Implications of the Financial Crisis for Long Run Retirement Security

This paper empirically discovered the inter-linkages between stock and crude oil prices before and after the subprime financial crisis 2008 by using Johansan co-integration and Granger causality techniques to explore both long and short- run relationships. The whole data set of Nifty index, Nifty energy index, BSE Sensex, BSE energy index and oil prices are divided into two periods; before crisis (from February 15, 2005 to December31, 2007) and after crisis (from January 1, 2008 to December 31, 2018) are collected and analyzed. The results discovered that there is one-way causal relationship from crude oil prices to Nifty index, Nifty energy index, BSE Sensex and BSE energy index but not other way around in both periods. However, a bidirectional causality relationship between BSE Energy index and crude oil prices during post subprime financial crisis 2008. The co-integration results suggested that the absence of long run relationship between crude oil prices and market indices of BSE Sensex, BSE energy index, Nifty index and Nifty energy index before and after subprime financial crisis 2008.

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A multifractal detrended fluctuation analysis of housing market: a role of financial crises in developed economies

International Journal of Housing Markets and Analysis ◽

10.1108/ijhma-06-2021-0068 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Syed Ali Raza ◽

Nida Shah ◽

Muhammad Tahir Suleman ◽

Md Al Mamun

Keyword(s):

Financial Crisis ◽

Housing Market ◽

Market Efficiency ◽

House Price ◽

Fluctuation Analysis ◽

Content Type ◽

Multifractal Detrended Fluctuation Analysis ◽

Long Run ◽

Before And After

Purpose This study aims to examine the house price fluctuations in G7 countries by using the multifractal detrended fluctuation analysis (MF-DFA) for the years 1970–2019. The study examined the market efficiency between the short-term and long-term in the full sample period, before and after the global financial crisis period. Design/methodology/approach This study uses the MF-DFA to analyze house price fluctuations. Findings The findings confirmed that the housing market series are multifractal. Furthermore, all the markets showed long-term persistence in both the short and long-term. The USA is identified as the most persistent house market in the short run and Japan in the long run. Moreover, in terms of efficiency, Canada is identified as the most efficient house market in the long run and the UK in the short run. Finally, the result of before and after the financial crisis period is consistent with the full sample result. Originality/value The contribution of this study in the literature is fourfold. This is the first study that has examined the house prices efficiency by using the MF-DFA technique given by Kantelhardt et al. (2002). Previously, the house market prices and efficiency has been investigated using generalized Hurst exponent (Liu et al., 2019), Quantile Regression Approach (Chae and Bera, 2019; Tiwari et al., 2019) but no study to the best of the knowledge has been done that has used the MF-DFA technique on the housing market. Second, this is the first study that has focused on the house markets of G7 countries. Third, this study explores the house market efficiency by dividing the market into two periods i.e. before and after the financial crisis. The study strives to investigate if the financial crisis determines the change in the degree of market efficiency or not. Finally, the study gives valuable insights to the investors that will help them in their investment decisions.

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Roman wealth and wealth inequality in comparative perspective

Journal of Roman Archaeology ◽

10.1017/s104775942000104x ◽

2020 ◽

Vol 33 ◽

pp. 341-353 ◽

Cited By ~ 1

Author(s):

Walter Scheidel

Keyword(s):

Financial Crisis ◽

Great Recession ◽

Wealth Inequality ◽

Barack Obama ◽

Long Run ◽

The World ◽

Small Measure ◽

The Media ◽

Looking Back ◽

Thomas Piketty

In 2013, Barack Obama called rising inequality “the defining challenge of our time”. Since the Financial Crisis and Great Recession of 2007-9, the gap between the haves and have-nots has attracted unprecedented attention in politics, the media and academia.1 Students of the more distant past have also begun to embrace this trend. Economists are once again looking back in time, inspired in no small measure by the broad impact of the work of Thomas Piketty.2 Historians are laboring hard to unearth and publish relevant data. Thanks to their efforts, we are now able to glimpse the contours of changes in the concentration of income and wealth over the very long run, at least in some parts of the world.3 Archaeologists have been joining the fray, gathering and analyzing plausible proxies of inequality such as house sizes.4

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ASYMMETRIC IMPACT OF EXCHANGE RATE CHANGES ON THE TRADE BALANCE: DOES GLOBAL FINANCIAL CRISIS MATTER?

Annals of Financial Economics ◽

10.1142/s201049521850015x ◽

2018 ◽

Vol 13 (04) ◽

pp. 1850015 ◽

Cited By ~ 7

Author(s):

BISHARAT HUSSAIN CHANG ◽

SURESH KUMAR OAD RAJPUT ◽

NIAZ HUSSAIN GHUMRO

Keyword(s):

Exchange Rate ◽

Financial Crisis ◽

Trade Balance ◽

Global Financial Crisis ◽

Sample Period ◽

Asymmetric Effect ◽

Distributed Lag ◽

Long Run ◽

Exchange Rate Changes ◽

The Global Financial Crisis

Recent studies have been mainly focusing on whether exchange rate changes have a symmetric or asymmetric effect on the trade balance. We revisit this question in the context of US and further extend previous studies by determining whether the relationship between these underlying variables change as a result of the global financial crisis. We use both linear autoregressive distributed lag (ARDL) and non-linear ARDL models for the whole sample period as well as in the pre- and post-crisis periods. Findings suggest that exchange rate changes have an asymmetric effect on the trade balance; however, the asymmetric behavior of the underlying variables change as a result of the financial crisis. In the short run, exchange rate asymmetrically affects trade balance in the post-crisis period only. In the long run, there is an asymmetric effect for all sample periods, where only the devaluation of currency significantly affects the trade balance when the whole sample period is selected. On the other hand, in pre- and post-crisis periods, only appreciation of currency significantly affects the trade balance. This study indicates that determining the asymmetric relationship without considering the global financial crisis may lead to spurious results.

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The Volatility for Pre and Post Global Financial Crisis

International Journal of Applied Evolutionary Computation ◽

10.4018/jaec.2011040104 ◽

2011 ◽

Vol 2 (2) ◽

pp. 82-95

Author(s):

Shih-Yung Wei ◽

Jack J. W. Yang ◽

Jen-Tseng Chen ◽

Wei-Chiang Samuelson Hong

Keyword(s):

Hong Kong ◽

Financial Crisis ◽

Global Financial Crisis ◽

Asset Returns ◽

Financial Asset ◽

Asymmetric Volatility ◽

Empirical Results ◽

Long Run ◽

Short Run ◽

Financial Asset Returns

The asymmetric volatility, temporary volatility, and permanent volatility of financial asset returns have attracted much interest in recent years. However, a consensus has not yet been reached on the causes of them for both the stocks and markets. This paper researched asymmetric volatility and short-run and long-run volatility through global financial crisis for eight Asian markets. EGARCH and CGARCH models are employed to deal with the daily return to examine the degree of asymmetric volatility (temporary volatility and permanent volatility). The authors find that after global financial crisis asymmetric volatility is lower (expect Hong Kong), and the long-run effect is more than the short-run effect. The empirical results for the short-run show that, after global financial crisis, there is significant decreasing in China and Taiwan but not in Japan; the others are significantly increasing. For the long-run, there is significant decreasing (except Thailand and Korea).

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Privatisation, Myopia and the Long-Run Provision of Economic Infrastructure in Australia

The Economic and Labour Relations Review ◽

10.1177/103530460801900105 ◽

2008 ◽

Vol 19 (1) ◽

pp. 57-72 ◽

Cited By ~ 2

Author(s):

Michael Johnson

Keyword(s):

Economic Growth ◽

Financial Crisis ◽

Short Term ◽

Public Economic ◽

International Financial Crisis ◽

Long Run ◽

Infrastructure Provision ◽

Economic Infrastructure ◽

The Impact

The privatisation of economic infrastructure in Australia that began in the 1980s has continued to be actively pursued by state and federal governments. Evaluations of the effects of the change of policy, ownership, control and regulatory arrangements that have accompanied privatisation and their impact on the longer-term stock of infrastructure and the growth of the economy have received less attention than the immediate privatisation decisions. This article reviews some of the studies that have been carried out to evaluate the impact of privatisation, focusing on long-term impacts on infrastructure provision. In particular, it discusses the myopia created by the emphasis on commercial transactions and managing markets that continues to shape the debate about the provision of infrastructure to meet Australia's economic, environmental and other objectives. Objectives have become even more difficult to achieve as an increasingly extensive and complex regulatory framework is required to manage privatised activities. This adds to costs and limits the potential for the introduction of new initiatives to address pressing problems. The issue is increasingly relevant, given the current perceived shortage of infrastructure and the flow-on effects of the current international financial crisis on Australia. The slow-down in economic growth accompanying the financial crisis is putting pressure on government budgets and threatening to perpetuate the existing policy bias towards short-term solutions, exacerbating the longer run problem of ensuring an adequate supply of public economic infrastructure.

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Making the Transition to Prepaid Medicare

The Journal of Economic Perspectives ◽

10.1257/jep.14.2.85 ◽

2000 ◽

Vol 14 (2) ◽

pp. 85-98 ◽

Cited By ~ 3

Author(s):

Thomas R Saving

Keyword(s):

Health Care ◽

Financial Crisis ◽

Baby Boomers ◽

Capital Stock ◽

Health Care Services ◽

Status Quo ◽

Contribution Rate ◽

Care Services ◽

Long Run ◽

The Status

The Medicare system is facing a financial crisis brought on by the combination of rapidly rising consumption of health care services by beneficiaries and financing based on generation transfers. This paper simulates a transition to prepaid Medicare where each generation puts aside funds for the health care it will demand later in life. By prepaying Medicare we increase the nation's capital stock which in the long run will allow the nation to enjoy greater consumption for both working and retired generations and we achieve immunity from generation size shocks. By transferring the baby boomers and younger generations into a prepaid system we can complete the transition in less than fifty years and achieve an ultimate contribution rate of 1.26% of taxable payroll instead of the more than 12% of taxable payroll that will be required if we remain in the status quo.

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Financial System Stability and Economic Growth in Nigeria

10.21203/rs.2.24249/v1 ◽

2020 ◽

Author(s):

Isaac Ikeafe NJANG ◽

Eko Eko OMINI ◽

Festus Victor BEKUN ◽

Festus Fatai Adedoyin

Keyword(s):

Economic Growth ◽

Financial Crisis ◽

Financial Stability ◽

Financial System ◽

Granger Causality Test ◽

System Stability ◽

Causality Test ◽

Long Run ◽

Integration Test ◽

Sustainable Economic Growth

Abstract This study primarily seeks to evaluate the influence of financial system stability on economic growth in Nigeria from 1986 to 2016. Employing the use of Principal Component Analysis (PCA), this study constructs a Financial System Stability Index (FSSI) as measurement for financial stability. The indicators used in building the index capture three sectors of the Nigerian Financial System (NFS). The three sectors cover the banking sector, the capital market, the external sector and include a fourth component representing financial depth. The resulting index serves as a single qualitative measure for evaluating the level of stability in a nation’s financial system and proves capable of warning of an eminent financial crisis. Employing the use of four macroeconomic indicators, the index is then regressed against the Nigerian economic growth rate with an aim of discovering the short-run and long-run dynamics existing between both variables. The granger causality test, Johansson Co-integration test and Vector Error Correction Model (VECM) are the estimation techniques employed in achieving the objectives of this research. The granger causality test revealed a uni-directional causality between financial stability and economic growth in Nigeria. The Johansson Co-integration test showed that long-run co-integration relationship exists between financial stability and economic growth. Finally, the VECM results find that financial stability displays a negative relationship with economic growth and bears no significant effect on economic growth in Nigeria. The findings disclose that financial stability in Nigeria may be high and has resulted in the underutilization of financial assets thus hampering sustainable economic growth in Nigeria. In conclusion, the outcome of the findings shows that while financial stability may be necessary for initiating economic growth, it is not sufficient for sustaining economic growth in Nigeria. This research work recommends that the FSSI be employed as an additional tool for measuring the condition/state of financial stability in Nigeria and in predicting the onset of a potential financial crisis. The study further recommends that financial authorities must give attention to other aspects of financial development to facilitate sustainable economic growth in Nigeria.

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Pooled Mean Group Approach to Test the Determinants of Financial Integration: Evidence From OECD and G20 Countries

Research in World Economy ◽

10.5430/rwe.v10n3p366 ◽

2019 ◽

Vol 10 (3) ◽

pp. 366

Author(s):

Ahliman Abbasov

Keyword(s):

Economic Growth ◽

Financial Crisis ◽

Financial Integration ◽

Financial Liberalization ◽

Global Financial Crisis ◽

Positive Impact ◽

Trade Integration ◽

Long Run ◽

Short Run ◽

The Impact

This study investigates the role of financial liberalization, trade integration, economic growth and global financial crisis on financial integration level of selected OECD and G20 countries during the period of 2000-2016. PMG technique has been implemented to estimate the ARDL model. Regression results suggest a statistically significant long run co-integration relationship between financial integration and independent variables. Analysis also concludes that there are both long run and short run positive impact of trade integration level on financial integration level. The study also concludes that the global financial crisis has had a negative influence on global financial integration both in the short run and long run. But according to the regression results the impact of financial liberalization on the actual financial integration level of the countries only appears in the long run. Results also indicate that positive impact of economic growth on financial globalization level appears only in the long run.

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Are Large Deficits and Debt Dangerous?

AEA Papers and Proceedings ◽

10.1257/pandp.20201103 ◽

2020 ◽

Vol 110 ◽

pp. 145-148

Author(s):

Michael J. Boskin

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Public Investment ◽

Private Investment ◽

Traditional View ◽

Early Recovery ◽

Present Evidence ◽

Long Run ◽

Tax Smoothing ◽

Future Income

The traditional view of large deficits and debt is that they are harmful, save in recession/early recovery, for tax smoothing or to fund productive public investment, as they crowd out private investment and lower future income, and taken to extremes, can cause inflation, even a financial crisis. Blanchard (2019) concludes they may have no fiscal cost and increase welfare. I present evidence of a debt problem, policies necessary to contain it, effects on recovery, interest rates, and long-run growth. There are several serious issues with Blanchard's reading of key data and modeling assumptions, the changing of which would reverse his conclusions.

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