Crisis In Countries Research Articles

Sustainable Visual Analysis for Bank Non-Performing Loans and Government Debt Distress

This article visualizes bank non-performing loans (NPLs) and government debt distress data integration and an outcome classification after the outbreak of European sovereign debt. Linear and functional principal component analysis (FPCA) and biclustering are used to show the clustering pattern of NPLs and government debt for 25 EU and BRICS countries (Brazil, Russia, India, China and South Africa) during the period of 2006 to 2017 through high-dimensional visualizations. The results demonstrate that the government debt markets of EU countries experienced a similar trend in terms of NPLs, with a similar size of NPLs across debt markets. Through visualization, we find that the government debt and NPLs of EU and BRICS countries increased drastically after the crisis, and crisis countries are contagious. However, the impact of the Greek debt crisis is lower for non-crisis countries, because the debt markets of these countries are decoupled from the Greek market. We also find that sovereign debtors in the EU countries have much closer fiscal linkages than BRICS countries. The level of crisis in the EU countries will be higher than that in the BRICS countries if crisis is driven by the common shocks of macroeconomic fundamentals.

Risk measurement of global stock markets: a factor copula-based GJR-GARCH approach

Financial crisis in 2008 caused huge loss and one of the accusations is the misprediction of risk measurement. Considering the important role the stock markets play, and the trend of globalization in economy, we propose forecasting Value at Risk of G20’s (except European Union) stock indexes in three periods, pre-crisis, during crisis and post-crisis, via factor copula model. Unlike those models based on multivariate normality, factor copula is based on the assumption that there exists a or several common factors which lead to the change of stock prices. In this paper, different levels of dependence among 19 countries are presented and the results indicate that, during crisis countries with higher values of coefficients tend to have larger loss than others. Also, the large numbers of violations to VaR may be an indicator of the upcoming financial crisis.

Antropofagia Distópica de um País em Crise

Este é um ensaio sobre antropofagia distópica em um país perpetuamente em crise, partindo da peça teatral O rei da vela, procurando revelá-la enquanto versão “em negativo” das utopias do Manifesto Antropófago de 1928. Expondo a concepção de Oswald de Andrade sobre aquilo que chamou de “baixa antropofagia”, este ensaio diferencia a Antropofagia (em sentido ritual como economia simbólica da alteridade) do Canibalismo (em sentido de degradação e exploração capitalista).

‘Tax the rich’? The financial crisis, fiscal fairness, and progressive income taxation

AbstractHas the financial crisis influenced taxes on the rich? In this article, I argue that crisis countries have raised income tax progressivity because of fiscal fairness considerations. I test this claim by analysing a new data set on top marginal personal income tax (PIT) rates for 122 countries from 2006 to 2014, applying matching methods and a difference-in-differences design. The results show that countries with a financial crisis have increased top PIT rates by 4 percentage points. Furthermore, rising public debt only leads to higher top PIT rates when it is crisis-induced. These findings demonstrate that notions of fiscal fairness can still shape progressive taxation in the 21st century.

Risk Management for Sovereign Debt Financing with Sustainability Conditions

We develop a model of debt sustainability analysis with optimal financing decisions in the presence of macroeconomic, financial and fiscal uncertainty. We define a coherent measure of refinancing risk, and trade off the risks of debt stock and flow dynamics, subject to debt sustainability constraints and endogenous risk and term premia. We optimize both static and dynamic financing strategies, compare them with several simple rules and consol financing to demonstrate economically significant effects of optimal financing, and show that the stock-flow tradeoff can be critical for sustainability. We quantify the minimum refinancing risk and the maximum rate of debt reduction that a sovereign can achieve given its economic fundamentals, and extend the model to identify optimal timing for debt flow adjustments that allow the sovereign to go beyond these limits. We put the model to the data on three real-world cases: a representative euro zone crisis country, a low-debt country (Netherlands) and a high-debt country (Italy). These applications illustrate the use of the model in informing diverse policy decisions on sustainable public finance. The model is part of the European Stability Mechanism toolkit to assess debt sustainability and repayment capacity of member states in the context of financial assistance.

Which skills and competences to develop in accountants in a country in crisis?

This research investigated the incorporation of professional skills into Greek accounting education studies. It was driven by complaints from employers and other stakeholders that Higher Education is not keeping pace with global trends in the economy. Questionnaires (N = 1626) helped to identify and rank professional skills reflecting the opinions of three stakeholder groups (accounting teachers, business administration and accounting students, and accountants). Ways to reform the curriculum were identified and a Priority Index was calculated to classify the skills requiring development, while strategic maps revealed an overall picture of conceptual differences between groups. The findings indicated that professional skills were considered important, but a gap existed between the importance assigned by the different stakeholder groups to relevant skills and also on how they should be developed by the educational process. The results identified the necessity to advance the critical thinking abilities of prospective accountants through new teaching approaches and through the development of a curriculum that supports graduates’ employability and sustainable development. Accounting faculty can use the outcomes of this research to improve accounting education studies; furthermore, this research combined with similar studies can add to the educational reforms required to exit the continuing socio-economic crisis in Greece.

Mauritania y el Sahara Español: entre Argelia y Marruecos (1969-1979)

The history of the Saharian conflict still contains some aspects to be studied, despite the number of essays that have been published in recent years on the subject. Among them, some actors who have gone almost unnoticed, at least for the Spanish historiography. Mauritania is one of them. This paper analyzes the role of that seemingly weak young country in the Sahara crisis making use of US and French diplomatic sources. Its motivations, the evolution of its positions and the political shift from the extreme defense of the principle of self-determination for the Sahara, along with Algeria, to its participation with Morocco in an adventure whose result will be key in the drift of the young Republic towards the abyss. All this process under the examination and/or action of two powers present in the conflict, to a greater or lesser extent: the US and France.

Ordoliberalism: The Next Generation. What Do Prospective Social Science Teachers in Germany Think About the Euro Crisis?

AbstractWe present results from a survey of 785 prospective social science teachers who were asked about their attitudes on the euro crisis during their first year at university in Germany. The students strongly believe that the crisis is mainly due to excessive public debt and lack of competitiveness in the crisis countries but do not consider Germany's persistent trade surplus as a major problem. A regression analysis suggests that students’ views about Germany's trade surplus are unrelated to their political orientation, their general support for the European idea or their perceptions of its efficiency and fairness. The implications for European integration and citizenship education are discussed.

Games borrower governments play: the implementation of economic adjustment programmes in Cyprus and Portugal

Research on the Economic Adjustment Programmes (EAPs) for Eurozone crisis countries has so far acknowledged the role of creditor countries and Troika institutions or has examined the economic effects or structural determinants of domestic implementation processes. The role of borrower governments as strategic actors within the ‘Troika complex’ has been neglected. Taking Cyprus and Portugal as cases in point, the article shows how reform-oriented borrower governments used the interaction with the Troika to overcome veto player opposition to programme implementation. Drawing on the two-level game and on negotiation theory, the study discusses borrower strategies in response to opposition from the court or parliament, and the costs of no agreement. Reform-oriented governments mostly used commitments to the international level or Troika pressure to pursue coercive strategies vis-à-vis domestic opponents. High costs of no agreement seem to be a necessary means to pass on political and market pressure through coercion.

Contagion from the crises in the Euro-zone: where, when and why?

ABSTRACTThe prevalence of contagion between the Euro-zone countries and other European countries since the Greek crisis of 2009 is now well – known, but the factors that influence the pattern of this contagion are not well understood. We investigate this question both within Europe and beyond to the USA and Japan, using an asymmetric M-GARCH model that focuses on extreme values of the risk premia on government bonds. We compare these extreme values with news of major events and find that they are highly correlated. We find a different pattern of contagion emanating from Ireland compared to the other crisis countries of Greece, Italy, Portugal and Spain. We also examine the factors that have made countries vulnerable to contagion and find that financial factors are more important than trade ones. However, intra-Euro-zone trade has also been a significant factor between the major Euro-zone economies. There is little evidence that global factors affect contagion between EU member states, but some evidence that nominal exchange rate movements offer a degree of insulation from contagion for the non-Euro zone states.

Myanmar's human resources for health: current situation and its challenges

BackgroundHuman resources for health (HRH) are the cornerstone of health systems, enabling the improvement of health service coverage. The systematic fortification of healthcare in Myanmar has accelerated since a new ruling party took office. Since 2006, Myanmar has been listed as one of the 57 crisis countries facing critical health workforce shortages. Therefore, this study aimed to assess the current situation of HRH in the public health sector where major healthcare services are provided to the people of Myanmar. MethodsA cross-sectional study was conducted from January to May 2017 by collecting secondary data from the official statistic of the Ministry of Health and Sports (MoHS), official reports, press-releases, and presentations of Government officials. The data were collected using a formatted excel spreadsheet. A descriptive analysis was applied and the density ratio per 1,000 population for medical doctors and health workers was calculated. FindingsIn total, 16,292 medical doctors and 36,054 nurses working at 1,134 hospitals were under the management of MoHS in 2016. The finding revealed that 13 out of 15 States and Regions were below the WHO recommended minimum number of 1 per 1,000 population for medical doctor. The distribution of medical doctors per 1,000 population in the public sector showed a gradually decreasing trend since 2006. Urban and rural medical doctor ratios observed wide disparities. InterpretationThe HRH shortage occurred in almost all State and Regions of Myanmar, including major cities. Wide disparities of HRH were found in urban and rural areas. The Myanmar government needs to consider the proper cost-effective HRH supply-chain management systems and retention strategies. The projection of health workforce, distribution of workforce by equity, effective management, and health information systems should be strengthened.

What’s fair? Preferences for tax progressivity in the wake of the financial crisis

AbstractProgressive taxation is an effective redistributive tool in times of growing inequality. However, like all public policies, an increase in tax progressivity is unlikely if it lacks popular demand. Has the financial crisis affected the demand for progressive taxation? Building on research that has identified fairness beliefs as the main factor pushing for taxes on the rich, I argue that the Great Recession and states’ reactions to it have caused a general shift in tax policy preferences. As a consequence, demand for tax progressivity is higher in crisis countries. Multilevel analyses using survey data for 32 countries show support for my argument. These findings have important implications for our understanding of the politics of redistribution in the 21st century.

Migrants in Countries in Crisis: The Experiences of Ghanaian and Nigerien Migrants during the Libyan Crisis of 2011

Using the experiences of Ghanaian and Nigerian migrants who were implicated in the 2011 Libyan crisis as a case study, this paper highlights the importance of examining micro-level factors in explaining migration decision-making processes. It therefore challenges the uncritical use of macro-level factors as exogenous ‘root causes of migration especially in developing country contexts. Adopting mainly qualitative approaches among seventy-five key informants from six distinct categories, the study finds that migration culture, household livelihood aspirations, geographical propinquity, the existence of social networks and migrant smuggling rings motivate migrations to Libya. The paper also challenges scholarship on the 2011 Libyan crisis that treats the experiences of sub-Saharan African (SSA) migrants in the country as an undifferentiated group. The paper concludes that within a developing country context, the political economy of the origin country contributes to the establishment, over time, of a migration culture especially among youth who feel trapped in waithood and are unable to realize basic socio-cultural and economic markers in life. The paper recommends the regionalization of evacuation and repatriation programmes to facilitate the timely extraction of trapped migrants from countries in crisis.

The Effect of Tltro-Ii on Bank Lending

This study estimates the effect of the European Central Bank’s second series of targeted longerterm refinancing operations (TLTRO-II) on bank lending using bank level data from multiple countries and instrumental variable estimation. Effects on corporate loans and loans for consumption are analysed separately. The cumulative effect of TLTRO-II on participating banks’ stock of corporate loans is estimated to be about 20 per cent. The effect on lending for consumption is found close to zero. The positive effects on corporate loans are found to be driven by crisis countries indicating that the effectiveness of monetary policy depends on the economic conditions. Additionally, the effect on government bond purchases is found negative. This result is very different from the earlier results regarding non-targeted liquidity operations.

Individual Behavior and Collective Action: The Path to Iceland's Financial Collapse

Unsustainable accumulation of debt precedes financial crises. The recent Western financial crisis was no exception in this regard. The external debt of Greece, Iceland, Ireland, and Spain increased exponentially, in Iceland at a rate higher than the rate of interest on foreign debt. The Ponzi scheme that played out in Iceland begs the question why a country would set out on a path that could lead to a financial crisis. We address this question and describe the private incentives faced by bankers, financiers, politicians and others. In particular, we show how private incentives and a culture that valued financial gains above all else collided with socially desirable outcomes. The root of the problem in Iceland as well as in other crisis countries was a failure at the state level to align private incentives with what was socially prudent, a failure due, at least in Iceland, to a combination of mistakes, incompetence and what can only be called corruption. Furthermore, misplaced belief in a market economy where morals and ethics play no role paved the way to serious lapses in accounting and in the operation of the banks.

Euro Area Sovereign Risk Spillovers Before and after the Ecb's OMT Announcement

We study the dynamics of sovereign risk spillovers from (and between) Spain and Italy, before and after the ECB's announcement of the OMT program. We identify domestic Italian and Spanish sovereign risk shocks through an intraday event study. The shocks are used as external instruments in bilateral, daily, local projection regressions. Prior to the announcement of the OMT, changes in the Spanish and, to a lesser extent, Italian spread spilled over to many other euro area member states, and also affected the euro-dollar exchange rate. Peak effects generally materialized after 2-3 days. Since the OMT announcement, spillovers to non-crisis, non-safe haven countries have disappeared. Some spillovers among crisis countries persist, but are smaller and shorter-lived than before. Overall, our results are consistent with the view that the OMT, through eliminating equilibrium multiplicity, has largely stopped contagion.

Unemployment Surges in the EU: The Role of Risk Premium Shocks

In the last decade, over half of the EU countries in the euro area or with currencies pegged to the euro were hit by large risk premium shocks. Previous papers have focused on the impact of these shocks on demand. This paper, by contrast, focuses on the impact on supply. We show that risk premium shocks reduce the output level that maximizes profit. They also lead to unemployment surges, as firms are forced to cut costs when financing becomes expensive or is no longer available. As a result, all countries with risk premium shocks saw unemployment surge, even as euro area core countries managed to contain unemployment as firms hoarded labor during the downturn. Most striking, wage bills in euro area crisis countries and the Baltics declined even faster than GDP, whereas in core euro area countries wage shares actually increased.

Unemployment Surges in the EU: The Role of Risk Premium Shocks

In the last decade, over half of the EU countries in the euro area or with currenciespegged to the euro were hit by large risk premium shocks. Previous papers havefocused on the impact of these shocks on demand. This paper, by contrast, focuses onthe impact on supply. We show that risk premium shocks reduce the output level thatmaximizes profit. They also lead to unemployment surges, as firms are forced to cutcosts when financing becomes expensive or is no longer available. As a result, allcountries with risk premium shocks saw unemployment surge, even as euro area corecountries managed to contain unemployment as firms hoarded labor during thedownturn. Most striking, wage bills in euro area crisis countries and the Balticsdeclined even faster than GDP, whereas in core euro area countries wage sharesactually increased.

The Short-Run Effect of Monetary Policy Shocks on Credit Risk: An Analysis of the Euro Area

We examine the credit channel of monetary policy from 2000 to 2015 in the Euro Area using daily monetary policy shock and credit risk measures in an autoregressive distributed lag model. We find that an expansionary monetary policy shock leads to a short-run increase in the credit risk of non-financial corporations. This dysfunctionality of the credit channel is driven by the crisis-dominated post-2009 period. During this period, market participants may have interpreted expansionary monetary policy shocks as a signal of worsening economic prospects. We further distinguish policy shocks aiming at short- and long-run expectations of market participants, i.e. target and path shocks. The adverse effect disappears for crisis countries when the European Central Bank targets long-run rather than short-run expectations.

Venezuela’s Sovereign Debt Restructuring: The Elephant in the Room

Dealing with Venezuela’s sovereign debt crisis is very different than it was during the 1980s and 1990s. The problem is much larger than oil prices; the entire economy has collapsed, including PDVSA. But beyond oil, there is politics. The government in Venezuela is an internationally sanctioned kleptocracy, ruling a country in grave social and humanitarian crisis, despite its possession of abundant natural resources, and regime change is not at all certain. Therefore, there are legal as well as reputational hazards, and moral and ethical considerations in Venezuela’s debt crisis. This article analyzes possible political scenarios, including the prospect of a transitional scenario within the current regime, for their impact on all forms of sovereign debt restructuring.