Effects Of Shocks Research Articles

Time-varying effects of the COVID-19 pandemic on stock markets and economic activity: evidence from the US and Europe

This paper examines the effects of the COVID-19 pandemic on CDS, stock returns, and economic activity in the US and the five European countries that have been most affected: the UK, Germany, France, Italy, and Spain. The sample period covers the period from 11 March 2020 to 19 February 2021. In the empirical analysis, first, we estimate benchmark linear VAR models and then, given the evidence of parameter instability, TVP-VAR models with stochastic volatility, which are ideally suited to capturing the changing dynamics in both financial markets and the real economy. The linear VAR responses of CDS to the number of COVID-19 cases are positive and statistically significant, whilst those of electricity consumption are insignificant and those of stock returns vary across countries in terms of their sign and significance. The results from the TVP-VAR analysis indicate that the effects of shocks on the system variables was more pronounced during the initial stages of the pandemic and then decreased in the following months. Specifically, there was a positive impact of the number of COVID-19 cases on CDS and a negative one on stock returns and economic activity, the latter two being interlinked.

The effect of actual and expected income shocks on mental wellbeing: Evidence from three East Asian countries during COVID-19

This paper evaluates the effects of economic shocks to current and expected income reduction on mental wellbeing. We use individual-level data from three East Asian countries; China, Japan, and South Korea, during the early phases of the pandemic when the COVID-induced economic shocks were severe. The findings reveal significant causal effects from current and expected income reduction on different aspects of mental health deterioration, including anxiety, trouble sleeping, boredom, and loneliness. Interestingly, we found that expectations of future income loss have a significantly larger effect on people's mental wellbeing compared to current falls in income. This has significant implications for the design of policies to support income during pandemics.

State-owned enterprises as countercyclical instruments: Quasi-experimental evidence from the infrastructure sector

This paper examines the effects of a negative macroeconomic shock on the financial performance of state-owned enterprises (SOEs) in infrastructure. The main aim of the paper is to explore whether SOEs serve as countercyclical instruments or whether they end up generating fiscal costs during a downturn, perhaps amplifying negative shocks. The paper introduces a new measure of fiscal injections that includes subsidies, equityrecapitalizations, and loans from the government, other SOEs, or state-owned financial institutions. The empirical setup uses a quasi-experimental setting that exploits the differential effects of a drastic fall in oil prices (in 2014–15) for SOEs in countries that experience a negative aggregate demand drop as a consequence of this shock versus similar firms in countries that do not suffer a downturn from the shock. The results—based on a balanced sample using coarsened exact matching and a differences-in-differences estimation—show that SOEs in treatment countries received increases in fiscal injections as a percent of average assets of 3.5 percent the year after the shock, equivalent to a significant recapitalization. These fiscal injectionstake the form of equity injections and loans from the government and state-owned financial enterprises. The results also show that capital expenditure as a percent of average assets in fully owned infrastructure SOEs decreased by 3.5 percentage points the year after the negative shock, equivalent to a 40 percent decline relative to its average level. In sum, this paper presents evidence that shows that SOEs do not serve as countercyclical tools and, in fact, may amplify negative shocks by requiring fiscal injections for SOEs while also lowering their capital expenditures.

China’s Monetary Policy Impacts on Money and Stock Markets

This study investigated the impact of China’s monetary policy on both the money market and stock markets, assuming that non-policy variables would not respond contemporaneously to changes in policy variables. Monetary policy adjustments are swiftly observed in money markets and gradually extend to the stock market. The study examined the effects of monetary policy shocks using three primary instruments: interest rate policy, reserve requirement ratio, and open market operations. Monthly data from 2007 to 2013 were analyzed using vector error correction (VEC) models. The findings suggest a likely presence of long-lasting and stable relationships among monetary policy, the money market, and stock markets. This research holds practical implications for Chinese policymakers, particularly in managing the challenges associated with fluctuation risks linked to high foreign exchange reserves, aiming to achieve autonomy in monetary policy and formulate effective monetary strategies to stimulate economic growth.

Balancing the scales: How housing supply regulation shapes household wealth inequality in China

Given its significant implications for the economy and society, this paper investigates the impact of housing supply regulation on household wealth inequality. Utilizing data from the China Household Finance Survey and land transaction records spanning from 2013 to 2019, we employ recentered influence function regression and two-way fixed effects models to analyze the effect of unexpected housing supply shocks on the wealth gap among households. Our findings reveal that positive unexpected housing supply shocks are crucial in reducing household wealth inequality. This reduction is attributed to the heterogeneous impacts of housing supply regulation on different wealth groups. By deregulating the housing supply, the upward trend in housing prices has slowed, which in turn makes homeownership more accessible and facilitates wealth accumulation for households that fall within the 20 % and 80 % wealth quantiles. Conversely, deregulation has a negative impact on property values for households in the 80–100 % wealth quantile, thus mitigating their overall wealth growth. Overall, this study emphasizes the significant role of housing supply regulation in shaping wealth inequality in China.

Max Share Identification of Multiple Shocks: An Application to Uncertainty and Financial Conditions

We generalize the Max Share approach to allow for simultaneous identification of a multiplicity of shocks in a Structural Vector Autoregression. Our machinery therefore overcomes the well-known drawbacks that individually identified shocks (i) tend to be correlated to each other or (ii) can be separated under orthogonalizations with weak economic ground. We show that identification corresponds to solving a nontrivial optimization problem. We provide conditions for non-emptiness of solutions and point-identification, and Bayesian algorithms for estimation and inference. We use the approach to study the effects of uncertainty and financial shocks, allowing for the possibility that the former responds contemporaneously to other shocks, distinguishing macroeconomic from financial uncertainty and credit supply shocks. Using U.S. data we find that financial uncertainty mimics a demand shock, while the interpretation of macro uncertainty is more mixed. Furthermore, variation in uncertainty partially represents the endogenous response of uncertainty to other shocks.

Influence of professional sports activities on bone mineral density (<i>literature review</i>)

Introduction. The positive effect of physical activity on the state of bone has been proven by many researchers. Professional sports activity is a model of the constant impact of physical activity on the human body, acting as the most powerful mechanism for activating and mobilizing the functional reserves of an athlete, which, against the background of a progressive increase in the volume, intensity and duration of exposure, shows an increase in the incidence of injuries and stress fractures, one of the leading causes of which is a decrease in bone mineral density (BMD) up to the development of osteoporosis. The risk factors for the development of the pathology of the musculoskeletal system, which have a direct impact on the formation of the BMD, in elite sports include the volume and intensity of training loads, the stereotype of the main competitive exercise, the daily balance of energy intake.The aim is to study is to analyze modern scientific publications on the impact of professional sports activities on bone mineral density.Materials and methods. The review is based on publications from the PubMed, Google Scholar, Cyberleninka, eLIBRARY databases. Preference was given to articles published in refereed sources over the past 10 years.Results. The specificity of the main competitive exercise determines the presence of asymmetry in the distribution of the BMD in athletes, in addition, the level of BMD is higher in the leading limb compared to the opposite. Increasing the qualifications, experience and age of an athlete shows a positive impact on the performance of the BMD, with the exception of certain specializations. A different effect of sports with a high osteogenic effect of shock and weight load on the state of the BMD was noted compared to the general population. Power athletes, combat and game sports athletes have higher levels BMD compared to representatives of cycling, swimming, rowing, triathlon and long-distance running, characterized by the limitation of gravitational (shock) load or a large amount of low-intensity training exposure. Lower BMD were noted in athletes in sports specializations with weight categories, aesthetic and cyclic sports, where the problem of a relative energy deficiency in sport, which negatively affects bone metabolism.Conclusions. In athletes, the volume and intensity of training loads, the stereotype of performing the main competitive exercise, the daily balance of energy intake have a direct impact on the formation of the BMD with the allocation of risk groups for the pathology of the musculoskeletal system in elite sports.

Altering shale permeability by cold shock

The matrix permeability of shale is on the order of nanodarcy (nD), and hydrocarbon recovery from it is economical only after hydraulic fracturing. Another fracturing technique, which is often overlooked, is cryogenic fracturing. This study determines the effects of cold shock on shale permeability by focusing on the sub-100-nm pore throats that control access to a significant fraction of the pore space in the matrix. We extracted shale samples, heated them to mimic various formation burial depths, and shocked them in liquid nitrogen. Subsequently, we measured their capillary pressures. This study presents a conceptual model to shed light on the heterogeneous deformations at a sub-100-μm scale. Also, it uses a network modeling approach to determine the permeability enhancement based on the pore-throat size distributions obtained from the capillary pressure measurements. It demonstrates that cold shock enhances permeability by 20%, significantly lower than the typical values reported in the literature where the effects of subsurface temperature have been neglected. The enhancement depends non-monotonically on the temperature difference applied. Moreover, the results indicate that there may be an optimal scenario to maximize the enhancement that can only be determined experimentally. The reason for the incapability of the purely analytical approach is also discussed.

Inflation and distributional impacts: Have mitigation policies been successful for vulnerable and energy poor households?

The aim of this paper is to assess the distributional impact of the 2021–23 price increase on Italian household expenditure and energy poverty. Using the microsimulation model developed by the Italian Parliamentary Budget Office, the analysis provides a comprehensive assessment of the uneven impact of inflation across the population and measures how mitigation policies have compensated for this impact. In particular, we focus on vulnerable households to examine whether energy poverty has been affected by the rise in energy prices and to what extent policies have succeeded in protecting these families. Our main findings show that in 2022, mitigation policies have stabilised the impact of inflation by compensating households for almost half of the effect of the price shock on their expenditure. Although not particularly well targeted at energy-poor households, the mitigation policies have protected households from a worsening of their energy vulnerability. However, the reduction of support measures adopted in 2023 is expected to increase the area of vulnerability, including households that are particularly sensitive to high energy costs. Finally, the behavioural response of households was also considered by estimating price elasticities of energy demand and measuring their impact on the simulated scenarios using a sensitivity approach.

Dynamics of cereal product price transmission between markets in Burkina Faso

PurposeEffective agricultural product price regulation policies depend on market integration and the degree of symmetry in the transmission of agricultural product price signals. This study analyzes the transmission and asymmetry of the price series between the Ouagadougou consumer market and assembly markets considering three primary cereal products in Burkina Faso.Design/methodology/approachThis study applies the nonlinear autoregressive distributed lag (NARDL) econometric model, which is an asymmetric extension of the ARDL cointegration model. The price series examined covers the period extending from January 2005 to December 2020.FindingsOur analysis provides novel insights regarding short- and long-term asymmetric effects in the transmission of price signals between assembly markets and the consumer market. We also determine that the effects of negative shocks are more persistent than those of positive shocks in several markets.Research limitations/implicationsFor markets that exhibit symmetrical responses of assembly market prices to consumer market prices, the results could reflect the continuous efforts of market players, particularly the government, to eliminate market failures and ensure the long-term efficiency of cereal markets. To this end, an agricultural market information system can have a crucial role in easing information access for all market players.Originality/valueThis study provides new evidence regarding the nature of the transmission and asymmetry of price information on primary cereal products in the largest markets in Burkina Faso. Applying the NARDL model makes it possible to simultaneously estimate short- and long-term asymmetry.

Confucian Culture and Enterprise Strategic Change from a Perspective of the Golden Mean Ethics

AbstractAs an important informal system, the impact of Confucian culture on enterprise strategic change decision‐making and economic and social development is often ignored. By using the OLS method and drawing from publicly listed companies on China's Shanghai and Shenzhen stock markets from 2002 to 2020 as research samples, this article empirically analyzes the relationship between Confucian culture and enterprise strategic change from the perspective of the “golden mean” ethics (a Confucian moral standard and philosophy of conduct). The article also attends to the moderating effects of foreign culture shock and stock rights between the relationship of Confucian culture and enterprise strategic change. A key finding is that the ethical thought of “golden mean” and “harmony” contained in Confucian culture has an inhibitory effect on the initiation of enterprise strategic change. Foreign culture shock positively moderates the relationship between Confucian culture and enterprise strategic change. When “shocked” by dominant foreign cultures, the negative impact of Confucian culture on enterprise strategic change will be weakened. Moreover, unlike previous research findings based on agency theory that suggests how state ownership may retard corporate development, the authors found that in an informal institutional environment with a strong Confucian culture, stock rights can play a positive moderating role in the relationship between Confucian culture and enterprise strategic change. When an enterprise is state‐owned, the inhibitory effect of Confucian culture on enterprise strategic change will be weakened further.

The scorching temperatures shock effect on firms’ performance: a global perspective

The scorching temperatures shock effect on firms’ performance: a global perspective

Frontiers in Operations: News Event-Driven Forecasting of Commodity Prices

Problem definition: Commodity prices have exhibited significant volatility in recent times, which poses an exogenous risk factor for commodity-processing and commodity-trading firms. Accurate commodity price forecasts can help firms leverage data-driven procurement policies that incorporate the underlying price volatility for financial and operational hedging decisions. However, historical prices alone are insufficient to obtain reasonable forecasts because of the extreme volatility. Methodology/results: Building on the hypothesis that commodity prices are driven by real-world events, we propose a method that automatically extracts events from news articles and combines them with price data using a neural network-based predictive model to forecast prices. In addition to achieving a high prediction accuracy that outperforms several benchmarks (by up to 13%), our proposed model is also interpretable, which allows us to identify meaningful events driving the price fluctuations. We found that the events frequently associated with major fluctuations in the price include “natural,” “hike,” “policy,” and “elections,” all of which are known drivers of price change. We used a corpus containing about 1.6 million news articles of a major Indian newspaper spanning 15 years and daily prices of four crops (onion, potato, rice, and wheat) in India to perform this study. Our proposed approach is flexible and can be used to predict other time series data, such as disease incidence levels or macroeconomic indicators, that are also influenced by real-world events. Managerial implications: Firms can leverage price forecasts from our system to design inventory and procurement policies in the face of uncertain commodity prices. Commodity merchants can also use the forecasts to design optimal storage policies for physical trading of commodities when prices are volatile. Our findings can also significantly impact policymakers, who can leverage the information of impending price changes and associated events to mitigate the negative effects of price shocks. History: This paper has been accepted in the Manufacturing & Service Operations Management Frontiers in Operations Initiative. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.0641 .

HOUSEHOLD DEBT AND THE EFFECTS OF FISCAL POLICY

AbstractWe examine how the effects of government spending shocks depend on the balance sheet position of households. Employing U.S. household survey data, we find a large, positive consumption response for households with mortgage debt, smaller response for renters, and an insignificant response for outright homeowners, in response to a positive government spending shock. We consider a model with three types of households and show that it can successfully account for these findings. Liquidity constraints and wealth effects play a crucial role in shock propagation. Our findings suggest the importance of household mortgage debt position in the transmission mechanism of fiscal policy.

The impact of monetary policy shocks — Do not rule out central bank information effects or economic news

This paper reassesses the impact of monetary policy and central bank information shocks while accounting for the influence of economic news. We regress a set of monetary policy surprises on a measure of economic news and incorporate these new instruments into an SVAR model. Furthermore, we distinguish between the two shocks via sign restrictions on the instruments’ impulse response functions. Our findings indicate significantly stronger and more enduring economic effects for monetary policy shocks, while the economic effects of central bank information shocks are weaker, if not vanish entirely. Nevertheless, persistent financial effects prevent us from completely dismissing the existence of central bank information effects. Consequently, it is important to account for both the effects of central bank information shocks and economic news in monetary policy settings.

Identification of vector autoregressive models with nonlinear contemporaneous structure

We propose a statistical identification procedure for recursive structural vector autoregressive (VAR) models that present a nonlinear dependence (at least) at the contemporaneous level. By applying and adapting results from the literature on causal discovery with continuous additive noise models, we show that, under certain conditions, a large class of structural VAR models is identifiable. We spell out these specific conditions and propose a scheme for the estimation of structural impulse response functions in a nonlinear setting. We assess the performance of this scheme in a simulation experiment. Finally, we apply it in a study on the effects of the macroeconomic shocks that propagate through the economy, allowing for asymmetry between responses from positive and negative impulses.

Application of a water-energy-carbon coupling index to evaluate the long-term operational stability of the anaerobic-anoxic-oxic-membrane bioreactor (A2/O-MBR) process under the influence of rainstorms

In the context of global climate change, sudden rainstorms and typhoons induce fluctuations in hydraulic shocks to wastewater treatment plants (WWTPs) in coastal areas, causing two challenges of stable effluent quality and low-carbon operation. We established a quantitative evaluation method for resistance of wastewater treatment processes to hydraulic shocks based on the water-energy-carbon nexus using operational data from a WWTP in southeast coastal China from July 2018 to December 2022. The effects of hydraulic shocks on the operational stability of the anaerobic-anoxic-oxic-membrane bioreactor (A2/O-MBR) process were analyzed following five steps. The results showed that the gray water footprint (GWF) of the process was 9.3% lower than that of the A2/O process. The energy footprint (ENF) and carbon footprint (CF) were approximately 2.1 times and 1.7 times higher than those of the A2/O process, respectively. The resistance to hydraulic shocks of the A2/O-MBR process is approximately 5.5 times higher than that of the A2/O process. In conclusion, the A2/O-MBR process exhibits higher process operational stability when subjected to hydraulic shocks, which is more conducive to the efficient and stable operation of WWTPs in rainstorm and typhoon-prone areas. The evaluation methodology provides qualitative technical support for selecting upgrading processes for WWTPs in different regions.

In Vitro Effects of Charged and Zwitterionic Liposomes on Human Spermatozoa and Supplementation with Liposomes and Chlorogenic Acid during Sperm Freezing.

Semen handling and cryopreservation induce oxidative stress that should be minimized. In this study, human semen was supplemented during cryopreservation with formulations of handmade liposomes and chlorogenic acid (CGA), an antioxidant compound. Zwitterionic (ZL), anionic (AL), and cationic (CL) liposomes were synthesized and characterized. Three aliquots of swim-up-selected sperm were incubated with ZL, AL, and CL (1:10,000), respectively. The percentages of sperm with progressive motility, high mitochondrial membrane potential (MMP; JC-1), double-stranded DNA (dsDNA acridine orange), and acrosome integrity (Pisum sativum agglutinin) were assessed. Then, human semen was frozen using both 1:10,000 ZL and CGA as follows: freezing medium/empty ZL (EL), freezing medium/empty ZL/CGA in the medium (CGA + EL), freezing medium/CGA loaded ZL (CGA), freezing medium (CTR). The same sperm endpoints were evaluated. ZL were the most tolerated and used for semen cryopreservation protocols. All the supplemented samples showed better endpoints versus CTR (p < 0.001). In particular, spermatozoa from the CGA and CGA + EL A samples showed increased motility, dsDNA, and acrosome integrity versus CTR and EL (p < 0.001; motility EL vs. CGA + EL p < 0.05). ZL and CGA can improve post-thaw sperm quality, acting on both cold shock effect management and oxidative stress. These findings open new perspectives on human and animal reproduction.

Gender Diversity: An Opportunity for Socially Inclusive Human Resource Management Policies for Organizational Sustainability

The context in which work is distributed, organized, and performed has certainly changed in recent decades. In recent years, shock events such as COVID-19 have contributed to the revision of human resource management (HRM) dynamics, which was previously for “standard work”. Overall, hybrid work is not a novelty but has significantly expanded, particularly in the post-COVID-19 period, creating new opportunities in human resource management, especially for female employees, who often manifest the need to reconcile family and work. The new post-pandemic situation has paved the way for gender sustainability processes in organizations by pushing towards a more general organizational sustainability. In fact, in recent decades, sustainability in companies has ceased to be merely environmental and has expanded its boundaries to a “sustainable” business model, whereby human resource management must also meet organizational sustainability criteria. The literature shows that women add value to organizations. Therefore, companies that take on the implementation of management policies with the aim of gender inclusion are committed to social and organizational sustainability, which leads to strategic ideas of competitive advantages. Starting from these considerations, the main purpose of this paper is to compare several strands of research on organizational sustainability and diversity management using an integrative literature review method that offers the opportunity to discover areas where further research is needed. This allows fields of study to be mapped. This paper, derived from a review, provides insights for line managers and upper management regarding pursuing sustainability goals within organizations’ boundaries. Limitations and potential future research directions are also discussed, contributing to the ongoing development of research on these subjects.

Unraveling the structural sources of oil production and their impact on CO2 emissions

In this study, we examine the structural short- and long-run effects of oil supply and demand shocks on the production of crude oil. Among these, oil supply shocks are the major determinant of oil production. Furthermore, we adopt local projections to elicit that oil supply and aggregate demand shocks are significant drivers of CO2 emissions, whereas oil-specific demand shocks have only limited impact on overall emissions in the short-, mid-, and long-term. These findings underscore the limitations of current demand-side policies within a selected group of countries, emphasizing the necessity for global support and binding commitments to effectively reduce emissions from oil production and meet the climate targets set by the Paris Agreement in 2015.