Income Fluctuations Research Articles

The Micro Anatomy of Macro Consumption Adjustments

We study crises characterized by large adjustments of aggregate consumption through their microlevel patterns. We document the cross-sectional patterns of consumption adjustment across the income distribution and find large adjustments for top-income households, who exhibit consumption-income elasticities similar to or larger than the average. We construct a heterogeneous-agent open economy model of consumption under income fluctuations and show that the data patterns are largely consistent with theories that attribute the dynamics of aggregate consumption to changes in aggregate permanent income. We also discuss our findings’ implications for theories based on the tightening of households’ borrowing constraints and analyze policy implications. (JEL D31, E21, E32, F33, G51, O11, O12)

The Role of Tauke in Fluctuations in Areca Farmers' Income According to an Islamic Economic Perspective

The Role of Tauke in Fluctuations in Areca Farmers' Income According to an Islamic Economic Perspective

Profitability Ratio Analysis to Measure Financial Performance at PT. Bank Sulselbar Makassar Main Branch

Financial performance plays an important role as a description of the company's ability to manage existing resources. Profitability ratios can be used as a tool to measure the company's financial performance in determining the company's efficiency in managing assets to obtain the maximum level of profit. This study aims to determine the financial performance of PT Bank Sulselbar Makassar Main Branch in the 2018-2022 period. The variables of this study are profitability ratios and financial performance. The population and sample of this study were financial statements in the form of balance sheets and profit and loss from PT Bank Sulselbar Makassar Main Branch in 2018-2022. Data collection was carried out using documentation techniques. Data analysis was carried out using profitability ratios with the two pont system approach. The results of this study indicate that the ROA ratio level of PT Bank Sulselbar Makassar Main Branch for the period 2018-2022 is classified as very healthy and the ROE ratio level of PT Bank Sulselbar Makassar Main Branch for the period 2018-2022 is classified as healthy. This is influenced by fluctuations in net income.

Wealth heterogeneity in a closed pooled annuity fund

The stability of income payments in a pooled annuity fund is studied. In those funds, members receive a fluctuating income depending on their experienced mortality in exchange for their pension savings. The focus is on describing the influence of different initial savings on the ability of the fund to provide a stable income in retirement. Because of this, members coincide in their characteristics except for their initial savings. We identify a term, which we dub ‘implied number of homogeneous members’, that directly links the initial savings to the size of the income fluctuations. Our main contribution is the analysis of this term and the development of a criterion to answer the question of whether or not a given group of same-aged people should pool their funds together.

Inefficient international risk-sharing

Complete financial markets are widely believed to be beneficial for the international economy, since they enable cross-country risk-sharing. Using a two-country New Keynesian model, we show that this is not the case if the source of income fluctuations is a country-specific markup shock. When preferences involve the wealth effect on labor supply and imply that Home and Foreign goods are Edgeworth substitutes, the absence of risk-sharing in autarky acts like a favorable markup shock, reducing the variability of relative inflation and output gaps created by the shock. Thus, welfare can be higher under autarky than under complete financial markets, indicating that international risk-sharing can be undesirable. However, if the wealth effect on labor supply is absent or Home and Foreign goods are Edgeworth complements, welfare reversals do not occur.

RESOURCE POTENTIAL OF COMMERCIAL BANKS AS AN INDICATOR OF FINANCIAL STABILITY AND RELIABILITY OF THE BANKING INDUSTRY IN THE CONTEXT OF EXTERNAL IMBALANCES

An effective system of managing the bank’s resource potential is one of the main conditions for stable functioning and ensuring competitive advantages in the market of banking services. The size and structure of the bank’s resource potential are influenced by factors of the market environment, which are manifested as economic, political, legal, social, technological opportunities and threats to the development of the bank. It is obvious that due to changes in the regulation of banking activity, changes in macro- and microeconomic dynamics, fluctuations in the money market situation, structural fluctuations in corporate and personal incomes, etc., the resource base for the formation of commercial banks is not stable. The paper examines and characterizes the economic essence and necessity of managing the resource potential of a commercial bank. The composition and structure of the resources of banking institutions by groups of state banks, banks of foreign banking groups and banks with private capital was analyzed, the effectiveness of resource portfolio management before the start of a full-scale Russian invasion and in war conditions was evaluated. The main methods of research were: the method of theoretical generalizations, the method of analysis, the tabular and graphical method, the method of comparison, abstract-logical methods. The theoretical and practical results of the research consist in developing recommendations for improving the efficiency of the commercial bank’s resource management in conditions of global imbalances, uncertainty and a full-scale Russian invasion of the territory of Ukraine. The issue of formation and effective management of the resource potential of banking institutions remains relevant, optimization of the structure and selection of the resource portfolio management strategy is especially in demand in the modern conditions of scarcity of bank resources. The stability and further growth of the investment activity of commercial banks depends on the growth and strengthening of the resource potential, and currently – the support of stable work during the war period.

Effect of Chinese Currency Appreciation on Investments in Renewable Energy Projects in Countries along the Belt and Road

Foreign investment in renewable energy generation projects is a critical part of the Belt and Road Initiative. Under the background of the market economy, the electric energy will participate in power market competition among the countries along the line, and the sales revenue will be settled in the local currency. The exchange rate of the countries along the Belt and Road fluctuates frequently and widely, thereby posing significant risks to the investment income of the projects. To address this problem, this paper proposes the concept of Ek as the effective exchange rate expressed by the on-grid price, investment cost per kilowatt electricity generation equipment, and annual operating cost rate of unit power generation capacity. Moreover, this paper presents a model of power generation cost, income, and earning expressed by the real exchange rate. The flexibility formula of the fluctuation of power generation cost, income, profit, and internal rate of return relative(IRR) to Ek is derived, and the effect of exchange rate level and fluctuation on projects is analyzed. With the wind power projects invested by China in Pakistan taken as an example, the trend during the entire life cycle is calculated. The changes in net profit rate, IRR, and levelized cost of energy (LCOE) are calculated under Chinese currency appreciation of 10%, 20%, and 35% and 5% and 10% reduction of investment cost per unit. As the Chinese currency appreciates and the project IRR declines significantly, LCOE decreases slightly, but this decrease is not sufficient to compensate for the losses caused by the decline in IRR. The following effective measures are proposed to deal with the exchange rate fluctuation of foreign renewable energy generation projects: building energy Internet, reducing project cost, and using Chinese currency as the settlement currency. In this paper, a solution is provided for investments in renewable energy projects in regions where exchange rates fluctuate greatly.

The evolution of consumption inequality and risk-insurance in Chile

Using micro survey data, I show that income and consumption inequality fell substantially in Chile since 1987. Consumption inequality between and within groups fell substantially over the last 35 years, especially for within groups. During this period, households' use of financial services increased substantially. Estimating a standard consumption model, the results reject both the autarky and the full risk sharing frameworks. It is found that for services and non-durable goods, consumption is almost half-way between autarky and full risk-sharing. However, purchases of Semi-Durables, Durables, Medical, Insurance, and other financial products are strongly affected by income fluctuations.

Association between early income variation around poverty thresholds, income trajectories, and birth, child, and family characteristics

Poverty is experienced by about 15% of children under the age of six in the United States at any given time and over 40% of children at least once prior to kindergarten entry. Given that many families experience dips in and out of poverty prior to school entry, increasing research focuses on early household economic conditions and family income instability among such families. Using Early Childhood Longitudinal Study-Birth Cohort data (2001–2007) sampling children in poor and moderate income families and two relevant theoretical frameworks, the present study investigated (a) the extent to which income varies around the official poverty threshold (as well as other relevant thresholds used to determine social safety net program eligibility) in a subsample of low-to-moderate income families, and (b) the early, time-variant factors associated with membership in specific birth to kindergarten income trajectories as well as fluctuations around well-used income thresholds in a subsample of low-to-moderate income families. Sixty-seven percent of children in the study were classified in the stable low income trajectory, and findings suggest the majority of these children oscillated above and below 100% Federal Poverty Level (FPL) at various times throughout early childhood (55%). Results also suggest birth, child, and family characteristics such as changes in maternal depression, maternal work status, and household composition differentiate income trajectory class membership and are associated with income fluctuation around 100% FPL and 130% FPL. Findings are discussed in the context of current dialogue about the nature of family poverty over time, and the limitations of social policy responses that attend to family needs at one point-in-time without consideration of trajectories and the consequences of cyclical poverty for children and their families.

Типология сельскохозяйственных организаций как субъектов сельской локальной экономики

Agricultural organizations act as key agricultural producers. They account for more than half of the value of agricultural products produced in 2021. Consequently, in the process of analyzing the rural local economy, typologization of agricultural organizations is also necessary. The value of imputed income acts as an indicator by which the ranking of agricultural organizations is carried out. The typologization is based on the method of ranking by multiply increasing intervals of fluctuations in imputed income, since in this case it is possible to obtain a distribution of agricultural organizations close to normal. Within the framework of this study, we have obtained three typological groups of agricultural organizations: farms with low, medium and high income.

Past, present, and future of the application of machine learning in cryptocurrency research

Cryptocurrency has captured the interest of financial scholars and become a major research topic in blockchain. In cryptocurrency research, the use of machine learning algorithms is enabled by the presence of many types of data and abundant resources. However, there is currently no comprehensive review on cryptocurrencies using machine learning. Therefore, we collect papers on cryptocurrency-related using machine learning in the web of science database, and summarize these papers according to the algorithm, and draw the following conclusions: (1) The application of machine learning for cryptocurrencies research is increasing year over year; (2) Predicting cryptocurrency price trends and income fluctuations is the most relevant research topic; (3) The machine learning algorithm utilized in cryptocurrency research is not unique, and the practise of combining multiple machine learning approaches has emerged; (4) Concerns such as overfitting and interpretability still persist with machine learning methods. Finally, we suggest future research directions.

Assessment of Production and Utilization Practices of Orange-Fleshed Sweet Potatoes (Ipomoea Batatas L.) in Sidama Region, Ethiopia

Sweet potato (Ipomoea batatas L.) is an important crop which ensures food security in developing countries. It can be harvested at any stage as needed, thereby providing a flexible source of food and income for rural families that are most vulnerable to crop failures and cash income fluctuations. The production and consumption of orange-fleshed sweet potatoes (OFSP) by smallholder farmers in the Sidama region of Southern Ethiopia were explored in this study to identify key problems and opportunities in OFSP production. A preliminary investigation and rudimentary data collection were used to gather data. The data were analyzed using descriptive statistics, multiple linear regression, and index grading. Based on the descriptive analysis, smallholder farmers have small landholdings of 0.51 ha per family. Farmers conserve their planting materials by leaving them in the field. This causes the materials to be extensively infested with diseases, insects, and other vertebrate pests. Farmers (54.4%) do not apply inorganic fertilizersassuming that it stimulates more vegetative growth and results in tasteless storage roots. The continuous cultivation of OFSP without fertilizer application results in nutrient depletion and reduced yield. Further, the production and utilization of OFSP in the Sidama region is constrained by factors such as diseases, lack of storage facilities, lack of planting materials, drought, insect pests, low market price, and shortage of money to purchase inputs. According to the index ranking, drought, shortage of planting material, diseases, and insect pests were the most important. Combinations of social, ecological, and economic factors limit the production of sweet potatoes and therefore, a stronger extension system on agronomic practices and credit system should be made accessible to the farmers.

The Effect of Monetary Policy on Consumption Inequality: An Analysis of Transmission Channels through TANK Models

AbstractWhat transmission channels drive the effect of monetary policy on consumption inequality? This paper investigates this question with tractable Two‐Agent New Keynesian models with search‐and‐matching frictions and wage rigidities. I make a distinction between credit‐constrained households and unconstrained households and find that an expansionary monetary policy shock decreases consumption inequality between those two households through three channels: (i) the income composition channel, through fluctuations in labor and profit income; (ii) the savings redistribution channel, through fluctuations in real interest rate; and (iii) the earnings heterogeneity channel, through fluctuations in unemployment. The results are in line with the empirical evidence.

The Gendered Impacts of Income Fluctuations on Household Departure, Labor Supply, and Human Capital Decisions: Evidence from Kyrgyzstan

How do fluctuations in income affect labor supply decisions, and how do their effects differ by gender? This study analyzes data from a thirteen-year rolling panel in Kyrgyzstan spanning 2004–16. It addresses the endogeneity of fluctuations in income to labor supply decisions by employing shift share instruments that exploit region-level changes over time in growth rates of different sources of revenue and production costs. Estimating a household fixed effects model, the study finds that reductions in income relative to the median spur departure from the household (for example, due to migration), with smaller impacts on women than men. However, women’s labor supply at the origin is affected significantly more, with short-term increases in hours of employment and declines in home production and other activities. Reductions in income also fuel temporary migration for both genders, with larger effects for men, and widen the gender gap in pursuit of non-compulsory education. HIGHLIGHTS Declines in income spur household departure, with larger impacts on men than women. Women are not always “left behind” following shocks; like men, they respond through changes in labor supply and livelihood decisions. At the origin, women face significantly greater increases in workloads than do men. Declines in income widen the gender gap in pursuit of non-compulsory education, favoring men. Policies that support women’s ability to control income can promote domestic work sharing and ensure income generation empowers women.

Disruption to vegetable food systems during the COVID-19 pandemic in the Lao People's Democratic Republic.

Globally, the COVID‐19 (SARSCoV‐2) pandemic has affected human health and the flow of goods and services in many sectors, with significant social and economic consequences and repercussions. COVID‐19 lockdowns have disrupted food systems; impacting farmers, food producers, traders and consumers. Using a food system approach, disruptions to and the resilience of vegetable food production and trade was analysed. Representatives of traditional farming systems in Lao PDR producing and trading vegetables were involved. Over 350 farmers, 60 wholesalers, 50 retailers and 70 consumers were surveyed to determine the disruptions to vegetable supplies in terms of quantities traded, prices and income fluctuations. Findings revealed significant impacts on trading capacity and consequent reductions in incomes, prices, purchases, transport and sales of produce. However, livelihoods resumed as soon as the lockdown lifted. Traditionally, vegetable production and trading are a woman's tasks and hence women were the most affected by the disruptions. With trading contractions, the stability of the food supply was threatened, but only temporarily, indicating that a traditional, resilient farming system based on lower population densities, lower input requirements and lower productivity could adapt to novel disruptions in the short term.

Economic insecurity and mental health; depression and suicidal ideation of the middle-aged and older adults in Korea

Objectives: In this research, the effect of economic insecurity on the mental health of Koreans aged between 45 and 79 was investigated. The multi-layered characteristics of economic insecurity were measured by 7 indicators: income volatility (A/B), economic difficulty, low-income period, subjective minimum living expenses, economic satisfaction, and economic anxiety/conflict.<BR>Methods: A total of 4,167 men and women were analyzed from the third to the tenth wave of KoWEPS. The effect of economic insecurity indicators on mental health is investigated, controlling the effect of sociodemographic variables. A multi-level panel model was used in consideration for the factors at the time, individual, and household levels.<BR>Results: Most indicators for economic insecurity had a statistically significant effect on depression and suicidal ideation. Specifically, drastic income fluctuations compared to the previous year (income volatility A), the experience of economic difficulties, and both emotional indicators (economic satisfaction, and economic anxiety/conflict) were associated with depression and suicidal ideation. On the other hand, income variance for certain years (income volatility B) had no statistically significant relationship with both mental states in multivariate analysis. Low-income period years and subjective minimum cost of living per month had a significant relationship with only depression.<BR>Conclusion: The results suggest that not only low income itself but also negative economic conditions, perception, and emotional feelings about one’s economic status have an impact on depression and suicidal ideation.

Life-course income trajectories of men and women in Norway: implications for self-rated health in later life.

BackgroundSocioeconomic inequalities in health are well-established, but studies addressing lagged effects of income or of fluctuations in income over the life course are relatively rare. The current study aims to (i) identify and describe life-course income trajectories for men and women who are currently in later life; and (ii) assess the association of income trajectories with self-rated health in older adults.MethodsThe study sample consisted of 1625 men and 1634 women born between 1937 and 1955 who participated in the third wave of the Norwegian Life course, Ageing and Generation Study. Latent class growth analyses were used to estimate dominant income trajectories from ages 30 through 62 in men and women. Stepwise logistic regression analyses were specified to analyze the association of income trajectories with self-rated health in later life.ResultsFour trajectories in women and three trajectories in men were estimated as dominant patterns of income over the life course. Differences in the level of income were considerable at age 30 and accumulated over time. Continued exposure to low income showed statistically significant higher odds for poor self-rated health in older men and women. This association remained significant after taking differences in educational attainment, working life, family formation and accumulated wealth into account.ConclusionThe findings suggested remarkable rigidity in income groups that had formed by age 30. A significant share of men and women remain mired in relatively low-income status across the life course with negative implications for health in later life.

Understanding Rising Concentration at the Extremes of the U.S. Income Distribution

We explore the importance of income fluctuations at the top of the U.S. income distribution in understanding rising income concentration. Very high income families—including the top .001 percent—account for much of the recent top income growth, but are under-studied even in the literature exploring high-income groups. Using 3-year panels of tax records from 1997 to 2013 we document that top-income shares are lower—typically by about 20 percent—when measured by using a three-year income average, and that cyclical income fluctuations are greatest at the very top of the income distribution. Trends toward rising concentration over time, however, cannot be explained by these fluctuations, as growth in top-income shares is comparable for annual and three-year average income, and measured income dispersion has increased only for the very top group. Further, the probability of remaining in the highest income groups over multiple years increased over the sample period.

Applications of Markov chain approximation methods to optimal control problems in economics

In this paper we explore some benefits of using the finite-state Markov chain approximation (MCA) method of Kushner and Dupuis (2001) to solve continuous-time optimal control problems in economics. We first show that the implicit finite-difference scheme of Achdou et al. (2022) amounts to a limiting form of the MCA method for a certain choice of approximating chains and policy function iteration for the resulting system of equations. We then illustrate that relative to the implicit finite-difference approach, using variations of modified policy function iteration to solve income fluctuation problems both with and without discrete choices can lead to an increase in the speed of convergence of more than an order of magnitude. Finally, we provide several consistent chain constructions for stationary portfolio problems with correlated state variables, and illustrate the flexibility of the MCA approach by using it to construct and compare two simple solution methods for a general equilibrium model with financial frictions.

Pengaruh Ukuran Perusahaan, Financial Leverage dan Kualitas Audit Terhadap Perataan Laba (Income Smoothing) Pada Perusahaan Manufaktur Sektor Industri Barang Konsumsi Tahun 2017-2020

Earnings information is paramount for investors because they can provide an overview of how dividends will be paid when investing their capital. Income smoothing is the practice of profit manipulation to reduce fluctuations in net income over a period of time. This study aims to determine how company size, financial leverage and audit quality affect earnings smoothing in manufacturing companies listed on the Indonesian Stock Exchange over the period 2017-2020. Targeted sampling is used as the sampling method, sample companies based on criteria was 31 companies with an observation period of 4 years, 2017 to 2020, so that 124 research samples were obtained. Eckel index measuring income smoothing using the technique of logistic regression analysis. Theory of eckel is used to calculate income smoothing. Hypothesis testing with logistic regression analysis. Research resultshow that company size, financial leverage and audit quality all have an impact on income smoothing. Firm size has no significant positive effect on income smoothing, financial leverage as measured by debt to equity ratio has no significant negative effect on income smoothing, while audit quality has a significant and negative effect on income smoothing.