Macroeconomics Commons^™

Discretionary Policy And Multiple Equilibria In A New Keynesian Model, Volker Hahn

Volker Hahn

How Default Probability Affects Returns On Loans, Lester G. Telser

Lester G Telser

Even the simplest kind of default as an independent random event poses difficulties. The correct formulas for the nominal return on a default free loan and the revisions to apply for a loan that may default follow from 2 assumptions. 1. A good now is better than a good later because survival from now to later is not sure. 2. Private loans occur only if the probability of default does not exceed an upper bound set by the reciprocal of the nominal return on a default free loan. This upper bound makes sense if and only if the nominal interest …

The Bedridden Queen Money!, John Samuel Cyrus Mr

John Samuel Cyrus Mr

During the past few decades, macro-economic activities had been rallied around glamorous industrial and technology oriented service sectors. Recent recession that began in 2008 is still continuing and the little improvement in 2009 was nothing but the fluctuation in the ICU monitor, which was connected to the bedridden queen Money. Many nations GDP growth rate has been continually falling and unemployment rates are continually rising. The American economy is in a complete mess, no remedies are found yet for European economic sovereign debt crisis, and the Asian economy fast fading due to India’s low GDP and the slide in Rupee; …

Economic Change And Evolutionary Perspectives., Mario Pianta

Mario Pianta

Economic studies with an evolutionary perspective have put the process of change at the centre of the analysis - replacing equilibrium views of economic activity – and have generally focused on the two mechanisms of variety generation – provided by innovation - and selection – provided by market processes, leading to a prevalence of microeconomic investigations. Recent developments in evolutionary biology have emphasised the equally important role of cooperation; cooperative economic behaviour is, in fact, as important as market competition for understanding macroeconomic processes, the role of institutions and public policies, opening up new directions for research. This interdisciplinary discussion …

Why Over-Financialization In The Eurozone Periphery Was Inevitable: A Crisis Of Flawed Legislation And Competitive Imbalances, Maximilian Bevan

Maximilian Bevan

Over the past three years, the heads of state in the Euro area have argued over the proper monetary mechanisms to alleviate the protracted European debt crisis. This paper illuminates the often-overlooked aspects of this crisis – the fundamental failures of the monetary union from its inception. It expands the scope of analysis on the Eurozone crisis by addressing the over-financialization in the Eurozone periphery (Greece, Portugal, and Spain) within a political-economy framework. It explicates the direct relationship between the political manipulations of the legislation by Germany (analyzed from a public choice perspective) and the resulting economic consequences that the …

Introducing Students To The Competing Schools Of Thought In Intermediate Macroeconomics, Harlan M. Smith Ii

Harlan M. Smith

The article discusses how the intermediate macroeconomics instructor can introduce students to ways of old and new Keynesians and classical theorists addressed the question on why output and employment fluctuate. Keynesian macroeconomics characterizes a school of thought developed around two central prepositions. New Keynesians develop alternative ways of explaining short-run movements in output and employment in the early 1970's. All individuals maximize utility, firm maximizes profits. Recently, new classicals developed an alternative approach in explaining short-run fluctuation in employment and output by redefining the concept of the short run.

Default Risk And Collateral In The Absence Of Commitment, David C. Mills, Robert R. Reed

David C Mills Jr

Default risk is an important concern for lenders and is a main reason they require borrowers to pledge collateral. There are two reasons for this. The first is that collateral provides some incentive for the borrower to not strategically default. The second is that, in the event of default, the lender can liquidate the collateral and salvage some value from the failed credit relationship. This paper provides a model to study properties of allocations that arise when collateral is part of an optimal lending contract that looks much like a repurchase agreement. In particular, a lack of commitment to future …

Human Capital Formation And Economic Development In Pakistan: An Empirical Analysis, Muhammad Irfan Chani, Mahboob Ul Hassan, Muhammad Shahid

Muhammad Irfan Chani

This study investigates the casual relationship between economic development and formation of human capital in Pakistan. Based on endogenous growth theory, this study empirically tests the standard growth model consisting of gross domestic product (GDP) per capita as a dependent variable and human capital formation, investment in physical capital and labor force as independent variables. Autoregressive distributive lag (ARDL) bound testing approach to cointegration is used to check the long-run equilibrium relationship between the variables included in the model. For checking the causal relationship between economic development and human capital formation, pair-wise Granger causality test is used for time series …

Some Socio Economic Determinants Of Fertility In Pakistan: An Empirical Analysis, Muhammad Irfan Chani, Muhammad Shahid, Mahboob Ul Hassan

Muhammad Irfan Chani

This study aims to investigate the role that various socioeconomic factors like female education, urbanization and female labour force participation play in determining fertility of women in Pakistan. ARDL bound test approach to cointegration is used to analyze the long-run relationship of the variables by using the data for the period from 1980 to 2009. The empirical results show that there exists a long-run as well as short-run relationship between fertility and urbanization, female labour force participation and female education in Pakistan. The analysis indicates there is a negative relationship between all 3 determinants with fertility. Female education and urbanization …

An Analysis Of Different Approaches To Women Empowerment: A Case Study Of Pakistan, Amatul R. Chaudhary, Muhammad Irfan Chani, Zahid Pervaiz

Muhammad Irfan Chani

Understanding The Legitimacy Of Both Dissension And Acceptance Of Accommodative Monetary Policy, Maximilian Bevan

Maximilian Bevan

No abstract provided.

Impacts Of Social Upbringing On Family Integration In Military Life In Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

In a country on the eve of losing one third of its land, 80% of potential natural resources and 75% of external exports value, economic future seems gloomy. Many opinions were given for economic solutions after the Southern Sudan secession. However, that does not support a theoretical framework that those are the only reasons for the expected economic collapse. Our theory here is that such collapse already happened because of economic mismanagement, corruption and hoarding initiated by the calls for empowerment and carried out by the regime's members. Such acts extended to the banks, economic institutions and randomized privatization. The …

Impacts Of Formal Financing On The Development Of The Sudanese Agricultural Sector, Issam A.W. Mohamed Professor

Professor Issam A.W. Mohamed

The agricultural sector of Sudan is faced by many problems. In the irrigated schemes, the government who officially owns most of them there are entrenched managerial problems that brewed for more than six decades. Moreover, the privatization policies of those schemes provoked many outcries and protests. Large schemes like Gezira have collapsed, this year 2011, only 10% of its over one million hectares were cultivated. The rainfed farming is not different with lack of machineries, shortages of available labor and high priced agricultural inputs, it is not expected to fare better than the irrigated schemes. However, even if those problems …

Impacts Of Sudan Macroeconomic Policy On Agriculture, Issam A.W. Mohamed Professor

Professor Issam A.W. Mohamed

The crisis of Southern Sudan and eminent secession in 9 July 2011 is a nightmare to the Sudanese national economy. The dependence on oil revenue that controlled the country for the past 11 years and negligence of the other real economy's economic sectors, agriculture and industry severely threatens the country. That is not only with diminished returns but with also with economic nightmarish economic catastrophe, famine and internal implosion. Short-sightedness on utilizing the oil money that bubbled the economy atrophied the real economic sectors and disabled it from responding to secession consequences of parting with 75% of revenues from oil …

Effects Of Social Edification And Family Integration In Military Life In Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

The Sudanese army human components are unique in its composition. That is reflected in the country's political and social life. The independence of 1956 means fifty five of turmoil and turbulences. Democratically elected governments controlled the country for only ten years while the military institution's coup de etats took the rest. This paper studies the impacts of social upbringing on the families, military or civilians in order too shed lights on why all military, seemingly are possessed by the illusion of grasping power. The military seems built into the Sudanese society in superior form, i.e., above the law. Thus if …

Challenges Of Formal Social Security Systems In Sudan, Issam A.W. Mohamed Professor

Professor Issam A.W. Mohamed

The present paper discusses issues of challenges of social security systems in Sudan. Following parameters advanced by ILO and UNCOSOC, those systems are analyzed. The conclusions focus on their applicability that faces axial difficulties mainly presented in the state of institutional interregnum facing the country. Moreover, it is important to revisit aspects of social cohesion that serves greater role in traditional social security in the Sudan.

Analysis Of The Impact Of Cash Out-Flow From The Banking Sector On The Sudanese Economy, Issam A.W. Mohamed Professor

Professor Issam A.W. Mohamed

Sudan as an example of LDCs the banking sector has been suffering from the problem of cash outflow over the last three decades, generating the following impacts: Loss of banking sector of its role of financial inter-mediation, cash scarcity in the banking sector, large government borrowings from unreal source of finance, thus, more inflation. The research attempts to specify the main determinants of cash outflow from the banking sector in Sudan (during the period 1972-2001). Hence, those revealing the major impacts of the cash outflow on the economic activity and rates of inflation. The research hypotheses were: (1) the Banks …

Effects Of Multicollinearity On The Estimation Of Macroeconomic Variables: Using Data From Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

The problem of multicollinearity in the assessments of coefficients is well established. However, it is rarely researched in the estimations of macroeconomic variables and economic performance of developing countries. Predicatively, it has impacts on the estimations of coefficients that should be used in economic decisions, strategic planning and if researchers are more industrious estimations of monetary supplies and demands. All such parameters are very basic and essential in economic plannings and their applications should be done not only in research but in ground applications of the specialized authorities, e.g., Ministries of Finance, Central Banks, Pricing Units, etc. However, that is …

Humanitarian Aid, Internal Displacement And Social Impacts In Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

The study presented here reviews activities of NGOs in Sudan by surveying and studying the activities of Save the Children of United Kingdom. Activities of NGOs in Sudan were always a controversial issue that resulted in the expulsion of many in 2009. There were also precedents of such expulsions in previous and following years. The paper discusses humanitarian work in Sudan, positive and negative sides. The case study's activities of the Save the Children efforts in Jebel Aulia Internally Displaced People, specially their efforts in education were investigated. It is concluded that introduce invaluable help in educational field, building classes …

Determination Of Import Demand In Pakistan: The Role Of Expenditure Components, Muhammad Irfan Chani, Zahid Pervaiz, Amatul R. Chaudhary

Muhammad Irfan Chani

The paper uses imperfect substitution approach to derive the aggregate import demand function on the basis of disaggregated expenditure components. This derived import demand function is then empirically tested for Pakistan by using co-integration and error correction mechanism. The empirical results show that elasticity of import demand with respect to different macro components of final expenditure is different. The import demand in Pakistan is affected positively and significantly by all expenditure components. The relative prices have negative but insignificant relationship with import demand in Pakistan. The findings indicate that use of aggregate expenditure variable in the aggregate import demand function …

Poverty, Inflation And Economic Growth: Empirical Evidence From Pakistan, Muhammad Irfan Chani, Zahid Pervaiz, Sajjad Ahmad Jan, Amjad Ali, Amatul R. Chaudhary

Muhammad Irfan Chani

This study aims to investigate the role of economic growth and inflation in explaining the prevalence of poverty in Pakistan. ARDL bound testing approach to co-integration confirms the existence of long run relationship among the variables of poverty, economic growth, inflation, investment and trade openness over the period of 1972-2008. Empirical results show that economic growth and investment have negative and inflation has positive impact on poverty. The effect of trade openness on poverty is insignificant in this study. The short run analysis reveals that economic growth has negative and inflation has positive impact on poverty whereas the role of …

Financial Crises And Economic Growth In Pakistan: A Time Series Analysis, Rauf -I- Azam, Iram Batool, Rabia Imran, Muhammad Irfan Chani, Ahmed Imran Hunjra, Javed Mahmood Jasra

Muhammad Irfan Chani

The purpose of this research is to investigate causal relationship between economic growth and major indicators of financial crisis -- inflation rate, interest rate and the volume of foreign debt-- in Pakistan. This study also highlights the stability of the relationship between indicators of financial crisis and economic growth. The annual time series data ranging from 1972 to 2010 is used for the analysis. Johansen's co-integration test is used to check the stability of long nm equilibrium relationship between the variables used in the study. The results indicate that is long nm stable equilibrium relationship between economic growth and the …

Gender Inequality And Economic Growth: A Time Series Analysis For Pakistan, Zahid Pervaiz, Muhammad Irfan Chani, Sajjad Ahmad Jan, Amatul R. Chaudhary

Muhammad Irfan Chani

This paper attempts to analyze the impact of gender inequality on economic growth of Pakistan. An annual time series data for the period of 1972-2009 has been used in this study. We have regressed growth rate of real gross domestic product (GDP) per capita on labour force growth, investment, trade openness and a composite index of gender inequality. The results reveal that labour force growth, investment and trade openness have statistically significant and positive impact whereas gender inequality has a significant and negative effect on economic growth of Pakistan.

Economic Crisis And External Trade In Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

Nowadays, Sudan suffers severe financial crisis with the eminent demise of 75% of its oil revenues that represented over 90% of its foreign currency after the secession of its Southern part after a constitutional referendum. The compensatory revenues generating economic sectors are not able in the short, medium or runs to function due to the lack/diminished infrastructures. Hard currency exchange rates have soured against the domestic one and inflation sky-rocketed with severe recession grasping the economic cycle in the country which assess logic assumptions of stagflation. Reforming Sudan's foreign trade sector is essential though it will not replace oil revenues …

Factors Effecting Job Satisfaction Of Employees In Pakistani Banking Sector, Ahmed Imran Hunjra, Muhammad Irfan Chani, Sher Aslam, Muhammad Azam, Kashif -Ur- Rehman

Muhammad Irfan Chani

Impacts Of Islamic And Commercial Banks' Reserves Restrictions On Macroeconomic Parameters Of Sudan (2007-2009), Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

The paper analyzes the impacts of Islamic and conventional Banks reserves' restrictions in Sudan. Comprehensively, those restrictions are necessary for health banks, performance and the viability of the macroeconomic performance in any country. The selected period of the analysis (2007-2009) is vital to study impacts of the Global Financial Crisis on the Sudanese economy. The paper introduces available data on banks institutions, macroeconomic policies and the central Bank of Sudan considering its part on controlling money supply and demand besides drawing policies for banks behaviors. It is conceivable from my conclusions here that there are conflicts between conventional and Islamic …

Measuring Poverty And Human Capital Development In Sudan, Professor Issam A.W. Mohamed

Professor Issam A.W. Mohamed

Catastrophes in Sudan are of many dimensions. Food security is a chronic and intrinsic problem in Sub Saharan Africa which is a fact recognized by the international society. Political instability, civil wars and finally recent secession of its Southern part is another fact which may be taken as a vivid example for other regions of that previously largest African country to be followed. The present paper introduces an analysis and assessment of measurements for human development indices in Sudan. It is empirically concluded that human welfare is invisible. The parameters are very low. Strategies are needed to provide for basic …

Black Tuesday And Graying The Legitimacy Line For Governmental Intervention: When Tomorrow Is Just A Future Yesterday, Donald J. Kochan

Donald J. Kochan

Black Tuesday in October 1929 marked a major crisis in American history. As we face current economic woes, it is appropriate to recall not only the event but also reflect on how it altered the legal landscape and the change it precipitated in the acceptance of governmental intervention into the marketplace. Perceived or real crises can cause us to dance between free markets and regulatory power. Much like the events of 1929, current financial concerns have led to new, unprecedented governmental intervention into the private sector. This Article seeks caution, on the basis of history, arguing that fear and crisis …

Employee Voice And Intent To Leave: An Empirical Evidence Of Pakistani Banking Sector, Ahmed Imran Hunjra, Muhammad Asghar Ali, Muhammad Irfan Chani, Hashim Khan, Kashif Ur Rehman

Muhammad Irfan Chani

A Note On Causal Relationship Between Fdi And Savings In Bangladesh, Mohammad Salahuddin, Muhammad Shahbaz Shahbaz, Muhammad Irfan Chani

Muhammad Irfan Chani

This paper aims to investigate the causal relationship between foreign direct investment and gross domestic savings in Bangladesh over a period of 1985-2007. In doing so, Johansen cointegration technique and error correction methods are employed to examine the long run and short run relationship between foreign direct investment and gross domestic savings. To determine the direction of causality, we used innovation accounting approach. Results suggest that there exist bi-directional causal relationship between foreign direct investment and gross domestic savings but the movement is stronger from domestic savings to foreign direct investment. The result also implies complimentary relationship between them and …