Accumulation Of Financial Assets Research Articles

HUMAN CAPITAL AS A COMPONENT OF THE BUSINESS MODEL: THREATS FROM ARTIFICIAL INTELLIGENCE AND A PRAGMATIC APPROACH IN THE ERA OF MODERN CHALLENGES

The purpose of this article is to examine the risks associated with artificial intelligence (AI) within the context of economic sciences, with a particular focus on the socio-economic transformations of the 20th and 21st centuries. The authors emphasize that the fundamental principle guiding mega-structures such as international organizations remains monetization rather than implementing positive changes in AI-human collaboration. The article employs a literature review methodology to investigate existing research frameworks and theoretical perspectives on the intersection of AI and economic practices. The scientific aim of this study is to identify and discuss the threats posed by AI arising from human greed and the operational mechanics of AI, highlighting the differences and sources of these threats. It aims to propose a balanced approach that emphasizes comprehensive education and a shift from the accumulation of financial assets towards the valorization of knowledge and added value. By reviewing scholarly articles, books, and reports, the study synthesizes key findings to present a comprehensive understanding of the challenges and implications of AI integration into economic systems. Key observations include: AI should enhance rather than replace human development. Overreliance on AI may erode fundamental human skills. Ethical considerations and privacy protection are paramount in AI integration. Harmonious coexistence of technology and human values is essential for sustainable business models. The conclusions of the study emphasize the need for integrating AI with a humanistic approach, ensuring that technology supports rather than diminishes human capabilities. Businesses must strive for a balance where AI augments human tasks, enhancing productivity and creativity without compromising human autonomy and creativity. The study suggests that AI should be viewed as a supportive tool, not a dominant force, in business processes. The future of business lies in fostering environments where AI and human potential coexist harmoniously, promoting both innovation and humanism.

Sustainable resource management policy of national economic development

The article considers the mechanism of possible full supply of strategic resources for the purpose of implementing the concept of sustainable development. Two main approaches to the accumulation of resources are indicated: i) the first approach, aimed at maintaining a strategic stock of energy resources, which involves the concentration of resources to ensure the stability and security of energy supplies; ii) the second approach consists in the accumulation of financial assets through the receipt of income and allows the formation of a financial reserve. In the case of the first approach, the country like the United States strategically accumulated crude oil reserves, exemplified by the establishment of the Strategic Petroleum Reserve (SPR) in the 1970s. The percentage ratio of US crude oil exports relative to their daily oil consumption in the United States from 1980 to 2023 was calculated and detailed in the research, with trends such as a decline of 1% in 2005 and a subsequent increase of 156% in 2023 being revealed, and the impact of technological and geopolitical factors on these changes was determined.

What are firms borrowing for? The role of financial assets

Recent studies show that nonfinancial corporate debt is weakly correlated with aggregate demand, raising the question: Why is the nonfinancial corporate sector borrowing? We use flow of funds data for fifteen advanced economies since 1990 to econometrically show that nonfinancial corporate borrowing primarily finances financial asset accumulation. We show that an increase in borrowing of one percent of GDP is associated with an increase in capital expenditures of only 0.013 percent of GDP, but a 0.82 percent of GDP increase in the acquisition of financial assets net of non-debt liabilities. This rise in net financial asset acquisition is dominated by gross financial asset accumulation. Furthermore, corporate borrowing is primarily associated with non-cash financial assets, and is not associated with foreign direct investment. These results suggest that the nonfinancial corporate sector’s growing orientation toward accumulating financial assets underlies the weak relationship between their borrowing and aggregate demand.

Corporate Financialization and Executive Interlocks

The financialization of US corporations has been well studied over the past decade. These accounts describe the accumulation of financial assets as a ubiquitous trend that touched all corners of organization populations. What is unknown, however, is how inter-organizational relations contributed to corporate financialization. Traditional theories afforded by research on board interlocks and isomorphism would suggest that focal firms financialized similarly as their interlocks. But more recent research suggests that a focal firm’s number of executive interlocks and the financial homogeneity of its board also played important roles in its financialization. My examination of S&P 1500 firms from 1996 to 2014 yields three important findings: First, focal firms indeed tended to financialize similarly to their interlocks, but (second) the financial homogeneity of those interlocks exacerbated their effects on the financialization of the focal firm. And third, boards seats filled by a greater proportion of executive directors limited the extent of the focal firm’s financialization.

Macroeconomic Implications of US Sanctions on Iran: A Sectoral Financial Balances Analysis

Abstract Iran is facing a severe macroeconomics crisis after the US (re)imposed sanctions on its oil and gas exports in May 2018, followed by additional sanctions on metal exports in 2019. Its exports have collapsed triggering a contraction of the economy along with accelerating inflation and depreciating currency. Using the sectoral financial balances (SFB) model, we study the interrelationship between several macroeconomic parameters maintaining stock-flow consistency across time and sectors of the economy. Fiscal and monetary policy cannot reverse the consequences of the sanctions although fiscal deficits as a percentage of GDP will see a rise to accommodate the domestic private sector’s desire to accumulate financial asset accumulation. The lack of a strong monetary policy mechanism in Iran may, however, be unable to quell the impact of expansionary fiscal policy on inflation and depreciating rial. Given the limited macroeconomic policy options open to Iran in dealing with the crisis Iran, the only option may be political – a return to the negotiating table with the US.

Demand, credit and macroeconomic dynamics. A micro simulation model

We develop a micro simulation model for the macroeconomic business cycle. Our model is based on three main ideas. First, we want to specify how macroeconomic coordination is achieved without a dominating influence of price mechanisms. Second, we want to incorporate the stock-flow-consistent (SFC) approach that has become popular in post-Keynesian macroeconomics. Existing macroeconomic models often pay no attention to how short-run outcomes (in the form of surpluses or deficits on the account balances of individual agents, or groups of agents) accumulate into long-run debt. The SFC approach models such deficits and surpluses, and their accumulation, explicitly, and imposes a logic in which these long-run balances co-determine the macroeconomic coordination outcome. Third, we want to allow for bankruptcies as a major mechanism in the business cycle. In reality, bankruptcies are a way in which long-run balances get adjusted, but most often the SFC models do not allow bankruptcies as a way in which long-run balances adjust. In our model, bankruptcies arise because agents do not adapt their behavior quickly enough as debt, or assets, accumulate. This is parametrized, so that bankruptcies can disappear in the simulation runs, which enables us to compare the nature of business cycles with and without bankruptcies. Our results show a clear business cycle that is driven by accumulation of financial assets and the effects this has on the real economy. By changing some of the key parameters, we show how the nature of the business cycle changes as a result of changes in the assumed behavior of agents.

An empirical assessment of rural livelihood assets from gender perspective: evidence from Ghana

Poverty studies have demonstrated that a group’s ability to escape poverty is largely dependent on the types of assets that the group’s members possess. A major claim that has been asserted with limited empirical evidence in the asset literature is the gender disparity dichotomy. Using rural Ghana as a case study, we assess the asset levels of farm households from a gender perspective. In doing so, we theorized and empirically tested assets on case bases. A household questionnaire survey was used to collect data from two hundred households in the Fanteakwa district of eastern Ghana. An asset index was used to compute the asset levels, while Kruskal–Wallis statistics was employed to compare the significance of the temporal changes. The results show a minimum level of asset endowment. Natural, social and financial assets were the three most endowed assets, with physical and human assets being the least. A gender analysis shows no significant difference, even though the levels of assets for the female-headed households were slightly higher than those of the male-headed households. However, the study found a 22.7% increment in the accumulation of financial assets among the female-headed households over the last 5 years compared to a 9.3% decrement in the same assets for their male-headed counterparts. Applying our theory, the results present an unbalanced and unstable asset situation among the household heads. We call for improvement, in physical and human assets. The overall study results imply an improvement in gender-asset accessibility in the context of rural Ghana.

Financial Development and Economic Growth in Sub-Saharan Africa: A Dynamic Panel Data Analysis

Financial Development is the accumulation of financial assets at a rate that is more rapid than the rate of non-financial assets accumulation. Economic growth is the evolution of gross domestic product (GDP) in the short, medium and long terms. We have attempted in this paper to analyze and to verify empirically the controversy on the relationship between the financial sphere and the real sphere. From the data observed on 21 Sub-Saharan African (SSA) countries and by using the dynamic panel GMM technique, we were able to show that there exists a positive link between financial development and economic growth. This link is intense for the issue of the financial system in the space of Sub-Saharan Africa. However, an outcome highlighting an eventual link between foreign direct investment and economic growth is opportune. Keywords: Real sphere – Financial sphere – Dynamic panel GMM – Sub-Saharan Africa.

Does “Banking the Unbanked” Help Families to Save? Evidence from the United Kingdom

I use an electronic transfer mandate in the UK Child Benefit program, a transfer received by virtually all families with children, to estimate the effect of bank account ownership on the savings behavior of less educated families with children. Compared to similar families without children, the mandate increased account ownership by 9 percentage points (12%) for families with children. Using this exogenous increase in account ownership, I examine the causal effect of transaction account ownership on the accumulation of financial assets. I find evidence of small but significant increases in financial assets for families that transitioned into account ownership. These estimates suggest that a policy to increase bank account ownership may have spillover effects that improve family economic well‐being.

Identifying Drivers for the Accumulation of Household Financial Wealth

Household financial assets and liabilities display considerable variation across countries and over time. This article investigates empirically the role of some of the key Life Cycle Model variables and other relevant factors behind household financial wealth disparities using data from 40 countries over the period 1995-2009. To the author's knowledge, it uses the largest macroeconomic dataset on household financial assets and liabilities assembled to date. The results are in line with the aggregative implications of the Life Cycle Model in that the wealth-to-income ratio decreases with income per capita growth and increases with the expected length of retirement. The study also presents empirical evidence for the role of financial and demographic developments on the accumulation of financial assets and liabilities by the household sector.

The Displacement Effect of Public Pensions on the Accumulation of Financial Assets.

The generosity of public pensions may depress private savings and provide incentives to retire early. While there is plenty of evidence supporting the latter effect, there remains considerable controversy whether public pensions crowd out private savings. This paper uses international micro-datasets collected over recent years to investigate whether public pensions displace private savings. The identification strategy relies not only on cross-country differences in generosity but also on differences in the progressivity or non-linearity of pension formulas across countries. We estimate that an extra dollar of pension wealth depresses accumulated financial assets around the time of retirement by 22 cents. An extra ten thousand dollars in public pension wealth reduces the average retirement age by roughly one month which implies an elasticity of retirement years with respect to pension wealth of -0.15.

CONSUMPTION AND SAVING OVER THE LIFE CYCLE: HOW IMPORTANT ARE CONSUMER DURABLES?

In this paper we investigate whether a standard life-cycle model in which households purchase nondurable consumption and consumer durables and face idiosyncratic income and mortality risk as well as endogenous borrowing constraints can account for two key patterns of consumption and asset holdings over the life cycle. First, consumption expenditures on both durable and nondurable goods are hump-shaped. Second, young households keep very few liquid assets and hold most of their wealth in consumer durables. In our model durables play a dual role: they both provide consumption services and act as collateral for loans. A plausibly parameterized version of the model predicts that the interaction of consumer durables and endogenous borrowing constraints induces durables accumulation early in life and higher consumption of nondurables and accumulation of financial assets later in the life cycle, of an order of magnitude consistent with observed data.

The Displacement Effect of Public Pensions on the Accumulation of Financial Assets

The generosity of public pensions may depress private savings and provide incentives to retire early. While there is plenty of evidence supporting the latter effect, there remains considerable controversy as whether or not public pensions crowd out private savings. This paper uses international micro-datasets collected over recent years to investigate whether public pensions displace private savings. The identification strategy relies on differences in the progressivity or non-linearity of pension formulas across countries. We also make use of large heterogeneity in earnings across education group and country. The evidence we present is consistent with previous studies using cross-sectional and time-series variation in savings and pensions. We estimate that an extra dollar of pension wealth depresses accumulated financial assets at the time of retirement by 23 to 44 cents and that an extra ten thousand dollars in pension wealth reduces the average retirement age by roughly 1 month.

The Effect of Bank Account Ownership on Credit, Consumption, and Savings: Evidence from the United Kingdom

I use an electronic transfer mandate in the UK Child Benefit program, a transfer received by virtually all families with children, to estimate the effect of bank account ownership on the financial behavior of less educated families with children. With the mandate increasing account ownership by as much as 29 percent for less educated families with children, it provides an exogenous increase in account ownership to examine the causal effect of bank account ownership on access to credit, purchase of household durable goods, vehicle ownership, vehicle purchase, and accumulation of financial assets. When a less educated family becomes an owner of a bank account, I find a 71 percentage point increase in the probability of owning a credit card, an increase of 1.4 household durable goods, and no change in vehicle ownership or purchase. Although I find that bank account ownership does not affect the mean level of financial assets, I do find evidence suggestive of an increase in the top half of the financial asset distribution which indicates that there may be heterogeneity in the savings response to owning a bank account. Overall, my findings suggest that the most important benefit of owning a bank account is access to credit and requiring lower income families to own a bank account will not reverse their low average savings levels in the short run.

Exploring the usage and impact of “transformational” mobile financial services: the case of M-PESA in Kenya

Since its introduction in March of 2007, the M-PESA application has grown rapidly, acquiring a user base of over seven million and an agent network of over ten thousand. Because of its rapid growth, the application has received a significant amount of attention. There have been assertions that it can engender transformational benefits by providing the unbanked with new opportunities to access financial services. There is, however, very little discussion of what these transformational benefits are and how they are brought about. This paper will contribute to filling this gap in the literature. It draws on ethnographic fieldwork conducted over fourteen months in two locations – an informal settlement near Nairobi and a farming village in Western Kenya. It will show that the M-PESA application was utilized for the cultivation of livelihood strategies. Such strategies helped residents to cope with (temporarily adjust) and recover from (longer-term shifts in livelihood strategies) stresses and shocks. It will also explain the outcomes resulting from these strategies. In particular, it will show how M-PESA was utilized for the solicitation and accumulation of financial assets and the maintenance of social networks. Attention will also be given to some of the negative outcomes, or unintended consequences, that were generated through usage.

Don’t stop thinking about tomorrow: Individual differences in future self-continuity account for saving

Some people find it more difficult to delay rewards than others. In three experiments, we tested a "future self-continuity" hypothesis that individual differences in the perception of one's present self as continuous with a future self would be associated with measures of saving in the laboratory and everyday life. Higher future self-continuity (assessed by a novel index) predicted reduced discounting of future rewards in a laboratory task, more matches in adjectival descriptions of present and future selves, and greater lifetime accumulation of financial assets (even after controlling for age and education). In addition to demonstrating the reliability and validity of the future self-continuity index, these findings are consistent with the notion that increased future self-continuity might promote saving for the future.

Factors Influencing Housing Equity Withdrawal: Evidence from a Microeconomic Survey*

The increase in housing equity withdrawal and coincident decline in aggregate savings rates in a number of countries in recent years is consistent with the consumption‐smoothing model of housing equity withdrawal. However, there are a variety of other theoretical models that purport to explain why households withdraw and inject equity. To assess the relative importance of these various theories, we use a comprehensive survey of the equity withdrawal and injection decisions of Australian households. We find support for several theories. Life cycle considerations appear to be most important, with older households accounting for the bulk of equity withdrawn. Portfolio rebalancing considerations also appear important, with financial asset accumulation the primary use of withdrawn funds. Consumption‐smoothing motives play an influential role, although primarily for smaller‐value transactions.

Financial Development Following Economic Growth: The Chinese Case

The purpose of this paper is to investigate the relationship between financial development and economic growth based on Chinese experiences during the period of 1979~2000. This study places more emphasis on the causality running from economic growth to financThe purpose of this paper is to investigate the relationship between financial development and economic growth based on Chinese experiences during the period of 1979~2000. This study places more emphasis on the causality running from economic growth to financial development contrary to the mainstream view, which asserts that the well-functioning financial systems exert a large positive impact on economic growth via two channels- capital accumulation and technological innovations. The reverse causality is postulated by considering two factors in developments of the country's financial system. Firstly, this paper argues that the rapid accumulation of financial assets and the remarkable expansion of the financial system during the examined period are due primarily to income rises and changes in industrial structures rather than inefficient financial reforms. Secondly, it is recognized in this study that various financial reform measures undertaken by the state since 1994 are emerged endogenously in response to Chinese financial disorders and macroeconomic imbalances built up during the 1979~93 period. This line of thinking is not following the mainstream view in which financial reforms are regarded as policy variables (or exogenous variables) in promoting economic growth. These two factors imply that the causality may run from economic growth to financial development at least in China.

(Financial Development Following Economic Growth: The Chinese Case)

The purpose of this paper is to investigate the relationship between financial development and economic growth based on Chinese experiences during the period of 1979~2000. This study places more emphasis on the causality running from economic growth to financThe purpose of this paper is to investigate the relationship between financial development and economic growth based on Chinese experiences during the period of 1979~2000. This study places more emphasis on the causality running from economic growth to financial development contrary to the mainstream view, which asserts that the well-functioning financial systems exert a large positive impact on economic growth via two channels- capital accumulation and technological innovations. The reverse causality is postulated by considering two factors in developments of the country's financial system. Firstly, this paper argues that the rapid accumulation of financial assets and the remarkable expansion of the financial system during the examined period are due primarily to income rises and changes in industrial structures rather than inefficient financial reforms. Secondly, it is recognized in this study that various financial reform measures undertaken by the state since 1994 are emerged endogenously in response to Chinese financial disorders and macroeconomic imbalances built up during the 1979~93 period. This line of thinking is not following the mainstream view in which financial reforms are regarded as policy variables (or exogenous variables) in promoting economic growth. These two factors imply that the causality may run from economic growth to financial development at least in China.

The Determinants of the Wealth and Asset Holding in Nineteenth-Century Canada: Evidence from Microdata

Wealth and asset holding in late-nineteenth-century Ontario are examined using a new data set of census-linked probated decedents. Hump-shaped wealth-age profiles are found, supporting the importance of demographic and life cycle forces in late-nineteenth-century financial asset accumulation. With financial asset holding more pronounced in Ontario than Quebec, the implication for Canadian economic development is that the differences in capital formation and industrialization across Ontario and Quebec are partly rooted in saving behavior. The results show that urbanization, occupational status, literacy, the number of children, and region of residence are important determinants of wealth and asset holding.