Monetary Indicators Research Articles

Stable aggregate currency using for precious metals prices dynamics analysis

In this paper we investigated the possibility of application a Stable aggregate currency unit of account consisting of four simple currencies – euro, pound, dollar, yen for analyze the dynamics of a exchange value of the aggregated commodity, consisting of four simple commodities – silver, gold, platinum, palladium. It has been shown that the variability of exchange value baskets which is measured by the standard deviation from one of corresponding the multiplicative monetary indices less than the same measure the variability of exchange value of national currencies and some precious metals. It was also investigated the dynamics of price a stable aggregate of precious metals, which is measured in units of stable aggregates of four solid currencies.

Financial and monetary policies in Ghana: A review of recent trends

This study has reviewed recent monetary and financial policies pursued in Ghana. The paper concludes that generally, while there have been remarkable improvements in the key monetary indicators which suggest relatively effective monetary policies during the period under review, the fiscal imbalance in the country has limited these outcomes. There is clearly the need for greater fiscal discipline given that monetary policies cannot achieve their intended purposes in the presence of fiscal imbalances. Moreover, although the policy rates have signalled a downward trend in lending rates, this has not reflected in the lending rates charged by deposit money banks (DMBs). This suggests that there are other factors driving interest rates in the country and therefore the need for policy intervention to make the cost of doing business favourable to the private sector.

Should Change the Main Objective of Bank of Albania

The main objective of the Bank of Albania is "to achieve and maintain price stability". In this study we have undertaken to compare this objective with central bank targets of many other countries. We'll compare it with developed and in developing countries of the region and the Far East. By comparison will look at whether this target is appropriate to the degree of development of the Albanian economy? Actions to achieve the main objective or influenced the realization of this objective? Do you have positively influenced other macroeconomic indicators such as economic growth and the decline in the unemployment rate? These impacts will look at analyzing a series of monetary aggregates and economic indicators. In the end we will give our opinion. Although the main objective of the Bank of Albania must change and we offer an objective. We offer a lens that is the foundation of his claim "economic growth and declining unemployment rate through financial stability ". DOI: 10.5901/ajis.2014.v3n3p273

Credit Cycles: Econometric Analysis and Evidence for Russia

One of the principal problem in contemporary macroeconomics is concerned with factors increasing or decreasing economic dynamics. The mainstream approach is based on neoclassical assumptions, but recently new approaches appear mostly based on new Keynesian concepts. In present time the influence of monetary market and credit instruments become more and more significant. Credit resources of banking and financial structures can affect and distort to reallocation of resources for national and even for global economic. In present paper an empiric and econometric analysis for some macroeconometric and monetary indices for Russian Federation is done. An econometrical models describing the influence of credit variables onto real GDP is estimated. It is shown that in short-term periods changes in credit variables do influence significantly onto GDP. It is shown that on short-term periods changes in money aggregate M2 brings influence (through credit variables) onto national output. As well it is shown that changes in short-term interest rate brings significant negative influence onto real output. Impulse response functions for GDP on shocks of credit variables, monetary base and short-term interest rate are evaluated. For the present study of credit cycles and their impact to real business cycles statistical data (quarterly time series) on the following factors for Russian Federation are collected: nominal and real GDP, monetary base M2, short-term interest rate, long-term interest rate (10-year treasuries bill rate), total debt outstanding. All time series are seasonally adjusted and collected for the period 2004 Q1 - 2013 Q2. All interest rates are adjusted for inflation (i.e. we deal with real interest rates). The investigation of long-term relationship for the factors under consideration are based on integration. It is important to note that in the present paper all econometric models are estimated on "pure" statistical data, while in many research papers on business and credit cycles all evaluations and inferences are based on "filtered" time series (mostly filtered by Hodrick-Prescott's method). In present paper "causality" always means "Granger causality". All estimations are made in gretl, an open-source multiplatform econometric software.

Measuring the monetary value of social relations: A hedonic approach

This paper presents an application of the hedonic approach to measure the monetary price of social relations. We use micro data for housing and labor markets in the 103 Italian province capitals to estimate the price of relational amenities and construct monetary indices of quality of relational life. We focus on time spent with friends, active participation in associations and frequency of going out for leisure activities as relational amenities, while controlling for standard amenities such as weather, environment, services, and socio-demographic characteristics. We find that individuals are willing to pay a positive and significant monetary price to live in cities where people spend more time with their friends. A one standard deviation increase in the share of those who meet their friends most frequently is worth an extra € 1150 per year in terms of higher housing costs and foregone wages.

Combining qualitative and quantitative approaches for measuring underground economy of Pakistan

The concern for underground, unofficial or shadow economy by researchers and practitioners has been enlarged in the past few decades. The existence and widespread findings of shadow economies is a growing problem around the world. In this study, we draw on insights from an active and growing economic literature on demand for currency approach and the underground economy. The study addresses the policy relevant issues in a technical fashion by using monetary approach with some extensions in the developing countries context like Pakistan over a period of 1975–2010. The study at first finds the long-run relationship between the currency in circulation and other variables (i.e., GNP, tax revenue as percentage of total revenue, interest rate on saving deposits and inflation rates) and subsequently used their results to infer the size of the informal sector in Pakistan’s economy. The result shows that GNP and inflation rate both have a positive relationship with currency circulation, however, the magnitude of both variables on currency circulation is different, as if there is 1 % increase in GNP and price level, currency circulation increases by 0.86 and 0.091 % respectively. The other variables i.e., tax revenues and interest rates are negatively associated with the currency circulation in the long-run. However, these results are disappearing in the short-run. On the basis of cointegration results, the study concludes that Pakistan’s underground economy increases from less than 30 % in 1975 to 19.8 % in 2010. A change in the size of the shadow economy reflected in a change in monetary indicators. Rising activity in the shadow economy is likely to push up the demand for currency in Pakistan.

A Money-Based Indicator for Deflation Risk

We employ a money-based early warning model in order to analyse the risk of a low inflation regime in the euro area, Japan and the US. The model specification allows for three different inflation regimes: Low, Medium and High inflation, while state transition probabilities vary over time as a function of monetary variables. Using Bayesian techniques, we estimate the model with data from the early 1970s up to the present. Our analysis suggests that the risks of a Low inflation regime in the euro area have been increasing in the course of the last six quarters of the sample; moreover, money growth appears to play a significant role in the assessment of such risks. Evidence for Japan and the US, on the other hand, shows that the inclusion of a monetary indicator variable does not substantially change the assessment of the risk of a Low inflation regime in either of the two countries.

Money demand and the role of monetary indicators in forecasting euro area inflation

This paper examines the stability of money demand and the forecasting performances of a broad monetary aggregate (M3), excess liquidity and excess inflation in predicting euro area inflation. The out-of sample forecasting performances are compared to a widely used alternative, the spread of interest rates. The results indicate that the evolution of M3 is still in line with money demand, even when observations from the economic and financial crisis are included. Both excess measures and the spread are useful for predicting inflation.

Measuring the Monetary Value of Social Relations: A Hedonic Approach

This paper presents an application of the hedonic approach to measure the monetary price of social relations. We use individual-level data for housing and labor markets in 103 Italian cities to estimate the price of relational amenities and construct monetary indexes of quality of relational life. We focus on time spent with friends, active participation in associations and frequency of going out for leisure activities, while controlling for standard amenities such as weather, environment, services, and socio-demographic characteristics. We find that individuals are willing to pay a positive and significant monetary price to live in cities where people spend more time with their friends. A one standard deviation increase in the share of those who meet their friends most frequently is worth an extra €1,150 per year in terms of higher housing costs and foregone wages.

Stabilization Effects of Narrative-based Monetary Policy in Jamaica

The study constructs a monetary policy indicator (MPI) from monetary policy documents and the actions of the Bank of Jamaica and Ministry of Finance and Economic Planning, and uses it to estimate four variants of an analytical narrative-vector error correction model (AN-VECM) with cointegration as the identifying restriction. In AN-VECMs 1 and 2, the cointegration is estimated in level form with respective short-term interest rate and the MPI as regressands. The first difference forms of respective models are re-estimated in AN-VECMs 3 and 4. The results are mixed, with AN-VECM 1 yielding the least results. However, in all cases, the impulse response functions indicate that the MPI yields slightly superior results in both AN-VECMs 2 and 4. A positive shock in the MPI produces price and exchange rate results which are consistent with a priori expectations from economic theory, and mixed liquidity effect and real output results. Thus, the MPI provides an important policy tool alternative for policymakers in small open economies to consider in the implementation of monetary policy.

Sustaining Welfare for Future Generations: A Review Note on the Capital Approach to the Measurement of Sustainable Development

Measuring sustainable development based on analytical models of growth and development and modern methods of growth accounting is an economic approach—often called the capital approach – to establishing sustainable development indicators (SDIs). Ecological approaches may be combined with the capital approach, but there are also other approaches to establishing sustainable development indicators—for example the so-called integrated approach. A recent survey of the various approaches is provided in UNECE, OECD and Eurostat [1]. This review note is not intended to be another survey of the various approaches. Rather the objective of this paper is twofold: to present an update on an economic approach to measuring sustainable development—the capital approach—and how this approach may be combined with the ecological approach; to show how this approach is actually used as a basis for longer-term policies to enhance sustainable development in Norway—a country that relies heavily on non-renewable natural resources. We give a brief review of recent literature and set out a model of development based on produced, human, natural and social capital, and the level of technology. Natural capital is divided into two parts—natural capital produced and sold in markets (oil and gas)—and non-market natural capital such as clean air and biodiversity. Weak sustainable development is defined as non-declining welfare per capita if the total stock of a nation's capital is maintained. Strong sustainable development is if none of the capital stocks, notably non-market natural capital, is reduced below critical or irreversible levels. Within such a framework, and based on Norwegian experience and statistical work, monetary indexes of national wealth and its individual components including real capital, human capital and market natural capital are presented. Limits to this framework and to these calculations are then discussed, and we argue that such monetary indexes should be sustainable development indicators (SDIs) of non-market natural capital, and physical SDIs, health capital and social capital. Thus we agree with the Stiglitz-Sen-Fitoussi Commission [2] that monetary indexes of capital should be combined with physical SDIs of capital that have no market prices. We then illustrate the policy relevance of this framework, and how it is actually being used in long term policy making in Norway—a country that relies heavily on non-renewable resources like oil and gas. A key sustainability rule for Norwegian policies is to maintain the total future capital stocks per capita in real terms as the country draws down its stocks of non-renewable natural capital —applying a fiscal guideline akin to the Hartwick rule.

A monetary policy strategy in good and bad times: lessons from the recent past

We evaluate the ECB's monetary policy strategy against some of the underlying economic features of the eurozone, in normal times and during the financial crisis. We show that in the years preceding the crisis the ECB's emphasis on monetary indicators and deliberate avoidance of excessive activism were justified by the underlying macroeconomic conditions that the ECB faced in the eurozone and contributed to avoid more volatile patterns of inflation and economic activity. After the collapse of financial intermediation in late 2008, the strategy of the ECB was to adopt several non‐standard policy measures. According to our quantitative evaluation of the impact of the main non‐standard policies decided in October 2008 and in May 2009, which notably did not include entering commitments regarding the future path of the policy rate, such measures have significantly contributed to preserving price stability and forestalling a more disruptive collapse of the macroeconomy. — Stephan Fahr, Roberto Motto, Massimo Rostagno, Frank Smets and Oreste Tristani

Editorial: PIA Volume 22

It is axiomatic of capitalist society that the concept of value must inevitably be reduced down to a single monetary index. In other words, we have come to expect that, in final analysis, economic value trumps all others. In the last couple of years we have seen this most clearly expressed in the government’s attitude to forestry. The historical reluctance of officaldom to recognise value of a more intangible kind also lies at the heart of the tension in cultural heritage management between the historic environment and the pressure placed on its guardians to exploit or ignore those assets in favour of economic priorities...

Boom-bust cycles and their explanatory factors in the Tunisian stock market

In this paper an attempt is made to examine whether the monetary and financial indicators and behaviour of investors increase the occurrence probability of stock market boom and bust in Tunisia. To this end, we employ the ordered logit model on quarterly data during the period from 1999 Q2 to 2010 Q3. Based on the real Tunindex index, our findings provide interesting insights into the channels between the macroeconomic environment and boom-bust cycles. Our analysis puts in evidence that the monetary and financial indicators and behaviour of investors have played a key role in explaining Tunisian stock market boom-bust cycles.

Quantitative predictive capacity of human development index in wireless telephony operations

The present study explores effects of human development (as measured by the human development index, or HDI) on the wireless telephony operations. The novelty and contributions of the paper are: 1 HDI, as a proxy for human development, can be a predictor for analysing and forecasting wireless telephony use per capita 2 the predictive capacity of HDI on wireless telephony expansion is found to be more than that of pure monetary indicators such as GDP per capita 3 a lower density of fixed lines per capita is not associated with a higher mobile use per capita. The findings can be used both in academia for informing students about factors influencing mobile use, and in industry for analysis and decision making in companies in telecommunication sector as well as companies that rely on telecommunication technologies in their operations.

Study Plans Concerning Monetary Evaluation of Mitigation Measures for the Fukushima Daiichi Accident

The Fukushima Daiichi accident raises various kinds of social unease in Japan. Especially, unease for radioactive contamination around the Fukushima Daiichi plant is serious. Also, around the other nuclear power plants, local residents would feel unease for a similar accident in the future. Although the government and the electric power companies have already implemented or plan to implement several measures to mitigate such unease, it is difficult to progress their policies effectively because the effect of each measure is not quantitatively clarified. The purpose of our research is to evaluate these effects by analyzing fluctuations in local property values and local residents economic welfare, which are monetary indexes reflecting the social unease, to construct information that is useful to plan an optimal package of mitigation measures in each nuclear power plant site from the viewpoint of cost-benefit analysis. In this paper, we explain the immediate plans of this research and its academic and political contributions.

Competitive indices of wheat + compact-mustard intercropping in a 5:1 row proportion as influenced by fertilizer doses and seed rates of wheat varieties

A field experiment in a split-plot design with three replications was conducted on wheat + compact-mustard intercropping in a 5:1 row proportion at the research farm, Institute of Agricultural Sciences, Banaras Hindu University, India, during the winter seasons of 2005.–2006 and 2006.–2007. The main plot treatment involved a combination of three fertilizer doses [100, 120 and 140% recommended fertilizer dose (RFD) to wheat, accompanied by 100% RFD to mustard] and two wheat varieties (HD-2824 and HUW-468); the subplot treatment consisted of three seed rates of wheat (100, 115 and 130 kg ha−1). The treatment differences were studied intensively in light of the various reciprocity indices. Wheat variety HD-2824 at 115 kg ha−1 seed rate and 140% RFD, intercropped with compact-mustard variety Sanjukta Aschesh at 100% RFD in a 5:1 row proportion, resulted in the best land utilization, maximum productivity and monetary advantage. Among the various yield indices studied, area time equivalent ratio (ATER), competitive ratio (CR) and effective land equivalent ratio (LER) curves were found to be good for comparing the variations in fertilizer doses and seed rates used in wheat varieties. Nevertheless, to compare monetary advantage, the monetary advantage index (MAI) based on LER proved a better index than intercropping advantage (IA), which is based on actual yield loss (AYL).

French economists and the purchasing power of money

When French economists read The Purchasing Power of Money, they were primarily interested in the equation of exchange and the reformulation that Fisher proposed regarding the quantity theory of money. This reading led them to ponder the meaning that should be given to this theory and to study its empirical significance. Some of them, namely Rueff and Divisia, went further still and considered Fisher's work as a starting point for their own analyses, which were related in particular to the monetary index, the integration of money into general equilibrium theory and the analysis of monetary phenomena in an open economy.

Generalized Measures of Correlation for Asymmetry, Nonlinearity, and Beyond

Applicability of Pearson's correlation as a measure of explained variance is by now well understood. One of its limitations is that it does not account for asymmetry in explained variance. Aiming to develop broad applicable correlation measures, we study a pair of generalized measures of correlation (GMC) that deals with asymmetries in explained variances, and linear or nonlinear relations between random variables. We present examples under which the paired measures are identical, and they become a symmetric correlation measure that is the same as the squared Pearson's correlation coefficient. As a result, Pearson's correlation is a special case of GMC. Theoretical properties of GMC show that GMC can be applicable in numerous applications and can lead to more meaningful conclusions and improved decision making. In statistical inference, the joint asymptotics of the kernel-based estimators for GMC are derived and are used to test whether or not two random variables are symmetric in explaining variances. The testing results give important guidance in practical model selection problems. The efficiency of the test statistics is illustrated in simulation examples. In real-data analysis, we present an important application of GMC in explained variances and market movements among three important economic and financial monetary indicators. This article has online supplementary materials.

The Value of Decentralisation in Wastewater Management: Gauteng Province Case Study, South Africa

In a semi-arid water scarce country like South Africa, the efficient use of limited water resources and measures to extend the service value of these resources is a prerequisite for achieving sustainable development. The conventional supply-sided management approach to water supply causes increased wastewater generation with accompanied increased pollution loads requiring higher levels of mitigation environmental pollution. Where disposal of wastewater treatment effluent takes place in rivers and natural water bodies, the lack of adequate natural compensating capacity of such water bodies typically result in severe ecological damage of the aquatic environment. With a shift of emphasis to a sustainable demand side management approach (as opposed to a supply side one), the avoidance of water wastage and high wastewater generation represents both resource conservation and environmental protection friendly approaches and contribute to overall sustainability. The integrated nature of water supply and wastewater management systems require an approach that considers these systems holistically. A new paradigm for water management is therefore needed to ensure that the issues of waste disposal and pollution are dealt with in a sustainable manner taking into account the emerging objectives of modern society for resource conservation and environmental protection.A balance therefore has to be found between the uses of additional fresh water resources as a means of satisfying en ever increasing water demand on the one hand and alternative unconventional resource exploration and employment, without the risk of depletion of natural available fresh water resource flow, irreversible harm to the environment and social and economic constraints.This paper explores wastewater and grey water reuse as unconventional resources in a qualitative manner within this balancing equation. It further proposes a methodology for deriving monetary indicator values for wastewater reuse by internalising negative environmental impacts. This is achieved through application of Lagrangian optimisation of the treatment plant production function (output distance function) for deriving marginal prices of contaminant removal and resulting avoided pollution.