Inflation Research Articles

The effect of ingtangible assets on the firm value: The case of construction companies listed on the stock market of Vietnam

This study examines the impact of intangible assets on the firm value of the construction industry listed on the Vietnam stock market with panel data of 71 companies from 2011 to 2020. The paper uses estimation methods, such as Pooled Least Squares (Pooled OLS), fixed effects model (FEM), and random effects model (REM) but in the end, the article uses FEM robust after performing the tests, such as: F test, Lagrange multiplier test, Hausman test, multicollinearity, homoscedasticity as well as autocorrelation.. The research results show that: Tangible assets (IA), debt-to-asset ratio (DAR), inflation (INFL), the exchange rate (USDRATE) have a negative impact on firm value with high reliability, represented by two criteria: Tobin's Q; P/B but variables: GDP growth (GDPGR); unemployment rate (UNEMP), stock market index (VNINDEX) give opposite results. Besides, the research results also show that: There is no scientific evidence on the impact of firm size (SIZE), liquidity (CR), revenue growth (SGR), and return on assets (ROA) on firm value. This research result is the basis for the article to make policy implications increasing firm value.

On the sustainable economy development of some European Countries

A new method to investigate the equilibrium state of an economy is proposed. The classification of the equilibrium states is given. The basic principle of equilibrium the economy to its environment is formulated. It is used to obtain the money circulation equation. On this basis the notion of the sustainable economic development is defined. The analysis of the economy of three European contries is given. The principle of adequacy of currency exchange and inflation rates to the determining factors is proposed.

Do pandemic COVID 19 and business cycle influence the Indonesia composite index?

The impact of the Covid 19 pandemic on the Indonesian economy was worse than the impact of the global financial crisis in 2008. We can see the business cycle from the contraction of economic growth, volatility of the exchange rate, and inflation. The shocks to these business cycles could create systemic risks and influence financial system stability. Financial system stability is more sensitive to shocks from changes in one of the macroprudential indicators, namely the Indonesia Composite Index (ICI). This study will examine the effect of the Covid 19 pandemic and the business cycle on ICI. This research was conducted in Indonesia using quarterly secondary data from 2008-2021. The data was obtained from Bank Indonesia. The model used is the Auto Regressive Distributed Lag (ARDL) model. The purpose of using this model is to see the long-term and short-term relationships between the variables studied. The results show that the Covid 19 pandemic and business cycle variables such as; economic growth, exchange rate, and inflation have a relationship on the ICI both in the short and long term. The decline in economic growth during a crisis is difficult to avoid. However, the government must continue to accelerate the economic growth so it does not decline sharply during the crisis. Monetary authorities must also maintain exchange rate stability and inflation so it does not fluctuate unsteadily.

An Econometrics Analysis of the Impact Exchange Rate on Economic Growth of Nigeria

The study interrogates the impact of exchange rate on the economic growth of Nigeria from 1981 to 2020 using quarterly time-series data from the Central Bank of Nigeria and the World Bank National Account. The dependent variable in the model was Real Gross Domestic Product (RGDP), and the independent variables were Exchange Rate (EXCHR), inflation (INFL), Interest Rate (INTR), Foreign Direct Investment (FDI), Broad Money Supply (M2) and Current Account Balance of Payment (CAB). The methodology employed was the Auto-Regressive Distributed Lag (ARDL) model which incorporates the Cointegration Bond test and Error-Correction Mechanism. The finding indicates that in the short run, EXCHR, CAB, M2 and FDI, had a positive impact on economic growth. The impact of EXCHR and CAB were significant on growth while that of M2 and FDI were insignificant to growth. However, INTR and INFL had a negative impact on economic growth with both variables being statistically significant. The bound test showed that there was a long-run relationship among the study variables, and the results from the long run reveal that the exchange rate has a positive and significant impact on economic growth. Inflation, Interest rate, FDI, Current Account Balance of Payment (CAB) and Broad Money Supply all have a positive and significant impact on economic growth. Based on the findings the study recommended that monetary authority should strictly monitor the operations of banks and other forex dealers with a view of ensuring unethical practices are adequately sanctioned to serve as a deterrent to others.

Economic Growth, Inflation, and Regional Minimum Wage: An Empirical Investigation of the Open Unemployment Rate in Sumatera, Indonesia

The purpose of this study is to investigate the determinants of the open unemployment rate in Sumatera island – Indonesia. We conjecture that the variation of the open unemployment rate (OUR) is the function of economic growth (EG), inflation (INF), and regional minimum wage (RMW). Using the sample of ten provinces in Sumatera island from 2006 to 2018, we further perform a panel data analysis with a random effect model (REM). The obtained empirical results show that there is a negative association between the independent variables (i.e., EG, RMW) and the dependent variable (OUR), while INF does not show any significant association with OUR. Referring to the empirical evidence, we infer that economic growth and regional minimum wage play an essential role in explaining the variation of the open unemployment rate in Sumatera island..

The Impact of Equity Capital on the Bank’s Profitability: Evidence From Vietnam’s Banking System

From 2008 to 2019, this research examines the effect of equity capital on the profitability of 24 Vietnamese commercial banks. The research findings indicate that, when ROAA and ROAE are used to measure the bank's profit, the equity capital ratio (CAP) has a statistically significant positive effect on the ROAA while having a negative effect on the ROAE. Between 2013 and 2019, the CAP variable has a positive effect on the ROAA and ROAE, indicating that banks with a larger equity capital ratio achieved higher profitability. Furthermore, the deposits-to-assets ratio (DTA) and loan-loss reserves ratio (LLR) both have a negative effect on both proxies for bank profitability, although bank size (SIZE) has a negligible effect on bank profits in the majority of circumstances. Additionally, the rate of GDP growth and inflation (INF) have a beneficial effect on the bank's profitability. The study's objective is to present some critical policy implications for bank executives about the importance of adequate equity capital for the bank's sustainability development.

Optimization of macroeconomic policy and stabilization of cyclical economic dynamics

This paper demonstrates that, despite the current mandate of monetary policy, its final goal (at least for central banks of developed countries) is the control of three main macroeconomic variables — economic growth, employment and inflation, — regardless on actual mandate for this policy. However, the priorities of realization of the final goal may face the imperfection of macroeconomic models and rules of monetary policy, which will make it impossible to control all three macroeconomic variables at the same time. The article proposes a new instrument for monetary policy — aggregate cumulative market imperfection — to optimize macroeconomic variables and stabilize cyclical economic dynamics. The author demonstrates the main competitive advantages of this instrument of monetary policy as compared with typical models of macroeconomic dynamics and simple rules of monetary policy (Simons, Friedman, and Taylor rules). In particular, this instrument is valid for any combination of market conditions, for any economy and for any moment of real time. It can be used simultaneously as: 1) a target of monetary policy; 2) a simple rule of monetary policy correction in the short-run; 3) a reaction function to evaluate a backward connection between the regulator’s actions and the effect of these actions on current economic situation; and 4) an instrument to stabilize cyclical economic dynamics; 5) an instrument to forecast starting (ending) point of recessions and shift in macroeconomic trends. If we can hold the aggregate cumulative market imperfection within a given optimal interval with the help of government regulations (i.e. to target this indicator only) using all possible instruments both of monetary, and (if necessary) of other kinds of regulation policy, we will be able to optimize all three main macroeconomic variables. Optimality of these variables means providing maximum economic growth and employment under comfortable inflation for any combination of market conditions and for any moment of calendar time, which will at the same time stabilize cyclical economic dynamics. In doing so, we will not target each of these three variables separately, that is, it is practically impossible to determine quantitatively their optimal values as they change permanently over time together with the constant change of current combination of market conditions.

Стратегії повсякденного виживання української еміграції у міжвоєнній Чехословаччині (1918– 1939 рр.)

The purpose of the study is to show the assessment of Ukrainian politicians in the interwar Czechoslovak Republic in the 1920s and 1930s of their departure abroad through the prism of everyday life. The research methodology is based on the principles of a specifi chistorical approach, problem chronological, objectivity, comprehensiveness, and integrity, as well as the use of methods of analysis and synthesis. Th e scientifi c novelty is to refl ect everyday life of Ukrainian emigration. Conclusions. The assessment of Ukrainian political exiles of their departure abroad and the expediency of their stay in the interwar Czechoslovak Republic at the level of everyday practices, in fact, depended on foreign and domestic political and economic factors. If in 1918–1921 attention to going abroad and the expediency of staying abroad was minimal, starting from 1921–1925, provided a combination of “the concept of rapid return”, “Russian aid action”, “golden years of the Czechoslovak crown” and the results of scientifi c and tech nological progress, the stay abroad of Ukrainian immigrants was assessed quite optimistically and eff ectively. Changes in emigration assessments of their departure abroad from optimistic to pessimistic began in 1925–1929: political and everyday – from the moment of the “turn” and the collapse of the “Russian aid action”, economic and everyday – from the time of the interwar Czechoslovakia with the fi rst eff ects of world war crisis and infl ation of the Czechoslovak crown. Since the peak of the economic crisis in the country fell in 1932 and thus the crisis lasted until 1935 (closing the labour market, total unemployment), Ukrainian emigrants were faced with the question of purely physical survival. It was no longer about any political, social, or cultural mani festations. In 1930, they demonstrated to Ukrainian emigrants the futility and inexpediency of their stay abroad, both by the fact that unemployment was eliminated in Bolshevik Ukraine, as well as throughout the USSR (1933), and by the fact that the Second World War “knocked” on emigrant doors (1938, the Munich conspiracy).

An empirical analysis of the determinants of the U.S. banks’ profitability

This study investigates the determinants of the profitability of U.S. banks. Employing quarterly data, this paper further examines the historical and recent trends for all U.S. banks from 1996 to 2019 in the relationship between return and assets (ROA) and other bank internal (or endogenous) profitability contributors such as net interest margin (NIM), loan loss reserves, ratio of non-performing loans to gross loans, and external (or exogenous) macroeconomic variables, such as the 30-year average mortgage rate, Gross Domestic Product (GDP) economic growth rate, unemployment rate, interest rate, inflation rate and openness (i.e., exports + imports/GDP) by using the Generalized Method of Moments (GMM) estimator technique. The results reveal that bank-specific variables, including net interest margin, loan loss reserves and non-performing loans, have a significant impact on bank profitability in the United States. Similarly, the results show that macroeconomic variables, namely the average mortgage rate, economic growth, and unemployment rate, exert significant effects on the U.S. banks’ profitability. The results further indicate that changes in openness are detrimental to bank profitability. The implications are discussed.

Оптимізація монетарної політики та стабілізація циклічної економічної динаміки

This paper demonstrates that, despite the current mandate of monetary policy, its final goal (at least for central banks of developed countries) is the control of three main macroeconomic variables — economic growth, employment and inflation, — regardless on actual mandate for this policy. However, the priorities of realization of the final goal may face the imperfection of macroeconomic models and rules of monetary policy, which will make it impossible to control all three macroeconomic variables at the same time. The article proposes a new instrument for monetary policy — aggregate cumulative market imperfection — to optimize macroeconomic variables and stabilize cyclical economic dynamics. The author demonstrates the main competitive advantages of this instrument of monetary policy as compared with typical models of macroeconomic dynamics and simple rules of monetary policy (Simons, Friedman, and Taylor rules). In particular, this instrument is valid for any combination of market conditions, for any economy and for any moment of real time. It can be used simultaneously as: 1) a target of monetary policy; 2) a simple rule of monetary policy correction in the short-run; 3) a reaction function to evaluate a backward connection between the regulator’s actions and the effect of these actions on current economic situation; and 4) an instrument to stabilize cyclical economic dynamics; 5) an instrument to forecast starting (ending) point of recessions and shift in macroeconomic trends. If we can hold the aggregate cumulative market imperfection within a given optimal interval with the help of government regulations (i.e. to target this indicator only) using all possible instruments both of monetary, and (if necessary) of other kinds of regulation policy, we will be able to optimize all three main macroeconomic variables. Optimality of these variables means providing maximum economic growth and employment under comfortable inflation for any combination of market conditions and for any moment of calendar time, which will at the same time stabilize cyclical economic dynamics. In doing so, we will not target each of these three variables separately, that is, it is practically impossible to determine quantitatively their optimal values as they change permanently over time together with the constant change of current combination of market conditions.

Petroleum Price Volatility on Macroeconomic Indicators in India

The selling price of petrol and diesel in the domestic market is determined by the volatility of crude oil pricein the international market and taxes and excise duty imposed on it. India is heavily dependent on foreigncountries to meet its growing petrol-diesel demand. Consequently, net trade balance reflected in the BOP isalways adverse, which in turn adversely affects all the macroeconomic indicators and thereby, the poorperformance of the entire economy. So attempts should be made and petroleum price fluctuations in Indiamust be controlled to reduce the current inflation and to maintain a balanced growth rate in the economy.

Social and Economic Drivers of Stock Market Performance in Nigeria

The study examines the effect of the social and economic indicators on the stock market performance in Nigeria between 1981 and 2019. The study employs secondary data from the World Bank and Central Bank of Nigeria using the ordinary least squares as the technique of estimation. Findings show that regarding the economic drivers, interest rate, exchange rate, and inflation rate negatively impact the stock market while only income exerts a positive impact. However, both income and interest rate are significant economic drivers of stock performance. Regarding social drivers, life expectancy, poverty, and population exert a positive impact on stock performance. Similarly, both life expectancy and population are significant social drivers of stock market performance in Nigeria. The study recommends that monetary authorities should be cautious in avoiding discretionary policies that might hike the exchange rate; otherwise, the flow of funds to the stock market will be derailed. Also, the fiscal authority should invest massively in safety nets programmes to enhance the capacity of the growing population and reduce poverty.

Structural Break and The Period of Indonesia’s Post-Pandemic Economic Recovery

The Covid-19 pandemic in 2020 caused economic contraction of 2.07 percent in Indonesia. Knowing the similar economic conditions in the past period and how long is the period of Indonesia's economic recovery after the pandemic are important. Therefore, this study aims to determine the period of economic structural break that has occurred in Indonesia and to determine the period of economic recovery. The analytical method used is the Bai-Perron, cointegration test, and VECM. The variables used are economic growth, exports, and inflation. The results of this study indicate the occurrence of structural break periods in the Indonesian economy in 1989, 1998 and 2004. Furthermore, based on the long-term VECM equation, exports have a positive but insignificant effect on economic growth. In contrast, inflation has a significant negative impact on economic growth. By using the IRF, it showed that economic growth will achieve stability or recovery after the occurrence of shocks to economic growth itself within a period of 5 to 10 years. If there is a shock to exports, economic stability can be achieved in a period of 5 to 10 years. Meanwhile, if there is a shock to inflation, stability can be achieved in less than 5 years.

Asset Growth In Sharia Insurance: Macroeconomic and Internal Factors of Sharia Insurance Companies in Indonesia

Sharia insurance presents an alternative system in insurance operation with risk sharing in ta'awun (cooperative). Knowledge and insight into reality and trends are used to assess and decide sharia insurance operationalization policies. This study analyzed the growth of Islamic insurance company assets in Indonesia in 2016-2020. The data is sourced from the Sharia Financial Statement Statistics published by OJK and Bank Indonesia Statistics from 2016 - 2020 with multiple linear regression analysis methods. This research aims to find out the influence of internal variables and external variables on the assets growth of sharia insurance in Indonesia. In this study, there are two variables, namely dependent variables and independent variables. Dependent variables are the assets growth of sharia insurance in Indonesia (PERASSET), and independent variables, namely GDP (GDP), inflation (INF), contribution (KONB), investment (INVEST), and operating costs (BOPERATE). The results of this study GDP, Inflation, Contributes, and Investment affects Sharia insurance's assets growth. While operating costs do not affect the assets growth of sharia insurance companies. Keywords: Sharia Insurance, Asset Growth, GDP, Inflation, Contribution, Investment, Operating Costs

The political economy of inflation

For the last 40 years, macroeconomics has been dominated by Milton Friedman’s view that inflation occurs when the supply of money rises more quickly than economic output – ‘too much money chasing too few goods’, as the saying goes. If inflation is always due to an imbalance of money supply and output, central banks alone determine the path of inflation, and fiscal policy merely has a redistributive function. This paper draws on historical and empirical evidence as well as recent theoretical literature to show that this view is mistaken. Monetary policy has redistributive effects, and fiscal policy affects the money supply. It is therefore impossible to separate them in practice. Both fiscal and monetary policy have inflationary consequences, and because their distributional effects are different, monetary policy cannot fully offset fiscal decisions. Fiscal and monetary policy are influenced by political decisions and are themselves political in nature. Since inflation reflects spending and saving patterns which are affected by political choices, it is fundamentally a political phenomenon.

Pemulihan Ekonomi Domestik Terhadap Umkm Terdampak Covid-19

The COVID-19 pandemic that has hit the world in the last 2 years has an impact on almost the entire global economy, including Indonesia as a result of this pandemic. The domestic economy experienced a significant decline, especially in the national micro, small and medium enterprises sector. The decline in population income affects internal economic inflation. Recovery of population income affects internal economic inflation. This economic recovery is one way to restore the efficiency of the national micro, small and medium enterprises economy. The method used in this research is descriptive qualitative research method. From this research paper, there are results that economic recovery for MSMEs affected by COVID can be carried out well, if there is cooperation between the government and the community as well as national micro, small and medium enterprises, because these contributions are needed so that the domestic economic sector can recover and become good.

Long-Run Determinants of Nigerian Inflation Rate: ARDL Bounds Testing Approach

Inflation is a problem in all facets of life and all economic entities. The government of any nation is concerned with ensuring that her plans are not frustrated by unpredictable and galloping prices. This paper studies the dynamic causal relationship between inflation rate (measured by consumer price index (CPI)), exchange rate, gross domestic product (GDP), money growth, and oil export in Nigerian during 2005: Q1 to 2019: Q4. The ARDL bounds testing approach and error correction model were used to verify whether there was a long-term relationship between the inflation rate and four determinants (exchange rate, GDP, money growth, and oil export). The results of our study showed that the current inflation CPI, the exchange rate, GDP, and money growth would still affect the next quarter's inflation rate in Nigeria. However, the oil export has no significant effect on the inflation rate. Moreover, we find the long-run cointegration relationship between inflation CPI, the exchange rate, and money. The cointegration relationship will be achieved in a short time (during the next two quarters of the year).

Towards a Carbon-Neutral State: International Progress, National Risks, and Coping Strategies

Climate change is a major social, economic and environmental challenge facing all countries in the world today. It has increasingly become a priority on the agenda of international relations. This article outlines major developments in international climate action during and after the pandemic. The article identifies the global trends of carbon action on the countries’ agendas for sustainable development in the near future, including accelerate the implementation of mature zero-carbon solutions and promote zero-carbon technology. It then presents risks in tackling the global climate crisis collectively confronted by the international community at present, such as economic slowdown, energy security, carbon financing, price inflation, carbon barrier, carbon trading and carbon debt. With these common dilemmas in mind, the article sums up by proposing multiple possible directions towards reducing emissions and putting forward some community strategies for New Zealand to implement. These include promote the electrification of transportation and establish green infrastructure, consumption, financial, technology and industrial systems. This article aims to inform on the debate about current challenges in building a sustainable and resilient carbon-neutral state in the wake of global public crisis by analyzing global developing trends in addressing climate change, as well as to provoke thinking on potential options for government to enable net zero carbon and new energy future.

Protecting Portfolios Against Inflation

Inflation is a perennial threat to the real value of portfolios, even though current inflation rates are low. To protect portfolios against inflation, cash, inflation-indexed bonds, equities, real estate, and commodities are the usual candidates. We examine each, plus other assets and, importantly, various kinds of liabilities, to examine their historical and prospective responses to expected and unexpected inflation. Our article is integrative, bringing together ideas and data from many different sources in one place.

Non-Oil Export and Exchange Rate Nexus in Nigeria: Another Empirical Verification

This study examined the nexus between Exchange Rate and Non-Oil Export in Nigeria using time series data from 1985 to 2018. Secondary data were sourced from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and World Bank Development Indicators (WDI). The study adopted Autoregressive Distributed Lag (ARDL) model and it was fitted with Seven variables; namely, Non-oil Export (NOE), Exchange Rate (EXR), Credit to Private Sector (CPS), Trade Openness (OPN), Inflation (INF), Interest Rate (INT) and Foreign Direct Investment (FDI). The results showed that the exchange rate has a positive and significant impact on non-oil export in Nigeria. Therefore, the study recommended that the Government should encourage international trade to boost non-oil export and increase foreign exchange earnings. Also, there is a need for the government to improve the financial institutions to make investment funds available. Lastly, there is a need to revisit the export-oriented policy to ensure that the non-oil sector is well catered for.