FINANCIAL VULNERABILITIES FOR SMALL ENTERPRISES IN KERALA

The small and medium-sized enterprises sector is an important segment of the Indian economy. Results of Third All India SSI unit censuses show a declining growth trend at the All India level and a growing trend in the Kerala sector. With the exception of the Fourth Census, employment growth in the Kerala SME sector has shown an increasing trend. Growth in the SSI Sector can do a lot to solve Kerala's acute unemployment problem. Sickness among the Kerala SME units is a major problem.

Analysis of market concentration in the banking sector of the Republic of Serbia

Analysis and measurement of the level of concentration of the banking market is a significant component of the efficient functioning of the economy, an indicator of the development of both the financial and real sectors and an indicator of the degree of competitiveness in the banking sector. This paper focuses on research and analysis of the level of concentration in the banking market of the Republic of Serbia. The main task and goal of this research is to analyze the level of concentration in the banking market of the Republic of Serbia through the prism of two indicators: the concentration ratio of the five largest banks (CR5) and Herfindahl-Hirschman concentration index (HHI), for the period from 2009 to 2019. The results of the research showed the absence of concentration (overall) in the domestic banking market, but also the existence of a trend (growth of market share of the five largest banks) which indicates that, in the future, there could be distortions of competition.

Trend Growth and Robust Monetary Policy

Recent monetary policy studies have shown that the trend productivity growth has non-trivial implications for monetary policy. This paper investigates how trend growth alters the effect of model uncertainty on macroeconomic fluctuations by introducing a robust control problem. We show that an increase in trend growth reduces the effect of the central bank’s model uncertainty and, hence, mitigates the large macroeconomic fluctuations. Moreover, the increase in trend growth contributes to bringing the economy into determinacy regions even if larger model uncertainty exists. These results indicate that trend growth contributes to stabilizing the economy in terms of both variance and determinacy when model uncertainty exists.

Why Has the U.S. Economy Stagnated Since the Great Recession?

Since the Great Recession in 2007-09, U.S. real GDP has failed to return to its previously projected path, a phenomenon widely associated with secular stagnation. We investigate whether this stagnation was due to hysteresis effects from the Great Recession, a persistent negative output gap following the recession, or slower trend growth for other reasons. To do so, we develop a new Markov-switching time series model of output growth that accommodates two different types of recessions, those which permanently alter the level of real GDP and those with only temporary effects. We also account for structural change in trend growth. Estimates from our model suggest that the Great Recession generated a large persistent negative output gap rather than any substantial hysteresis effects, with the economy eventually recovering to a lower trend path which appears to be due to a reduction in productivity growth that began prior to the onset of the Great Recession.

The macroeconomic projections of the German government: A comparison to an independent forecasting institution

This paper investigates the macroeconomic projections of the German government since the 1970s and compares it to those of the Joint Economic Forecast, which is an independent forecasting institution in Germany. Our results indicate that both nominal GDP projections are upward biased for longer forecast horizons, which seems to be driven by a false assessment of the decline in Germany’s trend growth and a systematic failure to correctly anticipate recessions. Furthermore, we show that the German government deviates from the projections of the Joint Economic Forecast, which in fact worsened the forecast accuracy. Finally, we find evidence that these deviations are driven by political motives.

Finland

The economy has performed well over the past three years but has slowed in 2019. There are some vulnerabilities in household finances, and productivity growth remains weak, with trend growth also constrained by adverse demographics. A new coalition government targets greater social support and inclusion, higher employment, carbon neutrality by 2035, and a balanced budget by 2023.

Estimating Time-Varying Long-Run Growth Rate of Russian GDP in the ARX Model with Oil Prices

The paper estimates the path of trend growth rates for Russian GDP based on an autoregressive model with exogenous variables and with a time-varying parameter of trend growth, which, by assumption, is described by a random walk process. In conditions of a high dependence of the Russian economy on commodity exports, terms of trade are used as a control exogenous variable for GDP dynamics. For the purpose of econometric estimation, the ARX model is presented as an unobserved components model and estimated using the maximum likelihood method with the Kalman filter applied. It is shown that in the first half of the 2000s the trend growth rate was at 4%, which can be interpreted as recovery growth after a transformational recession. The higher growth rates actually achieved during this period are explained by the intensive growth of world oil prices. Later, the potential for recovery growth was exhausted, and after the crisis of 2008 the rates of trend growth were remaining at the level of 2% per year for a long period of time. However, following the 2014 crisis, trend growth rates began to decline steadily, and had reached about 1% per year by the beginning of 2019, which can be interpreted as the impact of sanctions and geopolitical uncertainty on the economic development of the Russian Federation. The results of an econometric analysis of the model on household consumption and investment data also suggest that the trend growth rate is approximately 1% per year at present.