Debt Overhang and Monetary Policy in Czech Republic
We investigate the consequences of excessive international debt overhang as they relate to both debtor and creditor countries. In particular, we assess the impact of monetary policy on financial stability and how it can be used to smooth borrowers, as well as creditors, consumption over the business cycle. Based on [Goodhart, Peiris, Tsomocos, 2018], we establish that an independent countercyclical monetary policy, that contracts liquidity whenever debt grows whereas it expands it when default rises, reduces volatility of consumption. In effect, monetary policy provides an extra degree of freedom to the policymaker. We implement our approach to the Czech and Eurozone area economies during the 1990s.
In our model, we introduce endogenous default ά la [Shubik, Wilson, 1977], whereby debtors incur a welfare cost in renegotiating their contractual debt obligations that is commensurate to the level of default. However, this cost depends explicitly on the business cycle and it should be countercyclical. Hence, contractionary monetary policy reduces the volume of trade and efficiency, thus increasing default. This occurs as the default cost increases the associated default accelerator channel engenders higher default rates. On the other hand, lower interest rates increase trade efficiency and, consequently, reduce the amplitude of the business cycle and benefit financial stability.
In sum, the appropriate design of monetary policy complements financial stability policy. The modeling of endogenous default allows us to study the interaction of monetary and macroprudential policy.
Venture capital (VC) provides financial and managerial support for new innovative ideas at the initial stages of commercialization. It has helped to find the market for many radical innovations of 20th century, including personal computer, Internet and genetic engineering.
As a part of market economy venture business was not stable from the very beginning. The periods of rapid growth alternated with deep recessions. However each time VC revived anew as the Phoenix due to its very important function in modern knowledge-based economy.
This report presents an analysis of statistical data that prove the existence of several cycles in VC dynamics in the USA and the Great Britain. The main factors of these cycles formation are discussed. The author proposes two possible scenarios of development of VC market for the first 30 years of the new 21st century. A hypothesis is put forward about the relation between VC cycle's amplitude and a phase of Kondratieff's cycle.
Despite the impressive economic growth in Russia between 1999 and 2007, there is a fear that Russia may suffer the Dutch disease, which predicts that a country with large natural resource rents may experience a de-industrialisation and a lower long term economic growth. In this paper we study if there are any symptoms of the Dutch disease in Russia. Using a variety of Rosstat publications and the CHELEM database, we analyse the trends in production, wages and employment in the Russian manufacturing industries, and we study the behaviour of Russian imports and exports. We find that, while Russia exhibits some symptoms of the Dutch disease, e.g. the real appreciation of the rouble, the rise in real wages, the decrease in employment in manufacturing industries and the development of the services sector, the manufacturing production nonetheless increased, contradicting the theory of the Dutch disease. These trends can be explained by the gains in productivity and the recovery after the disorganisation in the 1990s, by new market opportunities for Russian products in the European Union and in CIS countries, by a growing Chinese demand for some products and by a booming internal market. Finally, investments in many manufacturing industries were largely encouraged, whereas those in the energy sector were strongly regulated, which contributed to the economic diversification.
The historical changes in Central and Eastern Europe demanded suitable paths for the transition from centrally planned to market based economies. The lack of relevant experience added to the challenge, giving rise to the incalculable risks of implementing untested policies. By focusing on monetary policy, trade, and convergence, this volume addresses some of the most urgent economic policy issues in the transition economies of Central and Eastern Europe and beyond.
The paper represents the review of contemporary approaches to the analysis of financial market imperfections and financial crises and their impact on fluctuations of the key macroeconomic variables during the business cycle as well as the transmission mechanism of financial shocks on the real economy in the framework of New Keynesian dynamic stochastic general equilibrium models. These models are widely used for the evaluation of monetary policy effects on macroeconomy and constitute the theoretical base for elaboration the optimal monetary policy not only during the crisis but for the further perspective. The construction of such models types for different economies including the Russian economy requires considering the institutional features and specific development and functioning characteristics of the of the national financial sector and economy as a whole.
The author traces the analysis evolution of the monetary shocks effects on the economy, exploring the key approaches to modeling of the monetary transmission mechanism. The article emphasizes the necessity of the monetary transmission mechanism modification in the conditions of current financial crisis: the active role reflection of the financial intermediaries, accounting of the development degrees of institutional capacity in the economy.
This thought-provoking monograph analyzes long- medium- and short-term global cycles of prosperity, recession, and depression, plotting them against centuries of important world events. Major research on economic and political cycles is integrated to clarify evolving relationships between the global center and its periphery as well as current worldwide economic upheavals and potential future developments. Central to this survey are successive waves of industrial and, later, technological and cybernetic progress, leading to the current era of globalization and the changes of the roles of both Western powers and former minors players, however that will lead to the formation of the world order without a hegemon. Additionally, the authors predict what they term the Great Convergence, the lessening of inequities between the global core and the rest of the world, including the wealth gap between First and Third World nations.
Among the topics in this ambitious volume:
· Why politics is often omitted from economic analysis.
· Why economic cycles are crucial to understanding the modern geopolitical landscape.
· How the aging of the developed world will affect world technological and economic future.<
· The evolving technological forecast for Global North and South.
· Where the U.S. is likely to stand on the future world stage.
Economic Cycles, Crises, and the Global Periphery will inspire discussion and debate among sociologists, global economists, demographers, global historians, and futurologists. This expert knowledge is necessary for further research, proactive response, and preparedness for a new age of sociopolitical change.
The study evaluates the relationship between charity brand image and donors’ giving behavior. We use qualitative data collected via online-survey (N=97) to elicit significant characteristics of charities as perceived by donors. Based on qualitative findings we design 63 bipolar scales and test our instrument on a sample of donors (those who donated money (N=91) and time (N=101)). Using exploratory factor analysis, we obtain 5 factors explaining 40,9% and 43,5% of variance in the answers, respectively. Factor structure is different for donors and volunteers. Using regressions we show that the five factors predict charitable intentions (repeated giving and recommendations) (R2=0,607 for monetary donators and 0,569 for volunteers). Money donors highly value positive emotions associated with giving, whereas volunteers put more emphasis on smooth operation of the charity. We find that such characteristic as popularity (charity is well-known) is not significantly linked with repeated donations or recommendations. The results indicate that brand-image is an important path of attracting donors. These findings may help managers of charities better tailor their branding campaign by addressing appropriate groups of donors/volunteers. The study focuses on both actual and future giving behavior and utilizes a combination of qualitative and quantitative methods to design and validate the survey instrument.
The article considers the value orientations of the Afrasian zone of instability on the basis of two gender dimensions: dimension of gender power and economic gender dimension. The authors include in the Afrasian zone of instability the Middle East (including North Africa) all the Big Middle East (including Central Asia and Pakistan), as well as the Sahel countries. The analysis allows us to conclude that, according to some of the country's values, the Afrazi zone forms a fairly compact cluster, which differs markedly both from the countries of Africa south of the Sahel and from the Eastern Islamic countries (Bangladesh, Indonesia and Malaysia). The differences of the countries of the Afrasian zone from Africa south of the Sahel are especially pronounced in these dimensions. The Eastern Islamic countries differ quite strongly from the countries of the Afrasian zone in the political gender space, but their differences are not so pronounced in the economic gender space, although these differences, however, are statistically significant. This fact correlates well with the fact that the countries of Africa south of the Sahel are characterized by high female labor force participation rates, which radically differs them from the countries of the Afrasian zone, for the majority of which extremely low female labor force participation rates are rather typical. At the same time, the Eastern Islamic countries (which are characterized by female labor force participation rates that are close to the world average) do not differ so much from the countries of the Afrasian zone in the economic geneder value dimension (although these differences are still statistically significant).
The history of the creation of champagne wines, the culture of their consumption and advertising