Management of Foreign Exchange Reserves of the European Central Bank

The aim of the article is to analyze the foreign exchange reserves of the European Central Bank and the methods of their modern management. As a result of the study, it was proven that when implementing foreign reserve management policy, the European Central Bank and national central banks should pursue the objectives of the current monetary policy for future generations. Foreign exchange reserves are a special good that only the current generation and the current government cannot use. The character of the article implies different research methods: analysis of the sources of law, legal dogmatic, comparative dogmatic method. The analysis carried out as part of the study indicates that management of foreign exchange reserves of ECB has an impact on intergenerational justice.

Deficit financing approaches and the Nigerian sector’s output

This study examined the effect of deficit financing on Sectorial Output in Nigeria from 1986–2020. The independent variable in the study is deficit financing measured by domestic debt, foreign debt, budget deficit, and Foreign exchange reserve while the dependent variable in the study is Sectorial Output measured by Manufacturing Sector and Services Sector Output. Accordingly, the two models support the ARDL Methodology since they reported mixed integration. The study found that domestic debt has a positive significant effect on Sectorial Output in Nigeria. More so, Foreign Debt has a negative insignificant effect on Manufacturing Sector Output. However, it has a significant effect on the Services Sector Output in Nigeria. Again, the study found that Budget Deficit exerted a positive significant effect on Manufacturing Sector Output. However, it exerted a negative insignificant effect on Services Sector Output. While Foreign Reserve exerted a negative insignificant effect on Manufacturing Sector Output, Foreign Reserve had mixed effects on Services Sector Output; such effect tends to be statistically significant only in the short run. Lastly, the both inflation rate and the interest rate have a mixed effect on Sectorial Output.

Economic Scar Tissue of COVID-19 Puzzle: An Analysis, Evidence and Suggestion on Global Perspective

The COVID-19 pandemic has instigated tremendous human and economic hardship around the world. Using meta-literature and time series analysis, we conduct both synthesis and empirical analysis to investigate particularly the economic perspectives of COVID-19 across several financial systems: (a) Asian market, (b) European market, (c) American market and (d) Gulf Cooperation Council (GCC) and Middle East and North Africa’s (MENA) market. The critical review of the leading business and finance journals of ISI-WOS summarizes that the outburst of COVID-19 mercilessly affects global economies; however, the end phase of the systematic cascading effect has not clearly folded yet. The probable reasons of economic downturn are productivity reduction, labour immobility, undue job loss, scarcity of employment opportunities, discontinuation of supply chain, declining foreign exports, investment uncertainty, adverse clientele effect, etc. However, after analysing the pre- and during COVID effect on foreign reserve and remittance, we identify an inconclusive finding: (a) bullish trend, (e.g., the USA, Canada, Mexico, Japan, India, Bangladesh and Singapore); (b) bearish trend, (e.g., the UK, Sri-Lanka, Saudi Arabia, Malaysia, Nigeria, Italy and Brazil). Our time series analysis between pre- and during COVID-19 also documents the economic mystery that although the overall economic growth has gone down, foreign reserve and remittance have increased gradually across several economies. Overall, the current global situation demands systematic, well-targeted and aggressive fiscal-monetary stimulus initiatives. Therefore, this study offers theoretical, empirical and policy-oriented academic novelty with the possible suggestions and dynamic strategies to circumvent COVID-19 adverse effects.

Factors associated with adoption of indigenous biscuit processing technology by mothers of school-going children in Ogun State, Nigeria

Wheat is the conventional flour in biscuit manufacture. However, the use of wheat is not economical due to the fact that huge foreign reserve is used in its importation in Nigeria. In addition, wheat-based foods are associated with celiac disease, hence the use of non-wheat crops like tubers and legumes in biscuit processing is desirable. A previous study had developed a nutritionally improved biscuit from underutilized crops, such as sweet potato, cooking banana and pigeon pea. The present study examined factors associated with adoption of the indigenous biscuit processing technology using non-wheat flours by mothers of school going children in Ogun State, Nigeria. A-multistage sampling procedure was utilized to select 120 respondents from the list of 1,123 registered farmers in 10 extension blocks in Ogun State. A questionnaire was used to collect data on the socioeconomic characteristics of respondents. Respondents were taught the various stages of biscuit processing through demonstration. Knowledge about the various stages of biscuit processing was measured on a 5-point Likert Scale. The five points used were: extremely understood, moderately understood, somewhat understood, slightly understood and not understood. Level of adoption indicates the psychological stages that an individual passes through before making a final decision to use a particular innovation. Adoption Level was thus measured on Knowledge, Persuasions, Decision, Confirmation and Continuation decision. Data were analyzed using Analysis of Variance, Chi square, and Pearson Product Moment Correlation. Results revealed the mean age of respondents to be 40.35 ± 10.33 years. Most respondents were traders, and the highest educational qualification was National Diploma (2.5%). The main sources of agricultural information were radio (64.2%) and extension agents (60%). There were high adoption rates in baking/production (87.7%) and flour blending (85.5%). Reasons for technology adoption were affordability (80.8%), availability of ingredients (81.7%) and relative advantage (80.8%). Adoption of technology was associated with age (r = 0.284, p < 0.05), quality of technology delivery (r = 0.267, p < 0.05), marital status (χ2 = 1.081, p < 0.05) and membership of association (χ2 = 12.055, p < 0.05). In conclusion, effective adoption of technology could be achieved among young married mothers.

Negative Effect of Current Account Surplus on Long-term Growth; Focused on the Cases of Japan, S. Korea and China

It is a teaching of current economics that the surplus of current account in international payment contributes to the increase of income. But it has got a negative effect on the long-term growth in the reality, which is easily proved by some instances. First, the Japanese growth rate has been very low despite its current account maintaining a huge surplus. Second, it is another instance that South Korea has suffered from its low growth rate even if its government has enforced the policy to defend its exchange rate from declining while its current account surplus has become large since 1998. Next, the growth rate of China has decreased from the time when its foreign reserve has begun to reduce despite its huge surplus of current account. This paper clarifies the reason why their growths are stagnant despite their huge surpluses in current account. If this paper changes the policies of above countries, it would resolve their economic difficulties and settle the imbalance of the world economy. And this paper would contribute to the evolution of economics.

Impact of Fiscal Prudence and Financial Development on Foreign Direct Investment Inflow: Nigerian Evidence

Foreign direct investment in a globalized and information technology driven environment, as we have today in the 21st century, acted as a driver of growth. This paper provides further evidences on macroeconomic management of FDI in emergent economies especially in Africa. The paper empirically measures the effects of fiscal prudence and financial development on foreign direct investment inflow in Nigeria. It tested the importance of household consumption, domestic credit to the private sector, fixed capital formation, domestic savings, external debt, foreign reserve and financial development for the purpose of ensuring FDI inflow in Nigeria. It findings show that domestic credit to private sector, fixed capital formation, foreign reserve and financial development are statistically significant in the case of Nigeria. The econometric methodologies followed for the study are log-linear regressions and ARDL bound testing. Data was sourced from National Bureau of statistics and World Bank’s World Development Index for the period ranging from 1985 to 2018.

The Impact of Exchange Rate on Ethiopia’s Coffee Export

Although coffee constitutes the largest share of exports, producers in Ethiopia have historically received a small percentage of the export revenue from the price of green coffee. Reasons often mentioned are heavy government intervention and high marketing and processing costs. Before 1992, government regulation of the domestic coffee market in the form of fixed producer prices and the Ethiopian Coffee Marketing Corporation's monopoly power put a substantial wedge between the producer price and the world price of coffee by imposing an implicit tax on producers. Having liberalized the market and adopted a floating exchange rate regime to boost exports (coffee) as the country struggles with foreign exchange shortages, not much has improved in exports (coffee) or foreign reserve availability. This paper utilizes monthly data from 2010-2015 to develop a multiple regression model to determine the impact the exchange rate has on coffee export if there is any. The empirical findings indicate that the exchange rate is not significant in determining or influencing exports but the prices of the two famous coffee types (Arabica and Robusta). Corroborated by the research outcome, we suggest that policymakers do not rely on the depreciation or devaluation of the ETB (Ethiopian Birr) as a tool for export promotion and growth.

The Effect of Financial Development on Productivity, Corporate Tax, Foreign Reserve & Export Vector Autoregressive (Var) Model Approach Case Study on Ireland

The development financial sector plays indispensable role in accelerating economic growth and improving countries welfare system. Robust financial sector can keep the momentum of economic growth with providing substantial financial support and preserving macroeconomic balance. Given the importance of this sector, this research tried to evaluate the role of Irish financial development on productivity, corporate tax, foreign reserve and export. The research comprises a time period between 1980 until 2016 and used Vector autoregressive (VAR) model. Financial development consists of advancement both in financial institutions as well as in financial markets structure of Ireland. The estimation consists of granger causality test, impulse response estimation and variance decomposition along with VAR estimation result. VAR estimation revealed that financial development caused significant positive effect on Ireland export performance in the short run. Conversely, financial development doesn’t have significant effect on Ireland productivity level, foreign reserve, and corporate tax in the short run. The Granger causality test for the study variables indicates that corporate tax rate in Ireland can cause financial development in the short run, while the remaining variables can’t cause effect on financial development in the short run. The granger causality Wald tests also demonstrates that Irish financial development and productivity can unilaterally cause change in the level of Ireland export performance in the short run. The variance decomposition estimation revealed that financial development is strongly exogenous both in the short run and long run. This indicates that financial development is weak in predicting the fluctuation of productivity, foreign reserve, and corporate tax. Nevertheless, financial development is endogenous both in the short and long run in predicting the fluctuation of Ireland export.