Macroeconomics Commons^™

Estimating The Stability Of Okun's Law, Xinrui (Crystal) Wang, Samuel Schreyer

SACAD: Scholarly Activities

This study focuses on employing the gap version of Okun's Law, conducting regression analysis between the output gap and the unemployment gap to assess their effectiveness and long-term stability, and also estimates the significant relationship between the output gap and the unemployment gap. This study also compares the output gap dynamics during economic contractions and expansions.

Trade Liberalization With Brics: A Cge Model Of Egypt, Kareem Ashraf

Theses and Dissertations

This paper presents an ex-ante impact assessment of a hypothetical FTA between Egypt and the BRICS from an Egyptian economy-wide and sectorial perspectives, with a granular look into manufacturing. The chosen methodology is a static SAM-based Computable General Equilibrium model calibrated to Egypt’s 2018-2019 Social Accounting Matrix (SAM). With respect to existing literature, the paper uniquely stands in considering an Egypt-BRICS FTA with a granular assessment of manufacturing subsectors and in running a simulation of Egypt’s trade liberalization with the wider BRICS alliance, including the accession of Saudi Arabia, UAE, Ethiopia, and Iran, which joined the bloc along with Egypt …

Does Dollarization Have An Impact On Economic Growth?, Jorge Robinson

Research Day

Many developing and undeveloped countries, grappling with issues such as hyperinflation, corruption, high unemployment rates, poverty, and financial instability, often view dollarization as a potential solution. Dollarization involves adopting the US currency as the official or parallel currency, a strategy observed in countries like El Salvador, Ecuador, and Zimbabwe. The purpose of this research is to compare the impact of dollarization on real gross domestic product (RGDP) to that of countries that did not adopt dollarization. My results indicate that dollarization does indeed affect economic growth. These findings demonstrate that dollarized countries experience a higher percentage change in RGDP compared …

Spillover Effects Of Capital Controls: A Critical Review And New Agenda For The Future Directions, Biswajit Panigrahi, K.P Prabheesh

Bulletin of Monetary Economics and Banking

This study tries to undertake a critical review of the spillover effects of capital controls and their welfare implications. We provide a synthesis of the literature on both the theoretical and empirical literature on the spillover effects of capital controls. Furthermore, the role of similar economies (geographical region, and economic characteristics), direction-specific capital controls, global financial crisis (GFC), asset-specific capital controls and the compositional effect of capital flows are discussed to explore the degree and extent of spillover effects of capital controls policy. Similarly, the welfare implications of capital controls depend on the policy motive behind the imposition of capital …

Does Inflation Targeting Anchor Inflation Expectations In India? Evidences From Surveys Of Household And Professional Forecasters, Irfan Ali Kc

Bulletin of Monetary Economics and Banking

This study examines whether inflation targeting (IT) anchors household and professional forecasters expectations in India. It investigates whether food and non-food inflation affect anchoring inflation expectations differently. Primarily, the results indicate significant decreases in the level and variability of expectations. Further, it provides evidence of successful anchoring for professional forecasters' and household expectations. However, it also found food inflation assist anchoring of expectations, while the non-food inflation doesn't. The results suggest the central bank to emphasize more on non-food inflation for better anchoring prospects. Additionally, the study identifies food inflation as the primary contributor to headline inflation variability.

Reinvigorating Gva Nowcasting In The Post-Pandemic Period: A Case Study For India, Kaustubh Na, Soumya Suvra Bhadury, Saurabh Ghosh

Bulletin of Monetary Economics and Banking

We reinvigorate nowcasting models considering structural changes caused by the COVID-19 pandemic. It emphasizes the need to understand the heterogeneous impact of shocks on agriculture, industry, and services sectors in an emerging market economy (e.g., India). Our findings advocate a bottom-up approach that tracks sectors separately rather than a headline number. Our results suggest including digital-activity index and supply-side disruption index in the post-pandemic period could improve nowcast performance. Expectation-Maximization (E-M) algorithm is used to combine data series based on their availability. Among bridging methods, the averaging method is preferred due to its simplicity and flexibility.

Digitalization And Economies Of Oic Countries, Mohsin Ali, Urooj Anwar, Mudeer Ahmed Khattak, Muhammad Umar Islam

Bulletin of Monetary Economics and Banking

This paper studies the impact of digitalization on the Organization of Islamic countries (OIC) economies. The study is conducted to see whether digitalization is playing its role in enhancing economic growth. We employ a panel dataset consisting of twenty-one years from 2000 to 2020 for 57 OIC countries. We use the system generalized method of moments (GMM) estimator. The results indicate that digitalization positively impacts the economies of OIC countries. As for policy implication, this study recommends governments of OIC member countries to invest in digital infrastructure in order to foster economic growth.

Fiscal Administration Versus Fiscal Policy: An Investigation Into The Determinants Of The Real Tax Revenues From Consumption Tax In Egypt, Nariman Zahran

Theses and Dissertations

This thesis highlights the importance of fiscal administration relative to fiscal policies. It presents a broad view of the developments in both fields and tests their effects on real revenues from consumption tax in Egypt from fiscal year 2002 till 2023. It initially explains the proxies used for fiscal administration: the size of the tax base and the collection lag. The major fiscal policy change in Egypt was shifting from sales tax to Value-Added Tax (VAT) during fiscal year 2016/17. The effects of fiscal administration and fiscal policy on real tax revenues will be assessed using the Autoregressive Distributed Lag …

Essays In Macroeconomics And Finance, Archil Dvalishvili

Dissertations, Theses, and Capstone Projects

Chapter 1: (A Quantitative Analysis of Interest on Reserves and Reserve Requirements) - I construct a medium scale DSGE model with financial frictions both on the demand (entrepreneurs) and supply (banks) sides of credit to study the costs and benefits of fixed/time-varying minimum reserve requirements and interest paid by the Fed on reserves.The results can be summarized as follows: (1) An optimal time-varying minimum reserve requirement generates substantial welfare gain when compared with a fixed minimum reserve requirement when no interest is paid on reserves. (2) Paying interest on reserves is substantially welfare inferior to a policy with no interest …

Performance And Policy Indexes In Carbon Pricing Efficacy: A Cross-Country Analysis Of Policy Impact (2012-2020), Ke (Zoky) Zhou

Honors Theses

Climate change poses a significant threat to global ecosystems and human societies, driven largely by CO2 emissions from various economic activities. This macroeconomic cross-country study empirically assesses the effectiveness of carbon pricing in reducing CO2 emissions across three periods: 2012-2017, 2015-2019, and 2015-2020. Building on the foundational research by Best et al. (2020), the analysis extends to more recent data, capturing the evolving impacts of carbon pricing amid changing global economic and policy landscapes. A key advancement in this research is the creation and integration of two comprehensive indexes—a performance index and a policy index—constructed from 14 environmental performance or …

Monetary Policy Across The Urban Rural Divide, Grace Hillis

Honors Theses

This paper measures the effect of monetary policy on the consumption of Urban versus Rural Households. I utilize the Consumer Expenditures Survey, conducted by the Bureau of Labor Statistics, and St. Louis Federal Reserve Economic Data for information on important macroeconomic variables. My empirical strategy examines how total consumption, housing consumption, health, food, and transportation consumption are impacted by the federal funds rate for urban relative to rural households. My research provides evidence that when the Federal Reserve increases rates, the consumption of rural households falls more relative to urban households. This result is statistically significant when examining consumption related …

Intergenerational Comparison Of Inequality And Standard Of Living, Jillian Cookinham

Honors Theses and Capstones

This paper encompasses how inequality and standard of living have changed intergenerationally. Existing research and a regression analysis examine how income, corporate profits, housing, education, retirement, and health insurance are interconnected in American inequality and standard of living. Data analyzed in the regression includes the period of 1990 to 2021. However, the literature review extends back to 1970. Findings from existing research and regression analysis are used to provide policy recommendations on how the federal government may improve inequality by addressing the housing shortage, revising the tax system, and encouraging automatic enrollment in retirement plans.

The Macroprudential Myth, Jeremy C. Kress, Jeffery Yufeng Zhang

Articles

According to conventional wisdom, the 2008 fnancial crisis fundamen- tally changed how policymakers approach fnancial regulation. Before the crisis, regulators sought to prevent individual fnancial institutions from collapsing, but this “microprudential” strategy proved inadequate to stop the market-wide meltdown. In response, policymakers purportedly turned to a new “macroprudential” approach that prioritizes the stability of the fnancial system as a whole instead of individual institutions in isolation. Regulators in the United States and abroad enthusiastically embraced macroprudential policy, implementing stress tests, capital buffers, liquidity requirements, and other supposed macroprudential tools. As the United States’ top bank regulator declared in 2015, “[W]e …

Exchange Rate Pass-Through To Inflation For Bangladesh: An Empirical Analysis, Saila Sarmin Rapti

Graduate Student Theses, Dissertations, & Professional Papers

Assessing the impact of exchange rate pass-through (ERPT) on inflation is a crucial concern for policymakers in both developed and developing economies. The study evaluates both short- and long-term pass-through effects, shedding light on the relationships between the exchange rate movements and inflation rates in Bangladesh. In this regard, this paper applies an Auto Regressive Distributed Lag (ARDL) model and Engle and Granger cointegration test with Error Correction Modeling (ECM) to estimate ERPT in Bangladesh based on monthly data spanning 2010 to 2023 to provide a more robust and rigorous investigation of the long-run and short-run pass-through of exchange rates. …

Inflation Expectations And Political Polarization: Evidence From The Cooperative Election Study, Ethan Struby, Christina Farhart

Department of Economics Working Paper Series

Using a unique, nationally representative survey from the 2022 midterm elections, we investigate the partisan divide in beliefs about inflation and monetary policy. We find that party identity is predictive of inflation forecasts even after conditioning on beliefs about both past inflation and the Federal Reserve’s long-run inflation target. Partisan forecast differences are driven by respondents who express low generalized trust in others and have a high degree of political knowledge; high-trust and low- knowledge partisans make similar forecasts all else equal. This finding is consistent with the literature in political psychology that examines the endorsement of conspiracy theories and …

Euro-Denominated Credit Liquidity: Tracing Cyclical Phases In Global Finance, Mateusz Mariusz Mierzejewski

Journal of Banking and Financial Economics

In the past few years, set against the backdrop of pandemic mitigation efforts and the resultant inflationary spike, the macrofinancial landscape has undergone significant transformation. The tightening of monetary policy by global central banks in response to these phenomena has notably affected global financial liquidity, particularly within the realm of foreign currency lending. This article delves into the shifts in credit liquidity, centering on the Global Liquidity Index for euro-denominated loans across European Union nations over the last two decades. Through the application of the Fourier Transform, we analyse the cyclical patterns within the index and delineate the primary phases …

Medical Expenditures And The Measurement Of Poverty In The United States, Luke Petach, David Wyant

Faculty Scholarship

Using data from the Medical Expenditure Panel Survey (MEPS) we estimate the fraction of the US population that is health poor. A person is health poor if their income prior to paying health insurance premiums and out-of-pocket healthcare costs is above the poverty line, but their income net-of-premiums and out-of-pocket healthcare costs is below the poverty line. Because resources used to finance health insurance premiums and out-of-pocket costs are (A) lexicographically preferred and (B) cannot be used to maintain an individual’s standard of living, they should be excluded from official poverty estimates. Approximately 1% to 2% of the US population …

Analysis Of Government Stimulus During Covid-19 And The Bank Distress Of 2023, Kara Hagler

CMC Senior Theses

Due to the hardships that small businesses were facing from the onset of COVID-19 in March 2020, the government created the Payment Protection Program (PPP). This program used banks as the initial lenders for small business loans to facilitate loans from the government to small businesses. In this article, I study how participation in the PPP lending program contributes to the Bank Distress of 2023 by using a bank-level quarterly panel data set from 2019-2023. Estimation of difference-in-difference specifications reveals banks that opted into the PPP program experienced an increase in held-to-maturity securities relative to non PPP banks. The mechanism …

Driven By Change: The Impact Of Macroeconomic Shifts And Covid-19 On New Vehicle Sales, Jackson Aldrich

CMC Senior Theses

This paper examines the impact of macroeconomic factors and the COVID-19 pandemic on new vehicle sales. In order to address these two topics, a two-pronged approach was used with separate regression models. The macroeconomic variables include monthly supply of new homes, CPI for urban public transportation, unemployment rate, disposable personal income, inflation expectation, consumer sentiment, average gas prices, and total vehicle miles traveled which were regressed on total vehicle sales from 1978-2022. The regression results confirmed and supported current literature and highlighted the importance of the housing market and unemployment rate on new vehicle sales. The COVID-19 pandemic model variables …

Essays On Consumption Dynamics, Shaun M. Gilyard

Graduate Theses, Dissertations, and Problem Reports (ETD)

This dissertation, titled "Essays on Consumption Dynamics," comprises three chapters delving into consumer behavior within the context of household financial management. It sheds light on how consumers navigate their budgets concerning daily expenses, particularly around bill payments, and examines the potential influence of household financial holdings on the redistribution effects of monetary policy.

The first chapter delves into how consumers strategically handle their budgets in proximity to bill payments. Analyzing daily transaction-level data containing detailed expenditure information, it reveals a trend of consumers deferring non-bill expenditures until after bill payments. Spending spikes by 41% - 51% above average on the …