Economic Adjustment Research Articles

The impact of Euro through time: Exchange rate dynamics under different regimes

AbstractIn this study, we examine the role of the Euro in currency co‐movements and contagion considering the USD exchange rates of six major currencies (i.e., EUR[DM], JPY, GBP, CHF, AUD, as well as, CAD). We identify five distinct intervals, each one corresponding to a different exchange rate regime or reflecting diverse economic developments. First, we model conditional volatility by introducing a novel DCC‐GARCH‐Copula model (based on GARCH selection criteria). Then, we investigate conditional volatility connectedness employing a Bayesian TVP‐(Pseudo)FAVAR model. This approach effectively refines existing measures of dynamic connectedness. Findings suggest strong co‐movements that differ across regimes. In addition, the EUR becomes weaker following both the collapse of Lehman Brothers and the decision for the first Economic Adjustment Programme for Greece. Following the announcement of the result of the EU referendum the GBP eventually receives influence from the EUR. Results remain robust to a series of tests.

Seizure control and anxiety: Which factor plays a major role in social adjustment in patients with Juvenile Myoclonic Epilepsy?

PurposeThis study aimed to determine the presence of anxiety disorder and severity of anxiety symptoms in an extensive series of consecutive patients with JME and its association with epilepsy-related factors. In addition, we evaluated the impact of anxiety and clinical variables on social adjustment. MethodsWe prospectively evaluated 112 (56.2 % females, mean age 27.2 years) patients with an electroclinical diagnosis of JME and 61 (52.4 % females, mean age 29.3 years) healthy controls. Anxiety symptoms were assessed by the State and Trait Anxiety Inventory (STAI). Social functioning was addressed with Self-Report Social Adjustment Scale (SAS). The patient group was also evaluated with a psychiatric interview. ResultsPatients with JME presented more severe anxiety symptoms and worse social adjustment compared with controls. The presence of anxiety disorder and the severity of anxiety symptoms was associated with frequent seizures - generalized tonic-clonic seizures (p = 0.008) and drug-resistant epilepsy (p = 0.021). Regarding social adjustment, the severity of anxiety symptoms was associated with lower economic adjustment (p = 0.039), while the presence of anxiety disorder impacted family relationships (p 0.025). The presence of hard-to-control myoclonic seizure was associated with lower scores on work (p = 0.019), leisure activities (p = 0.008), family relationship (p = 0.022) and overall social adjustment (p = 0.038). ConclusionPatients with JME have severe anxiety symptoms and worse social adjustment. Anxiety disorder and symptoms were associated with frequent seizures and drug-resistant epilepsy. Epilepsy-related factors and anxiety impaired distinct aspects of social functioning.

How the Eurozone disempowers trade unions: the political economy of competitive internal devaluation

Abstract The marginalization of trade unions was a notable feature of the sovereign debt crisis in the Eurozone periphery. However, governments have recently imposed liberalizing reforms against union protests in the Eurozone core too. We argue that organized labour loses influence across the core-periphery divide because the ‘new economic governance’ puts national governments under enhanced pressure to compete against each other on wage and labour market flexibility—a process known as competitive internal devaluation. The article illustrates this argument through comparative quantitative indicators of liberalization and qualitative process-tracing in three core countries. Whereas Germany’s outstanding competitiveness position allowed its unions to extract significant concessions, their counterparts in France and Finland faced unprecedented defeats from governments aiming to restore economic growth by closing down the competitiveness gap to Germany. Our findings highlight the class power implications of the Eurozone’s reliance on the labour market as the main economic adjustment variable.

Perceptions of Principals, Teachers, Parents and Students Regarding Follow Up of Business Ethics as Economic Adjustment of Students in Society

Perceptions of Principals, Teachers, Parents and Students Regarding Follow Up of Business Ethics as Economic Adjustment of Students in Society

Global Macroeconomic Scenarios of the COVID-19 Pandemic

The COVID-19 global pandemic has caused significant global economic and social disruption. In McKibbin and Fernando (2020), we used data from historical pandemics to explore seven plausible scenarios of the economic consequences if COVID-19 were to become a global pandemic. In this paper, we use currently observed epidemiological outcomes across countries and recent data on sectoral shutdowns and economic shocks to estimate the likely impact of COVID-19 pandemic on the global economy in coming years under six new scenarios. The first scenario explores the outcomes if the current course of COVID-19 is successfully controlled, and there is only a mild recurrence in 2021. We then explore scenarios where the opening of economies results in recurrent outbreaks of various magnitudes and countries respond with and without economic shutdowns. We also explore the impact if no vaccine becomes available and the world must adapt to living with COVID-19 in coming decades. The final scenario is the case where a given country is in the most optimistic scenario (scenario 1), but the rest of the world is in the most pessimistic scenario.The scenarios in this paper demonstrate that even a contained outbreak (which is optimistic), will significantly impact the global economy in the coming years. The economic consequences of the COVID-19 pandemic under plausible scenarios are substantial and the ongoing economic adjustment is far from over.

Parents’ Perceptions about the Economic Adjustment of Secondary Level Schools and Deeni Madaris Students’ in Society

Parents’ Perceptions about the Economic Adjustment of Secondary Level Schools and Deeni Madaris Students’ in Society

Analýza souvislostí strukturální nápravy vnější ekonomické nerovnováhy a dlouhodobého ekonomického růstu

Z teoretickeho pohledu lze vnějsi ekonomickou nerovnovahu vnimat jako problem chronicke přeinvestovanosti ci podspořenosti ekonomik. Proces napravy vnějsi ekonomicke rovnovahy proto chapeme jako proces systematickeho přibližovani miry narodnich uspor a investic k dlouhodobě rovnovažným hodnotam, který může být zachycen jako strukturalni zlom v casových řadach. V empiricke casti prace jsme se pokusili ověřit dlouhodobe dopady napravy vnějsi ekonomicke nerovnovahy na ekonomický růst – konkretně zda strukturalni zlomy v trendu velicin vztahujicich se k vnějsi ekonomicke rovnovaze souvisi s výskytem strukturalnich zlomů trendu HDP. Výsledky naznacuji, že dlouhodoba naprava vnějsi ekonomicke nerovnovahy je spojena s vyssi pravděpodobnosti výskytu zhorseni dlouhodobeho trendu HDP, avsak nebyl prokazan žadný jednosměrný kauzalni vliv.

Overseas Mergers and Acquisitions of Maritime Enterprises under the Background of Ocean Economy Adjustment and Optimization

Xiang, P. and Qu, L., 2020. Overseas mergers and acquisitions of maritime enterprises under the background of ocean economy adjustment and optimization. In: Yang, Y.; Mi, C.; Zhao, L., and Lam, S. (eds.), Global Topics and New Trends in Coastal Research: Port, Coastal and Ocean Engineering. Journal of Coastal Research, Special Issue No. 103, pp. 231–235. Coconut Creek (Florida), ISSN 0749-0208.Overseas mergers and acquisitions have gradually become an important form for Chinese companies to make overseas investments. However, due to the uncertainty of the international environment and differences between countries, overseas mergers and acquisitions by Chinese companies have shown difficulties in reaching transactions. The reasons are worth exploring. This article mainly studies the overseas mergers and acquisitions of maritime enterprises under the background of marine economic adjustment and optimization. This article analyzes the process of identifying and controlling the risks of merger and acquisition technology integration in enterprises, and studies the technological integration mechanism of overseas mergers and acquisitions of maritime enterprises under the background of marine economic adjustment and optimization, and provides a reference for manufacturing enterprises implementing overseas mergers and acquisitions in technology integration. This paper studies that after the acquisition of overseas companies in 2015, it achieved a 0.67% increase, but its asset-liability ratio decreased by 0.04%. It reflects that this overseas merger and acquisition has not affected the company's debt scale on the basis of expanding the asset scale. From the analysis of risk aversion, the long-term performance of this overseas merger and acquisition is effective.

Comfort in Floating

Chile offers an example of a country that has overcome the fear of floating by reducing balance sheet mismatches, enhancing financial market development, as well as improving monetary, fiscal, and political institutions, and strengthening policy credibility. Under the floating regime, Chile’s economic adjustment to external shocks appears significantly improved, and its exchange rate pass-through has substantially declined. Our results reinforce the case that moving to a clear and credible floating regime can be associated with a reduction in the fear of floating via economic transformation (like smaller balance sheet mismatches, a larger hedging market, and a lower exchange rate pass-through).

The Analysis of the Conversion of New and Old Kinetic Energy in Third-tier Cities from the Perspective of New Taxes: Taking City A as an Example

The economic adjustment function of taxation has played an important role in promoting the China’s conversion of new and old kinetic energy of enterprises. This study based on precious first-hand quarterly data of more than a hundred key tax source companies in City A from 2015 to the first quarter of 2018. The results show that government tax incentives and strengthened supervision have significantly promote the innovation level of enterprises; after the "replacing the business tax with a value-added tax", high labor costs of modern service hinder the speed of new and old kinetic energy conversion.

Capital structure decisions in a period of economic intervention

PurposeThis paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese large enterprises and from 4,233 non-financial small and medium enterprises for the period 2010-2016. Additionally, the authors selected a sub-period from 2010 to 2014 for a deeper understanding of the impact of the sovereign debt crisis and the Economic Adjustment Programme of Troika on the capital structure of those companies.Design/methodology/approachThree dependent variables were tested according to debt maturity, and a dynamic panel data model, namely, the generalised method of moments system estimator, was used to test the formulated research hypotheses following Arellano and Bover (1995) and Blundell and Bond (1998) to capture the dynamic nature of the firm’s capital structure decisions.FindingsIn general, the results point out that the capital structure decisions depend on a set of firm-specific factors, and that the effects of the determinants of the debt maturity ratios differ according to the type of firm, i.e. large/small firms, and the economic cycle.Originality/valueTo the best of the authors’ knowledge, this is the first study that has been carried out in Portugal by using two samples of large and small companies for analysing the effects of the Economic Adjustment Programme of Troika on the capital structure of companies. The authors seek to understand which type of companies suffered more because of the effects of the Economic Adjustment Programme of Troika during this period, and which are the capital structure determinants that present greater change. Contrary to what might be expected, large companies are the firms that suffer most from the Economic Adjustment Programme. Probably, because these companies are the most immediate, most scrutinised and those that must show abroad that the bank did not fund them in the long term, because of the imposition and limits to grant credit faced by the banks themselves.

Insolvency dynamics of the Greek private sector during the era of austerity: an empirical assessment

This paper examines empirically the impact of austerity on the financial balance of the Greek private sector, with the use of the Dynamic OLS (DOLS) methodology. The standard stock-flow consistent private expenditure function is extended by treating corporate profits separately from the disposable income of the private sector in order to take into account the impact of austerity on distribution and private spending. The empirical findings indicate that the economy is debt-led, with austerity generating insolvency dynamics for the private sector. On one hand, at least since the introduction of the euro currency, private expenditure was heavily relying on the disposable income net of profits in an unsustainable manner, while on the other, the implementation of the Economic Adjustment Programs (EAPs) have intensified these unsustainable conditions, degrading the growth prospects of the economy.

Under economic adjustment programs, do private sector wages respond to changes in public wages and employment?

We examine the spillovers from changes in public sector wages and employment on private sector wages. Using a panel VAR model, we show that changes in public sector wages have a greater effect on private sector wages than changes in public sector employment. We motivate our analysis using the Economic Adjustment Program for Greece, and a simple theoretical model. The empirical validity of these effects is verified through a series of robustness tests. These results have important implications on the evaluation of the recent EU Economic Adjustment Programs and the future design of Internal Devaluation strategies.

The “Trilemma” of Public Bodies: Bureaucratic Structures Versus Agencies Under Policy Conditionality

The aim of this article is to explore the implications of the delegation of powers from central bureaucracies to semi-autonomous agencies for public administration under policy conditionality. Focusing on Greece, we argue that agencification reforms that were introduced during the economic adjustment programs (2010–2018) have changed the role of the administrative apparatus in policy-making and implementation. Based on two exemplary case studies, tax administration and state assets management, the empirical findings illustrate the political dynamics that induced organizational transformation and show how policy conditionality has changed the domestic agencification pattern and has rebalanced the institutional, functional, and democratic dimensions of agencies.

Economic Adjustment During the Great Recession: The Role of Managerial Quality

This study investigates empirically how managerial practices have affected macroeconomic adjustment during the Great Recession after the 2008 economic crisis. We start by constructing a country*industry balanced panel data over the 2007-2015 period for eighteen industries in ten OECD countries, and complementing it by two indicators: an indicator of management quality at the country level based on the managerial practices categorical scores at firm level from Bloom et al. (2012); and an indicator at the industry level for the shocks stemming from the 2008 economic crisis. We then rely on the local projection method pioneered by Jorda (2005) to estimate the direct impacts of country management quality indicators and industry economic shocks as well as their joint impacts, on five variables of interest: value-added, employment, labour productivity, wage per employee and labour share during the Great Recession. We find that, in countries where management quality is higher, production and employment are more resilient during the Great Recession, with less production losses and employment damages, no effects on productivity, wage moderation and a slight increase in the labour shares. It appears, moreover, that this resilience is increasing with the size of industry shocks.

Research on the Impact of the County Administrated by Province Reform on the Improvement of County Economic Performance: Taking Sichuan Province as an Example

In the process of further transferring to the county of the space of economic and social development, how to solve the financial predicament at the county level, stimulate the vitality of county development and improve the people’s livelihood security system at the county level through the adjustment of the financial system have become the core content of the financial system reform below the province level. Finance is a kind of distribution system of “controlling finance by government and administrating through finance” with the state regime system as the main body. It has great significance for the government to perform and transform its functions. Financial reform will inevitably become an important part of the overall reform. Based on the decentralized reform mode under the province, this paper investigates the economic performance of the reform of the County Administrated by Province and the transmission mechanism of the reform from the two aspects of economic growth speed and industrial structure adjustment.

Mind the Gap: Southern Exit, Northern Voice and Changing Loyalties since the Euro Crisis

AbstractIn this article, we examine whether the EU's unequal encroachment on its northern and southern members' core state powers since the Euro crisis – manifested in highly uneven burdens of economic adjustment and the reversal of intra‐EU migration dynamics – has in turn affected individual European identity. Using individual‐level data from Eurobarometer pooled over time, we investigate the micro‐foundations of EU citizens' continued sense of belonging, be it shared (national or EU) or exclusive (national). Though a steady majority of EU citizens continues to identify at least partially as European, we observe a rather puzzling North–South divergence in identity among the young and a widening skills gap overall. We argue that the Euro crisis triggered dynamics of southern exit (through surging South–North migration), northern voice (based on EU adoption of policies preferred in the North) and shifting national versus European loyalties, which may have consequences for the changing nature of European identity research.

Macroeconomic Policy Lessons for Greece from the Debt Crisis

This paper studies the Greek economy in the aftermath of the 2007-8 global crisis looking for barriers to, and engines of, growth. We use a micro-founded macroeconomic model calibrated to Greece. We first study the years of the debt crisis between 2008 and 2016 and then the recent covid-19 pandemic. Departing from 2008, our simulations show that the adopted economic adjustment program (the fiscal austerity mix combined with the fiscal and monetary assistance provided by the EU, ECB and IMF), jointly with the observed deterioration in institutional quality (the degree of protection of property rights) can explain most (around 23% of GDP) of the cumulative loss in GDP in the data (around 26% of GDP) between 2008 and 2016. In particular, the economic adjustment program can explain a fall of around 13%, while the deterioration in property rights accounts for another 10%. Counterfactual simulations, on the other hand, show that this loss could have been around 10% only, if the country had followed a different fiscal policy mix; if the degree of product marker liberalization was closer to that in the core euro zone countries; and, above all, if institutional quality in Greece had simply remained at its pre-crisis level. On the other hand, we show that, in the absence of the official fiscal bailouts, the depression would be much deeper, while the accommodative role played by the quantitative policies of the ECB has been vital to the Greek economy. Finally, departing from 2019, we quantify the impact of the covid-19 pandemic under various policy scenaria. A loss of around 8:5% of GDP and a sharp jump of public debt seem to be unavoidable during 2020 but, like in the case of the debt crisis, the duration of the new crisis depends crucially on the policy mix chosen.

Comfort in Floating: Taking Stock of Twenty Years of Freely-Floating Exchange Rate in Chile

Chile offers an example of a country that has overcome the fear of floating by reducing balance sheet mismatches, enhancing financial market development, as well as improving monetary, fiscal, and political institutions, and strengthening policy credibility. Under the floating regime, Chile's economic adjustment to external shocks appears significantly improved, and its exchange rate pass-through has substantially declined. Our results reinforce the case that moving to a clear and credible floating regime can be associated with a reduction in the fear of floating via economic transformation (like smaller balance sheet mismatches, a larger hedging market, and a lower exchange rate pass-through).

A Labor Market–Augmented Empirical Stock-Flow Consistent Model Applied to the Greek Economy

This paper extends the empirical stock-flow consistent (SFC) literature through the introduction of distributional features and labor market institutions in a Godley-type empirical SFC model. In particular, labor market institutions, such as the minimum wage and the collective bargaining coverage rate, are considered as determinants of the wage share and, in turn, of the distribution of national income. Thereby, the model is able to examine both the medium-term stability conditions of the economy via the evolution of the sectoral financial balances and the implications of functional income distribution on the growth prospects of the economy at hand. The model is then applied to the Greek economy. The empirical results indicate that the Greek economy has a significant structural competitiveness deficit, while the institutional regime is likely debt-led. The policies implemented in the context of the economic adjustment programs were highly inappropriate, triggering private sector insolvency. A minimum wage increase is projected to have a positive impact on output growth and employment. However, policies that would enhance the productive sector’s structural competitiveness are required in order to ensure the growth prospects of the Greek economy.