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Macroeconomic Environment (macroeconomic + environment)
Selected AbstractsRATIONAL PARTISAN THEORY, UNCERTAINTY, AND SPATIAL VOTING: EVIDENCE FOR THE BANK OF ENGLAND'S MPCECONOMICS & POLITICS, Issue 2 2010ARNAB BHATTACHARJEE The transparency and openness of the monetary policy-making process at the Bank of England has provided very detailed information on both the decisions of individual members of the Monetary Policy Committee (MPC) and the information on which they are based. In this paper, we consider this decision-making process in the context of a model in which inflation forecast targeting is used, but there is heterogeneity among the members of the committee. We find that rational partisan theory can explain spatial voting behavior under forecast uncertainty about the output gap. Internally generated forecasts of output and market-generated expectations of medium-term inflation provide the best description of discrete changes in interest rates, in combination with uncertainty in the macroeconomic environment. There is also a role for developments in asset, housing and labor markets. Further, spatial voting patterns clearly differentiate between internally and externally apzpointed members of the MPC. The results have important implications for committee design and the conduct of monetary policy. [source] Bankruptcy prediction using a discrete-time duration model incorporating temporal and macroeconomic dependenciesJOURNAL OF FORECASTING, Issue 6 2008Chae Woo Nam Abstract The purpose of this paper is to build an alternative method of bankruptcy prediction that accounts for some deficiencies in previous approaches that resulted in poor out-of-sample performances. Most of the traditional approaches suffer from restrictive presumptions and structural limitations and fail to reflect the panel properties of financial statements and/or the common macroeconomic influence. Extending the work of Shumway (2001), we present a duration model with time-varying covariates and a baseline hazard function incorporating macroeconomic dependencies. Using the proposed model, we investigate how the hazard rates of listed companies in the Korea Stock Exchange (KSE) are affected by changes in the macroeconomic environment and by time-varying covariate vectors that show unique financial characteristics of each company. We also investigate out-of-sample forecasting performances of the suggested model and demonstrate improvements produced by allowing temporal and macroeconomic dependencies.,,Copyright © 2008 John Wiley & Sons, Ltd. [source] Reform complementarities and economic growth in the Middle East and North Africa,JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 1 2007Mustapha Kamel Nabli Abstract In this paper we empirically analyse the linkages amongst economic reforms, human capital, physical infrastructure, and growth for a panel of 44 developing countries over 1970,1980 to 1999. For this purpose, we generate aggregated reform indicators using principal component analysis. We show that the growth performance of Middle East and North Africa (MENA) has been disappointing because these economies have lagged behind in terms of economic reforms. However, our analysis also reveals that the growth dividend of some reforms has been small. This is the case when structural reforms are implemented in an unstable macroeconomic environment (which corresponds to the situation of the MENA countries in the 1980s), and when macroeconomic reforms are accompanied by a low level of structural reforms (as observed during the 1990s). Our result illustrates the complementarities between reforms as modelled by Mussa (1987) and Williamson (1994). Actually, after human capital and physical infrastructure, our analysis finds that macroeconomic and external stability are key variables for the reform process and for the growth prospects of the developing world. Copyright © 2006 John Wiley & Sons, Ltd. [source] Labour-market Institutions and Macroeconomic ShocksLABOUR, Issue 2 2003Yu-Fu Chen The effect of shocks depends on the nature of these institutions and the effect of institutional change depends on the macroeconomic environment. It follows that a given set of institutions may be appropriate in one epoch and not in another. We derive a dynamic model of labour demand in which the effect of firing costs on labour demand depends on the macroeconomic environment: when the level of macroeconomic activity is expected to drop and/or the trend rate of productivity growth is small, a rise in firing costs affects mainly (and adversely) the hiring decision and not the layoff decision. This makes firing costs harmful to employment when it may appear most appropriate. In contrast, firing costs can raise employment during periods of high growth and positive shocks. Our hypothesis is supported by empirical results using OECD data. [source] China's Current Real Estate Cycle and Potential Financial RisksCHINA AND WORLD ECONOMY, Issue 4 2006Xiaojing Zhang L1; E61; E51 Abstract The real estate cycle and financial stability are closely correlated. In light of global real estate bubbles, China's real estate cycle has attracted wide attention since 1998. The present paper analyzes three driving factors in the context of the current real estate cycle; namely, economic growth, macroeconomic environment and institutional establishment. Supported by econometric analysis using quarterly data from 1992,2004, the present paper indicates that real estate will develop steadily and that housing prices will consistently rise in the relative long run. Based on quantitative analysis, it is concluded that the implications of the current real estate cycle for financial stability include risks of real estate credit exposure, government guarantees and maturity mismatch. Some corresponding policy implications are discussed, such as advancing banking reform, encouraging the rational behavior of local governments and strengthening the regulation of foreign capital flows in and out of China's real estate industry. (Edited by Xinyu Fan) [source] | ||||||||||