Macroeconomic Perspective Research Articles

Modeling of crime rate in Indonesia during the COVID-19 pandemic from a macroeconomic perspective: Using robust regression with S-estimator

Indonesia is the 4th country in Southeast Asia with the highest crime index in 2020. Economic factors are often linked as the main motive for the crime. The purpose of this study is for modeling the crime rate in Indonesia during the Covid-19 pandemic from a macroeconomic perspective. Regression analysis is an analysis that is used to explain and model the relationship between variables. The existence of outliers is often a problem in regression analysis with OLS. To overcome the outlier problem, this research uses robust regression with S-estimation. The results show that was influenced by the unemployment rate, poverty rate, GRDP per capita, population density, and human development index.

Ageing and Welfare-State Policy: Macroeconomic Perspective

Ageing and Welfare-State Policy: Macroeconomic Perspective

Ageing and Welfare State Policy: A Macroeconomic Perspective

It has been widely recognized that population ageing could generate structural changes centered around a dwindling labor force, on one hand, and an expanding dependency on the generosity of the welfare state, on the other hand. Welfare state policy related to population ageing entails both fiscal and migration issues. This paper employs a general-equilibrium model with a policy making focus to help illuminate the mechanisms governing social benefit provision, labor income taxation, capital income taxation, and migration curbs on low-skilled and high-skilled workers, all driven by population ageing. Greater generosity of the welfare state comes together with a more liberal migration policy when incentives are compatible with the interests of the majority of voters. The effects of ageing on the tax and benefit sides of the welfare state depend on the number of dependents in the population and whether the country is a capital importer (in which case the capital tax burden is shared with foreigners) or a capital exporter (in which case the age-related wage increase skews taxation towards labor income). The tax-benefit narraive is about factor supplies. Low ageing evolution correlates with a relatively labor-abundant country (low retirement), which turns into a labor-scarce country (high retirement). Parallel to the evolution of the labor force, a country that is a capital importer (with a high rate of return) becomes a capital exporter (with a low rate of return). Greater demand for social benefits from an ageing population is balanced against the rising costs of labor income taxation and capital income taxation.

THE CURRENCY CONUNDRUM FOR AN INDEPENDENT SCOTLAND

AbstractIn this paper we revisit the issue of currency regime choice for an independent Scotland using an international macroeconomic/ finance framework. Specifically, we consider the main competing proposals for currency choice with an emphasis on the SNP’s official policy of the informal use of sterling post-independence. We conclude that from a macroeconomic perspective this option is unlikley to be credible to international capital markets. The option that would be credible, and avoids the austerity associated with the choice of a fixed exchange rate option, would be a free float at least during the transition period of independence.

The nexus of blockchain and governance: A use case of blockchain on trade finance

Having both opportunities and threats, blockchain is a game-changer disruptive innovation in our time. It keeps penetrating a wide scope of areas including banking, insurance, supply chain, trade finance, agriculture, etc. We explore this multifaceted technology as the first building block of our study. As a second building block, we focus on the governance concept and then we analyze the nexus of blockchain and governance. Our study contributes to the extant scarce literature by covering the recent developments on the subject. Following Liu, Lu, Yu, Paik, and Zhu (2022) we conduct our study through several steps. The literature review of our study is based on Web of Science and Google Scholar academic databases. Studies are selected according to the predefined inclusion and exclusion criteria. The review period of the study is the last five years. According to our analysis, we detect a literature gap between on-chain and off-chain governance. We believe our study contributes to filling this gap. We propose a recipe to the argument of Kaufman, Heister, and Yuthas (2021) that suggest blockchain technology has failed to produce promised benefits for enterprise networks despite its potential. Considering the increasing importance of trade finance especially during and afterward the COVID-19 pandemic, we bring forward our solution by employing a real use case of trade finance. During this effort, we explore XinFin and XinFin Digital Contract (XDC) as an example that can create added value from micro and macroeconomic perspectives simultaneously. Our future research will base on blockchain governance practices in specific sectors.

The economic feasibility of Gerga's orange (Citrus sp.) agribusiness as a new source of economic growth in Bengkulu, Indonesia

This research gave the empirical verification that orange’s agribusiness can be a source of new growth for its center production region, as in case the Gerga’s orange agribusiness for Bengkulu province in Indonesia. It is verified this kind of agribusiness benefited its largest stakeholder, namely farmers, based on parameters such as B/C ratio, farmer's share, and marketing margin. From a macroeconomic perspective, Gerga's agribusiness also can solve macroeconomic problems such as poverty, unemployment, basic needs, and regional minimum wages.

Consumers’ Journey between Liquid and Solid Consumption

Sharing economy brought changes both at the macroeconomic and the individual level. New models of consumption, such as the liquid one, are becoming very frequent, shaping countries’ productive systems and consumers’ habits. This paper—combining both theoretical approaches—aims at measuring the individual characteristics that induce consumers to prefer liquid versus solid consumption. First, the article contextualizes the topic from a broader, macroeconomic perspective, and later on, it narrows its angle of view making it rather microeconomic and behavioral. In this specific regard, by means of a cluster analysis, four profiles of consumers are identified: (1) Rational and liquid; (2) Hybrid and question mark; (3) Solid in transition; (4) Hyper solid. Characteristics as well as theoretical and managerial implications are outlined for each cluster. This research focusing on emerging consumer behavior contributes to the current debate on solid and liquid consumption (i) exploring the continuum between these two extremes, (ii) defining a first behavioral profile of customer that are traveling between solid and liquid state and (iii) designing a possible way to target such a blurred and fast evolving customer that mostly qualifies a global and rapidly evolving economic environment.

The Indonesian Macroeconomics Perspective: Halal Industry Sector be enhancing the Growth of Income per Capita

The purpose of writing this article is to examine the macroeconomic perspective of the halal industry sector on per capita income in Indonesia. The method used is qualitatively descriptive through the study of literature and literature. The halal industry sector in Indonesia has contributed to GDP based on the field sector. High GDP values support high per capita income through income distribution. There are several sub-sectors of the halal industry that contribute to the Indonesian economy. Recommended to the Indonesian government through the ministries of trade, MSMEs and Cooperatives to continue to support the acceleration of improvement in the realization of halal brands.

Evaluating the State Laws and Regulations of Microfinance Institutions (MFIs) in Asia: A Comparative Study

This study evaluates the laws and regulations of Microfinance Institutions (MFIs) in Asia. It compares the regulatory framework of MFIs with institutional development and macroeconomic perspective and concludes that central banks control formal MFIs by applying legislation. Conversely, semiformal MFIs are regulated and controlled by a government body or an apex organization. Unfortunately, informal MFIs are not regulated at all. It was observed that even though regulations are effective; however, the ownership structure, governance, and internal controls are not adequate and appropriate for all types of MFIs. Since the existing rules do not apply to all MFIs, this study recommends formulating special prudential regulations for MFIs, similar to the ones used in the banking sector. Formulating regulations should be the responsibility of the government, central banks, private sector, and the donors. Furthermore, regulators should develop a separate team of qualified members to monitor the regulatory environment, protect the interest of depositors and donors, and encourage MFIs to attain sustainability as well as outreach.Keywords: central banks, Microfinance Institutions (MFIs), prudential regulations, regulatory bodyJEL classifications: G2, G21, G28

How to Reach the New Green Deal Targets: Analysing the Necessary Burden Sharing within the EU Using a Multi-Model Approach

The Green Deal of the European Union defines extremely ambitious climate targets for 2030 (−55% emissions compared to 1990) and 2050 (−100%), which go far beyond the current goals that the EU member states have agreed on thus far. The question of which sectors contribute how much has already been discussed, but is far from decided, while the question of which countries shoulder how much of the tightened reduction targets has hardly been discussed. We want to contribute significantly to answering these policy questions by analysing the necessary burden sharing within the EU from both an energy system and an overall macroeconomic perspective. For this purpose, we use the energy system model TIMES PanEU and the computational general equilibrium model NEWAGE. Our results show that excessively strong targets for the Emission Trading System (ETS) in 2030 are not system-optimal for achieving the 55% overall target, reductions should be made in such a way that an emissions budget ratio of 39 (ETS sector) to 61 (Non-ETS sector) results. Economically weaker regions would have to reduce their CO2 emissions until 2030 by up to 33% on top of the currently decided targets in the Effort Sharing Regulation, which leads to higher energy system costs as well as losses in gross domestic product (GDP). Depending on the policy scenario applied, GDP losses in the range of −0.79% and −1.95% relative to baseline can be found for single EU regions. In the long-term, an equally strict mitigation regime for all countries in 2050 is not optimal from a system perspective; total system costs would be higher by 1.5%. Instead, some countries should generate negative net emissions to compensate for non-mitigable residual emissions from other countries.

Quantifying uncertainty: the socioeconomic impact of DCCs from an EU and a global health perspective

Abstract The third panelist will provide a brief overview of key scientific issues and discuss how uncertainty is quantified for different parameters, incl. factoring in socioeconomic dimensions and considerations for the European and global economy contributing to decision-making related to the proposal of the Digital COVID Certificate (DCC). The broader macroeconomic perspective given its implementation, as well as potential mitigating measures to assert implementation will not further contribute to exacerbating socioeconomic inequalities will be presented. Special mention will be made to the role of various determinants and on how potential inequities stemming from this measure can be further addressed.

Assessing the Potential for Digital Transformation

Historically, new technologies have always increased the efficiency of production processes. Production process efficiency increases productivity. With the growth of productivity, there is usually an increase in sales and profit. Today’s world is mainly influenced by digital technologies. The digitization of production processes leads to the digital transformation of the business and natural economy sectors. If, like other technologies in the past, the effects of digital technologies are associated with a growth in efficiency, productivity and thus also revenues and profits, the aim of this article is to propose a model to assess the potential of a digital transformation from a macroeconomic perspective. The proposed model, which was based on a composite indicator expressing the potential for digital transformation, was quantified for a certain period and for a selected sample of countries. The potential for digital transformation can occur in any country, regardless of the purchasing power of its population and GDP per capita. We can assume that the economic benefits of digital technologies are obvious. Businesses operating in any country innovate and are driven by digital technologies. This is also reflected in employment. New workers who know how to work with digital technologies are needed. Therefore, the results of the assessments and the proposal itself serve as a basis for national policy makers to create national strategies for digital transformation.

Varieties of Capitalism, Growth Regimes, and Structural Change in Eurozone Core and Peripheral Countries: Germany as a Role Model for Portugal?

This article aims at analyzing the structural changes that occurred in the Portuguese economy after the 2010/2013 sovereign debt crisis, compared with what occurred in Germany and using the current debate surrounding the new reform of the Eurozone as a backdrop. We thus intend to find out whether a peripheral southern economy like Portugal and the Eurozone’s core economy (Germany) have become closer and, if so, what that means in terms of the sustainability of the Eurozone as a set of different economies sharing the same currency. The study is framed in an institutional political economy approach (Varieties of Capitalism) and a macroeconomic post-Keynesian perspective (demand-led growth regimes), as well as a structural analysis of economic complexity and product specialization of these contrasting economies.

Sustainable consumption in macroeconomic approach in Poland

Motivation: The studies on sustainable consumption are conducted in Poland and worldwide on the basis of various source data. Macroeconomic perspective is one of research approaches. The data obtained from the system of national accounts are especially important for the assessment of the situation in Poland. As a result of research specific indicators are obtained which express changes in various areas of functioning of consumption entities in the perspective of sustainable consumption.
 Aim: to indicate the main trends of research on sustainable consumption in macroeconomic approach in Poland and to recognise the changes in the area of sustainable consumption on the basis of indicators adopted in the research on sustainable development conducted by Central Statistical Office.
 Results: In Polish official statistics, the process of tracing sustainable development which includes sustainable consumption as an integral part, can be conducted with the use of the set of indicators monitoring four main orders, i.e. social, economic, environmental and institutional, as well as political order. Indicators related to the patterns of sustainable consumption are located in the group of indicators of social order and include such measures as the structure of average monthly expenditure per capita in households by type, the structure of passenger cars by age groups and electricity consumption in households per capita. Conducted research shows that in the years 2004–2019 favourable changes were reported in Poland in the structure of individual consumption in the household sector. They were related to the decrease in the value of the food index and the increase in the expenditures free choice indicator. At the same time, the data from Central Statistical Office shows that a regression was observed in the other two research areas, i.e. the structure of passenger cars by age and energy consumption in households.

Determinants of stock market liquidity – a macroeconomic perspective

ABSTRACT This study examines the impact of macroeconomic indicators on the liquidity of the Indian stock market by using the Granger Causality, Vector Auto-Regressive Model, and Impulse Response Functions. Numerous macroeconomic indicators were analysed at monthly and quarterly frequencies for their effect on the liquidity of NIFTY 500 stocks measured across four facets, i.e. depth, breadth, immediacy, and tightness. The study reveals that the tightness facet of liquidity is primarily affected by the indicators and further concludes that higher foreign investment inflows and gold prices impair the aggregate liquidity. In contrast, a surge in money supply strengthens the stock market liquidity.

The Subsidized Green Revolution: The Impact of Public Incentives on the Automotive Industry to Promote Alternative Fuel Vehicles (AFVs) in the Period from 2010 to 2018

Throughout decades, conflicts related to the access and usage of various energy sources have caused political tensions between nations and confederations of states. Thus, partially to decrease the dependence on fossil fuels, a thorough transition towards renewable energies has been promoted by several regional and national governments as well as by multinational institutions such as the European Union. In this context, the automotive industry has particularly been held responsible for the production of negative externalities, such as global greenhouse gas emissions (GHG emissions), noise and air pollution. To a notable extent, these externalities were caused by vehicles running on fossil fuels such as petroleum products, including gasoline, diesel fuel and fuel oil. Accordingly, it is often argued that replacing vehicles run by internal combustion engines (ICEs) with so-called alternative fuel vehicles (AFVs), particularly with plug-in electric vehicles (PEVs), is crucial to increase the sustainability of the transport sector. Moreover, several EU-member states aim to reduce the vehicle-related petrol and diesel demand to decrease their dependence on foreign energy sources. However, one must consider that there are important economic costs related to such a transition process. This paper evaluates the short-term and long-term effects of fiscal policies on the European automotive market in the period from 2010 to 2018, focusing on the impact of mentioned public incentives for AFVs. This public interventionism will be critically evaluated to examine the effectiveness of government incentives in promoting AFVs, particularly for plug-in electric vehicles (PEVs). The author argues that the rather positive sales evolution of AFVs was not caused by corresponding actual customer demand but mainly by governmental policies in an increasingly interventionist market. He acknowledges that the growing variety of available PEV models, the increasing driving range of electric vehicles, as well as their decreasing production costs due to economies of scale, have helped PEVs to become more competitive. However, the concern should be raised that mentioned public interventionism is unsustainable from a macroeconomic perspective, possibly leading to significant market distortion and a new artificial market bubble. The narrowed focus on battery electric vehicles prevents the market from further elaborating on other potentially more sustainable technologies. Moreover, from a geostrategic perspective, the transition of the European automotive industry towards electrification is likely to reduce the EU’s dependency on imported fossil fuels but enables several non-European automotive brands to conquer a significant market with their new competitive plug-in electric vehicle technologies.

Pro-Environmental Behaviour in the European Union Countries

The purpose of the presented research is to assess pro-environmental behaviour (PEB) in European Union countries in 2009 and 2019. The study used a synthetic measure developed using the TOPSIS (Technique for Order Preference by Similarity to an Ideal Solution) benchmark method. This method enables distinguishing classes and ranks of countries depending on the adopted characteristics. Basic measures of descriptive statistics, i.e., average, standard deviation and the coefficient of variation, were used in the analysis of the data set. The main research question addressed in this study concerns the relationship between the level of PEB and economic, demographic, and educational factors—not only on a micro scale but also from the macroeconomic perspective. The research has revealed a wide variety throughout the European Union (EU-27) countries in terms of pro-environmental behaviour. Sweden, Finland, and Denmark top the ranking, while Malta, Greece, Spain, and Romania are at the bottom of it. Northern European countries can therefore be identified as a group that represents a positive benchmark in terms of PEB across the European Union (EU-27). The correlation between PEB and selected economic, demographic, and education-related variables was also investigated. Country-level PEB is correlated with demographic and economic variables, but it is not correlated with education-related variables.

RELATIONS BETWEEN INFRASTRUCTURE INNOVATIONS AND TOURISM SPENDING IN DEVELOPED COUNTRIES: A MACROECONOMIC PERSPECTIVE

Tourism spending as well as innovations are characterized by great economic value, which emphasizes the need for their research from a macroeconomic perspective. The objective of the research was to assess the significance of the relations between infrastructure innovations and tourism spending in a sample of developed countries. The analytical processes included macroeconomic indicators expressing tourism spending and innovations. The research sample consisted of 36 countries of the Organization for Economic Co-operation and Development (OECD) (2010–2019). The analytical processes were primarily performed using robust panel regression and cluster analysis. One of the most important findings is that innovations in information and communication technologies (ICTs) were dominant in terms of the effects on tourism visitors' spending. The results showed that innovations in other areas of infrastructure (general infrastructure, ecological sustainability) should not be neglected either. The significant effects of selected innovation indicators showed positive trajectories. As a result, with the strengthening of innovation activities, an increase in tourism spending is expected, which may lead to economic development. It can be assumed that innovation efforts in countries such as Mexico, the Slovak Republic and Turkey could have great potential for improvement. Based on the results, innovations should be considered a part of tourism development strategies, while ICTs play an important role in this issue. It is desirable to support effective tools to increase the number of innovations in tourism. These innovation efforts at the national level may translate into higher tourism spending, which appears to be economically beneficial.

Determinants of Unemployment in the Large and Medium Industrial Sector in Indonesia

As a country with the second-highest unemployment rate, Indonesian policymakers should worry about this condition. Based on the macroeconomic perspective, unemployment is affected by the firms' labour demand. It highlights that the firm's profit or loss highly determines the labour force demand. Using the Fixed Effect Model, this study results show that the labour force significantly affects industrial output, and the changes of industrial output highly increase the labour demand in the market. However, foreign and domestic capital neither significantly reduce unemployment rate in Indonesia nor stimulate the large and medium industries to absorb labour in the market. The Government should utilize foreign and domestic capital efficiently as possible to reduce unemployment rate.

The Effect of Education and R D on Tourism Spending in OECD Countries: An Empirical Study

The aim of the presented study was to evaluate the effects of education and research and development (R&D) on tourism spending in a sample of OECD countries. The analyses were performed on the basis of data on tourism spending and data on education and R&D. The research included 36 OECD countries, which were analysed for the period 2010-2019. Robust estimation was used in the panel data models. The results revealed the effect of R&D on leisure tourism spending (R&D›LTS) and the effect of R&D on visitor exports (foreign spending) (R&D›VEFS) with positive coefficients. On this basis, it can be concluded that improvements in R&D can lead to increased leisure tourism spending as well as foreign spending. The countries such as Latvia, Chile, the Slovak Republic, Mexico, Lithuania, Turkey, Poland, Greece, Estonia, and Hungary have a great potential for an improvement in R&D, which may also result in a growth of tourism spending. The research was focused on the macroeconomic perspective of education and R&D and their effect on tourism spending as key economic indicators. The study provides interesting findings that are useful for policy makers in revitalizing the tourism sector through the effective implementation of policies and strategies aimed at increasing tourism spending. The study also enriches and contributes to the knowledge about the relationships between economic development and the development of the tourism sector.