Diversity of Monetary Regimes and Reactions to the Pandemic Crisis

2021 ◽  
pp. 276-296
Author(s):  
Cornelia Sahling ◽  
Nikolay Nenovsky ◽  
Petar Pandushev Chobanov
Keyword(s):  
Monetary Policy ◽  
Institutional Diversity ◽  
Monetary Regimes ◽  
External Anchor ◽  
Monetary Regime ◽  
Balkan Countries ◽  
Short Run ◽  
Discretionary Monetary Policy ◽  
The Eu

This chapter analyses to what extent the type of monetary regime in three Balkans countries (Bulgaria, Romania, and Serbia) determines the scope and nature of reactions to the pandemic crisis in the short run (providing liquidity to different sectors) and considers the possibilities for a long-term recovery. A comparative perspective is particularly suitable for the Balkan countries with great institutional diversity of the monetary regimes. In particular, the two members of the EU, Bulgaria and Romania, have been following different principles of monetary regimes for decades (Currency Board versus discretionary Monetary Policy). Both Bulgaria and Romania follow closely the ECB monetary policy. Serbia, which is outside the EU, is not affected by the constraints of European integration and actually has its independent monetary policy (although the Euro is also an important external anchor).

scholarly journals DOES THE PROCYCLICALITY OF CAPITAL REQUIREMENTS AFFECT FINANCIAL STABILITY IN CEMAC?

2020 ◽  
Vol 8 (7) ◽  
pp. 17-37
Author(s):  
Djimoudjiel Djekonbé ◽  
Ningaye Paul ◽  
Nafé Daba
Keyword(s):  
Monetary Policy ◽  
Financial Stability ◽  
Policy Instruments ◽  
Factorization Method ◽  
Capital Requirements ◽  
Panel Var ◽  
Regulatory Capital ◽  
Short Term ◽  
Discretionary Monetary Policy

The objective of this article is to analyze the effects of procyclical variations of the capital requirements for risk coverage on financial stability in the CEMAC[1]. In order to achieve this objective, we have specified and estimated a panel VAR model using the structural factorization method on quarterly Central Bank data over the period 2006-2017. Firstly, the results show that procyclical capital adjustments in the CEMAC region lead to short-term financial instability through the contraction of credit to the private sector. Secondly, despite the low level of financial development, the effects maintained by the adjustment of monetary policy instruments in the short term remain significant on price stability. Finally, in the long term, the procyclicality of regulatory capital makes it possible to revive economic activity and guarantee financial stability. These results lead us to recommend the adoption of a more discretionary monetary policy so as to make more procyclical the capital requirement.     [1] Economic Community of Central African States comprising Cameroon, Central African Republic, Chad, Congo, Gabon and Equatorial Guinea.

scholarly journals Are EU Members’ Economies an “Engine” of the EU Candidates’ Economies?

2021 ◽  
Vol 21 (2) ◽  
pp. 97-117
Author(s):  
Marija Radulović ◽  
Milan Kostić
Keyword(s):  
Developing Country ◽  
Positive Impact ◽  
Positive Influence ◽  
Economic Benefits ◽  
Developed Country ◽  
Economic Relations ◽  
Long Run ◽  
Short Run ◽  
The Eu

Abstract Research background: Economic relations between countries members of the EU and EU candidates are very strong. Germany and France have the leading economies of the EU, are in the top ten economies worldwide, and drivers of EU development. Serbia has strong economic relations with Germany and France, especially with Germany. Therefore, it is necessary to examine whether Germany and France impact the development of Serbia. Purpose: The purpose of the study is to determine if there is a positive influence of a developed country on a developing country. The aim of the paper is to determine whether there is a long- and short-term positive relationship between Germany and France (EU members) and the Serbian economy (EU candidate). Research methodology: A Vector Error Correction Model is used to analyze quarterly data from 2002Q2 to 2018Q2. Results: The results showed a statistically significant long-term relationship between Germany and France and Serbia’s real GDPs, so EU members have a long-term positive impact on the economy of EU candidates. In the case of the French, there is a short-run positive impact on the Serbian economy. For Germany, it is not the case. Novelty: This paper fills the literature gap about the influence of a developed country on a developing country. Recommendations for policymakers in EU candidates could be that if they want to motivate people to accept the process of access to the EU, they must provide them with more information about long-run economic benefits from the association to the EU.

RES Cooperation Between West Balkan Countries and With the EU: From Short Term Pilots to Long Term Visions

2016 ◽  
Author(s):  
Andreas Tuerk ◽  
Dorian Frieden ◽  
Andre Ortner ◽  
Gustav Resch
Keyword(s):  
Short Term ◽  
Balkan Countries ◽  
The Eu

scholarly journals The Ukrainian interest rate pass-through in the post-1999 era and the effectiveness of the countercyclical monetary policy

2019 ◽  
Vol 6 (2) ◽  
pp. 191-204
Author(s):  
Chu V. Nguyen ◽  
Anna Kravchuk
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Test Results ◽  
Sample Period ◽  
Long Run ◽  
Short Run ◽  
National Bank ◽  
Bounds Test ◽  
Pass Through

This study investigates the nature of the Ukraine interest rate pass-through from January 2000 to November 11, 2018-the post-1999 era. The empirical results reveal a relatively high short-run interest pass-through of 0.724100 and a marginally overshooting long-run interest rate pass-through of 1.054309. The bounds test results indicate a strong long-term relationship between countercyclical monetary policy and market rates. These empirical findings suggest that the National Bank of Ukraine has been very effective in formulating and implementing its countercyclical monetary policy, in spite of the pervasive corruption, formidable political and economic challenges faced by the Ukrainian Republic over this sample period, the results are quite surprising.

Monetary Policy of Bank of Russia: Strategy and Tactics

2015 ◽  
pp. 53-85 ◽  
Author(s):  
E. Goryunov ◽  
S. Drobyshevsky ◽  
P. Trunin
Keyword(s):  
Monetary Policy ◽  
Real Interest Rate ◽  
Policy Instrument ◽  
Interbank Market ◽  
Short Term ◽  
Macroeconomic Conditions ◽  
Monetary Regime ◽  
Cross Country ◽  
Analysis Of Dynamics

In recent years Bank of Russia has made several major changes in its monetary regime, including elimination of the exchange rate corridor and introduction of the key rate as the main monetary policy instrument. The article discusses these developments in the context of long-term priorities of the monetary authority. We put emphasis on the extent to which monetary policy should stimulate economic growth and assess whether the policy of the Central Bank of RF was excessively tight in 2010-2014. In order to do that we use the real interest rate on short-term loans in the interbank market as an indicator of monetary policy tightness. Cross-country comparisons together with the analysis of dynamics of selected indicators suggest that Bank of Russia’s policy was rather soft. We conclude with comments regarding tactics of monetary policy under current turbulent macroeconomic conditions.

Lifting capital controls underpins Iceland’s growth

2017 ◽  
Keyword(s):  
Interest Rates ◽  
Capital Controls ◽  
Economic Conditions ◽  
Short Term ◽  
Content Type ◽  
Short Run ◽  
Small Economy ◽  
Economic Balance ◽  
The Eu

Subject Iceland‘s macroeconomic outlook. Significance Iceland at the turn of the year took several steps towards lifting its capital controls on households and businesses. The authorities had worried that this would create an outflow of capital, destabilising the economy through a weakened krona and rising inflation. However, positive economic conditions have reversed the problem at least in the short run, with the main worries being an even stronger krona which could threaten export and tourism industries. Impacts High expected GDP growth and interest rates might be tempting for foreign investors looking for short-term gains. Fresh elections are possible if the Independence Party fails to form a government. The largest challenge for Iceland will be to find long-term economic balance as a small economy outside the EU.

scholarly journals Credibility of the Philippine Central Bank: Evidenced by the Interest Rate Pass-Through

2017 ◽  
Vol 3 (1) ◽  
pp. 47-56
Author(s):  
Chu V. Nguyen
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Empirical Finding ◽  
Policy Makers ◽  
Long Run ◽  
Short Run ◽  
Pass Through ◽  
The Interest Rate

This study investigates the Philippine interest rate pass-through over the December 2001 through January 2016 period. The empirical findings suggest that the Philippine Central Bank has not been very effective in formulating and implementing its countercyclical monetary policy. Specifically, the empirical results reveal very low short-run and long- run interest rate pass-through. The Bounds test results indicate no long-term relationship between countercyclical monetary policy and market rates. Notwithstanding the banking system's remarkable performance in the recent years, amid lingering uncertainties in global financial markets, the Philippine Central Bank lacked the credibility in conducting its countercyclical monetary policy. This empirical finding may not be desirable but it forewarns the monetary policy makers of challenges in formulating and implementing their monetary policy.

scholarly journals Monetary Policy and Private Sector Credit Interaction in Ghana

2020 ◽  
pp. 180-191
Author(s):  
Alice Constance Mensah ◽  
Ebenezer Okyere
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Private Sector ◽  
Error Correction ◽  
Money Supply ◽  
Long Run ◽  
Short Run ◽  
The Government

Using a series of econometric techniques, the study analysed interaction between monetary policy and private sector credit in Ghana. This study made use of monthly dataset spanning January 1999 to December 2019 of credit to the private sector (PSC) and broad money supply (M2). The results reveal that there exists cointegration, a long run stationary relation between monetary policy and private sector credit. This implies, increases in credit should prompt long-term increases in monetary policy. It is not surprising that growth in the private sector might have a stronger effect on monetary policy. The Error Correction Test is statistically significant and that all the variables demonstrate similar adjustment speeds. This implies that in the short run, both money supply and credit are somewhat equally responsive to their last period’s equilibrium error. There is unidirectional causation from private sector credit to monetary policy. It can be said that, there is an interaction between money supply and private sector credit. Thus, credit to private sector holds great potential in promoting economic growth. It can be recommended to the government to increase the credit flow to the private sector because of its strategic importance in creating and generating growth of the economy.

scholarly journals Eurizacija kao instrument monetarne politike Srbije?

2006 ◽  
Vol 51 (168) ◽  
pp. 7-29 ◽  
Author(s):  
Nikola Fabris
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Current Account ◽  
Current Account Deficit ◽  
Theoretical Aspect ◽  
Policy Instrument ◽  
Foreign Exchange Reserves ◽  
Course Of Action ◽  
Monetary Regime ◽  
The Eu

The 1990s were characterized by two important yet mutually connected phenomena: the introduction of the euro as a national currency in the EU member countries, and recommendations for the introduction of dollarization as an instrument of attaining macroeconomic stability. Full dollarization (eurozation) is a relatively rare phenomenon. Yet in recent years it has attracted a lot of attention, which can be proved by an increasing number of studies dealing with this problem, as well as an increasing number of countries taking this course of action. This paper deals with the advantages and the disadvantages of dollarization, not only from the theoretical aspect but also on the basis of experience of other dollarized countries. The paper mostly deals with the analysis of the adequacy of dollarization (eurozation) as a monetary regime of Serbia. The unequivocal conclusion is that dollarization (eurozation) is not a monetary policy instrument that can be recommended to Serbia, the most relevant reasons for this being: the loss of capital surplus, the loss of some foreign exchange reserves, the danger of foreign exchange outflow through the balance of payment current account deficit, likely opposition from the EU, etc.

Sanctions of the USA and the Policy of Bank of Russia:double Blow to the National Economy

2014 ◽  
pp. 13-29 ◽  
Author(s):  
S. Glazyev
Keyword(s):  
National Security ◽  
Economic Sanctions ◽  
Capital Flight ◽  
Practical Advice ◽  
The Us ◽  
Monetary Authorities ◽  
The Usa ◽  
Simultaneous Adoption ◽  
The Eu

This article examines fundamental questions of monetary policy in the context of challenges to the national security of Russia in connection with the imposition of economic sanctions by the US and the EU. It is proved that the policy of the Russian monetary authorities, particularly the Central Bank, artificially limiting the money supply in the domestic market and pandering to the export of capital, compounds the effects of economic sanctions and plunges the economy into depression. The article presents practical advice on the transition from external to domestic sources of long-term credit with the simultaneous adoption of measures to prevent capital flight.

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