Development of the credit market of Ukraine under macroeconomic instability

The development of Ukraine’s credit market occurs under periodic economic crises. Available destructive processes inhibit the development of credit relations, negatively affecting the lending of economic entities and restraining the development of the national economy. This study aims to highlight the basic transformations in the development of the credit market of Ukraine, which are formed in macroeconomic instability. The economic development trends in Ukraine were assessed using classical statistical methods. The correlation regression analysis was used to analyze the influence of macroeconomic parameters (exchange rate, average salary, and cost of loans) on the volume of bank lending. The results show that the national economy of Ukraine during 2005–2021 developed in the conditions of periodic macroeconomic instability, and the pre-crisis (an indicator of 2013) parameters of bank lending volumes have not restored within the credit market. The paper stresses the significant impact of the COVID-19 pandemic: in 2020, the volume of bank lending decreased by 10.38 billion USD. Moreover, the econometric analysis of the influence of specific macroeconomic parameters (exchange rate, average salary, and cost of loans) on the development of bank lending in Ukraine demonstrated that the stability of the national currency exerts the greatest influence on the lending processes of economic entities in Ukraine. Its provision in the long term allows the creation of favorable conditions for the credit market functioning after the shock periods. Acknowledgment This study is conducted within the framework of the scientific project “Transformation of the households’ behavior in the financial services market in the context of digitalization” with the support of the Ministry of Education and Science of Ukraine

Monetary Policy Regimes, Fiscal Implications, and Policy Interactions among Developing Economies

This paper provides new empirical insights in order to give a relevant contribution to the more recent literature on international transmission of shocks among emerging market economies, with a particular emphasis in the most recent recession and postcrisis consolidation. Interdependence, commonality, and heterogeneity in macroeconomic-financial linkages are also identified in order to give new stimulus to the study of international business cycles and policy-making. An extension of a time-varying Structural Panel Bayesian Vector Autoregressive model is developed to deal with model misspecification and unobserved heterogeneity problems when studying multicountry dynamic panels and jointly investigating monetary and fiscal policy effects. The results argue that monetary policy transmission mechanisms and fiscal authority have worked actively among emerging markets but with different actions due to large differences in their financial structure

Skills or culture? An analysis of the decision to work by immigrant women in Italy

Activity and employment rates for immigrant women in many industrialized countries display a great variability across national groups. The aim of this paper is to assess whether this well-known fact is due to a voluntary decision (i.e. large reservation wages by the immigrants) or to an involuntary process in that the labour market evaluation of their skills is low. This is done by estimating the reservation wages for each individual in the dataset. Our results show that low activity and employment rates for certain national groups are not associated with high reservation wages. This implies that low participation should not be interpreted as a voluntary decision.Reservation wages, female labour supply, cross-national differences

Russian roulette from the Euromaidan protest to the Ukraine invasion: Is it different this time?

We scrutinise the impact of two periods of Russo-Ukraine strife: (a) the Russo-Ukraine war that started in February 2022; and (b) the Euromaidan protest of November 2013, on the financial markets. We observe severe ramifications in terms of abnormal returns, price discovery and time-varying herding between certain group of assets. Whereas the US dollar and the yen consistently serve as safe haven assets (proxied by negative or low unconditional correlations) to opposing countries' stock indexes and currencies in both periods, we generally document heterogeneity in the financial assets' degree of response to them

Business Risk in Changing Dynamics of Global Village 2

The monograph is prepared based on the presentations and discussions made at the II International Conference “BUSINESS RISK IN CHANGING DYNAMICS OF GLOBAL VILLAGE (BRCDGV 2019)”, November, 7th-08th, 2019, in Ternopil, Ukraine. The aim of this scientific international conference is to provide a platform for professional debate with the participation of experts from around the globe in order to identify & analyze risks and opportunities in today’s global business, and specifically in Ukraine. The conference will provide a framework for researchers, business elites and decision makers to uplift the business ties and minimise the risk for creating a better world and better Ukraine.The Conference is designed to call experts around the globe from different sectors of practices which are effected by globalization and watching changes in Europe as well as in Ukraine. It is an excellent platform for interactions and communication between academicians, corporate representatives, policy makers, representatives of organizations and community, as well as individuals being the part of this globalized world. The 1st edition of this conference was held at the University of Applied Sciences in Nysa, Poland (2017); the 2nd edition took place at Ternopil Ivan Puluj National Technical University, Ukraine (2019); the 3rd edition will be organized at Patna University, India (2020) in cooperation with Indo-European Education Foundation (IEEF, Poland) and its partner universities from Poland, India, Europe and other part of the world.Under modern conditions of globalization nowadays, economic activity is undergoing changes. Innovative technologies, new forms of business, dynamic changes taking place in the world today result in the emergence of the necessity to minimize risks in order to maximize benefits. The cooperation between experts from different fields with the aim to ensure sustainable growth – policymakers, scientists, universities representatives and business elites is essential nowadays. With the purpose to bring them together and discuss the main issues of todays’ global world this conference took place in Ternopil, Ukraine. As Ukraine is now passing through a dynamic period of changes, recommendations coming up from such discussions can be very beneficial for building stronger society and meet the risks globalization brings up. This monograph provides a useful review of economic, financial and policy issues in the context of globalization processes and has proven extremely popular with practitioners and industry advisors. This edition is given the continued high demand and interest for experts form different areas working on diminishing of business risks wishing to keep abreast of current thinking on this subject. According to many experts process of managing risks is currently one of the most relevant business technologies and at the same time it is a complex process which requires ground knowledge in the research field and practical experience. The popularity of business risks management is due to objective reasons such as dynamics of society, interconnections and interdependence between different players in the society, increasing role of human capital in the country’s sustainable developmen

Essays in Macroeconomics of Emerging Markets

Chapter 1. Law enforcement and the size of the informal sector. I assemble new cross-country evidence showing that contrary to the standard view, the relationship between the size of the informal sector and tax rates is, at best, ambiguous. Law enforcement and informality also show no clear relation. Motivated by these findings, I augment a standard two-sector (formal and informal) small open economy model with endogenous law enforcement that depends on the size of the informal sector (measured by its assets) and government expenditure. I use a micro-dataset from Colombia to show that both taxes and law enforcement are necessary to match the the size of the informal sector observed in the data. In the absence of law enforcement, tax evasion incentives imply a counterfactually large informal sector. However, law enforcement motivates households to reduce the supply of capital to the informal sector, hence decreasing the probability of detection. The dependence of the latter on government expenditure creates a non-linearity between tax rates and the size of the informal sector through a Laffer curve. The model implies that lowering tax rates would not necessarily reduce the size of the informal sector since there is a trade-off with the capability of law enforcement. Chapter 2. New shocks across countries: An empirical investigation. We estimate the role of news shocks to total factor productivity, foreign interest rates and commodity terms of trade in explaining the variance of output and other macro aggregates in a large sample of countries. To correct for the small-sample bias of the variance decomposition estimates we develop a Bootstrap-after-Bootstrap method. We find that the mean difference of variance share of output explained by news shocks between developing and developed countries is: I) Negligible for news shocks to total factor productivity. II) Positive for news shocks to foreign interest rates (6 p.p) and to commodity terms of trade (8.3 p.p). Using cross-sectional data, we find that countries with less financial development have a larger share of output variance explained by news shocks to foreign interest rates, and countries with higher total trade of commodities to output ratio and less developed financial markets exhibit a larger share of output variance explained by news shocks to commodity terms of trade. These results suggest that to study the role of news shocks in the economy, one-sector models with only shocks to total factor productivity are not adequate, and that there must be a structural distinction regarding financial markets\u27 development when modeling developing countries as opposed to developed in a general equilibrium framework. Chapter 3. Financial participation, hedging, and news shocks. Recent empirical findings show that news shocks to foreign interest rates and commodities\u27 terms of trade, explain a larger share of variance of both output and consumption in developing countries than in developed. I build a two-sector (final goods and commodities) small open economy model with financially excluded households, and hedging against commodity price risk. Due to consumption-smoothing motives, a higher share of financially included households leads to a lower share of variance in output and consumption explained by news shocks to foreign interest rates. Likewise, due to the transmission channel via demand for inputs, a larger share of commodity exports that can be hedged leads to a lower share of variance in output and consumption explained by news shocks to commodity prices. Chapter 4. Sticky Capital Controls. There is much ongoing debate on the merits of capital controls as effective policy instruments. The differing perspectives are due in part to a lack of empirical studies that look at the intensive margin of controls, which in turn has prevented a quantitative assessment of optimal capital control models against the data. We contribute to this debate by addressing both positive and normative features of capital controls. On the positive side, we build a new dataset using textual analysis, from which we document a set of stylized facts of capital controls along their intensive and extensive margins for 21 emerging markets. We document that capital controls are sticky ; that is, changes to capital controls do not occur frequently, and when they do, they remain in place for a long time. Overall, they have not been used systematically across countries or time, and there has been considerable heterogeneity across countries in terms of the intensity with which they have been used. On the normative side, we extend a model of capital controls relying on pecuniary externalities augmented by inclusion of an (S, s) cost of implementing such policies. We illustrate how this friction goes a long way toward bringing the model closer to the data. When the extended model is calibrated for each of the countries in the new dataset, we find that the size of these (S, s) costs is large, thus substantially reducing the welfare-enhancing effects of capital controls compared with the frictionless Ramsey benchmark. We conclude with a discussion of the structural interpretations of such (S, s) costs, which calls for a richer set of policy constraints when considering the use of capital controls in models of pecuniary externalities

A endogeneidade da oferta de moeda no Brasil : a criação de moeda crédito após a adoção do regime de metas de inflação

Orientadores: José Carlos de Souza Braga, Robert Peter Guttmann e Bruno Martarello De ContiTese (doutorado) - Universidade Estadual de Campinas, Instituto de Economia e Universidade Paris 13Resumo: A avaliação da endogeneidade da moeda revela os arranjos complexos que formam uma estrutura bancária e sua capacidade de criar dinheiro por meio do crédito. A este respeito, as principais características da abordagem pós-keynesiana estruturalista da oferta monetária são: (i) o dinheiro é principalmente criado no mercado de crédito; e (ii) as autoridades monetárias impõem alguns limites à criação de crédito, no entanto, não determinam totalmente o seu processo. Aqui, tanto a demanda por moeda como a preferência pela liquidez dos agentes (bancos, empresas e consumidores) são as forças subjacentes que sustentam esses dois atributos. A tese investiga o que tem determinado a oferta de moeda de crédito no Brasil e como a política monetária tem delimitado esse processo desde a adoção do regime de metas de inflação em 1999. Em primeiro lugar, nós delineamos as características intrínsecas da oferta de moeda em uma economia monetária de produção considerando a teoria estruturalista pós-keynesiana sobre o assunto. Em seguida, trazemos o atual pensamento acadêmico dominante que orienta a formulação de políticas monetárias pelos vários Bancos Centrais por quase três décadas, ou seja, o Novo Consenso em Macroeconomia (NCM), e avaliamos suas divergências em relação a abordagem pós-keynesiana. Mesmo que a crise financeira global de 2007-2009 tenha levantado questões sobre o fundamento científico das regras de política do NCM, ela não destruiu a essência de seus elementos teóricos pré-crise, que continuam a afirmar que a regra de Taylor e o uso de uma meta de inflação devem prevalecer, uma vez que qualquer alteração nas variáveis monetárias é, no melhor cenário, efêmera. Embora o Banco Central brasileiro tenha atualizado constantemente seus modelos, seu fundamento está na capacidade última da autoridade monetária de controlar a base monetária. No entanto, encontramos evidências, tanto nas análises empíricas como nos modelos econométricos, de que há outras variáveis que afetam a decisão de oferta de crédito dos bancos no Brasil: as expectativas de longo prazo das taxas de juros, influenciadas pela taxa básica de juros de curto prazo, que altera a curva de rendimentos dos bancos; e a demanda por crédito, que influencia a decisão dos bancos de valorizar sua riqueza e, consequentemente, aumentar ou não a oferta de crédito. Portanto, a oferta de crédito no Brasil é determinada endogenamente - como esperado pela teoria pós-keynesiana - pela preferência pela liquidez dos bancos e pela demanda por fundos, sendo assim delimitada pela política monetáriaAbstract: The evaluation of money endogeneity reveals the complex arrangements that form a banking structure and its ability to create money through credit. In this regard, the key features of the Post-Keynesian structuralist approach of money supply are: (i) money is mostly created in the credit market; and (ii) monetary authorities impose some limits to credit creation, however, they do not entirely determine its process. Hereof, both money demand and liquidity preference of agents (banks, firms and consumers) are the underlying forces that sustain these two attributes. The thesis investigates what has determined credit money supply in Brazil and how monetary policy has bounded this process after the adoption of the Inflation Targeting Regime in 1999. We, first, outline the intrinsic characteristics of money supply in a monetary economy of production by addressing the Post-Keynesian structuralist theory on the subject. Thereafter, we focus on the current dominant academic thinking that guides the formulation of monetary policies for numerous Central Banks by almost three decades, i.e. the New Consensus in Macroeconomics (NCM), and assess its divergences to the Post-Keynesian approach. Even though the global financial crisis of 2007-2009 has raised questions about the scientific foundation of the NCM policy rules, it has not shattered the essence of the pre-crisis theoretical elements, which still claims that the Taylor rule and the use of an inflation target should prevail since any alterations on monetary variables is at the best scenario, ephemeral. Afterwards, even though the Brazilian Central Bank has been constantly updating its models, its background lies on the ultimate ability the monetary authority has to control the monetary base. However, we find evidences, both in empirical analyses and in econometric models, that there are other variables which affect the credit supply decision of banks in Brazil: the long-run expectations of interest rates, influenced by the policy short-term interest rate by the provoked alterations on the yield curve of banks; and credit demand, which influences banks decisions to value their wealth and, in consequence, to increase or not the credit supply. Therefore, credit supply in Brazil is endogenously determined ¿ as expected by the Post-Keynesian theory ¿ by the liquidity preference of banks and the demand for funds, being, thus, bounded by the monetary policyDoutoradoTeoria EconomicaDoutora em Ciências EconômicasCAPE