Policy Interest Research Articles

International spillovers of conventional versus new monetary policy

We use a calibrated open-economy New Keynesian model to compare the spillovers from conventional and new monetary policy shocks from the US to Canada. We find that shocks with similar effects on the US GDP affect Canada’s private bond yield differently. For example, a forward guidance shock increases Canada’s private bond yield by 0.15%, however a quantitative easing (QE) shock decreases it by 0.13%. Our counterfactual policy simulations for the 2008 crisis show that (1) a more aggressive QE by the Fed would have resulted in a milder recession in the US but a steeper one in Canada. (2) If the Bank of Canada had followed the Fed’s QE policies, the drop in Canada’s GDP would have been much smaller. (3) Finally, if the Fed had implemented a mild negative interest rate policy, the effects on the Canadian economy would be similar to those of the benchmark zero-rate policy.

Do housing prices decrease when interest rates go up? Housing prices and interest rates: understanding the positive correlation across five countries

This paper investigates the relationship between changes in interest rate and house prices from the period 1975 to 2023 in five countries: United States, United Kingdom, China, Germany and Indonesia. Results show that contrary to the paradigm of real estate pricing, housing prices increase with interest rates. Furthermore we find that changes in house prices are independent of monetary policies and interest rate changes set by the central bank. Economically developed nations exhibit a stronger correlation between the two variables. We demonstrate that this is due to the 2008 financial crisis, where houses fell by nearly 30%, creating a fear of recession and the resulting policy of low interest rates to encourage investment.

Effects of Negative Interest Rates on Stability and Profitability of Commercial Banks

The article examines the impact of the European Central Bank's (ECB) negative interest rate policy (NIRP) on commercial banks in Europe. It traces the historical context of the policy back to the financial market and banking crises, which eroded trust among banks, leading to liquidity issues and economic downturns. To counteract this, the ECB introduced negative interest rates in 2014, aiming to stimulate the economy.The research question focuses on how NIRP affects banks' annual reports, particularly concerning total assets, credit and risk volumes, proprietary trading, profits, and stability. The hypothesis suggests that NIRP significantly increases risks in bank profitability and stability. Analysis spanning from 2014 to 2022 compares negative interest rate changes with bank balance sheet and profit/loss account developments.Economic theory predicts that negative interest rates decrease bank profits but increase lending activity. Statistical analysis confirms a correlation between NIRP and increased credit risk volume, as well as a shift from bonds to shares in proprietary trading. However, there is no statistical evidence linking NIRP with profit and profitability declines.In conclusion, while NIRP does lead to a significant increase in credit risk volume, it does not halt falling profits and profitability. Therefore, the hypothesis that NIRP increases risks for commercial banks' profitability and stability holds true, posing a threat to financial stability.

Kebijakan Moneter Dalam Pemulihan Ekonomi Indonesia Pada Masa Pandemi Covid-19

Introduction/Main Objectives: The Covid-19 pandemic, including Indonesia, has disrupted the world economy. In the world, Covid-19 has eroded the economy by USD 8.8 trillion or 9.7%. Bank Indonesia, the central bank that regulates monetary policy, has restored the economic problems that have occurred by collaborating with the government. This study aims to determine monetary policy in economic recovery during the Covid-19 pandemic. Research Methods: The method used in this research is qualitative with literature study techniques sourced from articles, books, journals, or other related sources. Finding/Results: The results of this study indicate that the monetary policies implemented by Bank Indonesia include accommodative macroprudential policies, rupiah exchange rate stability policies, SBN purchase policies from the secondary market, policy interest rate reductions (BI7DRR), and social assistance distribution policies (bansos) with the government. Conclusion: From several policies, it can be concluded that Bank Indonesia is serious in dealing with economic problems during the Covid-19 pandemic. So it is hoped that with the right Monetary Policy, the economy in Indonesia will improve.

Impact of Monetary Policy on Exchange Rate Stability in Nigeria

This study investigates the impact of interest rates, money supply, and Central Bank reserves on exchange rate stability in Nigeria. Utilizing quarterly economic data from 1980 to 2023, sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin, the research employs a longitudinal survey design to assess the relationships between these monetary variables and exchange rate volatility. The findings indicate that interest rates, money supply, and Central Bank reserves significantly influence exchange rate fluctuations, with Central Bank reserves having the most substantial impact. Specifically, interest rates exhibit a moderate effect on exchange rate volatility (t = 3.513, p = .001, Beta = .342), while money supply also significantly affects exchange rate volatility (t = 2.713, p = .010, Beta = .305). Central Bank reserves, however, have the most pronounced impact (t = 4.141, p = .000, Beta = .467). These results highlight the critical role of monetary policy in maintaining exchange rate stability. The significant positive relationship between interest rates and exchange rate volatility suggests that monetary authorities should carefully consider the ramifications of interest rate adjustments. Similarly, the influence of money supply underscores the need for meticulous management to prevent destabilization. Robust Central Bank reserves emerge as a crucial buffer against exchange rate fluctuations, emphasizing the importance of effective reserve management policies. The findings provide actionable insights for policymakers aiming to enhance exchange rate stability through strategic interest rate policies, careful money supply management, and maintaining adequate Central Bank reserves.

Where do the Pasinetti Rule and the Pasinetti Index Come from?

ABSTRACT The article describes the origins of the Pasinetti index and Pasinetti rule and links both notions to debates over concerns regarding which socio-economic income group in a modern capitalist economy was being hurt and which broad income class was benefiting from the high interest rate policy, especially during the Volcker era of the 1980s. These were statistical constructs as well as distinct normative concepts that resulted from a close reading of Pasinetti’s original writings published in 1980–81. The purpose of the Pasinetti index was to measure and monitor the actual transfer between the rentier and non-rentier sectors of an economy both cyclically and over the long term. As discussed in some detail, both authors of this article had directly participated in those debates and had basically initiated the early discussions around these concepts among post-Keynesians and other heterodox economists. The first part of our article, after the introduction, is primarily focused on what came to be called the Pasinetti rule, while the following section of the article recounts how the different variants of the Pasinetti index came to be constructed and used. We conclude with a discussion of the possible continued relevance of the Pasinetti norm in today’s world.

Lessons from low interest rate policy: How did euro area banks respond?

This paper studies the impact of the Eurosystem’s low interest rate policy on euro area banks. We first assess the impact of low rates on banks’ net interest margins. An important extension to previous studies is that we split the interest margin into a funding and lending component. The decomposition makes clear that the low interest rate environment significantly reduced banks’ net interest income by squeezing funding margins, which corroborates the reversal rate literature. We find no strong evidence that banks have boosted their lending margins to offset the lost funding margin. However, we do observe that banks partly compensated for the impact of low rates by switching to non-interest income sources and by cost savings. We also find that low interest rates have not reduced bank lending, which suggests that banks’ compensatory measures largely outweighed the impact of low rates.

At the origins of the Italy's public debt

The Italian public debt is one of the largest in the European Monetary Union and its ratio debt/GDP is the second highest among the Monetary Union countries. A legitimate question is: why Italy has got the most important debt in the euro area? Until the beginning of 1980s the debt to GDP ratio remained within acceptable limits. The Italian debt trend shows a sharp increase in the beginning of 1980s in connection with a new policy of debt financing agreed between the Bank of Italy Governor and the Ministry of Finance in 1981 (the so called “divorce”) and fully implemented in the following 2-3 years. This paper aims to understand if the overall debt increase is related to the dynamics of interest or that of social expenditure, as argued by many scholars. The causal relationships were analysed by testing Granger-causality on long time series of data starting from 1960. A sample including series coming from National Accounts is utilised in estimating our models. The empirical results generally confirm that interest payment was the main driver of debt increase before the European monetary union was established, even assuming that interest policy responded to exchange rates and inflation.

Public Spending and Economic Growth in Nigeria: Assessing Recurrent Expenditure’s Neutrality and Monetary Policy Interaction

In this study, we explored the influence of public spending on economic growth in Nigeria by testing the neutrality/non-neutrality of recurrent expenditure, as well as checking for the effect of interaction of the two expenditure components with monetary policy (interest rate) to see how they would influence economic growth. Data which covers the period 1981 to 2021 were analyzed using the technique of Autoregressive Distributed Lag (ARDL) model which was selected based on the fact that our variables were stationary at mixed order of levels and first difference. From the ARDL bounds test, the study revealed that there is a long-run relationship among the variables in the model which prompts the estimation of the error correction model. From the result, the findings suggest that recurrent expenditure exerts a positive and significant effect on economic growth, thereby signifying the non-neutrality of the recurrent expenditure component on economic growth. Further, the interactive terms indicates that an interaction of recurrent expenditure and interest rate on economic growth generated a negative effect though its one-period lag yields a positive and significant effect. Also, the long-run result indicates that recurrent expenditure yielded a positive but insignificant effect, thereby indicating the validity of the recurrent expenditure in the long-run. This is further confirmed as it exerted a negative but insignificant effect on economic growth when interacted with monetary policy. The policy implication of the findings centres on the fact that recurrent expenditure can only be non-neutral in influencing the macroeconomy just in the short-run.

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.

Homeland–diaspora nexus during crisis: Towards a transformed engagement model

AbstractHistorically, Greece perceived and approached its diaspora as a source of philanthropic funding, economic remittances and lobbying on matters of domestic and foreign policy interests. The 2009 economic crisis, the subsequent emigration wave, have added new meanings and dimensions to the Greek diaspora–homeland nexus. Drawing on qualitative analysis and process‐tracing, this article argues that the crisis has transformed the dynamics of the homeland–diaspora relation especially when it comes to political engagement from abroad. While investigating the reasons behind this transfiguration, the article examines the changing features of the Greek diaspora's political engagement, by examining the influence wielded by homeland political parties and by conducting an in‐depth analysis of the diasporic vote. The article also delves into the influence of technology to the emergence of transnational political engagement and the establishment of novel diaspora networks.

Mapping Fiscal Research Trajectories through Bibliometric Analysis: Echoes of Global Crises in Central and Eastern Europe

Abstract World economies have faced numerous crises throughout history. Fiscal issues have accordingly become a crucial aspect of economic policy discussions, particularly in Eastern Europe, a region shown to be especially vulnerable to the recent economic shocks. The paper therefore aims to provide a bibliometric examination of trends in fiscal research via the lenses of major economic and financial crises. The bibliometric analysis is based on 6,640 documents published between 1970 and 2022 and indexed in the Scopus database. The results reveal that fiscal research associated with crises has grown sharply over time, with significant bursts one year following each major economic and financial crisis. The most cited journal articles in fiscal research highlighted the following issues in all countries, including Central and Eastern European (CEE) countries: economic reform policies (1970-1997), economic development and financial conditions (1998-2008), crises in Europe and post-crisis recovery (2009-2019) and post-crisis recovery and effects (of the COVID-19 pandemic) on the public and business sectors (2020-2022). As well as identifying key countries and journals, although diverging in approach and scope the findings show shared interests in macroeconomic policy, fiscal stability, and the impact of crises on economic performance and public finance. Developed countries have addressed complex global economic issues and advanced development, whereas Central and Eastern European nations have focused on the transition from planned to market economies. This observation reflects their distinct economic paths and fiscal research interests, as revealed in detailed content analysis by subperiods. The findings maybe of benefit for both the scientific community and evidence-based policymaking.

Quantum-safe global encryption policy

Abstract Every day, individuals use the Internet to communicate, gather information, and engage in commercial transactions. Encryption renders such activities secure and possible in the first place. While interest in encryption policy has fluctuated among policymakers for the past three decades, this paper argues for the need to promote strong encryption at a global level. The paper sheds light on the risks posed by quantum computing to national security, wherein breached encryption could compromise classified information, military intelligence, sensitive devices, and critical infrastructures. The argument for a worldwide encryption policy is further substantiated by the looming spectre of profound global power asymmetries. As the evolution of quantum technology remains concentrated within a select cohort of nations, those in possession of functional quantum computers could gain unprecedented advantages and exploit such technological supremacy. To buttress this assertion, this paper employs the logic of the ‘least trusted country problem’ to underscore the fragility of global security in the face of such imbalances. In response, this paper introduces a three-fold strategy designed to pave the path towards a quantum-secure future. The strategy encompasses the pivotal elements of post-quantum cryptography, quantum key distribution, and quantum random number generators. While acknowledging the challenges inherent in implementing these measures, including the projected decade-long timeline for establishing standardized solutions, the paper underscores the urgency of confronting the imminent quantum computing menace in a proactive manner. By adhering to these strategic imperatives, the global community stands poised to reinforce encryption practices against the potent capabilities that quantum computing wields. In so doing, the security and integrity of information exchange can be preserved in an ever more interconnected world.

Health equity regional symposia: Convening local stakeholders to address health disparities in the US.

e13695 Background: Health inequities among underserved populations in the U.S. are complex and derive from unequal access to quality healthcare. Addressing these disparities requires a coordinated effort among multiple stakeholders. Genentech’s Health Equity Regional Symposia Program was created to reduce healthcare disparities by convening stakeholders representing community, patient, academic, policy, and health care interests. Methods: Specific criteria were employed to identify hosting locations, including regions with documented health disparities; areas serving a significant proportion of patients of color; sites with a vested interest in engaging historically underserved and/or underrepresented communities in clinical studies; organizations that have built a trusted relationship with the community. Since 2022, 79 programs have been funded and several organizations hosted multiple events. To date, 58% of programs focused on oncology and applied a range of formats including patient panels, research posters, and interactive presentations. Symposium topics were driven by local community needs and included: cancer prevention, screening, treatment barriers, and research; social drivers of health; and mental health. For each symposium, the cultural and preferred language of attendees was considered, and active discussions were held and centered on generating actionable solutions. Results: The symposia have reached more than 11,000 attendees including an estimated 63% healthcare professionals and 37% community members/patient advocates. A diverse mix of health-focused community organizations participated representing 23 states. Building community trust was a consistent theme across the symposia. Key results reported by the hosting organizations included: in a post-event survey, attendees reported more trust in cancer research and clinical trials, and expressed increased motivation to get screened (Bronx, NY); patient educational materials were developed with input from cancer survivors on tips to stay healthy (New Orleans, LA); due to the trusted relationship with patients, primary care physicians act as a crucial gatekeeper in diagnosis and care (Memphis, TN); increased community commitments to conduct cancer screenings (Cleveland, OH). Conclusions: Through our symposia, we successfully convened influential stakeholders focused on generating tangible solutions to improve the health of their communities. This approach can serve as a model to advance patient outcomes.

From science-policy interface to science-policy panel: The United Nations’ strengthening of the sustainable life cycle management of chemicals

In recent years, the chemical production and waste generation have been rapidly increasing, presenting substantial hazards to the ecosystem and human well-being. To address this issue, a series of multilateral environmental agreements (MEAs) have been developed internationally, that provide essential decision-making support for the appropriate governance of chemicals and wastes in the participating countries. MEAs have established subsidiary bodies known as science-policy interface (SPI) institutions to provide evidence-based support and scientific assessments for environmental policies. However, the existing SPIs face limitations that hinder their ability to tackle the obstacles presented by the vast quantities of chemicals and wastes currently found in the environment. Therefore, the fifth session of the United Nations Environment Assembly made the decision to establish a science-policy panel to promote the effective management of chemicals and waste and to prevent pollution (SPP-CWP). This panel is intended to be an independent intergovernmental body, similar to the Intergovernmental Panel on Climate Change and Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. The United Nations Environment Programme convened an ad hoc open-ended working group (OEWG) to design strategies for the SPP-CWP. Since 2022, three OEWG meetings have been conducted, and draft documents outlining the panel's scope, functions, operational principles, conflict of interest policy, institutional setup, work processes, and procedures have been formulated. In this article, we analyzed the background and development of the SPP-CWP and provided updates regarding the progress of the panel's establishment. We also suggested future trends for the SPP-CWP. We concluded that SPP-CWP will be a comprehensive and authoritative international body, providing policymakers with exhaustive reports, consequently strengthening the capacity of life cycle management of chemicals. Thus, the panel will effectively reduce or prevent waste production and pollution, promote material circulation, and minimize resource consumption, making significant contributions to the establishment of a circular economy and an environmentally friendly society.

Trends in NCCN enforcement of financial conflict of interest policies for guidelines panelists.

11070 Background: Financial conflict of interest (FCOI) among authors of clinical practice guidelines is a potential concern for the independence and integrity of guideline recommendations. The National Comprehensive Cancer Network (NCCN) Guidelines policy stipulates limits on physician-industry FCOI among its panelists (<$50,000 overall and <$20,000 from each individual company, annually). Those in violation will be asked to resign. However, COI policies reliant on physician self-report may be difficult to enforce. The increased transparency of FCOI resulting from Open Payments – and the ensuing attention in 2016 on high levels of FCOI among guideline-writing bodies including the NCCN – may have enabled and motivated increased enforcement of existing FCOI policy. We describe trends in FCOI among NCCN Guidelines panelists and in enforcement when violations occur. Methods: We manually extracted NCCN Guidelines panelist names and terms of service for the 20 most prevalent cancers, 2013-22. We manually linked each physician to their Open Payments records, a federal archive of financial transactions from industry to physicians. For each panelist, we included only the categories of industry payments deemed relevant by the NCCN COI policy: ownership payments and some General Payments categories (eg., speaking fees, consulting) but not others (eg., free meals). We measured payments during each full calendar year of service. If a panelist received payments above NCCN limits (“violation”), we assessed whether their term of service continued for at least 1 additional full calendar year (“retained"), inferring that panelists who were retained had not been asked to resign as stipulated. We assessed whether retention post-violation was less likely after 2016. Results: There were 978 eligible physician-guideline pairs. Mean industry payments increased from $6175 in 2014 to $9169 in 2019, then declined to $6492 in 2021 following the COVID-19 pandemic. There were 143 panelist-years in violation of NCCN FCOI limits. Violations occurred among 99 unique panelists; 32 panelists had multiple observed violations. Across the full study period, panelists with a violation were less likely to be retained versus those without a violation (OR 0.21, 95% CI 0.15-0.31). However, likelihood of post-violation retention was lower after 2016 compared to before. 81% were retained during 2014-15 (versus 89% for those without violation, OR 0.55, 95% CI 0.26-1.31) compared to 47% during 2017-20 (versus 89% without violation, OR 0.10, 95% CI 0.06-0.17). Conclusions: Lower retention among panelists receiving excessive industry payments is consistent with NCCN enforcement of its COI policy. Lower post-violation retention after 2016 is consistent with stricter enforcement following that year. However, even in 2017-20, in 47% of violations, the panelist continued to serve, suggesting that enforcement remains incomplete.

Research on RMB Depreciation and Its Impact on Chinese Corporate and Society

Raising interest rates by the Federal Reserve forces global capital flows to the US market, which in turn causes other countries economic growth to slow or currency to depreciate. China has been inevitably affected by the Feds higher interest rates, which have led to the devaluation of the RMB and have had a negative impact on the normal operation of Chinese corporations and society. Therefore, this paper analyzes the impact of RMB depreciation caused by the Federal Reserve interest rate hike on China through literature review and case analysis. Through research, the Federal Reserve adopted the policy of interest rate increases to force the Chinese government to tighten its internal monetary policy while continuing to promote the internationalization of the RMB, which in turn caused the depreciation of the RMB. Export-oriented enterprises can avoid interest rate risk caused by RMB depreciation through financial means, and the overall advantages outweigh the disadvantages. However, the depreciation of the RMB has increased the costs of cross-border e-commerce, Chinese tourists traveling overseas, and studying abroad, and the overall disadvantages outweigh the advantages.

Cross-sectional examination of commercial milk formula industry funding of international, regional and national healthcare professional associations: protocol

IntroductionCommercial milk formula manufacturers often emphasise their role in supporting infant and young child nutrition and breastfeeding, but their commercial goals to increase volume and profit margin of formula sales...

A multi-criteria model for measuring the sustainability orientation of Italian water utilities

This article investigates the influence of socioeconomic context and stakeholder pressure on water utilities' sustainability performance and disclosure. The Urban Water Cycle Services (UWCS) framework has been adapted to the Italian context and integrated with a social equity variable, which enhances the framework's ability to account for the distinctive characteristics and mission of water utilities in measuring sustainability performance. The sample comprises 17 Italian utilities providing water services that released a sustainability report in 2021. The results show that the socioeconomic context and stakeholder pressure influence how water utilities align with economic, environmental, and social sustainability goals. Listed multi-utility companies are strongly influenced by private shareholders, pushing them towards financial sustainability, while small public water utilities are more sensitive to the needs of their disadvantaged users, especially in low-income contexts. The findings of the study have interesting theoretical, managerial and policy implications.

Expanding BRICS Authority in Latin America: Geopolitical Significance for Russia

The paper analyzes the geopolitical situation in Latin America and the Caribbean (LACB), examines the prospects for expanding the BRICS interstate association in the region and the advantages of this organization that attracts LACB countries. Based on the criteria the authors carried out put forward, the analysis of scenarios to expand the BRICS in the strategic interests of the Russian Federation in the international arena, the directions for the most favorable cooperation and ensuring the interests of Russia in the conditions of a tense political situation and a hybrid war launched by the collective West against our country are determined. The role of BRICS is increasing in a change in the balance of power in the UN, G20 and G7 groups after the start of a special military operation by the Russian Federation. The work is based on neorealism, which considers both the global situation in international relations and Russia’s possibilities for promoting its interests in interaction with various actors. The major methods used: situational analysis and document analysis. The paper’s aim is to determine the strategic advantages of implementing Russian foreign policy interests associate the potential expansion of BRICS in Latin America.