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Can Cryptocurrencies Provide Better Diversification Benefits? Evidence from the Indian Stock Market

Cryptocurrency has recently emerged as a financial asset among policymakers, investors and academics as a new alternative asset in the financial landscape. This research intends to empirically evaluate the safe haven, diversification and hedging potentials of digital currencies against the Indian equity market during different time frames. Four cryptocurrencies (Bitcoin, Ethereum, Binance Coin and Ripple) and Nifty 50 index data have been collected on a daily basis, from 26 July 2017 to 31 August 2023, for this purpose. Using wavelet-based methods, the study has discovered higher volatility in Nifty 50 and cryptocurrency prices during the crisis and stronger co-movement between pairs of equities and cryptocurrencies. Furthermore, the study finds that, under normal economic conditions, cryptocurrency can hedge the Indian stock market over short-term, medium-term and long-term investment horizons. However, investing in cryptocurrencies in the Indian stock portfolio for the short term does not give any safe haven or diversification advantages during times of economic crisis. Finally, we anticipate that the findings of our study will provide valuable insights into the potential usage of cryptocurrencies in the Indian stock market, both in stable and turbulent economic conditions. JEL Codes: G01, G41, N2, P34

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Impact of the Russian–Ukrainian War on the National Economy of Russia

At the moment, the first phase of the military confrontation between Russia and Ukraine, which began in February 2022, is reaching its logical end: A certain front line has already been established and the economic state in which the countries are is becoming clearer. That is why the evaluation and forecasting of the military, economic and demographic impact of the war on other countries become relevant. This work examines what losses Russia received due to its actions. In the article, the authors examine the issue of the impact of the war in Ukraine on the Russian economy, as well as a retrospective forecast of the impact of Russia’s military operations on its national economy. Attention is focused on military and demographic aspects, as well as on the results of the impact of various types of sanctions. The main method that was used in the work can be considered modelling; however, in addition to it, analysis, historical method, graphic and others were also used. The practical results of the analysis showed that the government of the Russian Federation announced the transition to a command mobilisation economy, and today its first consequences are already visible in the form of rising prices and devaluation of the national currency. In addition, it was shown that despite the large number of sanctions imposed on Russia, the country has not yet felt the full consequences. The issue of how the defence economy of the Russian Federation is developing, how the military budget of Russia has changed over the past 11 years, and how the war in Ukraine affected the demographic situation has been examined. In the section on the impact of the war on the economy of the Russian Federation, it is shown that modernised production and industries will suffer the most from such actions, which will lead to a powerful technological lag. The article brings new knowledge for understanding the current functioning of the Russian economy and in the near future, as well as for making assessments of the possible future course of the war. JEL: H56, N4, J11, R11

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An Impact Analysis of Remittance Inflows on Reducing Income-based Poverty in South Asia

The purpose of this paper is to empirically examine the role of remittance inflow in reducing poverty in the South Asian region. A time-series dataset of the South Asian region for the period 1980–2021 is being considered for this study, and the autoregressive distributed lags model has been applied to examine the short- and long-run relationship between remittance inflows along with control variables, including inflation, trade openness and economic growth on poverty reduction. The results indicated that remittances have a substantial effect on poverty in both the short and long run. While inflation appeared to be a barrier to poverty reduction in the long term. Lastly, trade openness was also found to negatively affect poverty in the long run. It is the first inference in the context of South Asia that has captured income-based poverty in the form of household consumption expenditure. The study suggests that economic policymakers should devise the policy in such a manner that remittance inflows can be used for investment rather than only for consumption. Furthermore, inflation should be kept under control in the long run, and trade policies should be designed in such a way that they provide leverage to small-scale entrepreneurs, thereby reducing poverty in the long run. JEL Codes: F24, F62, F63, P46

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Is Female Genital Circumcision a Driver of Income Inequality in Sub-Saharan Africa? Evidence from Nigeria

This study considers the effects of female genital circumcision (FGC) on household income inequality in Nigeria. To the extent that FGC has adverse health consequences, it can lower female labour productivity and earnings relative to males. Theoretically, we motivate our inquiry within a simple game-theoretic household norm bargaining framework in which there are several possible equilibria based on the decisions of representative males to require FGC, and representative females accepting, or not. We link regional data on Nigeria from the Afrobarometer survey to existing regional FGC surveillance data in Nigeria to estimate with Ordinal Logit specifications, the effect of regional FGC rates on a household’s position in the income distribution. Our parameter estimates reveal that as the ratio of daughter to mother genital circumcision increases in a region, the odds of a household being in the lower income decile increases. The FGC effects are consistent with a political economy of gender bargaining about FGC choices in which males have more bargaining power in governing/managing the household relative to females. Our results suggest that any policy intervention that eradicates FGC, including interventions that affect a political economy of bargaining that at least equalises bargaining power between males and females, could reduce household income inequality in Sub-Saharan Africa. JEL: I14, I18, J16, O5, Z13

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