Monetization Of Economy Research Articles

Monetization of the Economies as a Priority of the New Monetary Policy in the Face of Economic Sanctions

The purpose of this paper is to conduct a comparative analysis of monetization as a priority of the new monetary growth of the economies using the example of the Russian economy, identifying new trends in global practices of monetary factor management, as well as the search for ways to stimulate economic growth using the best international experience. Our paper tackles the novel research question of whether changing the priorities of monetary policy from targeting (and curbing) inflation to stimulating economic growth might yield more favorable economic results and what best world practices should be appropriately introduced in Russia to improve the effectiveness of monetary policy. The key results of the paper are focused on a comparative analysis of the economies’ development under the influence of monetary factors in comparison with the most progressive economies, the study of the best practices for increasing the monetization of national economies, and the identification of recommendations for determining the most optimal way to increase economic growth through the monetization of the economy. Monetarist views on the decisive role of fiat money in the development of the real sector of the economy, capital markets, payment and settlement systems, the standard of living of the population, and other important aspects of macro- and microeconomics have become the mainstream of government regulation. It seemed that by finding the right indicators of the relationship between interest rates, GDP, and inflation, all problems of economic growth could be solved. By increasing the amount of money faster than the achieved economic growth, it was believed that it was possible to stimulate GDP growth through monetary investments and credit, i.e., more money was issued than the value produced represented by the goods and services. Accordingly, new money that had no value had to create new value. We argue that monetization can be seen as the main factor in providing such incentives. Our results can be useful for central bankers, policymakers, and stakeholders in the banking and financial sector. The conclusions and recommendations of the authors are based on studies conducted using such research methods as content analysis, logical analysis, and statistical analysis.

Using ANFIS in joint dynamics of monetization, financial development, public debt and unemployment analysis

Purpose: The modern concepts of contemplating joint dynamics of monetary policy effects on economic growth and its indicators require an indirect approach based on empirical research of mainly financial infrastructure, competitiveness of the financial markets and current economic conditions. Meanwhile, the problems of unemployment and the structure of employment within these concepts are most frequently linked with the polarization of the labor market and two important factors, that is, the effects of growth on unemployment and the fact that technological changes affect the changes in salary ranges. Methodology: By using the Adaptive Neuro-Fuzzy Inference System (ANFIS) and the set of data from 1995 to 2016, this paper analyzes these issues through a prism of established balances between the labor and financial markets, i.e., the monetization of economy (M1/GDP), financial development (Loans/GDP) and the share of gross government debt in GDP (government gross debt/GDP). Results: The proposed model suggests that the rate of unemployment is conditioned by the financial cycle and monetary policy (M1/GDP, Loans/GDP), as well as the business cycle and fiscal policy (gross d/BDP) and that a controlled and properly directed level of monetization of the economy (M1/BDP) and financial development measured as Loans/GDP can be “sufficient” for economic growth. Conclusion: Waiting in the “monetary union lobby”, i.e., waiting for the ERM II exchange mechanism can last longer than the set deadlines, leading to the need for Croatian economic policy to optimize monetary and fiscal policy measures in order to increase economic growth and reduce unemployment.

ОСНОВНІ ТЕНДЕНЦІЇ ТА ПРОБЛЕМИ МОНЕТИЗАЦІЇ ЕКОНОМІКИ УКРАЇНИ

У статті визначено основні тенденції та проблеми монетизації вітчизняної економіки, досліджено особливості формування структури та динаміки грошових агрегатів і рівень їх збалансованості з темпами приросту внутрішнього продукту, визначено кількісний вплив рівня монетизації на темпи економічного зростання, обґрунтовано основні напрями вдосконалення управління процесом монетизації економіки України на основі підвищення ефективності грошово-кредитної політики та регулювання грошового обігу. Встановлено, що процес монетизації характеризує рівень монетарної збалансованості грошово-кредитного ринку та окремих секторів економіки і покликаний сприяти підтримці стабільності фінансової системи та стимулювати економічне зростання.

The bottom billion: Why are the poorest countries failing and what can be done about it

Disadvantaged populations, such as the poor, pose a complex set of challenges to the process of economic development. While a girl child born in Japan in 2005 is expected to live for 86 years, deliver her child in a medical institution under skilled supervision and receive appropriate attention during her old age, her contemporary born in Angola, Lesotho, Sierra Leone, Swaziland, Zambia or Zimbabwe is expected to live for about 40 years, deliver her child at home without any skilled supervision and struggle to receive adequate care during old age if she survives that long. The child cannot be faulted for this diverse prospect of length and quality of life: countries that are home to such disadvantaged population groups are in extreme poverty and express their helplessness to rescue such groups. When countries are poor and small, their economies or governments are not in a position to respond effectively to diseases that predominantly affect their poor citizens. This inability to deal adequately with complex situations further impedes such countries’ growth. As a result, many low-income countries, where most of the world’s poor live, are drifting away, in developmental terms, from the rest of the world. On the other hand, the poor living in countries that are doing well economically face a different set of problems. Such people live alongside the rich and face similar market conditions due to increased globalization and monetization of economies. Possibilities to deal with the problems of poverty exist in better-off countries, but the poor often lack access to them. In such countries, the usefulness of economic growth lies in what it does to enhance people’s health and welfare. “Growth” has no meaning if millions of the poor lack access to basic amenities, such as health care. Whether developing or not, many low-income countries are caught in several traps which prevent them from prospering. To make things worse, the present global economy is unfavourable to the bottom billion people and the countries in which they live. Hence, it is much harder for disadvantaged countries to break out of the traps in which they find themselves. In this book, Paul Collier discusses four such traps that have previously received little attention. Interestingly, what many people would consider to be a source of prosperity – natural resources – is seen as a trap by the author. The other traps he discusses are conflict, being landlocked and surrounded by bad neighbours, and bad governance. The author claims that low-income, slow economic growth and high dependence on primary commodity exports are the key determinants of civil war, which is likely to continue longer if a country’s income is low. Civil war also tends to reduce a country’s economic growth by about 2.3% per annum. He notes that 73% of people among the bottom billion have been affected by civil war recently, 29% live in countries where natural wealth dominates the economy, 30% live in countries that are landlocked and resource-scarce and have bad neighbours, and 76% have lived through a prolonged period of bad governance and poor economic policies. The future progress of the bottom billion people is crucial for health and health system development. These are the people caught in the poverty/ill-health trap. Inequities in access to health care suffered by this group further disadvantage it. Conflicts, bad governance and lack of development clearly have an effect on the national health systems of the worst-affected countries. Breaking out of the traps discussed in the book is important for future health system development, and understanding these and other barriers to development is the essential first step. The book is a welcome contribution to health development literature and makes excellent reading for those who are concerned about poverty and the poor, and for those who tend to think that economic growth is the sum total of human welfare. The book powerfully describes the increasing income divisions between sections of populations; the difficulties that development agencies face in placing materials and staff in areas with maximum needs; governments’ inabilities and failures to deal with the situation; and investment failures in poor settings. The book also serves as a timely reminder for carrying out suitable policy and development responses. The author’s rich African experience is reflected in the valuable country examples provided, while the narrative style makes the book read well. A deliberately pessimistic view of the future prospects of the bottom billion is presented, but the book does provide some suggestions that the affected countries and the Group of Eight (G8) countries could adopt to improve the status quo. The book would have benefited from use of an analytical framework to better depict the evidence presented. ■