Economic Agents Research Articles

The Impact of Digital Currency on Demand for Money: Evidence from Indonesia

The purpose of this study is to examine the impact of digital currency transaction variables on the demand for money in Indonesia. The data used are data on the volume of mobile banking transactions, internet banking, interest rates, the level of currency fluctuations, and inflation on the demand for money for the period 2013 to 2022. Data analysis uses Autoregressive Distributed Lag (ARDL) cointegration method. The results of regression testing can be concluded that the long-term relationship is valid. In addition, using CUSUM and CUSUMQ from the quadratic test, the demand for money in Indonesia is relatively stable using the narrow definition of money, it implies that there haven't been significant and persistent shifts in either the mean or the variance of the narrow money supply. A stable demand for money suggests that the economic agents in Indonesia, such as households and businesses, are not undergoing substantial changes in their preferences or behaviors related to holding money. This stability can have implications for monetary policy and economic planning, as it indicates a certain level of predictability in the demand for money. However, it's crucial to keep in mind that economic conditions and factors influencing the demand for money can change over time. Therefore, continuous monitoring and periodic reassessment of the stability of the demand for money are necessary for accurate economic analysis and policy formulation.

Development of motivational mechanisms for risk transfer in public-private partnership projects

Subject. The article is devoted to the relations that arise between the State (public) partner and the private partner when distributing risks in public-private partnership (PPP) projects. Objectives. The study aims to establish features of motivation mechanisms designed to encourage private investors to accept the risks arising when making a PPP agreement. Methods. The basic research methodology is to determine the sensitivity of a private investor to certain types of risks based on systematization of motivation opportunities. The study employs content analysis and statistical data. Results. The paper identifies risk groups for which motivational incentives are applicable, and establishes standard motivational mechanisms. It notes that the formation of motivational mechanisms should consider key trends in the influence of the State on private investors. The areas that significantly influence the motivation of a private investor include, in particular, eliminating economic inequality of economic agents, opportunity to access innovation, solving social and environmental problems, creating a stable business environment and necessary infrastructure. Conclusions. Economic factors represent a key motivational element in risk allocation decisions, but they are not always completely dominant. Only a combination of individual and institutional measures can create an attractive environment for private investors considering the investment of their own capital in PPP projects. The findings can be used when concluding PPP project agreements at all levels, in accordance with the legislation on PPP, and ensuring the implementation of the proposed algorithm for the motivational mechanism formation.

Fossil fuel subsidy removal, economic welfare, and environmental quality under alternative policy schemes

The literature related to the environmental impacts of fossil fuel subsidy removal is inconclusive and fragmented, with non-negligible methodological shortfalls. Also, can the adverse economic effects of such subsidy removal be mitigated through government transfer payments to the firms and households? Taking the 2020 subsidy reform in Nigeria as a case, this study introduces the African Energy and Environment Integrated Computable General Equilibrium (AEEICGE) model, version 2.0., to examine the economic and environmental impacts of fossil fuel subsidy removal. The AEEICGE V.2.0. model accounts for the substitutability of intermediate input demand for energy products. The results show that although subsidy removal on fossil fuels improves environmental quality, such reform negatively affects the economic well-being of the economic agents and raises overall prices. These adverse impacts are reversed when the subsidy is reallocated differently to businesses and households through the government's transfer payments nonetheless. Particularly, the subsidy removal makes a 0.25 bps contribution to aggregate inflation and leads to welfare losses of about ₦0.049 billion and ₦0.108 billion, on average, for the poor and rich Nigerian households respectively. Notwithstanding, their welfare improves and gains, on average, about ₦15.89 billion and ₦78.96 billion respectively with the proposed resource reallocation schemes. The AEEICGE V.2.0 modelling approach and results do not only resolve existing puzzles in the literature, but also offers both theoretical and practical implications that are pivotal for the scientific community, policymakers, and industry stakeholders alike.

Agricultural value chain and households' livelihood in Africa: The case of Nigeria

One of the critical issues of concern is how African countries can take agriculture as a business that creates wealth which can help transform rural communities, increase income, reduce poverty and help the continent achieve the United Nations (UN) Sustainable Developments Goals (SDGs) of no poverty (SDG-1) and food and nutrition security (SDG-2) by 2030. Hence, this study examines how participation in agriculture through cassava value chain can improve households' livelihood income in Africa using the case of Nigeria. To achieve its objective, the study utilised quantitative analysis approach to address the linkages among economic agents within the agricultural value chain. The logit regression and propensity scores matching technique are used for the quantitative analysis. The result show that, while more significant proportion of male cassava production household heads sell cassava in its fresh form, their female counterparts add value by processing cassava further into finished staple foods. Another key insight is the high involvement of youth and women in cassava production, processing and marketing. Thus, they have greater influence in promoting and improving households’ livelihood income. Therefore, more targeted efforts should be made by all stakeholders to ensure that youth and women have better, less expensive and dependable assess to facilities at lower interest rates to participate in agricultural value chain. This will engender inclusiveness of the vulnerable groups in agricultural value chain.

Biases in Consumer Price Index Methodology in Pakistan: Suggestions for Improvements

The issues relating to the complexity of the measurement of the Consumer Price Index (CPI) which is regarded as the best and most well known indicator of inflationary trends and without referring to which economic policies cannot be evaluated have long been debated. Any measurement error in CPI may over or understate inflation, which can have serious repercussions on monetary, fiscal and other economic management policies. The report of the Boskin Commission [Boskin, et al. (1996)] has identified the possible sources of bias in the CPI. These biases which this study has also corroborated through a primary survey of selected households relate to commodity and outlet substitution, quality adjustment and new product introduction as well as index calculation in the existing methodologies. In this paper these biases have been evaluated for Pakistan and ways to improve the construction of the Index have been suggested. Other issues in Pakistan relate to selecting a representative product (or good), defining average quality, data collection, weights determination and base year change. The use of the Geometric means index formula and Laspeyre’s Index to reduce the formula bias has been proposed in this study. 1. INTRODUCTION The Consumer Price Index (CPI) is an index number measuring the average price of consumer goods and services purchased by households. It is one of the several price indices calculated by national statistical agencies. The percent change in the CPI is considered as a measure of inflation. The CPI can be used to index (i.e., adjust for the effects of inflation) wages, salaries, pensions, or regulated or contracted prices. The CPI, along with the population census and the National Income and Product Accounts, is one of the most closely watched national economic statistics. The relative prices of different goods and services change frequently in a time interval due to various factors and these changes lead to change in the consumers’ buying behaviour. As there has been sizeable increase in the population of the lower and the middle class,1 demand patterns have tended to shift increasingly to services2 away from goods, and to characteristics of goods and services like better quality, variety and greater convenience. But all these factors, plus others, mean a larger part of what is produced and consumed in an economy is more complex to measure than it was a couple of decades ago when the economy largely consisted of smaller number of easier to measure items such as flour and onions.3 Inflation in a complex dynamic market economy is hard to measure. Further, the rapidly changing behaviour of economic agents puts tremendous pressure on a statistical system to keep up with the change and provide the coverage of context and scope. However, agencies which construct the CPI are constantly engaged in research to improve the measurement. The Federal Bureau of Statistics (FBS) is the main agency doing this work in Pakistan. Like several other developing countries4 the FBS has no research programme to improve the CPI estimation methodology. As a result it could not incorporate any remedial measure for several biases which were pointed out by the Boskin Commission more than a decade ago. The report of the Boskin Commission [Boskin, et al. (1998)] has focused a great deal of attention on the CPI issues. This report created much interest in research circles. It identified possible sources of bias in the CPI like substitution, outlet, quality and new product. This report has called into question the accuracy and relevancy of the CPI even when international standards are followed. Since the release of this report, major revisions in the CPI have been under consideration in various countries in the light of the issues raised in it. New Zealand, Australia, Canada, Japan and European countries have taken a lead in this regard. Many issues on CPI methodology, like outlet and substitution biases have been the object of considerable research in these countries. On the contrary developing countries are facing two main constraints in revising the construction of the CPI. The first one is the shortage of trained economists and statisticians in the area of price statistics, and the second is the concerned agencies’ limited funding capacity.

Изменения границ внутри человеческого общества. В преддверии постгуманизма

With the prevailing ideas of humanism in the public consciousness, many boundaries were created that divide people into categories. At the same time, on one side of the border there are those who are more deserving of the title ‘human’ in comparison with those who are on the other side. Over the course of history, these borders have been actively rebuilt, and the pace of their changes has become increasingly rapid in recent years. The article examines changes at five such boundaries: between men and women, according to belonging to different religious denominations, to different nationalities and races, between healthy people and disabled people (including between the mentally healthy and the crazy), as well as changes in attitudes over time to the homeless and tramps. The author considers the consequences of changes that have already occurred or are planned at each of these five boundaries. The author believes that a mandatory factor in global economic development has always been the “friendly-alien” division. With the help of such division in economic activity, trust is generated, which is the most important institution necessary for the existence and development of the economy and social organization. Trust facilitates the interaction of economic agents and facilitates the functioning of monetary mechanisms. Large-scale attempts to erase boundaries between people are being made through coups and revolutions, but they lead to the replacement of previously existing boundaries between people with new ones. An attempt to eliminate classes leads to the creation of a new system of boundaries - property inequality. An attempt to eliminate property inequality and the exploitation of man by man leads to the creation of a new system of boundaries – by the place in the vertical of power, by membership in the ruling party, and others. For this reason, with any reforms and radical transformations, it is advisable to anticipate the formation of new borders, and also to evaluate if they are much better than the previous ones in terms of social justice and economic efficiency.

Dynamic Modeling of Environmental Subsidies

In this research, the intertemporal optimal management of subsidies offered by the environmental regulator and the dynamic conflict between two groups of economic agents involved in environmental quality are discussed. First the environmental model is examined in its optimal control management form with two state variables. The analysis of the improved model, inspecting the social planner’s decision (policy) variable, the variable which influences not only environmental quality but the national budget stock, reveals that is dependent on the growth of the national budget stock. A negative growth rate leads to the long run saddle point equilibrium, while an incremental growth rate, but less than the model’s discount rate, leads to an interesting complicated limit cycle equilibrium, for which under certain parameter values the orbit’s phase portrait can be drawn. For the dynamic game model between the social planner and natural resource exploiters, the equilibrium conditions are examined. It is rather a richer than the point equilibrium for which the cyclical strategies have great importance. Therefore, the conditions for that rich equilibrium are found. As a continuation, the paper concludes that the equilibrium condition is that the players’ discount rates are both greater than the national budget interest rate. Finally, the certain values of the equilibrium strategies and national budget stock are provided.

The Specifics of the Return of Czech Tourism to the Positives of the Pre-COVID-19 Era

Academic success will always be ensured when the internships will take place at the economic agents in the area where the school is located because the students are more motivated to become future specialists for the companies in the areas where they live.Of course, this academic success will always be ensured with the help of the teacher because the theoretical part is put into practice at the economic agent where the internships take place.Thus, the correlation of the school, economic agent, teacher, student, parents, but also local authorities represents a unit that can ensure success, that is, the training of specialists who can integrate more easily into the labor market.

Unfair competition – an attack on the patrimonial rights of natural and legal persons

The subjects of the economic activity, whether they are natural persons or legal entities, are obliged to exercise their activity in good faith, according to honest usages, respecting the interests of consumers and the requirements of fair competition.
 Based on the principles of freedom of trade and freedom of competition, any merchant has the right to attract the clientele of his competitors. Thus, the act of competition, even if it causes damage to some economic agents, is not illegal by itself, but only if the means, acts or facts used to attract customers are unfair.
 A basic principle/inherent condition of the market economy is the competition between the companies carrying out economic activity on the respective market, of course when this competition is by the customs and provisions governing the rivalry of competitors.
 The present study is intended to analyze the phenomenon of competition through the legislation of the Republic of Moldova that regulates competitive relations, including, addressing issues related to the identification and responsibility of the actors/ subjects of competitive relations, the types of legal liability, and the impact of unfair competition on the competitive environment in general and, on the rights and interests of natural and legal persons, but also of the society in particular.
 The authors analyzed the provisions of competition legislation to identify the regulatory framework's quality and its deficiencies. For this purpose, the authors analyzed the provisions of the competition law no. 183/2012 and the Republic of Moldova's administrative, contraventional, and criminal Code.
 The conclusions reached by the authors revealed a series of legislative loopholes, but also new research directions that would constitute the basis for certain recommendations and proposals for improving the analyzed normative framework.

Microcredit: equilibrium effects

Abstract Changes to access to credit can potentially cause changes to the returns to various factors—general equilibrium (GE) effects. This paper considers changes in wages, prices of goods and services, interest rates, and in the returns to forming or maintaining social ties. Such GE effects can lead to positive and/or negative indirect effects on economic agents, including those who are not directly affected by a given credit policy. Thus such effects matter for the average level and distribution of impacts resulting from credit access. In addition, GE effects have implications for research design, in that those who are indirectly affected via GE channels are generally not a valid counterfactual for those who are directly affected.

The iSPAC

Special purpose acquisition companies (SPACs) are one of the most celebrated investment vehicles in recent years. Relative to traditional IPOs, SPACs are much more cash-strapped and speculative. Resultantly, the scope for SPACs remains sparse for certain segments of the financial system notwithstanding the SPAC euphoria surrounding the financial markets: one notable exception is Islamic banking and finance. The Islamic banking business model is based upon the ethical ontologies and epistemologies – informed by the divine sources of Quran and Sunnah: the Shariah – operating with the mandate to promote socio-economic justice through a fair redistribution of wealth while embargoing speculative trading or investments and adopting a risk-sharing model between economic agents. Unsurprisingly, – owing to the speculative nature of SPACs – the Islamic finance industry remains reluctant to participate in the SPAC-mania despite the frenzy engulfing global securities markets. This work addresses the misaligned incentives inherent in a conventional SPAC structure and proposes alternative SPAC structure terms i.e., the iSPAC, which potentially mitigates the noted misaligned incentives and offers less dilutive SPAC terms to shareholders. Specifically, iSPAC structure terms address the issues of speculation (gharar), information asymmetry, and transparency in the pre-IPO phase, which may lead to adverse selection and moral hazard. Equally, the proposed structure reconciles post-IPO operational and investment-related risks such as the treatment of proceeds, interest rate (riba), opportunity costs, and management costs in consort with unethical behavior i.e. cashing-out opportunities that may lead to uneven redistribution of wealth thereby, widening the socio-economic voids in the society.

Resilience in a noisy urban system

The ability of cities to recuperate from disturbances and return to their evolutionary pathways depends, first and foremost, on the type of damage that the shock created. But in addition, it depends on how information is transmitted in the urban system and on how noise filters distort the information that reaches economic agents. So long as the transmission of information does not disturb the functioning of the urban economy, shocks do not prevent the return to the long‐run evolutionary paths. We study the migration decisions of agents, following information that they receive using an agent‐based model of endogenous growth in a closed urban system. These decisions affect the spread of innovative ideas, of innovations, and the birth rate of new firms. The aggregate reactions of agents to shocks can affect the resilience of the entire urban system and of individual cities, sometimes allowing a return to the same domain, and sometimes driving the system and parts of its constituents to another regime of behavior. We analyze the repercussion of shocks on the resilience of urban systems by considering how noise in the transmission of information affects the decisions of agents at various times and locations. The conclusions are that, while information noise is a burden that constantly and systematically hinders the economic potential of the system, financial shocks reshuffle resources causing a fundamental change in the urban system trajectories.

The shipping industry under the EU Green Deal: An Input-Output impact analysis

In 2021, the European Commission introduced the ‘Fit for 55’ package, a set of policies aimed at reducing greenhouse gas (GHG) emissions by at least 55% by the year 2030. This initiative, aligned with the European Green Deal, seeks to make Europe a climate-neutral continent by 2050. A pivotal aspect of ‘Fit for 55’ is the proposed extension of the European Union Emissions Trading System (EU ETS) to the shipping industry. According to the European Commission, water transport accounts for 2.5% of global GHG emissions, while the shipping industry accounts for 13% of the EU’s GHG emissions from transportation.This stringent new shipping policy makes it imperative to determine how the world’s economy will respond, considering three distinct implementation proposals with different rates of policy introduction. Evaluating the short-term impacts of the policy is crucial to ensuring that the sustainability initiative is not only ambitious but also pragmatic and adaptable to the realities. To assess the implications, this paper uses the Leontief price model, the environmental input–output (EIO) model, and the OECD Inter-Country Input-Output (ICIO) Table for 2018, which contains information for 45 sectors. The focus is on EU countries and its Top 10 Trading Countries.Our findings show that a short-term trade-off exists between economic and environmental goals and that environmental gains incur economic losses for key stakeholders. They also show that the impact of this policy is felt more by producers in the EU and consumers in non-EU countries than by other agents in the respective countries. Lastly, a recommendation from our study is that the policy should be phased in progressively to provide economic agents with the necessary adjustment time and thus minimize economic losses.

AN ASSESSMENT OF THE FELDSTEIN–HORIOKA PUZZLE FOR INDIA: A MARKOV REGIME SWITCHING APPROACH

The study aims to examine the Feldstein–Horioka puzzle in the Indian context during 2002Q2 to 2019Q4 to unearth nonlinear patterns in the data. Findings from an augmented Markov regime-switching model reveal two distinct, yet random regimes for correlations between savings and investment-GDP ratios, with higher correlation between the variables persisting for a longer duration. In the low correlation regime, trade-related factors, policy uncertainty and global shocks have a significant impact on the correlation. Fiscal shocks and trade costs explain high correlations in regime 2, while global shocks act to decrease the correlation in this regime. The high correlation regime dominates the study period and indicates that the Feldstein–Horioka puzzle of limited capital mobility persists in India. Economic agents appear to respond rapidly to changing domestic and global policy conditions, besides being affected by incomplete integration of goods markets, explaining the pattern of correlations.

The “School Meals Market” in Hungary — Typical Characteristics of Demand and Supply

AbstractThe present study examines the Hungarian practice of public catering for children from an economic perspective, bearing in mind that the production and consumption of food is, at the same time, an economic activity. Taking this approach, we focus on which institutions contribute to or hinder efficiency, by which we mean the efforts of economic agents to generate maximum welfare from the available (meager) resources. For social reasons, the supply of public catering for children is a statutory obligation on the part of local authorities, where efficiency must be combined with social considerations. The study reviews the rationing mechanism of school meals catering as a public service, looking first at the main factors determining the level of demand for public catering for children, and then at the main factors that influence supply.

Game Analysis of Strategies for Providing Material Support to the Population

The article focuses on the possibilities of game analysis of options for providing material support to the population, implemented in the form of a game with nature – a generalized player, whose inclusion in the game analysis allows us to consider the diverse interaction of economic agents with the socio-economic environment. This set of methods has a number of advantages among the complex of mathematical methods in economics and management in conditions when regression models become irrelevant due to increasing uncertainty or lack of sufficient initial data. The purpose of the study is to overcome the insufficient use of the potential of game models in the practice of modeling social situations, taking into account the real information conditions that have developed to date. The research methods are the methods of game theory (construction of a set of active strategies for providing material support to the population; identification of possible variants of states of nature reflecting the possibilities of the number of people who really need material support; determination of the optimal strategy for providing material support, taking into account the selected optimality criterion). Their use contributes to improving the quality of decisions made in the field of providing material assistance to the population. Among the results of the study, we will indicate the implementation of all the necessary stages of the game analysis of strategies for providing material support to the population. The proposed mechanism for assessing the usefulness of funds, used for material support of the population, takes into account various contributions to the assessment of the final utility of the distribution of funds, arising both in cases of receiving funds by those in need and in cases of non-receipt of funds by those in need, as well as in cases of receiving funds by citizens who do not really need financial assistance. The authors have made calculations and assessed the consequences of strategies, the implementation of which involves reducing the number of citizens who receive financial assistance (with simultaneous dynamics of the amount of financial assistance). The game analysis of strategies for providing material support to the population became possible due to the construction of a game model of a basic level of complexity that takes into account the main scenarios of the development of the social situation under consideration. In the process of studying the constructed game model, a high degree of sensitivity of strategies for providing material assistance to the population to the choice of the optimality criterion, as well as its parameter, was established. This feature requires clarification of the information situation in which the strategy of providing financial assistance is chosen. In conclusion, we note that the material of the article may be useful for consideration with subsequent pilot testing at various levels of state and municipal administration, when developing and adopting legislative initiatives on social support measures aimed at strengthening the targeting of financial assistance to the population. Also, the material and tools of this study can serve in the course of improving existing and developing new academic disciplines, the content of which is related to the quantitative analysis of socio-economic problems and situations.

Does the use of digital tools improve a firm’s performance?

AbstractThe COVID-19 pandemic has had a significant economic impact. Different economic agents have been forced to make temporary or permanent changes to their usual patterns of economic activity. In some business sectors, confinement brought activity to a standstill; in others, it led to the spread of teleworking and, in parallel, highlighted, among other aspects, the importance of digital sales channels. In this context, digitalization can be seen as an opportunity (even a necessity) to maintain the level of business activity and to develop new business initiatives. Firms that used digital tools in their pre-pandemic processes were better prepared to face the health and economic crises and could emerge from them earlier than those companies that were less digitized. Drawing on data from The Future of Business Survey, this paper analyzes the adoption of digital tools in the wake of the pandemic and examines the relationship between pre- and post-pandemic indicators of business digitization and business performance, as measured by sales and employeees. It also considers the diversity of existing digital platforms and the possible uses of these tools.

Ensuring Academic Succes by Running Intership at Economic Agents, in Rural Areas

Academic success will always be ensured when the internships will take place at the economic agents in the area where the school is located because the students are more motivated to become future specialists for the companies in the areas where they live.Of course, this academic success will always be ensured with the help of the teacher because the theoretical part is put into practice at the economic agent where the internships take place.Thus, the correlation of the school, economic agent, teacher, student, parents, but also local authorities represents a unit that can ensure success, that is, the training of specialists who can integrate more easily into the labor market.

Léon Walras and Alfred Marshall: microeconomic rational choice or human and social nature?

Abstract Alfred Marshall’s and Léon Walras’s works have often been compared in the literature, on the one hand underlining their several differences and on the other hand focussing on their possible resemblances building what was called ‘neoclassical economics. This interpretation failed to pay due attention, however, to a number of important aspects that in fact stand in the way of a proper understanding of these two authors’ contributions. This paper focuses on the analogies to be found between Walras’s and Marshall’s analyses of economic behaviour, which are related not to a supposed affiliation to a common neo-classical tradition but to a common conception of the relation between human economic agents and society.

Entry regulations with implementation lag: Evidence from convenience store markets in Korea

Seocho County in Korea attempted to advance the interests of incumbent businesses by weakening competition in the convenience store market. To this end, it created a regulation impeding the opening of new convenience stores. Although this regulation intensified proximity restrictions between stores, our findings reveal that the announcement of legislation condemned incumbent businesses to unfavorable survival probabilities. We provided supporting evidence that so-called implementation lags—time lags between the announcement and implementation of policies—and adaptive behaviors of potential store owners may have caused unintended consequences. Our findings imply that policymakers should consider implementation lag and the adaptive behaviors of economic agents.