Common Currency Research Articles

The Synchronization of ASEAN +3 Business Cycles: Prerequisites for Common Currency Union

This study aims to analyze the relationship between the business cycles of the ASEAN +3 countries. In addition, the effects of the spillover value on the coincident indicators are determined. This study employs secondary data and uses multivariate time series of five ASEAN countries, namely, Indonesia, Malaysia, Singapore, Thailand, and the Philippines. The proxy was the real gross domestic product (GDP) collected annually from the CEIC, the IMF, and the World Bank for the period from 1964 to 2016. The data was plotted against two time periods, 1964–1998 as the pre-crisis period, and 1999–2016 as the post-crisis period. The index data was changed to the base year 2010. The data was subsequently separated from the trends and the cyclic components. The cyclic components were obtained by using Hondrick-Prescott filter, and them were further analyzed. The analytical method used was Contemporaneous and Cross-Correlation tools. The results showed that, before and after the crisis, the value of the business cycle correlation between ASEAN +3 countries was stronger and moved together at the same level of lag value. The implication of this research was an initial finding of the ASEAN +3 countries’ prerequisites for the formation of a common currency.

Computational and Neurobiological Substrates of Cost-Benefit Integration in Altruistic Helping Decision

Although altruistic behaviors, e.g., sacrificing one's own interests to alleviate others' suffering, are widely observed in human society, altruism varies greatly across individuals. Such individual differences in altruistic preference have been hypothesized to arise from both individuals' dispositional empathic concern for others' welfare and context-specific cost-benefit integration processes. However, how cost-benefit integration is implemented in the brain and how it is linked to empathy remain unclear. Here, we combine a novel paradigm with the model-based fMRI approach to examine the neurocomputational basis of altruistic behaviors. Thirty-seven adults (16 females) were tested. Modeling analyses suggest that individuals are likely to integrate their own monetary costs with nonlinearly transformed recipients' benefits. Neuroimaging results demonstrate the involvement of an extended common currency system during decision-making by showing that selfish and other-regarding motives were processed in dorsal anterior cingulate cortex and right inferior parietal lobule in a domain-general manner. Importantly, a functional dissociation of adjacent but different sub-regions within anterior insular cortex (aINS) was observed for different sub-processes underlying altruistic behaviors. While dorsal aINS and inferior frontal gyrus were involved in valuation of benefactors' costs, ventral aINS and middle insular cortex (vaINS/mINS), as empathy-related regions, reflected individual variations in valuating recipients' benefits. Multivariate analyses further suggest that both vaINS/mINS and dorsolateral prefrontal cortex reflect individual variations in general altruistic preferences which account for both dispositional empathy and context-specific other-regarding tendency. Together, these findings provide valuable insights into our understanding of psychological and neurobiological basis of altruistic behaviors.SIGNIFICANCE STATEMENT:Altruistic behaviors play a crucial role in facilitating solidarity and development of human society, but the mechanisms of the cost-benefit integration underlying these behaviors are still unclear. Using model-based neuroimaging approaches, we clarify that people integrate personal costs and non-linearly transformed other's benefits during altruistic decision-making and the implementations of the integration processes are supported by an extended common currency neural network. Importantly, multivariate analyses reveal that both empathy- and cognitive control-related brain regions are involved in modulating individual variations of altruistic preference, which implicate complex psychological and computational processes. Our results provide a neurocomputational account of how people weigh between different attributes to make altruistic decisions and why altruistic preference varies to a great extent across individuals.

Introduction to ‘Italy and Germany: Incompatible Varieties of Europe?’

This article introduces the questions that motivate this special issue: the growing divergence among Eurozone member states and the overall disappointing performance of the Eurozone as a whole. It justifies the choice of Germany and Italy as the two countries that can best exemplify what are considered, respectively, the northern and southern politico-economic models coexisting in the Eurozone and proposes an approach to these questions that deviates from the mainstream. It argues that comparing the performance of Eurozone member economies as if they were independent of one another prevents an accurate assessment of the externalities created by the common currency and claims that microeconomic solutions to macroeconomic problems have the effect of reinforcing the divergence, rather than attenuating it. Incorporating the insights drawn from the detailed analysis of the various aspects of the German and Italian models provided by the contributors to this special issue, it concludes by assessing the likely impact of the impending reform of EMU.

Thanks, neighbor! Stock market experience around significant European tax cuts

PurposeThis paper analyzes the effect of corporate tax cuts on the competitiveness of the tax-cutting countries and neighbor countries.Design/methodology/approachThis study utilizes four significant corporate tax reforms among the OECD countries in Europe that offer a one-time tax cut of 6% or more. The short-term event study approach examines the stock index reactions for both the tax-cutting countries and the other countries. Multivariate fixed-effect regressions are employed to study the cross-sectional variations in the non-tax-cut countries.FindingsThis paper finds positive excess returns for Slovakia and Germany around the tax-cut passage. Multivariate analysis of stock market reactions of the non-tax-cutting countries reveals some evidence supporting both the positive spillover effect and the negative competitive loss effect. More advanced countries are more likely to experience higher abnormal returns, while higher tax countries are more likely to suffer lower abnormal returns. Other factors identified that might have influenced the effect of a foreign tax cut include the existing trade flows with the tax-cutting countries, whether the country has a common currency and the export orientation of the economy.Research limitations/implicationsThe findings are subject to sample-size issues. The lack of results for the other two countries is due to complicating events, as suggested by the further investigation of concurrent news events around the event days.Practical implicationsThe simultaneous analysis of the reform countries and the other countries in the region suggests that policymakers need to consider the relative positioning of their country vs the other countries in terms of economic development and current tax burdens when determining the optimal policy for their country or to respond to the tax policy changes in the other countries.Originality/valueThis study offers empirical evidence regarding the effect of corporate tax changes on competitiveness through the lens of stock markets' reactions, which depend on the net results of the spillover gain vs the competitive loss.

Is there a euro effect in the drivers of US FDI? New evidence using Bayesian model averaging techniques

In this paper the authors analyze the potential determinants of US outward FDI stock with a particular focus on the euro effect during the period 1985–2017. To this aim, they consider a large set of candidate variables suggested both by theory and previous empirical analysis. They select the covariates using Bayesian model averaging, a data-driven methodology. Their sample includes a total of 56 host countries, that represent around the 70% of US outward FDI stock. They study the role of the euro on American FDI both in Europe and the rest of the world. In Europe, they consider various country groups: the European Union (EU), the euro area (EA), as well as core and periphery within this last group. They conclude that many variables studied by previous FDI literature cannot be considered robust determinants. Moreover, US OFDI is explained by both horizontal and vertical motives. However, HFDI strategies predominate in EA core countries, whereas VFDI prevails in the periphery. As for the euro effect, the common currency seems to have played an important role encouraging US FDI, being a crucial element in the convergence of EA periphery to its core. In addition, the results indicate that the adoption of the euro has favoured VFDI to the detriment of HFDI.

Responding to Socioeconomic Diversity in the European Union (and to Steven Klein’s Essay) with Democracy-Enhancing Conflicts Law

Responding to Socioeconomic Diversity in the European Union (and to Steven Klein’s Essay) with Democracy-Enhancing Conflicts Law

Energetics and fear of humans constrain the spatial ecology of pumas

Energetic demands and fear of predators are considered primary factors shaping animal behavior, and both are likely drivers of movement decisions that ultimately determine the spatial ecology of wildlife. Yet energetic constraints on movement imposed by the physical landscape have only been considered separately from those imposed by risk avoidance, limiting our understanding of how short-term movement decisions scale up to affect long-term space use. Here, we integrate the costs of both physical terrain and predation risk into a common currency, energy, and then quantify their effects on the short-term movement and long-term spatial ecology of a large carnivore living in a human-dominated landscape. Using high-resolution GPS and accelerometer data from collared pumas (Puma concolor), we calculated the short-term (i.e., 5-min) energetic costs of navigating both rugged physical terrain and a landscape of risk from humans (major sources of both mortality and fear for our study population). Both the physical and risk landscapes affected puma short-term movement costs, with risk having a relatively greater impact by inducing high-energy but low-efficiency movement behavior. The cumulative effects of short-term movement costs led to reductions of 29% to 68% in daily travel distances and total home range area. For male pumas, long-term patterns of space use were predominantly driven by the energetic costs of human-induced risk. This work demonstrates that, along with physical terrain, predation risk plays a primary role in shaping an animal's "energy landscape" and suggests that fear of humans may be a major factor affecting wildlife movements worldwide.

The economic cost of delirium: A systematic review and quality assessment.

This review aims to systematically identify and appraise the methodological quality of claims on the cost of delirium; and discuss challenges and opportunities for improvements in the precision of the estimates. Searches of scientific papers and gray literature were performed up until June 2020. The Larg and Moss checklist was used to assess the methodological quality of the included studies. After deduplication, the search identified 317 potentially relevant articles, of which 17 articles were eligible for inclusion. After adjusting for inflation and common currency, the cost of delirium ranged between $806 and $24,509 (in 2019 US$). This review found significant variation among the cost estimates and methodological quality. There has been limited focus on dementia as a sequela of delirium in terms of economic implications, but recent evidence suggests cost implications of delirium may be 52% higher when dementia is considered.

January to March: Vaccinating Europe

The three European Council meetings which are discussed in these Notes covered a wide range of subjects and included sessions with the new US president and NATO's secretary general. They were nevertheless dominated by the pandemic and more particularly by the efforts of the EU and its member states to vaccinate their citizens as rapidly as possible. It was not an easy task and the EU rollout during the first three months of 2021 was significantly slower than that of either the UK or the US. There were many explanations, including the European Commission's failure to invest enough money early enough, inefficiencies at member state level and the production difficulties of the manufacturers in general and of AstraZeneca in particular. As the months have passed, many if not most of these difficulties seem, however, to be less consequential than they did at the time. The Commission and most of the member states learned from and made good their early failures and, AstraZeneca apart, BioNTech and the other manufacturers succeeded in delivering even more vaccines than they had promised to do. These improvements were already beginning to make themselves felt before the end of the first quarter. They were not widely acknowledged however, either inside or outside the political class. Partly because good news is always slow to drive out bad news, but still more because the debate about the vaccination rollout was driven by forces which were only loosely connected with the pandemic, including in particular the German-German debate in an election year, the British government's need to find and proclaim a post-Brexit success and the blunders of the European Commission's president. The politics of the rollout are indeed as interesting as, if not more interesting than the objective challenges which policymakers grappled with. Above all because the process highlighted once again the significance of the European Council. Despite strong countervailing pressures in the media, which continued to propagate the story of 'Europe's failure' and widespread dislike of von der Leyen's management style, the European Council maintained its commitment to an EU-wide rollout strategy and endorsed a string of initiatives, including an EU certificate, which aimed to defend the Union against the corrosive effects of the pandemic. The non-Covid business which the European Council addressed between January and March may have been overshadowed by the pandemic but it was far from unimportant, and the debates which it provoked anticipated both the concerns and the language of European Council discussions later in the year about the EU's role in a rapidly changing world order. The sessions with Jens Stoltenberg and Joe Biden in February and March respectively were reassuring rather than dramatic, but it was already apparent, particularly in the debate before and during the February meeting, that the lines between 'Atlanticists' and 'Europeans' have shifted significantly and that the buzz words of the emerging EU consensus – 'resilience', 'the reduction of dependencies' and 'a European capacity for autonomous action' – were well on the way to becoming common currency.

The formation of input–output architecture: Evidence from the European Union

Abstract Employing sector-level data on production input interlinkages within and across all countries of the European Union, I use a stochastic actor-oriented model to estimate the evolution of input–output architecture over the period 2001–2014. My behavioral model of network formation approaches these dynamics from the perspective of individual nodes and thus provides a framework to test alternative microfoundations of an endogenous production network. The proposed methodology resolves at least two fundamental problems of empirical investigations into the dynamics of production networks. First, it bypasses the endogeneity problem that arises when topological features of the network determine the formation or dissolution of network ties. Second, it accounts for the mutual dependence between the network and producers’ individual behaviors. Building on this model, I find that supplier heterogeneity in productivity, growth, and labor costs, the introduction of a common currency, and several structural network characteristics such as degree centrality (preferential attachment) as well as the tendencies to connect to indirect suppliers in the nearest network neighborhood (transitivity) and to form bilateral relationships (reciprocity) determine the evolution of the production network. At the same time, changes of the network structure feed back on productivity, growth, and labor costs as producers converge in behavior to their supply chain partners. My results, therefore, testify to additional dynamic network effects on aggregate outcomes that arise from the adjustment of the production network in response to idiosyncratic shocks.

Risk-benefit in food safety and nutrition – Outcome of the 2019 Parma Summer School

Risk-benefit assessment is the comparison of the risk of a situation to its related benefits, i.e. a comparison of scenarios estimating the overall health impact. The risk–benefit analysis paradigm mirrors the classical risk analysis one: risk–benefit assessment goes hand-in-hand with risk–benefit management and risk–benefit communication.The various health effects associated with food consumption, together with the increasing demand for advice on healthy and safe diets, have led to the development of different research disciplines in food safety and nutrition. In this sense, there is a clear need for a holistic approach, including and comparing all of the relevant health risks and benefits. The risk–benefit assessment of foods is a valuable approach to estimate the overall impact of food on health. It aims to assess together the negative and positive health effects associated with food intake by integrating chemical and microbiological risk assessment with risk and benefit assessment in food safety and nutrition.The 2019 Parma Summer School on risk–benefit in food safety and nutrition had the objective was to provide an opportunity to learn from experts in the field of risk–benefit approach in food safety and nutrition, including theory, case studies, and communication of risk–benefit assessments plus identify challenges for the future. It was evident that whereas tools and approaches have been developed, more and more case studies have been performed which can form an inherent validation of the risk–benefit approach. Executed risk–benefit assessment case studies apply the steps and characteristics developed: a problem formulation (with at least 2 scenarios), a tiered approach until a decision can be made, one common currency to describe both beneficial and adverse effects (DALYs in most instances). It was concluded that risk–benefit assessment in food safety and nutrition is gaining more and more momentum, while also many challenges remain for the future. Risk-benefit is on the verge of really enrolling into the risk assessment and risk analysis paradigm. The interaction between risk–benefit assessors and risk–benefit managers is pivotal in this, as is the interaction with risk–benefit communicators.

Does attention solve the "apples-and-oranges" problems of judging task difficulty and task order?

How do we compare the difficulty of different kinds of tasks, and how we do sequence tasks of different kinds when the basis for the ordering is the tasks' difficulty levels? The ability to do these things requires a common currency, but the identity of that currency, if it exists, is unknown. We hypothesized that people may believe that the time that attention is paid to tasks enables people to compare and sequence tasks of different kinds. To evaluate this hypothesis, we tested three groups of participants. One group estimated the proportion of time that performance of a task requires attention-what we called attention time proportions or ATPs. We obtained ATPs for tasks that were "more intellectual" (counting) and others that were "more physical" (locomotion). Two additional groups made 2-alternative-forced-choice decisions about the relative ease and preferred sequencing of all possible pairs of tasks for which ATPs were independently obtained. We found that ATPs predicted judgments of task difficulty and preferred task order.

Common Currency Area in GCC Region: An Application of Euro Model

US Dollar (USD) is the most dominant currency encompassing 59.54% of the world reserve currency. Euro is the second one, which holds 20.57% share of world reserve currency. The recent studies reveal that the USD might not be the dominant world reserve currency in the future. Euro as a common regional currency is the only competitor of USD, which shows the strength of a unified regional currency. In 1981, the six rich oil states formed Gulf Cooperative Council (GCC); the countries include the Kingdom of Saudi Arabia, the State of Qatar, the Sultanate of Oman, the Kingdom of Bahrain, the State of Kuwait, and the United Arab Emirates. This establishment of GCC signifies the close cultural, economic and political link between the GCC countries. GCC countries have almost all essential ingredients required to establish a common currency area or monetary union. The researcher applied the European Monetary Union (EMU) model to GCC states to find out the feasibility of a common currency or monetary union between GCC states. Currently, EMU is the only example of successful implementation of common regional currency founded on Mundell’s theory of Optimum Currency Area (OCA). The results obtained indicate that all the GCC states successfully fulfill the Euro criteria which are also called Maastricht criteria. The research has established that GCC countries are ripe for establishing a monetary union, especially if they follow the steps of EMU.

The Impact of the Euro on Trade: Two Decades into Monetary Union

The consensus back in 2008 – ten years after the introduction of the euro – was that the adoption of a common currency had made a limited impact of around 2% in total on the trade flows of the first wave of euro area countries (Baldwin et al., 2008). Since then, six more countries have joined the euro area, and firms have internationalised their production processes. These two phenomena are interrelated and may have changed the way the common currency affects the euro area economy. Therefore, with the common currency now into its third decade – and with more countries queuing to adopt it – this paper revisits the trade effects of the euro, focusing on the newer euro adopters (i.e. those countries that have adopted the euro since 2007) and their interaction with the first wave of euro area members via supply chains. The contribution of the paper is twofold. First, it revisits the estimated aggregate impact of the euro on euro area trade, as well as on trade within and between the two waves of adopters. Data on bilateral flows between 1990 and 2015 for an extended sample of countries to estimate a gravity equation indicate a significant trade impact, ranging between 4.3% and 6.3% in total on average, with the magnitude being the highest for exports from the second wave of adopters to the first wave of adopters. If a synthetic control approach (Abadie and Gardeazabal, 2003; Abadie et al., 2010) is used instead, the estimated gains associated with euro adoption are greater. In particular, exports of both intermediate and final products from countries belonging to the first wave of euro adopters to those belonging to the second wave are estimated to have increased by about 30% using this approach. The second contribution made by this paper relates to the channels through which trade might be affected by a currency union. This question is explored by looking separately at trade in intermediate goods and final products. While we find that trade gains were mainly driven by trade in intermediate goods among countries that adopted the currency earlier (5.3%), our results also show that the euro had a positive effect on the exports of final products from the second wave of adopters to other euro area countries. This effect is as high as 10.6% with the gravity model and 32% with the synthetic control approach. One of the reasons for the difference in the range of estimates between the two approaches might be that the gravity model can control for unobserved characteristics via fixed effects, while the synthetic control approach may fail to do so. These results suggest that the euro facilitated the establishment and expansion of international production chains in Europe. In turn, this is likely to have increased business cycle synchronisation in the euro area and to have supported market access for later adopters. JEL Classification: F14, F15

Privatna bezbednost i jedinstven sistem prekograničnog (obezbeđenja) transporta novca između zemalja članica Evrozone

With the creation of the European Union (EU), the signing of the Maastricht Agreement, the introduction of the single market and freedom of movement of labor and the introduction of the Euro as a common currency, the problem of cross-border road transport of cash and valuables between eurozone members arose. This is because almost all EU member states had more or less different solutions and practices for this type of transport. The EU tried to solve the problem by adopting Regulation No. 1214/2011 on professional cross-border road transport of cash between Euro-area Member States. The mentioned Regulation successfully solved many problems related to this issue, such as: issuance of appropriate permits (licences), maximum duration of delivery, rights and obligations of teams, necessary knowledge and skills of security staff, carrying weapons in the host country, type and equipment of vehicles, mutual information, etc. Although the intention was to establish a unified system of cross-border money transport, in addition to significant progress in the functioning of private security, it can be said that because some countries have retained their specifics, a unified system with the same rules has not been fully established. The paper presents and deals with the advantages and disadvantages of a single system (securing) of cross - border transport of cash under the said Regulation. The Republic of Serbia, as a country on the path to EU membership, has a special interest in getting to know and preparing in time for the harmonization of its legal solutions and practices which regulate the mentioned area (activity) of private security.

Is a New Asian Monetary Fund Emerging?

The plan initiated by Japan for forming an Asian Monetary Fund in a mode of ASEAN+3 countries after Asian financial crisis in 1997 was not realised due to opposition from USA, IMF and China and the plan was revamped through CMI multilateral currency swap and pacific nation’s joining with US Dollar hegemony but at present it is confronting Chinese supremacy over the region. Thus, in this paper the author thought of forming a new Asian bloc consisting of SAARC, ASEAN, GCC, China, Japan and Korea for which a new framework of Asian Monetary Fund can be set up with a view to not only supplying additional liquidity in crisis period as well as for developmental finance but also can function for issuing a common currency of the new Asian bloc that is a currency basket which will be formed by currencies of China, Japan and Korea and the currencies of blocs viz SAARC, ASEAN and GCC where unit of account of currency will be measured by gold or silver and the exchange of currency unit of Asia is primarily fixed with Chinese Yuan. The exchange rates of all currencies in the basket will be calculated daily through floating exchange rate mechanism in Asian bloc and common currency will also be floated in SDR basket if CUA is included in SDR basket. The exchange rates will be maintained by Asian Monetary Fund through target zone of ±2.5% fluctuation. The plan also requires monetary and trade integration as well as political integration with the implementation of Asian stock exchange institute, Asian Parliament, Asian Security council, Asian Central Bank and Asian Clearing Union respectively. The common barriers like Sino-Japan rivalry, US dollar hegemony, non-cooperation from IMF, premature OCA criteria and low capital market internationalisation may delay the process of Asian Economic Integration towards formation of a new Asian Monetary Fund.

Half-century after Bretton Woods: Dollar vs Common Currency

Contradictions and mistakes which Bretton Woods system contained from the very beginning, are considered in the article. An estimation is given to positive qualities and to shortages of Bretton Woods system as a provisional construction suitable for special situation in world economy after World War II. It is explained, what is wrong with “Triffin dilemma”, and an estimation is given for misunderstandings following from this theorem. The confirmation is presented that Jamaican monetary system corresponds to world economy requirements, and no needs exist for its reform. It is confirmed also that world currencies emerge from competing national currencies achieving maturity. So world economy doesn’t need any artificial common currency, including SDR.

Analysing the degree of integration of the euro area: how a lack of complete markets and insufficient risk sharing raise concerns about its durability and stability

The goal of the creation of the euro area (EA) was to bring forth a common currency and interest rate structure that would reduce risk associated with trade across its members that, over time, woul...

How Britain’s and Colombia’s Privileged Partnerships with the United States Influenced Their Respective Journeys through the European Community and UNASUR

This paper explores how Britain’s and Colombia’s privileged relations with the United States (U.S.) influenced their journey through the European Community (EC) and the Union of South American Nations (UNASUR). The Anglo–American Special Relationship (AASR) was compatible with British participation in the European Single Market, but not with adherence to creating the EC’s common currency, nor with leadership in building a European defence structure autonomous from NATO. Thus, since the start of the Iraq war, Britain played a rather obstructive role in what later was called European Common Security and Defence Policy (CSDP). The US–Colombia Partnership (USCP), based on a longstanding military association reinforced under Plan Colombia, naturally discouraged any meaningful Colombian participation in UNASUR’s South American Security Council (CDS), a regional cooperative security project, promoted by Brazil. Cherished projects of the liberal CAP – such as triangular cooperation (to export Colombian security expertise to Central America with U.S. co-financing and oversight) and NATO partnership – also distracted Colombia’s interest from UNASUR, diminishing the latter’s relevance collaterally. A role for UNASUR – alongside the Organization of American States (OAS) – in South American security management was compatible with the liberal CAP, but not with the neoconservative CAP. Even a lopsided complementation – such as the one between NATO and the CSDP – proved unviable between the OAS and UNASUR.

"Common Currency" Between Experience and Brain: Spatiotemporal Psychopathology of the Resting State in Depression.

The aim of this contribution is to introduce Spatiotemporal Psychopathology and the way it may complement and extent Phenomenological Psychopathology by bridging the methodological gap between the brain and experience. In the first part, I will provide examples for spatiotemporal correspondence between neuronal and psychopathological features. Specifically, I will discuss how spatial changes in the brain's spontaneous activity translate into abnormal experience of the self in major depressive disorder (MDD). Finally, I will briefly discuss the method of such Spatiotemporal Psychopathology and distinguish it from the methods relied on in other forms of Psychopathology with a special focus on showing the continuity between Spatiotemporal and Phenomenological Psychopathology.