Macroeconomic Perspective Research Articles

CONTRADICTIONS OF TACTICAL AND STRATEGIC DECISIONS IN BUSINESS DEVELOPMENT

The expected consequences of the Government's decision to temporarily ban imports of petroleum products from abroad are analyzed from a macroeconomic perspective. Contradictions of this kind of selective tactical decisions from the point of view of business strategy within the national economy are considered. The problems of such sectoral tactical decisions are analyzed in terms of their direct and indirect impact on the development of socio-economic processes in the country. Potential ways to smooth out the contradictions of tactical and strategic decisions in the interests of domestic business development are demonstrated.

From Barter to Libra Do Money and Cryptocurrencies Lie Along the Same Evolutionary Line?

A spectre is haunting World: the idea that money is nothing but an illusion, a thing no more real than a fiction we tell each other and we have decided to believe in. But behind the scenes, someone is quetioning this story and something is happening. Every day a new cryptocurrency is born. Among those that have been recently created, the most important is undoubtedly Libra, sponsored by Facebook, which puts itself forward as a real international currency and has aroused both curiosity and concern in the banking, political and institutional world. The change seems unstoppable and is destined to significantly affect the daily life of each of us. The real question is: are cryptocurrencies money? Can they aspire to replace in all respects traditional national currencies? Is there a single evolutionary line that begins with bartering, in the mists of time, and ends with Libra, in the glittering digital age? Or are cryptocurrencies a different and temporary phenomenon, perhaps destined to carve out a small niche in the global digital ecosystem, but nothing more? In this paper, I will try to answer these questions by adopting a new perspective compared to the traditional technical and regulatory approach, observing the phenomenon from a historical, social and macroeconomic perspective. I will conclude by pointing out that money is nothing more than a register of public debt (coins and banknotes are a means of updating the register), which was at first centralised, then decentralised, and is now distributed thanks to blockchain technology. Cryptocurrencies are therefore money for all intents and purposes.

Which consumer feedback metrics are the most valuable in driving consumer expenditure in the tourism industries? A view from macroeconomic perspective

The link between consumer feedback metrics and consumer expenditure at the microeconomic level has been extensively examined. However, little is known at the macroeconomic level about the influence of consumer feedback metrics on consumer expenditure. Relying on actual data concerning consumer feedback metrics and consumer expenditure, the present study examines the influence of various consumer feedback metrics on consumer expenditure in the tourism industries. Our study collected data about consumer feedback metrics and consumer expenditure over the period 2008–2017. The findings indicate that consumer satisfaction and consumer effort score (CES) are the best performing consumer feedback metrics in hotels, restaurants, and travel agencies industries. Furthermore, the top-2-box performs best for predicting consumer expenditure in online booking industry. The findings reflect the significance of consumer feedback metrics on the economy as a whole; therefore, efforts to boost consumer feedback metrics should consider a national agenda.

Macroeconomic Aspects of Job and Labor

This paper discusses about job and labor from the perspective of macroeconomics and politics using short essays and examples. It is often the case that jobs and labor events are in conflict with an intuition which is led from labor economics based on microeconomics theory. These discrepancies are based on differences between microeconomic and macroeconomic perspectives. By looking at the labor market based on the assumption of macroeconomics, mysterious events in jobs and labor can be seen as rational. The most important viewpoint is that the viewpoint of the labors (ruled) is completely opposite of the viewpoint of capitalists and nations (ruler), and it is necessary to consider events from the latter viewpoint. The discussions in this paper based on a macro accounting, general equilibrium model, and these will provide the different point of view from standard labor economics.

Some dynamic macroeconomic perspectives for India’s economic growth

PurposeThe purpose of this paper is to study impacts of changes in crude oil price, money supply, fiscal deficit and effective exchange rate on India’s economic growth (expressing all variables in real term).Design/methodology/approachFirst, a simple macroeconomic model is formulated to this effect. Next, linear autoregressive distributed lag procedure and vector error-correction model are applied for growth empirics. Annual data are used from 1977 through 2015.FindingsRises in real crude oil price and monetized real fiscal deficits have negative short-run and long-run effects on real economic growth. Increase in real money supply and real effective exchange rate appreciation helps promote real economic growth in both short run and long run. In all cases, there is evidence of net interactive positive feedback effects among the variables in the short run. Real effective exchange rate appreciation dampens exports, but it is helpful to imports of capital goods and crude oil that contribute to economic growth. So, the net effect on the economy may be conjecturally positive.Originality/valueTo the best of the authors’ knowledge, this paper is unique because of the formulation of macro-economic model pertaining to the topic and its subsequent empirical verification. Moreover, this paper seems more comprehensive than some other studies, cited in the literature review.

Drinking is Different! Examining the Role of Locus of Control for Alcohol Consumption

Unhealthy behavior can be extremely costly from a micro- and macroeconomic perspective and exploring the determinants of such behavior is highly important from an economist’s point of view. We examine whether locus of control (LOC) can explain alcohol consumption as an important domain of health behavior. LOC measures how much an individual believes that she is in control of the consequences of her own actions for her life’s future outcomes. While earlier literature showed that an increasing internal LOC is associated with increased health-conscious behavior in domains such as smoking, exercise or diets, we find that drinking seems to be different. Using German panel data from the Socio-Economic Panel (SOEP) we find a significant positive effect of having an internal LOC on the probability of moderate and regular drinking. We suggest and discuss two likely mechanisms for this relationship and find interesting gender differences. While social investments play an important role for both men and women, risk perceptions are especially relevant for men.

The Macroeconomic Costs of Conflict

Macroeconomic costs of conflict are generally very large, with GDP per capita about 28 percent lower ten years after conflict onset. This is overwhelmingly driven by private consumption, which falls by 25 percent ten years after conflict onset. Conflict is also associated with dramatic declines in official trade, with exports (imports) estimated to be 58 (34) percent lower ten years after conflict onset. The onset of conflict often also induces significant refugee outflows to neighboring non-advanced countries in the short run, and relatively small but very persistent refugee outflows to advanced countries over the long run. Finally, we stress that conflict should be defined in terms of the number of people killed relative to the total population. The traditional definition of conflict-based on the absolute number of deaths-skews the sample toward low-intensity conflicts in large countries, thereby understating the negative effects of conflict from a macroeconomic perspective.

Dynamic volatility spillover connectedness of sectoral indices of commodity and equity: evidence from India

The objective of this study is to evaluate the static and dynamic volatility spillover correlation connectedness of the Indian commodity and equity indices in financial and macro-economic perspective. The purpose is to gain insights of agriculture, metal and energy commodity prices vis-à-vis with sectoral equity indices like bank, financial, metal, energy, etc. through the spillover effect from each other. We also try to see how far the fundamental factors can explain the spillover correlation dynamics of commodity and equity prices. To conduct this study the dynamic conditional correlation (DCC) GARCH methodology is employed. The result gives an insight to investors that how well the factors are connected and how they react due to the spillover. The study reveals a weak spillover correlation between the commodity and equity sectoral indices over the sample period, and most of the time they are slightly negatively correlated with each other, offering adequate space for significant portfolio diversification between equity and commodity.

Relationship Between Transport Infrastructure Development and Price Formation

The paper suggests a bidirectional nexus between transport infrastructure and price formation. It is argued that the link between these two factors is not only through microeconomic effect that transport infrastructure development has on pricing, but also that it can be analyzed from the macroeconomic perspective. Hence, the article is aimed at investigating the bidirectional nexus between transport infrastructure and price formation. The main hypotheses of the research are the following: (1) Macro- and macroeconomic effects are different with respect to the sign of their influence; (2) Microeconomic effect is described by the negative effect of transport infrastructure development on price level; (3) Macroeconomic effect is perceived as a positive influence of price level increase on transport infrastructure development. Therefore, it is assumed the link between transport infrastructure and price formation is bidirectional: transport infrastructure has a negative effect on price formation, whereas price formation positively impacts transport infrastructure development. To test the hypothesis, analysis was conducted of 118 countries of different economic, social and political systems with the use of panel regression. The panel data for 2009-2018 years was used. The results indicate the presence of the said bidirectional link and prove the hypotheses set. Transport infrastructure development, represented by transport infrastructure score through the global competitiveness index, leads to reduction in price level, measured by the conversion factor of purchase power parity to exchange rates. In contrast, an increase in price level positively impacts transport infrastructure development. The nexus of transport infrastructure and price formation is explained through two directions: 1) from specific to general (including price fall by transport capacity increase – microeconomic effect); 2) from general to specific (as a social development level that determines the efficiency of management processes, in transport and logistics – macroeconomic effect).

Accounting for Latin American Growth: A Trade and Macroeconomic Perspective

This paper reviews Latin America’s growth over the last half century using a novel method that decomposes countries’ growth relative to the world into three factors: (1) the traction on growth exerted by export expansions (export pull), (2) the growth implications of changes in external imbalances (external leverage), and (3) the economy’s ability to expand faster than its imports (domestic response). It applies this method to explore the macroeconomic and trade drivers behind several historical growth trends: (1) the success or failure of Latin America’s import-substitution industrialization, (2) Mexico’s persistent slow growth despite a successful switch to export-oriented industrialization, (3) the ability or failure of South American commodity exporters to grow smoothly based on commodities, and (4) the heterogeneous growth performance of Central American services producers and exporters. With different mixes and patterns by subregion, insufficient export pulls, depressed domestic responses, and bursts in external leverage all played major roles in explaining the region’s disappointing growth.

Macroeconomic implications of public policies in the pandemic-borne crisis

Serbia and the world are facing the largest health-cum-financial crisis in the living memory. By utilizing the novel class of macroeconomic SIR models, we demonstrate that neither its origin nor its transmission is fully exogenous, but crucially depends on the complicated interaction of governments, firms and individuals? economic behavior. Hence, COVID-19 epidemics and provoked public health response exhibit profound economic and financial consequences that may well be mutually reinforcing. Paper dismisses neoliberal approach to pandemics, but also criticizes Serbian public policy as palliative and erroneously obsessed with amassing life-support machines. In fact, we argue that small open economies should focus on providing obligatory epidemiological gear and disinfectants to their population for public use while awaiting more effective medical treatment, especially after quarantines get called off. In terms of macroprudential policy and measures aimed at mitigating the economic crisis, even though reasonable at the onset, they would have to be fine-tuned and more sector specific as pandemics subsides. Instead of numerical guesswork with regards to the key macroeconomic stats, we inspected Serbian constellation in terms of likely growth trajectories without and with the second wave of contagion. From purely macroeconomic perspective, much depends upon the size and probability of capital flow reversals which so often additionally worsen the initial financial havoc. Thus, on top of conventional policy instruments, capital controls should play a greater role and must be deployed counter-intuitively to ongoing practice.

Does Fiscal Decentralization Influence on Management Efficiency of Country Innovative Development?

This paper summarizes the arguments and counterarguments within the scientific discussion on the influence of fiscal decentralization measures on the management of innovative country development. The main purpose of the research is to test the hypothesis that expenditure and revenue decentralizations have a positive impact on the management of innovative country development. Testing the hypothesis considers realization of panel data regression analysis, and consists of several stages, such as: 1) elimination of control variables multicollinearity based on the correlation analysis; 2) identification of the regression model specification (fixed or random effects model) with the help of Hausman test; 3) realization of the regression analysis and characteristic of its results (confirmation or rejection of the hypothesis). It also should be noted that country sample consists of 12 unitary European countries (Czech Republic, Denmark, Estonia, France, Hungary, Italy, Latvia, Lithuania, Poland, Slovak Republic, Slovenia, and Ukraine). Time horizon – 2008-2018. Global Innovation Index is a measure of innovative country development. At the same time, the ratio of local budget revenue to consolidated budget revenue, the rate of domestic budget expenditure to consolidated budget expenditure, the proportion of local budget tax revenue to gross local budget revenue are measures of fiscal decentralization in the research. There are also selected a set of control variables that often used in economic growth models and reflect macroeconomic perspectives of country development. However, the practical realization of the stages, as mentioned above, allow identifying that fixed effect specification of the model is more appropriate in all three cases (for three different measures of fiscal decentralization). Panel data regression analysis allows confirming the hypothesis on the positive impact of revenue fiscal decentralization and the negative impact of expenditure decentralization on innovative country development. In turn, there is no statistically significant cohesion between ratio of local budget tax revenue to gross local budget revenue and Global Innovation Index. These findings in terms of fiscal decentralization reform might be considered in order to ensure a balance between power (expenditures) redistribution from central to sub-central governments and local budget financial capacity. While in terms of innovative country development, it should be considered that the lack of local budget financial resources to cover all redistributed from central government level powers makes it impossible to invest in the development of innovation. However, the increase of local government financial capacity creates opportunities not just for essential functions financing but also advanced features investment such as innovative development. Keywords fiscal decentralization, innovation development, local budget expenditures, local budget revenue, local community.

Pengaruh Faktor Makroekonomi Terhadap Resiko Pembiayaan Bank Syariah: Studi Pada Bank Umum Syariah di Indonesia Tahun 2015-2018

Sharia banks are one of the financial institutions that are currently still developing in Indonesia. Like other financial institutions, Sharia banks also have a risk faced, namely the risk of financing. The risk of financing in Sharia banks is commonly known as the risk of financing problems. The level of problem financing in Islamic banks is one indicator of the level of the soundness of banks. The size of the problematic financing level is partly due to bad financing due to the sluggishness of the real sector in response to macroeconomic conditions. Financial system instability (financial crisis) in addition to influencing banking liquidity also encouraged an increase in problem financing. From a macroeconomic perspective, Indonesia’s current economic conditions of public concern include the exchange rate and the inflation rate. This research was conducted to determine the effect of macroeconomic factors, exchange, and comparison, on interest rates, Sharia Commercial Banks in Indonesia. The data used in this study are secondary data obtained from Sharia Banking Statistics issued by the Financial Services Authority (OJK) and data from Bank Indonesia (BI). Analysis of the technique in this study uses multiple linear regression analysis techniques. The results showed that the rupiah exchange rate and the exchange rate were significant for troubled funds at Sharia Commercial Banks. Meanwhile, the exchange rate is significant towards problem financing at Sharia Commercial Banks, while the exchange rate is significant against problem financing at Sharia Commercial Banks.

Impact of Controllable Factors on Export Performance of SMEs in Jordan

Exporting is of great interest for SMEs in Jordan from both microeconomic and macroeconomic perspective. The objective of this study was to identify to what extent specific internal factors contribute to export success of SMEs in Jordan. This study hypothesized that export performance of SMEs is directly affected by three groups of internal factors. These include firm characteristics, managerial characteristics, and marketing strategy. A multiple case approach is used to conduct this research and a structured interview is developed to collect the data directly from the participants. A pattern matching approach was used to test the hypotheses. The results show that export performance is positively affected by firm characteristics, managerial characteristics, and marketing strategy. Additionally, the demographic characteristics of managers and adaptation of distribution channels are unlikely to have an influence on export performance. This was unexpected, because of the plenty of empirical evidences in the literature that support the impact of these variables on export success.

Labor Market Analysis of the U.S.A and Eurozone; Similarities, Differences, and Reasons behind Them

The significant amount of well-organized and deeply-researched scholarly articles standing to the macroeconomic theories comes to define the labor market, which is also known as “job market”, a place where the supply side of the model comes from employees seeking for the best job while the demand side represents the employers who are mainly interested in skill-match and productivity of whom they hire for their industry. In the labor market, the equilibrium wage rate is determined at the intersection point of Wage-setting and Price-setting relation which pinpoints the relative wage on the vertical axis and the natural rate of unemployment on the horizontal axis in R^2. In order to comprehensively picture the labor market and its preliminary indicators that can be considered as the unemployment rate, and labor force participation rate, the macroeconomic perspective must be introduced in such a way that the role of investors, policymakers, and participants of the model is imaginable. In view of that, this small-scoped research conducted considers trade reforms, labor market outcomes, foreign competition, and labor market adjustment as well as the effect of the economic and financial crisis to scrutinize the current labor market conditions, similarities, and differences in the U.S.A and Eurozone respectively.

The Friedman-Lucas Transition in Macroeconomics. A Structuralist Approach. Front Matter: Foreword, Preface, Acknowledgements and Table of Contents.

In an age of scepticism about the relevance of neoclassical economics for today’s economic policy, it’s easy to argue that what went wrong lay primarily with the discipline’s over-reliance on highly idealized theories such as rational choice and rational expectations in applied policy research. Fingers are pointed, most often, at the University of Chicago Nobel laureates, especially Milton Friedman and Robert Lucas. Of course, their opponents often have just as simplistic and highly idealized theories; they just come from a perspective that they consider more “realistic,” “true,” or laden with the “right” ethical perspective. But what is really needed is an evaluation of the Chicago approach — especially the macroeconomic perspective that emerges from the work of Friedman and Lucas — that takes seriously, and hence, as its own starting point, the epistemic, methodological, economic and institutional assumptions that Lucas actually held.

Financialization and the Labor Share of Income

Abstract Financialization has been growing importance in macroeconomic perspectives since the finance-dominated capitalist relations have captured many of the specific positions in an aggregate economy. However, the empirical literature has substantially ignored the examination of the link between an increasing scale of financialization and the rising income inequality. In this study, a major hypothesis is based on the fact that the finance-dominated capitalism has a considerable effect on distributional practices through the channels of bargaining power. By applying the Kaleckian approach, the paper investigates the relationship between financialization and the labor share of national income using a panel dataset of 52 countries over the 1992-2012 period. The results suggest that a higher level of stock market development leads to a more unequal distribution of income and, thus, to the decline of wage share in the national income. Other factors such as globalization and technical change can also exacerbate the decline of wages, coupled with a decrease in the bargaining position of labor measured by unemployment rate and labor force participation rate.

ENTREPRENEURSHIP EDUCATION FOR MSMES AND YOUTH ORGANIZATION (KARANG TARUNA)

According to data from the Ministry of Manpower (Menaker) in 201 8 the number of entrepreneurs who grew in Indonesia rose 3.4% from the previous year of 3.1%. This growth exceeds International Standards of 2%. This growth rate is still very small for other ASEAN neighboring countries such as Malaysia which has grown 5%, Thailand has grown 4% and Singapore has grown to 7%. Chinese entrepreneurship growth has reached 10% and Japan has reached 11%. By looking at the comparison of the growth achievements of other countries , Indonesia is expected to become more competitive. To be able to achieve an increase in entrepreneurial growth, the government must work together with major companies to provide education and training entrepreneurship. Community empowerment by conducting entrepreneurship training and development aimed at Micro, Small and Medium Enterprises and Youth Youth Organization . In addition, there is also a need for training on how to get access to funding in creating a new company. As is known, one of the obstacles in creating new entrepreneurs is funding. . Entrepreneurs are considered to have a special role in innovation and bringing social change, traditionally from a macroeconomic perspective (Bosma et al, 2012).

INNOVATION OF NATURAL MOSQUITO REPELLENT PRODUCTS (AMUK CANDLE) AS THE OPPORTUNITY FOR COMMUNITY BUSINESS

Often the word innovation is associated with the word invention. According to Drucker (1985), Innovation is a special tool in exploiting changes in various businesses and services. He added, this innovation can be presented as a discipline that can be learned and practiced. In other words, innovation is also said to be "an idea, practice, or object that is considered new by other individuals or adoption units" (Daugherty et al., 2011; Grawe, 2009; Rogers, 1995). Meanwhile, Tidd, Bessant, Pavitt, and Wiley (1998) define innovation as the process of turning opportunities into fresh ideas and being widely used in practice. Global Entrepreneurion Monitor (GEM), reports that entrepreneurship is now the main stage in the arena of public policy in most countries. As social, environmental and economic challenges face humanity, many people believe that business has an important role to play in transforming society in the future . Entrepreneurs are considered to have a special role in innovation and bringing social change, traditionally from a macroeconomic perspective (Bosma et al, 2012). The field of innovation is very broad. The ability to develop new ideas and innovations has become a priority for many organizations. Intense global competition and technological developments have made innovation a reality a source of competitive advantage. The ability of an entrepreneur to put forward the idea of a higher value can be a source of competitive advantage. Entrepreneur that can create competitive advantage are able to increase their activities with the experience gained, by the knowledge gained, over time, it may be a source of distinctive competence in the market.

Does competition explain growth in OECD and BRICS countries?

PurposeThis paper aims to explain the empirical relationship between competitiveness and economic growth in a globalizing world. In recent times, the advanced economies have experienced a slowdown of growth, whereas the BRICS countries continue to experience high growth. The authors explore the following question: Does competitiveness of nations’ degree of competition explains this differential in growth? The authors explore competiveness and growth in a macroeconomic perspective for the large economies in the OECD and BRICS countries.Design/methodology/approachThe authors use dynamic panel data modelling technique to find the relationship between competitiveness and economic growth. This technique enables to control heterogeneity problem of this group to some extent. The focus variable of this study is annual GDP growth rate for the period 2007-2017. The proxies for measuring competitiveness in this paper are trade as percentage of GDP, product market regulation, unit labour cost and global competitive index. Innovation prevalence of foreign ownership, efficiency, competition, state of cluster development, venture capital availability, extent of market, research and development expenditure as percentage of the GDP mergers and acquisitions and multifactor productivity are the control variables.FindingsThe authors find that the degree of competitiveness competition is less likely to impact economic growth in the OECD countries because they have more or less similar competitive environment. Innovation, extent of market and state of cluster development and venture capital availability explaining growth differential. Increased competition is likely to affect growth negatively. This explains the oligopolistic structures of the world economy. However, the BRICS countries vary significantly in competitive environment. This is the reason of volatility in their growth. The conclusion is that competitiveness is important for sustained growth. Competitiveness is, however, an outcome of a set of policies, not a policy itself.Research limitations/implicationsProductivity data for OECD and BRICS countries are not available. Various series are not comparable. OECD countries have discontinued yearly unit labour cost series, and high frequency series are available but no such series for BRICS exists.Practical implicationsFirst, this paper proposes that wage growth, measured by the unit labour cost growth rate, is an important determinant of competitiveness amongst the nations. Wage growth is falling short of productivity growth in the OECD countries. This has implications for the long run sustainability of growth, skill development and inequalities in the region. Since 2011, world economic recovery is slow. Wage growth is imperative for generating sufficient private demand in the OECD countries. Second, this paper provides evidence that competitiveness is important for explaining growth in the OECD and the BRICS countries. However, it also highlights that competitiveness can be measured effectively by the trade differential or with the help of unit labour cost. Unaligned real effective exchange rate in terms of unit labour costs is the real cause of the problem.Originality/valueResearch in this area is still in infancy. This research finds that how competitiveness affects growth. A more competitive nation can sell more, but not necessarily grow rapidly. In development process, growth comes first, and at the latter stages, countries have to introduce effective reforms for competitiveness. This is the effect of competitiveness on growth by comparing various indexes.