Monetary Research Articles

How Not to Build a Monetary Union?

How Not to Build a Monetary Union?

Eco-Zero Weeding - A Wow Incredible Scientific Innovation for Altering Things around Us and India Inaction

Weeds grow everywhere and create crop loss, involve huge expenditure in weeding, produ allergic pollens and unpalatable fodder, forages and cause green house gas emission in environment around us. Several high tech weeding machines including robotics were developed and focused as wonderful development and marketing strategy created to make huge profit in the global business by many developed countries forming company consortium to harness the benefits from such unaffordable technologies. Further, these weeding machine based practices are not suitable where sowing is done by hand broadcasting, as is prevalent in eastern India and many countries of the world, as well as under aberrant weather condition making field condition not walk able or too dry condition for any field operation., Hence, problem of weed management and global warming are not likely to get solved by such technical developments. It requires some miracle like discovery to stand as panacea scientific solution. The present study reports an innovative research on science of ecology that becomes a non monetary panacea total solution in agriculture and stands as method of weed management superb over any known mechanical-robotic weeder getting claimed as breakthrough on weeding works. This innovation was submitted to Indian Council of Agricultural Research, New Delhi over a year ago i.e. on August 17, 2017, as fulfillment of a challenge on weed management, but it is pending due to inaction. The new science based discovery not only overcomes weed control under all conditions, including the broad casting situations, as well as aberrant weather condition, but eco zero weeding fixes atmospheric natural nitrogen that enhances unimaginable high yield of crops. This discovery equips world with intellectual property of immense value that enable world acquire huge economic gain and overcome climate change and foster environment protection.

Impact of bank withdrawals taxation on cash holdings, interest rates, inflation and bank deposits: Empirical evidence from Pakistan

To avoid debt burdens and to meet budgetary expenditure within internal resources leads to introduction of bank withdrawal taxation in Pakistan. The research has been carried out to empirically investigate the impact of bank withdrawal taxation on cash holdings, bank deposits, inflation, borrowing and lending rates. The withdrawal taxation was imposed in 2006 therefore the study analysis period has been from 2006 to 2014. The complex relationship among variables leads to analyze the data through VAR. The empirical findings through Vector auto regression (VAR) and impulse response suggests the presence of disintermediation in Pakistani economy. The disintermediation in the economy is captured through the study findings that there is increase in the cash holdings during the study period and reduction in bank deposits. The monetary variables such as inflation, borrowing and lending rates are reduced due to imposition of bank withdrawal taxation.

Le temps (réel), c’est de l’argent

À l’âge du trading haute fréquence sur les marchés financiers et de la mise en place de services de paiements instantanés dans le commerce de détail, on peut trouver étrange que l’échéance la plus courte négociée sur le marché monétaire soit le « au jour le jour ». Cette situation est le reflet de politiques menées par les banques centrales qui fournissent gratuitement la liquidité intra-journalière au système bancaire. De telles politiques sont difficiles à fonder en théorie et comportent des limites auxquelles les banques centrales pourraient remédier en conduisant des politiques monétaires en temps réel. L’article détaille comment, à la suite de cette décision, les banques centrales pourraient adapter certaines caractéristiques de leur cadre opérationnel de politique monétaire et de leurs systèmes de réglement brut en temps réel. En tout état de cause, les avantages potentiels d’un tel choix devraient être soigneusement pesés en contrepartie des coûts pour les banques centrales, les intermédiaires financiers et la société.

Bank Al-Maghrib communication: A new evaluation of the power of monetary and economic transparency

Theoretical arguments indicate that transparency could increase the credibility of low-inflation monetary policy, ameliorate the performance of decision-making and enhance the efficiency of interest rate setting. However, the qualitative nature of the communication makes its assessment difficult. The purpose of this article is to propose a new method of quantifying the information contained in central bank press releases and to examine whether the words spoken by policymakers can influence future monetary policy decisions in addition to macroeconomic variables. Through discourse analysis, we compared the importance attached to price stability and production. Then we developed a specific dictionary to measure Bank Al-Maghrib’s communication and finally, we examined the utility of transparency in predicting monetary decisions by exploiting the prospective Taylor rule. By creating two indicators of transparency (monetary and economic), we find that central bank governor statements are significantly related to future interest rate decisions. This approach should improve the ability of market participants to predict interest rate decisions and reinforce the emphasis placed on the information in the Taylor rule in addition to anticipating inflation and production, especially that Morocco is considering the transition to an inflation-targeting regime.

Supply Chain Management of Indian Agriculture Industry: An Exploratory Study

Indian Agriculture/Agro Industry (IAI) is an integral part of Indian society and economy. Approximately half of the total population relies on this industry as a principle source of income and it contributes around 14% of India’s GDP. Indian food business has increased to US$ 250 billion in 2015 as compared to US$ 220 billion in the year 2009 and expected to grow further rapidly in the next ten years. Indian Agriculture is a world leader in terms of production of many product categories As a result, on one hand engagement of huge population, rising demand, farm mechanization, increase in global markets, etc., offer huge potential for this industry. On the other hand, it faces many severe problems. Producers of agro products are getting merely 30–35 per cent of the market price in most of the cases due to lack of supply chain practices. Annual wastages of agricultural output are also very high which in monetary term sums up to around Rs 90,000 Crore. This wastage is mainly due to inadequate supply chain infrastructure. The objective of this paper is to highlight the present scenario of Indian Agricultural Industry in terms of prospects and explores various supply chain related issues of this industry.

Fuentes de las fluctuaciones macroeconómicas en Puerto Rico

Se investiga cuáles son los aspectos macroeconómicos que dan origen a las fluctuaciones económicas en Puerto Rico. Se parte de un sistema macroeconómico, y de acuerdo con los resultados de las funciones impulsos respuesta y de la descomposición de la varianza del error de proyección, la trayectoria del desempleo se ve afectada a corto y largo plazo por los impulsos de oferta local y por los de demanda generados por el Banco de la Reserva Federal de Estados Unidos a través de su instrumento intermedio de política monetaria. Por su parte, la inflación se ve afectada mayormente, tanto a corto como a largo plazo, por los impulsos de demanda externo y por los de demanda local.

Relationship Between GDP And GDS In The UAE: ARDL Bound Testing Approach

This study explores the relationship between Gross Domestic Product (GDP) and Gross Domestic Saving (GDS) in United Arab Emirates (AUE covering the period 1980 – 2013 , using the autoregressive distribution lag (ARDL) cointegration framework. Granger Causality test were employed in the empirical analysis. Using Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) stationarity test, the variable proved to be integrated of the order one 1(1) at first difference. The results based on the bounds testing procedure confirm that a long-run relationship between GDP and GDS exist. The results indicate that domestic savings is significantly positively related to growth in UAE These results are consistent with the findings of Mphuka (2010), Abu (2010), Nurudeen (2010) and Mohan (2006). The econometric evidence that LGDS causes LGDP and there is evidence that saving is the driver of economic growth in UAE. Considering the findings mentioned above, we make the following recommendations; Measures to increase growth and economic diversification in UAE should aim to promotes domestic savings and increases domestic savings overall. Fiscal and Monetary policies that allow for increased savings and that enhances domestic savings is vital. The study recommends the need for development of financial instruments to encourage domestic savings.

RECOGNITION AND ENFORCEMENT OF FOREIGN NON-MONETARY JUDGMENTS IN CHINA

Transboundary recognition and enforcement of judgments is of increasing practical significance and it draws a great deal of efforts at various levels. However, the efforts already made are predominantly in relation to cross-border movement of monetary judgments, leaving non-monetary judgments beyond recognizability. Investigation into China’s legislation and adjudication reveals that there is no distinction made between recognition of monetary and non-monetary judgments, and practice also ignores such a distinction. Following the trend of embracing non-monetary judgments within the scope of recognizablility, China’s standpoint seemingly appears to be desirable, although the long-standing non-differentiation of monetary and non-monetary judgments is not presumed to be originally out of promoting recognition and enforcement of foreign non-monetary judgments in China. It is submitted that for promoting recognition and enforcement of foreign non-monetary judgments, China shall introduce independent rules in order to facilitate the circulation of such judgments, which merits a special treatment. For parties to seek the recognition and enforcement of such judgments, prior to any overhauling of the current legal regime, they have to follow China’s persisting general legal regime and judicial practice regarding recognition and enforcement of all categories of foreign judgments, and a special call is made for particular attention to the reciprocity requirement and due service requirement.

THE KOLMAR V. SUTEX CASE ON RECIPROCITY IN FOREIGN JUDGMENTS ENFORCEMENT IN CHINA: A WELCOME DEVELOPMENT OR STILL ON THE WRONG TRACK?

In December 2016, the Nanjing Intermediate People’s Court in China issued its ruling in the Kolmar v. Sutex case, where a monetary judgment from Singapore was recognized and enforced against a local textile company. The case confirms that once a foreign country has taken the initiative, Chinese courts will follow up to enforce judgments from that country reciprocally. This is the doctrine of de facto reciprocity adopted by some Chinese courts. The paper surveys the judicial practice of Chinese courts and finds that this area of law is full of confusion and uncertainties due to the lack of applicable rules. Recent developments suggest that China may move away from this approach and adopt a relaxed version of reciprocity, which is worthy of close attention.

Residents’ Perceptions of Impending Forced Relocation in Urban China

Residents’ Perceptions of Impending Forced Relocation in Urban China

(Heterogeneity in Price-Setting Patterns of Firms and Their Implications for Monetary Policy)

Korean Abstract: 본고는 한국은행이 실시한 「2016년 기업 가격설정행태 조사」의 결과를 정리하고 통화정책에 대한 시사점을 시뮬레이션을 통해 분석하였다. 먼저 「2016년 기업 가격설정행태 조사」에서 나타난 결과를 요약하면 다음과 같다. 첫째, 가격을 정기적으로 점검·변경(경직적인 가격결정)하고 있는 기업들이 다수를 차지하고 있으나 가격변동요인이 발생할 경우 가격을 점검하고 변경(신축적인 가격설정)하는 기업들이 늘어났다. 둘째, 가격변경주기는 기업 간 이질성이 존재하며, 단기화되고 있는 것으로 나타났다. 셋째, 기업들이 가격을 변경하기 어려운 이유로는 고객과의 장기적 거래관계 중시, 경쟁기업의 가격 유지, 전략적 고려 등이 상위를 차지하였다. 넷째, 기업들은 비용, 수요, 물가 등이 크게 변하지 않는 경우 가격을 유지하는 경향이 있는 것으로 조사되었다. 또한 가격을 설정할 때 경제 전반의 상황과 해당 기업이 소속된 산업의 상황을 모두 고려하는 기업들의 비중이 2012년 조사에 비해 늘어난 것으로 나타났다. 마지막으로 기업들은 적정 이윤, 경쟁기업의 가격, 시장수급상황 등을 주로 고려하여 가격을 설정하는 것으로 조사되었다. 본고에서는 금번 조사에서 나타난 결과 중 기업 가격변경주기의 이질성과 단기화에 주목하여 이러한 현상이 통화정책의 유효성에 어떠한 영향을 미치는지를 분석해보았다. 분석 결과 기업의 가격변경주기가 이질적인 경우에는 동질적인 경우에 비해 정책금리 조정이 실물(생산갭)에 미치는 영향은 확대되나 물가에 미치는 영향은 축소되는 것으로 나타났다. 가격경직성이 완화(가격변경주기의 단기화)될 경우 통화정책의 효과는 가격변경주기가 동질적인지 이질적인지에 따라 달라지는 것으로 분석되었다. English Abstract: This paper summarizes the results of the Bank of Korea’s “Survey on Price-setting Patterns of Firms in 2016” and carries out a simulation to analyze the implications for monetary policy. The survey results can be summarized as follows. First, firms that regularly check and change prices (rigid pricing) account for a majority of all firms, but the number of firms that check and change prices (only) when there is a factor causing price changes (flexible pricing) has increased. Second, the frequency of price adjustments is found to differ from firm to firm, and to have increased. Third, firms cite the following as the top reasons for difficulties in changing prices: the value placed on long-term business relationships with customers, the decisions of competitors to keep prices unchanged, and strategic considerations. Fourth, firms are found to keep their product prices unchanged unless there are large changes in costs, demand or inflation. In addition, the share of firms that consider both overall economic conditions and the relevant industry-specific environment before setting prices is found to have grown since 2012. Last, firms set prices mainly in consideration of optimum margins, prices of competitors, and market supply and demand conditions. This paper focuses on the heterogeneity in and the increase of the frequency of price adjustments of firms and analyzes their impacts on the effectiveness of monetary policy. According to the analysis results, when the frequency of price adjustments differs from firm to firm (rather than being the same for all firms), monetary policy are found to have greater impacts on the real sector (the output gap), while having reduced impacts on inflation. When the frequency of price adjustments increases, the effects of monetary policy are analyzed to differ depending upon whether the frequency of price adjustments is the same or different across firms.

Experiencias de política monetaria en economías pequeñas y abiertas: Chile 2012-2016

En esta conferencia, el autor reflexiona sobre los desafíos de la política monetaria en economías pequeñas y abiertas como la chilena.

La Banque centrale européenne et la crise des dettes souveraines : politique monétaire, politique économique ou état d’exception ?

L’affaire Outright Monetary Transactions (OMT), qui a vu s’opposer le Tribunal constitutionnel fédéral allemand et la Cour de justice de l’Union européenne (CJUE) sur la question de la conformité au droit de l’Union européenne de l’action de la Banque centrale européenne (BCE) lors de la crise des dettes souveraines de 2010-2012, constitue sans aucun doute, à ce jour, l’illustration la plus éclatante de la controverse relative à l’existence (ou non) d’une mutation constitutionnelle tacite du mandat de la BCE. Dans son arrêt du 21 juin 2016, le Tribunal constitutionnel fédéral confirme la conformité du programme monétaire OMT au droit de l’Union et à la Loi fondamentale allemande, mais n’en maintient pas moins de « sérieuses objections » à l’encontre du raisonnement de la CJUE, témoignant ainsi de la persistance de certaines tensions entre, d’une part, les interventions de la BCE et, d’autre part, les dispositions du Traité sur le fonctionnement de l’Union européenne (TFUE) relatives à ses compétences.

The Analysis of Monetary Transmission Mechaniscm by Expectation Patterns in Influencing the Inflation

Bank Indonesia set inflation targeting framework from 1 July 2005 by publicizing the inflation target or forward inflation to the public. However, the phenomenon show that most of the actual inflation of Indonesia is not in accordance with inflation targeting that have been set by Bank Indonesia. The purpose of this research is to analyze and know the flow of monetary policy transmission mechanism of expectation line in influencing inflation, to analyze and to know the influence of long-term and short-term and the shocks of interest rate, exchange rate, inflation expectations, output gap and GDP on inflation in Indonesia. The variables used in this research are BI Rate, Exchange Rate, Inflation Expectation, Output Gap, GDP and Inflation. The data used in this research is monthly data of time series from January 2006 until June 2016 which come from Bank Indonesia (BI) and Central Statistic Agency (BPS). The method used in this research is Vector Error Correction Model (VECM). The result of research indicates that: The flow of monetary policy transmission mechanism of expectation line in influencing inflation in Indonesia runs continuously with indicated the existence of two-way relationship between exchange rate and inflation variable, in the short term, the BI Rate, Exchange Rate and Output Gap are significant and positively affect inflation, inflation expectation variables are significant and affect inflation and GDP variable is insignificant to inflation in Indonesia, while in long run variable affecting inflation rate are BI Rate and inflation expectations, based on the variance decomposits result shows that the biggest variant contributing to inflation in Indonesia is the BI Rate.

Les effets redistributifs des politiques monétaires de la BCE

Cette contribution s’intéresse aux effets redistributifs des politiques monétaires non conventionnelles. Les canaux par lesquels la politique monétaire influence les inégalités sont présentés et cette relation est testée au niveau de la zone euro. Les résultats suggèrent que les politiques monétaires non conventionnelles ont pu exacerber les inégalités en favorisant les ménages déjà détenteurs d’un emploi ou possédant un patrimoine financier. Classification JEL : D3, D63, E25, E5 .

Les inégalités, entre bonne et mauvaise finance

Malgré le lien persistant entre finance et inégalités, établi dans des contextes très différents au cours des quelques milliers d’années de civilisation urbaine et monétaire, la nature de ce lien demeure très problématique. En effet, s’agit-il d’une causalité, le développement des activités financières provoquant l’essor des inégalités, ou d’une simple corrélation, les deux phénomènes découlant fondamentalement de causes similaires ? On défend ici plutôt la seconde position, ce qui ne signifie pas que les outils financiers et le succès des professions financières ne puissent pas amplifier la hausse des inégalités, mais que cette dernière trouve plutôt son origine dans des processus sociaux à forte composante politique. Mieux, cela fait ressortir comment, au moins en certaines occasions, les techniques financières peuvent contribuer à la pacification sociale – elle-même à distinguer du progrès vers l’égalité. Ainsi, sans tomber dans le piège idéologique d’une neutralité axiologique ou instrumentale de la finance, il nous semble que c’est plus la captation de cette dernière par un groupe politiquement dominant que la nature de ses activités qui pose problème. Classification JEL : D5, D63, E25, G0, N3 .

The Relationships between Financial Policy, Fiscal Policy, Visitor Exports and the Tourism Economy of Thailand

This objective of this research is to apply the Vector Autoregressive (VARs) model to study the relationships between the macroeconomic variables in the tourism sector by using Gross Domestic Product in the tourism sector of Thailand with interbank rates, individual government expenditures on tourism and visitor exports (foreign spending). Quarterly data from 1995 to 2016 with a total of 88 data sets are employed in the study. The results show that the interbank rate had the greatest impact on the gross national product of the tourism sector in Thailand at 9.17%. On the other hand, individual government expenditures on tourism had an impact of only 2.77%. Consequently, monetary policy will affect the economy of the tourism sector in Thailand more efficiently than fiscal policy. Therefore, the Thai government should implement fiscal policy together with monetary policy to boost the tourism economy and to increase competitiveness.

Analysis of Tourism in the Slovak Republic in the Period after Accession to the European Monetary Union

Tourism is an important part of the economy in the world. Despite good conditions in Slovakia, the share of tourism in the economy accounts for only a small percentage. The rise in tourism would greatly benefit especially for the growth of employment rate, wage growth, the influx of foreign tourists and ultimately would particularly benefit the growth of Slovakia's economy. The aim of this paper was to describe tourism and selected indicators of tourism and their impact on employment, added value and wages of employees. Slovakia has many natural beauties, cultural and historical sights, so these advantages should be used to develop the economy. In the paper was used method of analysis of selected indicators of tourism. The indicators were examined and subsequently compared during the period from 2009 to 2015. Meaning of analysis of indicators has a direct impact on the growth of employment in Slovakia, the improvement of the services provided and the indirect impact on the growth of other products for the development of tourism. Slovakia has a high potential in terms of tourism but needs to be more visible, especially abroad, needs to offer more educated workers in the field, promote the growth of wages and bonuses and overall to support entrepreneurship in tourism.

FinTech y la banca central en la encrucijada

espanolEste articulo esboza parte de la evolucion reciente de las innovaciones FinTech, nombre con el que se conoce a los desarrollos financieros facilitados por la tecnologia. En particular, analiza como estas innovaciones pueden afectar la provision de servicios financieros en economias en desarrollo y el rol de los bancos centrales como agentes reguladores o salvaguardadores de la estabilidad financiera. Dado que una parte significativa de la poblacion en paises de bajos ingresos aun carece de acceso a servicios formales de instituciones nancieras, las innovaciones FinTech pueden suplir esos vacios y tener un impacto positivo. Sin embargo, la innovacion financiera tambien puede afectar la transmision de la politica monetaria, cambiando el rol de los agregados monetarios y el sistema bancario, con riesgos para la estabilidad financiera. Las FinTech, ademas, pueden competir con proveedores financieros tradicionales en areas como los sistemas de pago, el comercio, la custodia, la administracion de activos y la intermediacion de prestamos. Asi es como la regulacion y la formulacion de politicas publicas deben adaptarse a los desafios planteados por las tecnologias modernas y asegurar, a la vez, que estas no se transformen en barreras a posibles innovaciones. EnglishThis document outlines part of the recent evolution in FinTech —technologically-enabled innovation in financial services. In particular, it looks at how it can impact the provision of financial services in developing economies and the role of central banks as regulators or backstops for financial stability. A significant part of the population in lower-income countries still lacks access to formal services from financial institutions, and FinTech can fill in these gaps and have a positive impact. Nonetheless, financial innovation can affect the transmission of monetary policy by changing the role of money aggregates and the banking system, and it may pose risks for financial stability. FinTech may also compete with traditional financial providers in areas such as payment systems, trading, custody, asset management, and loan intermediation. Regulations and policy making will need to adapt themselves to overcome the challenges posed by modern technologies, and to ensure that they do not become a bottleneck to possible innovations