scholarly journals Financial Development, Saving Rates, and International Economic Volatility: A Simple Model

Mathematics ◽  
2021 ◽  
Vol 9 (16) ◽  
pp. 2010
Author(s):  
Hejie Zhang ◽  
Huiming Lv ◽  
Shenghau Lin

This study constructs a dynamic and open economy model to show that low saving rates are the cause of economic volatility in developed countries, whereas inadequate financial development is identified as the reason for economic volatility in emerging countries. With low saving rates or inadequate financial development, countries find it difficult to avoid economic volatility, because it is difficult to alleviate the financing constraints of firms and maintain the stability of investment. Under similar conditions, economic volatility is more severe in developed countries and has spillover effects by triggering interest rate fluctuations in the global capital market and intensifying economic volatility in other countries. By contrast, emerging countries or small economies do not have spillover effects. To avoid dramatic international economic volatility, emerging countries should prompt financial development, and developed countries should increase their saving rates.

2020 ◽  
Vol 14 (1) ◽  
pp. 7
Author(s):  
Bolortuya Enkhtaivan ◽  
Jorge Brusa ◽  
Zagdbazar Davaadorj

Immigration is a controversial topic that draws much debate. From a human sustainability perspective, immigration is disadvantageous for home countries causing brain drains. Ample evidence suggests the developed host countries benefit from immigration in terms of diversification, culture, learning, and brain gains, yet less is understood for emerging countries. The purpose of this paper is to examine the presence of brain gains due to immigration for emerging countries, and explore any gaps as compared to developed countries. Using global data from 88 host and 109 home countries over the period from 1995 to 2015, we find significant brain gains due to immigration for emerging countries. However, our results show that there is still a significant brain gain gap between emerging and developed countries. A brain gain to the developed host countries is about 5.5 times greater than that of the emerging countries. The results hold after addressing endogeneity, self-selection, and large sample biases. Furthermore, brain gain is heterogenous by immigrant types. Skilled or creative immigrants tend to benefit the host countries about three times greater than the other immigrants. In addition, the Top 10 destination countries seem to attract the most creative people, thus harvest the most out of the talented immigrants. In contrast, we find countries of origin other than the Top 10 seem to send these creative people to the rest of the world.


Author(s):  
Salih Katircioglu ◽  
Hatice Imamoglu

Purpose This study aims to investigate the role and spillover effects of the financial sector on the size of the informal economic activity in Turkey. Design/methodology/approach Time series analysis has been adopted for annual data of the 1970-2017 period. New approaches in unit root and cointegration tests have been used in this study. Estimations have been done via dynamic ordinary least squares and fully modified ordinary least square approaches. Findings Results confirm the existence of a long-run equilibrium relationship between the financial system and informal economic activities in Turkey. At the earlier stages of financial development (FD), informality tends to rise while in further stages, informality tends to decline over time. This study confirms the U-shaped relationship between FD and the informal economy in Turkey. Research limitations/implications This study has used logarithmic values of series in the econometric analysis except for real interest rates because of negative values in some periods. Thus, by using level forms of real interest, missing values would be avoided. Practical implications Increasing efficiency, control and institutional quality, as well as the quality of governance environment, would be useful tools in reducing the size of informality, as this study finds that spillover effects of financial services on the informal economic activity are adverse. Originality/value This study is the first of its kind to the best of the knowledge in the case of Turkey, which estimates the spillover effects of FD on informal economic activity.


2021 ◽  
Vol 57 (2) ◽  
pp. 170-199
Author(s):  
Delano Villanueva ◽  
Roberto Mariano

This paper develops and discusses an open-economy growth model in a modi!ed Arrow learning-by-doing framework, in which workers learn through experience on the job, thereby increasing their productivity. Applying optimal control to maximize the discounted stream of intertemporal consumption, the model yields domestic saving rates of 18-22 percent of GDP, which are feasible targets in developing and emerging market economies. Sustainable gross foreign debt is in the range of 39-50 percent of GDP. Saving, debt, and growth policies are suggested.


2012 ◽  
Vol 51 (4II) ◽  
pp. 209-226
Author(s):  
Shahbaz Nasir

Traditionally, developed countries are the major exporters of services; however, technological developments in IT and communications over the last two decades have made it possible for developing countries to exploit their comparative advantage in some modern services. The driving force for this comparative advantage is the large pool of semi-skilled and skilled graduates in emerging countries who can deliver their services across borders, using advanced communication technologies. Why do emerging countries have increasing modern services exports? How are these exports explained by theory? What are the factors behind this export growth and the reasons to expect future growth? These are some of the important questions that researchers and policy-makers would like to find answers to and an attempt has been made to answer these questions in this paper. Identification of the sources of services export growth from emerging and developing countries can be attempted through established theories of goods trade and production. This paper reviews selected theory and empirical work in order to explain the underlying causes for growing exports of services. Causes for the export of modern services may include a comparative advantage of the exporting country, cost reduction for the importing firm through outsourcing, reduction in trading costs due to technological improvements and an increase in gains from services trade.


2018 ◽  
Vol 14 (5) ◽  
pp. 591-612
Author(s):  
Luiz Eduardo Gaio ◽  
Tabajara Pimenta Júnior ◽  
Fabiano Guasti Lima ◽  
Ivan Carlin Passos ◽  
Nelson Oliveira Stefanelli

Purpose The purpose of this paper is to evaluate the predictive capacity of market risk estimation models in times of financial crises. Design/methodology/approach For this, value-at-risk (VaR) valuation models applied to the daily returns of portfolios composed of stock indexes of developed and emerging countries were tested. The Historical Simulation VaR model, multivariate ARCH models (BEKK, VECH and constant conditional correlation), artificial neural networks and copula functions were tested. The data sample refers to the periods of two international financial crises, the Asian Crisis of 1997, and the US Sub Prime Crisis of 2008. Findings The results pointed out that the multivariate ARCH models (VECH and BEKK) and Copula-Clayton had similar performance, with good adjustments in 100 percent of the tests. It was not possible to perceive significant differences between the adjustments for developed and emerging countries and of the crisis and normal periods, which was different to what was expected. Originality/value Previous studies focus on the estimation of VaR by a group of models. One of the contributions of this paper is to use several forms of estimation.


Author(s):  
F. Basov

This article is dedicated to the German policy towards the EU enlargement. Its history as well as the current German policy towards prospective enlargements are analyzed in this paper. The article offers party-political and sociological analysis of Germany`s attitude towards the EU enlargement, also the reasons for it are determined. FRG supported all of the European Community and European Union enlargements. This line is being continued, but nowadays only step to step approach is being supported. Germany‘s motives to the EU enlargement are based on the liberal concept of the common security. The main goals of this policy are the including of European countries into the Western community of developed countries (the EU), the extension of the stability and security area. The economic integration is also very important for Germany. The key priority of the EU enlargement is the Western Balkan region (the so called “Europeanisation” of Western Balkans). This process is being supported by political elites of the region and by the European Union itself. It is recognized, that the Europeanisation of Western Balkans was used as a sample for the Eastern Partnership Program. Without consideration of the Russian factor, though, this strategy towards the post-Soviet countries has many weaknesses. But the EU-membership for the Eastern Partnership members is not excluded.


INDIAN DRUGS ◽  
2021 ◽  
Vol 58 (06) ◽  
pp. 07-18
Author(s):  
Ria Christine Siagian ◽  
◽  
Novilia Bachtiar ◽  
Prastuti Soewondo ◽  
◽  
...  

The past decade has seen an increasing number in production of newly-developed biopharmaceuticals, biosimilars and biobetters that can help contribute to improved global health. Global market growth in this industry was reported to increase and approach more than US$200 billion. As the industry matures, the growth is significantly higher in emerging markets than in developed countries. This shows a shift of biopharmaceuticals production outside of developed countries, thereby sending signals to emerg-ing countries the opportunity to become global leaders in new industries. This literature review seeks to identify the commercial levers in biopharmaceutical development in emerging countries. The study found that biopharmaceuticals industry was promising for emerging countries to compete in global mar-ket if it were supported by strong government involvement. This involvement revealed key strategies to improve poor pipeline productivity shaped by political, economic, technological and market fact.


Vestnik MEI ◽  
2021 ◽  
Vol 1 (1) ◽  
pp. 11-20
Author(s):  
Sergey V. Loktionov ◽  
◽  
Aleksey V. Kochergin ◽  
Aleksey N. Sharov ◽  
Gleb S. Loktionov ◽  
...  

The aim of the work is to study the effect the variation of the phase-shifting transformer (PST) reactance has on the accuracy of calculating its control angle and the electrical network operating parameters obtained as a result of this control. The operating parameters, in particular, active power flows in the electrical circuit branches, are controlled by changing the PST angle; however, in view of the PST design features, this control entails a change of its reactance. Depending on the design features of different PST models and the control angle value, the PST reactance may be constant or vary in a significant range. In connection with a growing use of PSTs in industrially developed countries and with the fact that the first samples of this equipment have emerged in the CIS countries, including Russia, an increased attention is paid to this topic in a number of domestic and foreign publications. In particular, matters concerned with the stability of electric operation modes are considered in view of the fact that the PST reactance depends on its control angle, and the effect this dependence has on the operating parameters is estimated. The necessity of taking into account the varying PST reactance in calculating its control angle for controlling active power flows is considered for different cases. Forced redistribution of active power flows in the closed loops of an electrical network by means of a PST can be used to reduce active power losses and to maintain the required loading of the power lines for various reasons, for example, for commercial purposes or in the case of transit power flows between different countries. In view of the complexity of calculations, constant values of the PST reactance are usually assumed, but this approach is valid not for all types of PST designs. In the majority of PSTs, their reactance varies with increasing the control angle. Therefore, calculations carried out without taking this feature into account may yield a fortiori incorrect correspondence between the control angle and the transformer reactance value. In turn, an error will be introduced in the accuracy of the PST control angle calculations, as well as in the calculations of the operating parameters that should be obtained from the control action.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zulkefly Abdul Karim ◽  
Danie Eirieswanty Kamal Basa ◽  
Bakri Abdul Karim

Purpose This paper aims to investigate the relationship between financial development (FD) and monetary policy effectiveness (MPE) on output and inflation in ASEAN-3 countries (Singapore, Malaysia and the Philippines). Design/methodology/approach This study uses an open economy structural vector autoregressive model to generate MPE. Then, an autoregressive distributed lagged (ARDL) model is used to analyze the effect of FD on MPE across countries. Findings The findings revealed that FD plays a different role in MPE across countries. In Malaysia, a more developed financial system tends to reduce the MPE on output, whereas in Singapore, results show that the more developed financial system (stock market capitalization) tends to increase MPE on output. However, in the Philippines, the main results show that the effect of FD (liquid liabilities) upon MPE on output is depending on the policy variable (interest rates or money supply). Originality/value This paper fills this gap by providing the first study of ASEAN-3 countries in examining how effective is a monetary policy in response to the development of the financial market across the country. Second, this paper considers two FD indicators, namely, the banking sector and capital market development in investigating its effect on MPE on output and inflation. Third, the authors construct the MPE in each country using a structural (identified) VAR model by aggregating the response of output growth and inflation rate on monetary policy changes (interest rate and money supply) using impulse–response function. Regarding this, the results of this study provide new empirical evidence and insight into the long debate on the relationship between FD and the MPE.


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