scholarly journals The COVID-19 Economic Crisis in Mexico through the Lens of a Financial Conditions Index

2021 ◽  
pp. 1-27
Author(s):  
Julio A. Carrillo ◽  
Ana Laura García
Keyword(s):  
Financial Markets ◽  
Market Economy ◽  
Economic Crisis ◽  
Economic Activity ◽  
Financial Distress ◽  
Emerging Market ◽  
Financial Conditions ◽  
Real Shocks

The COVID-19 pandemic not only generated real shocks affecting economic activity severely, but also a broad uncertainty that unleashed an extreme shock to financial markets. In this paper, we focus on the financial dimension of the pandemic from the viewpoint of an emerging market economy. Accordingly, we estimate a financial conditions index for Mexico since 1993 and find that the acute turmoil generated by the pandemic stands among the four largest episodes of financial distress experienced by the country. In addition, we find evidence suggesting that real variables have responded differently to shocks that worsen financial conditions than to shocks that improve them.

Exchange Rates and the Working Capital Channel of Trade Fluctuations

2018 ◽  
Vol 108 ◽  
pp. 531-536 ◽  
Author(s):  
Valentina Bruno ◽  
Se-Jik Kim ◽  
Hyun Song Shin
Keyword(s):  
Exchange Rates ◽  
Market Economy ◽  
Opposite Direction ◽  
Economic Activity ◽  
Emerging Market ◽  
Manufacturing Firms ◽  
Supporting Evidence ◽  
Working Capital ◽  
Firm Level ◽  
Cross Border

Exchange rates affect the economy not only through the competitiveness of exports but also through a financial channel. The financial channel goes in the opposite direction to the competitiveness channel in that a stronger currency goes hand-in-hand with more buoyant real economic activity on the back of faster credit growth and cross-border banking flows. The effect is particularly marked for emerging market economies for the broad dollar index: a stronger dollar may actually lead to a decline in trade volumes of an emerging market economy. Our paper develops a stylized model that generates such an effect and finds supporting evidence in a firm-level investigation of manufacturing firms from Asia.

Are the Effects of Financial Market Disruptions Big or Small?

2020 ◽  
pp. 1-39
Author(s):  
Regis Barnichon ◽  
Christian Matthes ◽  
Alexander Ziegenbein
Keyword(s):  
Time Series ◽  
Financial Market ◽  
Economic Activity ◽  
Financial Distress ◽  
Financial Shocks ◽  
Asymmetric Effects ◽  
Structural Time Series ◽  
Financial Conditions ◽  
Time Series Analyses ◽  
Structural Time

While episodes of financial distress are followed by large and persistent drops in economic activity, structural time series analyses point to relatively mild and transitory effects of financial market disruptions. We argue that these seemingly contradictory findings are due to the asymmetric effects of financial shocks, which have been predicted theoretically but not taken into account empirically. We estimate a model designed to identify the (possibly asymmetric) effects of financial market disruptions, and we find that a favorable financial shock —an easing of financial conditions— has little effect on output, but an adverse shock has large and persistent effects. In a counter-factual exercise, we find that over two thirds of the gap between current US GDP and its 2007 pre-crisis trend was caused by the 2007-2008 financial shocks.

ANALISIS FINANCIAL DISTRESS DAN PENGARUHNYA TERHADAP RETURN SAHAM PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

2019 ◽  
Vol 7 (4) ◽  
Author(s):  
SISCA KRISTANTI B2042141020
Keyword(s):  
Social Sciences ◽  
New York ◽  
Empirical Evidence ◽  
Market Economy ◽  
Financial Distress ◽  
Stock Exchange ◽  
Emerging Market ◽  
Z Score ◽  
Factors Influencing ◽  
Altman Model

Kebangkrutan merupakan masalah yang sangat perlu yang diwaspadai oleh perusahaan. Perusahaan yang mengalami kebangkrutan tentunya akan memberikan dampak negatif pada stakeholder perusahaan. Sebelum kebangkrutan itu terjadi, perusahaan mengalami kondisi financial distress atau kondisi dimana keuangan perusahaan dalam keadaan tidak baik yang menjadi indikator awal terjadinya kebangkrutan. Tujuan penelitian ini adalah menganalisis potensi kebangkrutan pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia periode 2012-2016 berdasarkan model Z-Score Altman dan Springate serta pengaruhnya metode Z-Score Altman dan Springate terhadap return saham perusahaan. Sampel yang digunakan dalam penelitian ini 10 perusahaan manufaktur. Analisis yang digunakan adalah analisis deskripstif dan analisis regresi linier berganda dengan menggunakan perangkat lunak SPSS. Hasil prediksi financial distress menggunakan metode Altman Z-Score dan Springate terdapat dua perusahaan yang berada pada financial distress yaitu PT Semen Holcim serta PT. Tirta Mahakam Resources Tbk. Metode altman z-score tidak berpengaruh sedangkan springate berpengaruh positif terhadap return saham perusahaan Manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2012-2016 Kata kunci : kebangkrutan, manufaktur, altman z-score dan springateDAFTAR PUSTAKA Adnan, A.M. 2001. Analisis Ketepatan Prediksi Metode Altman Terhadap Terjadinya Likuidasi pada Lembaga Perbankan (Kasus Likuidasi Perbankan di Indonesia). dalam JAI Volume 5 No. 2. Jakarta. Jurnal Akuntansi Indonesia Adnan, M.A dan, Kurniasih, E. 2000. Analisis Tingkat Kesehatan Perusahaan Untuk Memprediksi Potensi Kebangkrutan Pada Penekatan Altman (Kasus Pada Sepuluh Perusahaan Di Indonesia), Jurnal Akuntansi Dan Auditing Indonesia, 4 (2), 131-149. Alifiana, M. A Dan  N. R Arumsari., 2017. Analisis Kinerja Bank Badan Usaha Milik Negara  Berdasar Metode Altman Dan Return Saham  Studi Pada Pt Bank Negara Indonesia (Persero) Tbk.  PROSIDING SNATI F Ke-4 Tahun 2017 ISBN: 978-602-1180-50-1 Altman, 2002. Corporate Financial Distress. John Wiley & Sons, 1983. New York. Fakhrurozie, 2007, Analisis Pengaruh Kebangkrutan Bank Dengan Metode Altman Z-Score Terhadap Harga Saham Perusahaan Perbankan Di Bursa Efek Jakarta. Skripsi.  Semarang . Universitas Negeri Semarang, Hanafi, H. M. dan H. Abdul. 1996. Analisa Laporan Keuangan. UPP-AMP YKPN. Yogyakarta. Marcelina . T. A Dan W.S Yuliandhari, 2014. Prediksi Kebangkrutan Menggunakan Metode Z-Score Dan Pengaruhnya Terhadap Harga Saham Pada Perusahaan Transportasi Yang Terdaftar Di Bursa Efek Indonesia Tahun 2008-2012. E-Proceeding Of Management : Vol.1, No.3 Desember 2014 | Page 291 Munawir, S 2001. Analisa Laporan Keuangan. Liberty. Yogyakarta Munawir, S 2002. Analisa Laporan Keuangan. UPP AMP YKPN. Yogyakarta Muslich, M. 2000. Manajemen keuangan Modern. Rineka Cipta. Jakarta. Nur Fadli Andriawan, N.F Dan D Salean., 2016. Analisis Metode Altman Z-Score Sebagai Alat Prediksi Kebangkrutan Dan Pengaruhnya Terhadap Harga Saham Pada Perusahaan Farmasi Yang Terdaftar Di Bursa Efek Indonesia.  Jurnal Ekonomi Akuntansi, Hal 67 – 82 Volume 1, Nomor 1, April 2016 Platt, H., dan M. B. Platt. 2002. Predicting Financial Distres. Journal of Financial Pranowo. 2010. “The Dynamics of Corporate Financial Distress in Emerging Market Economy: Empirical Evidence from the Indonesian Stock Exchange 2004-2008”. European Journal of Social Sciences Vol 16 Number I, 138-149. Purwanti, E., 2016. Analisis Perbedaan Model Altman Z Score Dan Model Springate Dalam Memprediksi Kebangkrutan Pada Perusahaan Pertambangan Di Indonesia (Studi Empiris Pada Perusahaan Pertambangan Yang Terdaftar Pada Bursa Efek Indonesia Tahun 2010-2014). Jurnal STIE Semarang, Vol 8, No 2, Edisi Juni 2016 (Issn : 2252-826) Sukana. 2008. Factors Influencing Financial Distress and Bankruptcy Risks. Universitas Padjajaran, Bandung. Syamsul, H Dan Atika, A. 2008. Pemilihan Prediktor Delisting Terbaik (Perbandingan Antara The Zmijewski Model, The Altman Model, Dan Springate Model). Thesis. Jakarta. Universitas Islam Indonesia. Weston, F.J. 1997. Manajemen Keuangan. Erlangga. Jakarta

Investors may be underpricing more US Fed tightening

2019 ◽  
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Federal Reserve ◽  
Economic Activity ◽  
Emerging Market ◽  
Oil Price ◽  
Content Type ◽  
The Us ◽  
Equity Funds ◽  
Global Growth

Subject Financial markets. Significance The US stock market has rallied by 11.8% this year, buoyed by the US Federal Reserve (Fed) executing a dovish policy reversal in late January. Slower global growth prompted the turnaround, but at the same time, US economic activity still has momentum. Reflecting the uncertainty, a week ago futures investors saw a 20.0% chance of the Fed's next move being a rate cut and a 3.5% chance of a hike by January 2020. Expectations have since shifted, to a 7.0% chance of a cut and a 6.9% chance of a hike, respectively. Impacts The dollar is 1% higher since the Fed turnaround at end-January; much larger concerns about Europe than US activity will keep it rising. Emerging market (EM) bond and equity funds are attracting consistently high inflows, but sharply lower Chinese growth would be contagious. The Brent oil price has risen more than 20% this year, but weaker global growth will limit further gains.

scholarly journals Identifying an index of financial conditions for South Africa

2015 ◽  
Vol 32 (2) ◽  
pp. 256-274 ◽  
Author(s):  
Kirsten Thompson ◽  
Renee Van Eyden ◽  
Rangan Gupta
Keyword(s):  
South Africa ◽  
Financial Crisis ◽  
Financial Markets ◽  
South African ◽  
Economic Activity ◽  
Content Type ◽  
The Real ◽  
Financial Variables ◽  
Financial Conditions ◽  
Rolling Window

Purpose – The purpose of this study is to construct a financial conditions index (FCI) for the South African economy to enable the gauging of financial conditions and to better understand the macro-financial linkages in the country. The global financial crisis that began in 2007-2008 demonstrated how severe the impact of financial markets’ stress on real economic activity can be. In the wake of the financial crisis, policy-makers and decision-makers across the world identified the critical need for a better understanding of financial conditions, and more importantly, their impact on the real economy. Design/methodology/approach – The FCI is constructed using monthly data over the period 1966 to 2011, and is based on a set of 16 financial variables, which include variables that define the state of international financial markets, asset prices, interest rate spreads, stock market yields and volatility, bond market volatility and monetary aggregates. The authors explore different methodologies for constructing the FCI, including full sample and rolling-window principal components analysis. Furthermore, the authors investigate whether it is beneficial to purge the FCI of the real effects of inflation, economic growth and interest rates, and evaluate the performance of our constructed FCIs by comparing their ability to pick up turning points in the South African business cycle, and by running in-sample causality (forecast) tests. Findings – The authors find that the estimated FCIs are good predictors of economic activity; with the rolling-window FCI being the “best” performing index. Causality tests indicate that this FCI is a good in-sample predictor of industrial production growth and the Treasury Bill rate, but a weak predictor of inflation. Practical implications – The authors find that the resulting FCI can act as an “early warning system”. This, in turn, may serve to indicate that monetary policy should take broader financial conditions into account. Originality/value – This study offers three main contributions to the existing literature on financial conditions in South Africa: the authors construct an FCI over a sample period that is three decades longer than existing indices, the FCI of this paper comprises a wider coverage of financial variables than others and the authors make use of rolling-window estimation techniques that allow them to account for parameter instability and to capture the real-time constraints faced by a policymaker.

World Economic Crisis as a Process of Substitution of Technological Modes

2009 ◽  
pp. 26-38 ◽  
Author(s):  
S. Glaziev
Keyword(s):  
Economic Crisis ◽  
Economic Activity ◽  
Sharp Increase ◽  
Energy Resources ◽  
Long Wave ◽  
The World ◽  
World Economic ◽  
Technological Mode ◽  
World Economic Crisis

The article analyzes fundamental reasons for the world economic crisis in the light of global technological shifts. It proves that it is caused by the substitution of technological modes. It is shown that sharp increase and slump in stock indices and prices for energy resources are typical of the process of technological substitution which occurs regularly according to the rhythm of long-wave fluctuations of the world economic activity. The article rationalizes a package of anti-crisis measures aimed at stimulating the new technological mode. Its structure and role of the locomotive factor of the new long wave of economic growth are revealed.

scholarly journals Financial stability and local economic development: the experience of Italian labour market areas

2021 ◽  
Author(s):  
Cristian Barra ◽  
Roberto Zotti
Keyword(s):  
Economic Development ◽  
Labour Market ◽  
Financial Distress ◽  
Financial Stability ◽  
Local Economic Development ◽  
Banking System ◽  
Spatial Effects ◽  
Financial Conditions ◽  
Market Areas ◽  
The Relationship

AbstractRegulators should ensure the smooth functioning of the system and promote regional development. Making the health of financial institutions is therefore a prerequisite for a sustainable economic development. This paper contributes to the literature on the relationship between the financial stability and growth within the area of one country. This implies that institutional, legal, and cultural factors are more adequately controlled for and financial markets are more accurately bounded. Using a rich sample of Italian banks over the 2001–2012 period, this paper addresses whether different measures of financial distress affect economic development of labour market areas in Italy. Results show that the financial stability has a positive effect on local economic development, robust to alternative variables capturing financial vulnerability. The presence of spatial effects is tested showing that better financial conditions of the banking system in neighbouring areas have a detrimental effect on an area’s growth.

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