Real Effective Rate Research Articles

Threshold Impact of Remittances on Real Exchange Rates for WAEMU: A Panel Smooth Transition Regression Approach

This paper explores the nonlinear relationship between workers’ remittances and real effective exchange rates for West African Economic and Monetary Union (WAEMU) member countries using the panel smooth transition regression (PSTR). The PSTR was estimated with one transition function and one location parameter as dictated by the diagnostic tests. The diagnostic tests reveal that the relationship between workers’ remittances and real effective rates is nonlinear. The estimated threshold value is 3.07%. The results reveal that increases in workers’ remittances have a depreciating effect on real effective exchange rates in regime one, associated with threshold value of less than 3.07%. However, in the second regime when the threshold value is greater than or equal to 3.07%, increases in workers remittances have an appreciating impact on real effective exchange rates. These results substantiate that the relationship between workers’ remittances and real effective exchange rates is asymmetric and as such should be modeled accordingly. Above all, the results confirm the presence of Dutch disease effect in the second regime where the estimated coefficient on workers’ remittances is negative and statistically significant. However, there is no evidence of Dutch disease effect in the first regime where the regression coefficient on workers remittances is positive and also statistically significant. Policy implications are discussed.

Effective biomarker testing rates in a large U.S. community practice.

e21093 Background: Molecular testing is an integral part of care for patients with non-small cell lung cancer (NSCLC). Professional guidelines advise broad molecular profiling to identify driver mutations that have either FDA approved therapies or available clinical trials. Testing is recommended for at least 8 biomarkers plus PD-L1 immunohistochemistry and obtaining biomarker testing results back before initiation of treatment is critical. However, many patients with NSCLC remain untested or receive inadequate treatment prior to obtaining a test result. We performed a retrospective chart review to assess real world effective biomarker testing rates and practice patterns to understand the current biomarker testing scenario in a large US community practice, Florida Cancer Specialists (FCS). Methods: Advanced NSCLC patients (Stage IV; n = 361) who received care in the FCS network and were diagnosed or received first-line treatment on or after 1/1/2020 were included in this retrospective observational study. Data was extracted from the electronic medical records in participating practices as well as via abstraction of patient records when available. Patient-level data was anonymized and reported in aggregate. All data collected for this analysis was evaluated in accordance with regulatory requirements and applicable guidance for electronic records. We determined the percentage of biomarkers tested, orders placed and received before treatment, test ordered after treatment, and the overall effective testing rate, defined as orders placed and result received before treatment start/stage IV patients treated. Results: The median patient age was 70 years (range, 41-90), 188 (52%) were male, and 277 (77%) were Caucasian. 270 (75%), had adenocarcinoma histology, and 273 (76%) had an ECOG status of 0 or 1. Biomarker testing was ordered for 285 patients (79%). EGFR tests were more likely to be ordered before the start of treatment than other biomarkers. The median time between biomarker test ordering to treatment start was 15 days. 217 patients received test results before treatment start (effective testing rate = 60%). 6% of patients had tests ordered later in their workup, while 13% had tests ordered early, but received test results after treatment start. 21% of patients were not tested for any biomarker. 85% of stage IV patients tested received multi-gene tests. 71% of patients had PD-L1 testing and less than 2% received PD-L1 testing alone. Conclusions: This real-world study showed that 85% stage IV NSCLC patients in a large US community practice network underwent multigene biomarker testing and 60% received their test results prior to treatment start. The median time between biomarker test ordering to treatment start was 15 days. Strategies to improve time to biomarker test order, enhance percentage of patients tested, and improvement of percentage of patients with test results prior to initiation of therapy are ongoing.

China’s trade in services and role of the exchange rate: An asymmetric analysis

Nearly all studies in the literature have assessed the impact of exchange rate changes on trade flows for goods. Service industries, however, have not received much attention. Two studies have assessed the effects of exchange rate changes on U.S. service trade with its partners. We add to this literature with a new study that assesses the symmetric and asymmetric effects of changes in the real effective rate of the yuan on China’s trade in 11 service industries with the world. While we find short-run effects on imports and exports for almost all service categories, short-run effects last into long-run asymmetric effects in six Chinese importing service industries and eight Chinese exporting service industries.

AN EMPIRICAL STUDY ON REAL EXCHANGE RATE AND ECONOMIC GROWTH IN TURKISH ECONOMY

In this emprical study the affair between the real effective exchange rate and economic activity for the Turkey was analyzed. As in the case of Uddin et al. (2014), which is the direction of the affair between real effective exchange rate and economic activity, the existence of a bidirectional relationship is generally determined. However in our research, the presence of the affair between economic activity and the real effective exchange rate for Turkey's economy, Granger causality (Granger causality) was tested. The industrial production index and the real effective rate are used during the period of 1995-2019. According to the obtained results, unilateral relationship from the real exchange rate to economic activity has been determined.

Prior credit assessment of long-term SME projects with non-standard cash flows

Over the past three decades, the relative bank loan demand has changed due to the arising small and medium-sized enterprises (SMEs). Therefore, banks in their operations face the problem of processing an ever-increasing number of loan applications. The aim of this paper is to develop an auxiliary approach to assessing the prior creditworthiness of long-term SME projects with nonstandard cash flows.This study reveals how the principles of value-based management can be incorporated into the process of borrower’s creditworthiness assessment to improve the process of screening loan applications. For this, the internal rate of return was used as a criterion for loan granting decision at the initial stage of loan underwriting.An algorithm for the preliminary evaluation of loan applications is proposed and is based on the principle of maximizing the shareholder value of banks. This algorithm helps to define the credit terms taking into consideration the distribution of positive cash flows throughout the project’s expected economic life, calculate the possible real effective interest rate concerning the borrower’s nonstandard cash flow schedule, make a rough analysis on the economic efficiency of lending and state the necessary criterion to initiate the procedure of loan underwriting for the projects with nonstandard cash flow schedules. The proposed estimation algorithm stemming from the IRR-approach for the cash flow analysis can also be initially used by a borrower as a tool for credit solvency self-testing via screening of periods with corresponding cash flows that can be used for loan servicing.

Constructing a Financial Conditions Index for Emerging and Developing Countries: A Static Panel Data Approach

This study employs the basic panel data framework to develop a financial conditions index for six emerging and developing countries and estimate its impact on both economic growth and inflationary trend. The countries are Brazil, Malaysia, Mexico, Nigeria, Pakistan and South Africa, while the selected financial variables are treasury bills rate, real effective interest rate, interest rate spread, credit to private sector ratio to nominal GDP and market capitalization ratio to nominal GDP. Using annual data from 2010 to 2010, our findings indicate that real effective exchange rate is the most significant variable in the constructed financial conditions index, followed by credit to private sector, while treasury bills rate, interest rate spread and market capitalization play an insignificant role in the index. Our evidence also indicates that the constructed financial conditions index has a highly significant explanatory power for economic growth, while it contains little information for future inflationary trend. We, therefore, argue that adopting policies that focuses more on exchange rate and financial deepening would accelerate economic growth process in emerging and developing countries.

Impact of Changes in Exchange Rate on Stock Market: An Empirical Evidence from Indonesia

The study examines the impact of changes in exchange rate on stock market the case of Indonesia. The quantitative approach is used to find out the connection among the two quantifiable variables fluctuations of the exchange rate and share market. The exchange rate of Indonesia is presented through the real effective rate of exchange while for share market; the time series of share market returns has been gathered. The study uses the ARDL model in order to determine whether the time series of fluctuations in the rate of exchange predict share market. The findings of the current study suggest that in the context of Indonesia, the long-term relationship between rate of exchange fluctuations and share market has been established.

Determinants of Growth in Cement Production in Nigeria

Rapid industrialisation through sector-led industrial policies, prohibitive tariffs and aggressive subsidies has become commonplace in many African countries. In Africa’s largest economy, Nigeria, one of the flagship industries cited as a success story of successful industrialisation is the cement industry. However, the Nigerian cement industry manifests certain industry peculiarities such as oligopoly and bulky mass, that is not easily replicable across sectors. The aim of this paper is to isolate the key market characteristics and industry incentives granted to the cement sector so as to identify the most important determinants of the recorded phenomenal growth. Based on previous studies, four industry variables: concentration ratio, capital intensity, installed capacity and demand-supply gap were identified. In addition, four other macroeconomic variables that impacted production costs: financing costs, tax rate, real exchange rate and effective rate of protection; were also tested in the model. Data was obtained for the cement industry from 1980 to 2015 for the cointegration model. The results indicate that tariff protection was the most significant determinant of the growth in cement production. Subsidies, in form of tax holidays and cheaper financing, were only minimally important. The findings of this study underscore the huge cost of supporting the growth of industrialisation in African countries through various instruments.

Estrategia omnicanal para no usuarios del e-gobierno

Las organizaciones públicas vienen incorporando canales de distribución para que los ciudadanos puedan acceder a los servicios públicos. Si bien existían elevadas expectativas en relación a la adopción del e-gobierno por parte de los ciudadanos, las tasas efectivas de uso no están alcanzando los niveles deseados. Por ello se une un nuevo enfoque, la omnicanalidad, que sugiere la valoración de los canales en base a como ayudan a generar la mejor experiencia de uso de los usuarios respecto del total de los canales. El presente trabajo analiza el impacto que sobre la intención de uso del e-gobierno tiene que los ciudadanos vengan empleando la Administración Telefónica o Presencial. Tras una metodología cualitativa y cuantitativa, se establece cómo mientras para los usuarios de la administración telefónica la intención de uso del e-gobierno viene explicada por algunos de los factores favorecedores (expectativa de resultado e influencia social), en el caso de la Administración Presencial el modelo tiene una estructura dual en la que aparecen tanto favorecedores (expectativa de resultado) como inhibidores (inercia y hábito). De la dispar estructura de los modelos se derivan diferentes vías de actuación para lograr incrementar el uso del e-gobierno por parte de los ciudadanos.

Оценка влияния монетарной политики на макропоказатели экономики России

Статья посвящена моделированию воздействия переменных монетарной политики Банка России – денежной базы и денежной массы – на ключевые показатели развития российской экономики: ВВП, индекс потребительских цен и реальный эффективный курс рубля. Предложены три эконометрических модели, показывающие степень влияния анализируемых факторов и его разложение по времени. Оценка моделей производилась на квартальных (для ВВП) и месячных (для ИПЦ и реального эффективного курса рубля) данных в период с 2003 по 2014 года. Показано, что в условиях российской экономики влияние монетарных факторов на ВВП значимо превосходит их же влияние на ценовые показатели.

О противоречии бюджетной и монетарной политики современной России как основной причине кризисов

Статья посвящена эмпирическому исследованию вопроса о причинах периодических кризисов в российской экономике и является продолжением статьи автора «Влияние обменного курса рубля на динамику экономического роста». Для расчетов и графиков использовались данные Банка России по основным направлениям единой государственной денежно-кредитной политики за 2000-2015 годы. На основании макроэкономической статистики России за период 1995-2015 годов выделены основные факторы (реальный эффективный курс рубля, цена на нефть, капитальный счет платежного баланса, темп роста регулируемых цен), которые позволяют построить модель развития кризиса.В качестве главных причин кризисов 1998, 2008 и 2014 годов предложена идея о наличии постоянного противоречия между денежно-кредитной и бюджетной политиками государства. Данное противоречие иллюстрируется на примерах каждого из этапов экономического развития России (1995-1999, 2000-2008, 2009-2014).Предложена модель самоподдерживающегося кризиса и пути решения данной проблемы.

An Assessment of the Real Exchange Rate Misalignment in Egypt: A Structural VAR Approach

This paper calculates the equilibrium real effective exchange rate for the Egyptian economy during the period (1974-2012). The paper reviews the evolution of Egypt’s exchange rate policy and the most significant developments of its real effective exchange rate during the same period. Using a structural vector auto-regression model identified with long-run restrictions, it evaluates the relative importance of real supply, demand and nominal shocks to the disturbances of Egypt’s real effective exchange rate. The identified shocks and their impulse responses are consistent with the theoretical priors stemming from the Mundell-Fleming model. The main contribution to the fluctuations of the real effective exchange rate, roughly 80 percent, comes from both real demand and supply shocks. The model is used to check if the real exchange rate in Egypt is misaligned during the period under investigation. It shows that the actual real effective exchange rate has deviated from the equilibrium real effective rate with various degrees during the estimation period

Causality Relationship between Exchange Rate and Stock Returns in India - An Analytical Study

The present study tries to estimate causality relationship that exists between exchange rate and stock returns. The impact of exchange rate on the returns from stock in India is examined, by using periodical data from the beginning of 1997 to the close of 2014. Macro variables are considered for the study: Real Exchange Effective Rate (REER) and BSE SENSEX. The study reveals that there exists some relationship between these two elements found through Granger Causality Technique [8]. However, from the short run results one cannot confirm that the exchange rate does not influence return on shares and vice versa. This study asserts that the exchange rate neither affects stock returns nor stock return affects the exchange rate. Thus, the present study empirically proves that the former does not induce the latter and in turn stock returns have no influence over exchange rate.

Copper in Chile - When the Resource “Outside” Becomes a Blessing

Abstract The article aims at explaining how a small opened economy can effectively deal with a resource abundance problem. The thesis of the essay is a statement that Chile has been able to cope with the resource “outside” by developing proper institutions and diversifying the structure of its foreign trade. To verify the thesis, a literature review of theoretical recommendations how to utilize resource revenues without harming economy, as well as analyses of chosen macroeconomic variables were conducted. The possible solutions on how to deal with resource abundance problem are following: investing resource revenues outside of the economy, implementing fiscal rules that will stabilize budget revenues and prevent inflation from rising, and diversifying export in terms of product and geographical structure. Consequently, these solutions have been introduced in Chile, the world leading producer of copper, several years ago and proved to be very successful. Chile enjoys stable resource revenues despite the business cycle and performance of the copper market, while its real effective rate and export competitiveness has not been eroded. T is paper presents, according to author's knowledge, the first detailed case study analysis of the country from Latin America, that has been successfully dealing with the resource abundance problem over several decades.

Efficiency Evaluation Metrics for Wireless Intelligent Sensors Applications

The metrology field has been progressed with the appearance of the wireless intelligent sensor systems providing more capabilities such as signal processing, remote multi-sensing fusion etc. This kind of devices is rapidly making their way into medical and industrial monitoring, collision avoidance, traffic control, automotive and others applications. However, numerous design challenges for wireless intelligent sensors systems are imposed to overcome the physical limitations in data traffic, such as system noise, real time communication, signal attenuation, response dynamics, power consumption, and effective conversion rates etc, especially for applications requiring specific performances. This paper analyzes the performance metrics of the mentioned sensing devices systems which stands for superior measurement, more accuracy and reliability. Study findings prescribe researchers, developers/ engineers and users to realizing an optimal sensing motes design strategy that offers operational advantages which can offer cost-effective solutions for an application.

Real and nominal effective exchange rates of African countries during 1971Q1–2012Q4

One of the macro variables that are included in most models is the exchange rate. Overall performance of a country’s exchange rate is measured by changes in nominal or real effective exchange rate (REER). These rates are constructed and published mostly for industrial countries by international organizations. Less developed countries have received little attention. In this article, the two rates are constructed for 21 African countries using quarterly data over the period 1971Q1–2012Q4. As an application, we use the REERs to show that even in Africa the movements of the real effective rates follow a nonlinear path.

MODEL KEBIJAKAN MONETER DALAM PEREKONOMIAN TERBUKA UNTUK INDONESIA

This paper analyze the impact of foreign policy (the Fed) on Indonesia’s monetary economy, focusing on the attention is also to the fund rate. An empirical model of VAR (Vector Auto Regression) is developed to capture the impact of increase in fund rate to Indonesia’s monetary sector. The system of equations covers central bank policy rate, lending rate, inflation, real effective rate (REER), and the output growth. The result shows that the increase of fund rate tended to push Bank Indonesia to increase his policy rate, hence the lending rate. On the other side, positive shock of foreign fund rate lower inflation and output growth, and appreciate the Real Effective Exchange Rate with lag. Keyword: monetary policy, lending rate, inflation, exchange rate.JEL Classification: E52, F41

Monetary Policy Model for Open Economy of Indonesia

This paper explains stylized facts about the monetary economy in Indonesia covering the Bank Indonesia (BI) policy on the exchange rate, lending rates, inflation, real effective rate (REER), and growth. This is done to get an understanding on the impact of foreign policy (influenced by the Fed) on Indonesia’s monetary economy, with some attention to the fund rate. An empirical model of VAR (Vector Auto Regression) was developed to capture the impact of an increase in fund rate to Indonesia’s monetary sector. Furthermore, a theoretical model was developed to capture the result from empirical model. The theoretical model shows that the increase of fund rate influenced the increase of BI rate, lending rate, inflation, while reducing REER and growth. Keyword: monetary policy, lending rate, inflation, exchange rate.JEL Classification: E52, F41

Evaluation of Macroeconomic Condition in Azerbaijan in 2010

This analytical review had been prepared by the experts of the National Budget Group with the aim to evaluate macroeconomic activity in Azerbaijan in 2010. Basic macroeconomic indicators (GDP, employment, income of the population, foreign trade, foreign investments, poverty, etc.) of Azerbaijan in the recent 5 years (2006–2010 years) were analyzed in the presented review in the background of global economic processes observed in the world. Dependence of fiscal parameters on oil revenues, state investments and infrastructure expenditures, social policy (education, healthcare, social protection), taxation and administrative reforms, main parameters of monetary policy (money supply and inflation rates, real effective currency rate variations, credits, interest rates) and state of banking sector during the analyzed period were subjects of research in this paper. It was revealed as a result of conducted research that the economy of Azerbaijan for recent years including 2010 demonstrates decline in dynamics of real economic growth rate; in addition, it was determined that there is a risk of deficiency in technological productivity of the current economic growth originators necessary to maintain sustainable economic growth rate. The research showed that the main impelling power of GDP in Azerbaijan economy is the actual final consumption, and there is no unique tendency in the role of export and saving. High dependence on raw oil, natural gas and oil products still remains in export operations which are the main components of the GDP. In addition, the research defined that “Deindustrialization symptom” of “Dutch disease” intensified in Azerbaijan’s economy with diminishing share of industrial and agrarian sector and relative expansion of share of the service sector in the GDP structure. Analyzes show that less share of nominal growth and nominal volume of GDP was provided by non-oil sector as compared to the oil sector; however, non-oil sector, particularly its construction segment, continues to hold the leading place in the investments made in economy; the poverty level is gradually decreasing, whereas employment level and nominal incomes of the population are increasing in Azerbaijan. Simultaneously, there is a problem of labour productivity in the economy, including serious salary differences between oil and non-oil sectors.

Real Time Data, Regime Shifts, and a Simple But Effective Estimated Fed Policy Rule, 1969-2009

This paper re-examines the use of estimated Taylor rule equations as a standard long run description of Federal Reserve policy. The empirical results suggest that until 1979 Fed policy changed the real funds rate in response to the output gap, with no response to an inflation target. During the Volcker period the policy rule kept the real funds rate at a high but constant level, with no response to the output gap. These regime shifts affect the descriptive performance of the basic Taylor rule equation and any further analysis that is based on it. Taking into account the regime shifts and real time data, a simple but effective federal funds rate equation can be estimated using only inflation and the output gap.