Policy Credibility Research Articles

Exploring the nexus between inflation targeting and exchange market pressure: Evidence from the global financial crisis

This study investigates the effects of the inflation targeting (IT) monetary framework on the exchange market pressure index (EMPI) across 24 Asian economies from 1998 to 2018, with a particular focus on the period covering the global financial crisis (2008–2018). Employing dynamic panel data modeling and Propensity Score Matching, our analysis reveals a positive impact of implementing the IT on the EMPI. The findings suggest that adopting an IT regime effectively reduces exchange market pressure, demonstrating notable resilience following the global financial crisis of 2008. This highlights that an IT policy enhances the credibility of monetary policy, thereby decreasing the need for central bank interventions in the foreign exchange market within this framework.

Effects of trilemma policies patterns on monetary policy credibility

The open economy trilemma refers to the impossibility of a country fully and simultaneously achieving three political objectives: monetary policy independence, exchange rate stability and financial openness. However, corner configurations related to the three policies of the trilemma are increasingly rare. In fact, countries tend to choose a policy combination composed of partial financial integration, managed exchange rate flexibility and partial monetary independence. Given the possibility of intermediate choices, there exists an index able to measure the relative divergence (or convergence) regarding the policy choices of the trilemma. The index identifies whether countries are adopting similar (or divergent) policy mixes in relation to the trilemma policy options. However, the consequences of adopting a more (or less) convergent policy arrangement on monetary policy credibility are unknown. Hence, this study investigates the effects of trilemma policies convergence patterns on monetary policy credibility. The idea is to verify whether a more convergent arrangement of policies related to the trilemma in open economies helps build monetary policy credibility. Our database is formed by 94 (developed and developing) countries with different characteristics. Thus, we run estimates based on a family of Tobit models for different sub-samples of countries, and also considering different periods – before and after the Global Financial Crisis. The study brings important practical implications. In general, the findings show that a convergent strategy increases credibility. The estimates corroborate the idea that countries adopting divergent policies from the global standard tend to be more exposed to economic instability and, as a result, have difficulties in anchoring inflation expectations.

Problematising anabolic-androgenic steroids in Australian media: Violence, crime and disordered masculinity

As anabolic-androgenic steroid use has become more mainstream, so has media reporting on steroid-related problems and harms. The media is a particularly important site in shaping the social meanings of alcohol and other drug use, yet no research to date has focused on media representations of steroids and their effects. Informed by Bacchi’s post-structural method of problematisation analysis, we examine how the Australian news media problematises steroids and significant political effects produced by dominant problematisations. Australian news articles from 37 sources were electronically collected via the Factiva database during 2022, with 151 articles included in the final sample. In this article, we focus on the three most significant themes across the data. First, we analyse how steroid use is problematised in relation to alcohol use in public and men’s ‘natural’inclination to violence. We then explore how steroid supply and distribution is problematised as a matter of organised crime. Lastly, we analyse how steroid using subjects are constituted in relation to disordered masculinity and psychopathology, producing a range of negative material effects for consumers. We conclude by arguing that such media reporting is active in the normalisation of policies and interventions focused on pathologizing or criminalising individuals. As a result, the need for other credible policy responses, such as strategies for addressing steroid-related stigma, harm reduction policies and decriminalisation, tend to be ignored.

Economic policy mix: An imperative for monetary credibility in Nigeria

This research examined the economic policy mix as an imperative for monetary credibility in Nigeria, covering a study period of 35 years spanning from 1988--2022. The paper sourced data from the Central Bank of Nigeria (CBN) Bulletin (2022). The study used the autoregressive distributed lag methodology. This study revealed that government expenditure (GOEX), tax revenue and greater trade openness significantly improve monetary credibility. However, lower monetary policy rates (MPRs) enhance monetary credibility. Moreover, the broad money supply (BMOS) does not significantly affect monetary credibility. The paper concludes that fiscal discipline, effective tax revenue collection strategies, low MPR, and high trade openness are crucial for maintaining monetary policy credibility. Consequently, the Nigerian government should prioritize policies that improve tax revenue collection efficiency and compliance. While ensuring that government-awarded projects undergo postproject audits, the emphasis of government expenditures should be on improving the educational sector and healthcare sector.

Public investment on renewable energy R&D Projects: The role of geopolitical risk, and economic and political uncertainties

Recently, there has been growing concern about the impacts of geopolitical tension as well as economic and political uncertainties on the decision-making process of governments when it comes to allocating resources for renewable energy R&D. This paper employs the panel autoregressive distributed lag (ARDL), cross-sectional panel autoregressive distributed lag (CS-ARDL) and Fully Modified Ordinary Least Squares (FMOLS) technique to examine the impacts of geopolitical risk, economic and political uncertainties, renewable energy technologies innovations, government financial affordability and CO2 emissions on government spending on renewable energy research and development projects. The novel aspects of the panel ARDL and CS-ARDL methodologies lie in their ability to capture both short-run and long-run dynamics within a panel data framework, as well as their ability to provide a more comprehensive understanding of the relationships under investigation. The empirical results presented in this paper indicate that in the face of ongoing geopolitical tension, as well as economic and political uncertainties, financially capable governments continue to increase their investments in renewable energy R&D in the long run. This strategic move aims to safeguard the supply of renewable energy, uphold economic and political policy credibility, maintain a first-mover advantage, and establish control over the intellectual property rights associated with renewable energy technology.

Strengthening Nurses' Influence in Health Policy.

With nurses at the forefront of health care, the need for their active engagement in policy has never been more urgent. Numerous national and global reports call for nurses to lead policy change. The Patton Zalon Ludwick Policy Assessment Framework is intended to answer this call by serving as a foundational guide to nurses' self-assessment of their health policy actions. It includes three dimensions: engagement, partnership, and reach, each with three levels. The levels of engagement are literacy, advocacy, and influence. The partnership levels are single unit or community group, interdisciplinary team(s), and broad-based coalitions. The reach levels are based on the location of policy work: local/unit/organization, regional/state, and national/global. The dimensions are interconnected, and the levels build upon one another but are not necessarily symmetrical, linear, or prescriptive. In this article, the authors describe each dimension and level in detail, and the accompanying tables provide examples of policy goals and actions. Nurses worldwide can use this framework to engage in self-reflection and envision actions to achieve their policy goals. It will enable nurses to evolve from being policy bystanders to becoming visible, credible policy leaders.

Empowering women in central banking

ABSTRACT When are women appointed to the board of central banks? While progressive societal gender norms may facilitate women's ascension to leadership positions, recent research indicates that women are more likely to assume leadership positions during crisis periods. Because of the widely documented 'male dominance' in the policy domain of central banking, analyzing changes in women's descriptive representation on central bank boards provides a unique laboratory to study the role of women in economic policymaking. Building on previous literature on women's political leadership, we argue that sovereign debt crises are powerful catalysts for lifting women into leadership positions. We hypothesize that appointing women to central bank leadership positions during sovereign financial distress signals a policy change to bolster monetary policy credibility. Using data covering 90 countries from 2000 to 2017, we show that women are more likely to be appointed to central bank leadership positions during a sovereign debt crisis. A sovereign debt crisis increases the likelihood of women’s appointments to a central bank board by 21.1 percent. To mitigate concerns that our results are spurious, we implement a battery of robustness checks. Our study suggests that women's empowerment can be beneficial in restoring monetary policy credibility during sovereign financial distress.

The impact of Reserve Bank of India officials' resignations on financial sector returns: An event-study analysis

In this study, we examine the short-term effects of the resignations of high-ranking officials from the Reserve Bank of India (RBI) on financial sector returns. We apply a commonly used event-study method to analyze financial sector stocks during the period from February 16, 2018, to July 22, 2019. The findings reveal that the financial sector was sensitive to the resignations of RBI Governor Urjit Patel and Deputy Governor Viral Acharya, both strong supporters of the RBI's independence. Patel’s resignation caused a significant negative impact on cumulative abnormal returns, while Acharya’s resignation led to a significant positive impact on these returns. Our results suggest that central bank independence (CBI) may have varied short-term effects on financial sector performance. It is, therefore, important for both politicians and investors to understand the implications of our findings in order to fully grasp the political and economic consequences of central bank independence and the credibility of monetary policy on financial sector outcomes. For future research, we suggest exploring the effects of these resignations on other financial indicators, such as bond yields, exchange rates, and interest rates, using alternative methods.

Inflation Uncertainty from Firms’ Perspective, Overconfidence and Credibility of Monetary Policy

Abstract This paper uses survey data to gauge firms’ inflation uncertainty. First, it shows how commonly used proxies of uncertainty, such as ex post squared forecast errors or forecast dispersion differ from measures of actual ex ante inflation uncertainty. Second, this paper documents novel stylized facts: firms’ uncertainty and overconfidence – low ex ante variances compared to ex post (squared) forecast errors – are shown to be relevant for how firms’ form their beliefs about inflation and their inflation forecasts accuracy (firms know what they do not know) and to impact firms’ beliefs about credibility of monetary policy.

An integrated MCDM model with enhanced decision support in transport safety using machine learning optimization

Having the capacity to effectively manage multi-criteria decision-making (MCDM) issues with considerable reliability is a crucial prerequisite for any MCDM model. This study introduces an advanced MCDM model that integrates logarithmic percentage change-driven objective weighting (LOPCOW), multi-objective optimization on the basis of a ratio analysis plus the full multiplicative form (MULTIMOORA), and density-based spatial clustering of applications with noise (DBSCAN). The goal is to provide robust decision support. Specifically, the model incorporates a machine learning tool, namely, grid search, to optimize the parameters of neighborhood radius (ε) and the minimum number of points, which significantly influence the clustering quality of DBSCAN. Subsequently, the cluster centers determined by DBSCAN serve as initial points for k-means clustering to negate the impact of outliers. This approach addresses the failures of DBSCAN in nearest neighbor search and parameter selection, and it also resolves the limitations of k-means related to the uncertainty in cluster outcomes due to varying initial centroid selections. Utilizing a real case study from the European Union, comprehensive comparisons of the model results demonstrate the adaptability, reliability, and stability of the proposed model, affirming its effectiveness in providing credible policy recommendations and practical decisions. Overall, this study presents policymakers, professionals, and administrators with a reliable decision-making system for conducting real-world MCDM tasks with enhanced confidence and robustness.

Determinants of fiscal rules policy credibility in West African Economic and Monetary Union countries

Determinants of fiscal rules policy credibility in West African Economic and Monetary Union countries

Critical Success Factors for Public-Private Partnerships in the Development of Mega Power Generation Infrastructures in Sri Lanka

Ceylon Electricity Board (CEB) seeks alternative financing through Public Private Partnerships (PPP) due to non-cost-reflective tariff losses and debt overhang, relying on maturity in critical success factors. Thus, the research examines the success factors of Public Private Partnerships in developing power generation infrastructures in Sri Lanka, using quantitative data from a questionnaire distributed to stakeholders in CEB. The data analysis tools of descriptive and inferential statistics were used to analyze the collected data. The economic viability of the project, credibility of government policies, legal and regulatory framework, equitable risk allocation, transparent and efficient procurement process, financial market, a strong and good private consortium, and political stability, were found as the main CSFs for the development of mega power plants. The study was concentrated on the public agency of CEB, for generalization investigation to be extended to private investors, practitioners, and policymakers in the power sector. Further, a comprehensive study on the exploration of CSF to attract private investors to PPP for the development of mega power plants in Sri Lanka would be most beneficial to the industry. The framework developed in this research would be the benchmark for identifying critical success factors for improvement in PPP projects in Sri Lanka.

Policy credibility is a key component for an effective and efficient EU Emissions Trading System

Policy credibility is a key component for an effective and efficient EU Emissions Trading System

Dynamics of deposit dollarization in Turkey

<p style="text-align:justify"><span style="font-size:16px"><span style="font-family:Times New Roman,Times,serif"><span dir="ltr" lang="EN-US"><span style="color:black">Deposit dollarization in Turkey has been on the rise, reaching record levels in 2022. This was caused by the worsening macroeconomic fundamentals along with the transition to the presidential system in 2018 and the associated deviation from the monetary policy stance afterward. The unique case of Turkey presents an excellent natural experiment to explore the dynamics of deposit dollarization and how it is affected by the changes in the institutional structure as well as various social, economic, and financial shocks in a relatively short time. This study examines the time varying reactions of deposit dollarization for the period between 2013 and 2022 based on rolling window maximum entropy bootstrap estimates. Our findings reveal that all the model variables had significant and sometimes asymmetric effects on deposit dollarization during the different stages of this turbulent period. In particular, we observe diminishing effects of real exchange rate, policy credibility and consumer confidence over time. The findings provide ample new evidence regarding the dynamics of deposit dollarization in general, and how it is affected by loss of monetary policy credibility.</span></span></span></span></p>

Informing evidence-based policy for sport-related concussion: are the consensus statements of the concussion in sport group fit for this purpose?

ABSTRACT This essay explores how evidence-based policy can be developed for sport-related concussion (SRC), focusing particularly on the role and influence of the Consensus Statements of the Concussion in Sport Group (CiSG). Three credible policy purposes are suggested: (i) to mitigate acute health impacts of concussion events in sport; (ii) to reduce or eliminate the identified causes of SRC (direct blows to the head, neck, or body); and (iii) to improve long-term brain health outcomes for athletes. Eight of ten systematic reviews commissioned for the most recent Consensus Statement, and ten of its thirteen headings, address the first purpose. The primary influence of the CiSG Consensus Statements has been to improve SRC acute response practice and protocols in professional/elite sport, which has always been their primary policy purpose, although evidence of improvement is more limited in child/adolescent and recreational sport. But a primary focus on mitigating acute health impacts has crowded out other credible policy purposes of concern to stakeholder groups with whom evidence-based policy for SRC must be co-produced. No recommendations are made to improve long-term brain outcomes for athletes because concerns about imperfections in evidence are cited to question the link between such outcomes and SRC. Modifications to reduce or eliminate purposive blows to the head, neck, or body that are permitted as a structural part of the way some sports are played are given very limited attention, even when discussing prevention, where they are just one approach considered alongside protective equipment, neuromuscular strengthening, and concussion management strategies. The essay concludes that the CiSG should shift the primary policy purpose of its Consensus Statements to address the identified causes of SRC: purposive blows to the head, neck, or body. Reducing or removing causes of SRC both better safeguards children/adolescents and renders debates about the link between SRC and long-term brain health outcomes superfluous.

Inflation targeting and capital flows: A tale of two cycles in developing countries

Global factors have traditionally determined capital flows, but domestic policies also matter. Developing countries face the challenge of managing procyclical capital inflows that can destabilize their macroeconomic environment. Inflation targeting can help solve this problem by enhancing the credibility and predictability of monetary policy. In this paper, we explore how inflation targeting affects the cyclical behavior of capital inflows in developing countries. First, we complement the data on international capital flows from the IMF with locational and consolidated banking statistics from the BIS. Second, we address the self-selection associated with inflation targeting by using entropy balancing. We find that inflation targeting reduces the procyclicality of capital inflows in developing countries. Specifically, inflation-targeting countries receive more (less) capital inflows during recessions (booms) than non-targeting countries. Other investment debt from the private sector mainly drives this effect. Our results are robust to various sensitivity checks and alternative specifications and methodologies.

Food, nutrition, and related policy issues: Evidence-based policy and the credibility crisis

Abstract In recent years, the push for evidence-based policy has gained momentum, particularly in the field of food and nutrition, where the stakes for public health are high, underscoring the need for aligning policy with robust scientific evidence. This paper examines the credibility crisis in evidence-based policymaking, highlighting challenges such as conflicts of interest and misuse of scientific findings. We delve into the complexities of food policies, including nutrition labeling and food assistance programs, and discuss the limitations of relying on single studies and short-term impacts for policymaking. The paper explores perverse incentives within the policy research ecosystem and illustrates potential bias and the lack of equipoise in research design. We conclude with recommendations for enhancing the credibility of evidence-based policy, emphasizing the importance of independence, relevance, and transparency in research citations and the need for dynamic policy responses informed by ongoing scientific developments.

EU carbon prices signal high policy credibility and farsighted actors

AbstractCarbon prices in the EU emissions trading system are a key instrument driving Europe’s decarbonization. Between 2017 and 2021, they surged tenfold, exceeding €80 tCO2−1 and reshaping investment decisions across the electricity and industry sectors. What has driven this increase is an open question. While it coincided with two significant reforms tightening the cap (‘MSR reform’ and ‘Fit for 55’), we argue that a reduced supply of allowances alone cannot fully explain the price rise. A further crucial aspect is that actors must have become more farsighted as the reform signalled policymakers’ credible long-term commitment to climate targets. This is consistent with model results that show historic prices can be better explained with myopic actors, whereas explaining prices after the reforms requires actors to be farsighted. To underline the role of credibility, we test what would happen if a crisis undermines policy credibility such that actors become myopic again, demonstrating that carbon prices could plummet and endanger the energy transition.

The essential role of climate policy uncertainty in carbon emissions: a fresh insight.

This study assesses the influence of climate policy uncertainty (CPU) on carbon emissions (CE) against the backdrop of economic policy uncertainty (EPU) in the US. The wavelet analysis provides a comprehensive understanding of correlations in the time and frequency domains. The results demonstrate a significant correlation between CPU and CE, which varies across different time periods and frequencies. In the time domain, the results indicate that the CPU and CE move together during certain subperiods. Moreover, there are observable comovements in the frequency domain, particularly in the short to medium range. However, the correlation becomes stronger in the short term when there is no EPU, suggesting a closer interaction between CPU and CE. Therefore, it is crucial for governments to prioritize improving the clarity, credibility, and consistency of climate policies. They should also consider potential economic shocks when designing these policies.

A framework for analyzing the effects of modifiable areal unit problem on ecological security pattern

Ecological security pattern (ESP) provide a solution to balance ecosystems and urban development. The modifiable areal unit problem (MAUP) is a well-known geographical issue that affects the understanding of ecological processes and the results of spatial modeling. However, only a few studies have explicitly clarified the effects of MAUP on ESP. Herein, we propose new methods for identifying ecological sources and mapping the resistance surface, as well as a framework for analyzing the effects of MAUP on ESP. Our results indicate that (1) the datasets used for identifying ecological sources should possess a grain size of smaller than 300 × 300 m2. (2) The resistance surface directly influenced the results of the ecological corridors and nodes. (3) MAUP could generate uncertainties in ESP policymaking. Additionally, this study developed comprehensive network analysis tools based on graph machine learning to analyze the effect of MAUP on ESP policymaking, which can provide important landscape planning. The network analysis approaches may help policymakers gain a comprehensive understanding of the ESP network to improve the credibility of policies.