Stabilization Policy Research Articles

Impact of political instability of monetary policy conduct and economic activity recovery: empirical investigation

Impact of political instability of monetary policy conduct and economic activity recovery: empirical investigation

The Role of Central Bank of Nigeria in Exchange Rate Stabilization

The study X-rays the role of Central Bank of Nigeria (CBN) in exchange rate stability in Nigeria, using quarterly time series data. The study adopts GARCH family models to decipher the potency of CBN’s monetary policy in exchange rate stability in Nigeria. Anchor interest rate, official exchange rate, and money supply were incorporated into the variance equation to determine their exact impact on the volatility variable (conditional variance). Empirical results show that Anchor interest rate, official exchange rate, and money supply are key in exchange rate stability in Nigeria. The study also finds that despite CBN’s official intervention, exchange rate instability in Nigeria persists overtime. It concludes that Central Bank of Nigeria has a major role to play in managing exchange rate volatility in Nigeria especially when it uses the aforementioned monetary policy tools.

A tale of two languages: charting Chinese parents’ beliefs about and engagement with Chinese and English language learning

ABSTRACT This study investigates Chinese parental beliefs about and engagement with their children’s Chinese and English language learning in Yinchuan, China, utilizing the theory of planned behaviour as an analytical framework and a mixed-methods approach. Quantitative data from 879 parents reveals a strong preference for Chinese language education based on its perceived utility, cultural identity, and socioeconomic returns, contrasting with an ambivalent stance towards English. Qualitative insights highlight the influences of nationalism, anti-Western sentiments, and the COVID-19 pandemic on parental attitudes. These findings underscore the dominance of top-down language policies and societal expectations in shaping parental choices, often leading to contradictions between expressed attitudes and realized engagement. Perceived behavioural control emerges as a critical factor, with parents navigating challenges such as resource limitations, policy instability, and the dynamics of child autonomy. This study offers valuable insights into the evolving landscape of parental involvement and the factors shaping language learning priorities, thus contributing to the growing body of literature on language education in China. These findings can inform language education policies and practices, emphasizing the need for accessible home-based resources, cultural understanding, and open dialogue to support effective and equitable language learning outcomes for Chinese children.

Britain's Liability-Driven Investment Episode Was a Canary No One Elsewhere Bothered to Think About

Britain's liability-driven investment crisis in fall 2022 had lessons for other major financial centers that, as evidenced by the US and Swiss banking crises only a few months later, were largely ignored. They are still relevant. In this article, I first discuss what drove the British crisis before identifying lessons for the microregulation of pension funds; for financial stability policy on shadow banking and beyond; for central banking balance sheet regimes, including lending of last resort and market making of last resort; and for monetary policy when fiscal policy makers sit on their hands.

Indonesia’s financial resilience: Between optimism and risk

This study aims to evaluate the relationship between financial resilience, exchange rate, inflation, and economic growth from 1996 to 2022 using secondary data from the World Bank. The analysis method uses vector autoregressive to understand the causality dynamics between these variables. The results show that past economic growth positively impacts current economic conditions, but an increase in the exchange rate can hinder economic growth. The exchange rate also tends to be influenced by previous values, but high economic growth does not always increase the exchange rate. Previous conditions significantly affect financial resilience and can be strengthened by a strong currency. Meanwhile, inflation has an inverse relationship with economic growth, where past inflation seems to suppress current inflation, which price stabilization policies can cause. From an institutional economics perspective, this study provides an understanding of the interaction between various economic factors in the structural framework and policies that regulate economic activities. The impulse response function (IRF) shows that economic growth can react strongly to sudden changes, although this reaction may not last long. The exchange rate fluctuates with economic changes, reflecting market optimism and uncertainty. Financial resilience may be strong initially but may weaken over time, indicating the need for policies to strengthen the financial system to ensure economic stability. Furthermore, the role of social capital in economic resilience is highlighted as it can amplify the positive effects of a robust institutional framework by fostering trust and collaboration among economic actors. Inflation reacts differently to economic changes, challenging policymakers to balance growth and price stability. Overall, the IRF provides insights into how economic variables interact with each other and react to sudden changes, albeit with some uncertainty in the estimates. The forecast error decomposition variance (FEVD) analysis in this study reveals that internal factors initially influence economic growth, but over time, external factors such as the exchange rate, financial resilience, and inflation come into play. The exchange rate, which was initially volatile due to internal factors, becomes increasingly influenced by economic growth, indicating a close relationship between the economy and the foreign exchange market. From an institutional economics perspective, financial resilience, which was initially stable due to internal factors, becomes increasingly dependent on global economic conditions, suggesting the importance of a solid institutional framework for maintaining economic stability. In addition, inflation, which was initially explained by economic growth and exchange rates, has gradually become more influenced by financial resilience, indicating the importance of effective monetary policy in controlling inflation. This study highlights the importance of understanding how economic variables influence each other for effective economic governance. Integrating institutional economics and social capital perspectives provides a comprehensive framework for enhancing financial resilience and promoting sustainable economic development in Indonesia.

COVID-19 Pandemic and Ghana’s Economy: A Deep Dive into Economic Indicators

The study presents an in-depth analysis of the COVID-19 pandemic’s effect on Ghana’s gross domestic product (GDP), balance of payments and international investment position (BPM6), and inflation (INFL). Employing a pre-and post-COVID-19 comparison (2017-2022) through repeated measures ANOVA and tests of between-subject effects, it investigates whether the government’s economic performance was significantly impacted. Key findings show a notable decrease in GDP and BPM6, alongside a major increase in inflation rates post-pandemic. The study concludes that the COVID-19 pandemic had a statistically significant impact on Ghana’s economic performance in terms of GDP and BPM6, but not inflation. Recommendations include implementing economic stabilization policies, managing the balance of payments, controlling inflation, and focusing on sustainable growth. These insights are crucial for policymakers and stakeholders in navigating Ghana’s post-COVID-19 economic situation.

Hysteresis and the long shadow of the exchange rate regime

This paper offers empirical evidence consistent with hysteresis, which is the idea that temporary demand shocks can have long-lasting effects on the economy. I rely on the fact that fixers (i.e., countries with fixed exchange rates) were on average hit harder by the 2008 global financial crisis than non-fixers. Fixers continue to underperform non-fixers more than a decade after the crisis. This holds for the period 2008–2019, but also for sub-periods such as 2010–2019 and 2012–2019, which is indicative of hysteresis and even super-hysteresis effects. If hysteresis is real, it has important implications for macroeconomic stabilization policies and, by extension, the choice of exchange rate regime.

The Local Declines in Child SSI Applications and Awards During COVID

Child applications and awards for Supplemental Security Income (SSI) fell sharply at the outset of the COVID-19 pandemic. Cumulative applications from April to September 2020 were about 30% lower than applications over the same period in 2019 with substantial variation in rates of decline across local areas. In this article, we explore the factors correlated with the change in applications and awards across localities at the beginning of the pandemic. Our findings point to three particularly important factors influencing the magnitude of the change in applications and awards: (a) the restriction of in-person services in all Social Security Administration field offices in March 2020, (b) the pandemic’s disruptions to social and service networks through which people may learn about SSI, and (c) new economic stabilization policies, such as economic impact payments and supplemental unemployment insurance payments. These results highlight the substantial local variation in SSI participation. This variation is especially important in considering general issues around access to SSI, particularly for policies that aim to improve SSI access through outreach. Our findings underscore the importance of local networks in creating program awareness at local levels, and that they might be fruitful avenues for further outreach efforts.

The asymmetric effect of the stabilisation policies on the general price level in the Southern African Common Monetary Area

The asymmetric effect of the stabilisation policies on the general price level in the Southern African Common Monetary Area

Labor market dynamics in developing countries: analysis of employment transformation at the macro-level

Understanding labor market dynamics remains a pivotal aspect within contemporary economic discourse, as necessitates the pursuit of effective employment models to ensure steady progress in the conditions of changes in the economic structure. The aim of the research is to examine the dynamics of the labor market in developing countries, with particular emphasis on China and Kazakhstan, taking into account economic, social, and technological trends. The methodology includes the analytic and comparison of trends in the labor market in developing countries, such as China and Kazakhstan over the past 20 years, and also monitoring the socio-economic nature of the labor process. The study identified changes in the labor market and provided empirical evidence for new forms of employment, utilizing comparative analysis and data visualization of the sectoral structure of the economy and global labor market trends up to 2027. The obtained results provide three main conclusions: a decrease in demand for low-skilled workers and an increase in demand for highly qualified individuals; the emergence of jobs with low levels of social protection; new forms of employment-oriented towards workers outside the social security system, domestic workers, and self-employed individuals. These types of employment can fill jobs in platform and piecework economies, cooperativism, and the sharing economy, which allows employers in developing markets to optimize employment. The findings of the study can contribute to understanding the functioning of the labor market in developing countries including the development of small and medium-sized businesses, startups, and innovative projects, and may be applicable in the development of economic and social policies for sustainable economic growth and social stability.

Distributive Conflict, High Inflation, and Stabilization Programs in a Small Open Economy Framework: The Case of Argentina in the 1980s

ABSTRACT The debates between demand-pull and cost-push theories of inflation have shaped stabilization programs since the 1923 German hyperinflation. This article combines elements from the modern revival of the Classical tradition of value and distribution and the Latin American Structuralist Approach to analyse the political economy behind Argentina's high-inflation regime and stabilization policies from 1983 to 1989. Our main hypothesis is that exchange rate dynamics play a crucial role in stabilizing distributive configurations and price dynamics in a small open economy with conflicting claims. High external debt, persistent devaluation expectations, and exchange rate policies imposed by international creditors to safeguard the economy's repayment capacity are identified as the primary causes behind the failure of stabilization attempts in Argentina during the late 1980s.

Government decisions and macroeconomic stability: Fiscal policies and financial market fluctuations

Since the 2008 Financial crisis, macroeconomic and financial markets' stabilisation policies relied mainly on monetary actions, reducing the ECB's margin of manoeuvre and calling for a major role for fiscal authorities. We investigate the impact of government decisions on financial markets for 11 Eurozone economies (from 1995 to 2021), in the very short run, using an event study, finding a positive (negative) reaction to fiscal expansion (consolidation) announcements and in the short/medium-run, with a Bayesian TVP-FAVAR, identifying cross-country heterogeneities; stronger (weaker) public finances show a direct (indirect) relation between fiscal policies and stock prices and an indirect (direct) one with 10-year bond yield.

PROBLEMS OF DETERMINING THE BOUNDARIES OF THE SUBURBAN AREA OF THE LARGEST CITIES OF UKRAINE

The article examines a relatively recent concept used in regulatory documents, known as the largest cities in Ukraine. Unfortunately, statistical data on the population size has not been kept in Ukraine for a long time, which makes it challenging to conduct the research in the most detailed and in-depth manner. Despite this, the study used data from enterprises and industries, cartographic data, and field surveys. It allowed us to identify seven potentially largest cities: Kyiv, Kharkiv, Odesa, Dnipro, Donetsk, Lviv, and Zaporizhzhia. The authors studied the concept of suburban areas in detail and found differences between different classes of suburban areas. We used works from various scientific fields: geographical, economic, sociological, legal, and urban planning, which makes this article interdisciplinary. Also, we considered the regulatory legal documents of the State Building Code, the Laws of Ukraine, and historical materials. The cities of this study tend to grow and spread geographically throughout the area, signalling us to revise previously accepted interpretations and norms of suburban areas. It led us to conduct the study and adopt a new definition of the suburban area of the largest city. Therefore, the ‘suburban area of the largest city’ is the territory located outside the largest city along transport and motorways and providing close partnership with the city in economic, environmental, recreational, cultural, labour, scientific, and other areas. The article considers the modern problems of the suburbs, such as territorial conflicts on the appropriation of land, conflicts on the use of territories not for their intended purpose, and clashes between developers of the residential sector, enterprises, and the ecological framework. In the latter, the natural flora and fauna system suffers the most. External factors also influence the slowdown of suburban development: military conflicts, instability of foreign policy, economic decline, and others. To prevent such a scenario, we have defined the goals and objectives of the suburbs. In the current situation in Ukraine, this study can help to facilitate further research on the development of territories. Keywords: suburban area, largest cities, planning, boundary, accessibility.

Does Privatization improve Corporate Governance and Profitability? Evidence from Cement Company of Northern Nigeria

The paper study how Privatization improves Corporate Governance and Profitability of Cement Company of Northern Nigeria. Data was collected from secondary sources, and the statistical tools employed in the Methodology were descriptive statistics and OLS regressions. The study aimed at bridging literature gap on studies that relate corporate governance and privatization policy in Nigeria. The results suggest that, The result suggest that, the company has lower market capitalization, private sector and foreign investors have concentrated ownership, bigger board size, lower percentage of executive directors and higher percentage of non-executive directors, Board chairmen were not the chief executives and chairmen audit committees were non-executive directors, lower workforce, higher percentage of management staff small percentage of non-management staff, lower profitability, products demand depended on government capital projects, The Company purchased 5MW power plant in 1991, macro-economic challenges such as devaluation of naira, energy sector crisis, foreign exchange rate, inflation, trade liberalization, inconsistent stabilization policies, political instability and banks’ strikes and weak private sector. Inferential result reveals that, has state ownership, percentage of management staff, percentage of non-management staff and privatization have positive and significant relationship with profitability. However, minority ownership has a negative and significant relationship with profitability. Based on these findings, the researcher arrived at the conclusion that, Corporate governance has significant impacts on profitability of Cement Company of Northern Nigerian. Even though, unfavourable macroeconomic environment militated against its efficiency. The study recommends that, government needs to introduce macroeconomic stabilization measures that will improve effective demand of cement products particularly with the problem of withdrawal of fuel subsidy in the economy. The company should, as a matter of necessity, design strategies that will; create international market opportunities, enhance security measures, cheap inputs, efficient financial and inventories management that will improve profitability post privatization.

Default Risk, Risk Premium, and Corporate Resilience: The Role of Regulatory and Stabilization Policies

This study investigates the interaction between monetary and macroprudential policy measures and evaluates whether policymakers should address financial disruptions. To achieve this goal, we developed a dynamic stochastic general equilibrium model that incorporates frictions in financial markets and financial shocks alongside traditional macroeconomic shocks. One of the main focuses of macroprudential policies is to stabilize credit cycles. We used Moroccan data to estimate the model and assess various policy actions to counter imbalances in financial markets, including adjustments to the interest rate tool. Our findings highlight the benefits of addressing financial disruptions, the extent depending on the shock characteristics. While acting on interest rates in response to financial variables may stabilize some economic factors, it has the potential to increase the volatility of others substantially. The results confirm that the use of optimal regimes can reduce default processes and ensure companies stabilize risk premiums. Implementing such regulations leads to greater opening of the companies’ capital to external financing sources. JEL Classification C11, D53, D58, E52, E58

한국 정치인 테러양상과 요인경호대책

Politics is a process through which stakeholders negotiate and states determine policies to enhance citizen welfare and establish optimal public policies for societal stability and prosperity. At its core, this process involves politicians striving to attain power to realize their beliefs, and it must be democratic. Consequently, terrorism against politicians, being both undemocratic and violent, must be rigorously condemned. An examination of the terrorism patterns targeting South Korean politicians reveals a persistent inclination to suppress opposition through violence—a vestige of regressive tendencies not yet fully eradicated since the post-liberation period. This study finds that security of key personnel for major politicians opposing current power structures are significantly inadequate. Therefore, we propose the urgent establishment of a “Security of Key Personnel Law” to strengthen national security for key political figures. Additionally, given the frequency of terrorist attacks on domestic politicians, it is crucial to expand the number of security personnel and enhance their training. Moreover, adopting socially inclusive policies towards political opposition and reinforcing the roles of media and popular culture are essential for fostering a more advanced political culture.

The Macroeconomic Impact of Crude Oil Price Fluctuations in Nigeria

The main objective of the study was to determine the way fluctuations in the price of crude oil affected macroeconomic variables in Nigeria from 2000 Q1 to 2022 Q4. The data was analysed in the paper using Structural Vector Autoregressive (SVAR) models. According to the findings, Nigeria's current economic growth has been significantly impacted by lag GDP values. This indicates that economic growth in Nigeria was significantly impacted by one-period lag GDP by 3,791.7 units in the short-run and 7,430.4 units in the long-run. Also in the short-run, the current broad money supply was significantly impacted by both the one-period lag general price level (0.445 units) and the one-quarter lag broad money supply (757.7 units). According to the crude oil price fluctuation model, current crude oil price variations in Nigeria are significantly influenced by one-period lags in general price level (-64.9 units), crude oil price fluctuation (1,114.6 units), and fiscal budget deficits (0.65 units). All of the one-period lagged coefficients of macroeconomic variables, including real GDP, broad money supply, interest rates, general price level, inflation rates, and fiscal budget deficits, had a significant impact on current economic growth and broad money supply, respectively, as demonstrated by the long-run economic growth and broad money supply models. The real GDP's impulse response to fluctuations in crude oil prices fell during the first period, peaked during the second, and then increased to show a positive trend during the third. This study came to the conclusion that shocks or fluctuations in the price of crude oil are the main cause of macroeconomic policy instability in Nigeria. The study recommended that the government should control foreign exchange rate regimes, pursue expansionary monetary policy, general price level control and stabilisation measures.

Central bank communication and stabilization policies under firms’ motivated beliefs

Central bank communication and stabilization policies under firms’ motivated beliefs

Selling soldiering: Marketisation, gender complementarity and the promise of military femininity in 1990s Sweden

AbstractThis article examines the first large‐scale attempts to recruit women as soldiers and officers in 1990s Sweden, focusing on the techniques and promises employed by the Swedish Armed Forces (SAF). Building on a wide range of documents and audiovisual sources, we demonstrate how the SAF utilised various marketing techniques, including advertisements and sponsorships, to attract and ‘sell’ soldiering to young women. Analysing these efforts through scholarship on neoliberal governmentality and gendered military identity, we argue that these strategies marked the onset of military marketisation, reflecting broader neoliberal trends in 1990s Sweden. Moreover, we show how the SAF's marketing techniques promised women a narrowly defined, complementary, feminine military identity that reinforced existing gender stereotypes in the name of gender equality. Our findings shed new light on the instability of gender equality policies deemed progressive and pioneering and, in contrast, the stability of the global racialised hierarchies that inscribe some nations as gender equality forerunners.

Structural policies, FDI and economic stability effects on employment elasticities: case of emerging economies

The focus of this paper is centred on distinguishing between labour and product market policy ( Lmp and Pmp ) indicator’s role to empirically examine if foreign direct investment (FDI) and economic stability (GDPG volatility) effect the employment’s sensitivity to output fluctuations in 44 countries from Africa and Middle East Area over the period of 2000–2017. To address this objective, in the first step we provide by OLS the cross-sectional employment elasticities. Then, unlike previous studies, which are based only on linear specifications, this paper propose different nonlinear specifications to assess the floating marginal effect of the structural indicators. In a third step, each augmented nonlinear model is used to deduce the role of macroeconomic indicators. Based on U- or N-shaped floating marginal effect of only a single structural labour or product market policy ( Lmp or Pmp ), the Lmp indicator is found to have the important increasing impact on employment elasticities which depends on the initial policy condition. Based on augmented cubic model, to maximise employment responsiveness, structural policies have to be complemented by macroeconomic stability policies. Furthermore, the estimations confirm that FDI triggers aggregate employment elasticities and then employment follows the FDI promotions.