A Probabilistic Model for the Distribution of GDP per Capita in NUTS 3 Zones of Europe

A macroeconomic indicator of productivity and economic development, used to obtain information on the economic and social conditions of a country, is the GDP per capita, which is also used as an indicator of social welfare. By construction it can be used directly to compare areas of interest. It is an indicator of great variability to which it is difficult to assign a probabilistic model to describe its distribution. In fact, it usually appears as a strongly asymmetric and frequently multimodal variable, which directly indicates a strong non-normality. In this work we propose to deal with the problem of finding a probabilistic model for this variable through the estimation of a model of finite mixtures of normal distributions. As an application example, we present the model obtained through the finite mixture for GDP per capita data from the NUTS 3 zones in the nomenclature of the European Union, EU countries and neighbouring countries. Thus, the model is estimated, its validity is checked and the results obtained are analysed, both for the GDP per capita variable and as a function of the countries to which the studied areas belong.

Key Function of the Bank of Russia: Contradictions and Problems

The article examines the most important categories, mechanisms, and instruments of the monetary policy of the Bank of Russia from the point of view of both its development and its implementation. The essence, origins and driving forces of the main contradiction of Russia's monetary policy are revealed. It is shown that monetary policy, along with the economic policy of the state, should act as a regulator of important meanings of human existence, such as the growth of real incomes of the population, directly affecting the redistribution of money – this market form of universal requirement for part of the national wealth. The author's position is presented, according to which inflation is not so much a macroeconomic indicator, as it is often customary to treat this phenomenon, as a fundamental process of a market economy that determines the redistribution of national wealth between economic entities through money. The authors identified and described the main problems and local contradictions in the development and implementation of a unified state monetary policy, presented a detailed description of these phenomena. The methodology of dialectical-systemic and logical analysis, which was used by the authors as a research tool, allowed for the first time to formulate the main contradiction of the unified state monetary policy. The presented formulation reflects the essential principles of the poles of contradiction – the contradiction between form and content. In order to solve the problems identified and existing for a long time, the authors justify the need to take priority organizational and legal measures, first of all, changing the statute, reforming functions, strengthening operational capabilities and staffing of the National Financial Council.

Identifying the degree of dependence of foreign direct investments on adjusted net savings of the recipient country

Due to the loss of the dominance of GDP as the main macroeconomic indicator of the social welfare, this study uses a more accurate and realistic indicator – adjusted net savings (ANS). Based on the economic and mathematical modelling, the study suggests a new method for identifying the value of adjusted net savings as a stimulating factor to increase the inflow of transnational capital to the recipient country. After assessing the current environment of investment attractiveness of recipient countries, attention was paid to identifying the degree of dependence of foreign direct investment on adjusted net savings. The novelty of this study is conditioned by the search and identification of the dominant macroeconomic indicator of investment attractiveness of the recipient country. Such an indicator will most fully reveal the conditions and prospects for attracting investments. The aim of this study was to consider alternative approaches to the country's development and to demonstrate the existence of a functional relationship between the volume of foreign direct investment and adjusted net savings. The purpose of this study is to build models of the dependence of foreign direct investment on adjusted net savings of the recipient country as an alternative indicator that most widely reveals the level of social welfare and economic development of the studied countries. Adjusted net savings consist of elements that cover the sustainable development of society, namely the economic, environmental, and social components. As a result, using the correlation and analysis of variance, the existence of dependence and its degree of influence on the volume of foreign direct investment on the adjusted net savings of the recipient country has been proved.

COVID-19: Relationship between mobility and macroeconomic indicator

Lockdowns have been widely used as a policy instrument to manage the COVID pandemic and ensure that the safety of communities and the healthcare system does not get overwhelmed by the number of cases. Though lockdowns are meant to assist with effectively managing the spread of the pandemic, they come at an enormous economic cost to individuals and households. Economically poorer households may be unable to adhere to such lockdowns as they might struggle to maintain their livelihood and venture out to find a livelihood. Using the Google Mobility Data of several countries and sub-regions, we find that increase in economic indicators such as per-capita GDP (in case of countries) and household income (in case of sub-regions within a country) is the single biggest indicator of the likely reduction in mobility to work and increase in time spent in-residence. The trend is remarkably stable, which can help determine elasticity values. It is anticipated that these macro-economic elasticities can be used to potentially design economic relief to make it possible for individuals to adhere to lockdown.

CYCLICAL FLUCTUATIONS IN THE ECONOMIES OF V4 COUNTRIES

The Visegrad Four (V4) countries, which include Slovak Republic, Czech Republic, Poland and Hungary, are trying to catch up with the economic development and living standards of their more developed neighbours. The brake on this are economic recessions that regularly occur within market economies. The objective of this article is to assess the economic development in the V4 countries, in particular on the basis of development in the main macroeconomic indicator, which is GDP. All these countries went through two recessions in the 2008-2020 period. The first was the recession caused by the spillover of the global financial and economic crisis from the USA to Europe and thus to the V4 countries. During this crisis, the largest decrease was recorded in Hungary and in Slovak Republic. The second, and even stronger, economic crisis affecting the entire world economy and hence the V4 countries too is the current crisis caused by the coronavirus pandemic and the measures taken to prevent its further spread. The highest decrease in GDP is projected in Slovak Republic (at -10.3%) and the lowest in Poland (at -4.3%).

Optimal reduction of public debt under partial observation of the economic growth

We consider a government that aims at reducing the debt-to-(gross domestic product) (GDP) ratio of a country. The government observes the level of the debt-to-GDP ratio and an indicator of the state of the economy, but does not directly observe the development of the underlying macroeconomic conditions. The government’s criterion is to minimise the sum of the total expected costs of holding debt and of debt reduction policies. We model this problem as a singular stochastic control problem under partial observation. The contribution of the paper is twofold. Firstly, we provide a general formulation of the model in which the level of the debt-to-GDP ratio and the value of the macroeconomic indicator evolve as a diffusion and a jump-diffusion, respectively, with coefficients depending on the regimes of the economy. The latter are described through a finite-state continuous-time Markov chain. We reduce the original problem via filtering techniques to an equivalent one with full information (the so-called separated problem), and we provide a general verification result in terms of a related optimal stopping problem under full information. Secondly, we specialise to a case study in which the economy faces only two regimes and the macroeconomic indicator has a suitable diffusive dynamics. In this setting, we provide the optimal debt reduction policy. This is given in terms of the continuous free boundary arising in an auxiliary fully two-dimensional optimal stopping problem.

Private Label and Macroeconomic Indexes: An Artificial Neural Networks Application

Retail companies operate with a private label assortment of 40–45% of their total assortment, which has led to a significant growth of private labels in recent years in their countries of origin; however, when retail companies decide to internationalize, it is important to know which macroeconomic indicators are more relevant when entering a new country or continent. For that reason, in this study we have as a main objective to establish which are the most transcendental macroeconomic variables for the volume and value of the private label. For this purpose, we have analyzed a total of 1400 samples, creating an artificial neural network (ANN). The results show that the most important macroeconomic indicator that must be taken into consideration above other macroeconomic indicators for retail companies to be successful within a country is the per capita debt. In addition, we have considered in this research that unemployment is not the most important primary indicator for the volume of the private label.

COVID-19: Economic Recession or Depression?

This paper is interested to introduce a new macroeconomic indicator to evaluate the impact of any massive pandemic such as COVID-19 on the world economy performance in the short run (1 year) and long run (10 years). The new macroeconomic indicator is entitled “The Economic Uncontrolled Desgrowth from COVID-19 (-δCOVID-19).” In fact, the new macroeconomic indicator assumes that always COVID-19 is going to be the major factor to generate a large economic leakage on the final GDP formation anytime and anywhere. Additionally, the same paper is willing to evaluate two post-COVID-19 possible scenarios. The first scenario: if COVID-19 is going to generate a short economic recession, then the world economy gross domestic product can delay between two and three years. The second scenario: if COVID-19 is going to produce a large economic depression, then the world economy gross domestic product can take easily between five and ten years such as the case of the world great depression of 1928. From now, the economists need to decide between two possible choices to solve these two types of economic crisis (recession or depression): The first choice is the uses of the classical economic policies –fiscal or monetary- from past experiences (Keynesians and Monetarists). The second choice is the creation of new and innovative polices approaches to reduce the COVID-19 damage under the support of new theoretical and methodological approaches.