Recession Research Articles

Impact of Economic Factors on the Process of Population Transition from Labour Activity to Pension in the Republic of Moldova

Abstract The purpose of research is to analyse the impact of population ageing process on labour force market, as well as economic factors on the transition from labour activity to pension in the Republic of Moldova. The change in the structure of labour force to wards elder ages, as well as interruption of active economic activity and retirement is one of the factors in economic growth slowdown, which is conditioned by a reduction of labour force reproduction and its growth. In this situation, in order to mitigate the negative consequences of labour force deficit, it is necessary to take effective measures to increase labour productivity not only to ensure economic growth, but also to ensure the welfare of the country’s population and meet the necessities of an increased share of the population-dependents (both the elderly population and children under 15). Taking into account the relevance of the above-mentioned problem, the analysis of the relationship between economic factors and the transition from labour activity to pension in the conditions of demographic ageing was carried out, including the evaluation of the role of economic factors in making a decision to exit from the labour market to pension. In this context, the comparative quantitative and qualitative analysis of tendencies in the economically active and employed population was carried out, including pre- and pension ages and the phenomenon of precarious employment, the demographic coefficient of dependence on old age, the dependence of pension from the income level, and the financial stability of the Social Insurance Budget. The proposals to improve the effectiveness of government policies in regulation and harmonization the transition from the labour market to pension, including the continuation of active economic activity was elaborated in order to reduce the negative consequences connected with the process of population ageing and to ensure the stability of labour market development. The article is developed in the framework of the research Subprogramme “The demographic transition in the Republic of Moldova: particularities, socioeconomic implications and demographic resilience straightening” (2024-2027).

Economic sanctions and sovereign debt default

This paper analyzes the effect of US economic sanctions on sovereign debt default across 118 developing nations from 1980 to 2018. We use entropy balancing method, and provide robust evidence that US sanctions increase sovereign debt default in the targeted states. This finding withstands several robustness tests, including alternative specifications and databases, and alternative estimation methods. The results also reveal some heterogeneity depending on the type of sanctions (for example, trade versus financial sanctions), on whether they are imposed unilaterally or multilaterally, on the severity of the sanctions, on the geographical distance from the United States, the time since sanctions were imposed, and some structural characteristics. In addition, we find that the development of cryptocurrencies reduces the effect of sanctions, and that failed sanctions have a greater effect on default. The composition effect of the type of debt in default shows that the effect is only found on external and not internal debt. Next, we identify three main channels through which sanctions trigger sovereign risk; namely economic growth contraction, the occurrence of banking crisis and reduced access to international financial market. Finally, we explore the effect of other sanctions, notably those of the European Union and the United Nations, and find that these sanctions also raise the probability of sovereign debt default.

Aggregate productivity, economic fluctuations, and export orientation: Evidence from India

Understanding the cyclicality in aggregate productivity helps answer whether the economy allocates resources efficiently or not. The paper analyses the sources of aggregate productivity growth, such as direct efficiency gain within-plants, allocative efficiency gain, and gains due to entry and exit during economic fluctuations. In particular, we exploit the economic shock of the Great Recession to analyse the validity of the 'Cleansing’ or ‘Scarring’ effect of recession and 'Schumpeterian Darwinian Selection' for Indian manufacturing. The rise and fall of within-plant and net-entry effects during the economic fluctuations explains the pro-cyclicality of productivity growth. Plants in export-oriented industries are crucial in explaining the pro-cyclicality. Negative external shock to exporting sectors during 2008–09 shifted resources from more productive to less productive plants. The relatively productive exporters exited the markets following the global crisis, scarring the economy. Nonetheless, the positive effect from the net-entry exit of plants during the economic downturn makes the 'Schumpeterian approach of Darwinian Selection' valid.

A Critical Examination and Scrutiny between Tata Steels and JSW Steels Limited in India

Abstract: Over the past few years, the Indian steel sector has advanced quickly thanks to solid foundations. The industry is receiving all of the necessary components needed for rapid expansion. The industry is receiving billions of dollars in investments from the private sector and advantageous industrial changes from the government. Due to the robust domestic demand from the building, automotive, and infrastructure sectors, the industry was able to maintain its positive growth momentum even during the difficult economic downturn. With a stellar history, the nation is now well-known in the global steel sector. The remarkable performance of the industry has attracted global steel companies from all over the world. For instance, India's production of crude steel reached 56.6 million metric tonnes in 2009, a modest year-over-year increase of 2.7%. Conversely, a number of Asian nations, including South Korea and Japan, experienced a sharp drop in their production levels. This further demonstrates the Indian steel industry's robustness and resilience against outside risk factors. The impact of the steel industry on two significant businesses, Tata Steels and JSW Steels, is discussed in this essay. Additionally, the author has attempted to use ratio analysis in the study to highlight Tata Steels' and JSW Steels' financial performance.

Mehmet Şevki (Yazman) as an Author of the Journal Kadro

After the National Struggle, Turkish National State was established under the leadership of Atatürk. After the form of goverment became a republic in 1923, the understanding of national will and national soverignty was adopted. The revolutions made one after the other were meant for the movements to protect and enable this new national state. After the World Economic Depression of 1929, the Republic of Turkey adopted the princeples of statism in 1932. It is possible to say that the Journal Kadro, which started its publication life in January of the same year and published 36 issues in 3 years, tried to produce a unique theory of the Turkish revolution. The articles in the journal were generally focused on culture, literature, domestic and foreign policy and the current political situation. But actually articles on economics and economy were focused. In this context, the authors of the Journal Kadro, who were motivated by Turkey’s need for economic development, published original ideas on industrialisation and technological progress. In this paper, the articles of M. Şevki (Yazman) Bey, one of the authors of the Journal Kadro were evaluated. It was tried to reveal that the ideas and thoughts put forward by Yazman contributed to the economic, technical and scientific development of Turkey.

Promoting Sustainable Development of Organizations: Performance Pressure, Workplace Fun, and Employee Ambidextrous Innovation

In the context of an economic downturn, organizations need to continuously improve their performance requirements for employees, and in the macro environment of intensified competition, organizations need to continuously motivate employees to innovate in order to seize development opportunities. Flexibly adjusting to the internal pressure of an organization while ensuring organizational vitality can promote employee adaptive growth and achieve sustainable development in the organization. However, the impact of performance pressure on employee ambidextrous innovation is currently unknown. Based on this, this article explores the positive effects of performance pressure in influencing employee ambidextrous innovation through job involvement from the perspective of Affective Events Theory and uses workplace fun as a moderating variable in order to analyze the internal logic of long-term motivation for employee ambidextrous innovation in organizations. This article conducted a survey and analysis of 362 in-service employees in enterprises and institutions and found the following: (1) performance pressure has a significant positive impact on employee ambidextrous innovation; (2) job involvement plays a partial mediating role between performance pressure and exploratory innovation; (3) workplace fun has a moderating effect on the relationship between job involvement and exploitative innovation, and the higher the level of workplace fun, the stronger the positive impact of job involvement on exploitative innovation.

Financial Development, Financial Openness, and Policy Effectiveness

This study explores how financial development and openness influence the effectiveness of fiscal and monetary policies. An analysis of data from about 100 countries between 1980 and 2018 reveals that both financial openness and development weaken the impact of monetary and fiscal policies. Our results further show that financial development in a country diminishes policy effectiveness depending on the country’s level of financial development; specifically, the more developed a country, the less effective the policies would be. Additionally, through a detailed examination employing a dynamic panel GMM approach, the study investigates the global repercussions of economic downturns in the US and how financial maturity shapes policy effectiveness during these times. We also discuss some policy implications that show that the positive impacts of monetary policy on output growth are lessened during crisis periods, and policymakers should act accordingly.

The resilient self-employability of women and senior people after sudden economic shocks

AbstractIn recent times, various crises have negatively affected the financial stability, job security, and health of countless individuals. According to research, different factors that operate at both the individual and contextual levels can play a prominent role in influencing people's self-employment during periods of economic downturn. This study investigates the changes in the likelihood of self-employment by gender and age across various contexts following sudden shocks. By analyzing the intersection of occupational choice and business cycle theories, this research offers insights into how crises affect people's ability to work for themselves. Using a sample of over 250,000 individuals from sixteen countries and applying a multilevel binary logistic regression analysis, the results confirm that women and older individuals are less inclined to be self-employed in general. However, unexpected economic recessions may lead to a slight increase in their likelihood of self-employment. Furthermore, when women and seniors live in a higher GDP per capita context, this context positively moderates the relationship between gender, age, and the propensity for entrepreneurship. These findings offer valuable insights for policymakers seeking to promote resilient self-employment among vulnerable individuals for post-crisis recovery.

Reframing water demand management: a new co-governance framework coupling supply-side and demand-side solutions toward sustainability

Abstract. Water demand management adopts economic and non-economic measures to reduce human water use. However, it is argued in this study that water use changes may cause idle water supply facilities and revenue losses, thereby challenging the sustainability of water supply systems in the context of climate change. A co-governance framework was established to inspire practical strategies of sustaining water supply systems by re-evaluating the long-term impacts of water demand changes. This framework adopts a broader view of water demand management by integrating the political, financial, and consumptive needs of the government, the market, and the users in the form of a collaborative strategy coupling both supply-side and demand-side solutions. The proposed framework was applied to the analysis of the sustainability of China's South-to-North Water Diversion Project. It is found that the South-to-North Water Diversion Project is not a simple water supply infrastructure but rather a synthesis of supply-side and demand-side water management solutions. Actively releasing water for ecological and cultural purposes is suggested in this study to maintain the socio-ecological benefits of the project in the context of human water use decline. The economic cost of the water supply could be recovered by ongoing revenues that include not only the water fees charged to users but also the benefits gained from cooperative investment in broader water-related businesses by both the state-owned water transfer company and local governments in water-receiving areas. The proposed framework and strategies are valuable for other water utilities around the world, especially those challenged by reduced water demand caused by climate change, high water prices, and economic depression.

Partisanship, elections and lockdowns: Evidence from US states

AbstractIn this article, we use state‐level variation in Senate elections and partisanship to understand the variation in lockdown characteristics in the US. We argue that the state‐level decision makers and their parties weigh off the perceived political costs in an election year of a depressed economy against risks to public health. Democrats and Republicans, and their voters, vary in the weights they attach to these costs and benefits. We are thus exploring the marginal effect of the party–election interaction after accounting for other likely drivers of variations in lockdown characteristics. We find that Republican states with an election have less strict and shorter lockdowns compared to Democratic states with an election. Our results have implications for the communication of pandemic policies, including vaccination strategies.

Gender disparities in the labor market during COVID-19 lockdowns: Evidence from online job postings and applications in China

We investigate the impact of COVID-19 lockdown on labor market gender differences using a unique dataset of job postings and job applicants in China. We find a “she-cession” in both the national lockdown period (the short run) and afterward (the medium run). Compared to the pre-COVID level, job postings in female (male) dominated industries on average decreased by 38.87 % (37.62 %) and 30.93 % (24.32 %) in the short and medium run, respectively, demonstrating a persistently widening gender gap in labor demand. On the labor supply side, the number of female (male) job applicants decreased by 30.28 % (27.04 %) in the short run but increased by 20.83 % (17.62 %) in the medium run, showing that females search for jobs more actively than males did when the national lockdown was lifted. Hence, the she-cession in China becomes more severe in the post-lockdown period, as more females are competing for fewer available positions. Reduced job openings in contact-intensive industries, unequal intra-household division of childcare responsibilities, and decreases in family savings all contribute to these patterns. Our results have general implications for understanding labor market gender differences in public health crises and economic downturns.

How does a poor labour market affect inequalities in access to postsecondary education? Empirical evidence from 31 affluent countries

Abstract This study examines how macroeconomic conditions affect inequality of educational opportunity. Using longitudinal data from 30 European countries and the USA, we study the effect of changing unemployment rates on the extent of social inequality in postsecondary transitions in the period (2004–2016), which includes the Great Recession. The findings from multilevel models with country fixed effects show that rising unemployment rates tend to increase social inequalities in postsecondary transitions, as youth from low-educated families have increased risk for exclusion from both employment and education, while the likelihood of postsecondary enrolment slightly rises for youth from higher-educated families. Yet, economic downturns also incentivize youth whose parents have middle level of education to opt for postsecondary education, especially in contexts where it is more affordable. Our findings suggest that changing opportunity costs and economic insecurity are the relevant factors to explain changing inequalities in access to postsecondary education during a recession.

Transmission of Inflation and Exchange Rate Effects: The Markov Switching Vector Autoregressive Methodology

The aim of this study is to delve into the intricate the mechanism through which alterations in currency exchange rates give rise to shifts in inflation rates, while taking into careful consideration the country’s economic cycle. In order to accomplish this objective, we used a dataset that spanned from 1 January 1999 to 1 July 2023, focusing our analytical lens on three specific geographic areas, namely the Eurozone, the United Kingdom, and Canada. In our pursuit of understanding this complex relationship, we employed the Markov Switching Vector Autoregressive model. Our research outcomes can be succinctly encapsulated as follows: in the initial stages, particularly during phases characterized by robust economic growth, the transmission of exchange rate effects onto inflation levels appeared to exhibit a partial impact across all geographic areas under examination. However, during periods marked by economic downturns, both the United Kingdom and Canada displayed a distinctly more comprehensive transmission of these effects. Moreover, the prevailing projections for the forthcoming time horizon, across all the countries encompassed by our study, strongly indicate the onset of an expansionary phase that is projected to extend over a span of 25 months. Lastly, concerning the implications of unexpected disturbances or shocks, it is noteworthy that the response of exchange rates to inflation induced shocks was neither immediate nor as pronounced as the corresponding reaction of inflation to sudden shifts in exchange rates.

The Impact of Monetary Policies on the U.S. Financial Crisis

This paper examines the role of monetary policy in addressing economic crises by analyzing four significant events in U.S. history: Great depression, stagflation in 1970-198, the 2008 financial crisis and the COVID-19. The monetary policy in the country's economic management has been highlighted in order to resist the decline in financial activity, inflation, large-scale unemployment, and economic recession. History evaluation of policy responses and the results can be employed to assess the efficacy of monetary measures, such as quantitative easing and interest rate adjustments, in achieving financial stability and economic recovery. Nevertheless, this paper points out that it is paramount for the monetary policy adjustment to different economic conditions, and stresses that financial supervision should have the power to avoid speculative activities and guarantee the stability of financial system. The outcomes contribute to deeper knowledge of monetary policy as a tool in managing the crises and provide valuable insights for the policymakers for strategy formulation in future challenges.

The Impact of Logistics Industry Development on Resident Consumption: An Empirical Analysis Based on Chinese Macro Data

Logistics has become an integral part of the market economy, influencing the development of various industries and serving as an essential component of peoples lives. Against the backdrop of global economic downturn following the COVID-19 pandemic, understanding the effects of Chinas logistics industry development on resident consumption becomes crucial. This paper employs a simple linear regression model and utilizes provincial panel data from 2005 to 2022 to explore the impact of logistics industry development on resident consumption in China. Furthermore, it employs heterogeneity analysis methods to study this relationship from different regional, temporal, and consumption perspectives. The findings of this study reveal that (1) there is a positive relationship between logistics industry development and resident consumption, (2) the effect of logistics industry development on increasing resident consumption levels is most significant in the eastern region of China, (3) the positive impact of Chinas logistics industry development on resident consumption increased after the introduction of free shipping by Taobao in 2008, and (4) the positive impact of Chinas logistics industry development on rural consumption is greater than that on urban consumption.

Household debt and financial vulnerability: empirical evidence for Spain, 2002–2020

The aim of this paper is to analyse the evolution of Spanish households’ indebtedness and financial vulnerability over the course of this century using micro-data from the Household Finance and Consumption Survey. Our results show a growing debt participation of Spanish households and an increase in the stock of outstanding debt of indebted households, a trend that reversed with the end of the Great Recession. Moreover, the percentage of financially vulnerable households according to three indicators grew dramatically until the end of the downward phase of the last economic cycle and showed considerable signs of improvement during the second half of 2010s. These results, nonetheless, call attention to the number of Spanish households being unable to service their debts in the face of an economic downturn.

Evaluating social protection mitigation effects on HIV/AIDS and Tuberculosis through a mathematical modelling study

The global economic downturn due to the COVID-19 pandemic, war in Ukraine, and worldwide inflation surge may have a profound impact on poverty-related infectious diseases, especially in low-and middle-income countries (LMICs). In this work, we developed mathematical models for HIV/AIDS and Tuberculosis (TB) in Brazil, one of the largest and most unequal LMICs, incorporating poverty rates and temporal dynamics to evaluate and forecast the impact of the increase in poverty due to the economic crisis, and estimate the mitigation effects of alternative poverty-reduction policies on the incidence and mortality from AIDS and TB up to 2030. Three main intervention scenarios were simulated—an economic crisis followed by the implementation of social protection policies with none, moderate, or strong coverage—evaluating the incidence and mortality from AIDS and TB. Without social protection policies to mitigate the impact of the economic crisis, the burden of HIV/AIDS and TB would be significantly larger over the next decade, being responsible in 2030 for an incidence 13% (95% CI 4–31%) and mortality 21% (95% CI 12–34%) higher for HIV/AIDS, and an incidence 16% (95% CI 10–25%) and mortality 22% (95% CI 15–31%) higher for TB, if compared with a scenario of moderate social protection. These differences would be significantly larger if compared with a scenario of strong social protection, resulting in more than 230,000 cases and 34,000 deaths from AIDS and TB averted over the next decade in Brazil. Using a comprehensive approach, that integrated economic forecasting with mathematical and epidemiological models, we were able to show the importance of implementing robust social protection policies to avert a significant increase in incidence and mortality from AIDS and TB during the current global economic downturn.

Aruba’s Tourism Resilience: Navigating Through Crises and Building a Diverse and Adaptive Industry

Summary The case study of Aruba’s tourism industry showcases how the island quickly bounces back from different crises, thanks to its varied tourist attractions, successful marketing as “One Happy Island,” and solid collaborations between the government and private sector. Aruba’s ability to adapt demonstrates its strength in facing challenges, making it a prime example for other economies heavily relying on tourism. The study details Aruba’s strategies in responding to tough times, such as economic slumps and the COVID-19 pandemic, highlighting the critical role played by offering a wide range of tourist activities, maintaining a solid brand identity, and working closely with partners to build a resilient tourism sector that can withstand hardships. Information © The Author 2024

Z-number based fuzzy MCDM models for analyzing non-traditional security threats to finance supply chains: A case study from Vietnam

Non-traditional security (NTS) threats have a vast and profound impact on many aspects of economic, political, social, and many other areas, especially supply chain finance (SCF), particularly in countries like Vietnam, which potentially affects the economic efficiency of businesses' supply chain financial, thereby affecting the general economy of the country and the world. In order to prevent and minimize the negative impacts caused by NTS threats to SCF, this study was conducted to identify NTS threats affecting SCF in Vietnam, at the same time calculate the weight of the impact level and find out the cause and effect relationship between them. Solution strategies are also proposed and ranked, thereby serving as a reference basis for relevant parties to choose appropriate response solutions. Due to the multi-criteria nature of NTS threats, the multiple criteria decision-making (MCDM) method is used in combination with the Z-number concept and Fuzzy set theory to approach the problem of certainty and increase the accuracy of study. The NTS threats are first identified through a literature review and then validated for suitability using the DELPHI technique (DELPHI). Suitable threats will be determined by relationship, weighted by Decision Making Trial And Evaluation Laboratory (DEMATEL) method. Proposed strategies are ranked using the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method. The results indicate that there are 19 NTS factors affecting SCF in Vietnam, and the global economic downturn, pandemic and health crisis, financial crisis and cybersecurity risk are the four root cause factors with the most decisive influence. Businesses and concerns need to prioritize addressing these four threats because they not only have a strong impact but also entail many other threats. The two strategies considered to be the most effective are a sustainable practice and a risk-hedging strategy. Businesses, governments, and stakeholders also should pay attention to the macroeconomic environment, technology, and environment and build sustainable businesses, regularly monitoring economic fluctuations and creating plans to prevent risks.

Impact of COVID-19 pandemic on some fiscal and monetary indicators in the kingdom of Saudi Arabia

PurposeThe purpose of this study is to investigate the impact of COVID-19 on some fiscal and monetary indicators in the Kingdom of Saudi Arabia.Design/methodology/approachThe research relied on data, studies and reports issued by the International Monetary Fund, Arab Monetary Fund, Saudi Central Bank, Investing Website and the World in Data Website.FindingsMany sectors have been affected by the COVID-19 pandemic, which outbreak has been associated with a high cost, in addition to increased inflation and prices, a result that was confirmed by the increase in consumer price indices for different sectors. The general consumer price index for the second period rose above that of the first period, while an upward shift occurred in the curve depicting the Saudi Riyal exchange rate against the United States (US) dollar during the second period above that of the first period, only in slope, due to outbreak of the pandemic. Impact of the number of daily new cases infected with COVID-19 was the highest on the opening and closing price indices of the food retail sector, the pharmaceutical sector and the transportation sector; while impact of the number of daily deaths by COVID-19 was the highest on the opening and closing price indices of the banking sector, the general index and the investment and finance sector. In addition, impact of the daily reproduction rate of COVID-19 was the highest on the opening price indices of the energy sector, the food production sector and the transportation sector.Research limitations/implicationsThe research aims to demonstrate measures taken by the Kingdom of Saudi Arabia through fiscal and monetary policies.Practical implicationsThe COVID-19 pandemic is still an ongoing global pandemic. The virus was first identified in Wuhan City in China at the beginning of December 2019. At the end of January 2020, the World Health Organization (WHO) declared that the outbreak of the virus represented a public health emergency, and later, on March 11, 2020, WHO declared the situation had transformed into a pandemic. Until January 17, 2022, the pandemic had caused more than 328 million cases and 545 million deaths, while 188 million of the cases had recovered. It is worth mentioning that the pandemic caused several social and economic disruptions, including a global economic recession; shortages in goods, supplies and equipment due to consumers' panic and thus tendency to buy; besides causing other disruptions like the negative impacts on health, as well as political, cultural, religious and sport events that influenced economic policies, including both the fiscal and monetary policies of world countries (Wikipedia, 2022).Social implicationsSocial implications steps that taken to reduce the impacts of the COVID-19 pandemic, in addition to measuring the impacts of the COVID-19 pandemic (as the main event next to which other events fade up) on some of the fiscal and monetary indicators for the Kingdom of Saudi Arabia.Originality/valueThe research aims to demonstrate measures taken by the Kingdom of Saudi Arabia through fiscal and monetary policies to mitigate the impacts of the COVID-19 pandemic, in addition to measuring the impacts of the COVID-19 pandemic (as the main event next to which other events fade up) on some of the fiscal and monetary indicators for the Kingdom of Saudi Arabia.