scholarly journals Adoption Of Macroprudential Policy In An Inflationary Economy: Implication For Developing Economies

2014 ◽  
Vol 8 (2) ◽  
pp. 1301-1311
Author(s):  
Augustine Ujunwa ◽  
Ifeoma Nwakoby ◽  
Chinwe Okoyeuzu
Keyword(s):  
Global Financial Crisis ◽  
Developing Economies ◽  
Practical Implication ◽  
Structural Characteristics ◽  
Financial System ◽  
Governance Structure ◽  
Developed Economies ◽  
Local Literature ◽  
Systemic Crisis ◽  
Prudential Policy

Purpose: The purpose of this paper is to critique the suitability of macro prudential policy as a proactive and effective toolkit for mitigating financial system risk in developing economies.Design/methodology/approach: The author first discusses the causes of the 2007/2008 global financial crisis in developed and developing economies. The narration is to demonstrate that the causes, duration and amplitude of the crisis differ across jurisdictions, and any regulatory model that will be effective in mitigating future crises must take into cognizance the institutional peculiarities of those countries. Findings: The paper provides evidence on the difficulties of implementing the macro-prudential policy toolkits in developing economies because of their institutional and structural characteristics such as inflationary pressure, undiversified economy, lagging supervision, among others.Research Limitations/implication: There is paucity of substantial local literature on macro-prudential policy in developing economies, especially Africa. While this study is meant to close this gap, literature reviewed however, relied extensively on studies on developed economies. Practical implication: The extrapolation of prudential tools from developed economies requires serious caution by developing economies because of dissimilarities in economic structure, financial system, governance structure and causes of systemic risk, which may not be mitigated by macro-prudential toolkits.Originality and Value: The study adds value to the global discourse on regulatory models for mitigating systemic crisis by introducing the perspective of developing economies to the macro-prudential debate.

Central Banks

2018 ◽  
Author(s):  
Alex Cukierman
Keyword(s):  
Interest Rate ◽  
Exchange Rates ◽  
Gold Standard ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Financial System ◽  
Price Stability ◽  
Bretton Woods ◽  
Developed Economies

The first CBs were private institutions that were given a monopoly over the issuance of currency by government in return for help in financing the budget and adherence to the rules of the gold standard. Under this standard the price of gold in terms of currency was fixed and the CB could issue or retire domestic currency only in line with gold inflows or outflows. Due to the scarcity of gold this system assured price stability as long as it functioned. Wars and depressions led to the replacement of the gold standard by the more flexible gold exchange standard. Along with restrictions on international capital flows this standard became a major pillar of the post–WWII Bretton Woods system. Under this system the U.S. dollar (USD) was pegged to gold, and other countries’ exchange rates were pegged to the USD. In many developing economies CBs functioned as governmental development banks.Following the world inflation of the 1970s and the collapse of the Bretton Woods system in 1971, eradication of inflation gradually became the explicit number one priority of CBs. The hyperinflationary experiences of the first half of the 20th century, which were mainly caused by over-utilization of the printing press to finance budgetary expenditures, convinced policymakers in developed economies, following Germany’s lead, that the conduct of monetary policy should be delegated to instrument independent CBs, that governments should be prohibited from borrowing from them, and that the main goal of the CB should be price stability. During the late 1980s and the 1990s numerous CBs obtained instrument independence and started to operate on inflation targeting systems. Under this system the CB is expected to use interest rate policy to deliver a low inflation rate in the long run and to stabilize fluctuations in economic activity in the short and medium terms. In parallel the fixed exchange rates of the Bretton Woods system were replaced by flexible rates or dirty floats. The conjunction of more flexible rates and IT effectively moved the control over exchange rates from governments to CBs.The global financial crisis reminded policymakers that, of all public institutions, the CB has a comparative advantage in swiftly preventing the crisis from becoming a generalized panic that would seriously cripple the financial system. The crisis precipitated the financial stability motive into the forefront of CBs’ policy concerns and revived the explicit recognition of the lender of last resort function of the CB in the face of shocks to the financial system. Although the financial stability objective appeared in CBs’ charters, along with the price stability objective, also prior to the crisis, the crisis highlighted the critical importance of the supervisory and regulatory functions of CBs and other regulators. An important lesson from the crisis was that micro-prudential supervision and regulation should be supplemented with macro-prudential regulation and that the CB is the choice institution to perform this function. The crisis led CBs of major developed economies to reduce their policy rates to zero (and even to negative values in some cases) and to engage in large-scale asset purchases that bloat their balance sheets to this day. It also induced CBs of small open economies to supplement their interest rate policies with occasional foreign exchange interventions.

Macroeconomic Shocks and Unconventional Monetary Policy

2019 ◽  
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Emerging Markets ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Spillover Effects ◽  
Macroeconomic Shocks ◽  
Monetary Policies ◽  
Developed Economies

Barely two decades after the Asian financial crisis Asia was suddenly confronted with multiple challenges originating outside the region: the 2008 global financial crisis, the European debt crisis, and, finally developed economies’ implementation of unconventional monetary policies. Especially the implementation of quantitative easing (QE), ultra-low interest rate policies, and negative interest rate policies by a number of large central banks has given rise to concerns over financial stability and international capital flows. One of the regions most profoundly affected by the crisis was Asia due to its high dependence on international trade and international financial linkages. The objective of this book is to explain how macroeconomic shocks stemming from the global financial crisis and recent unconventional monetary policies in developed economies have affected macroeconomic and financial stability in emerging markets, with a particular focus on Asia. In particular, the book covers the following thematic areas: (i) the spillover effects of macroeconomic shocks on financial markets and flows in emerging economies; (ii) the impact of recent macroeconomic shocks on real economies in emerging markets; and (iii) key challenges for the monetary, exchange rate, trade, and macroprudential policies of developing economies, especially Asian economies, and suggestions and recommendations to increase resiliency against external shocks.

scholarly journals Peak of SO2 Emissions Embodied in International Trade: Patterns, Drivers and Implications

2021 ◽  
Vol 13 (23) ◽  
pp. 13351
Author(s):  
Bin Wang ◽  
Dechun Huang ◽  
Chuanhao Fan ◽  
Zhencheng Xing
Keyword(s):  
International Trade ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Decomposition Analysis ◽  
Energy Structure ◽  
So2 Emissions ◽  
Trade Patterns ◽  
Developed Economies ◽  
Production And Consumption

International trade links countries consuming goods and services to those where products and related SO2 pollution are produced, thereby affecting national mitigation responsibilities. This study combined accounting and decomposition techniques to investigate the patterns and drivers of SO2 emissions embodied in international trade from 1995 to 2015 and quantified the contribution of each country or region on the production and consumption sides. The global embodied emissions increased at an accelerated rate before the global financial crisis and peaked at 51.3 Mt in 2008, followed by a fluctuating decline from 2008 to 2015. Spatially, the transfers of SO2 emissions tended to flow from developed countries to less developed ones, but the trend has weakened after the financial crisis. Our decomposition analysis suggests that the energy and production system transitions and the slowdown in international trade jointly accounted for the peak and decline in emissions. Our contribution analysis indicates that developing economies have contributed to decreased emissions due to their recent efforts in production technology upgrading, energy efficiency improvement and energy structure optimization. The influence of developed economies on emissions decreased due to their reduced dependency on imports. Targeted policy methods are provided from the production and consumption perspectives for developing and developed economies, respectively.

Mobile Money - A Catalyst for Financial Inclusion in Developing Economies: A Case Study of Zimbabwe using FinScope Survey Data

GIS Business ◽  
2016 ◽  
Vol 12 (4) ◽  
pp. 45-56
Author(s):  
Kingstone Mutsonziwa ◽  
Obert K. Maposa
Keyword(s):  
Rural Communities ◽  
Developing Economies ◽  
Adult Population ◽  
Financial System ◽  
Financial Inclusion ◽  
Viable Option ◽  
Mobile Money ◽  
Bank Branches ◽  
Financial Transactions

Mobile money in Zimbabwe has extensively extended the frontiers of financial inclusion to reach millions who were earlier excluded within a relatively short space of time. The growing use of mobile phones in transferring money and making payments has significantly altered the countrys financial inclusion landscape as millions who had been hitherto excluded can now perform financial transactions in a relatively cheap, reliable and secure way. The FinScope results found out that 45% of the adult population use mobile money services. Of those using mobile money, 65% mentioned that is convenient, while 36% mentioned that it is cheap. Mobile money is accessible. These drivers are in the backdrop of few or no bank branches in rural communities as well as time and cost of accessing the bank branches. In Zimbabwe, mobile money is mostly used as a vehicle for remittances. While some people are enjoying mobile money services, it is important to mention that there are still people who are excluded from the formal financial system. The reasons why people do not use mobile money are mainly related to poverty issues. Mobile money remains a viable option to push the landscape of financial inclusion in Zimbabwe and other emerging markets where the formal financial system might not be strong.

Conclusions

2017 ◽  
Author(s):  
Yilmaz Akyüz
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Developing Economies ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Advanced Economies ◽  
The Global Financial Crisis ◽  
Zero Bound

The preceding chapters have examined the deepened integration of emerging and developing economies (EDEs) into the international financial system in the new millennium and their changing vulnerabilities to external financial shocks. They have discussed the role that policies in advanced economies played in this process, including those that culminated in the global financial crisis and the unconventional monetary policy of zero-bound interest rates and quantitative easing adopted in response to the crisis, as well as policies in EDEs themselves....

scholarly journals Innovative entrepreneurship in emerging and developing economies: the effects of entrepreneurial competancies and institutional voids

2021 ◽  
Author(s):  
Amirmahmood Amini Sedeh ◽  
Amir Pezeshkan ◽  
Rosa Caiazza
Keyword(s):  
Developing Countries ◽  
Developing Economies ◽  
Negative Impact ◽  
Institutional Voids ◽  
Developed Economies ◽  
Key Drivers ◽  
Innovation Barriers ◽  
Entrepreneurial Competencies ◽  
Emerging And Developing Countries ◽  
Different Levels

AbstractInnovative entrepreneurship is one of the key drivers of economic development particularly for less developed economies where the economic growth is at the forefront of policymakers’ agenda. Yet, the research on how various factors at different levels interact and bring about innovative entrepreneurship in emerging and developing countries remains relatively scarce. We address this issue by developing a multilevel framework that explains how entrepreneurial competencies attenuate the negative impact of innovation barriers. Our analysis on a sample of individuals from 24 economies, 17 developing and 7 emerging countries, reveals that entrepreneurial competencies become more instrumental for innovative entrepreneurship when general, supply-side, and demand-side innovation barriers are higher. The findings offer unique insights to policymakers particularly in developing countries interested in promoting innovative entrepreneurship and to entrepreneurs and investors seeking to establish and support innovative ventures.

Through the Lens of Recession 2.0: Diversification Dynamics Between the Leading Asian Stock Markets

2021 ◽  
pp. 097226292098395
Author(s):  
Manu K. S. ◽  
Surekha Nayak ◽  
Rameesha Kalra
Keyword(s):  
Stock Market ◽  
Stock Markets ◽  
Market Integration ◽  
Developing Economies ◽  
Positive Impact ◽  
Global Market ◽  
Stock Market Integration ◽  
Developed Economies ◽  
Market Participants ◽  
Causality Tests

The focus of this article is to analyse the inter-linkages between eight leading stock markets in Asian continent from the period of July 2011 to February 2018. This period holds relevance as this was the time when Recession 2.0 set in, which adversely affected the developed economies; however, the developing economies withstood the crisis without much of an impact. Co-integration and Granger causality tests were conducted to probe the inter-linkages. Study revealed a positive impact on Asian stock market indices collectively on each of the indexes. The highest number of unidirectional causalities was to KOPSI and NIFTY from rest of the stock indices. Results confirmed that no co-integration relationship existed among the selected indices indicating favourable diversification opportunities. Thus, the study fosters global market participants and policymakers to consider the nitty-gritties of stock market integration so as to benefit from international stock market diversification in the Asian region.

scholarly journals Air Pollution and Tourism: Evidence from G20 Countries

2020 ◽  
pp. 004728752097772
Author(s):  
Sefa Awaworyi Churchill ◽  
Lei Pan ◽  
Sudharshan Reddy Paramati
Keyword(s):  
Carbon Dioxide ◽  
Developing Economies ◽  
Tourism Industry ◽  
Annual Data ◽  
Panel Data Models ◽  
Developed Economies ◽  
International Tourist ◽  
Empirical Perspective ◽  
Practical Implications ◽  
Pm2.5 Emissions

Theoretically, it is well argued that environmental factors affect the growth of the tourism industry; however, from an empirical perspective, some gaps still exist in the literature. We empirically examine the effect of carbon dioxide (CO2) and particulate matter (PM2.5) emissions on tourist arrivals in a panel of G20 countries. Using annual data from 1995 to 2014 and a series of panel data models, our results suggest that the growth of both CO2 and PM2.5 emissions adversely affects international tourist arrivals. The results also show that the observed effect of CO2 emissions is more pronounced in developed economies, while the effect of PM2.5 emissions is stronger for developing economies. Given these findings, our study provides and discusses a number of policy and practical implications.

scholarly journals Exploring the Role of Islamic Fintech in Combating the Aftershocks of COVID-19: The Pen Social Innovation of the Islamic Financial System

2021 ◽  
Vol 7 (2) ◽  
pp. 136
Author(s):  
Mustafa Raza Rabbani ◽  
Abu Bashar ◽  
Nishad Nawaz ◽  
Sitara Karim ◽  
Mahmood Asad Mohd. Ali ◽  
...  
Keyword(s):  
Financial Services ◽  
Open Innovation ◽  
Financial Stability ◽  
Social Innovation ◽  
Global Financial Crisis ◽  
Financial System ◽  
Real Economy ◽  
Business Context ◽  
The World

The purpose of the current study is to investigate the role of the Islamic financial system in recovery post-COVID-19 and the way Fintech can be utilized to combat the economic reverberations created by COVID-19. The global financial crisis of 2008 has established the credentials of the Islamic financial system as a sustainable financial system which can save the long run interests of the average citizens around the world while adding value to the real economy. The basic ethical tenets available in the Islamic financial system make it more suited and readymade to fight the economic aftershocks of a pandemic like COVID-19. The basic principles of ethical Islamic finance have solid connections to financial stability and corporate social responsibility within the wide-reaching business context. With the emergence of Financial technology (Fintech) it has provided a missing impetus to the Islamic financial system to compete on equal ground with its conventional counterpart and prove its mettle. The study uses discourse analysis along with the content analysis to extract content and draw a conclusion. The findings of the study indicate that COVID-19 pandemic has provided the opportunity for the social and open innovation to grow and finance world have turned to open innovation to provide a speedy, timely, reliable, and sustainable solution to the world. The findings of the study provide significant implications for governments and policy makers in efficient application of Fintech and innovative Islamic financial services to fight the economic consequences of the COVID-19 pandemic.

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