Aggregate Demand Shortfalls and Economic Institutions

2015 ◽  
Author(s):  
Ryan H Murphy ◽  
Taylor Leland Smith
Keyword(s):  
Aggregate Demand ◽  
Economic Institutions

Institutional Theory of Endless Redistribution

2005 ◽  
pp. 4-18 ◽  
Author(s):  
K. Sonin
Keyword(s):  
Property Rights ◽  
Institutional Theory ◽  
Growth Rates ◽  
Rent Seeking ◽  
Economic Institutions ◽  
Wide Spread ◽  
Grass Roots ◽  
Protection Systems ◽  
Private Protection ◽  
The Rich

In unequal societies, the rich may benefit from shaping economic institutions in their favor. This paper analyzes the dynamics of institutional subversion by focusing on public protection of property rights. If this institution functions imperfectly, agents have incentives to invest in private protection of property rights. The ability to maintain private protection systems makes the rich natural opponents of public protection of property rights and precludes grass-roots demand to drive the development of the market-friendly institution. The economy becomes stuck in a bad equilibrium with low growth rates, high inequality of income, and wide-spread rent-seeking. The Russian oligarchs of the 1990s, who controlled large stakes of newly privatized property, provide motivation for this paper.

Economic effects of monetary policy in Russia: What do large datasets tell us?

2020 ◽  
pp. 31-53 ◽  
Author(s):  
Anna A. Pestova ◽  
Natalia A. Rostova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Economic Activity ◽  
Global Financial Crisis ◽  
Exchange Rate Regime ◽  
Aggregate Demand ◽  
Economic Effects ◽  
Theoretical Concepts ◽  
Empirical Estimates

Is the Bank of Russia able to control inflation and, at the same time, manage aggregate demand using its interest rate instruments? In other words, are empirical estimates of the effects of monetary policy in Russia consistent with the theoretical concepts and experience of advanced economies? This paper is aimed at addressing these issues. Unlike previous research, we employ “big data” — a large dataset of macroeconomic and financial data — to estimate the effects of monetary policy in Russia. We focus exclusively on the period after the 2008—2009 global financial crisis when the Bank of Russia announced the abandoning of its fixed ruble exchange rate regime and started to gradually transit to an interest rate management. Our estimation results do not confirm standard responses of key economic activity and price variables to tightening of monetary policy. Specifically, our estimates do not reveal a statistically significant restraining effect of the Bank of Russia’s policy of high interest rates on inflation in recent years. At the same time, we find a significant deteriorating effect of the monetary tightening on economic activity indicators: according to our conservative estimates, each of the key rate increases occurred in March and December 2014 had led to a decrease in the industrial production index by about 0.2 percentage points within a year.

Modeling the co-evolution of economic institutions and the economy of resource producing regions

2020 ◽  
Vol 18 (4) ◽  
pp. 122-131
Author(s):  
Vadim F. Islamutdinov ◽  
Sergey P. Semenov
Keyword(s):  
Economic Growth ◽  
Resource Availability ◽  
Regional Economy ◽  
Cumulative Effect ◽  
Volterra Equations ◽  
Economic Institutions ◽  
Predator Prey Model ◽  
Resource Endowment ◽  
Disincentive Effect ◽  
Good Institution

The purpose of the study is to develop a model for the co-evolution of the regional economy and economic institutions. The research methods used: abstract-logical for the study of theoretical aspects and the experience of modeling co-evolution; and economic-mathematical for the development of own model of coevolution. The results of the study: approaches to modeling the evolution of economic institutions, as well as the co-evolution of the regional economy and economic institutions are considered, strengths and weaknesses of existing approaches to modeling co-evolution are identified, on the basis of the logistic model and Lotka-Volterra equations, an own co-evolution model has been developed, which includes three entities: regional economy, “good” institution and “bad” institution. Three versions of the model have been developed: the co-evolution of the regional economy and the “good” institution, the co-evolution of the regional economy and the “bad institution,” and a variant of the co-evolution of all three entities simultaneously, in which the “good” and “bad” institutions interact according to the “predator-prey” model, and their the cumulative effect determines the development of the regional economy. Numerical experiments have been carried out in the MathLab, which have shown the capabilities of the model to reflect the results of the co-evolution of the economy of a resource-producing region and economic institutions. In the first variant, a “good” institution promotes economic growth in excess of the level determined by resource availability. In the second variant, the “bad” institution has a disincentive effect on the GRP, as a result of which the GRP falls below the level determined by the resource endowment. In the third variant, the interaction of “good” and “bad” institutions still contributes to economic growth above the level determined by resource availability, but causes cyclical fluctuations in the GRP.

Economic Institutions and Growth Nexus: The Role of Governance and Democratic Institutions—Evidence from Time Varying Parameters’ (TVPs) Models

2016 ◽  
Vol 55 (4I-II) ◽  
pp. 675-688
Author(s):  
Ghulam Murtaza ◽  
Muhammad Zahir Faridi
Keyword(s):  
Structural Changes ◽  
Jel Classification ◽  
Economic Institutions ◽  
Time Varying ◽  
Democratic Institutions ◽  
Main Hypothesis ◽  
Dynamic Relationship ◽  
Rolling Window

The present study has investigated the channels through which the linkage between economic institutions and growth is gauged, by addressing the main hypothesis of the study that whether quality of governance and democratic institutions set a stage for economic institutions to promote the long-term growth process in Pakistan. To test the hypothesis empirically, our study models the dynamic relationship between growth and economic institutions in a time varying framework in order to capture institutional developments and structural changes occurred in the economy of Pakistan over the years. Study articulates that, along with some customary specifics, the quality of government and democracy are the substantial factors that affect institutional quality and ultimately cause to promote growth in Pakistan. JEL Classification: O40; P16; C14; H10 Keywords: Economic Institutions, Growth, Governance and Democracy, Rolling Window Two-stage Least Squares, Pakistan

Inclusive Growth with Zakat

2015 ◽  
Vol 54 (4I-II) ◽  
pp. 997-1010
Author(s):  
Muhammad Mazhar Iqbal
Keyword(s):  
Economic Growth ◽  
Aggregate Demand ◽  
Economic Consequences ◽  
Poor People ◽  
Kuznets Curve ◽  
Inclusive Growth ◽  
Marginal Productivity ◽  
The Social

Zakat is an annual religious levy that is collected from rich Muslims and its proceeds are disbursed among poor people of the society. It has many spiritual and social merits. For example, it purifies the hearts of zakat-givers as they give away a part of their wealth, one of the most precious things in their lives, seeking the pleasure of God without requiring any worldly gains whatsoever. It bridges the social gap between „haves‟ and „have-nots.‟ This study analyses, however, only economic consequences of Zakat for economic growth. They cannot be appreciated duly unless one understands the following concepts of modern economics; various theories of consumption, aggregate demand, stagnation thesis, consumption puzzle, marginal productivity of capital and Kuznets curve.

Globalization’s Vulnerabilities and the Response of Islamic Economics

2000 ◽  
Vol 17 (3) ◽  
pp. 70-94
Author(s):  
Tahir Beg
Keyword(s):  
Global Governance ◽  
National Policy ◽  
Economic Institutions ◽  
Wide Scope ◽  
Global Capital ◽  
Theoretical Premise ◽  
Islamic Economic

The philosophical-theoretical premise of globalization is ignorant of thevalues of justice, equity, and oneness of humanity, hence it leads to verticalintegration of humanity, systemic vacuum in global governance,drastic erosion in national policy autonomy, and accountability-freeempowerment of global capital. The Islamic worldview provides analternative paradigm for globalization and offers wide scope for refprmof contemporary globalization by re-exploring the interrelationshipbetween the concepts ‘Ummah’ and ‘one humanity.’ This suggests thatoperational re-orientation of Islamic economic institutions is greatlyneeded to protect the Ummah and humanity against the vulnerabilitiesof contemporary globalization

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