International Liquidity Research Articles

On Problems of International Liquidity in Capitalist World Economy

In capitalist countries, there has been a very lively debate in recent years about the legitimacy or illegitimacy, adequacy or inadequacy of the current form of the international monetary system. One of the main indirect motives for this general attention now being given to international monetary problems is the unfavorable development and weakened position of the reserve currencies, i.e. the US dollar and the pound sterling. The dollar and the pound form, to a greater or lesser extent, part of the monetary reserves of all capitalist countries, and concern over their prospects necessarily leads to considerations of the possibilities and reliability of the entire current international monetary system.

The relevance of post-Keynesian macroeconomics for middle-income economies

PurposeThis paper, based on the 2022 Master Class delivered at the 50th National Economic Meeting organized by ANPEC, discusses how post-Keynesian macroeconomics and New Developmentalism complement each other to understand middle-income economies' development in financial globalization. It summarizes my academic reflection about the advance in post-Keynesian thinking to develop macroeconomics for peripheral middle-income economies.Design/methodology/approachAs part of this reflection, I first bring up the idea of a developmental convention and, next, how peripheral financialization impacts the elaboration of this convention. Given the asymmetric configuration of the international financial system and the context of hierarchical currencies, I discuss the challenge of overcoming underdevelopment in peripheral economies. The post-Keynesian macroeconomics and advances in the structuralist debate provide the analytical tools to understand how peripheral economies develop virtuous or vicious growth cycles. At the end of the paper, I present some comments on the stagnation of the Brazilian economy.FindingsThe growth strategy with foreign savings does not provide the conditions for middle-income economies to operate with sufficient economic policy autonomy to promote productive transformation. To this end, a developmental convention should replace the neoliberal convention that has dominated since the 1970s.Originality/valueThe dynamics of peripheral, middle-income economies, often influenced by international liquidity flows, are a crucial area of study. This research underscores the importance of understanding these dynamics, as it forms the basis for economic policy recommendations. The paper also highlights the inadequacy of the growth strategy with foreign savings in the current configuration of the international financial system, emphasizing the need for middle-income economies to operate with greater economic policy autonomy to foster productive transformation.

Outsourcing Empire: International Monetary Power in the Age of Offshore Finance

Abstract Offshore finance allows foreign banks to create US dollars under the laws of an offshore jurisdiction. How and why does this affect international monetary power? Conceptually, I argue that offshore finance bifurcates across borders the shared power of the state and banks to create money, combining the US dollar with mostly English law. Empirically, I demonstrate that more US dollars are created offshore outside US jurisdiction than onshore within it. Offshore finance increases liquidity, at higher risk, and leads to a cross-border entanglement of issuing country, offshore financial centers, borrowers, and global banks. In short, offshore finance changes the power inherent in money. Consequently, international monetary power has become the ability to get access to offshore dollars in combination with the capacity to determine international liquidity and to set, select, or circumvent the related rules. It is constrained by the hierarchically organized social credit relations that money consists of. The international monetary power of the United States has become an instance of indirect rule with global banks having been delegated the prerogative of US dollar creation. As is common with indirect rule, it entails a difficult balancing act between geographical reach and centralization of power.

Currency Hegemony as a Tool of US Global Dominance

Subject. The formation of new centers of global influence predetermines corresponding changes in the global balance of power. At the same time, the lack of real reforms of the global monetary system allows the United States to continue to set the rules of the game in the global economy, despite its increasing crisis potential. In this regard, there is a need to identify the driving forces capable of producing constructive changes in the global monetary order. Objective. A summary of the practice of using the US dollar to suppress global competition and maintain American superiority in international economic relations. Results. The control of the international monetary sphere by the country — hegemon of the world economy can be traced at all stages of the development of international economic relations (IER). Currently, the hegemonic country’s self-interest from issuing international liquidity, with non-resistance to such a policy on the part of all other IER participants, hinders the development of effective anti-crisis measures and worsens the general condition of the world economy. Scattered attempts to overcome the failures of global currency regulation at the local level (including through the use of digital technologies) seem to be ineffective, since they are not systemic in nature. Conclusions. A qualitative reform of the global monetary system is impossible without combining the efforts of the world’s largest economies to counter the destructive policies of the country that issues key international liquidity. Otherwise, the costs of financial crises become an insurmountable obstacle to the global economy entering a path of sustainable development.

The impact of financial sanctions on financial risk of target countries

ABSTRACT By using panel data of 181 countries of which 83 countries have been subjected to financial sanctions from 1980 to 2020, this article employs a Time-Varying difference-in-differences (DID) model and explores the nexus between financial sanctions and financial risk. This article finds firstly that financial sanctions significantly increase the fin ancial risk of target countries. Second, we conclude that financial sanctions increase the financial risks of target countries by limiting international capital flows and foreign aids. Third, financial sanctions affect the risk for foreign debt, risk for debt service and risk for international liquidity significantly, however financial sanctions have no impact on risk for exchange rate stability and risk for current account. Last but not least, financial sanctions increase the financial risk significantly for countries with low political stability and financial development level, however the effect is not significant in countries with high level of political stability and financial development. In the light of this, our research should help policymakers in many nations develop valuable policies from the perspective of international politics and finance.

International transmission of the U.S. dollar liquidity shock: The channel of FX borrowing and lending

Access to foreign exchange (FX) liquidity is crucial to the growth and stability of emerging market economies. We examine the impact of U.S. dollar liquidity shocks on firm investments in Korea by constructing a dataset that merges four distinct micro-level data spanning ten years from 2006 to 2015. We trace the path of FX liquidity from the international financial market to Korean banks and subsequently to listed firms. During international liquidity shocks, banks borrow less FX but pay higher interest rates. Weak banks, whose FX borrowing rates are sensitive to these shocks, reduce their FX credit supply to firms. Among the FX loan-reliant firms that are highly productive, those borrowing from weak banks reduce their investments. This channel of FX borrowing and lending accounts for 19% of the decline in the investment of listed firms during the peak of the Global Financial Crisis.

Long-run asymmetric effects of financial risks on Sukuk market development: empirical evidence from Malaysia

Purpose The purpose of this study is to empirically investigate the asymmetric effects of financial risk on Sukuk market development for a sample of Malaysian countries over the period of 2010–2021. Design/methodology/approach This study refers to the International Country Risk Guide (ICRG) in determining the financial risk factors to be studied in addition to the Malaysia financial stress index (FSI) to capture changes in financial risk level. The authors use the nonlinear autoregressive distributed lag (NARDL) model to tackle the nonlinear relationships between identified financial risk variables and Sukuk market development. Findings The results suggest the existence of a long-run relationship between foreign debt service stability, international liquidity stability (ILS), exchange rate stability (ERS) and financial stress level with the Sukuk market development in Malaysia. Indeed, higher ILS and ERS will boost Sukuk market size, whereas higher foreign debt services and financial stress are negatively related to Sukuk market development. Findings also indicate that the long-run positive and negative impacts of identified financial risk components on Sukuk market development are statistically different. Taking into account the role of the Sukuk market in facilitating Malaysia’s economic growth, the country should aim to keep the foreign debt-to-GDP ratio at a sustainable level. Research limitations/implications This study points to three possible directions for future research. The first is the differential impact of financial risk components on Sukuk issuance for different Sukuk structures. As more data becomes available in the future, this area could be further explored by conducting the above analysis for different combinations of Sukuk structures and currency denominations. In addition, future researchers could also consider exploring the variability of financial risk impacts through comparative studies of the leading Sukuk-issuing countries to account for differences in regulatory frameworks and supporting infrastructure. Practical implications This study provides valuable practical and policy implications for strengthening the growth of the Sukuk market. While benefiting from the diversification benefits of funding sources to finance private or government projects and developments, Malaysia should remain vigilant to global economic conditions, foreign exchange markets and financial stress levels, as all of these factors may significantly influence investor sentiment and the rate of return offered by Sukuk issuance. Originality/value The use of the NARDL approach, which investigates the long-run effects of financial risk factors on Sukuk market development in Malaysia, makes this study a valuable addition to the literature, as there has been little research into the asymmetric effects of those variables on Sukuk market development using samples from emerging Asian markets.

АКТУАЛЬНІ ПАТЕРНИ СВІТОВОЇ ЕКОНОМІЧНОЇ АРХІТЕКТУРИ

The article analyses the main features of the modern global financial landscape. The "new economic models" are considered, the idealistic urges of states to build competitive forms of IT image are described. Domestic authors comprehensively considered the qualitative characteristics of the global economy in terms of its innovativeness. The World Ranking of Digital Competitiveness from 2023 is illustrated. Critical prerequisites for the formation of current properties of the world economic system are highlighted. The categories of economic diplomacy, regionalization, migration movement, as well as the knot of food/energy security issues were studied – in particular, in the context of the growth of global debt. The driving forces of the "digital" trajectory of the development of the world economy are interpreted. The pattern of economic diplomacy is described by three phenomena – sanctions pressure, multilateral coordination, as well as the reactionary policy of protectionism as a response of states to the actual geoeconomic realities. The main factors of the global economic potential are singled out, in particular the following: forced migration of human capital, distortion of global supply chains, incapacity of the world food security system, disorganization of international liquidity. Three key components of global economic development are illustrated with an emphasis on the dynamics of the recovery of the international financial climate. The problem of the sensitivity of developing countries to the turbulence of the world economic architecture is singled out, the inflation index manifests as one of the key quantitative rates of reduction of inflationary pressure in both developed and developing countries. Constitutive quantitative indicators of the trajectory of economic decline are analysed with the determination of innovative forecasts regarding the centre of financial recovery.

Observation of Multiply Imaged Quasars with the 4-m ILMT

Gravitationally lensed quasars (GLQs) are known to potentially provide an independent way of determining the value of the Hubble-Lemaître parameter H0, to probe the dark matter content of lensing galaxies and to resolve tiny structures in distant active galactic nuclei. That is why multiply imaged quasars are one of the main drivers for a photometric monitoring with the 4-m International Liquid Mirror Telescope (ILMT). We would like to answer the following questions: how many multiply imaged quasars should we be able to detect with the ILMT? And how to derive accurate magnitudes of the GLQ images? Our estimation of the possible number of multiply imaged quasars is 15, although optimistic forecasts predict up to 50 of them. We propose to use the adaptive PSF fitting method for accurate flux measurements of the lensed images. During preliminary observations in spring 2022 we were able to detect the quadruply imaged quasar SDSS J1251+2935 in the i’ and r’ spectral bands.

Surface Brightness Properties of LSB Galaxies with the International Liquid Mirror Telescope

Low surface brightness (LSB) galaxies make up a significant fraction of the luminosity density of the local universe. Their low surface brightness suggests a different formation and evolution process compared to more-typical high-surface-brightness galaxies. This study presents an analysis of LSB galaxies found in images obtained by the International Liquid Mirror Telescope during the observation period from October 24 to November 1, 2022. 3,092 LSB galaxies were measured and separated into blue and red LSB categories based on their g′−i′ colours. In these samples, the median effective radius is 4.7 arcsec, and the median value of the mean surface brightness within the effective radius is 26.1 mag arcsec−2. The blue LSB galaxies are slightly brighter than the red LSB galaxies. No significant difference of ellipticity was found between the blue and the red LSB galaxies.

Accessibility of the ILMT Survey Data

The 4m International Liquid Mirror Telescope (ILMT) continuously scans a 22′ wide strip of the zenithal sky and records the images in three broadband filters (g’, r’ and i’) using a 4K×4K CCD camera. In about 10–12 hours of observations during a single night, ∼15 GB of data volume is generated. The raw images resulting from the observations in October–November 2022 have been pre-processed and astrometrically calibrated. In order to exploit the scientific capabilities of the ILMT survey data by the larger scientific community, we are disseminating the raw data (along with dark and flat fields) and the astrometrically calibrated data. These data sets can be downloaded by the users to conduct the scientific projects of their interest. In future, the data will be processed in near real-time and will be available via the ARIES data archive portal.

Serendipitous Detection of Orbital Debris by the International Liquid Mirror Telescope: First Results

Orbital debris presents a growing risk to space operations, and is becoming a significant source of contamination of astronomical images. Much of the debris population is uncatalogued, making the impact more difficult to assess. We present initial results from the first ten nights of commissioning observations with the International Liquid Mirror Telescope, in which images were examined for streaks produced by orbiting objects including satellites, rocket bodies and other forms of debris. We detected 83 streaks and performed a correlation analysis to attempt to match these with objects in the public database. 48% of these objects were uncorrelated, indicating substantial incompleteness in the database, even for some relatively-bright objects. We were able to detect correlated objects to an estimated magnitude of 14.5 and possibly about two magnitudes greater for the faintest uncorrelated object.

The 4m International Liquid Mirror Telescope Project

The International Liquid Mirror Telescope (ILMT) project is a scientific collaboration in observational astrophysics between the Liège Institute of Astrophysics and Geophysics (Liège University, Belgium), the Aryabatta Research Institute of observational sciencES (ARIES, Nainital, India) and several Canadian universities (British Columbia, Laval, Montréal, Toronto, Victoria and York). Meanwhile, several other institutes have joined the project: the Royal Observatory of Belgium, the National University of Uzbekistan and the Ulugh Beg Astronomical Institute (Uzbekistan) as well as the Poznan Observatory (Poland). The Liège company AMOS (Advanced Mechanical and Optical Systems) has built the telescope structure that has been erected on the ARIES site in Devasthal (Uttarakhand, India). It is the first liquid mirror telescope being dedicated to astronomical observations. First light was obtained on 29th April 2022 and commissioning is being conducted at the present time. In this short article, we describe and illustrate the main components of the ILMT. We also highlight the ILMT papers presented during the third BINA workshop, which discuss various aspects of the ILMT science programs.

An Automated Photometric Pipeline for the ILMT data

The International Liquid Mirror Telescope (ILMT) is a 4-meter survey telescope continuously observing towards the zenith in the SDSS g’, r’, and i’ bands. This survey telescope is designed to detect various astrophysical transients (for example, supernovae) and very faint objects like multiply-imaged quasars and low surface brightness galaxies. A single scan of a 22′ strip of sky contains a large amount of photometric information. To process this type of data, it becomes critical to have tools or pipelines that can handle it efficiently and accurately with minimal human biases. We offer a fully automated pipeline generated in Python to perform aperture photometry over the ILMT data acquired with the CCD in Time Delayed Integration (TDI) mode. The instrumental magnitudes are calibrated with respect to the Pan-STARRS-1 catalogue. The light curves generated from the calibrated magnitudes will allows us to characterize the objects as variable stars or rapidly decaying transients.

SunPhot: Preparations for an Upcoming Quasar Variability Survey with the International Liquid Mirror Telescope

Recent research suggests a correlation between the variability and intrinsic brightness of quasars. If calibrated, this could lead to the use of quasars on the cosmic distance ladder, but this work is currently limited by lack of quasar light curve data with high cadence and precision. The Python photometric data pipeline SunPhot is being developed as part of preparations for an upcoming quasar variability survey with the International Liquid Mirror Telescope (ILMT). SunPhot uses aperture photometry to directly extract light curves for a catalogue of sources from calibrated ILMT images. SunPhot version 2.1 is operational, but the project is awaiting completion of ILMT commissioning.

The 4m International Liquid Mirror Telescope: a Brief History and Some Preliminary Scientific Results

The present article is based upon an invited talk delivered at the occasion of the inauguration of the 4m International Liquid Mirror Telescope (ILMT) which took place in Devasthal (ARIES, Uttarakhand, India) on 21st March 2023. We present hereafter a short history of the liquid mirror telescopes and in particular of the 4m ILMT which is the first liquid mirror telescope entirely dedicated to astrophysical observations. We discuss a few preliminary scientific results and illustrate some direct CCD images taken during the first commissioning phase of the telescope. We invite the reader to refer to the series of ILMT poster papers published in these proceedings of the third BINA workshop for more details about the instrument, operation, first observations, performance and scientific results.

A Year-long Representation of the ILMT Observations in Different Coordinate Systems

The 4m International Liquid Mirror Telescope (ILMT) is the first optical survey telescope in India that performs zenithal observations of a 22′ wide strip of the sky. To determine the portion of the sky covered by the ILMT during the entire year, we represent the ILMT Field of View (FoV) in three different coordinate systems - galactic, ecliptic, and equatorial. We adopt a constant declination of +29°21′41.4′′ and varying right ascension (RA) ranges corresponding to the Local Sidereal Time (LST). The observations from June to September are hampered due to the monsoon season. The handiness of such representations will allow us to locate a transient event in the ILMT FoV. This will enable prompt follow-up observations with other facilities.

Astrometric and Photometric Calibrators for the 4-m International Liquid Mirror Telescope

The International Liquid Mirror Telescope (ILMT) is a 4-meter class survey telescope. It achieved its first light on 29th April 2022 and is now undergoing the commissioning phase. It scans the sky in a fixed wide strip centred at the declination of and works in Time Delay Integration (TDI) mode. We present a full catalog of sources in the ILMT strip derived by crossmatching Gaia DR3 with SDSS DR17 and PanSTARRS-1 (PS1) to supplement the catalog with apparent magnitudes of these sources in g, r, and i filters. These sources can serve as astrometric calibrators. The release of Gaia DR3 provides synthetic photometry in popular broadband photometric systems, including the SDSS g, r, and i bands for ∼220 million sources across the sky. We have used this synthetic photometry to verify our crossmatching performance and, in turn, create a subset of the catalog with accurate photometric measurements from two reliable sources.

Survey of Variables with the ILMT

Nestled in the mountains of Northern India, is a 4-metre rotating dish of liquid mercury. Over a 10-year period, the International Liquid Mirror Telescope (ILMT) will survey 117 square degrees of sky, to study the astrometric and photometric variability of all detected objects. One of the scientific programs will be a survey of variable stars. The data gathered will be used to construct a comprehensive catalog of light curves. This will be an essential resource for astronomers studying the formation and evolution of stars, the structure and dynamics of our Milky Way galaxy, and the properties of the Universe as a whole. This catalog will be an aid in our advance to understanding the cosmos and provide deeper insights into the fundamental processes that shape our Universe. In this work, we describe the survey and give some examples of variable stars found in the early commissioning data from the ILMT.

Follow-up Strategy of ILMT Discovered Supernovae

The 4m International Liquid Mirror Telescope (ILMT) facility continuously scans the same sky strip (∼22′ wide) on each night with a fixed pointing towards the zenith direction. It is possible to detect hundreds of supernovae (SNe) each year by implementing an optimal image subtraction technique on consecutive night images. Prompt monitoring of ILMT-detected SNe is planned under the secured target of opportunity mode using ARIES telescopes (1.3m DFOT and 3.6m DOT). Spectroscopy with the DOT facility will be useful for the classification and detailed investigation of SNe. During the commissioning phase of the ILMT, supernova (SN) 2023af was identified in the ILMT field of view. The SN was further monitored with the ILMT and DOT facilities. Preliminary results based on the light curve and spectral features of SN 2023af are presented.