High Inflation Rates Research Articles

Optimizing treasury management in a high-inflation environment: A strategic framework for U.S. Financial Institutions

There has been a considerable innovative rise in the United States' financial institutions achievable through numerous implementations including treasury management optimization irrespective of the high inflation rate. Treasury management tends to be an important technique viable in managing risks in this world of increasing cyberattacks on financial institutions. To effectively counter this threat, financial institutions must implement a comprehensive risk management technique, among which is the Repo risk management technique. This article, through an extensive literature review, aims to analyze possible means of improving risk management in US financial institutions during high inflation through treasury management optimization strategies. The roles of treasury management were effectively analyzed, and the effects of high inflation in optimizing cash flows through liquidity risk management.

6.X.2. Food Insecurity in Europe: Voices from across Europe

Abstract Food insecurity (FI), “lack of regular access to enough safe and nutritious food for normal growth and development and an active and healthy life”, is a global public health issue. The United Nations (UN) have identified achieving food security as a key Sustainable Development Goal (SDG), where all people should “have access to safe, nutritious, and sufficient food all year round.” However, disasters related to the consequences of changing climates, pandemics, wars, displacement of populations, high inflation rates, changes in social protection systems, and food system changes challenge the achievement of this SDG. FI persists even in high-income countries including Europe. This workshop session will foster a knowledge, research and experience exchange on the situation of individuals / different population groups in the context of FI in different European countries. Starting with a contribution from Austria, the term food poverty is introduced and considered from a food system perspective / from an equity perspective. The second contribution illuminates the relationships between FI, shopping behaviours and social support among food bank users in Germany during the COVID-19 pandemic. The final third contribution comes from the Netherlands and explores the needs and perceptions regarding healthy eating among people at risk of FI. In all three studies, standardized measurement tools were applied to measure FI but recruiting methods and data collection methods varied considerably between and within the studies. The session enhances the knowledge on FI in Europe from different perspectives. Key messages • Food insecurity does exist in Europe: there is a need for regular, consistent monitoring across European countries. • Food insecurity involves more than just access to food; it also considers nutritious and climate-friendly options, addressing the link between climate, health, and equity.

Macroeconomic Determinants of Foreign Direct Investment Inflow in Laos

This study aims to study macroeconomic determinants of foreign direct investment inflow in Lao PDR, which includes macroeconomic variables such as gross domestic product growth rate (GDPGRO), government investment spending (GI), exchange rate (EXR), inflation rate (IFR), interest rate (IR), openness trade (OPTR) and money supply (MS) from 2001-2022. This results found that: The foreign direct investment inflow has 12,298.57 million US dollars on an average per year is equal to 559.03 million US dollars and has an average growth rate of 4.73% per year, for the public expenditure used to investment is increasing every year with an average growth rate of 10.96% per year. The exchange rate of kip per US dollar has an increasing trend but overall there is a growth rate equal to 1 digit only in 2022 there is a growth rate equal to 2 digits which is equal to 45.94%. For the inflation, the growth rate is 6.33% per year, which is the year with the lowest inflation rate is 2017 which is equal to 0.83% and the year with the highest inflation rate is 2022 which is equal to 22.96%, The decreasing trend in which the year with the highest interest rate on US currency loans is 2002 which is equal to 13.5% and the year with the lowest interest rate on US currency loans is 2011 which is equal to 8.15%, the open trade has an increasing trend. The year with the highest increase in 2021 is equal to 77.91% of GDP and the money supply is increasing every year. For the analysis of macroeconomic factors to foreign direct investment, it was found that the economic growth rate of gross domestic product (GDPGRO), public investment expenditure, the exchange rate of kip per US dollar and the money supply have a positive coefficient and reject the null hypothesis with a statistical significance level of 0.01 and 0.05 indicates that it is a doubtful factor for foreign direct investment to increase. Meanwhile, the inflation rate has a negative coefficient and rejects the null hypothesis at a statistical significance level of 0.05, which is a factor that reduces foreign direct investment transfers. For the interest rate in dollars and the open trade, there are accepted null hypothesis, it shows that there is no effect on the transfer of foreign direct investment.

How to make sense of the crisis of the international economic system: the emergence of the Group of Thirty and the debate on inflation (1978–81)

ABSTRACT This article explores the early history of the Group of Thirty (G30, 1978), which is an economic policy body committed to the analysis and spread of policy prescriptions as regards the evolution of the international economic and monetary system after the end of Bretton Woods. In so doing, this work represents the first critical recounting of the G30ʹs early experience from a historiographic perspective. The article frames the organizational roots and the early history of the G30 within the wider economic and political context that marked the transformations of the international system between the late 1970s and the early 1980s. Moreover, this article deals with one of the most challenging policy issues that characterized the international economic policymaking at that time: the spread of high inflation rates. The emergence of sustained inflation trends in Western Europe will receive specific attention. Finally, the article discusses the relevance that social and political concerns acquired in the very conceptualization of anti-inflationary and market-oriented measures, as these were promoted by the G30ʹs affiliates between the late 1970s and the early 1980s.

Non-performing Assets (NPA) Dynamics in Emerging Markets: A Comparison Between India and China

Non-performing assets (NPAs) are a serious concern for banks, and they serve as a key measure of profit. Elevated levels of NPAs suggest a higher chance of credit bankruptcy, which harms banks' profitability and net worth while also reducing the value of their assets. This review provides a thorough investigation of NPAs in emerging countries, with a particular emphasis on a comparative analysis of regulatory methods in India and China. It seeks to clarify the significance of NPAs in emerging market economies by examining their role as indices of financial health, drivers of systemic concerns, and impediments to effective monetary policy. The study elucidates the performance of NPAs in banks in India and China. Additionally, the study identifies the economic, political, institutional, and social factors governing NPAs in these countries. Lastly, the study supports controlling NPAs rather than simply eliminating them, especially considering the higher inflation rates and bank margins found in these countries.

Inflation-threshold effect on current account imbalance in Tunisia: new evidence from a nonlinear approach

PurposeIn this article, we assess the impact of inflation on the current account balance in the case of Tunisia, covering the period 1976–2022.Design/methodology/approachThe study utilizes a threshold regression approach proposed by Hansen (2001) in a bid to identify inflation threshold values.FindingsThe results show two inflation threshold values (3.87% and 8.41%), which determine three inflation regimes in the case of Tunisia. In lower inflation regimes, inflation has a positive and statistically significant impact on the current account balance. However, in higher inflation regimes, where inflation rates exceed 3.87%, there is a negative and statistically significant correlation with the current account balance, resulting in a deficit.Originality/valueThe research suggests the need for a new policy approach that considers these threshold levels to address high inflation rates, which currently stand at approximately 11%, and aims to restore them to the targeted rate of 4%. This necessitates coordinated monetary and fiscal measures.

Fighting recent inflation: An empirical literature review of monetary and governmental policies

Inflation is a crucial issue for businesses and households, central banks and governments, in fact for all economic actors, as it has a strong impact on economic growth and welfare. This literature review captures how monetary policy and governmental policy can control inflation, how their measures work, and which are the key points to consider when conducting these policies, especially in times of crisis. It uses academic papers from the past eight decades, supplemented by publications from financial and economic institutions, but focuses on literature beginning with the 2000s to capture the latest methods and techniques to find out what drives inflation and how. Monetary policy and governmental policy should act together to effectively fight inflation. Monetary policy can have adverse effects on governments’ future tax revenues and debt-to-GDP ratios. Fiscal policy measures should be associated with altered government spending to avoid high inflation rates and/or high debt burdens in the future. Especially during and right after crises, measures have to be evaluated as too long support can fuel inflation in the future. Both parties should also take into account people’s inflation expectations, as these shape their economic behaviour.

Problems and Solutions in the Bond Market of UK

The global economy after the COVID-19 pandemic, continues to face challenges by widespread inflation. In response, central banks globally, including the Bank of England, have started cycles of interest rate raise to control inflationary pressures, directly affecting the bond market by increasing bond interest rates. Under the latest market situation, it is necessary to analysis the potential problems in bond market, to further understand its impacts on economic development and monetary policies. The UK bond market is sensitive to monetary policy, particularly during periods of economic distress. For example, when the Bank of England introduced a sudden reversal in policy from quantitative tightening to urgent bond repurchasing program in September 2022, the bond market has volatile response to changes in fiscal and monetary strategies. There is market segmentation in the UK bond market significantly impacts liquidity, particularly during periods of market stress or financial crises. This segmentation effect caused by investor preferences and maturity structures, results in liquidity differences that increasing funding costs. UK government have large burden of bond interest payments, which are mainly driven by high inflation rates and the bond structure with large proportion of inflation-indexed bonds. To mitigate these problems, it is recommended that the UK government implement transparency policy changes, with clearly identify these problems, adopting the recommend approaches to deal with problems from various aspects.

The Role of Inflation and Foreign Investment on Economic Growth in Banten Province

Inflation and foreign investment have an important impact on economic growth in a province, including Banten Province. Investment can open up extensive employment opportunities. This research method uses a literature review method. Literature review is an important stage in research which aims to collect, analyze and summarize information from various sources relevant to the research topic. The research results show that high inflation can reduce people's purchasing power, so that household consumption can decrease. When inflation is out of control, people will be more careful in spending, which can affect demand for goods and services. High inflation rates can create uncertainty in the market, thereby reducing investors' interest in investing. Conversely, low and stable inflation can encourage greater investment

Association Between Government Expenditures, Inflation and Interest Rate in Nigeria

The study analysed the relationship between government expenditure, economic growth, inflation and interest rate in Nigeria. The high inflation and interest rate with high government expenditure has been a problem for the Nigerian economy. Secondary data from 1986 to 2022 were collated from the Central Bank of Nigeria Statistical Bulletin and analyzed using multiple regression analysis. The results showed a positive relationship between inflation rate, government expenditure and Gross Domestic Product (GDP). This means that as inflation and government expenditure increased, real gross domestic product (GDP) would increase while there existed an inverse relationship between interest rate and gross domestic product (GDP), which implies that as interest rate increased, GDP would decrease. The test for the model fitness using adjusted R2 indicated the predictor values accounted for 95 per cent variations in the dependent variable (GDP). The study therefore recommended that monetary and fiscal authorities should regulate government expenditure by targeting a contractionary fiscal policy which decreases the amount of government expenditure in a bid to tackle inflationary trends. The government should aim at inflation targeting through a single-digit interest rate which could encourage the private sector to accumulate funds to be used to augment government efforts in regulating stability in the economy. Besides, even though the structural inflation facing the country did not have a very significant effect on the domestic economy concerning government expenditure and its impact on GDP, this should be resolved by dismantling all rigidities and bottlenecks such as the war against insecurities and herdsmen that have been distorting farming and agricultural output in Nigeria of late.

Black Market Exchange Rate, Currency Substitution and Demand for Money

Strict control on foreign exchange and successive devaluation of domestic currency adopted by Algerian government for nearly four decades resulted in black market for foreign currencies, high inflation rates and consequently, lost of confidence in Algarian dinar as a unit of account and store of value. The aforementioned results have given rise to the phenomenon of currency substitution.The aim of this paper is to provide evidence of the existence of currency substitution in Algeria. Using time series data covering the period 1990-2021 and an autoregressive distributive lag (ARDL) model combined with CUSUM and CUSUMQ, the demand for money in Algeria is estimated. Our results point out to the existence of currency substitution when the black market exchange rate is incorporated in the money demand equation. Our findings contribute to the existing litterature on currency substitution issue. As far as policy makers are concerned, the existence of CS could hinder the effectiveness of stabilization policies and thus, means of reducing currency substitution should be devoted.

Influence of inflation on the construction sector and economic growth in selected countries: A continental comparison

Whether in developed or developing countries, the construction industry had a vital part to play concerning the GDP throughout the ages. The increasing inflation since the pandemic affected numerous main sectors, no doubt construction industry is not different and has not been immune to. The presence of inflation and resultant interest rate influence the growth of the economic sector. There have been no reported studies to evaluate the impact on construction industry, nor a comparative analysis at continental level for selective countries. The study designed to explore the long-run (LR) and causality (CA) of the inflation and interest rate on the GDP and the construction sector depending on the four selected variables and models from 1991 to 2022 on nine selected countries from Americas, Asia and Europe that are facing ever-rising inflation in most recent years. Data of the study have been collated from official databases, where the sources are introduced. The research concluded that the interest rate and inflation have positive bidirectional long run estimates in seven countries which that impact negatively on the economic growth. However, it is also found that the impact of inflation and interest rate on the GDP and the construction sector differs from country to country. It is shown that the high inflation and interest rate issue can also pushes GDP upwards, not necessarily on real value

Error Correction Model (ECM) For Macroeconomic Factors And LQ45 Stock Price Index

This research aims to test the causal effects of the inflation rate empirically, the Rupiah exchange rate against the United States Dollar, and world crude oil prices on the LQ45 stock price index. In its testing, this research uses the Error Correction Model (ECM) and uses data every month from 2000 to 2022. The research results show that the inflation rate, exchange rate and world gold prices significantly affect the LQ45 stock price index. Furthermore, the inflation rate and exchange rate have a negative influence on the LQ45 index. Not optimal company growth due to high inflation and exchange rates will affect public market share demand, thereby reducing share prices. Then, world crude oil prices positively influenced the LQ45 index. These results support previous research findings that changes in world crude oil prices positively affect stock market prices in developing countries.

Analysis of factors affecting inflation in Vietnam during the COVID-19 pandemic

During the COVID-19 pandemic, countries have faced various economic repercussions, including high inflation rates. By employing the autoregressive distributed lag approach and autoregressive distributed lag bounds test, this study aims to estimate the impact of macroeconomic factors and the factors related to COVID-19 on inflation in Vietnam from 2020 to 2022. The results show that both in the short and long term, factors such as FDI, short-term interbank interest rates, oil price index, real exchange rate, and import prices increase the inflation rate. By contrast, freight and carriage reduce inflation. Although the industrial production index has a negative impact in the short run, this impact is insignificant in the long term. The number of deaths, on the other hand, only has a positive impact on inflation in the long run. The findings of this study provide a foundation for future research seeking to expand the scope of factors influencing inflation. Additionally, this paper proposes recommendations to control inflation in Vietnam in the context of resuming economic activities after the pandemic.

Trade Wars, Nominal Rigidities, and Monetary Policy

Abstract This paper shows that the outcome of trade wars for tariffs and welfare will be affected by the monetary policy regime. The key message is that trade policy interacts with monetary policy in a way that magnifies the welfare costs of discretionary monetary policy in an international setting. If countries follow monetary policies of flexible inflation targeting, trade wars are relatively mild, with low equilibrium tariffs and small welfare costs. Discretionary monetary policies imply much higher tariffs, high inflation rates, and substantially larger welfare costs. We quantify the effects of a global trade war among major economies using estimates of trade elasticities, economic size, net foreign assets, and trade openness. We find large welfare benefits of an inflation targeting monetary policy for all countries.

THE EFFECT OF INFLATION, MINIMUM WAGE, LABOR ABSORPTION AND THE COVID-19 PANDEMIC ON POVERTY IN INDONESIA

Poverty is still the most important problem in Indonesia, especially in urban areas. The problem of urban poverty is long-term, making it difficult to overcome until now. The increase in urban poverty is often characterized by underdevelopment and backwardness, low productivity and low income received, and the ability and opportunity to develop themselves and improve their welfare. The Covid-19 pandemic also has an impact not only on health but also on urban poverty. There are several factors that cause urban poverty such as high inflation rates, low wages, low employment and Covid-19 Pandemic. The purpose of this study is to determine the effect of Inflation, Minimum Wage, Labor Absorption, and The Covid-19 Pandemic on Urban Poverty in Indonesia. This research uses quantitative methods with multiple linear regression analysis techniques and the Generalized Least Square (GLS) model. This research uses secondary data and the Covid-19 pandemic is categorized as a dummy variable. The results of this study show that inflation has no significant effect on urban poverty. Minimum wage and labor absorption have a negative and significant effect on urban poverty. Meanwhile, the Covid-19 pandemic has a positive and significant effect on urban poverty.

A HOLISTIC EVALUATION OF MANAGEMENT GRADUATES' DETERMINATION TO BECOME ENTREPRENEURS IN TODAY'S BUSINESS ENVIRONMENT

India has a higher rate of unemployment due to its large population, high inflation rate, and a lack of entrepreneurs. There are more job searchers than job creators. More job creators are needed in India. This dynamic business climate is providing new opportunities and sectors. Because of the pandemic Covid-19, massive technological intervention in every area resulted in new business patterns. We, too, have many sources of funding for an entrepreneurial venture. Even the government intends to promote fresh inventive ideas, incubation centers, and start-ups. The most significant barriers are a lack of understanding about funding options and central government entrepreneurial efforts. Even young people must come up with business concepts in order to launch their own ventures. They must develop their self-employment skills. This study is an attempt to examine the students' perceptions and degree of interest in pursuing entrepreneurship as a career. Various aspects, such as their demographics and employment aspirations, were considered for the study. This study included around 200 students from different education levels.

Mitigating the African Economic Crisis Through Financial Inclusion

This study sought to examine the challenges facing the African economy and financial inclusion. The paper undertakes a comprehensive exploration of the African economic landscape, navigating through historical intricacies, structural challenges, and global influences. Grounded in a quantitative methodology, the study adopted the survey method to systematically unravel the multifaceted dimensions of the economic crisis and financial inclusion in Africa. The study was anchored on both Monetarist and Keynesian models. A sample size of 350 participants was studied, using a purposive sampling technique. The study discovered that cultural, technological, and regulatory limits all significantly contribute to the economic crisis, which is evidenced by the high rate of currency devaluation in Africa, high rates of inflation in the price of goods, and economic downturns. Thus, the paper recommends that fin-tech companies, appropriate technology applications, and advancements in online payments could potentially save this predicament. The paper further recommends that the government should enact regulatory changes that lower entrance barriers for financial institutions, support innovation, and safeguard consumers to advance financial inclusion.

Inflation – Causes and Measures. Inflation in Romania

Abstract The causes of global inflation developments are the central subject of political debates, after in 2022 it became a global phenomenon, remaining above the average of the pre-pandemic period. According to the World Bank, there is a wide range of shocks to global supply and demand, oil prices and global interest rates that together drive global inflation. According to the International Monetary Fund, the global recovery is becoming increasingly sluggish and with growing regional divergences, with a future downward trend in global growth below the historical average of the period 2000-2019. Moreover, it is estimated that inflation will subside in the next period, but without reaching the estimated target for 2025. However, Romania has the highest inflation rate in the EU, increasing double the average of the EU countries. There are views that monetary policy, more rigor in fiscal consolidation and lower international commodity prices can control inflation and rein in debt growth. But what measures have been adopted in this regard and why does Romania have a different evolutionary trajectory?

Is Indirect Taxes Bad for the Poor? Examining the Determinants of Poverty in Pakistan

This study investigates the determinants of poverty in Pakistan from 1985 to 2023, focusing on unemployment, inflation, indirect taxes, secondary school enrollment, and total population as key variables. Employing the Augmented Dickey-Fuller unit root test, the analysis finds that while many variables exhibit non-stationary behavior at levels, they become stationary at first difference, ensuring the reliability of time series analysis. The ARDL Bounds Analysis confirms the significant relationship between poverty and its predictors, indicating that changes in these variables markedly impact poverty levels. The estimated long-run and short-run results highlight the significant roles of inflation, secondary school enrollment, total population, and unemployment in influencing poverty, with diagnostic tests affirming the model's robustness. The study underscores the positive relationship between secondary school enrollment and poverty reduction, advocating for increased investment in education. The analysis reveals that indirect taxes do not significantly impact poverty levels, yet suggests a review of the tax structure to ensure it does not disproportionately burden low-income households. A progressive tax system could aid in wealth redistribution and support poverty reduction efforts. The positive correlation between total population and poverty levels indicates that rapid population growth strains resources and infrastructure, highlighting the need for effective population management strategies, including family planning programs and investments in healthcare and education. Unemployment's significant impact on poverty calls for targeted interventions to create job opportunities. Policymakers should promote economic diversification, support SMEs, and implement active labor market policies such as job training and placement programs. While higher inflation rates are associated with lower poverty levels in this analysis, maintaining inflation within a manageable range is crucial to avoid eroding purchasing power and harming economic stability. The study advocates for continuous and comprehensive data collection to enable timely and evidence-based interventions, enhancing the effectiveness of poverty reduction strategies. Prioritizing inclusive economic growth, fostering an environment conducive to investment, innovation, and entrepreneurship can create jobs and reduce poverty, ultimately supporting sustainable socio-economic development.