Macroeconomic Analysis Research Articles

State investment policy as a tool to overcome threats to national economic security caused by anti-Russian sanctions

Aim. To study the impact of investment on economic growth and ensuring economic security in modern Russia, developing under the conditions of economic sanctions from the countries of the “collective West”.Tasks. To describe the impact of sanctions on the Russian economic system, to assess their impact on national economic security. To study investment activity in Russia in the medium term, including its transformation in the conditions of non-economic shock caused by sanctions. To offer recommendations for improving the state investment policy.Methods. In preparing the article we used general scientific methods of research (comparative, retrospective, macroeconomic analysis), as well as special methods of economic and mathematical modeling, forecasting, statistical data analysis, and expert assessments.Results. Anti-Russian sanctions have caused a number of new challenges and complex threats to national economic security. The sanctions caused a macroeconomic shock. But, despite the volatility and volatility of GDP, the Russian economy is experiencing a trend of long-term growth, which indicates the presence of sufficiently effective mechanisms for preserving national economic security. At the same time, this growth is rather sluggish, it is necessary to launch mechanisms for its acceleration, which is difficult in the conditions of external sanctions restrictions. The basis for success in economic growth is high investment activity. Its stimulation should become one of the priorities of Russia’s current economic policy. Despite the political and economic turbulence caused by the sanctions and the general contraction of the economy, investments, contrary to expectations, did not decline in Russia in 2022, although their growth rate slowed down. At the same time, the structure of investments has changed unfavorably. The author’s study reveals atypical behavior of investments in Russia under the shocks of 2020 and 2022: the growth rate of investments slowed down, but at the same time they grew in absolute terms in both actual and comparable prices, despite the general crisis in the economy. This creates preconditions for future growth. Apparently, Russian investors did not revise their plans, remaining confident that external sanctions will not only be successfully overcome, but may also give a new impetus to the development of domestic production, as it happened with agricultural production after the food embargo introduced in 2014. This indicates high confidence of national business in the policy pursued by the authorities. In order to maintain the sustainability of socio-economic development and the realization of national economic interests, it is important to achieve a steady decline in investment activity and prevent the curtailment of investment. This is possible only through the creation by the state of such an investment environment, such conditions that are understandable and attractive for the business community and arouse its confidence.Conclusions. The impact of sanctions on the Russian economy is immediate and prolonged. The Russian economy has successfully coped with the initial sanctions shock. But the delayed effects of sanctions remain, they act as a significant threat to national economic security, which makes it necessary to strengthen measures to counteract them and preserve economic stability. The investment policy of the state has a significant role in solving these problems, which is considered in the article as a tool to overcome the threats to national economic security caused by sanctions. Investment activity of private business in the new conditions requires state support, the article reveals the directions and conceptual provisions of such support.

Macro Economics Analysis of Relationship between Unemployment and GDP Growth of Bhutan: Application of Okun’s Law

This paper examines the relationship between unemployment and the GDP growth rate in Bhutan, focusing on the applicability of Okun's laws from 1991 to 2022. The findings reveal significant short-term and long-term impacts of unemployment on Bhutan's GDP. Both the short run and long run demonstrate the negative effects of unemployment on GDP in Bhutan. The results confirm the validity of Okun's law in the country, showing that a one-unit increase in unemployment leads to a decline of 2 percentage points in GDP. Consequently, this study emphasizes the need for appropriate measures and policies to address the unemployment problem in Bhutan. To tackle this issue, the implementation of hands-on training and workshops on job-related skills during undergraduate studies is recommended. By providing practical training early on, individuals will be better prepared for the job market, enhancing their employability and contributing to the economy more effectively. Furthermore, the government should allocate mandatory internships in various related fields. These internships will provide students with valuable practical experience, bridging the gap between theoretical knowledge and real-world application.

Macroeconomics: An Overview of Key Concepts and Policies

This scientific journal article provides an in-depth analysis of macroeconomics, focusing on its fundamental concepts and policies. Macroeconomics is a vital field in economics that examines the behavior of an entire economy, studying factors like aggregate production, unemployment, inflation, and economic growth. This article aims to shed light on the key principles governing macroeconomic phenomena and the policies employed to stabilize and improve economic conditions. By understanding macroeconomics, policymakers can make informed decisions to foster sustainable economic development.

Does Urbanization Matter For Poverty Reduction in Nigeria: An Empirical Evidence From Autoregressive Distributed Lag (ARDL) Estimation

Abstract Urbanization has been argued to be having an impact on several other development challenges. To this end, this paper aims to contribute to the empirical literature by exploring the effect of urbanization and its' magnitude on poverty, both in the short run and long run in Nigeria. The macroeconomic analysis was conducted using data from 1982 to 2017 which was obtained from the World Bank. Bound Test and autoregressive distributed-lag (ARDL) estimation techniques were used to test the existence of a cointegration relationship and to estimate the short and long-run effect of urbanization and other variables on poverty reduction. Results from the study and an economic standpoint, provide strong evidence that urbanization remains an important factor in poverty reduction in Nigeria. The analysis further shows that while international remittances have a positive and significant effect, foreign aid and government expenditure have significant negative effects on poverty reduction in the long-term period. While findings from this study suggest that urbanization remains a valid tool in the fight against poverty, the need for sustainable urbanization policies and efforts by the Nigerian government is highly imperative.

E-citizen Model at the Digital Municipality Level and Macroeconomic Analysis of Internet Services

The article focuses on the formation of civil society, which plays an important role in the implementation of e-municipality, and the study of the shades of influence at the macroeconomic level. From this point of view, the article analyzes the contribution of Internet services to the social economy of Azerbaijan in 2000-2020. The purpose of this study is to investigate digital citizenship on social field in municipalities and to investigate relations among Internet services, fixed capital investment, per capita income and subsidies to local budgets (municipalities) using economic methods of econometric analysis, and to determine the direction of relations. The research methodology is based on the ARDL (autoregressive distributed lag models) cointegration technique and the Granger Causality test. According to the ARDL co-integration analysis, there is a one-sided cause-andeffect relationship between internet services (thousand manats) and subsidies (million manats) to local budgets (municipalities). The limitation of scientific research covers the processes of establishing civic relations in e-municipality and the processes within economic relations in the field of ICT. According to the results, the impact of Internet services (thousand manats) on subsidies (million manats) to local budgets (municipalities) is positive.

The problem(s) with representing decision processes under uncertainty

Underscoring the economic significance of the Knightian distinction between risk and uncertainty, Don Katzner forcefully challenges the continued dominance of the expected utility model based on subjective probability in macroeconomic analysis and offers in its place a simple yet elegant model of decision making inspired by the pioneering work of G.L.S. Shackle. In doing so, Katzner lends support to a research program to identify a more coherent and empirically grounded theory of decision making under uncertainty. Our paper makes three contributions to this program. First, we argue that the appropriate choice of a model of individual behavior under uncertainty cannot be adjudicated merely on logical, a priori grounds, but must ultimately be based on consistency with observed behavior. There are many internally consistent models and their external conditions of validity hardly ever rely on inconceivable scenarios. Second, while Katzner’s model certainly provides a plausible foundation for understanding choice under uncertainty, we suggest that it is somewhat underdetermined. It requires further theoretical articulation to yield testable predictions which differentiate it from competing approaches. Third, we discuss recent experimental findings that may need to be addressed by any satisfactory theoretical account of decision making under uncertainty.

Employment Intensity of Economic Growth in Southern Europe: Evidence from Multidimensional Panel Data

This paper examines the employment intensity of economic growth in Southern Europe during the so-called “post-crisis” recovery years. A labor demand estimation model based on multidimensional panel data from 2010 to 2019 was utilized. Findings from our macroeconomic analysis of eight different industries refute the predictions of neoclassical labor theory in the region. The results further indicate the presence of jobless growth in the areas of overall employment, fulltime employment, and overall employees. They also signal that economic growth may have created job opportunities in part-time and youth employment, and among temporary employees, rather than full-time jobs. The paper links these findings to particular characteristics of the regional labor market, discusses their implications for understanding unemployment and formulates recommendations for future policy.

Distributional and Macroeconomic Analysis: A Suggestion to Build Tax-Transfers Multipliers

Distributional and Macroeconomic Analysis: A Suggestion to Build Tax-Transfers Multipliers

Analisis Perekonomian Kota Blitar Khususnya Pada Tingkat Makro

Regional development is the driving force for national development, which makes regional governments the planners to carry out various kinds of economic transformation for the welfare of the existing society. Broadly speaking, the components that must be discussed in the regional macroeconomic analysis concern economic production and income, growth, unemployment, inflation, employment, external trade relations, financial institutions, regional finance, and poverty or social welfare. Regional macroeconomic analysis can at least show the face of the regional economic structure where this will determine the sustainability of the economy in accordance with development goals. The economic growth of a region, especially the City of Blitar, which of course comes from the results of regional taxes, regional levies, management of regional assets, and other legal regional revenues, which aims to provide flexibility to the regions to seek funding in the implementation of regional autonomy as a manifestation of the principle of decentralization and to increase PAD and support government activities and national development, a budget from the regional government is needed, one of which is from the regional tax sector. In one course experiencing economic stability and problems of economic growth. One of the main problems or drivers of economic instability that can disrupt economic growth is the occurrence of general and continuous price increases or better known as inflation.

Tax burden of food industry companies of Ukraine

The tax burden determines the payment of taxes by the market subject to various budgets and serves as the basis for verification by the State Tax Service. The corporate income tax rate, which is equal to 18% in Ukraine, is called normative. The effective tax rate can be determined from the standpoint of macroeconomic analysis of the tax burden for the industry and from the standpoint of microeconomic analysis of the tax burden for individual enterprises. It is relevant to study the effective tax burden of food industry enterprises, which form significant shares of GDP and tax payments in the consolidated budget of the country. The purpose of the study is a microeconomic analysis of the influence of factors on the effective tax rate of food industry companies of Ukraine and the verification of the hypothesis about the degree of deviation of the effective rate from the normative tax rate of food enterprises. Methodology. The methods of generalization, descriptive statistics and systematization, factor and correlation-regression analyses are used in the investigation. Economic and statistical analysis was carried out using Microsoft Office software packages. The results. An algorithm for calculating the effective corporate tax rate is proposed. The list of financial operations at food enterprises of Ukraine, which produce a change in the financial result before taxation, is determined. It was revealed that in recent years the effective tax burden approaches to the normative tax rate, 18%. A methodology of microeconomic calculations was developed for assessing the tax burden of a company based on indicator-factors, including: company assets, income from product sales, number of employees, share of liabilities in assets, share of tangible assets in assets, share of current assets in assets, profitability of assets and equity capital, labor intensity, growth rate of real GDP. Correlations between the effective tax rate and the factors are determined. The largest number of influencing factors and the number of correlations are obtained for four enterprises of the sample: private joint stock companies "Mondelis Ukraine", "Lagoda Confectionery Factory", "Rivne confectionery factory", "Kharkiv biscuit factory". Key words: tax burden, tax return, normative tax rate, effective tax rate, food industry enterprises, factoranalysis, correlation analysis.

Profitability Determinants of Transport Service and Warehouse Enterprises

The main purpose of the research is to identify differences in the factors determining changes in the return on capital (ROE) of transport and warehouse enterprises in individual voivodeships in Poland. The research used the ROE decomposition method which was justified by mathematical aspects. It paid attention on the decomposition of relative differences shaping the changes in this specific indicator. The substantive basis is the modified 5-factor Du Pont model. This method allowed for analysing relative changes in three decision areas. These areas encompass operational, financial, and tax management. The findings confirmed that the differences in individual voivodeships compared to the entire section H in Poland result mainly from financial management. However, the examined differentiation was not dependent on tax management. The presented research results can represent the basis for the strategy of corporate management in section H in positioning against competitive enterprises in Poland. The research also allows for a macroeconomic analysis of the phenomena occurring in the transport as well as warehousing sector, especially in terms of changes in their profitability.

FDI interconnectedness and sustainable economic development: A linear and non-linear Granger causality assessment

Previous studies on foreign direct investment (FDI) have not examined the hidden effects of its inherent connectedness characteristics among different economies. In order to uncover such hidden effects, this study conducts two sets of analyses.Firstly, the systemic risk-based approach constructed using Granger-causality networks and Principal Component Analysis is used to examine the level and degree of the network of pairwise statistical relationships among countries in the Latin American and Caribbean (LAC) region.Secondly, the determinants of the observed connectedness index are examined using regression models. This set of analysis shows that region-specific and global macroeconomic conditions such as the Consumer Price Index of the LAC region, US term spread, and interest rates impact the degree of interconnectedness.The complexity and stability of the system of FDI capital expenditure connectedness within the LAC region offers interesting prospects for macro-economic analysis, policy and stakeholder decision-making and further research development.

Justification for the development of measures to neutralize sanctions pressure and further development of the Russian economy

An unprecedented number of sanctions have been imposed against Russia over the past year. The sanctions imposed against our country by Western countries have affected almost all spheres of the economy. From industry and agriculture to the banking sector, from the blatant discrimination of our athletes in the international arena to the attempt to abolish Russian culture. The article analyzes the impact of sanctions on various sectors of the economy, including the energy sector, mechanical engineering, agriculture, banking and IT spheres, and others. The strengths and weaknesses of the domestic economy are assessed, the directions in which the countries of the world critically depend on Russia are presented, among them the production of agricultural products, fertilizers, chemical, metallurgical, machine-building and other industries. The analysis of macroeconomic indicators of Russia and some Western countries that imposed sanctions is carried out. Macroeconomic analysis showed the stability of the domestic economy, while the decline in gross domestic product was less than predicted, and domestic inflation was lower than in some Western countries. A large section of the article is devoted to areas to reduce the country's dependence on Western products and technologies, presents the main measures to neutralize sanctions pressure and further development of the Russian economy, which the authors divided into three areas: measures in the short, medium, and long-term prospects. The list of measures to reduce the negative impact of sanctions, among other things, included ensuring budget revenues through the sale of energy resources, import substitution of products of departed Western companies, ensuring the sustainability of the economy, the development of a digital, and subsequently an innovative economy. All this should ensure the socio-economic prosperity of the state and ensure its sustainable development for many years.

Macroeconomics Analysis on COVID-19 Based on Mathematical Models

From the past century, humanity has never witnessed such a health crisis like the Covid-19 worldwide pandemic. Since it was declared a global health crisis in March 2020, country governments have put forth efforts to curb transmission of the disease and to manage the impacts on the economy. The forced measures have caused adverse and difficult to manage macroeconomic consequences. Many studies have been carried out in various regions and countries to explore these macroeconomic impacts. This paper offers a review of the research associated with the consequences of COVID-19 on macroeconomics. The author will use previous research studies that have applied various economic models (CGE, DSGE, and GEM) to quantify the macroeconomic results of the pandemic. The review concludes that the macroeconomic consequences of various pandemics can be quantified using economic models. It provides comprehensive and specific data on the consequences of COVID-19 on macroeconomics. It also exhibits information about carious economic modelling that can be used to estimate pandemic impacts.

The monetization of economy: An indicator that indicates nothing

The indicator of monetization of the economy; equal to the ratio of nominal money supply to nominal GDP; is very popular among Russian economists and is used to assess the effectiveness of the monetary policy pursued and is often employed in cross-country comparisons. Many economists believe that the monetization of the Russian economy is excessively low; which reflects the underdevelopment of the national financial system and requires steps towards monetary expansion. According to this view insufficient monetization of the Russian economy is as an obstacle to its rapid development; therefore increase in monetization should be made a key priority of the Bank of Russia’s policy. Although widely accepted; the complex of theories; ideas and assumptions behind these recommendations; however; has never been adequately empirically tested. In this paper we formulate several statements that are shared by the majority of economists in this area; based on a review of relevant publications; and then test the statements on cross-country data. As a result of empirical testing; it was shown that most of the statements are not supported by evidence. The monetization indicator does not carry any additional relevant information about the macroeconomics conditions; having other indicators considered. High monetization does not create additional stimulus for economic growth; and the ability of central banks to affect monetization is limited significantly. In countries with low monetization; inflationary risks of monetary expansion are sharply higher. The conducted empirical study provides arguments against the broad use of the monetization indicator in macroeconomic analysis and casts doubt on the idea of laying responsibility for increasing the level of Russian economy monetization on the Bank of Russia.

The Practical Application and Marginal Expansion of Keynesian Model

Recently, there have been a lot of discussion about how variable change will affect output, real wages, and the nominal values of stock in certain assumptions. This paper describes improved new Keynesian model in closed economy for showing the adjustment of different component. Firstly, it will discuss the condition when an increase in tax by using mathematical derivation and examine the change when a rise in nominal wage through the use of macroeconomic analysis, then it will analyze the process when changing the target interest rate. Lastly, it will provide some evaluations of these several conditions. The results of the studies indicate that while an increase in tax, the real wages will rise, output will decline and the nominal money stock will do the same. Besides, the analysis has revealed that when a growth in nominal wages will result in a boost in price level and nominal money stock, and production remains constant. Additionally, when the target interest rate is raised, output will fall, real wages will rise as a result of a declining price level and a fixed nominal wage, and the nominal money stock will drop. All these preliminary results throw light on real life scenarios of central banks and countries.

Economic Debate On Financing Model of The National Health System

The topic of health-care financing is becoming increasingly important, particularly in light of the Covid-19 pandemic. In this study, we examine the pattern of funding for the national health system from the standpoint of economic thought, as well as the role of government in the context of macroeconomic analysis of social welfare. Conceptual Analysis is the method employed. The data used is based on related theory. This study discovered that health issues are social welfare issues as one of the macroeconomic goals. The macroeconomic debate employs an interdisciplinary framework in which the determinants include external shocks and policy levers, while the pure or theoretical ones are descriptive and applied, resulting in outputs such as prices, growth, output, and international balances. In theory, government involvement in the economy can be divided into two extremes: the classical view and the Keynesian view. The problem of wage and price flexibility, self-adjustment, and government intervention is the result of these two views, though there is a middle view; Schumpeter. The health system can be funded in three ways: entirely by the government, partially by the government, and entirely by the private sector or the public. Furthermore, the cost of health insurance is influenced by the economy, competition, rules, company goals, market structure, government intervention, and a variety of other factors. In the future, studies must be conducted using big data

Complexity defying macroeconomics

Abstract This article contributes to the literature on complexity and macroeconomic models by exploring the analytical relationship and tensions between complex phenomena and macroeconomics. By evaluating the properties of organised complexity, this article suggests alternative strategies for analysing the macroeconomy. Drawing on F. A. Hayek’s notion of organised complexity, I examine how its causal properties relate to the analytical criteria and assumptions that contemporary macroeconomic models use. The purpose is twofold: first, I associate the properties of complexity to the idea of the macroeconomy as an emergent totality arising from the causal interplay between individuals and the organising structure. This conceptually challenges modern macro and frames analytical tensions between complexity and macroeconomic analysis. Second, introducing complexity facilitates breaking away from current analytical and conceptual straitjackets in macroeconomics. Economic inquiry requires looking for alternative ways beyond standard models to analyse the macroeconomy as an emergent totality. This suggests stepping away from current formalistic methods and radical reductionism, in favour of unconventional strategies and approaches that are sensitive to rules, structures, and the causal properties of organised complexity.

Mining on land or in the deep sea? Overlooked considerations of a reshuffling in the supply source mix

In a context of high global demand for energy transition minerals, the possibility of accessing the large resources in the deep sea appears to some as a supply and financial opportunity. This article posits that deep-sea mining (DSM) could become a significant part of the global supply mix for some of the metals required in battery manufacture, namely cobalt, copper, manganese, and nickel. Under a conceivable scenario, a reshuffling of global supply in favour of DSM would negatively affect other metal suppliers, and particularly the terrestrial mining sector. This would have negative implications for mining jurisdictions and localities. After laying out the current state of knowledge, the paper provides a preliminary analysis that assesses current and future vulnerabilities in extractive locations. We characterise the terrestrial sources of cobalt, copper, manganese and nickel and the social, political, and economic contexts in which resources are located. Factors considered include the jurisdiction's economic dependence on mining and governance score; mining communities’ remoteness; and mining projects’ relative position in the cost curve. More predictive macro-economic analyses are needed to assess the scale of the indirect effects DSM supply could trigger.

Fostering Macroeconomic Research on Hydrogen-Powered Aviation: A Systematic Literature Review on General Equilibrium Models

Hydrogen is a promising fuel to decarbonize aviation, but macroeconomic studies are currently missing. Computable general equilibrium (CGE) models are suitable to conduct macroeconomic analyses and are frequently employed in hydrogen and aviation research. The main objective of this paper is to investigate existing CGE studies related to (a) hydrogen and (b) aviation to derive a macroeconomic research agenda for hydrogen-powered aviation. Therefore, the well-established method of systematic literature review is conducted. First, we provide an overview of 18 hydrogen-related and 27 aviation-related CGE studies and analyze the literature with respect to appropriate categories. Second, we highlight key insights and identify research gaps for both the hydrogen- and aviation-related CGE literature. Our findings comprise, inter alia, hydrogen’s current lack of cost competitiveness and the macroeconomic relevance of air transportation. Research gaps include, among others, a stronger focus on sustainable hydrogen and a more holistic perspective on the air transportation system. Third, we derive implications for macroeconomic research on hydrogen-powered aviation, including (I) the consideration of existing modeling approaches, (II) the utilization of interdisciplinary data and scenarios, (III) geographical suitability, (IV) the application of diverse policy tools and (V) a holistic perspective. Our work contributes a meaningful foundation for macroeconomic studies on hydrogen-powered aviation. Moreover, we recommend policymakers to address the macroeconomic perspectives of hydrogen use in air transportation.