Monetary Changes Research Articles

Cryptocurrencies and capital flows: evidence from El Salvador’s adoption of Bitcoin

ABSTRACT This paper explores a monetary experiment, the adoption of Bitcoin as legal tender in El Salvador in 2021, to analyse the impact of digital currencies on international capital flows. Using a difference-in-differences approach, we find that, instead of making transfers easier, El Salvador’s official cross-border financial activity has decreased after the monetary change. This finding may reflect an increase in uncertainty. However, it is also in line with findings that link digital assets to illegal activity as previously officially recorded financial transfers may have been replaced by unrecorded activities.

Evaluating Named Entity Recognition: A comparative analysis of mono- and multilingual transformer models on a novel Brazilian corporate earnings call transcripts dataset

Since 2018, when the Transformer architecture was introduced, Natural Language Processing has gained significant momentum with pre-trained Transformer-based models that can be fine-tuned for various tasks. Most models are pre-trained on large English corpora, making them less applicable to other languages, such as Brazilian Portuguese. In our research, we identified two models pre-trained in Brazilian Portuguese (BERTimbau and PTT5) and two multilingual models (mBERT and mT5). BERTimbau and mBERT use only the Encoder module, while PTT5 and mT5 use both the Encoder and Decoder. Our study aimed to evaluate their performance on a financial Named Entity Recognition (NER) task and determine the computational requirements for fine-tuning and inference. To this end, we developed the Brazilian Financial NER (BraFiNER) dataset, comprising sentences from Brazilian banks’ earnings calls transcripts annotated using a weakly supervised approach. Additionally, we introduced a novel approach that reframes the token classification task as a text generation problem. After fine-tuning the models, we evaluated them using performance and error metrics. Our findings reveal that BERT-based models consistently outperform T5-based models. While the multilingual models exhibit comparable macro F1-scores, BERTimbau demonstrates superior performance over PTT5. In terms of error metrics, BERTimbau outperforms the other models. We also observed that PTT5 and mT5 generated sentences with changes in monetary and percentage values, highlighting the importance of accuracy and consistency in the financial domain. Our findings provide insights into the differing performance of BERT- and T5-based models for the NER task.

Monetary policy and risk of commercial banks in Vietnam

This study investigates the bank risk-taking channel of monetary policy transmission by comprehensively analyzing multiple bank risk measurements amid monetary policy shocks in Vietnam. Using banking data for 2008–2021, a dynamic panel model is estimated to examine the risk exposure of 30 Vietnamese commercial banks. The paper employs the annual M2 money supply growth as a monetary policy variable, besides two policy interest rates established by the central bank. We find that an expansion of monetary policy benefits the quality of loan portfolios; however, reduced interest rates or an extended money supply increase insolvency risk. We also document that heightened economic growth corresponds to a reduced likelihood of credit and insolvency risks, while a surge in the inflation rate leads to an escalation in insolvency risk, manifested by a decline in the Z-score index. Overall, the findings on different risk dimensions in this paper are expected to draw a comprehensive picture of banks’ risk appetite and behavior in response to monetary changes.

Russia's transition to settlements in national currencies in the context of changes in the world monetary and financial system

Aim. To determine the background and prospects of the Russian Federation's (RF) transition to settlements in national currencies in the context of changes in the world monetary and financial system.Objectives. To analyze the current state of the currency market of the Russian Federation in terms of currency structure and main instruments; to identify the reasons for the transformation of the currency market of the Russian Federation; to characterize the prerequisites for the transition to settlements in national currencies in foreign trade; to assess the prospects of such a transition and its impact on the currency market of the Russian Federation in the context of the latest trends in the development of the global monetary and financial system.Methods. With the help of general methods of scientific cognition, graphical analysis the current state, dynamics and structure of the currency market of the Russian Federation in the conditions of sanctions are considered. In addition, the article assesses the background and prospects of the Russian Federation's transition to settlements in national currencies in view of the new trends in the development of the world monetary and financial system.Results. In 2022, after the economic sanctions against Russia were imposed, the state was forced to accelerate the process of transition to settlements in national currencies with major trading partners, and the domestic currency market underwent a significant transformation. In the conditions of digitalization of the financial sphere and the development of central bank digital currencies (CBDCs) , the introduction of international settlements using the digital ruble seems to be a promising direction.Conclusions. The period after the sanctions against the Russian Federation were imposed (2022) is marked by significant changes in the domestic foreign exchange market, primarily associated with the gradual displacement of world currencies (primarily the dollar) and their replacement by the ruble and renminbi. In general, this trend reflects the state of the RF foreign trade. With the reduction in the volume of the local foreign exchange market and the withdrawal of Western players, the government is taking measures aimed at preserving the potential of the foreign exchange market. A promising direction for international settlements under sanctions is through CBDC. However, the implementation of such a system will take years, during which the financial system of the Russian Federation will have to preserve its potential in isolation from Western financial markets.

BRICS as a driving force of changes in the world monetary and financial system aimed at the transition to settlements in national currencies

Aim. To determine the place and development potential of BRICS (interstate association of Brazil, Russia, India, China, South Africa) in the global monetary and financial system.Objectives. To analyze the BRICS contribution to the world economy; to assess the role of the BRICS currencies in the modern monetary and financial system; to identify areas for strengthening the role of the BRICS in the monetary and financial system; to assess the BRICS actions aimed at reducing its dependence on world currencies in favor of national currencies; to characterize the obstacles to integration and strengthening the role of the BRICS.Methods. With the help of general methods of scientific knowledge, graphic and tabular analysis the state at the present stage and the potential of BRICS development in the world economy and monetary and financial system are considered.Results. In the 15 years since the BRICS were established, the contribution to the world economy of the member countries has increased significantly, while their role in the global currency market remains not so significant. At the same time, since its establishment, one of the most important objectives of the BRICS has been to reform the existing global monetary and financial system, via strengthening the role of the association and shifting from global currencies to the national currencies of the member countries.Conclusions. Over the past few years, the BRICS countries have taken a number of measures aimed at de-dollarization, both at the level of individual countries and at the level of the association. In particular, the countries have made no secret of their intention to create a payment system based on digital currencies that is autonomous from the Western financial infrastructure, which would undoubtedly facilitate a faster transition to settlements in national currencies. Despite the difficulties for the monetary and financial integration of the BRICS countries, BRICS has great potential to influence the global monetary and financial system due to its growing economic power and the prompt development of the financial technology sector in recent years.

The theory of rhetoric between the attraction of originality and the temptations of modernity, Abd el-Malik Murtad and Muhammad el-Omari

Recent monetary changes give rise to many new terms and concepts; it is necessary to stand on the terms, adjust their significance, and take note of the circumstances of their development remove interference from the receiver; critical jurisprudence tried to adjust many terms, such as rhetoric, the subject of intervention.

ФИНАНСОВАЯ ПАРАДИГМА РАЗВИТИЯ РОССИЙСКОЙ ЭКОНОМИКИ

The article deals with financial issues in the context of changes in the content of the processes of development of the national economy, integration processes, changes in monetary and financial regulation. The problems of financial regulation are substantiated and new approaches of monetary and financial interaction with economic entities are proposed.

Developmental deviation in delay discounting as a transdiagnostic indicator of risk for child psychopathology.

The tendency to prefer smaller, immediate rewards over larger, delayed rewards is known as delay discounting (DD). Developmental deviations in DD may be key in characterizing psychiatric and neurodevelopmental disorders. Recent work empirically supported DD as a transdiagnostic process in various psychiatric disorders. Yet, there is a lack of research relating developmental changes in DD from mid-childhood to adolescence to psychiatric and neurodevelopmental disorders. Additionally, examining the interplay between socioeconomic status/total household income (THI) and psychiatric symptoms is vital for a more comprehensive understanding of pediatric pathology and its complex relationship with DD. The current study addresses this gap in a robust psychiatric sample of 1843 children and adolescents aged 5-18 (M = 10.6, SD = 3.17; 1,219 males, 624 females). General additive models (GAMs) characterized the shape of age-related changes in monetary and food reward discounting for nine psychiatric disorders compared with neurotypical youth (NT; n = 123). Over 40% of our sample possessed a minimum of at least three psychiatric or neurodevelopmental disorders. We used bootstrap-enhanced Louvain community detection to map DD-related comorbidity patterns. We derived five subtypes based on diagnostic categories present in our sample. DD patterns were then compared across each of the subtypes. Further, we evaluated the effect of cognitive ability, emotional and behavioral problems, and THI in relation to DD across development. Higher discounting was found in six of the nine disorders we examined relative to NT. DD was consistently elevated across development for most disorders, except for depressive disorders, with age-specific DD differences compared with NTs. Community detection analyses revealed that one comorbidity subtype consisting primarily of Attention-Deficit/Hyperactivity Disorder (ADHD) Combined Presentation and anxiety disorders displayed the highest overall emotional/behavioral problems and greater DD for the food reward. An additional subtype composed mainly of ADHD, predominantly Inattentive Presentation, learning, and developmental disorders, showed the greatest DD for food and monetary rewards compared with the other subtypes. This subtype had deficits in reasoning ability, evidenced by low cognitive and academic achievement performance. For this ADHD-I and developmental disorders subtype, THI was related to DD across the age span such that participants with high THI showed no differences in DD compared with NTs. In contrast, participants with low THI showed significantly worse DD trajectories than all others. Our results also support prior work showing that DD follows nonlinear developmental patterns. We demonstrate preliminary evidence for DD as a transdiagnostic marker of psychiatric and neurodevelopmental disorders in children and adolescents. Comorbidity subtypes illuminate DD heterogeneity, facilitating the identification of high-risk individuals. Importantly, our findings revealed a marked link between DD and intellectual reasoning, with children from lower-income households exhibiting lower reasoning skills and heightened DD. These observations underscore the potential consequences of compromised self-regulation in economically disadvantaged individuals with these disorders, emphasizing the need for tailored interventions and further research to support improved outcomes.

Valuing changes in the portfolio of service flows from climate-induced extremes on a linked food, energy, water system (C-FEWS)

Introduction:Recent work examining the impact of climate-change induced extremes on food-energy-water systems (FEWS) estimates the potential changes in physical flows of multiple elements of the systems. Climate adaptation decisions can involve tradeoffs between different system outcomes. Thus, it is important for decision makers to consider the potential changes in monetary value attributed to the observed changes in physical flows from these events, since the value to society of a unit change in an outcome varies widely between thing like food and energy production, water quality, and carbon sequestration.Methods:We develop a valuation tool (FEWSVT) that applies theoretically sound valuation techniques to estimates changes in value for four parameters within the food-energy-water nexus. We demonstrate the utility of the tool through the application of a case study that analyzes the monetary changes in value of a modelled heat wave scenario relative to historic (baseline) conditions in two study regions in the United States.Results:We find that food (corn and soybeans) comprises the majority (89%) of total changes in value, as heatwaves trigger physical changes in corn and soybeans yields. We also find that specifying overly simplified and incorrect valuation methods lead to monetary values that largely differ from FEWSVT results that use accepted valuation methods.Discussion:These results demonstrate the value in considering changes in monetary value instead of just physical flows when making decisions on how to distribute investments and address the many potential impacts of climate change-induced extremes.

Milton Friedman and the Road to Monetarism: A Review Essay

Milton Friedman and the Road to Monetarism: A Review Essay

CATENA OF ABILITY UTILIZATION, INSTITUTION, BUSINESS DEALING AND BUSINESS CONDENSE

This study analyzed the effect of Ability utilization, establishments and monetary Dealing on business development of Pakistan for the time of 1985-2014. Vector blunder adjustment model is applied to dissect the short run and long run relationship among factors. Assessed outcomes uncover that Ability utilization, institutional quality, monetary Dealing, work and capital emphatically affect business development while shopper value record and loan fee adversely affect monetary development of Pakistan. It is proposed that administration should build the interest in Ability area and work on the institutional quality in the country while monetary changes and rebuilding of monetary area will advance private loaning so joblessness will be decreased.

Transformations in the Monetary and Financial Policy of the European Union under the Influence of COVID‑19

The article analyses institutional changes in monetary and financial policy mechanisms, including the temporary «freezing» of the Stability and Growth Pact as an extraordinary anti-crisis policy measure under the influence of the COVID‑19 pandemic. We considered the anti-crisis instruments of the operational mechanism of the unified monetary policy and their impact on the «inflation» of the ECB balance sheet. Trends and directions of strengthening the regulatory role of the ECB and the general budget of the EU in the integration processes in the European Union are analyzed. We based our research on dialectical, systemic and institutional approaches. Also, we used methods of comparative and statistical analysis. Based on our study, we revealed the features of the new approaches of the European Central Bank to the broad interpretation of the monetary policy strategy. Further, we identified transformations in the operating mechanism and tools of the unified monetary policy under the influence of the COVID‑19 pandemic. Finally, we determined and assessed the priority orientation of the EU general budget expenditures for 2021–2027 and new collective funds to tackle the crisis to promote innovation and improve the competitiveness of the European economy.

Outline of the Evolution of the Hungarian Monetary Policy from the Restoration of the Two-level Banking System to the Present Day

This study outlines the development of Hungary’s monetary policy, and the course and changes in its objectives and instruments since the beginning of the market economy transition in the late 1980s. The author’s basic thesis is that the period since the two-level banking system was reinstated after four decades of a planned economy system, in 1987, can be basically divided into three development phases with significantly different characteristics. The first phase was an ‘attempt to introduce’ an imported monetary mechanism, or perhaps an urge to comply with it, while the second phase was an approach of a monetary regime change launched in 2013 and supporting economic growth and financial stability strongly and directly, which lasted until the appearance of the traumatic elements of the Covid-19 pandemic crisis. The third phase is evolving today, under the circumstances of adapting to the conditions of the real essence of the twenty-first century, i.e. a new type of international competitiveness, which is pursued by the Central Bank of Hungary as stipulated by the Fundamental Law and the cardinal Central Bank Act of Hungary.

U.S. Monetary Policy Spillovers to Emerging Markets: Both Shocks and Vulnerabilities Matter

Using a macroeconomic model, we explore how sources of shocks and vulnerabilities matter for the transmission of U.S. monetary changes to emerging market economies (EMEs). We utilize a calibrated two-country New Keynesian model with financial frictions, partly-dollarized balance sheets, and imperfectly anchored inflation expectations. Contrary to other recent studies that also emphasize the sources of shocks, our approach allows the quantification of effects on real macroeconomic variables as well, in addition to financial spillovers. Moreover, we model the most relevant vulnerabilities structurally. We show that higher U.S. interest rates arising from stronger U.S. aggregate demand generate modestly positive spillovers to economic activity in EMEs with stronger fundamentals, but can be adverse for vulnerable EMEs. In contrast, U.S. monetary tightenings driven by a more-hawkish policy stance cause a substantial slowdown in activity in all EMEs. Our model also captures the challenging policy tradeos that EME central banks face. We show that these tradeoffs are more favorable when inflation expectations are well anchored.

Green Finance: A New Norm for Banking Sector in India

COVID 19 has brought about significant monetary and non- monetary changes in the economy with banking sector undergoing an unplanned structural and behavioral changes. The bank moratorium scheme, injection of funds in the economy, easing out monetary policy especially in the first half of its financial year has led to significant transformation in the financial and non-financial operations of the banking sector. A short-term disruption, prolonged loss of potential customers and high probability of default from SME’s and micro entrepreneurs are the challenges placed before the policymakers. But in the midst of COVID -19 the foreseeable opportunity is diversion of resources to green investments which in long run would accelerate the off sets of COVID 19. Green finance remained undermined in the Indian economy since long but banks can now play a catalytic role by bridging the wide gap in need and actual lending of green finance requirements in the country. The study attempts to portray the green finance landscape in the country along with role of banking sector in accelerating the recovery path. The study uses mixed methods of research to provide a comprehensive report along with concrete suggestions for policy makers..

Роль финансового сектора в трансмиссии шоков макроэкономической политики в российской экономике. Оценка при различных предпосылках о структуре производства

The financial sector plays a crucial role in the economy, not only being a simple intermediary between creditors and borrowers, but also having a significant impact on the economy’s development and its various characteristics. For this reason, accounting for financial sector peculiarities is critical when developing policy-oriented general equilibrium models for practical use. This drives the interest of many researchers in development of approaches to describing the financial sector and financial frictions in DSGE models. In financial frictions models one can describe the production side of the economy in a simplistic way. However, it could be important to model the production sector in more detail. For instance, separating tradable and non-tradable sectors of the economy could be of great significance, especially for developing economies which depend on foreign trade a lot. In this paper we analyze the role of the financial sector and how important it is for transmission of monetary and fiscal shocks under different assumptions about the production sector. Namely, we compare two-sector economy with tradable and non-tradable sectors with a simplistic model which assumes that the economy produces only tradable goods. According to the results, financial frictions impact tradable and nontradable sectors asymmetrically. In the two-sector model the effect of financial frictions is quantitatively smaller than in the one-sector economy. Therefore, using the latter simplifying assumption could lead to overestimating the role of financial frictions in the transmission of monetary and fiscal shocks. In addition, the paper provides estimates of how changes in monetary and fiscal policy instruments impact the Russian economy given the existence of financial frictions.

The Currency Composition Channel of Monetary Policy and the Role of Macroprudential Regulation

We examine how domestic and foreign monetary policy affect the supply of bank credit when bank lending is denominated in domestic and foreign currencies, and how domestic macroprudential regulation shapes the transmission of foreign monetary spillovers. We use a country-level and a bank-level dataset from several European emerging economies on the lending activities of local banks broken down by currency denomination. We merge this information with indicators of monetary and macroprudential policy actions, and with bilateral trade linkages between countries. We document three main results. First, there exists a domestic currency composition channel of monetary policy: domestic monetary changes affect the share of lending in foreign currency in the domestic banking sector. Second, monetary shocks transmit across countries through international trade networks giving rise to an international bank lending channel in its currency dimension. Third, macroprudential policies enacted in home lending banking systems partly offset the spillover effects of monetary policies initiated abroad, suggesting an active role for macroprudential regulation in shielding the home economy from foreign shocks.

U.S. Monetary Policy Spillovers to Emerging Markets: Both Shocks and Vulnerabilities Matter

Using a macroeconomic model, we explore how sources of shocks and vulnerabilities matter for the transmission of U.S. monetary changes to emerging market economies (EMEs). We utilize a calibrated two-country New Keynesian model with financial frictions, partly-dollarized balance sheets, and imperfectly anchored inflation expectations. Contrary to other recent studies that also emphasize the sources of shocks, our approach allows the quantification of effects on real macroeconomic variables as well, in addition to financial spillovers. Moreover, we model the most relevant vulnerabilities structurally. We show that higher U.S. interest rates arising from stronger U.S. aggregate demand generate modestly positive spillovers to economic activity in EMEs with stronger fundamentals, but can be adverse for vulnerable EMEs. In contrast, U.S. monetary tightenings driven by a more-hawkish policy stance cause a substantial slowdown in activity in all EMEs. Our model also captures the challenging policy tradeos that EME central banks face. We show that these tradeoffs are more favorable when inflation expectations are well anchored.

Monetary Policy and Inequality

The article provides a literature review of studies of the impact of monetary policy on income and wealth inequality. Based on the analysis and systematization of the articles mainly written over the past 25–30 years as well as articles written by central bank authorities, the main approaches to assessing the extent to which the Fed's actions are responsible for the growth of wealth inequality in the United States, which began in the 1970s, are identified. It was revealed that the relative unanimity of economists on this issue was replaced by significant pluralism of opinions after the crisis of 2007–2009. Among other reasons this was caused by the activity of central banks and their use of non-conventional approaches in conducting the monetary policy. In addition, the channels through which the actions of central banks affect the distribution of wealth in the economy are identified. In total, five such channels were singled out. Thus, changes in the monetary policy affect the debt market and the structure of assets and liabilities of households, while households with fixed incomes and with a high propensity to use cash are more likely to suffer losses during the expansionary monetary policy. And the fifth channel, which is less popular among the economists, the "Cantillon effect", leads to an increase in the wealth of the first recipients of the issued money at the expense of those who are farthest from the center of emission. The article provides empirical evidence of why this effect is significant for the American economy, and theoretical arguments indicating that taking the Cantillon effect into account can add certainty to studies of both monetary policy costs and institutional changes caused by rising inequality.

Inflation and the negotiation of wages. Comparative responses to monetary changes in Germany and the United States during the Gold Standard Era, 1876–1926

ABSTRACT Negotiations over wages have always been a central part of industrial relations in capitalist economies. The unstable value of money in the 19th and 20th centuries has made these negotiations both crucial and complex. Linking contemporary understandings of monetary values to wage bargaining provides an important historical background for a better understanding of real wage developments and the agency of workers. Adopting a comparative perspective, this paper discusses how managers and workers dealt with changing monetary values in Germany and the United States from the 1870s to the immediate aftermath of the First World War. The paper also discusses the extent to which actors understood the instability of their respective currencies’ purchasing power and whether their perceptions changed over time. The paper reveals that negotiations were never exclusively shaped and guided by concepts such as inflation or the ‘cost of living’ in both countries but that the importance of the concepts changed with the level of price fluctuations and institutional setting. Indices could achieve a dominant role only in exceptional circumstances due to their artificial and contestable nature, their neglect of the complexity of workers’ job contexts and living environments, and their normative implications concerning wage demands.