Financial Repression is Knocking at the Door, Again

Financial repression (legal restrictions on interest rates, credit allocation, capital movements, and other financial operations) was widely used in the past but was largely abandoned in the liberalization wave of the 1990s, as widespread support for interventionist policies gave way to a renewed conception of government as an impartial referee. Financial repression has come back on the agenda with the surge in public debt in the wake of the Global Financial Crisis, and some countries have reintroduced administrative ceilings on interest rates. By distorting market incentives and signals, financial repression induces losses from inefficiency and rent-seeking that are not easily quantified. This study attempts to assess some of these losses by estimating the impact of financial repression on growth using an updated index of interest rate controls covering 90 countries over 45 years. The results suggest that financial repression poses a significant drag on growth, which could amount to 0.4-0.7 percentage points.

Download Full-text

Assessing The Impact Of The Global Financial Crisis On GCC Countries

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v8i2.682 ◽

2010 ◽

Vol 8 (2) ◽

Cited By ~ 4

Author(s):

Hisham H. Abdelbaki

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

The United States ◽

Font Size ◽

Negative Effects ◽

Gcc Countries ◽

The World ◽

The Global Financial Crisis ◽

The Impact

No doubt, the international financial crisis that started in the United States of America will cast its effects on all countries of the world, developed and developing. Yet these effects vary from one country to another for several reasons. The GCC countries would not escape these negative effects of this severe crisis. The negative effects of the crisis on gulf countries come from many aspects: first, decrease in price of oil on whose revenues the development programs in these countries depend; second, decrease in the value of US$ and the subsequent decrease in the assets owned by these countries in US$; third, a case of economic stagnation will prevail in the world with effects starting to appear. It is obvious that this would be reflected on the real sector in the economies causing a series of negative effects through decrease of the world demand for exports of GCC countries of oil, petrochemicals and aluminum.  Lastly, increased inflation rates with decreased interest rates will result in a decrease in real interest with an accompanying decrease in incentives for saving and consequently investment and economic development. The main aim of the research is to assess the economic effects of the global financial crisis on GCC countries. The paper results are that the big reserves of foreign currencies achieved by the GCC countries in the past few years have helped increase their ability to bear the effects of the financial effects on one hand and their ability to adopt expansionary policies through pumping liquidity to absorb the regressive effects of the crisis on the other. The paper recommends the necessity of taking precautionary procedures for the effects which will result from the expansionary policies effective in GCC countries.

Download Full-text

Impact of the COVID-19 pandemic on the production and sales of cars in the world

Automobile Transport ◽

10.30977/at.2019-8342.2021.49.0.06 ◽

2021 ◽

pp. 63-70

Author(s):

Inna Shevchenko ◽

Illia Dmytriiev ◽

Oksana Dmytriieva

Keyword(s):

Automotive Industry ◽

Global Financial Crisis ◽

Negative Consequences ◽

Negative Effects ◽

The Past ◽

The World ◽

The Global Financial Crisis ◽

The Impact ◽

Insight Into

Problem. The global automotive industry has already had an experience of recovery from the global financial crisis of 2008, but the pandemic crisis of 2020 is quite different in nature and pattern of progress: in recent history it has had no analogues and it will be premature to state its completion. Therefore, it is important to determine the impact of the pandemic on the production and sale of cars in order to overcome the negative consequences. To address this issue, the article identifies the sensitivity of this subsector of mechanical engineering to destructive changes in the environment; an analysis of changes in the volume of production and sales of cars by countries of the world over the past period has been made. Goal. The aim of the work is to determine the destructive consequences and trends of the COVID-19 pandemic impact on the global automotive industry, namely the production and sale of cars. Methodology. To determine the impact of the COVID-19 pandemic, a vertical and horizontal analysis of car production and sales in the world has been conducted. Results. The results of the analysis allowed the authors to group the countries of the world by the destructive effects of the pandemic crisis of 2020 for the automotive industry. Originality. The carried out classification of countries by the destructive effects of the COVID-19 pandemic provided an opportunity to gain insight into its impact on the automotive industry, in particular on the production and sale of cars. Practical value. The obtained results can be recommended to identify further ways to overcome the negative effects of the COVID-19 pandemic in the automotive industry.

Download Full-text

The Impact of the Global Financial Crisis on Central Banking

The Oxford Handbook of the Economics of Central Banking ◽

10.1093/oxfordhb/9780190626198.013.6 ◽

2019 ◽

pp. 170-192

Author(s):

Alex Cukierman

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Financial Stability ◽

Inflation Targeting ◽

Global Financial Crisis ◽

The United States ◽

Central Banking ◽

The Global Financial Crisis ◽

The Impact ◽

Regulatory Reforms

This chapter describes the impacts of the global financial crisis on monetary policy and institutions. It argues that during the crisis, financial stability took precedence over traditional inflation targeting and discusses the emergence of unconventional policy instruments such as quantitative easing (QE), forex market interventions, negative interest rates, and forward guidance. It describes the interaction between the zero lower bound (ZLB) and QE, and proposals, such as raising the inflation target, to alleviate the ZLB constraint. The chapter discusses the consequences of the relative passivity of fiscal policies, “helicopter money,” and 100 percent reserve requirement. The crisis triggered regulatory reforms in which central banks’ objectives were expanded to encompass macroprudential regulation. The chapter evaluates recent regulatory reforms in the United States, the euro area, and the United Kingdom. It presents data on new net credit formation during the crisis and discusses implications for exit policies.

Download Full-text

Macroeconomic factors and stock prices in the food and drink industry

British Food Journal ◽

10.1108/bfj-12-2018-0839 ◽

2019 ◽

Vol 121 (7) ◽

pp. 1627-1641

Author(s):

Jana Šimáková ◽

Daniel Stavárek ◽

Tomáš Pražák ◽

Marie Ligocká

Keyword(s):

Interest Rates ◽

Stock Prices ◽

Stock Price ◽

Global Financial Crisis ◽

Supply And Demand ◽

Macroeconomic Factors ◽

Content Type ◽

Food And Drink ◽

The Global Financial Crisis ◽

The Impact

Purpose The purpose of this paper is to estimate and evaluate the impact of macroeconomic fundamentals on stock prices of selected food and drink industry stocks during the period of 2005–2015, which saw the global financial crisis and its aftermath. Design/methodology/approach The paper employed correlation analysis and the Johansen cointegration test with the vector error correction mechanism for EU companies operating in the food and drink industry. The paper tested the effects of GDP, inflation and interest rates (IR) on the stock prices of companies from Austria, Croatia, Cyprus, Denmark, Finland, Germany, Ireland, Italy, Lithuania, Poland, Spain and the UK. Findings Based on the results, the authors can see that GDP has a generally positive effect on stock price development. In contrast, the relationship between stock prices and inflation and IR is negative in most cases. Originality/value Despite the fact that a majority of empirical research on companies in the food and drink sector was performed using the microeconomic approach, this paper used the macroeconomic approach and clearly demonstrated the effects of selected macro-variables on stock prices in selected EU markets. Macroeconomic factors shape the company’s performance and could potentially lead to persistent changes in supply and demand conditions in food and drink markets.

Download Full-text

Finance, financiers and financial centres: a special issue in honour of Youssef Cassis Introduction

Financial History Review ◽

10.1017/s0968565020000153 ◽

2020 ◽

Vol 27 (3) ◽

pp. 283-302

Author(s):

Carlo Edoardo Altamura ◽

Martin Daunton

Keyword(s):

Interest Rates ◽

Global Financial Crisis ◽

Social Characteristics ◽

Special Issue ◽

Low Interest Rates ◽

Rise Of China ◽

Initial Work ◽

The Global Financial Crisis ◽

City Of London ◽

The Impact

This special issue celebrates the career of Youssef Cassis. The introduction will outline his major contributions from his initial work on social characteristics of the financiers of the City of London, and their relationship with landed aristocrats and industry, through his analysis of a succession of financial centres, the comparative study of big business, the relationship between finance and politics, to his new project on the memory of financial crises. Then, we will draw on Youssef's mode of analysis to consider some of the more pressing issues in the era since the global financial crisis and the impact of Covid-19. We will consider the role of central banks, the challenge of fintech, the impact of low interest rates on inequality, savings and debt, and the potential shift in financial centres and reserve currencies with the rise of China. We will conclude by arguing that the mode of analysis developed by Cassis over his long and productive career has never been more pertinent.

Download Full-text

Migration to Australia in Times of Crisis

The Oxford Handbook of Migration Crises ◽

10.1093/oxfordhb/9780190856908.013.51 ◽

2018 ◽

pp. 816-832

Author(s):

Jock Collins

Keyword(s):

Financial Crisis ◽

Immigration Policy ◽

Global Financial Crisis ◽

Boat People ◽

The Past ◽

Political Interests ◽

The Global Financial Crisis ◽

The Impact

Australia has been one of the western world’s major migration nations for the past seven decades. Immigration has always been controversial, with periodic immigration debates erupting.This chapter reviews the impact of periodic global economic, political, and social crises on Australian immigration policy, on migration discourses and debates, and on migrants themselves. It takes the boat people “crisis,” the global financial crisis, and the crisis in globalization to demonstrate how immigration flows and immigrants themselves have been impacted by these crises and how, at the same time, these events have been politicized and been constructed as a crisis to serve political interests in Australia.

Download Full-text

Change in the ownership policy paradigm in Poland: State control vs. privatisation

Acta Oeconomica ◽

10.1556/032.2017.67.1.1 ◽

2017 ◽

Vol 67 (1) ◽

pp. 1-20 ◽

Cited By ~ 5

Author(s):

Piotr Kozarzewski ◽

Maciej Bałtowski

Keyword(s):

Global Financial Crisis ◽

Active Role ◽

Rent Seeking ◽

The State ◽

Endogenous Factors ◽

Role Of The State ◽

Polish Government ◽

The Global Financial Crisis ◽

The Impact

The paper presents an analysis of the shift in the ownership policy of the Polish government in office since 2015 towards a more active role of the state and a more reluctant attitude towards privatisation. This shift reflects a general change in the paradigm of the role of the state towards the concept of the state as a strong market player, which includes the strengthening of its ownership functions. Among others, it has led to stalling the privatisation process and concentrating only on its fiscal goals. Possible factors causing this statist shift are divided into two dichotomic groups: the government’s good faith vs. the impact of rent-seeking interest groups and endogenous vs. exogenous factors. Our main conclusion is that despite similarities with the trends observed in some other countries, endogenous factors such as increasing capture of the state by rent-seeking groups, and not the exogenous ones, including the global financial crisis, contributed most to the growing statist trends in the Polish state’s ownership policy.

Download Full-text

The Impact of the COVID-19 Pandemic on the Unpredictable Dynamics of the Cryptocurrency Market

Entropy ◽

10.3390/e23091234 ◽

2021 ◽

Vol 23 (9) ◽

pp. 1234

Author(s):

Kyungwon Kim ◽

Minhyuk Lee

Keyword(s):

Global Economy ◽

Global Financial Crisis ◽

Time Window ◽

Approximate Entropy ◽

Health Crisis ◽

The Past ◽

Bull Market ◽

The Global Financial Crisis ◽

Lz Complexity ◽

The Impact

The global economy is under great shock again in 2020 due to the COVID-19 pandemic; it has not been long since the global financial crisis in 2008. Therefore, we investigate the evolution of the complexity of the cryptocurrency market and analyze the characteristics from the past bull market in 2017 to the present the COVID-19 pandemic. To confirm the evolutionary complexity of the cryptocurrency market, three general complexity analyses based on nonlinear measures were used: approximate entropy (ApEn), sample entropy (SampEn), and Lempel-Ziv complexity (LZ). We analyzed the market complexity/unpredictability for 43 cryptocurrency prices that have been trading until recently. In addition, three non-parametric tests suitable for non-normal distribution comparison were used to cross-check quantitatively. Finally, using the sliding time window analysis, we observed the change in the complexity of the cryptocurrency market according to events such as the COVID-19 pandemic and vaccination. This study is the first to confirm the complexity/unpredictability of the cryptocurrency market from the bull market to the COVID-19 pandemic outbreak. We find that ApEn, SampEn, and LZ complexity metrics of all markets could not generalize the COVID-19 effect of the complexity due to different patterns. However, market unpredictability is increasing by the ongoing health crisis.

Download Full-text

Analysis of Interest Rate Impact on the Profitability Level of the Banking System in Albania during the Period 2005 -2014

European Journal of Economics and Business Studies ◽

10.26417/ejes.v3i1.p203-213 ◽

2015 ◽

Vol 3 (1) ◽

pp. 203

Author(s):

Sokol Ndoka ◽

Anilda Bozdo

Keyword(s):

Interest Rate ◽

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

Banking System ◽

The Other ◽

Factors Affecting ◽

The Interest Rate ◽

The Global Financial Crisis ◽

The Impact

This study is an analysis of the movement and impact of interest rates on the profitability level of the banking system in Albania. This analysis covers a 10-year timeframe (is organized in three time segments - before, during and after the financial crisis), taking into consideration the critical point of the years 2008-2009 considered as the “peak” of the global financial crisis. Such separation is made in order to see the possible changes of each period of time and to identify the impact differences of this factor in each period of study. This study is based on the hypothesis that the decrease of the interest rate has positively affected the income increase from interest as a result of the impact of two factors, negative levels of Gaps and an increased level of spread toward the average assets. As a matter of fact, it has neutralized on a certain level the other risks such as that of the loan which has dominated over the other risks. This paper is based on an empirical study with secondary quantitative and qualitative data. This study provides a considerable contribution in the framework of identification of factors affecting the profitability of the banking system in Albania, namely in the context of interest rate; In addition, this study aims at highlighting the importance of open Gaps minimization for the efficient profitability increase of the financial system.

Download Full-text

Zadłużenie gospodarstw domowych a dynamika wydatków konsumpcyjnych w krajach OECD po wybuchu kryzysu finansowego

Kwartalnik Kolegium Ekonomiczno-Społecznego Studia i Prace ◽

10.33119/kkessip.2017.1.9 ◽

2017 ◽

pp. 145-158

Author(s):

Piotr Bolibok

Keyword(s):

Economic Growth ◽

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

Disposable Income ◽

Household Debt ◽

Rate Of Growth ◽

The Global Financial Crisis ◽

The Impact

The paper aims at empirical evaluation of the impact of household debt on the dynamics of consumption spending since the beginning of the global financial crisis. The research employed linear regression analysis of the rate of growth of household spending against the rate of growth of disposable income, the level of indebtedness and long-term interest rates in the OECD member states between 2008-2014. The results obtained indicate that household indebtedness was one of the factors influencing the dynamics of consumption demand and thus the processes of economic growth in the OECD states after the beginning of the global financial crisis. Variations in the relation of total debt to net disposable income and in the level of long-term interest rates were both negatively related to the changes in consumption spending. This impact turned out to be markedly stronger when total household debt of a given country was exceeding 85% of GDP, which is consistent with the results of previous investigations on the in&uence of the indebtedness of household sector on the dynamics of economic growth

Download Full-text