Macroeconomic Outlook Research Articles

Navigating technological shifts: worker perspectives on AI and emerging technologies impacting well-being

AbstractThis paper asks whether workers’ experience of working with new technologies and workers’ perceived threats of new technologies are associated with expected well-being. Using survey data for 25 OECD countries we find that both experiences of new technologies and threats of new technologies are associated with more concern about expected well-being. Controlling for the negative experiences of COVID-19 on workers and their macroeconomic outlook both mitigate these findings, but workers with negative experiences of working alongside and with new technologies still report lower expected well-being.

Interest Rate Skewness and Biased Beliefs

ABSTRACTConditional skewness of Treasury yields is an important indicator of the risks to the macroeconomic outlook. Positive skewness signals upside risk to interest rates during periods of accommodative monetary policy and an upward‐sloping yield curve, and vice versa. Skewness has substantial predictive power for future bond excess returns, high‐frequency interest rate changes around Federal Open Market Committee announcements, and survey forecast errors for interest rates. The estimated expectational errors, or biases in beliefs, are quantitatively important for statistical bond risk premia. These findings are consistent with a heterogeneous‐beliefs model in which one of the agents is wrong about consumption growth.

An analysis of the Russian macroeconomic outlook

Subject. This article discusses the prospects of the Russian macro-economy. Objectives. The article aims to determine the priorities of the Russian macroeconomic prospects. Methods. For the study, I used a systems approach based on the methods of statistical, neural network, and cluster analyses. Results. The article reveals the priority of GDP dynamics in constant prices and total State revenues in rubles, and it finds that the dynamics of GDP in constant prices and total State revenues in rubles demonstrates an active growth in the percentage of total State revenues in GDP. Conclusions and Relevance. The results of the analysis of the Russian macroeconomic outlook, including the priority of the dynamics of total State revenues in rubles, indicate the potential for economic growth. The provisions of the study can help expand the competences of the scientific community and public authorities concerned in creating conditions for economic growth and development of the Russian economy.

Uncertainty and corporate investments in response to the Fed's dual shocks

AbstractThe Federal Reserve's impact on corporate investments varies with the type of monetary shock. From a conventional standpoint, contractionary monetary shocks trigger a rise in financing costs that significantly reduce investment. Such effects are predicted by the widely investigated monetary policy channels. However, we highlight informational circumstances under which monetary contraction reduces uncertainty and incentivizes a rise in investment. These effects arise when monetary tightening conveys a positive assessment of the macroeconomic outlook by the Fed. We further show that the positive effect of contractionary Fed information shocks on investment is largely driven by these shocks’ ability to reduce uncertainty.

U.S. - INDIA Relations: Current Scenario

Both their respective home attempts to achieve their respective domestic climate targets and the remotivated global efforts to boost climate ambition were shared by India and the United States. Both parties reiterated their promise to the crucial role of multilateral cooperation in addressing these global macroeconomic challenges as they discussed the current challenges to the global macroeconomic outlook in the context of the conflict in Ukraine, such as rising commodity and energy prices as well as supply constraints. They both reaffirmed their commitment to stepping up their efforts to put the G20 Common Framework for Debt Treatment into effect in a realistic, timely, organised, and coordinated way.

Perceived economic effects of the war in Ukraine: survey-based evidence from Italian firms

ABSTRACT Using data from an Italian business survey and a quasi-experimental analysis, we document the effects of the Russian invasion of Ukraine on firms’ expectations. The conflict led firms to revise upward their inflation expectations and their own expected prices changes and made them more pessimistic about the general macroeconomic outlook and their business conditions. These effects did not materialize immediately after the Russian invasion but built up in the second and third weeks thereafter.

The Impact of the Corona Pandemic on The Application of IFRS 9 In the Management of Financial Assets in Egyptian Banks

Shortly before the COVID 19 crisis, the Financial Accounting Standards Board reformed the accounting requirements for modeling and accounting for provisions in lending operations. The Financial Accounting Standards Board (FASB) put these amendments into effect in January 2020, and the International Accounting Standards Board (IASB) issued IFRS 9, which went into effect in The crisis that could develop from COVID19 will be the first test of the new credit loss models that have arisen Originally from another global financial crisis in 2009. This paper provides an overview of these new ECL & CECL models. This is done by explaining the main differences between loan models. As a result of conducting the study, the expected credit loss model – even if it reflects the management method – should be implemented once, necessary and unchanged once implemented. All available information must be incorporated into the form. As a result, companies cannot be wary of increasing creditworthiness, but changing the macroeconomic outlook is an important driving force for the credit model

The Fed’s dual shocks and the housing market

The Federal Reserve has both a monetary and an informational impact on the housing market. Using high-frequency identification, we separate monetary shocks in the conventional sense from the shocks that convey the Federal Reserve’s assessment of the economic outlook. Conventional monetary contraction reduces residential investment, home prices, and returns on Real Estate Investment Trusts (REITs). In contrast, monetary contraction that conveys positive economic information shocks triggers subsequent rises in both housing prices and residential investment, in addition to larger gains for REITs. We provide novel support from the housing market for the recent emphasis on the Fed’s role as a credible assessor of the macroeconomic outlook.

Macroeconomic outlook optimism and analysts’ four-quarter-ahead quarterly earnings forecast optimism*

ABSTRACT We examine the relationship between the long-run macroeconomic outlook and four-quarter-ahead quarterly earnings forecasts and find that the four-quarter-ahead quarterly earnings forecasts are more optimistically biased in periods when the four-quarter-ahead quarterly macroeconomic forecasts are optimistically biased as well. This relationship is stronger when forecasts are for periods that turn out to be recessionary, which is attributable to all forecasters’ inability to predict recessions. Collectively, our results provide a non-opportunistic rationale for the optimistic bias in long-term quarterly earnings forecasts.

The effects of fiscal policy on households during the COVID-19 pandemic: Evidence from Thailand and Vietnam.

The economic crisis created by the COVID-19 pandemic induced many governments to provide financial assistance to households. Using representative consumer surveys conducted during the pandemic in 2020, we examine the effects of this fiscal policy instrument on households in two emerging economies, Thailand and Vietnam. Our paper contributes to the literature by studying how consumer sentiment and durable spending relate to receiving government financial support and the underlying transmission channels for these responses. We find that financial support to households is related to more positive consumer sentiment and increases in actual and planned durable spending, while also being correlated with a more optimistic macroeconomic outlook, higher trust in the government, and higher personal well-being.

United Republic of Tanzania: Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for the United Republic of Tanzania

The COVID-19 pandemic has negatively impacted Tanzania’s macroeconomic outlook. The Tanzanian authorities are implementing a comprehensive emergency pandemic response plan to help mitigate the significant socioeconomic and health effects of the crisis, resulting in an ongoing urgent balance of payments need.

Trends of industry-leading biotechnology stocks during COVID-19

The 2019-nCoV coronavirus has significantly impacted the macroeconomic outlook for countries across the world. The biotechnology sector experienced a relatively positive stock price outlook, which corroborates the trends exhibited by biotechnology stocks in previous pandemics such as SARS (2003) and AH1N1 (2009). During the COVID-19 pandemic, vaccine roll-out rates have been more efficient than in any other pandemic, as companies today are more experienced in combating the time constraint to create vaccines. Gilead Sciences Inc. saw its shares rise 18% after developing the first FDA-approved COVID-19 vaccine, 'remdesivir'. In contrast, AstraZeneca's shares fell 2.28% in 2021 after its vaccine underwent investigations into blood-clotting side effects and subsequent suspension from several countries. Companies developing mRNA vaccines like Moderna, BioNTech, and Pfizer witnessed surges in share prices ranging from 10% to 20%. Many newer biotech companies such as Genexie, Sanovi, OnoSec, and Vaxart have also developed vaccines for COVID-19. Share prices are more volatile for these less established companies. This paper observes how developing new technologies, staging clinical trials, obtaining FDA approvals, gaining publicity, and several other complex factors have profound impacts on the stock prices of these biotechnology companies.

United Republic of Tanzania: Requests for Disbursement Under the Rapid Credit Facility and Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for the United Republic of Tanzania

The COVID-19 pandemic has negatively impacted Tanzania’s macroeconomic outlook, and negatively impacted its population’s health and well-being. Tourism collapsed in the wake of travel restrictions, the economy reportedly decelerated to 4.8 percent growth in 2020, and growth is expected to remain subdued in 2021. The previous government downplayed the presence of the COVID-19 virus in Tanzania and the impact of the pandemic in the country, and budgeted insufficient resources to address the health and economic crisis. This has left the new administration of President Hassan with an enormous and urgent challenge to tackle the COVID-19 pandemic. The new administration is implementing comprehensive plans to immediately address the pandemic, resulting in an urgent balance of payments need.

Media Partisanship and Fundamental Corporate Decisions

AbstractUsing the introduction of Fox News as a natural experiment, we investigate whether partisanship in television news coverage influences fundamental corporate decisions. We find that during the George W. Bush presidency, firms led by Republican-leaning managers headquartered in regions into which Fox was introduced shift upward their total investment expenditures and financial leverage. Our findings imply that in making fundamental corporate decisions, Republican-leaning managers are swayed by the Republican slant of Fox that presents an optimistic macroeconomic outlook. The results highlight the importance of heterogeneity in media slant in understanding the role of the media in corporate decision making.

Impacts of the COVID-19 pandemic on electric energy load and pricing in the Iberian electricity market

The ongoing COVID-19 pandemic has established itself has one of the biggest health crises facing humanity. Countries all around the world were forced to adopt unprecedented restrictive measures in order to halt the spread of the virus and safeguard public health. These measures have profoundly changed the way of life and severely affected practically all sectors of activity, with major demand and supply shocks, leading to one of the largest recessions in world history. An essential pillar to the proper functioning of modern societies is energy security, particularly electricity security, which guarantees a reliable and efficient supply of electricity. Energy distributors and utility companies remained operational during mandatory stay-at-home orders, to ensure an uninterrupted power supply. Given the relevant role of energy in society, this work will study the consequences of the economic shutdown on the Iberian electricity market, and discuss the timeline of events, the macroeconomic outlook, the financial status of the major electric utility companies (prior to being hit by the COVID-19 health pandemic), the changes in load profile, the generation mix and, finally, the electricity market spot prices.

Senegal: Third Review Under the Policy Coordination Instrument and Request for Modification of Quantitative Targets, and Requests for a Stand-By Arrangement and an Arrangement Under the Standby Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Senegal

The macroeconomic outlook has worsened amid a second wave of the COVID-19 pandemic, higher commodity prices and social unrest, rooted in widening inequality and a lack of opportunities for the youth. The COVID-19 vaccination campaign was launched in February but has so far covered less than 5 percent of Senegal’s population. The President announced in early April an emergency program for youth employment and economic insertion amounting to 3 percent of GDP, spread evenly over 2021–23.

Trade openness and economic growth in Africa's regional economic communities: empirical evidence from ECOWAS and SADC

In light of increasing globalisation, countries do not just open their economies to trade; some factors have to be influenced. This study analyses the relationship among trade openness and macroeconomic outlook of Africa's regional economic communities (RECs), focusing on the Economic Community of West African States (ECOWAS) and Southern African Development Community (SADC). The study applies the Pooled OLS, Fixed and Random Effects techniques of estimation and the Durbin-Wu Hausman test for endogeneity to categorised secondary data from the World Bank's World Development Indicators (WDI) and the United Nations Conference on Trade and Development (UNCTAD) databases. The datasets are classified into three segments for comparative analysis, comprising the total, ECOWAS, and SADC datasets. The results show a positive but insignificant nexus between economic growth rate and trade openness in both the combined simulated ECOWAS and SADC and the individual REC. The results emphasise that the government and other relevant stakeholders should ensure policies are enacted and enforced to transmit the experienced economic growth into substantial trade gains and further trade openness in ECOWAS and SADC.

‘Macro-finance determinants and the stock market development: evidence from Morocco’

ABSTRACT This paper focuses on the role of the macroeconomic outlook in explaining the returns volatility from 1998 to 2018 in Morocco. Our findings show that the inclusion of low-frequency macroeconomic information can improve the explaining ability, particularly for the long-term variance component. Information in some indicators which represent forward-looking variables (i.e. international economic situation, interest rates, exchange rates and inflation) seem to take into account the current economic situation, and remain useful in the Moroccan stock market development. Nevertheless, the historical realized volatility exceeds all models with macro-finance data in terms of explaining the long-term volatility. Therefore, it is noteworthy that investors and decision makers are considered to be more affected by the stock results, namely the past returns performance and the historical volatility. In general, modeling the long-term volatility component has a great potential and is very useful for portfolio selection, hedging decisions and macroeconomic risk management.

The Science and Art of Communicating Fan Chart Uncertainty: The Case of Inflation Outcome in Sierra Leone

The use of macro-econometric modelling technique has become a norm for policy decisions in central banks and in particular, the Bank of Sierra Leone. This study has leveraged on the technicalities of scientific and artistic approaches of assessing risks around point / baseline forecast; this in general makes it more convincing for probability confidence bands to be used in explaining uncertainty that surround point forecast in particular. In the case of this study, the use of the Box-Jenkins ARIMAX model has made it possible to highlight the relevance of Composite Leading Indicator (CLI) like Exchange Rate in alerting signals about early turning point of inflation outcome, both in terms of the uncertainty and risks surrounding its projections. With the derived (scientific) probability distribution of risks (30%, 60% and 90%), it was possible for the study outcome to unearth vast amount of information from the Inflation Fan Chart, particularly with respect to the art of providing balanced assessment of policy framework needed to communicate the BSL’s price stability objective. While the use of Fan Chart is hailed as a very relevant tool, the paper also recommend the use of other model approaches like Scenario and Sensitivity analysis, also considered relevant in providing leading evidence of balancing risks surrounding macroeconomic outlook.

V for Vaccines and Variants

We employ a new version of the ABC macro-epidemiological agent based model presented in Delli Gatti and Reissl (2020) to evaluate the effects of vaccinations and variants on the epidemic and macroeconomic outlook. Vaccination plays the role of a mitigating factor, reducing the frequency and the amplitude of contagion waves, while also significantly improving macroeconomic performance. The emergence of a variant, on the other hand, plays the role of an accelerating factor, increasing the volatility of epidemic curves and worsening the macroeconomic outlook. If a more contagious variant emerges after vaccination becomes available, therefore, the mitigating factor of the latter is at least partially offset by the former. A new and improved vaccine in turn can redress the situation. Vaccinations and variants, therefore, can be conceived of as drivers of an intertwined cycle impacting both epidemiological and macroeconomic developments.