public Spending ◽  
Structural Shocks ◽  
Content Type ◽  
Fiscal Multipliers ◽  
The Government ◽  
The Impact ◽  
Fiscal Shocks

PurposeThe present paper aims to evaluate the structural impact of exogenously induced fiscal shocks on the Moroccan economy. This entails an analysis of the effect on the GDP of COVID-19-induced fiscal shocks manifesting in terms of budgetary revenues and expenditures. A key aspect of this analysis addresses the size of the tax and fiscal multipliers.Design/methodology/approachThe study examines the structural relationship between five variables during the period between Q1 2009 and Q2 2020 using an SVAR approach that allows for a dynamic interaction between ordinary expenditures and revenues on a quarterly basis.FindingsPositive structural shocks on public spending are likely to negatively impact economic growth. Negative economic growth, in turn, will damage price levels and interest rates, mainly over the long term. However, public-revenue-multiplier-associated shocks exceed these price- and interest-rate multiplier-associated shocks. Indeed, a structural shock to ordinary revenues can have a positive but insignificant impact on the GDP stemming from the ensuing decrease in the government budget deficit that proceeds from the increase in government revenues.Originality/valueThis is one of the first studies in the Moroccan context to assess the impact of the current worldwide pandemic on public finances. In addition, this study highlights the importance of boosting economic recovery through public spending.

Poor outlook drives fiscal expansion in Argentina

2016 ◽  
Keyword(s):  
Economic Policy ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Investment ◽  
Content Type ◽  
Foreign Companies ◽  
Policy Measures ◽  
The Government ◽  
Nominal Anchor

Significance Soon after taking office, President Mauricio Macri announced a "rain of new investments" from foreign companies attracted by the business-friendly tone set by his administration. Despite key economic policy measures, such as the removal of foreign exchange controls, the unfreezing of utilities tariffs and the agreement with holdout creditors, there have been no signs of significant medium- or long-term foreign investment inflows, raising doubts over Macri's promise of an economic rebound in the second half. Impacts Expansionary measures will make it harder to achieve fiscal goals, especially as tax collection is rising at rates well below inflation. While the downturn may ease inflation, the temptation to use the exchange rate as a nominal anchor would worsen competitiveness problems. The government faces a difficult dilemma: expansionary measures will help it in mid-term elections, but delay economic stabilisation.

US Fed faces long-term COVID-19 challenges

2020 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Balance Sheet ◽  
Donald Trump ◽  
Current Form ◽  
Content Type ◽  
Debt Overhang ◽  
Negative Interest Rates ◽  
Do So

Significance In responding to COVID-19, the Fed, working with the Treasury, is making massive fiscal interventions. Congress has also appropriated 3 trillion dollars in aid so far. Impacts The HEROES Act will not pass the Senate either in its current form, or before June 2020, given debt concerns. President Donald Trump has suggested the Fed introduce negative interest rates, but it is unlikely to do so. The debt overhang from Fed balance sheet expansion will shape monetary policy for a decade.

Digital currencies enhance 21st century monetary tools

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Central Banks ◽  
Content Type ◽  
The Public ◽  
Digital Currency ◽  
Advanced Economies ◽  
Severe Recession

Subject From fiat to digital currencies. Significance With the use of cash dwindling in the advanced economies, central banks are losing their only direct monetary connection to the public. At the same time, monetary policy could face meaningful limits in stimulating growth if a severe recession strikes the advanced economies as policy interest rates are already close to zero. Impacts Tech advances, combined with downgraded long-term growth, price and interest rate forecasts, draw attention to new monetary policy tools. Central bank digital currencies would have a central custodian to coordinate them, overcoming a key ‘stateless’ cryptocurrency weakness. A digital currency gives central banks a way to reflate the economy and support certain households, but there may be political obstacles.

Money supply and inflation impact on economic growth

2019 ◽  
Vol 12 (1) ◽  
pp. 121-136 ◽  
Author(s):  
Dinh Doan Van
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Money Supply ◽  
Karl Marx ◽  
Continuous Increase ◽  
Content Type ◽  
The Government ◽  
Short Time ◽  
The Impact

Purpose At present, countries are concerned about inflation and the impact of inflation on each country’s economic growth. This inflation has been said by economists that inflation is a phenomenon of currency and currency, which has caused inflation in some countries by their monetary policy. According to the economic theory of Karl Marx, Irving Fisher, Friedman, inflation is caused by a continuous increase in the money supply. Design/methodology/approach The economic theories of Fisher, Friedman and an econometric model are applied to analyse the relationship between money supply and inflation. Besides, Vietnam’s and China’s research data are also collected in the period of 2012-2016. Findings It is found out that the continuous increase in the money supply causes inflation in the long-term, but the continuous increase in the money supply growth does not cause inflation in a short time, this was analyzed based on the theory of monetary quantity. Moreover, Chia’s and Vietnam’s correlations of the money supply growth and inflation are 99.1 per cent. These correlations are very close. Originality/value Research results show that money supply and inflation are closely related, and the money supply directly affects economic growth. Therefore, the government should have the relevant monetary policy to grow the economy and proposals to make monetary policy, control inflation levels and stimulate economic growth.

Interpreting the Reagan Deficits

2017 ◽  
Author(s):  
Thomas J. Sargent
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Reagan Administration ◽  
Federal Budget ◽  
Ronald Reagan ◽  
Government Budget ◽  
Government Deficits ◽  
Tax Smoothing ◽  
The Government ◽  
Monetary And Fiscal Policy

This chapter examines the large net-of-interest deficits in the U.S. federal budget that have marked the administration of Ronald Reagan. It explains the fiscal and monetary actions observed during the Reagan administration as reflecting the optimal decisions of government policymakers. The discussion is based on an equation whose validity is granted by all competing theories of macroeconomics: the intertemporal government budget constraint. The chapter first considers the government budget balance and the optimal tax smoothing model of Robert Barro before analyzing monetary and fiscal policy during the Reagan years: a string of large annual net-of-interest government deficits accompanied by a monetary policy stance that has been tight, especially before February 1985, and even more so before August 1982. Indicators of tight monetary policy are high real interest rates on government debt and pretax yields that exceed the rate of economic growth.

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