Economic Policy Research Articles

Current Situation, Problems and Suggestions of Agricultural Futures Market in China

The agricultural futures market occupies a central position in China's financial landscape, wielding substantial influence over the sustainable development of the national economy. Apart from its core roles in price discovery and risk management for agricultural products, this market acts as a catalyst for efficient allocation of resources and continuous financial innovation. Furthermore, it enhances market liquidity and amplifies China's global economic impact. As China's financial sector matures, the agricultural futures market will continue its dual role of bolstering agricultural prosperity and financial dynamism, despite encountering various challenges. This study explores the present state of China's agricultural futures market, evaluating metrics such as total market turnover and penetration. Analysis identifies several critical issues, including inadequate liquidity, susceptibility to market manipulation, speculative activities, and uncertain economic policies. To address these challenges, the paper proposes targeted strategies. The research outcomes carry significant implications for nurturing the sustainable and resilient growth of China's agricultural futures market.

The role of natural resources, fintech and economic complexity in sustainable development for BRICS nations: A policy insight from advanced panel data techniques

In recent times, ecological sustainability has become a pertinent area of interest for policy stakeholders in emerging nations. The BRICS nations are five nations that have significantly contributed to the world's GDP and play a significant role in the environmental policy arena. The ongoing research has confabulated the interconnections among three pertinent economic policy variables, i.e., NTR, FNT, and ECX, on SGR in five selected nations. The research has used the most rigorous method, MMQR, for the empirical outcomes. The empirical outcomes elucidate that ECX and ENT are essential sources to augment SGR. In contrast, NTR is one of the most prominent factors escalating ecological degradation in these nations. The research has provided a few interesting policy insights; for instance, according to the empirical outcomes, environmental taxes can be used to abate CO2 emissions. However, it is recommended that these taxes must be accompanied by green finance and green credit, which ultimately will help the firms and promote green growth. Green growth is an essential tool for boosting SGR in the chosen nations. Furthermore, the chosen nation must focus on strategies that promote the sustainable use of NTR for a cleaner and greener tomorrow.

On the different impact of local and national sources of policy uncertainty on sectoral stock volatility

We analyze the impact of state-level and national-level economic policy uncertainty (EPU) on stock volatility across 17 sectors. Using EPU data from 46 U.S. states, we construct a local uncertainty index through principal component analysis and compare it with national uncertainty using quantile regression. Our findings indicate that banks are influenced by both local and national uncertainty. Consumer-related sectors, such as beverages and transportation, react more to local uncertainty, while healthcare and defense sectors respond to national uncertainty. Sectors like medical, technology, electricity, and chemicals show no significant impact from either source. The effects are more pronounced at the 75th quantile, suggesting greater impact during high volatility periods. Our results provide important evidence that a generalized policy may not be effective as sectors respond differently to various sources of uncertainty. Instead, policymakers should combine national level policies with sector-specific approaches.

The blue economy effects on EUROMED tourism: forecasting approach

This study examines the factors that influence the blue economy in EUROMED, aiming at promoting economic growth in line with the UN Sustainable Development Goals. EUROMED was chosen because all of its nations have fisheries and marine tourism, which are the two key indicators of the blue economy. Blue economy contributes to sustainable development in the fisheries and marine tourism sectors. A commitment to sustainability has sped up national and regional blue economy policy development. The study uses secondary qualitative data and literature review to analyse the synergies and conflicts between EUROMED blue economy strategies and the UN Sustainable Development Goals. The findings suggest that GDP growth, aqua production, open trade, CO2 emissions, and inflation rate influence the blue economy, and that ecotourism that considers education, society, and the environment may generate sustainable fisheries and marine tourism. Only 21 countries gave the ARDL test between 2000 and 2019. This study analyses synergies and conflicts between EUROMED blue economy strategies and UN Sustainable Development Goals. Location-based contextual development of blue economies that suit all players' requirements is essential to maintain sustainability objectives. Ensure resilience against future environmental and political shocks, preserve the ecological underpinning for vibrant blue economies, and create capacity at all levels to promote effective and fair governance. This study tries to make good use of ocean conservation and aquaculture within the context of the blue economy. This is the first EUROMED blue economy study and contributes to the theoretical and methodological development of blue economy research.

The “effect modifier” of US interest rate in the economic policy uncertainties and economic conditions of fifty (50) US states: A semi-parametric smooth varying-coefficient approach

In this study, we investigate the relationship between economic policy uncertainty [EPU] and the economic conditions of the 50 US states, as well as the role of interest rates. We use a semi-parametric smooth varying coefficient model (SVCM) to examine how interest rate affects the nexus of EPU-economic conditions. Our findings suggest a negative relationship between EPU and economic conditions and that when the interest rate is around 3 %, the negative impact of EPU on economic conditions decreases in more than 60 % of US states. Furthermore, we find that the rate of change in the interest rate between 2 % and 3 % helps mitigate the negative effects of EPU and improves economic conditions in several states. Our results remain consistent across different interest rate periods, regardless of whether the uncertainty is of internal or external origin.

Extreme co-movements between CO2 emission allowances and commodity markets and their response to economic policy uncertainty

This study employs the generalized extreme value - autoregressive conditional Fréchet - tail quotient correlation coefficient (GEV-AcF-TQCC) analytical framework to investigate the extreme co-movements between the EU carbon futures market and the commodity futures market. Subsequently, it also examines the response of the dynamic tail quotient correlation coefficient (TQCC) values to economic policy uncertainty stemming from the US using the linear Granger causality test. The empirical results demonstrate that the tail risk indices for both upside and downside trends of the two futures markets experience changes most of the time and show drastic changes during extreme events. More importantly, before the outbreaks of the COVID-19 pandemic (from September 2019 to February 2020) and the Russia-Ukraine conflict (from May 2021 to February 2022), the dynamic TQCC values for the downside trends of the two futures markets remain at relatively high levels. Of note, when examining the dynamic TQCC values between GSCI_down and EUA_down, as well as between GSCI_down and EUA_up, it can be observed that these TQCC values rise to higher levels during periods of extreme volatility. However, they quickly decline as the GSCI futures market experiences significant fluctuations during its downside trend. This pattern indicates a tail risk spillover effect from the GSCI futures market to the EUA futures market. Further analysis using the linear Granger causality test reveals that economic policy uncertainty is a significant driver of the extreme co-movements between the EU carbon and the commodity futures markets in most cases, in addition to the extreme co-movements between the downside trend of the EU carbon futures market and the upside trend of the commodity futures market. The insights gained from this study can provide valuable guidance and enlightenment for policymakers, financial investors, and academic researchers in understanding the dynamics of the extreme relationship between the two markets under discussion, and the impacts of economic policy uncertainty on their extreme co-movements.

Analyzing banking sector development and renewable energy consumption impact on load capacity factor in Sudan

This study delves into the impact of banking sector development (BSD), renewable energy consumption (REC) and economic growth (EG) on environmental quality (EQ), using the load capacity factor (LCF) in Sudan. Utilizing time series data from 1990 to 2018 and the Autoregressive Distributed Lag (ARDL) method, this research aims to explore both short-term and long-term dynamics, and cointegration, to provide a detailed understanding of these relationships. The study's primary objective is to elucidate the effects of BSD, REC, and EG on Sudan's EQ through the LCF metric and to test the Load Capacity Curve (LCC) hypothesis. The results indicate that the squared values of per capita GDP (long-term) and REC (short- and long-term) contribute to an increase in Sudan's LCF, thereby enhancing EQ,while BSD and per capita GDP negatively affect EQ, thus confirming the LCC hypothesis. Sudan authorities are urged to prioritize environmentally friendly economic policies, sustainable urban development, and the transition to renewable energy sources. However, the revelation that BSD diminishes environmental sustainability suggests a reevaluation of the financial sector's role. Encouraging green technologies could amplify the LCF and mitigate environmental degradation, enabling Sudan to create a sustainable environment by promoting renewable energy investments and long-term GDP per capita growth while curbing financial expansion. This research provides a critical framework for policymakers to create strategies that balance economic development with ecological preservation, ensuring Sudan's long-term sustainability.Graphical

Navigating the Malaysian dilemma: Constructing a sustainable economy in the post-COVID-19 era

The Malaysian dilemma presents a complex challenge in the wake of the COVID-19 pandemic, requiring a comprehensive statistical analysis for the formulation of a sustainable economic framework. This study delves into the multifaceted aspects of reconstructing Malaysia’s economy post-COVID-19, employing a data-driven approach to navigate the intricacies of the nation’s economic landscape. The research focuses on key statistical indicators, including GDP growth, unemployment rates, and inflation, to assess the immediate and long-term impacts of the pandemic. Additionally, it examines the effectiveness of government interventions and stimulus packages in mitigating economic downturns and fostering recovery. A comparative analysis with pre-pandemic data provides valuable insights into the extent of economic resilience and identifies sectors that require targeted support for sustained growth. Furthermore, the study explores the role of technology and digital transformation in building a resilient economy, considering the accelerated shift towards remote work and digital transactions during the pandemic. The analysis incorporates data on technological adoption rates, digital infrastructure development, and innovation ecosystems to gauge their contributions to economic sustainability. Addressing the Malaysian Dilemma also involves an examination of social and environmental dimensions. The study investigates the impact of economic policies on income distribution, social equity, and environmental sustainability, aiming to achieve sustainable economic growth. The study contributes a nuanced analysis to guide policymakers and stakeholders in constructing a sustainable post-COVID-19 economy in Malaysia.

Economic activities, dry bulk freight, and economic policy uncertainties as drivers of oil prices: A tail-behaviour time-varying causality perspective

This paper examines the dynamic impact of economic activity, Baltic dry bulk and economic policy uncertainty on oil prices. Drawing on demand-side economic theory, we focus on how economic activity and economic policy uncertainty drive oil prices and subsequently contribute to the formation of market equilibrium. In this context, we first introduce a unidirectional quantile and time-varying Granger-causality mechanism for the drivers of oil prices. Our novel rolling window quantile Granger causality approach reveals that economic activity drives crude oil price fluctuations and highlights their important role in market imbalances. In particular, economic activity and the Baltic exchange rate index emerge as essential drivers of oil prices, confirming our hypothesis of a demand-side effect. Moreover, our robustness wavelet quantile correlation (WQC) analyses reveal that economic activity promotes oil price fluctuations along both long-term equilibrium trends and short-term dynamics. In contrast, economic policy uncertainty has a dampening effect on oil prices. More broadly, economic activity is positively correlated with the Baltic exchange dry index, highlighting its broader impact on global trade indicators. Moreover, we use a bivariate Quantile on Quantile regression method to identify the equilibrium searches of different thresholds and estimate the robustness of the validity of the WQC findings. Analyzing the quantile and frequency connectedness spillovers, we observe that shocks from economic activity are particularly pronounced in the tail quantiles, reinforcing the demand-side narrative. Overall, the increased risk in extreme tails underscores the increased interaction between economic activity, oil prices and economic policy uncertainties. Our findings have important implications for policymakers and highlight the need for adaptive strategies to manage potential oil price shocks. Thus, by adopting a demand-side perspective, policymakers can better anticipate and respond to oil price fluctuations, promoting more resilient economic policies.

Renewable Energy Consumption Determinants: Do They Differ between Oil-Exporting Countries and Oil-Importing Ones?

This paper delves into the critical determinants of renewable energy consumption, focusing on the contrasting roles of oil imports and exports. It aims to bridge the knowledge gap by comparing these determinants across both oil-importing and oil-exporting nations, offering a comprehensive and nuanced perspective to inform policy recommendations. Using annual data from 1990 to 2018 sourced from the World Bank database, the study employs panel multiple regression analysis and adopts a fixed effects model to explore two main questions: What drives the use of renewable energy sources? How does a country’s oil importer or exporter status affect these factors? The findings reveal a significant but inverse relationship between oil rents and renewable energy consumption (REC) for both types of countries. Additionally, there is a notable negative correlation between GDP growth and REC for both oil-exporting and oil-importing countries. Interestingly, the crude oil average closing price and inflation show an insignificant impact on REC in both contexts. The study also highlights that net energy imports significantly affect REC, with a much stronger inverse relationship in oil-importing countries compared with oil-exporting ones. For oil-importing countries, diversifying energy sources is a crucial investment. Governments should prioritize research and development in renewable energy to spur technological advancements, enhancing efficiency and affordability. Economic growth-promoting policies, such as tax incentives and subsidies for renewable energy businesses, are vital for encouraging sustainable practices. Consistent, long-term policies are essential for providing investor confidence and supporting the transition to renewable energy. For oil-exporting countries, similar strategies are recommended. Additionally, allocating a portion of oil revenues to renewable energy infrastructure and funding research and development in renewable technologies through local universities and startups are crucial steps. This dual approach will not only enhance energy diversification but also foster innovation and sustainability in the energy sector.

Liquidity hoarding and bank profitability: The role of economic policy uncertainty

We examine the relation between liquidity hoarding and bank profitability in the context of economic policy uncertainty (EPU). Using data on bank liquidity hoarding from Berger et al. (2022), we find that liquidity hoarding is negatively associated with profitability when EPU is low, but positively associated with profitability when EPU is high. Our results hold both in normal and crisis periods, and for banks of different sizes.

Spatiotemporal Dynamics and Evolution of Grain Cropping Patterns in Northeast China: Insights from Remote Sensing and Spatial Overlay Analysis

Understanding the spatiotemporal patterns and driving mechanisms of cropping patterns’ evolution tailored to local conditions is crucial for the effective allocation of black soil in northeast China and the advancement of agricultural development. This study utilized the Google Earth Engine platform to extract the spatial distribution data of major grain crops in northeast China for the year 2022. Using crop classification data from 2000 to 2022, the spatial overlay analysis method identified cropping pattern types based on spatial and temporal changes. The primary cropping patterns identified were continuous maize cropping, maize–soybean rotation, mixed cropping, and continuous soybean cropping. Simultaneously, this research constructed three distinct crop periods: Period I (2000–2002), Period II (2010–2012), and Period III (2020–2022). Over three periods, these patterns covered 94.73%, 88.76%, and 86.39% of the area, respectively. The evolution of the dominant cropping pattern from Period I to Period II involved the transition from continuous soybean cropping to continuous maize cropping, while from Period II to Period III, the main shift was from continuous maize cropping to maize–soybean mixed cropping. From a spatial perspective, since Period I, maize has increasingly replaced soybean as the dominant crop, with continuous maize cropping expanding northward and continuous soybean cropping contracting. The maize–soybean rotation area also migrated northward, particularly in the core area of the Songnen Plain, evolving mostly into continuous maize cropping. Maize cropping areas exhibited significant regional characteristics, being densely distributed in the Sanjiang Plain and Liaohe Plain, and along major tributaries in northeast China. Consequently, the interplay of the natural environment, economic policies, and agricultural technologies drove these changes. The findings offer valuable insights for optimizing cropping patterns and developing rotation systems in northeast China.

Environmental protection is more important to European citizens of all political persuasions than economic growth: A 14-country study in the marine context

To focus on voters' priorities, Bill Clinton's campaign famously used the slogan, “It's the economy stupid.” With growing environmental crises, is this still true? We explored this issue for the marine sector, using representatively-weighted survey data from 14 European countries (N = 11,130). Citizens were asked about their own and policy makers' (perceived) preferences for marine-related economic, environmental, and human health policy goals. Results found the public consistently prioritised environmental protection and, to a lesser extent, health over economic growth. However, the public believed that policy makers cared less about the environment and health, but more about the economy than they did themselves. These patterns were consistent across all countries, all points of the political spectrum, and among coastal and inland residents. Marine policy makers who care about public opinion, may want to start considering that, at least for the European public, it is increasingly about “the environment, stupid!”.

ANALYZING THE RESPONSES OF DEFENSE SECTOR STOCKS TO INTERIM UNION BUDGET ANNOUNCEMENT 2024: AN EVENT STUDY

The interim union budget, the government's primary economic policy document, outlines the intended use of public funds to achieve policy objectives. Industries look forward to it as it can lead to significant changes, and stock markets also react to budget releases to some extent. The paper examines how the NSE's Defense Stocks are affected by the Interim Union Budget. The data was accumulated between 2023 and 2024 from the authorized NSE website. The impact is measured in terms of daily average returns in the pre-and post-budget periods of the top five contributors to the Nifty India Defense index. The statistical tools used include regression analysis and a one-sample t-test. The study found that the impact on defense sector stocks was attributed to factors other than budget announcements. This paper suggests that investors should not consider budget announcements as significant events and should focus on other market factors as well for trading and investing.

Effects of the Minimum Wage (MW) on Income Inequality: Systematic Review and Analysis of the Spanish Case

The minimum wage has become a standard measure in the economic and social policies of countries all over the world. The primary objective of this measure is to guarantee that workers receive a minimum wage that allows them to lead a decent life, thereby reducing inequality and poverty. However, studies on the minimum wage have not focused on assessing the effects on these dimensions but only on employment. The objective of this study is to address this research gap by analysing the effects of minimum wage increases on income inequality and poverty. To this end, firstly, a systematic review of the empirical analyses was conducted using the PRISMA methodology, with a view to ensuring that all empirical evidence was available. Secondly, the Spanish case was examined. The significant increase in minimum wage in Spain in 2019 (21.3% in real terms) presents an invaluable opportunity to utilise this event as a natural experiment to generate new evidence. A difference-in-differences approach was employed to assess the impact of this phenomenon in the period 2018–2019 with microdata from European Statistics on Income and Living Conditions (EU-SILC for Spain). In doing so, two basic scientific contributions were made. The first one, a systematic, exhaustive, and up-to-date literature review (up to June 2024), as there is, to our knowledge, no recent systematic review of this relationship (minimum wage vs. inequality). The available evidence indicates a clear inverse relationship between the minimum wage and inequalities and poverty. The second one, regarding the Spanish case, there has been a dearth of scientific studies on this subject. Thus, this paper provides new scientific evidence demonstrating that a significant increase in the minimum wage can significantly improve the income of low-wage earners, thereby reducing income inequality and in-work poverty. Furthermore, there is evidence of a spillover effect towards income groups closer to the treatment group.

Globalization in a Covid-19 Afflicted World

This paper attempts to assess the impact that the current Covid-19 pandemic can exert on the globalization process. The pandemic crisis, which fully unfolded worldwide in March 2020, had dramatic consequences for the world population, some of which are of economic character. As some of the global value chains and international trade and investment relationships were destabilized or suspended, a legitimate question as to the possible developments of the globalization process arises. We commence with a multidimensional concept of globalization and its critical evaluation. Subsequently, three possible scenarios of pandemic-induced development are identified and explored: disrupted globalization, de-globalization and finally re-balanced globalization. The discussion of these scenarios also includes implications for economic policy.

Extending comparative typologies of diaspora policies: Towards a "cautiously proactive" diaspora policy state

In the past two decades, the 'diaspora turn' in research and policy has led to the development of several typologies of diaspora policies around the world. This study explores and extends Francesco Ragazzi's established 2014 global typology of diaspora policies. We use in-depth qualitative analysis of Czech diaspora policies to assess the internal validity of the typology and identify new dimensions that are central to our understanding of diaspora politics. We then replicate Ragazzi's quantitative analysis with the inclusion of new data on the Czech Republic, Slovakia, Hungary, Croatia and Poland, assessing the typology's external validity. We find a new cluster of diaspora policy types, characterized by a “cautiously proactive” mix of diaspora policy mechanisms based on relatively generous cultural and citizenship policies, variably accentuated symbolic policies and limited social and economic policies. We suggest that this mix has been structured by the tension between the countries' commitment to a (neo) liberal emigration regime and the continued importance of ethno-cultural conceptions of nationhood. In addition, we identify three new variables that should be included in future typologies: 1) the volume and distribution of funding for diaspora policy; 2) the symbolic recognition of diaspora in the legal system; 3) policy differentiation among different kinds of diaspora. Our mixed-method approach illustrates the importance of using nuanced qualitative data to provide a meaningful depiction of policy.

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

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

Հարկաբյուջետային քաղաքականության ներառականության գնահատման մեթոդաբանական մոտեցումները / Methodological approaches to assessing the inclusiveness of fiscal policy

The idea of inclusiveness of economic development has become one of the main guidelines for developers and implementers of economic policies in many countries of the world. Issues related to inclusiveness make their comprehensive study relevant and topical. Recently, much attention to the problems of ensuring the inclusiveness of economic policy is associated with globalisation and technological change. The latter have the potential to significantly improve the quality of life of households and contribute to poverty reduction in some developing countries. On the other hand, the economic and financial crises and the resulting economic and social distortions make changes in research and management approaches inevitable. Thus, quantifying the inclusiveness of fiscal policy is a necessity as it provides valuable information on the efficient allocation of a state's financial resources. On the other hand, assessing the inclusiveness of fiscal policy can serve as a benchmark in the process of fiscal policy formulation. Individual authors in their studies approach the problems from different positions, use different groups of factors under consideration, use different research methods. The purpose of the study is to interpret and summarise the methodological approaches to assessing the inclusiveness of fiscal policy discussed in professional platforms and in the literature. By comparing the advantages and disadvantages of the evaluation methods, acceptable approaches to assessing fiscal policy inclusiveness for the Republic of Armenia were identified.

Research on the Comovement of Business Cycles and International Economic Policy Coordination

Research on the Comovement of Business Cycles and International Economic Policy Coordination