Inflation and Bank Credit

e objective of this paper is to assess empirically the effects of inflation rates on bank credit using panel data of the 32 Mexican states during 2003-2015. Our research method utilizes static models (pooled OLS, fixed effects, and random effects) and dynamic models (mean group, pooled mean group, and dynamic fixed effects) to analyze the relationship in the short and long runs. e main empirical result indicates that inflation rates exert negative effects on credit in the long run, but those effects tend to be positive in the short run. Concerning originality and findings, few papers study inflation and bank credit under macroeconomic stability, or in the case of Mexico with static and dynamic panel data models. However, one research limitation is the lack of data to apply the methodology before 1999 when inflation rates used to be higher. is would be useful to compare macroeconomic stability with instability.

Batik SMEs In East Java Indonesia: Interrelationship Between Personal Value and Management Skills Towards SMEs Performance in The New Normal Era

The development of Batik SMEs in East Java shows a sector that is highly affected by the pandemic due to the unpreparedness of SMEs to face the pandemic conditions. The need for encouragement from the government and strengthening this sector so that it can develop again and make a positive contribution to the regional and national economy. Managerial aspects and personal values owned by Batik SMEs in East Java are expected to be a reinforcing factor for SMEs in facing a very dynamic environment. The purpose of this study was to determine the relationship between personal values and management skills on the performance of Batik SMEs during the new normal era in East Java, Indonesia. The data used were obtained through a survey using a questionnaire, which was then analyzed by factor analysis, descriptive statistics, Pearson product-moment correlation, and multiple regression. The results of the study stated that there was no relationship between personal values and performance, and there was no relationship between management skills and the performance of Batik SMEs in East Java, Indonesia. This research does not include external factors of the research variables, namely government policies that can be measured by inflation rates and tax policies, as well as Bank Indonesia credit interest rates. This study uses the variable management skills, personal values, and performance of Batik SMEs in East Java during the normal era, which are products with local cultural features.

The Effect of Government Bonds, Inflation, And Exchange Rate in Achieving SDGs

This study aims to examine the effect of bonds, inflation rates, and exchange rates on economic growth to achieve Indonesia's 2030 sustainable development goals, namely reducing government and poverty. This study uses a quantitative regression analysis method with a path analysis approach to determine the direct or indirect effect between variables. The variables used are published values, inflation, exchange rates, economic growth, poverty rates, and poverty in Indonesia in 2016-2020. Based on the path analysis, the coefficient of determination of 60.72% indicates that the diversity of the data of 60.72% can be explained in the model. Government Bonds have a direct and significant effect on the economic growth of -1,243. Government obligations indirectly affect the level of movement and mission of 1,098 and 1,128, respectively. The inflation rate directly affects the rate of economic growth of 0.712. The inflation rate has no direct effect on the movement level and poverty of -0.6294 and -0.6644. The exchange rate has no significant direct or indirect effect on economic growth, movement, and poverty. This study concludes that the government needs to control inflation and inflation so that the economy can be achieved and reduce inflation and poverty. Keywords: Government Bond, Inflation Rate, Exchange Rate, Economic Growth, SDG’s

Inflation Co-Movement Dynamics: A Cross-Country Investigation Using a Continuous Wavelet Approach

The economic literature provides evidence that inflation rates can co-move across nations because of a host of reasons, ranging from low frequency changes in monetary policy to similar high frequency shocks. Hence, this paper investigates inflation rate co-movements between nine (9) African countries and their bilateral linkages with five (5) developed economies using continuous wavelets at different time scales or frequencies. Specifically, we examine the coherency and the phase relationship in time-frequency space in inflation rates of the selected countries. Several findings are documented. First, inflation rates co-movements in the nine African countries are time varying, multi-scale, and characterized by structural breaks. In addition, we find that inflation co-movements across countries in the Africa sub-region is weak at low frequencies. Furthermore, we find evidence of inflation co-movement between Africa and developed economies, suggesting that central banks and policy-makers in Africa need to monitor international price developments, and analyze their implications for their domestic economies. Second, we find that inflation rates in the selected African countries explain, on average, almost 80% of their own inflation variance over the whole sample period. Spillover analysis reveals that China and Canada account for a greater percentage of inflation variation in Africa.

CRECIMIENTO IMPULSADO POR LOS SALARIOS EN MÉXICO: UN ANÁLISIS DE REGRESIÓN UMBRAL

<p>En este artículo proponemos que la actividad económica de México puede estimularse cuando los salarios progresan en relación directa con la productividad laboral y las tasas de inflación objetivo. Para ello, aplicamos regresiones de umbral para mostrar que, después de un cierto valor, los salarios no son inflacionarios en absoluto y que, si la productividad laboral aumenta, los niveles de ocupación o empleo aumentan. Entonces, esto conlleva a un aumento en la actividad económica (considerando otras variables, a saber: los costos unitarios comparativos del trabajo en la industria manufacturera, las condiciones críticas de ocupación —precariedad—, la tasa de interés interbancaria de equilibrio y el índice de tipo de cambio real). Mostramos esto para la economía mexicana con datos mensuales del periodo 2007/01-2019/05.</p><p align="center"><strong> </strong></p><p align="center">WAGE-LED GROWTH IN MEXICO: A THRESHOLD REGRESSION ANALYSIS</p><p align="center"><strong>ABSTRACT</strong><strong></strong></p>In this article we propose that the Mexican economic activity can be boosted when there are progressive wages in direct relation to labor productivity and targeted inflation rates. To this purpose, we apply threshold regressions to show that, after a certain threshold value, wages are not inflationary at all and that, if labor productivity increases, occupation or employment levels increase. Then, this leads to an enhancement in economic activities (controlling for other variables, namely: comparative unit costs of labor in the manufacturing industry, critical employment conditions —precariousness—, the equilibrium interbank interest rate and the real exchange rate index). This is shown for the Mexican economy with monthly data during the period 2007/01-2019/05.

THE ROLE OF PRESIDENT ABDEL FATTAH AL-SISI'S GOVERNMENT FOR THE DEVELOPMENT OF EGYPT'S POST-REVOLUTIONARY ECONOMIC REFORMS IN 2011

<pre style="text-align: justify; background: #F8F9FA;"><span style="font-size: 11pt; font-family: 'Times New Roman', serif;" lang="IN">After the revolution in 2011, Egypt has experienced various conditions of instability in various fields, especially the economy and politics. <span class="y2iqfc">The government of Mohammed Morsi, which was previously expected improve the Egyptian economy, actually exacerbated the situation. The Egyptian people staged various protests and other forms of protest in order for the government to immediately improve the situation. However, the government failed to carry out conflict management so the military carried out a coup. Morsi's position was later replaced by Abdel Fattah Al-Sisi. Al-Sisi's background as a military figure led to repressive policies being implemented. During Al-Sisi's reign, there was a significant increase in the Egyptian economy. The purpose of this research is to identify the role of President Al-Sisi's government for the development of economic reform in Egypt after the 2011 Revolution. This research use</span></span><span class="y2iqfc"><span style="font-size: 11pt;" lang="EN-US">d</span></span><span class="y2iqfc"><span style="font-size: 11pt;" lang="IN">a qualitative approach with an exploratory type of research, and refers to the theory of liberalism and the rational actor model. The results of this research indicate that President Al-Sisi's policies have a positive impact on the development of the Egyptian economy as indicated by an increase in Egypt's Gross Domestic Product, a decrease in inflation rates, and poverty.</span></span></pre>

Taylor’s rule, political cycle, and Latin America—An analysis of time series in search of responsibility for monetary stabilization

The decades before 1990 were dramatic for Latin American economies. However, from 1990 onwards, a set of policies followed by the various states in the region acheived economic stabilization with real income recovery. The attribution of this success has been disputed by politicians, economists and officials from international economic support institutions. This work will analyze the responsibility for this success in 4 economies in the region (Brazil, Colombia, Mexico and Peru). Through the combined analysis of ARDL, Markov states and structural breaks, we highlight different sources of responsibility in different periods. Additionally, detailing the states of each regime, we verify the duration of the regimes related to inflation rates and to interest rates in the region. We identify specific governments as associated with moments of economic stabilization in the region, so the hypothesis of the political cycle cannot be rejected for the set of results achieved. As policy implication, we claim that Taylor rules are endogenous to Political Budget Cycles and so stabilization plans are restricted to political tenures.

Central banks and inflation: where do we stand and how did we get here?

The inability of central banks to attain their target inflation rates in recent years has raised questions about the extent to which central banks can control the inflation process. This paper discusses the evolution of thought and evidence since the 1960s on the determinants of inflation and the role that should be played by central banks. The paper highlights the roles played by two streams of thought associated with Milton Friedman: monetarist theories predicting a key role for monetary aggregates in determining inflation and the rise in popularity of the expectations-augmented Phillips curve. The author discusses the influence of the latter in determining the modern consensus on central-bank institutions and the relative roles for fiscal and monetary policies. The paper concludes with a discussion of macroeconomic developments since 2010 and current policy options to stimulate the economy and restore inflation to its target levels, including the merits of ‘helicopter money’.

SECTORAL LABOR MOBILITY AND OPTIMAL MONETARY POLICY

How should central banks optimally aggregate sectoral inflation rates in the presence of imperfect labor mobility across sectors? We study this issue in a two-sector New-Keynesian model and show that a lower degree of sectoral labor mobility, ceteris paribus, increases the optimal weight on inflation in a sector that would otherwise receive a lower weight. We analytically and numerically find that, with limited labor mobility, adjustment to asymmetric shocks cannot fully occur through the reallocation of labor, thus putting more pressure on wages, causing inefficient movements in relative prices, and creating scope for central bank’ s intervention. These findings challenge standard central banks’ practice of computing sectoral inflation weights based solely on sector size and unveil a significant role for the degree of sectoral labor mobility to play in the optimal computation. In an extended estimated model of the US economy, featuring customary frictions and shocks, the estimated inflation weights imply a decrease in welfare up to 10% relative to the case of optimal weights.