Macroeconomic Policy Research Articles

This article examines the theoretical foundations, economic principles, and key characteristics of organizing investment activities in enterprises. In today's dynamic economic environment, investment decisions must be based not only on financial profitability but also on strategic alignment with long-term corporate goals. The study highlights the influence of macroeconomic policies — including monetary, fiscal, regulatory, and trade policies — on investment behavior and demonstrates how enterprises must adapt to these external factors. Furthermore, the article discusses the essential components of investment evaluation and monitoring systems, including investment analysis methods, strategic alignment, risk management, and continuous performance measurement. A strong emphasis is placed on developing flexible and comprehensive investment systems that support sustainable growth, enhance financial resilience, and ensure strategic competitiveness in both domestic and international markets. Keywords: Investment Activity, Economic Principles, Strategic Alignment, Investment Evaluation, Risk Management, Macroeconomic Policy, Enterprise Development, Investment Monitoring, Sustainable Growth, Financial Resilience.

This paper introduces a novel Bayesian network framework for modeling temporal causality in complex macroeconomic systems. This data-driven, network-based methodology directly addresses the limitations of traditional econometric models, such as VAR, which often require restrictive structural assumptions and can struggle to effectively map non-linear policy and transmission lags. I apply this framework to the comprehensive Macroeconomic Imbalance Procedure (MIP) panel dataset for the European Union, covering 27 countries over the 23-year period from 1999 to 2021. The analysis models the dynamic interdependencies among eight key indicators, including GDP per capita, unit labour costs, unemployment, government debt, and private corporate debt, using a Hill Climbing learning algorithm. The results reveal a striking difference between static and dynamic perspectives. While a cross-sectional view shows a simple network, the temporal analysis uncovers a dense web of 242 causal connections dominated by two-year lag structure. Key findings demonstrate that building permits are a powerful leading indicator for forecasting GDP growth two years in advance. Furthermore, the model identifies private corporate debt as the central transmission hub for propagating economic shocks throughout the EU system, while also highlighting a delayed relationship between investment shifts and unemployment. The central implication for policymakers is that short-term, reactive interventions are fundamentally misaligned with the EU’s economic structure. Effective macroeconomic policy requires proactive, sustained implementation over at least two years. This framework provides a robust tool for ex-ante policy simulation and the strategic design of more resilient, coordinated economic policies.

Agricultural exports in Nigeria have been adversely affected by fluctuations in macroeconomic indicators. Insufficient private agricultural investment and limited public expenditure directed toward the sector have resulted in inadequate productivity and suboptimal export performance. This study investigates the macroeconomic determinants of agricultural exports in Nigeria. A multiple regression model is specified, with agricultural exports (as a percentage of total merchandise exports) as the dependent variable. The independent variables are national output (economic growth rate), inflation rate, interest rate, exchange rate, and tariff rate. The analysis employs descriptive statistics, correlation, stationarity, and cointegration tests. After confirming the absence of multicollinearity, heterogeneity, autocorrelation, and nonstationarity in the time series data, the variables are deemed suitable for regression analysis. The model is estimated using ordinary least squares, and the results are interpreted at the 5% significance level. The findings indicate that all macroeconomic indicators, except the tariff rate, significantly influence agricultural exports. It is recommended that Nigerian policymakers reassess the effects of macroeconomic policies on the country's external balance, with particular attention to agricultural exports.

As a core precious metal with dual commodity and financial attributes, gold price fluctuations are profoundly influenced by macroeconomic policies, monetary conditions, and market supply-demand dynamics. As the global benchmark for gold pricing, the COMEX gold futures market generates price signals that hold significant reference value for investors asset allocation decisions, central banks reserve management practices, and the stability of the global bulk commodity market. Against this backdrop, this study focuses on the dynamic linkage between COMEX gold futures prices and key macroeconomic variables, aiming to quantitatively analyze the short-term impact effects and long-term equilibrium relationships of the U.S. dollar exchange rate, real interest rates, and inflation rates on gold prices. Methodologically, the Vector Autoregression (VAR) model, this research uses monthly data of COMEX gold futures prices, U.S. Dollar Index (DXY), U.S. 10-year Treasury real yields, and U.S. core PCE inflation rate from 2015 to 2024 as the research sample.

Abstract The global energy transition is leading to a new division of labor in renewable energy production and economic activity in the associated value chains. As trade in renewable energy becomes more technologically feasible and economically viable, it is likely that different countries will focus on different steps in the energy transition value chains, such as the green hydrogen and lithium battery value chains. While industrialized countries are mainly looking to source low-cost renewable energy and critical raw materials in the Global South to green their industries, the benefits for developing countries are less clear. We ask what kind of green industrial policies would be relevant for developing countries to reap more benefits of the global energy transition than reinforcing traditional patterns of commodity exports to the global North. For this, we link the recent debate on green industrial policy to new concepts of developmentalist thinking. We develop a framework to relate specific policies to two distinct neo-developmentalist approaches: one more oriented towards domestic economic diversification and income redistribution, the other one more towards technologically upgrading green energy-linked exports to global markets, thus advancing the economic complexity of the country. Applying recent concepts of industrial policy, we take a broad stance and include macroeconomic and financial policies. We demonstrate that this framework can be used to evaluate green transition strategies and outcomes of countries in the global South with different degrees of economic complexity and size regarding their contribution to economic development.

Purpose This study examines the impact of non-renewable energy consumption, green innovation and institutional quality on economic welfare in Türkiye, using data from 1990 to 2021. Design/methodology/approach The dynamic autoregressive distributed lag (DARDL) model is employed for the analysis. Additionally, the frequency domain causality (FDC) is used to assess the direction of causality and check the robustness of the study. Economic welfare is measured using principal component analysis (PCA). Findings The results indicate that non-renewable energy positively affects economic welfare in the short run and long run, although only the long-run effect is statistically significant. Similarly, green innovation significantly promotes economic welfare in the long run, but its short-run impact is statistically insignificant. Conversely, institutional quality has a detrimental effect on economic welfare, exhibiting a negative and significant impact in the short and long run. The FDC test results reveal that all variables Granger-cause economic welfare, with a unidirectional causality between non-renewable energy, institutional quality and economic welfare. However, a bidirectional causal relationship exists between green innovation and economic welfare. Practical implications The study provides policymakers with insights into balancing energy use, green innovation and institutional quality for sustainable welfare. Accordingly, policymakers in Türkiye should prioritize green patents. In addition, reducing the permit-process time for renewable energy projects is imperative to incentivize investors, while ensuring institutional reforms are aligned with sound macroeconomic policies for sustainable welfare. Originality/value This is the first study to simultaneously analyze the effect of non-renewable energy, green innovation and institutional quality on economic welfare in Türkiye.

The main aim of this study is to propose a series of recommendations to public administrations for the development of economic policies that promote the contribution of the construction and civil engineering sectors to the design and implementation of sustainable cities. The study was conducted on the island of Tenerife. Documentary research and in-depth interviews with key agents were used as qualitative techniques. The recommendations are described in a portfolio of action policies grouped into three action areas: macroeconomic demand policies, regulation and reform policies, promotion and support policies, and governance and collaboration policies. Among other results, it is worth mentioning that there is a European support framework for economic policies to promote this transformation, but it is necessary to apply them whilst taking into account the environment where they are applied. Existing measures need to be evaluated to improve them and/or replace them with those mentioned by the key agents, all within an action plan that facilitates their implementation. Building sustainable cities requires public–private collaboration, institutional efficiency, and the socio-environmentally responsible performance of companies in the sector.

ABSTRACT This study examines the complex relationships between macroeconomic policies and environmental pollution in Mediterranean countries through the lens of quantile regression analysis. Drawing on panel data from 19 Mediterranean nations spanning from 1990 to 2024, we investigate how fiscal, monetary, trade, and exchange rate policies affect CO 2 emissions across different points in the pollution distribution. Our findings reveal significant heterogeneity in policy effects, with explanatory power increasing substantially from lower to higher emission quantiles. Fiscal constraints, represented by public debt levels, demonstrate increasingly positive associations with pollution as emission levels rise. Monetary policy instruments show varying effects, with interest rates positively associated with emissions particularly among high polluters, while credit expansion exhibits a transition from negative to positive effects across the distribution. Trade openness consistently shows negative relationships with emissions, contradicting the pollution haven hypothesis for this region. Exchange rate appreciation is associated with higher emissions, with effects strengthening at upper quantiles. To address potential endogeneity concerns, we employ a two‐stage quantile regression approach, which confirms these patterns while highlighting the critical roles of fossil fuel consumption and renewable energy in determining emission outcomes. The results underscore the importance of integrated policy approaches that account for differential effects across pollution levels and emphasize the need to incorporate environmental considerations into core macroeconomic policy frameworks. These findings contribute to our understanding of the macroeconomic–environmental nexus and offer insights for designing more effective environmental governance systems in the Mediterranean region.

The study examines the dynamics of herding behavior in relation to macroeconomic shocks and monetary policy shifts in the Bangladesh equity market. By employing robust empirical methodologies across distinct market states including bullish, bearish, crisis, extended crisis, and COVID-19 phases, we first demonstrate that herding prevails under conditions of heightened uncertainty. Based on this foundation, we examine how exchange rate fluctuations and interest rate shifts alongside changes in deposit rates and reserve requirements serve as catalysts for collective investor behavior. The findings demonstrate that depreciation of the domestic currency and reductions in interest rates result in significant intensification of herding during vulnerable market phases. Moreover, monetary policy adjustments, predominantly changes in deposit rates and reserve ratios, trigger coordinated trading responses, especially during bearish and crisis markets. These results reveal the profound sensitivity of frontier equity markets to macro-financial signals and underscore the critical role of policy communication and stability in mitigating destabilizing herd dynamics. By bridging macroeconomic policy and investor psychology in a frontier market context, this research offers practical insights that can help regulators and policymakers improve market resilience.

The object of the study is the financial system of Russia. The subject of the study is the reasons for the increase in household deposits in banks and the impact of these funds on the economy during the period of reducing the key rate. The relevance of the work is due to the potential impact of these funds on inflation. The purpose of the study is to assess the volume of funds on bank deposits that can exert inflationary pressure, and to develop proposals for its minimization. Econometric modeling and general scientific methods , including analysis and synthesis, were used. Based on the results of the study, it was recommended that authorized government agencies carry out a liquidity maneuver in order to reduce inflationary pressure from deposits. This should also contribute to the growth of stock market capitalization. scientific novelty lies in a comprehensive study of the problem of household savings and the proposal of a liquidity maneuver to solve a number of macroeconomic problems. Conclusions are made that deposits can affect inflation depending on the macroeconomic scenario. To minimize this impact, the authors proposed to conduct a liquidity maneuver, the effectiveness of which will depend on the implementation of a set of measures, including: expanding the investment insurance system to include property recorded in all household investment accounts; increasing the profitability and diversity of collective investment schemes through legal incentives for management companies by the regulator within the framework of consolidated supervision; improving the culture of dividend payments within the framework of the exercise of shareholder rights; promoting the creation of independent “long-only” funds that invest for the long term; creating a state-controlled fund to support the IPO market and secondary circulation of recently listed shares; fine-tuning tax incentives for companies entering IPO and SPO, and for households investing in industries critical to the economy; exemption from dividend taxation; creating guarantees for households participating in IPOs; popularizing the culture of investment in the media. The results of the study may be useful to government agencies when making decisions on further macroeconomic policy.

Environmental, Social, and Governance (ESG) principles have evolved from micro-level corporate practices to macroeconomic governance frameworks, becoming key variables influencing growth models, resource allocation efficiency, and welfare distribution. This paper systematically reviews two decades of international literature on ESG-macroeconomy interactions, analyzing bidirectional mechanisms through which ESG affects economic growth, inflation, employment structures, and balance of payments via pathways such as green innovation, human capital accumulation, and institutional quality optimization. Concurrently, it examines how macroeconomic cycles, policy frameworks, and globalization shape ESG practices. Findings reveal limitations in analyzing heterogeneous pathways, modeling dynamic feedback mechanisms, and understanding interactions under extreme shocks. Future research should integrate complex systems theory with big data methods to construct multidimensional dynamic frameworks, enhance cross-country comparisons and policy evaluations, and provide theoretical support for global sustainable development goals.

Globalization has accelerated environmental issues like climate change and biodiversity loss, threatening ecosystems and the global economy. To tackle these, the international community created a global governance framework centered on the 2030 Agenda for Sustainable Development and the Paris Agreement. This framework promotes a green economic model for coordinated development. However, achieving this goal faces dual bottlenecks of funds and technology, especially for developing countries undergoing low -carbon transformation. This article adopts the methods of literature analysis and case study to explore the role and strategies of the International Monetary Fund (IMF) in promoting green trade and sustainable development. Research has found that the IMF, through its three core functions of supervision, lending and capacity building, has established a stable macroeconomic policy foundation for the global green trade system. In addition, the technical assistance and international cooperation of the IMF have also provided significant support for member countries in addressing climate change.

In the context of macroeconomic and financial system policies it is of high importance to have models encapsulating interactions between the real economy and the financial system. In particular, the process of constructing such a model is described within this paper. For that purpose, a VAR model of industrial production, unemployment and loan-deposit interest rate spread is used. The most notable finding of the research is that spread considerably influences both output and employment in the long run.

This study examines how monetary and fiscal policies affect economic growth in China under global economic uncertainty. We estimate a Markov Switching Regression (MSR) model using quarterly data from 1996: Q1 to 2024: Q4. We also apply Bayesian Model Averaging (BMA) to choose the relevant control variables. During expansions, higher policy rates, government revenue, moderate inflation, FDI inflows, and export growth support growth. Government expenditure can crowd out private investment. During recessions, higher policy rates reduce growth. Government expenditure has limited impact, but revenue collection remains growth-supportive. Global uncertainty steadily reduces growth. Government expenditure shows negative effects, which indicates possible crowding out. The findings support that monetary and fiscal policies coordination may sustain long-term growth in China and strengthen the resilience amid global uncertainty. The Impulse response functions (IRFs) from Bayesian Vector Autoregression (BVAR) confirm the persistence and dynamics of policy shocks under global uncertainty. This study adds to the empirical literature on the role of macroeconomic policies in shaping economic growth in the case of China.

ABSTRACT This paper analyses the impact of monetary policy on corporate investment efficiency using data from 624 listed firms in Vietnam between 2007 and 2023, covering both the global financial crisis and the COVID-19 pandemic. We show that a relaxed monetary policy is associated with higher investment efficiency. Our additional analysis indicates that the effects of monetary easing are most evident among underinvesting firms, consistent with the view that lower interest rates alleviate financing constraints and facilitate access to external funding, allowing firms to pursue potential investment projects. However, the effects of monetary policy differ significantly during economic shocks. The impact is amplified during the financial crisis, but it weakens and even reverses during the COVID-19 pandemic. By highlighting the distinct effects of these two shocks, our paper contributes to the literature on macroeconomic policy transmission during crises.

Abstract Modern monetary theory (MMT) argues that all governments that issue their own currency have the same fiscal and monetary policy space. This paper argues against this position. For MMT’s assumptions to be valid, MMT must abstract from the gravitational force of the US dollar that stems from it being backed by a mass of securities – an influence transmitted through international investment flows. Once the dollar’s gravitational force is recognised, it becomes clear that the huge size disparity separating the US financial market from those of other markets, and most notably those of the emerging market economies (EMEs), translates into an equally huge disparity regarding fiscal and monetary policy capacities. The strategic implications of recognising this disparity are that EME governments should, where possible, join their financial markets into regional blocs of sufficient size to give their regional currencies enough backing mass to allow them to resist the gravitational pull of the dollar. Only by pooling their currency sovereignty can EME governments retain some scope for pursuing macroeconomic policies independently of those pursued by the US government. Without doing so, if EME governments in countries with small financial markets follow MMT’s advice to retain their local currencies, this will condemn these currencies to entrapment in the dollar’s gravitational field and possibly outright dollar colonisation.

Constraints on policy autonomy structurally stem from uneven capitalist development and pre-date neoliberalism, but their degree of restrictiveness varies depending on the balance of power among major states and the nature of their dominant classes. The analysis of China’s overseas development finance (CODF) reveals how its contender state-society complex relaxes external constraints on industrial policy autonomy. CODF expands finance for underfunded sectors, allows performance requirements, prioritizes the public sector, relaxes macroeconomic policies, and institutes a long-term derisking approach. It creates space for Southern countries’ political agency and terrain to grow a counterhegemonic historical bloc to transcend US-led (neo)liberal order. Still, the realization of CODF’s potential is contingent on political configurations of beneficiary countries and on the emergence of popular national forces capable of addressing the legacies of neoliberalism. JEL Classification: F63, F02, F33, F54, O25, P33, P51

The research examines how anti-money laundering (AML) laws affect the banking sector stability (BSS) in four nations which are Haiti, Myanmar, Malta, and Nigeria between 2015 and 2024. Based on panel data and Vector Error Correction Model (VECM), the study assesses the interaction between AML efforts and macroeconomic factors that include GDP growth, inflation, and the size of the banks. According to descriptive analysis, the distribution of BSS and AML risk is broad across the countries with Haiti performing the worst in terms of risk and stability and Malta performing the best across standards of regulation. Unit root tests and cointegrating tests verify long-run relationships, and the results demonstrate that lower regulation of AML contributes significantly to a lack of stability in banks, whereas an increased growth of GDP strengthens stability. BSS is impacted negatively by inflation, but the size of banks is not an important factor. The term that represents the error correction shows a convergence of 32 percent each year towards equilibrium. The research proposes the wherewithal, AML-specific, and harmonised macroeconomic policies to strengthen the resilience of banking, especially in weaker and riskier jurisdictions.

This study aims to analyze the influence of the BI Rate, Gross Domestic Product (GDP), Residential Property Price Index (RPPI), and Indonesia Sharia Stock Index (ISSI) on the mortgage financing of Islamic banks in Indonesia. The objective of this research is to provide recommendations for the government in formulating macroeconomic policies that facilitate public access to Islamic mortgage financing. This research employs a quantitative approach using the Autoregressive Distributed Lag (ARDL) method, processed with E-Views 12. Data were sourced from Islamic Banking Statistics by OJK, Bank Indonesia, Kemendagri, BPS, and CEIC for the 2014-2024 period. The findings indicate that in the short term, the BI Rate and GDP have a significant positive influence, while RPPI has a significant negative influence on Islamic mortgage financing. Conversely, ISSI shows no significant influence in the short term. In the long term, only GDP has a significant positive impact on Islamic mortgage financing, whereas the BI Rate, RPPI, and ISSI exhibit no significant effects. These findings provide critical insights into the dynamics of macroeconomic variables affecting Islamic mortgage financing and their implications for economic policy formulation.

Relevance. The macroeconomic policy of the state plays a key role in regulating the economy, ensuring stability and creating conditions for sustainable growth. In modern conditions of globalization and instability, state adaptation mechanisms are becoming especially important. This article examines the main theoretical aspects of the macroeconomic policy of the state, including classical, Keynesian and Monetarist theories, analyzing the key tools, goals and challenges faced by modern states.The purpose is to consider the theoretical foundations of macroeconomic policy, analyze its impact on the economic development of the country, as well as to study modern challenges and methods of overcoming them.The objectives of the research are related to the analysis of the use of macroeconomic approaches in public production, the definition of the role of state macroeconomic policy in modern economic theory, including in times of crisis, the presentation of comparative characteristics of theoretical approaches to macroeconomic policy, as well as the justification of the practice of applying macroeconomic theory in the economies of various states.Methodology. The use of methods and sources allows us to formulate hypotheses and concepts based on a theoretical understanding of the data, comprehensively assess the dynamics of key macroeconomic indicators, and identify sustainable patterns of the Russian economy in a changing global economic environment.The results. The literature review examines the works of Adam Smith, John Maynard Keynes, Milton Friedman, and modern Nobel Prize laureates. Special attention is paid to the impact of macroeconomic policy on the Russian economy in the context of global challenges.Conclusions. The results of the conducted research allow us to state that in real practice, the state rarely follows one macroeconomic theory, which allows it to combine them depending on economic challenges. When regulating the macroeconomic crisis, the state faces an objective need to develop fundamentally new monetary policy instruments that are adequate to external challenges and threats.