Inflation Research Articles

THE IMPACT OF CAPITAL STRUCTURE ON BANK PERFORMANCE IN TURKIYE

The aim of this study is to examine the impact of capital structure on Turkish banking performance by using panel regression model for the period between 2012 and 2023. The ratio of return on assets (ROA) and return on equity (ROE) are used as a dependent variable which are one of the important indicators of the banking performance. There are 9 bank-spesific and 2 macroeconomic (inflation and economic growth) independent variables in the analysis. Panel data analysis results reveal that the capital structure [Debt ratio (DTA) and Debt to equity ratio (DTE)] negatively impacts business performance (ROA) of Turkish private deposit banks. The financial performance, which is measured by ROA, is significantly and negatively associated with variables such as Non-Performing loan ratio (NPL), credit risk (CIR) and cost management (OA), whereas effect of bank size (BS), economic growt (GDP) and inflation (INF) have positive impact. On the other hand, the effects of DTA, DTE, BS, NPL, CIR, OA and GDP on ROE are significant. Besides, the effects of DTA, BS and GDP are positive, whereas the effect of DTE, NPL, CIR and OA are negative. The study concludes that the capital structure proxies have impact on financial performance of Turkish private deposit banks measured both by return on assets and return on equity.

Taming inflation: the Brazilian experience of combatting inflation in the last quarter of the 20th century

In the context of a global inflationary spike, a retrospective view on the problem of curbing inflation in Brazil is becoming more relevant than ever. This paper aims at analyzing the measures of inflation targeting policies set in motion by the Brazilian economic stabilization plans over the last quarter of the XXth century. The commencement of “The Lost Decade” in Brazil negated the achievements of “The Brazilian Economic Miracle” which occurred in the first half of the 1970s: inflation hit an all-time high. The only viable solution that led Brazil out of the crisis proved to be the stabilization plan - named “The Real Plan” - carried out in three phases: fiscal adjustment, transition to the Real Value Unit and emission of a new currency - the Brazilian Real. The authors confine their attention to how Brazilian experience of taming inflation helps the country suppress current inflation surge.

Analyzing economic inflation's impact on food security and accessibility through econometric modeling

This study investigates the impact of economic inflation on food security and accessibility through the development of an econometric modeling approach. As inflation rates rise, the purchasing power of consumers diminishes, leading to increased food prices and potentially exacerbating food insecurity. This research aims to quantify the relationship between inflation and food security indicators, such as availability, access, utilization, and stability of food supplies. By employing time-series data and econometric techniques, the model captures the dynamic interactions between inflation rates, food prices, and socioeconomic factors affecting food security. The model incorporates key variables, including consumer price index (CPI), food inflation, income levels, and unemployment rates, to analyze their collective impact on food security across different demographics. The findings indicate that rising inflation significantly correlates with higher food prices, disproportionately affecting low-income households and vulnerable populations. This relationship highlights the necessity of understanding inflation's broader implications on food accessibility, especially in regions where food security is already a pressing issue. Future research directions are proposed, focusing on policy interventions aimed at stabilizing food prices and enhancing food security. Potential strategies include price controls, subsidies for staple foods, and targeted social safety nets for low-income households. Additionally, the study suggests further examination of supply chain factors contributing to food price volatility, such as transportation costs and global market dynamics, which can exacerbate inflation's effects on food security. This research contributes to the literature on food security by providing empirical evidence of inflation's impact on food accessibility and identifying critical areas for policy intervention. By addressing the complex interplay between inflation and food security, stakeholders, including policymakers and food industry leaders, can develop informed strategies to mitigate adverse effects and promote food security in inflationary environments.

The impact of digital financial inclusion on economic growth in ASEAN countries – Policy implications for Vietnam

Applying the Bayesian approach, this paper examines how digital financial inclusion affects economic growth in ASEAN nations between 2015 and 2022. The findings demonstrate that digital financial inclusion has a detrimental effect on economic growth. This is a significantly different conclusion from earlier research. This can be explained by the fact that digital financial services are still expensive and require a while to mature or adapt to current development paradigms. On the part of control factors, while unemployment (UNE) negatively affects economic growth, others including population growth (POP), inflation (INF), and foreign direct investment (FDI) have a positive effect. The authors used the research results on the data range of ASEAN countries as prior information to regress the model with the data range of Vietnam. The research model’s findings in Vietnam are quite similar to those of the research model in ASEAN countries in general except for the POP variable, which assumes that economic growth (GDP) will decrease when POP increases. Consequently, to stimulate economic growth, ASEAN nations, particularly Vietnam, must identify strategies to lower the cost of accessing digital finance, decrease the unemployment rate, attract more foreign direct investment, and sustain a moderate inflation rate. To reduce the cost of accessing digital finance, policymakers should encourage financial institutions to provide services at lower costs and in remote areas. Additionally, FinTech providers can be leveraged to provide digital financial services.

The Rule of Law and Entrepreneurship Development in Nigeria: The Role of Governance Quality

This study examined the impact of the Rule of Law and the Role of Governance Quality on entrepreneurship development in Nigeria from 1998 to 2022. This research appropriated the use of Auto Regressive Distributed Lag to empirically investigate the rule of law and the role of governance quality on the dependent variable Entrepreneurial Development (ED) using data sourced from 1998 – 2022. The independent variables include; Gross Domestic Product per Capita (GDP/C), Inflation (INFL), Governance Effectiveness (GE), Regulatory quality (RQ), and the rule of law (RL). The study shows that the natural log of GDP/C is statistically significant and has a positive relationship with entrepreneurship development while Despite being statistically significant, INFL & ED have a negative relationship. Meanwhile, RL has a positive attribute but a statistically insignificant relationship with ED and a statistically negatively insignificant relationship exists between GE, RQ, and ED. The study recommends the Government must deliberately work towards reforming the legal system to have an effective Rule of Law, and improve regulatory quality and governance effectiveness that will lead to economic efficiency and improved living standards. Keywords: Entrepreneurship Development, Economic growth, Rule of law, Start-up, Innovation

Stabilizing food supply chains with Blockchain technology during periods of economic inflation

This study explores the potential of blockchain technology to stabilize food supply chains during periods of economic inflation. Economic inflation poses significant challenges to food security, as rising prices can disrupt supply chain transparency, efficiency, and trust among stakeholders. This research develops a conceptual model demonstrating how blockchain can enhance transparency and stability in food supply chains, ultimately improving resilience against inflationary pressures. By providing a decentralized, immutable ledger, blockchain technology allows for real-time tracking of food products from farm to table, enabling better inventory management and demand forecasting. The proposed model integrates key components, including smart contracts, which automate transactions and ensure compliance with quality and safety standards. This feature not only reduces delays but also fosters trust among supply chain participants, such as farmers, distributors, retailers, and consumers. Additionally, the model emphasizes the role of data analytics in harnessing blockchain data to provide insights into pricing trends and inventory levels, facilitating proactive decision-making in response to inflation. Future research directions are identified, focusing on innovations within blockchain technology that could further mitigate the effects of inflation on food supply chains. Potential areas of exploration include integrating artificial intelligence (AI) for predictive analytics, utilizing Internet of Things (IoT) devices for real-time data collection, and developing decentralized finance (DeFi) solutions to enhance liquidity and investment in the agricultural sector. This study contributes to the growing body of literature on blockchain applications in supply chain management by highlighting its potential as a tool for enhancing food security in inflationary environments. By ensuring transparency, improving stakeholder collaboration, and providing actionable insights, blockchain technology can play a pivotal role in stabilizing food supply chains amidst economic fluctuations. Ultimately, this research advocates for the adoption of blockchain solutions as part of comprehensive strategies to safeguard food systems from the adverse impacts of inflation. Keywords: Blockchain Technology, Food Supply Chains, Economic Inflation, Transparency, Stability, Smart Contracts, Predictive Analytics, Data Analytics, Food Security, Decentralized Finance.

Monetary Policy and Inflation Expectations in Brazil: From 2005 to 2022

The Focus Report prepared by the Central Bank of Brazil summarizes the statistics calculated from market expectations, such as inflation expectations for the next four years that are weekly collected. The report shows the evolution of these data using graphs and weekly projections for price indices, economic activity, and exchange rates. However, the expectations of households and firms regarding the future of inflation, which are determinants for current inflation, go beyond problems of theoretical and empirical foundation. Thus, the research question addressed in this study is as follows: Do expectations of inflation measured by the Focus Market Report explain inflation measured by the CPI in Brazil? To answer this question, we compare expected and actual inflation data and analyze the correlations between them. This research is important because part of the argument for increasing the basic interest rate in the Brazilian economy is based on data from the Focus Report, which may contain forecasting errors, thereby resulting in monetary policy mistakes. The research methodology consists of contrasting data on monthly expectations with actual inflation rates and assessing the correlations between them.

Indonesia’s financial resilience: Between optimism and risk

This study aims to evaluate the relationship between financial resilience, exchange rate, inflation, and economic growth from 1996 to 2022 using secondary data from the World Bank. The analysis method uses vector autoregressive to understand the causality dynamics between these variables. The results show that past economic growth positively impacts current economic conditions, but an increase in the exchange rate can hinder economic growth. The exchange rate also tends to be influenced by previous values, but high economic growth does not always increase the exchange rate. Previous conditions significantly affect financial resilience and can be strengthened by a strong currency. Meanwhile, inflation has an inverse relationship with economic growth, where past inflation seems to suppress current inflation, which price stabilization policies can cause. From an institutional economics perspective, this study provides an understanding of the interaction between various economic factors in the structural framework and policies that regulate economic activities. The impulse response function (IRF) shows that economic growth can react strongly to sudden changes, although this reaction may not last long. The exchange rate fluctuates with economic changes, reflecting market optimism and uncertainty. Financial resilience may be strong initially but may weaken over time, indicating the need for policies to strengthen the financial system to ensure economic stability. Furthermore, the role of social capital in economic resilience is highlighted as it can amplify the positive effects of a robust institutional framework by fostering trust and collaboration among economic actors. Inflation reacts differently to economic changes, challenging policymakers to balance growth and price stability. Overall, the IRF provides insights into how economic variables interact with each other and react to sudden changes, albeit with some uncertainty in the estimates. The forecast error decomposition variance (FEVD) analysis in this study reveals that internal factors initially influence economic growth, but over time, external factors such as the exchange rate, financial resilience, and inflation come into play. The exchange rate, which was initially volatile due to internal factors, becomes increasingly influenced by economic growth, indicating a close relationship between the economy and the foreign exchange market. From an institutional economics perspective, financial resilience, which was initially stable due to internal factors, becomes increasingly dependent on global economic conditions, suggesting the importance of a solid institutional framework for maintaining economic stability. In addition, inflation, which was initially explained by economic growth and exchange rates, has gradually become more influenced by financial resilience, indicating the importance of effective monetary policy in controlling inflation. This study highlights the importance of understanding how economic variables influence each other for effective economic governance. Integrating institutional economics and social capital perspectives provides a comprehensive framework for enhancing financial resilience and promoting sustainable economic development in Indonesia.

COVID-19 Pandemic and Ghana’s Economy: A Deep Dive into Economic Indicators

The study presents an in-depth analysis of the COVID-19 pandemic’s effect on Ghana’s gross domestic product (GDP), balance of payments and international investment position (BPM6), and inflation (INFL). Employing a pre-and post-COVID-19 comparison (2017-2022) through repeated measures ANOVA and tests of between-subject effects, it investigates whether the government’s economic performance was significantly impacted. Key findings show a notable decrease in GDP and BPM6, alongside a major increase in inflation rates post-pandemic. The study concludes that the COVID-19 pandemic had a statistically significant impact on Ghana’s economic performance in terms of GDP and BPM6, but not inflation. Recommendations include implementing economic stabilization policies, managing the balance of payments, controlling inflation, and focusing on sustainable growth. These insights are crucial for policymakers and stakeholders in navigating Ghana’s post-COVID-19 economic situation.

The link between gender inequality, financial development, and economic growth in Nigeria: A spectral Granger causality approach

AbstractThe male and female genders have crucial roles to play in economic advancement. Thus, the main reason for this research is to pinpoint the causal link between gender inequality (GPIN), financial development (FIDX), inflation (INFL), and economic growth (GDPC) in Nigeria from the year 1980–2020 utilizing the Spectral Granger and Pairwise Granger causality methods and “Residual Augmented Least Square (RALS) cointegration. The RALS result show confirms the stationarity properties of the variables. The Spectral Granger causality outcomes show that GPIN granger causes GDPC in the long, medium, and short–term. In addition, the FIDX granger causes GDPC in the long and short–term, while the medium–term impact is insignificant. For INFL, causality only occurs in the long–term. On the other hand, the Pairwise Granger causality results show that GPIN and FIDX granger cause GDPC, while INFL is insignificant. Therefore, if GPIN and FIDX can predict economic expansion, policymakers need to create policies that can reduce diverse forms of inequalities, promote financial development, and reduce inflation to the barest minimum.

Effectiveness of Fiscal and Economic Policy in Monitoring Inflation in Nigeria

This study investigates the effectiveness of monetary and fiscal policies in controlling inflation in Nigeria from 1993 to 2023. Using co-integration and error correction methods on yearly time series data, the study reveals several key findings. The unit root test indicates that only inflation (INF) is stationary at levels, while money supply (MS), taxation (TAX), and government expenditures (GEX) are stationary at first difference. The results show that an increase in the money supply and government expenditures lead to a rise in the inflation rate, whereas higher taxation reduces it. Based on these findings, the study concludes that MS, TAX, and GEX significantly impact on inflation in Nigeria. The study recommends that policymakers should better manage the money supply to reduce the inflation rate by decreasing the amount of money in the economy. Increasing the tax rates on individuals and companies, especially during periods of high inflation, can lower the amount of spendable money among citizens, thereby reducing inflation. Lastly, the government should control its expenditures to decrease the total amount of money in circulation, effectively reducing the country's inflation rate.

The creative economy for sustainable tourism in the post-mining era in Pangkalpinang city

Micro, Small, and Medium Enterprises (MSMEs) in Pangkalpinang are crucial contributors to the local economy, especially in the post-tin mining era, by driving economic diversification and regional development. This research delves into the role of the creative economy in fostering sustainable tourism during this transitional period. Through a qualitative approach, the study employs the SWOT analysis framework to assess the development of MSMEs and their connection to sustainable tourism in Pangkalpinang. The strengths of these MSMEs are evident in their distinctive product offerings, robust stakeholder networks, and the recognition and certifications they have attained. These elements position them well within the market. However, they face notable internal challenges, including limited resources, technological constraints, and financial difficulties, which hinder their growth potential. Externally, MSMEs in Pangkalpinang contend with high economic inflation, stiff competition from larger retail entities, and shifting consumer preferences driven by economic downturns. These factors create a challenging environment for MSMEs to thrive. Despite these challenges, there are significant opportunities for growth. MSMEs can capitalize on product diversification, which allows them to cater to a broader range of consumer needs. Additionally, there is substantial support from the government and various institutions, which can provide the necessary backing for these enterprises. Aligning their business models with sustainable tourism trends also presents a promising avenue for long-term success. By leveraging these opportunities, MSMEs in Pangkalpinang can enhance their resilience and contribute meaningfully to sustainable regional development in the post-mining era.

Bitcoin: a Ponzi scheme or an emerging inflation-fighting asset?

Under the dual impact of the COVID-19 pandemic and the Russian-Ukrainian conflict, the excessive stimulation of monetary policy continuously pushes up global inflation (INF). Therefore, this article explores whether Bitcoin can serve as a safe haven for INF. We apply the rolling-window Granger causality test to solve the issue of parameter instability in vector autoregression (VAR) systems and investigate the time-varying interaction between INF and Bitcoin price (BP). The negative influence of INF on BP means a high inflation shock causes BP to decline, indicating that Bitcoin cannot be a safe asset against INF. This is because investors have decreased their willingness to hold Bitcoin under the high INF expectations and cause BP to fall. This finding is not supported by the Intertemporal Capital Asset Pricing Model, emphasising that INF positively impacts BP. Conversely, BP has positive and negative impacts on INF. The positive effect highlights the effectiveness of Bitcoin in predicting INF fluctuations, but economic factors could undermine this effectiveness. In the context of economic stagnation and market turmoil, investors can adjust their portfolio investments based on Bitcoin. The government should utilise the trend of BP to regulate the dynamics of INF to reduce uncertainty in the financial system.

Exploring Iranian English language teachers’ hope: an ecological perspective

PurposeThe present study explores five Iranian English language teachers’ hopes by drawing on an ecological approach as its conceptual underpinning.Design/methodology/approachData were collected from narrative frames and semi-structured interviews.FindingsAnalyses of our data highlighted how teacher- and student-related factors caused fluctuations in teachers’ hopes. In addition, our findings indicated that while teachers’ past teaching experiences increased their hope, teachers’ lack of agency and economic inflation were among the most significant factors that decreased teachers’ hope in their profession.Originality/valueThis study is one of the first studies in the field of language studies with an ecological perspective on language teachers' hope.

Industrial Online Gambling as Dangerous Cyber Crime in Indonesia

Currently, the reality of a lifestyle that tends to be consumptive, especially combined with the increase in daily necessities due to the speedy rate of economic inflation, makes everyone want to achieve everything practically and instantly, or they think it is easy. One of the things done is gambling. Gambling is a criminal act, i.e., risking a certain amount of money where the winning party will get the entire bet. Gambling can also be referred to as a matter of luck, as it can harm society and the nation's moral values. This crime also disturbs public order, peace, and security. In addition, the influence of gambling does not only affect adults but the impact of gambling also affects children. The Online Gambling Task Force (Satgas), formed by President Joko Widodo and the Financial Transaction Reporting and Analysis Center (PPATK), found several findings related to online gambling in Indonesia. Among them, the turnover of online gambling money reached Rp 600 trillion, and the flow of funds flowed to several countries abroad, including several ASEAN countries such as Cambodia, Vietnam, Thailand, and the Philippines. Online gambling turnover will reach 600 T, and the January-March 2024 period will reach 100 T. A total of 2,370,000 residents are addicted to online gambling, 2% (800,000) of children under the age of 10 years.

Cost-Push and Conflict Inflation: A Discussion of the Italian Case

ABSTRACT This study contributes to the ongoing discussion surrounding the recent surge in inflation. It presents an analytical framework and empirically examines inflation trends in Italy. The primary aim is to identify the underlying causes, distributive repercussions, and mechanisms through which inflation is propagated. We adopt a cost-push and distributive conflict perspective on current inflation. Within this perspective, some contributions argue for profit-driven inflation, while others dispute this interpretation, emphasizing that increases in the profit share, amid rising import costs do not necessarily imply heightened overall profitability. To clarify these issues, the paper puts forth an analytical framework that shows how escalating import costs can affect profit shares and set in motion a period of inflation propagation, even in the absence of a wage-price spiral. Turning attention to the Italian context, the study utilizes descriptive statistics, sectoral data, and simple simulations to gain insights into the drivers of inflation and its distributive consequences. Additionally, a local projections analysis is deployed to uncover the nature and timing of the propagation process. The paper concludes with some policy implications based on the findings.

Budget Deficit and Economic Growth in Nigeria: An Empirical Analysis

This study was expected to investigate the impact of Budget Deficit on economic growth of Nigeria between 1983 and 2023. Ex – post facto research design was accepted; annual time series data for analyses were collected from Central Bank of Nigeria Statistical Bulletin of 2022. Real Gross Domestic Product (RGDP) was used as the explained or dependent variable proxy for economic growth. budget deficit (BDF), inflation (INF) and money supply (MS) all represent explanatory or independent variables. The study employed Auto Regressive Distributed Lag (ARDL) Model which was used to analyzed and evaluate the coefficients of the model’s parameters. Other diagnostic tests employed by this study include; unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality, and they confirmed the validity and reliability of the model used; the inferential results showed that budget deficits impacted significantly on the economic growth of Nigeria under the review period. The paper recommended strongly that the country should display a high degree of transparency in its fiscal policies or operations by directing its fiscal deficits present towards investments that will increase productivity such as building roads, providing electricity and encouraging Foreign Direct Investments (FDI). The paper equally recommended inflation targeting in order to achieve a non-inflationary trend economy purposely to achieve the macroeconomic goal of price stability. The policy makers should direct capital and financial resources of government toward targeted programs like employment opportunity in productive ventures.

Corporate debt, repayment and maturity structure, and monetary policy transmission

Abstract This article develops a stylized New Keynesian Dynamic Stochastic General Equilibrium model and explores the function of the repayment and maturity structure of corporate debt in the monetary policy transmission mechanism. The results demonstrate that following an unanticipated policy tightening, long-term floating-rate debt exacerbates the credit channel, causing a greater decline in investment and output due to the increased debt burden relative to long-term fixed rate debt. In response to the downward trajectory of the output, the central bank pursues a lower interest rate path, thereby inflation remains at a relatively elevated level. Thus, the monetary authority is less effective in stabilizing inflation in economies with long-term floating rates compared to those with fixed rates. Prolonging the maturity of floating-rate debt aggravates these effects and renders firms even more susceptible to adverse shocks.

Public debt stabilization via a stochastic differential game paradigm

In this paper, we examine a public debt stabilization in a country under inflation targeting by arguing that bond yields are sensitive to inflation risks. Endogenously defining the convenience premium function, we focus on fiscal and monetary strategic interactions within an optimal control setting. The level of the debt-to-gross domestic produced (GDP) ratio and current inflation rate of the country are considered as the state variables in the game. We then focus on the convenience risk premium and rate of inflation as market-based disciplining devices, to articulate the Nash noncooperative equilibria, cooperative equilibria and Stackelberg equilibria via a feedback control strategy. We show that the outcome of the game depends on the parameters of the game, the type of equilibrium one considers and the decision horizon. When the current inflation rate follows an uncontrolled Ornstein–Uhlenbeck dynamic process, we highlight its effects on the growth rate of the debt ratio. Hence, our model provides a novel framework in which monetary and fiscal authorities can simultaneously achieve their individual interests, while achieving an optimal debt stabilization policy in the presence of inflation. We also highlight the need for governments to adopt policy-approaches which maintain the debt-to-GDP ratio under an inflation-dependent ceiling.

Does Inflation Affect Emissions Reduction?

Inflation and sustainable development are two important factors in the economic development of most countries. This study will use empirical analysis to examine how macroeconomic variables, including the money supply (M2), economic growth rate (GRR), trade openness (TO), and inflation (INF), related to CO2 (the environment variable) in Vietnam from 1995 to 2022. The effect of detecting emitted CO2 can be considered both in the short and long term. This study uses the research analysis method of the self-healing distributed slow (ARDL) model. Several independent variations are proposed in the model, including M2 supply, economic growth rate, trade expansion rate, and issuance rate, to evaluate the influence of increasing emission waste. Research results show that the impacts are statistically significant in the short and long term. Finally, the study also offers some policy tips for Vietnam to adjust economic variables to achieve a better level of development and move towards sustainable economic development.