Stabilization Policy Research Articles

Financial integration and economic growth in Africa

The main objective of this article is to assess the link between financial integration and economic growth in African countries during the period 1990-2017. To achieve this goal, we used a dynamic panel model using the generalized method of moments (GMM) in first difference with threshold effects on a sample of 29 African countries. The results of the estimates reveal, on the one hand, that the countries that benefit from the benefits of financial integration on economic growth are those with high trade and financial openness, high human capital, low inflation, democratic regime, and high public expenditure. On the other hand, these results indicate that financial integration is associated with a low probability of surviving a banking crisis in the countries studied. Thus, the governments of African countries must implement policies aimed at a progressive liberalization of trade and financial activities, coupled with the implementation of macroeconomic stability policies and the improvement of the quality of the institutional environment, which determines the impact of financial integration on economic growth.

Black Market Exchange Rate, Currency Substitution and Demand for Money

Strict control on foreign exchange and successive devaluation of domestic currency adopted by Algerian government for nearly four decades resulted in black market for foreign currencies, high inflation rates and consequently, lost of confidence in Algarian dinar as a unit of account and store of value. The aforementioned results have given rise to the phenomenon of currency substitution.The aim of this paper is to provide evidence of the existence of currency substitution in Algeria. Using time series data covering the period 1990-2021 and an autoregressive distributive lag (ARDL) model combined with CUSUM and CUSUMQ, the demand for money in Algeria is estimated. Our results point out to the existence of currency substitution when the black market exchange rate is incorporated in the money demand equation. Our findings contribute to the existing litterature on currency substitution issue. As far as policy makers are concerned, the existence of CS could hinder the effectiveness of stabilization policies and thus, means of reducing currency substitution should be devoted.

The Impact of Monetary Policy in Achieving Exchange Rate Stability in the Iraqi Economy for The Period (1990 - 2023) an Econometric Study

The exchange rate is a monetary economic indicator that expresses a country's economic performance. The exchange rate is the basic foundation on which the economies of any country in the world are built, whether developed or developing. As a result, most governments seek to implement regulations that ensure the currency exchange rate remains stable. To avoid the radical changes that currencies will endure during another period. The exchange rate also plays a prominent role in monetary policy, due to its use as an intermediate target, or as a tool, or simply as an indicator of the competitiveness of countries through its impact on components of economic growth such as investment, the degree of economic openness, the inflation rate, the narrow money supply, and the volume of exports. And the volume of imports, and foreign exchange reserves. Therefore, the primary goal of this study was to try to identify the nature of the exchange rate. As a result, in the first section, we discussed the concept of monetary policy, its most important tools, its most important goals, the exchange rate, and Iraq’s experience in the field of exchange during the period (1990-2023). While the second section was devoted to measuring the impact of monetary policy in achieving stability in the exchange rate of the Iraqi dinar against the US dollar using the vector model. correcting the mistake. The study concluded with some recommendations to reduce exchange rate fluctuations.

Does Macroeconomic Moderate The Effect of Risk and Diversification on Financial Stability? Evidence from Islamic Commercial Bank

<em><span>Islamic banking's financial stability can improve efficiency and health and be able to withstand shocks originating from internal and external factors. This study analyzes the impact of risk, diversification, and inflation on the financial stability of Islamic banking. By using monthly time series data from 2018–2022, the analysis method used is multiple linear regression and moderate regression analysis (MRA) using the Eviews version 10 application. The results showed that the credit risk variable (NPF) has a significant negative relationship to financial stability (Z-Score). As well as the liquidity risk variable (FDR), financing diversification has a significant positive effect on the financial stability of Islamic banking (Z-Score). Macroeconomic variables (inflation) can strengthen the effect of financing diversification and weaken the effect of liquidity risk (FDR), but inflation cannot moderate the effect of credit risk (NPF) on the financial stability of Islamic banking (Z-Score). This study introduces a new theoretical approach to the conceptual relationship between variables. The findings can serve as a reference for monetary authorities in considering the impact of inflation in setting financial stability policies.</span></em>

Monetary Policy Effectiveness under the Ultra‐Low Interest Rate Environment: Evidence from Yield Curve Dynamics in Japan

I examine the effectiveness of monetary policy under the ultra‐low interest rate environment in Japan through the lens of yield curve dynamics. To that end, I employ the dynamic Nelson–Siegel model with time‐varying parameters, thereby computing indicators for tracing monetary easing effects. I show that the estimation performance of the yield curve models is sufficiently improved even under the ultra‐low interest rate environment by extending the dynamic Nelson–Siegel model to allow a loading parameter to vary over time, in addition to three factors of yield curve dynamics: level, slope, and curvature. However, I also demonstrate that the identification of the level and loading parameters is critical in assessing monetary policy effects. I reveal that monetary easing effects under the Quantitative and Qualitative Monetary Easing (QQE) are produced by flattening the yield curve in the ultra‐long‐term maturity zone over 10 years, while monetary easing effects from maturities shorter than ten years remain almost unchanged. Monetary policy fails to produce sufficient monetary easing effects within the time frame of the standard macroeconomic stabilization policy, even with the full‐fledged implementation of unconventional monetary policy measures under the ultra‐low interest rate environment in Japan.

The welfare costs of business cycles unveiled: Measuring the extent of stabilization policies

How can we measure the welfare benefit of ongoing stabilization policies? We develop a methodology to calculate the welfare cost of business cycles taking into account that observed consumption is partially smoothed. We propose a decomposition that disentangles consumption into a mix of laissez-faire and riskless components, decoupled by a parameter that captures the span of stabilization power. We estimate this parameter profiting from two distinct variance regimes measured in the historical consumption data and an identification strategy for the mapping between the span for each of these periods. In our preferred specification, we find that the welfare cost of total fluctuations is 11 percent of lifetime consumption, of which 82 percent is smoothed by the status quo policies, yielding a residual 1.8 percent of consumption to be tackled by policymakers.

Fiscal and monetary policy regimes: New evidence from India

The paper examines how fiscal and monetary policy coordination in India stabilizes macroeconomic fundamentals. We consider two coordinating fiscal and monetary policy regimes, the “Indian Fiscal” (IF) and M regime and then examine the transmission of public expenditure (PE) shock across these regimes. Monetary policy in the IFregime supports fiscal policy in debt stabilization by reducing interest rates. The M regime fiscal policy supports monetary policy in curbing inflation through fiscal consolidation drives. The IF regime is more conducive to the Indian economy as PE stimulus accelerates economic activity without causing high inflationary and high debt scenarios. In contrast, the M regime has a crowding out effect on PE stimulus while worsening the government's fiscal space. The findings indicate that in the Indian case, the monetary authority should maintain its accommodative stance on PE stimulus.

Islamic Economic Approach to Strengthening Public Purchasing Power through Price Stabilisation Policy

Islamic Economic Approach to Strengthening Public Purchasing Power through Price Stabilisation Policy

Public debt stabilization via a stochastic differential game paradigm

In this paper, we examine a public debt stabilization in a country under inflation targeting by arguing that bond yields are sensitive to inflation risks. Endogenously defining the convenience premium function, we focus on fiscal and monetary strategic interactions within an optimal control setting. The level of the debt-to-gross domestic produced (GDP) ratio and current inflation rate of the country are considered as the state variables in the game. We then focus on the convenience risk premium and rate of inflation as market-based disciplining devices, to articulate the Nash noncooperative equilibria, cooperative equilibria and Stackelberg equilibria via a feedback control strategy. We show that the outcome of the game depends on the parameters of the game, the type of equilibrium one considers and the decision horizon. When the current inflation rate follows an uncontrolled Ornstein–Uhlenbeck dynamic process, we highlight its effects on the growth rate of the debt ratio. Hence, our model provides a novel framework in which monetary and fiscal authorities can simultaneously achieve their individual interests, while achieving an optimal debt stabilization policy in the presence of inflation. We also highlight the need for governments to adopt policy-approaches which maintain the debt-to-GDP ratio under an inflation-dependent ceiling.

Analysis of Rice Trade and Food Security in Southeast Asian Countries

The rice trade serves to maintain sufficient rice stocks to meet domestic country demands. The world’s main rice exporters and importers are located in the Southeast Asia region, so the volume change of traded rice can affect the flow of trade. Given the strategic importance of rice, numerous nations have stepped in to control the domestic rice market, to ensure political stability as well as food security. This article aims to examine how the rice trade has evolved in Southeast Asia with respect to food security. The study aims are addressed by the application of the descriptive analysis method. The findings indicate that from 110.5 million tones in 2010–2011 to 128.3 million tones in 2021–2022, Southeast Asian countries accounted for 1.22% of global rice imports, >22% of the world’s total rice consumption. In the meantime, the annual growth rate of rice exports was 3.3%. Over the past 10 years, ASEAN’s net rice exports have made up 53.3% of the world’s total and are expected to reach about 54.8%. Southeast Asian countries intervene in the rice market through international trade policies, both in the form of export bans and domestic rice price stabilization policies, to maintain rice stocks to strengthen the level of food security. Southeast Asia’s economic integration through the ASEAN Economy Community is an important moment to become the basis for achieving food security at the regional levels while at the same time making the rice market more open among Southeast Asian countries. Keywords: rice, trade, policy, Southeast Asia

Analyzing the causal relationship between exchange rate and international tourism in Vietnam

The impact of tourism on exchange rates, and vice versa, varies from country to country. This study empirically explores the causal relationship between exchange rates and international tourism in Vietnam. To examine this relationship, data on real exchange rates, foreign tourist arrivals, and real tourism revenue were extracted from the general statistical yearbook from 2000 to 2019. This paper explicitly highlights how exchange rates impact tourism under a government-controlled exchange rate regime. The results indicate a weak unidirectional causal relationship between foreign tourist arrival and real exchange rates. An increase in the real exchange rate increases short-term income but has a negative impact on long-term tourism revenue, while an increase in real tourism revenue reduces the real exchange rate in the short run but is stable in the long run. The research supports the perspective that maintaining a stable exchange rate attracts international tourists in the long term. Based on these findings, the Vietnamese government should adopt a cautious approach to price stabilization policies and encourage export-oriented industries to attract international tourists and promote tourism.

End-to-End Autonomous Driving Decision Method Based on Improved TD3 Algorithm in Complex Scenarios.

The ability to make informed decisions in complex scenarios is crucial for intelligent automotive systems. Traditional expert rules and other methods often fall short in complex contexts. Recently, reinforcement learning has garnered significant attention due to its superior decision-making capabilities. However, there exists the phenomenon of inaccurate target network estimation, which limits its decision-making ability in complex scenarios. This paper mainly focuses on the study of the underestimation phenomenon, and proposes an end-to-end autonomous driving decision-making method based on an improved TD3 algorithm. This method employs a forward camera to capture data. By introducing a new critic network to form a triple-critic structure and combining it with the target maximization operation, the underestimation problem in the TD3 algorithm is solved. Subsequently, the multi-timestep averaging method is used to address the policy instability caused by the new single critic. In addition, this paper uses Carla platform to construct multi-vehicle unprotected left turn and congested lane-center driving scenarios and verifies the algorithm. The results demonstrate that our method surpasses baseline DDPG and TD3 algorithms in aspects such as convergence speed, estimation accuracy, and policy stability.

One money, one voice? Evaluating ideological positions of euro area central banks

We provide new insights into the effectiveness of central bank communication in the euro area relying on a novel methodology. The time-varying text based ideal point model (TV-TBIP) is used focusing on two crucial topics communicated by central bankers, namely price stability and financial stability. The methodology permits identification of the ideological position of the speaker. We find that the ECB transitions between a high ideal point state reminiscent of interventionist monetary policy and their effects on financial markets and a low ideal point state with emphasis on risks to fragmentation from monetary policy and financial stability policies. The individual euro area central banks tend to mirror the ECB’s position which suggests that some specialization/coordination of responsibilities from the communications activities of euro area national central banks takes place. National central banks’ positions change gradually and usually during crisis periods. In contrast, the ECB’s ideological position is very stable. We also conduct several econometric tests that point to national inflation rates influencing ideological positions. Additionally, we find that professional forecasts are responsive to the position taken of central bankers in their speeches.

Multi-Dimensional Analysis of Offshore Wind Industry: The Case of French Wind Farms

The development of the offshore wind industry faces a number of organizational and economic hurdles, often strong societal resistance and the instability of public policies, thus drawing interest from academics who have analyzed this process from multiple viewpoints. This body of knowledge has served as the basis for a study aiming at characterizing France’s first three offshore wind farm projects, which finally reached the energy production stage after over ten years of development. Results show that although this development has been the subject of atypically strong social opposition, the projects’ features are quite close to those highlighted by the literature.

Peran Kepemimpinan Transformasional Dalam Merespons Tantangan Modern di Lingkungan Birokrasi Publik Pemerintah Provinsi Sumatera Selatan

This research examines the role of transformational leadership in addressing modern challenges in the public bureaucracy of South Sumatra Province. Through a qualitative approach and single case study, field data successfully revealed the dynamics of leadership and the challenges faced in achieving transformational goals at the provincial level. Findings highlight the imbalance in focus on government vision and mission, lack of employee participation and engagement, challenges in technology implementation accompanied by human resource limitations, and policy instability due to the politicized local leadership selection system. Policy recommendations include aligning vision and mission to prioritize public service, efforts to increase employee participation, investment in technology-related human resource capacity development, and advocacy for reforming the local leadership selection system. Conclusion, these findings provide a comprehensive insight to guide improvements in leadership and policies in South Sumatra Province in addressing modern challenges in the public bureaucracy environment. Keywords: Modern Challenges, Public Bureaucracy Transformational Leadership,

The Impact of Financial Inclusion and Stability on Economic Growth in African Countries

This study investigates the effect of financial inclusion and financial stability on economic growth in a panel study of 30 African countries over the period between 2004 and 2020. Data were analyzed using the panel ARDL model. The panel ARDL estimation results demonstrate that financial inclusion has a statistically significant positive long-term effect on economic growth, though its short-term impact is insignificant. The study also found that the effects of financial inclusion on economic growth vary across different income levels. Specifically, there is a positive association in low-income countries, a negative association in lower-middle-income countries, and a positive but insignificant effect in upper-middle-income countries. On the other hand, the financial stability measured by the bank Z-score has a significant negative impact on long-run economic growth and a positive one in the short run. The effect is negative for low-income countries, positive for lower-middle-income countries, and negative but insignificant for upper-middle-income countries. Thus, the study findings suggest financial inclusion and financial stability policies should be tailored to the country's income level in African countries.

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.

Reconsideration of modern monetary theory-type fiscal and monetary stabilization policy from a viewpoint of the dynamic Keynesian model

Reconsideration of modern monetary theory-type fiscal and monetary stabilization policy from a viewpoint of the dynamic Keynesian model

The Role of Public Authorities in the Agro-Tourism Sector

Abstract In the countries of the European Union, agritourism is not a new phenomenon. Over time, for most EU countries: time meaning several decades, tourist accommodation has been practiced in a more or less spontaneous or organized manner. The new in this field is manifested by the expansion of the tourist phenomenon in the rural area. This expansion is explained, on the one hand, by relaunching the development of rural regions and, on the other hand, by diversifying the forms of mass tourism practice. The activity has proven to be profitable, especially as a result of changes in the preferences and habits of tourists towards individual tourism, to the detriment of mass tourism. On the other hand, the migration to the city, the modernization of work in the agricultural sector, the changes caused by the increase in competition in the rural world through the expansion of the free community market, have a counterweight in agritourism. Activities in the sphere of tourism can economically revive the villages, if the benevolent attitude of their inhabitants, to receive and accept in their midst wasteful and demanding guests, is favorably received. The objective of this article is to interconnect the concept of agritourism analyzed at the European level with the main strategies and stability policies of public authorities in the large-scale development of this type of non-invasive tourism

미군정기 농사교도국(農事敎導局) 신설과 해체 과정

This study explores establishment and disbandment of The Agricultural Extension Service In USArmy Military Government in South Korea and reviews Political and social meaning. To do so, we analyzed the US Army Military Government in Korea (USAMGIK) documents and memorandum of South Korean agricultural officials, including the U.S. military's response to agricultural issues, discussions on the establishment of the Agricultural Extension Service and activities. A comparative study was also conducted with the agricultural policies of the Syngman Rhee regime to identify the characteristics of the Agricultural Improvement Service and the Agricultural Extension Service that USArmy Military Government established. The results of this study are as follows. First, The process of creation of the Agricultural Extension Service was a manifestation of new values that countered coloniality. But We can also see the reaction of countering the tendency. Second, the newly created agricultural experiment organization achieved a qualitative strengthening of rural leaders along with a quantitative strengthening, including the expansion of rural leaders, which laid the foundation for the achievements of the Agricultural Extension Service. Third, the establishment of Syngman Rhee's regime brought about a major change in the perspective and operation of agricultural extension, which led to the atrophy and disappearance of the Agricultural Extension Service and the emergence of the legacy of colonial agriculture into the mainstream of Korean agricultural administration. The creation and activities of the Agricultural Extension Service were process of the spread of American values that emphasized procedural democracy. Not only that, The establishment of The Agricultural Extension Service was in line with the Cold War goals of the United States. It was therefore likely to be promoted by the USArmy Military Government’s rural stabilization policy. But this was qualitatively different from colonial agrarianism in that modern values based on democracy were spread to rural society.