Macroeconomics Commons^™

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 …

Innovations In Money And Banking Markets, Eduardo Guimaraes Minuci

Graduate Theses, Dissertations, and Problem Reports (ETD)

The U.S. banking industry has experienced several technological and banking regulatory changes in the past two decades. This dissertation is composed of three papers that review and investigate how these banking and technological innovations have impacted depositors, bank provision of monetary assets, and bank performance. The order in which the papers are presented follows the order in which they were produced as the production of one paper helped spark ideas that led to the next.

Motivated by the fact that money has become more heterogeneous in terms of its returns, Chapter 1 focus on innovations in money markets by focusing …

The Impact Of Disparity In Infrastructure Development On Aceh's Economic Performance: An Inter-Provincial Analysis, Mutiara Fahmi

Economics and Finance in Indonesia

This study provides empirical findings on regional disparity in infrastructural facilities in 23 districts/municipalities of Aceh Province and the impact of the disparity on the economic performance of Aceh Province, specifically on those of economic growth, poverty, and unemployment. The unit of analysis is the district level and the Infrastructure Development Index (IDI) is used as the variable computed by using the multivariate method. Regional disparity is measured by the Coefficient of Variation and the impact of IDI on the provinces economy is analyzed using the econometric model. The analysis shows that infrastructure development disparity exists and that IDI generally …

Public Health Spending, Governance Quality And Poverty Alleviation, Mohamad Komarudin

Economics and Finance in Indonesia

Poverty alleviation has become the main priority program in most developing countries. This research empirically studies the correlation between public health spending, governance quality, and poverty alleviation in developing countries. The panel data were estimated via a random-effects (RE) model and robustness check using instrumental variables (IV) (two-stage least-squares [2SLS]) and first-difference generalized method of moments (GMM) because of the endogeneity problem. The results suggest that public health spending has a significant effect on reducing the poverty rate, and that countries with better governance tend to reduce poverty than countries with poor governance. Increasing public health spending by one percentage …

The Role Of Banking Services In Determining The Destination Countries For Indonesia's Non-Oil And Gas Export, Rini Satriani

Economics and Finance in Indonesia

This study aims to examine whether the risk factor and banking services play a significant role in determining not only the export performance of a country but also the pattern of export destination markets, with the reference to the case of Indonesia. These two indicators are interrelated because the risk factor in export transactions can be mitigated by banking sector. Using the data of export Letter of Credits (LCs) for non-oil and gas exports of Indonesia as a banking instrument to mitigate special risk transactions to 102 export destination countries as well as a panel data methodology for the 2011-2018 …

A Decomposition Analysis Of Fertility: Evidence From Dki Jakarta And East Nusa Tenggara, Farma Mangunsong

Economics and Finance in Indonesia

Fertility control has been one of the priorities of development in Indonesia. However, the 2000 and 2010 population censuses showed an increase in fertility indicators. To identify the sources of increased fertility in developed and less developed areas, DKI Jakarta and East Nusa Tenggara Provinces were selected for comparison. Using 2000 and 2010 census data, the decomposition analysis shows that the increase in Total Fertility Rate (TFR) of DKI Jakarta was dominated by the increase in nuptiality rate, while the increase in TFR of East Nusa Tenggara was mainly caused by the increase in Marital Fertility Rate (MFR). The highest …

Business Vulnerability And Credit Access For Agriculture-Based Micro And Small Women Entrepreneurs, Dewi Ratna Sjari M

Economics and Finance in Indonesia

Micro and Small Industries (MSIs) constitute the largest share of Indonesia's manufacturing sector and play an important role in providing employment opportunities and value-added creation. However, their business sustainability and scaling up are often hindered by various factors, one of which is access to credit. The subsidized loan scheme provided by the government, namely People's Business Credit (KUR), appears to be insufficiently attractive to entrepreneurs, especially to Micro and Small Women Entrepreneurs (MSWEs). Employing a logit regression method and utilizing the BPS-Statistics Indonesia's 2015 MSI survey data, this study aims to investigate factors affecting MSWEs decision to apply for bank …

The International Tourism Performance Amidst Several Intervention Events: More Than 20 Years Of Multi Input Intervention Analysis In Bali, Jakarta, And Kepulauan Riau Provinces, Taly Purwa

Economics and Finance in Indonesia

As one of the priority sectors in economic development of Indonesia, tourism is expected to be the main key in accelerating economic and social growth, hence reducing poverty. The tourism performance, especially international tourism market, is highly prone to intervention events that can reduce the number of inbound tourists and produce a negative impact on economic development of the destination country. Therefore, anticipating and mitigating various intervention events is necessary to maintain the performance of the tourism sector in Indonesia. This study investigates the magnitude and patterns of impact of several intervention events on the number of international visitor arrivals …

Should I Bribe? Re-Examining The Greasing-The-Wheels Hypothesis In Democratic Post-Soeharto Indonesia, Irfan Kurniawan

Economics and Finance in Indonesia

During the Soeharto Era corruption was considered to grease the wheels of growth in Indonesia, a country once considered to be the most corrupt country in the world. Indonesia began to experience instantaneous decentralization and democratization after the Soeharto Era abruptly ended. While vastly celebrated, these episodes have their unintended consequence: coercive regulation. We employed the extensive firm-level Large and Medium Manufacturing (Industri Besar Sedang/IBS) census data combined with the Indonesian Democracy Index (Indeks Demokrasi Indonesia/IDI) at provincial level spanning from 2009 to 2015 and found that bribery hampered Indonesian firm output and productivity growth by 9.8% and 12.6%, respectively. …

Islamic Financial Literacy Index Of Students: Bridging Sdgs Of Islamic Finance, Arief Dwi Saputra, Alfina Rahmatia

Economics and Finance in Indonesia

This research aims to measure the level of Islamic financial literacy among students by reviewing 2 dimensions, 8 variables, and 33 indicators obtained from literature studies and experts. This study applied mix method to qualitative and quantitative data with a total sample of 273 respondents. The data were obtained from interview and online FGD and then processed by word similarity analysis as well as validity and reliability tests, the results of which are used as reference and conclusion. The analysis shows that the level of understanding of financial literacy among students remains significantly low, proven by the value of the …

Aggregate Stock Liquidity Of Bursa Malaysia, Liew Ping Xin

Student Works (2020-2029)

Liquidity plays a crucial role in the functioning of secondary stock markets. However, little is known about the liquidity condition and how trading activities of different investor groups affect liquidity in the Malaysian stock exchange. This thesis focuses on three aspects of Malaysian stock market liquidity, namely, aggregate liquidity in the context of foreign equity flows, higher-order statistical moments of liquidity in the context of proprietary day trading, and, the liquidity connectedness of stock, bond, money and foreign exchange markets. First, this thesis examines the impact of gross foreign equity inflows on aggregate liquidity in a Vector Autoregression framework using …

Impact Of Tax Revenue On Economic Growth In Nigeria (1981-2017), Abubakar Biliksu Aliyu, A. A. Mustapha

Bullion

The main objective of this research is to assess empirically the impact of tax revenue on economic growth in Nigeria, spanning from 1981 to 2017. It employs, time series data obtained from the CBN statistical bulletins, FIRS annual publications and National Bureau of Statistics (NBS) portal. To achieve the objectives of the study, OLS and ARDL techniques were employed to estimate the relationships and the dynamics and longrun effects of independent variables on dependent variable. ARDL bound test revealed that the variables are cointegrated while ARDL long-run estimation indicated that petroleum profit, value added tax and government domestic debt are …

Impact Of Financial Deepening On Socio-Economic Development In Nigeria: 1991 - 2018, Igonibo Dumoteim Abili

Bullion

This study investigates the relationship between financial deepening and socioeconomic development in Nigeria. The specific objectives examined the impacts of broad money supply, private sector credit and financial openness on human development index in Nigeria from 1991 to 2018. Time series data on each of the variables were analyzed using Fully Modified Least Squares and Granger Causality test. The unit root test results revealed that all the variables in the model became stationary after first difference and are all I (1). The cointegration test result revealed that the variables had long run relationships. The cointegrating regression result indicated that broad …

Markovian Approach To Stock Price Modelling In The Nigerian Oil And Gas Sector, Ayo Adekunle S., Uwabor Eboigbe S.

CBN Journal of Applied Statistics (JAS)

The study investigates the stock price movement of quoted Nigerian oil and gas firms using the Markovian model. Specifically, the study estimates the change in likelihoods and steady-state distribution of the share prices of the firms to determine the average time spent by the share price to move to another state and the turnover rate of the selected stocks. Markov chain-based stochastic modelling approach was employed by using the daily closing share prices of all the seven oil and gas firms quoted on the Nigerian Stock Exchange from April 2017 to January 2020. The study finds that the transition probabilities …

Money And Foreign Exchange Markets Dynamics In Nigeria: A Multivariate Garch Approach, Atoi Ngozi V., Nwambeke Chinedu G.

CBN Journal of Applied Statistics (JAS)

This study examines the money market and foreign exchange market dynamics in Nigeria by estimating the dynamic correlation and volatility spillovers between the Nigeria Naira/US Dollar Bureau De Change (BDC) exchange rate and interbank call rate with data from January 2007 to August 2019. The study employs a dynamic conditional correlation form of the GARCH model (DCC-GARCH) to assess the nature of correlation, while an unrestricted bivariate BEKK-GARCH (1, 1) form of the multivariate GARCH model is utilized to investigate shocks and volatility spillover of the rates. The estimated DCC-GARCH (1, 1) reveals that interest rate and exchange rate are …

Macroeconomic Stabilization In The Digital Age, John Beirne, David Fernandez

Research Collection Lee Kong Chian School Of Business

Macroeconomic Stabilization in the Digital Age provides insights into factors affecting the macroeconomic management of the economy in the digital age. Policy makers need to be aware of the increasing prominence of the digital economy and digital finance and seek to better understand how continued digitalization will affect policies aimed at managing the economy. For emerging market economies (EMEs), macroeconomic policy challenges have been exacerbated by the digital finance revolution in the aftermath of the global financial crisis and the coronavirus disease (COVID-19) pandemic, when many EMEs experienced large and volatile capital flows. Policy makers must also navigate through fluctuating …

The United Kingdom's Credit Guarantee Scheme (U.K. Gfc), Christian M. Mcnamara

Journal of Financial Crises

The September 15, 2008, bankruptcy of Lehman Brothers resulted in a collapse of wholesale funding markets that threatened the ability of UK financial institutions to continue funding themselves. By the end of the month, two leading UK banks—HBOS and Bradford & Bingley—had to be rescued, and there was a real risk that the entire financial system could collapse. Faced with the need to stabilize the system, UK regulators on October 8 introduced a package of measures that included a £250 billion Credit Guarantee Scheme (the Guarantee Scheme) aimed at providing banks with access to needed funding. Under the Guarantee Scheme, …

Sweden's Guarantee Scheme (Sweden Gfc), Lily S. Engbith, Kevin Kiernan

Journal of Financial Crises

Although Sweden was not as directly impacted by the Global Financial Crisis as some other economies, Lehman Brothers’ bankruptcy on September 15, 2008, prompted Swedish authorities to take preemptive measures to protect domestic banks and financial institutions. One such program, announced on October 20, 2008, and implemented on October 29, 2008, was designed to preserve credit extension to businesses and households through what became known as the Swedish Guarantee Scheme. Per the terms of the Scheme, new short- and medium-term debt of maturities ranging from 90 days to five years issued by eligible banks would be guaranteed by the Swedish …

The Portuguese Guarantee Scheme (Portugal Gfc), Julia A. Arnous

Journal of Financial Crises

By October 2008, Portuguese banks’ access to liquidity was severely restricted due to strains in international wholesale markets. On October 12-13, 2008, the Portuguese government notified the European Commission of a guarantee scheme intended to promote solvent credit institutions’ access to liquidity as part of the European policy response to the acute financial crisis aiming to achieve and maintain financial stability. Under the scheme, the Portuguese government guaranteed financing agreements and banks’ issuance of non-subordinated short- and medium-term debt. To obtain a guarantee under the Scheme, banks paid a fee based on the maturity of the debt and a risk …

The Polish Guarantee Scheme (Poland Gfc), Manuel Leon Hoyos

Journal of Financial Crises

Faced with the global financial crisis of 2007–2009, Poland implemented a scheme of State support for financial institutions. In view of a potential global credit crunch, it aimed at improving short- and medium-term liquidity of domestic financial institutions. The scheme came into force on March 13, 2009, and was approved by the European Commission under European Union State Aid rules on September 25, 2009. The scheme enabled the Ministry of Finance, on behalf of the State Treasury, to provide support in the form of Treasury guarantees on newly issued bank debt and the exchange of Treasury bonds for less liquid …

The Dutch Credit Guarantee Scheme (Netherlands Gfc), Lily Engbith

Journal of Financial Crises

As fallout from the global financial crisis intensified in October 2008, governments around the world sought to implement stabilization measures in order to calm and protect their domestic markets. While not directly exposed to the subprime mortgage crisis, the Kingdom of the Netherlands announced the creation of the Dutch Credit Guarantee Scheme (the Guarantee Scheme) on October 13, 2008, to boost confidence in interbank lending markets and to ensure the flow of credit to Dutch households and companies. In establishing this program, the Dutch State Treasury Agency of the Ministry of Finance (DSTA) committed €200 billion to support the issuance …

The State Guarantee Of External Debt Of Korean Banks (South Korea Gfc), Lily S. Engbith

Journal of Financial Crises

Following the Lehman Brothers bankruptcy of September 15, 2008, a number of foreign governments enacted stabilization measures in order to bolster their currencies and inject much-needed liquidity into domestic markets. As part of its effort, the Korean Ministry of Strategy and Finance announced a series of government interventions that included a three-year guarantee of foreign debt issued (including extensions of maturity) by domestic banks between October 20, 2008, and June 30, 2009. This opt-in program was introduced as a preemptive step in ensuring that Korean financial institutions would retain competitive access to external funding in the wake of the global …

Ireland's Credit Institutions (Eligible Liabilities Guarantee) Scheme (Ireland Gfc), Claire Simon

Journal of Financial Crises

Following the failure of Lehman Brothers in September 2008, Irish banks found themselves unable to roll over their significant foreign borrowings on the interbank lending market. With the banks facing a liquidity crisis, the Irish government decided to issue a blanket guarantee of all liabilities of six banks through the Credit Institutions Financial Support Scheme (CIFS). As the crisis worsened, and it became clear that Irish banks were facing a solvency—not just liquidity—crisis, the Irish government was forced to provide additional support to the financial system, which took the form of capital injections and a national asset management company for …

The Hungarian Guarantee Scheme (Hungary Gfc), Alec Buchholtz

Journal of Financial Crises

In the midst of the global financial crisis, in October 2008, the Magyar Nemzeti Bank (MNB), the Hungarian national bank, noticed a selloff of government securities by foreign banks and a large depreciation in the exchange rate of the Hungarian forint (HUF) in foreign exchange (FX) markets. Hungarian banks experienced liquidity pressures due to margin calls on FX swap contracts, prompting the MNB and Minister of Finance to seek assistance from the International Monetary Fund (IMF), the European Central Bank (ECB) and the World Bank. The IMF and ECB approved Hungary’s requests in late 2008 to create a €20 billion …

Austria's Oesterreichische Clearingbank Ag (Oecag) (Austria Gfc), Claire Simon

Journal of Financial Crises

In October 2008, euro-area countries adopted a joint framework to guide national policies combatting the effects of the global financial crisis. In Austria, this led to the enactment of a number of measures and amendments, including the Interbank Market Support Act (Interbankmarktstärkungsgesetz, or IBSG). IBSG called for the establishment of a new clearing bank to facilitate interbank lending. It also permitted the Minister of Finance to guarantee up to €5 billion of short-term securities issued by the clearing bank and to absorb losses of the clearing bank up to €4 billion. The clearing bank, Oesterreichische Clearingbank AG (OeCAG), was owned …

Austria's Ibsg Guarantee Program (Austria Gfc), Claire Simon

Journal of Financial Crises

Following the adoption of a joint framework by euro-area countries in response to the intensifying financial crisis in October 2008, Austria enacted a package of measures including the Interbank Market Support Act (Interbankmarktstärkungsgesetz, "IBSG"). In addition to calling for the establishment of a new clearing bank to facilitate interbank lending, IBSG permitted the Austrian government to guarantee debt securities issued by other eligible institutions. Securities issued by eligible institutions with a maturity of three years or less (five years in exceptional circumstances) were eligible for guarantee. According to IBSG, the amount outstanding for all measures taken under the act could …

The Australian Government Guarantee Scheme For Large Deposits And Wholesale Funding (Australia Gfc), Ariel Smith

Journal of Financial Crises

The Australian Guarantee Scheme for Large Deposits and Wholesale Funding was developed in 2008 shortly after the failure of Lehman Brothers. It was designed to foster financial-system stability and confidence and to help depository institutions continue to access funding during a period of volatility. In addition to a guarantee for large deposits, the scheme allowed institutions to apply for a government guarantee for newly issued wholesale liabilities with maturities of up to five years; in return, the institutions paid the government a monthly fee based on their credit rating and the value of the debt guaranteed. The entire Guarantee Scheme …

The Debt Guarantee Program Of The Temporary Liquidity Guarantee Program (U.S. Gfc), Justin Katz

Journal of Financial Crises

Following the collapse of Lehman Brothers in September of 2008, banks faced extreme difficulty in issuing new debt and finding affordable sources of funds due to heightened fears over counterparty solvency and liquidity risk. By the end of September, the TED spread had spiked to 464 basis points, and issuance of commercial paper fell 88%. On October 14th, to boost confidence and lower short-term financing costs, the Federal Deposit Insurance Corporation announced the Debt Guarantee Program (DGP) as part of the Temporary Liquidity Guarantee Program (TLGP). Under the DGP, the FDIC guaranteed in full a limited amount of senior unsecured …

Bank Debt Guarantee Programs, Christian M. Mcnamara, Greg Feldberg, David Tam, Andrew Metrick

Journal of Financial Crises

One of the hallmarks of the global financial crisis of 2007-09 was the rapid evaporation of the non-deposit, wholesale funding many financial institutions had become increasingly reliant upon in the years leading up to the crisis. In the aftermath of the Lehman Brothers bankruptcy, governments became increasingly concerned about even fundamentally sound institutions’ ability to access necessary funding. In response, beginning in October 2008, authorities across the globe began introducing guarantee programs enabling institutions to issue debt that would be backed by a guarantee from the government in exchange for a guarantee fee. While the specific details of these programs …

Denmark's Loan Bills Temporary Credit Facility (Denmark Gfc), Keni Sabath

Journal of Financial Crises

The loan bills temporary credit facility was first implemented in May 2008, before the Global Financial Crisis had truly hit Denmark. It continued to be utilized as part of a broader effort to increase interbank lending after the collapse of Lehman Brothers in September 2008. The objective of the loan bills scheme was to facilitate lending among financial institutions. Each week, loan bills could be pledged as collateral for a seven-day loan from Denmark’s central bank, Danmarks Nationalbank. One banking institution could borrow from another institution by issuing a loan bill, and the institution buying the bill could raise liquidity …