Monetary Authorities Research Articles

Governance with relationship between entrepreneurship and economic growth in Palestine

PurposeThe purpose of this study is to examine mediating role of public sector governance in the relationship between entrepreneurship and economic growth in the Palestinian context during the years 2005–2020.Design/methodology/approachThe necessary data were collected from the World Bank website and the annual financial reports of the Palestinian Monetary Authority. To achieve the study’s objectives, the researcher used content analysis method and regression model.FindingsThere is an effect of some dimensions of entrepreneurship (starting a business, obtaining credit, women starting a business) and public sector governance with dimensions (voice and accountability, political stability and absence of violence, effectiveness of government performance, organizational quality, the rule of law and control of corruption) on economic growth. In addition, there is no mediating effect of public sector governance in the relationship between entrepreneurship and economic growth.Practical implicationsThe study helps in enhancing the elements of entrepreneurship by evaluating public governance in Palestine. It also offers future researchers a comprehensive vision that encourages Palestinian economic growth.Social implicationsThe paper contributes to showing the reality of public governance indicators for the Palestinian context and the amount of support for entrepreneurial activities indicators that affect economic growth.Originality/valueTrying to activate cooperation mechanisms between government institutions and entrepreneurial institutions to adopt creative projects and ideas, especially for women, needs to focus on activating the principles of public sector governance in addition to facilitating administrative and financial procedures to start commercial projects in a way that enhances economic growth with the need to achieve the highest level of public sector governance indicators.

Gradations of organizational autonomy in Singapore: a comparison of the Monetary Authority of Singapore, Temasek Holdings, and the Development Bank of Singapore

Gradations of organizational autonomy in Singapore: a comparison of the Monetary Authority of Singapore, Temasek Holdings, and the Development Bank of Singapore

Was the post-war international trade order bound to succeed while the Bretton Woods monetary order established in 1944 was doomed to fail?

This paper explores the reasons embedded in the original architecture of both the international trade and monetary regimes that determined different outcomes for both. It proposes that the original version of the Bretton Woods monetary regime showed faster its essential failures and basically had to be replaced as early as 1971, while the trade regime embodied in the GATT and later in the WTO managed to at least survive until present day. It posits that correspondence (or the lack of it) of the basic characteristics of the said regimes with the underlying political reality where the regimes would apply (in line with Ruggie´s depiction of «embedded liberalism») accounts for the differentiated outcomes. It explains that the international trade regime showed more flexible traits that allowed it to adjust to the underlying political and led to its survival. The lack of that adaptability element would likewise explain the early demise of the original Bretton woods scheme.

Navigating the Pandemic: An Analysis of the Monetary Policy Response in Singapore

The COVID-19 pandemic substantially impacted the worldwide economy, and Singapore was not immune to its effects. In response to the outbreak, to sustain the economy and ensure price stability, the Monetary Authority of Singapore (MAS) implemented various monetary policy measures. This paper analyzes a series of timely and effective measures taken by the Monetary Authority of Singapore, including specific actions and their impacts, by combining qualitative and quantitative methods with specific economic activity data over the years. This paper demonstrates the effectiveness of most policies adopted by the Monetary Authority of Singapore, including an evaluation of their impact and potential future implications, as well as their contribution to monetary policy and its response to crises.

Comment on: “The International Spillovers of Synchronous Monetary Tightening” by Dario Caldara, Francesco Ferrante, Matteo Iacoviello, Andrea Prestipino, and Albert Queralto

Ever since Rogoff, 1985, international policy cooperation has been considered particularly counterproductive in periods of disinflation—the argument being that cross-border agreement aiming to moderate the global recessionary effects of monetary policy would erode the credibility of domestic monetary authorities in the eyes of domestic workers and firms. The paper by Caldara et al. offers a timely and healthy warning—cross-border spillovers of monetary tightening may be highly non linear: The cumulative effects of strongly anti-inflationary stance in many countries may worsen the trade off faced by each national monetary authority.

Analysis of Foreign Trade Movement and its Impactin Exchange Rate Dinar the Iraqi for the Duration (2004-2021)

The research aims to study and analyze foreign trade indicators in Iraq, and their impact on the Iraqi dinar exchange rate. Therefore, the research problem was formulated to answer the question: Does foreign trade movement affect the Iraqi dinar exchange rate? Therefore, the time series was analyzed and the significant relationship between foreign trade indicators and the exchange rate was estimated using the VAR model and the Granger test. The test results for the VAR model showed that there was an effect of the volume of foreign trade on the exchange rate of the parallel Iraqi dinar during the research period. The researcher suggested several Recommendations, the most important of which are: The Monetary Authority in Iraq must take effective steps commensurate with the volume of demand for the dollar, especially in the currency sales window and the inclusion of small traders in foreign transactions that take place via the electronic platform to achieve stability in the exchange rate of the Iraqi dinar against the dollar, and to bridge the gap between the exchange rate Formal and parallel.

Mathematical Models for Forecasting Unstable Economic Processes in the Eurozone

In an unstable economic climate, all market participants want to know is when is the timing to overcome a recession, and what measures and means to use for economic recovery. In this regard, the process through which the Eurozone economy has gained momentum since the summer of 2022 has been a volatile one. This was reflected in a sharp rise in the price level, followed by a sharp rise in the ECB interest rates. The purpose of this paper is to provide short-term forecasts of the main parameters of monetary and fiscal policy by the euro area monetary authorities, based on a model developed by the authors. The distinctive feature of the presented and proposed model lies in the particularly careful selection of the parameter values based on actual statistical data. The statistics used for the proposed model cover the period from 2015 to December 2022. The simulation results show that the European Central Bank (ECB) needs to maintain a policy of high interest rates for a period of 12 to 14 months, which will help to bring inflation down to 2–3 percent in the future and move to a stage and phase of sustainable economic growth.

Study of Literature on Business Ethics for Entrepreneurs

Bank Indonesia as the monetary authority is responsible for the smooth running of the payment system. In general, the payment system in Indonesia is divided into two, namely the cash payment system and the non-cash payment system. In the cash payment system, the tools used are in the form of currency or commonly called banknotes and coins as a means of payment. Then in the non-cash payment system, the tools used are Card-Based Payment Instruments, bilyet giro, checks, debit notes, and the latest instruments, namely electronic money. The range of cashless payment systems is divided into two types of transactions, namely transactions with large transaction values (wholesale) and retail transactions. While the number of entrepreneurs in Indonesia is still recorded at 0.43% of the total productive age population, this figure is very far behind neighboring countries, such as Singapore where the number of entrepreneurs has reached 7%, Malaysia 5%, and Thailand 3%. Meanwhile, according to the chairman of KPPU said that in 2017 the number of entrepreneurs in Indonesia ranged from 1.6% - 1.8% of the total population in Indonesia. This number is still very far from the standards of developed countries with a minimum number of entrepreneurs of 2% of the total productive age, to overcome this the government seeks to create 20,000 new entrepreneurs and the development of 1,200 Small and medium industry centers or can be called SMIs. In this article, we provide an idea from Bank Indonesia for business ethics for entrepreneurs. The method used in this article is to study the literature and review some of the references obtained. So it is hoped that this idea will have a good impact on readers and provide changes for Indonesian entrepreneurs in the future.

Monetary Policy and Current Trends in the Development of the Banking Sector in Azerbaijan

The purpose of the article is a comprehensive study of aspects of the development of the banking sector in Azerbaijan and the development on this basis of practical recommendations to improve the efficiency of the country’s banking system. The processes taking place in the banking system after Azerbaijan gained independence are considered. The quantitative and qualitative parameters of the development of banks, as well as the monetary policy carried out by the Central Bank of Azerbaijan are analyzed. The indicators characterizing the credit potential of banks and their role in the development of the country’s economy are given, ways and methods for further modernization of the country’s banking system are proposed, and important tasks that need to be solved by the monetary authority of Azerbaijan are outlined. This is the reduction of inflation, maintaining a stable exchange rate of the national currency, the development of the banking sector and ensuring financial stability. When working on the article, the author relied on the research of domestic and foreign authors on the development of the national banking sector.

Climate risk and financial stress in ECOWAS

This study examines the causal relationship between climate risk and financial stress in ECOWAS countries spanning the period from 2000–2019. We use the Multivariate Threshold Autoregressive Vector model (MTVAR) to estimate this relationship. Our findings reveal the existence of an optimal temperature threshold, below and above which a complex interplay occurs between climate risk and financial stress. This empirical evidence strongly supports the the non-linear relationship between climate risk and financial stress. Specifically, our analysis identifies 28.35°C as the optimal temperature threshold. Below this point, the contribution of climate risk to financial stress diminishes, and conversely, the financial system acts to mitigate global warming. However, above 28.35°C, climate risk exacerbates financial stress, and the financial system becomes a contributor to global warming. Public and monetary authorities need to pay more attention to the impact of climate risk on finance and the way it operates in ecological transitions.

Nigerian Economic Growth and Monetary Policy Nexus

Due to the unresolved argument on the efficacy of monetary policy in the growth of an economy, this study is conceived examine whether monetary policy variables have predicted economic growth in Nigeria. To achieve this, data were obtained from Central Bank of Nigerian Statistical bulletin of 2022. The relationship between monetary policy variables and economic growth was estimated with Autoregressive Distributive Lags (ARDL). After the analysis, the outputs revealed that the entire monetary policy variables employed were found to have negative and significant relationship with economic growth in Nigeria within the scope of the study. On this note, the researchers are of the opinion that a flexible monetary policy by the monetary authority will help sustain price stability and economic growth in the country. Policy instruments should be well- coordinated and as well have an optimal mix to significantly influence economic growth and stability.

Macroeconomic conditions of Russia’s transition to high growth rates: China’s experience

Taking China’s economy as an example, some macroeconomic characteristics of the new economic world order, which ensure GDP growth rate ahead of the US, acceleration of innovation activity and growing influence on the structure of global finances are considered. Attention is drawn to the little-studied effect generated by the difference in financing fixed capital investment: while in China the direct use of budgetary resources for that purpose plays a major role, in the United States the indirect use of similar resources dominates. As a result, there is a lag effect, which allows China (given equal rates of the issue of money) generate a higher growth rate and lower inflation. It is shown that in Russia in 2023—2025 no changes towards China’s macroeconomic characteristics are expected. One reason lies in selective attitude of monetary authorities to the economic theory. First, the hypothesis of the neutrality of money in the long term still prevails. With the help of the shifting mode of reproduction model it is shown that this hypothesis is incorrect: in the long run, money can be both neutral and non-neutral, what matters is how a single cash flow is distributed between investment activities and the production and consumption of non-productive goods. Therefore, the possibility of switching to a policy of monetary stimulation of economic growth is ignored. Second, the macroeconomic theory of managing the transitional processes arising from a sharp acceleration in the rate of GDP is insufficiently developed. Calculations of nonstationary trajectories of GDP rates and inflation have been made, as well as ways to minimize the duration of the transition process and to mitigate inflationary fluctuations have been developed. This largely removes the problem of uncertainty in the transition process, and also makes it possible to control it. As a result, it is possible to transit to accelerated economic growth in Russia.

Legal regulation of virtual assets in the Hong Kong Special Administrative Region of the PRC

The article is devoted to the study of the current legal regulation of virtual assets in the Hong Kong Special Administrative Region of the People’s Republic of China. The author analyses the advantages and disadvantages of the relevant legal framework, as well as the possibility and feasibility of implementing the most successful solutions into Ukrainian legislation.
 Due to the lack of in-depth studies that would combine the main regulatory norms and definitions and provide a general overview of this regulatory system, it became necessary to study in detail the current legal system of the Hong Kong Special Administrative Region of the People’s Republic of China, which is characterised by high autonomy from the rest of the PRC, and to identify the institutions that perform the functions of a regulator of virtual assets.
 Next, the author provide a legislative definition of virtual assets and their classification. Unlike other jurisdictions, the Hong Kong Special Administrative Region of the PRC focuses on the key features inherent in this particular object of civil rights, and excludes from the definition other objects that have similar features but are already regulated separately.
 The common law system makes it possible to regulate certain aspects of the circulation of virtual assets through precedents, which helps to quickly adapt to changes in this market, where new concepts and civil law relations emerge every few years. For example, it was through precedent that it was determined that cryptocurrencies are property and can therefore be the subject of a trust.
 Currently, not all objects created on the basis of blockchain technology are subject to regulation, such as non-fungible tokens or central bank digital currencies, as the possibility of their circulation is still being investigated by the Hong Kong Monetary Authority.
 The article also examines the new nuances of licensing service providers related to the circulation of virtual assets, which require dual licensing under two regimes regulated by separate legal acts.
 The author concludes that Hong Kong has managed to regulate the circulation of virtual assets in one way or another, but has not managed to create a clear system for all market participants, so it is possible to introduce some solutions into Ukrainian legislation, but in general, this legal regulation system has many disadvantages and sometimes creates legal uncertainty.

Monetary Policy and Economic Growth of SAARC Countries

The debate on economic policies continues in both the local and global economies. All of the academics are interested in monetary and fiscal policy and how it affects the economy. The study attempts to explore whether there is any evidence that the SAARC countries' economic growth can be influenced by monetary policy. The study applies the Pedroni cointegration approach for panel autoregressive distributed lag (ARDL) with the Pooled Mean Group (PMG) to study the relationship between monetary policy and economic growth of six SAARC nations over the period from 1983 to 2020. The recent study addresses the empirical gap within the context of the southeastern regions of the globe. Overall stylized facts show that monetary policy is causally linked and successful in the long run to accelerate economic growth. Money supply, one of the most crucial variables under study, contradicts the monetarist claim that monetary policy is too effective in the short term. The study also notes that currency devaluation is a serious concern for both short- and long-term growth while inflation is only a short-term one. In the SAARC countries, domestic credit to the private sector is better for short-term economic growth even though it has no long-term benefits. Thus, monetary authorities and the government of the SAARC nations should maintain an adequate level of money supply, adopt an export-led policy to appreciate currency, promote short-run domestic credit to the private sector, and stabilize the short-term price level to accelerate economic growth and development.

Supply Chain Management in Agriculture using Blockchain

Block chains are now firmly established as a digital technology that combines cryptographic, data management, networking, and incentive mechanisms to support the verification, execution, and recording of transactions between parties. While block chain technologies were originally intended to support new forms of digital currency for easier and secure payments, they now hold great promise as a new foundation for all forms of transactions. Agribusiness stands to become a key beneficiary of this technology as a platform to execute ‘smart contracts’ for transactions, particularly for high-value produce. First it is important to distinguish between private digital currencies and the distributed ledger and block chain technologies that underlie them. The distributed and cross-border nature of digital currencies like Bit coin means that regulation of the core protocols of these systems by central banks is unlikely to be effective. Monetary authorities are focused more on understanding ‘on-ramps’ and ‘off-ramps’ that constitute the links to the traditional payments system rather than being able to monitor and regulate the currency itself. In contrast to the digital currency feature of block chain, the distributed ledger feature has the potential for widespread use in agribusiness and trade financing, especially where workflows involve many different parties with no trusted central entity.

The Causal Relationship between Financial Development, Financial Globalization and National Savings in Pakistan

Financial globalization has a role in transmitting information within financial markets and helps in financial development. Additionally, financial globalization facilitates risk diversification alleviates the negative consequences of economic recessions, enabling nations to engage in international borrowing and lending activities, thus stabilizing income, consumption, investment and savings levels. This research study analyzes the causal nexus between financial development, financial Globalization and national savings in Pakistan. Co-integration test indicates co-integration vector henceforth, there is relationship between variables in the long run. The causal relation is determined through vector error correction mechanism and it is found that there is long run bidirectional causality between financial development, financial globalization and national savings in Pakistan. This study recommends that monetary authorities in Pakistan to encourage financial inclusion as the ratio of account holders in financial sector is very low. This will encourage documented economy and savings will be channelized to productive sectors. Likewise, financial development up gradation with par with international standards will not only encourage domestic savings but also help in financial globalization.

Financial Depth and Stock Returns in Sub-Saharan Africa: A Three-Country Comparative Study

This study examined the relationship between financial depth indicators and the stock returns in three selected Sub-Saharan African (SSA) countries from 1990-2019 comparatively. Specifically, the study investigated the effect of financial depth variables (ratios of market capitalization to the Gross Domestic Product (GDP); monetary/liquidity in circulation (M3) to the GDP; lending/savings rate spread, financial sector contribution to GDP; credit to private sector to GDP; Central Bank assets to GDP and commercial banks liabilities to GDP) on the stock market returns of the selected Anglophone SSA countries (Kenya, Nigeria and South Africa). The study employed descriptive statistics, correlations, Johansen co-integration, vector autoregressive (VAR) and Granger causality to analyze the data of selected countries and compare the results to identify the different natures of effects of financial depth on stock returns. Results revealed, that, to a large extent, financial depth variables promote stock market growth in Kenya but there was no evidence that the former significantly affected the latter in Nigeria. However, in South Africa, financial depth variables have significant negative effect on stock returns, at least, in the short-run. These results imply that, comparatively, there are marked differences among the three countries with respect to the effect of financial depth on stock returns. Nevertheless, there is evidence of causal relationship between the variables in the three countries. The study concluded that financial depth has significant effects on stock returns in Kenya and South Africa but not in Nigeria. It is therefore recommended that monetary authorities should develop strategies that will minimize monetary policy lags which delay the transmission of policy effects on the target in the short run. Also, governments and the Central Banks of the countries under study, especially Nigeria and South Africa should re-appraise their financial depth efforts vis-à-vis stock market development.

Complex Systems Modeling of Community Inclusion Currencies

This interdisciplinary paper blends knowledge from computer science and economics in proposing a complex dynamic system subpopulation model for a blockchain form of local complementary currency, generic to the Grassroots Economics Foundation’s Community Inclusion Currency (CIC) implemented in Kenya. Our contribution to the emerging economics literature is five-fold: (i) we take a novel meso-economic approach to elicit utility from actual transactions data and reveal an ‘optimal’ disaggregation number of typical community subgroups; (ii) we relate the local CIC functioning to a nation-wide currency board monetary regime to argue that such a credible CIC implementation ensures trust in the CIC and makes it a valuable market-based channel to alleviate poverty, in addition to humanitarian or government aid channels. However, (iii) we also find evidence in our data that substitutes for real-world money such as CICs are perceived as inferior, and hence CIC systems can only be transitional. Then, (iv) we reveal that, for a poor population, saving dominates as a use of a cluster’s CIC balance, accounting for 47%, followed by purchase of food and water, 25%. Despite these dominant patterns, (v) we uncover a considerable heterogeneity in CIC spending behavior. Our contribution to the related computer-science and Tokenomics literature is two-fold: (i) we provide an open-source scaffold for modeling CIC viability and net flows; (ii) to simulate a subpopulation mixing process, we employ a network-based dynamical system modeling approach that is better grounded in economic principles and monetary theory.

Information overflow between monetary policy transparency and inflation expectations using multivariate stochastic volatility models

The forward-looking policy is useful for joint decision-making between public and monetary authorities. The study calculates the monetary policy transparency index, inflation expectations, and their volatility spillover effects at a data-driven angle. Optimization mechanisms of monetary policy transparency influencing inflation and inflation expectations volatility, and transparency index based on market participants’ optimization decisions are analysed. Multivariate stochastic volatility models for measuring the volatility of inflation and inflation expectations are analysed. Additionally, the relationships between inflation and inflation expectations volatility and transparency are tested empirically. Tests show that: first, the most suitable models for measuring volatility of inflation and inflation expectations are obtained. Second, monetary policy transparency has a negative effect on the volatility of inflation and inflation expectations. Third, there is a unidirectional Granger relationship from the volatility of inflation expectations to the volatility of inflation, and it indicates that the volatility of inflation expectations has an important guiding effect on that of inflation, and it is necessary to stabilize inflation expectations for stabilizing inflation. Fourth, improving monetary policy transparency can not only reduce inflation, inflation expectations, inflation volatility, inflation expectations volatility, but also reduce the sacrifice rate, that is, to stabilize the price level with less anti-inflation costs.

Revisiting the linkages between oil prices and macroeconomy for the euro area: Does energy inflation still matter?

This study revisits the relationship between oil prices and the macroeconomy for the euro area while assessing the effects of recent energy inflation on the real economy. We particularly investigate the impact of energy inflation on the real sector (household consumption, firm investment, and economic growth), financial sector (inflation, financial market), and economic agents' confidence. Considering the monetary authority's recent actions, we review this oil price–macroeconomy relationship while taking into account the ongoing monetary policy to check the policy's efficiency and to assess whether the recent successive interventions of the European Central Bank (ECB) have attenuated the effects of energy inflation. We test these hypotheses in linear and nonlinear frameworks using threshold models that offer a flexible econometric modeling. Our results reveal two interesting findings. First, an oil price shift exerts a significant and nonlinear effect on the real and financial sectors. This impact is asymmetrical and varies by regime, depending on the economic situation (geopolitical tension, inflation, war in Ukraine, etc.). Additionally, we empirically and endogenously estimate the threshold level at which the impact of oil price changes is significant. Second, the reaction of economic growth and inflation rate to oil price shifts remains highly significant, even when considering the ongoing monetary policy of the ECB.