Finance Commons^™

Effects Of External Debt On Inflation In The West African Monetary Zone (Wamz), Collins Anosike

Journal of Global Awareness

This research examined the effect of external public debt on inflation in the West African Monetary Zone (WAMZ) using annual data from 1960 to 2022. The study selected the six member countries of WAMZ, namely: Gambia, Guinea, Nigeria, Sierra Leone, Liberia, and Ghana, to examine their economic well-being, growth performance, external debt, and inflation over a 63-year period. This study is unique because it examines three periods, namely: pre-WAMZ (1960 to 2000); during WAMZ (2001 to 2022); and the entire period (1960 to 2022), extends previous studies by using updated data, and then shows the long-run positive effect of external …

The Impact Of Financial Inclusion On Inflation In The Mena Region: Oil Vs Non-Oil Countries, Jailan Elsaid

Theses and Dissertations

The study examines the impact of financial inclusion on inflation as a tool for monetary policy effectiveness in the MENA region, separating the analysis into oil and non-oil countries from 2004 to 2022. The Principal Component Analysis (PCA) technique is used to create a multidimensional index of financial inclusion through usage and access dimensions. Additionally, PVAR GMM estimation and Granger causality tests are implemented to analyze the dynamics and causality between financial inclusion and inflation, while controlling for other variables such as broad money, real effective exchange rate, and real GDP growth, which may influence the relationship according to the …

European Household Savings Dynamics: Under Inflation And Post-Pandemic Shocks, Mateusz Mierzejewski, Julia Szczurek

Journal of Banking and Financial Economics

The Covid-19 pandemic, which began in early 2020, triggered a global health and economic crisis, leading to unprecedented changes in consumer behaviour and the functioning of national economies. This article examines the impact of the pandemic and the subsequent inflationary crisis on household savings levels in selected European countries. The analysis includes an assessment of household responses to changing macroeconomic conditions, such as inflation, interest rates, and household incomes, as well as the effectiveness of implemented monetary and fiscal policies. The study employs a neural network model considering autoregressive relationships in a panel data approach. The research covers data from …

Three Essays On The Interaction Between Macroeconomics, Money, And Government Bonds, Zejun Jiang

Graduate Theses, Dissertations, and Problem Reports (ETD)

This dissertation, ''Essays on the Interaction between Macroeconomics, Money, and Government Bonds,” has three chapters that study how macroeconomics (e.g., inflation), government bonds, and money interact with each other. It provides insights into how households make optimal maturity choices in government bonds, how households own different types of government bond assets, and how money growth can help understand the cross-country inflation after COVID-19.

The first chapter develops an intertemporal portfolio choice model to investigate the optimal household portfolio choice for government bonds across maturities. The U.S. Treasury data displays a higher holding share of long-term government bonds. Adding uncertain labor …

Monetary Policy And Stagflation: A Trade-Off Between Price Stability And Economic Growth?, Leef H. Dierks

Journal of New Finance

Several euro area economies are likely to experience a stagflation in 2023. This situation is characterized by a combination of economic stagnation, i.e., GDP growth falling below its potential growth rate, and a pronounced increase in inflation as was last observed during the 1970s’ oil crisis. A stagflation presents the European Central Bank with a dilemma. Should it further tighten its monetary policy in an attempt to align euro area inflation (expectations) with its target of two per cent p.a. in the medium term? Or should the ECB re-adopt a more accommodative stance so as to stimulate economic growth in …

Reflections On Inflation: How Bad Has It Been?, Jesus Felipe

Angelo King Institute for Economic and Business Studies (AKI)

THE increase in prices that countries have experienced since March 2022 has brought old fears about the deleterious impact of inflation. It is true that prices increased after the Russian invasion of Ukraine and this affected a series of commodities that are imported. Yet, it is important to understand how much prices have increased, the nature of inflation we have experienced, and the reaction of central banks.

The Macrodynamics Of Indian Rupee Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Working Papers

This paper econometrically models the dynamics of Indian rupee (INR) swap yields based on key macroeconomic factors using the autoregressive distributive lag (ARDL) approach. It examines whether the short-term interest rate has a decisive influence on long-term INR swap yields after controlling for other factors, such as core inflation, the growth of industrial production, the logarithm of the equity price index, and the logarithm of the INR exchange rate. The estimated models show that the short-term interest rate has an important influence on the swap yields. This implies that the Reserve Bank of India (RBI) can sway borrowing and lending …

Food Price And Inflation Adjustments In Nigeria: Evidence From Threshold Cointegration, Usman A. Bello, Aliyu R. Sanusi

CBN Journal of Applied Statistics (JAS)

This paper investigates two stages of transmission through which inflation stabilization policy affects headline inflation by estimating a threshold cointegration model. The paper finds that asymmetric monetary shocks passing-through food prices exerts inflationary pressure on consumer prices, and is characterized by deep asymmetric movement, large degree of stickiness in adjusting downward, while exhibiting upward momentum in correcting food price fall. In addition, asymmetries were found in consumer price adjustment as food price shock transmits substantial inflationary pressure to consumer prices, while disinflationary effect originating from a fall in food price is inconsequential. The coefficients of adjustment were found to be …

An Inquiry Concerning Japanese Yen Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Working Papers

This paper econometrically models Japanese yen (JPY)–denominated interest rate swap yields. It examines whether the short-term interest rate exerts an influence on the long-term JPY swap yield after controlling for several key macroeconomic variables, such as core inflation, the growth of industrial production, the percentage change in the equity price index, and the percentage change in the exchange rate. It also tests whether there are structural breaks in the dynamics of Japanese swap yields and related variables. The estimated econometric models show that the short-term interest rate exerts an important influence on the long-term swap yield in some periods but …

Chinese Yuan Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Faculty Publications

This paper models the dynamics of Chinese yuan–denominated long-term interest rate swap yields. It shows that the short-term interest rate exerts a decisive influence on the long-term swap yield after controlling for various macrofinancial variables, such as core inflation, the growth of industrial production, the percent change in the equity price index, and the percentage change in the Chinese yuan exchange rate. The autoregressive distributed lag approach is applied to model the dynamics of the long-term swap yield. The findings reinforce and extend John Maynard Keynes’s conjecture that in advanced countries, as well as emerging market economies such as China, …

Effects Of Central Bank Independence And Financial Stability On Inflation In Selected African Countries, Adamu Yahaya, Mohammed T. Saidu, Abdulaziz Sadi

CBN Journal of Applied Statistics (JAS)

This study examines the relationship between central bank independence (CBI), financial stability, and inflation in 14 African countries within the period 1985-2019. Initial test revealed the presence of cross-sectional dependence (CD) among the countries. Thus, the Mean Group (MG), Common Correlated Effect Mean Group (CCEMG) and Augmented Mean Group (AMG) were employed for the analysis. The CCEMG and AMG results showed a significant and negative correlation between central bank independence and inflation. On the other hand, financial stability is only significant in the MG Model. Additional results obtained using the Garriga CBI index is consistent with our main results. The …

The Limits Of Financial Equity: The Federal Reserve, The Depression Of 1921, And The End Of Wilsonian Progressivism, Terril Hebert

LSU Master's Theses

The Limits of Financial Equity: The Federal Reserve, the Depression of 1921, and the End of Wilsonian Progressivism is an examination of monetary policy and centralized macroeconomic planning in the American economy during the inflationary spiral of the 1910s that culminated in the Depression of 1921. Put forward for consideration is the successful populist campaign for agricultural credit equity by the burgeoning Federal Reserve System; set against a backdrop of intentional inflation, world and domestic citizens competed against as the price and supply chain distortions perpetuated by the policing of American commerce by the Food Administration, A. Mitchell Palmer’s Department …

Inflation Expectations Can Be A Self-Fulfilling Prophecy, Aurobindo Ghosh, Khyati Chauhan, Muskan Bagrodia

Research Collection Lee Kong Chian School Of Business

In a commentary, SMU Assistant Professor of Finance (Education) Aurobindo Ghosh, SMU postgraduate student and Research Assistant for the SInDEx Project Muskan Bagrodia and International Monetary Fund Economic Research Assistant Khyati Chauhan weighed in on why inflation expectations matter as much as economic data. They discussed how inflation expectations can be a self-fulfilling prophecy, and shared the key takeaways of the quarterly DBS-Sim Kee Boon Institute’s Singapore Index of Inflation Expectations (DBS-SKBI SInDEx) survey. They concluded that effective communication on inflation control measures, in addition to credible policy decisions, will help consumers feel assured and refrain from basing purchasing decisions …

Inflation And Ukraine War Make It Challenging For Our Beloved Value Stores To Survive, Aurobindo Ghosh, Taimur Baig

Research Collection Lee Kong Chian School Of Business

In a joint commentary, SMU Assistant Professor of Finance (Education) and Principal Investigator of DBS-SKBI Singapore Index of Inflation Expectations Project Aurobindo Ghosh and Chief Economist and Managing Director at DBS Bank Dr Taimur Baig discussed how global inflationary pressures and rising commodity prices due to war in Ukraine and sanctions against Russia are culminating into a perfect storm and making it challenging for value stores to survive. They also gave advice on what value stores can do to survive this perfect storm.

Measuring The Impact Of Loan-To-Deposit Ratio (Ldr) On Banks' Liquidity In Nigeria, A. O. Adenuga, J. A. Mohammed, C. V. Laniyan, A. A. Akintola, O. C Asuzu

Economic and Financial Review

The study measures the impact of loan to deposit ratio (LDR) on Banks' liquidity in Nigeria between 2000Q1 and 2019Q3. The paper applied the Factor-Augmented Vector Autoregressive (FAVAR-X) methodology for estimation and forecasting. The result suggests that an LDR of 70.0 per cent, which reduces Banks' liquidity from N187.95 billion in 2019Q4, through N153.09 billion in 2020Q2 to close at N135.15 billion in 2020Q4, may require cautious acceptance. Thus, increasing LDR beyond 70.0 per cent may impact Banks' liquidity negatively. Furthermore, a direct relationship is established between LDR and inflation. The findings conform to a priori expectations as higher LDRs …

Gambling Autonomy: The Impact Of Latin American Central Bank Independence On Risk Aversion Within Monetary Policy Implementation, Julia Duarte Schulman

CMC Senior Theses

This paper examines the effect of Latin American central bank independence (CBI) on risk-averse behaviors in monetary policy. Using a fixed effects panel regression, I document how multiple forms of monetary policy are influenced by different macroeconomic variables, conflicting policy targets and central bank independence benchmarks. The results show that increasing CBI has a positive impact on risk aversion, especially in policies targeting inflation and money supply. Additionally, the results show that interest rates and reserve requirements were especially susceptible to changes in independence, while the monetary base and volume of domestic credit were less influenced. Finally, as time and …

Inflation Expectations In Singapore: A Behavioural Approach, Alexander Clark, Aurobindo Ghosh, Samuel Hanes

Research Collection Lee Kong Chian School Of Business

The expectations of economic agents have significant impact on their decisions and are key determinants of macroeconomic outcomes such as inflation, economic growth and unemployment. For example, if a worker believes that consumer prices will rise sharply next year, she would demand a wage increase. Similarly, a homeowner with a fixed interest mortgage might make an early repayment if she expects price levels to fall, knowing that the real value of her mortgage debt will increase. In these cases, expectations about inflation could lead to changes in behaviour and in the aggregate, influence prices and become self-fulfilling.

Interest Rate Dynamics And Real Output Behaviour In Nigeria: A Simulation Analysis, S. Rapu, G. Sanni, D. Penzin, N. Nkang, P. Golit, H. Okafor, E. Ibi

Economic and Financial Review

The declining output growth observed from the second quarter of 2014, which led to calls for a more expansionary monetary policy despite rising inflationary pressure, necessitated a reassessment of the impact of interest rate on real output growth in Nigeria. Using a Bayesian Vector Autoregressive (BVAR) model and quarterly data from 2000:Q4 to 2015:Q3, the effect of monetary policy transmission (interest rate dynamics) on real output performance was estimated. Although results of the simulation analysis were somewhat mixed, those of the impulse response functions indicated that positive shocks to monetary policy rate (MPR) produced a negative and small impact on …

A Retrospective Insight Into Pakistan's Exchange Rate Regimes And Their Impact On The Economy, Lalarukh Ejaz, Madeeha Akhtar

Business Review

Nuclear tests carried out by Pakistan in May 1998 had a distinctive impact on the evolution of the exchange rate. This case describes what happened to the exchange rate before and after the nuclear tests and focuses on the overall impact of Pakistan’s transition from a hostile relationship with the US in the post-Cold War era to becoming an ally of the US in the war on terror. This case can be used to study the concepts of real and nominal exchange rates, the linkage between exchange rate policy and external balance, how exchange rate can be used as a …

The Nominalistic Principle: A Legal Approach To Inflation, Deflation, Devaluation And Revaluation, Alain H. Sheer

Georgia Journal of International & Comparative Law

No abstract provided.

Hyperbolic Memory Discounting And The Political Business Cycle, T. Scott Findley

Economics and Finance Faculty Publications

The vintage political business cycle framework of Nordhaus (1975) represents the idea that the macroeconomic business cycle is manipulated opportunistically by an incumbent government to achieve re-election. A key assumption in this prototypical framework is that voters discount their memories about unemployment and inflation at a constant rate. Yet starting with Ebbinghaus (1885) and Jost (1897), a large body of research in psychology documents an empirical regularity that has come to be known as Jost's Second Law of Forgetting-individuals discount recent memories at a higher rate compared to the rate at which they discount older memories. I find that incorporating …

Inflationary Dynamics In Guatemala, Thomas M. Fullerton Jr., Miguel Martinez, Wm. Doyle Smith, Adam G. Walke

Departmental Papers (E & F)

Short-run price dynamics for Guatemala are analyzed using a linear transfer function methodology. This approach has previously been employed for other national economies such as the United States, Mexico, Colombia, Ecuador, and Nigeria. The data for this study range from 1960 to 2010. Inflation is measured using the consumer price index. Explanatory variables include the monetary base, real output, interest rates, and the exchange rate. All of the estimated coefficients exhibit the arithmetic signs hypothesized by the theoretical model. Almost all of the parameter estimates satisfy the 5-percent significance criterion and all exhibit economically plausible magnitudes. Estimation results indicate that …

The Effects Of Quantitative Easing In The United States: Implications For Future Central Bank Policy Makers, Matthew Q. Rubino

Senior Honors Projects, 2010-2019

The purpose of this thesis is to examine the effects of the Federal Reserve’s recent bond buying programs, specifically Quantitative Easing 1, Quantitative Easing 2, Operation Twist (or the Fed’s Maturity Extension Program), and Quantitative Easing 3. In this study, I provide a picture of the economic landscape leading up to the deployment of the programs, an overview of quantitative easing including each program’s respective objectives, and how and why the Fed decided to implement the programs. Using empirical analysis, I measure each program’s effectiveness by applying four models including a yield curve model, an inflation model, a money supply …

An Overview And Dynamics Of Financial Market Development In Nigeria And Imperatives For Exchange Rate Stability, E.U. Ukeje

Economic and Financial Review

The article discusses the important role money market plays in the economic development of any country which provides the platform for central banks to influence short-term interest rates,

Fuel Subsidy And Other Unproductive Public Expenditures Removal: A Pragmatic Approach To Restructure And Transform The Nigerian Economy, Lawrence O. Akinboyo

Bullion

While the short term measures to reduce recurrent expenditure are necessary conditions for fiscal sustainability, the long term imperative is to increase revenue. Thus, efforts should be made by the fiscal authorities in Nigeria to pursue the policy of balancing of expenditure with revenue improvements. The issues of the underperformance of the capital budget should be reversed before savings from cuts in recurrent expenditure can be diverted to the financing of capital expenditure. From the analysis, we say that removal of fuel subsidy would no doubt have some social and economic hardship on the people in the short run, However, …

Money And Asset Prices With Uninsurable Risks, Nicolas L. Jacquet, Serene Tan

Research Collection School Of Economics

We develop a model where the coexistence of money and a higher yielding asset is endogenously obtained when no restriction is placed on the use of either object as a medium of exchange. Due to the presence of uninsurable risks, agents have, in equilibrium, di⁄erent relative valuations of the asset to money, and hence, the use of money as a means of payment is strictly preferred. This endogenous di⁄erence in the willingness of agents to use money over the asset implies that money carries a greater liquidity premium than the asset. We obtain that the asset strictly dominates money in …

Central Bank Of Nigeria Annual Report And Statement Of Accounts For The Year Ended 31st December 1999, Central Bank Of Nigeria

CBN Annual Report

The Annual Report contains details of Central Bank of Nigeria (CBN) financial activities during the 1999 accounting year in accordance with statutory requirement. During the period under review, the Bank carried out its core functions under CBN Decree No. 24, 1991, and the Banks and Other Financial Institutions (BOFI Decree No. 25, 1991). The CBN also performed developmental and technical assistance roles to contribute to economic development and capacity building. In 1999, the CBN carried out core functions, including issuance of currency notes and coins, maintaining Nigeria's external reserves, and promoting monetary stability. The Bank implemented policies to reduce excess …

The Fundamental And Non-Fundamental Components Of Stock Prices: The Role Of Time-Varying Expected Inflation, Maosen Zhong

Doctoral Dissertations

I derive testable implications of fundamental and non-fundamental components of stock prices. In order to control for the role of time-varying expected inflation and to be able to perform reasonable empirical tests, I use a nominal (rather than a real) interpretation of the present-value model (PVM), whereby nominal interest rates approximate expected inflation. I conjecture that the fundamental and non-fundamental components represent the permanent and temporary components of stock prices, respectively. A series of cointegration analysis over the annual period 1871–1997 confirms my conjecture for the model with time-varying expected inflation. Various fundamental and non-fundamental exclusion tests indicate that both …

Central Bank Of Nigeria Annual Report And Statement Of Accounts For The Year Ended 31st December 1992., Central Bank Of Nigeria

CBN Annual Report

In 1992, Nigeria's economy faced significant pressures but showed resilience, with rapid growth in output and economic liquidity. The Central Bank of Nigeria (CBN) intensified efforts to achieve inflation and exchange rate stability while improving the efficiency of the financial sector. The financial sector experienced rapid growth and structural changes, with the strongest growth occurring in common unity banking and mortgage finance institutions. Monetary and credit aggregates expanded at unprecedented rates, matching the all-time highs of the oil boom era of the mid-seventies. Interest rates rose significantly, with both deposit and lending rates rising in tandem with the movements of …

Government Expenditures, Money Supply And Prices: 1970-80, J. O. Osakwe

Economic and Financial Review

The main objectives of this paper are to ascertain the amount of the Federal Government expenditures which affected money supply, during the period 1970-80; to examine the movements of government expenditures, money supply and prices within the period 1970-80 and to investigate the empirical relationships between government spending and money supply, and money supply and prices. In order to achieve the above named objectives, the paper is divided into four parts as follows: Part 1 deals with the estimates of government expenditures which affected money supply. Part 2 describes the movements of government expenditures, money supply and prices; Part 3 …