The Impact of Chinese Monetary Policy Shocks on East Asia

We study the effects of Chinese monetary policy shocks on China’s major trading partners in East Asia by estimating structural vector autoregressive (SVAR) models for six economies in the region. We find that a monetary expansion in Mainland China leads to an increase in real GDP (temporary) and the price level (permanent) in a number of economies in our sample, most notably in Hong Kong and the Philippines. The impact could result from intertemporal substitution present in a general equilibrium framework which allows for positive domestic impacts of foreign monetary expansions. Our results emphasize the growing importance of China for its neighboring economies and the significance of Chinese shocks for the design of monetary policy in Asian economies.monetary policy shocks; Asian production chain; SVAR; East Asia; China

Testing quantity theory of money for the Turkish economy

In this paper, it is tried to test the main assumptions of the Quantity Theory of Money for the Turkish economy. Using some contemporaneous estimation techniques to examine the long-run stationary economic relationships on which the quantity theory is constructed, it is found that stationary characteristics of the velocitities of narrowly and broadly defined monetary aggregates cannot be rejected. However, monetary aggregates seem to be endogenous for the long-run evoluation of prices and real income. It is concluded that monetary authorities follow an accommodative monetary policy inside the period given the endogeneity of the monetary variables.Theory of Money ; Neutrality ; Co-integration ; Turkish Economy ;

Testing Quantity Theory of Money for the Turkish Economy

In this paper, it is tried to test the main assumptions of the Quantity Theory of Money for the Turkish economy. Using some contemporaneous estimation techniques to examine the long-run stationary economic relationships on which the quantity theory is constructed, it is found that stationary characteristics of the velocitities of narrowly and broadly defined monetary aggregates cannot be rejected. However, monetary aggregates seem to be endogenous for the long-run evoluation of prices and real income. It is concluded that monetary authorities follow an accommodative monetary policy inside the period given the endogeneity of the monetary variables.Quantity Theory of Money, Neutrality, Co-integration, Turkish Economy.

The impact of digital payments on the velocity of money in the Chinese market

To study the impact of digital payments on the velocity of money circulation, this paper selects the velocity of money circulation at the M2 level in the Chinese market from FY2012 to 202112 quarters as the dependent variable, the size of digital payment transactions as the independent variable, and gross national product, inflation rate and opportunity cost of money as control variables. In terms of model selection, since the inflation rate and opportunity cost of money are monthly data, while the transaction size of digital payment and the circulation speed of money at the M2 level are quarterly data, the MIDAS series model is chosen to compare with the traditional OLS model, and it is found that MIDAS-PDL has the best fitting effect and prediction accuracy. Through the empirical results of the MIDAS-PDL model, we find that for the Chinese market, digital payments have a significant positive effect on the velocity of money circulation, in addition, inflation has a significant positive effect on the velocity of money circulation, while the opportunity cost of money has a significant negative effect on the velocity of money circulation

Turkish money demand, revisited: some implications for inflation and currency substitution under structural breaks

In this paper, a money demand model constructed on currency in circulation is used to determine the appropriate alternative cost to hold monetary balances in the Turkish economy. Our estimation results, using contemporaneous multivariate co-integration methodology, indicate that the most significant alternative cost to demand for money is the depreciation rate of the nominal exchange rate. This brings out the importance of having a currency substitution phenomenon settled in the economy when economic agents make their decisions as to their monetary transactions. Moreover, we find that domestic inflationary framework has been subject to a weakly exogenous characteristic and conclude that the main factors leading to domestic inflation are determined out of the money demand variable space.Money Demand ; Inflation ; Currency Substitution ; Turkish Economy ;

Exchange Market Pressure in Australia

This paper measures the exchange market pressure (EMP) on the Australian dollar over the post-float period using the model-dependent approach proposed by Weymark (1995, 1998) and the model-independent approach developed by Eichengreen, Rose and Wyplosz (1996). Although there are some concerns over the estimation of the model-dependent index, the resulting EMP indices both appear to provide relatively plausible descriptions of the pressure on the Australian dollar. The role of foreign exchange intervention is examined through the construction of degree of intervention (DI) indices. The results reveal that intervention by the Reserve Bank of Australia contributed to the large depreciation of the Australian dollar between 1997 and 2001.exchange rate; exchange market pressure; foreign exchange intervention

Will digital financial development affect the effectiveness of monetary policy in emerging market countries?

Whether digital finance should be included in the quantitative framework of monetary policy in emerging market countries has been widely discussed by scholars. However, the current research just focused on a single format of digital finance, lacking comprehensive analysis at the overall level and the refinement of general rules. Therefore, this paper constructed a spatial econometric model to empirically analyze the impact of digital finance on the effectiveness of monetary policy and its heterogeneity, taking China as the representative of emerging market countries. The empirical test showed that (1) Although the total index of digital finance had a negative impact on economic growth, the interaction between digital finance and monetary policy was significantly positive. This indicated that the “moderating effect” of monetary policy was beneficial to digital finance in promoting economic growth, which was confirmed from the subindexes level as well. (2) The development of digital finance had obvious characteristics of the “polarization effect” and the “spatial spillover effect”. Meanwhile, there was a significant regional difference in the “moderating effect” of monetary policy. (3) In terms of control variables, consumption level, fixed capital formation level, and fiscal policy all had a significant positive impact on economic growth, with a positive “spatial spillover effect”. Whereas, the impacts of COVID-19 and export level on economic growth were both negative. Hence, coping with the challenges of COVID-19 and revitalizing exports were important breakthroughs for emerging market countries to recover the domestic economy. Finally, based on the empirical conclusions, this paper proposed three suggestions. First, monetary policy should be strengthened to intervene in the development of digital finance. Second, digital financial development should be integrated into the quantitative framework of monetary policy. Third, it is essential to build a “double pillar” policy framework to compensate for the shortage of monetary polic

the input-output and computable general equilibrium modelling for environmental and energy issues

1 Nexus di produzione di petrolio e sostenibilit\ue0 ambientale per l'economia cinese: approccio basato su moltiplicatori macro basati su IO L'economia cinese \ue8 l'economia mondiale in pi\uf9 rapida crescita con un tasso di crescita medio di circa il 10% all'anno fino al 2015. A causa dell'eccellente tasso di crescita economica, la Cina ha iniziato l'importazione di petrolio greggio nel 1993 per soddisfare il requisito dell'economia. A met\ue0 2013, i giacimenti petroliferi domestici della Cina hanno danneggiato negativamente a causa delle inondazioni e di conseguenza le importazioni di petrolio della Cina sono aumentate drasticamente e la Cina \ue8 diventata il pi\uf9 grande importatore di petrolio superando gli Stati Uniti. Il presente studio contribuisce alla letteratura nel raggiungimento dell'obiettivo analizzando l'impatto dell'attuale shock petrolifero sui diversi settori industriali della Cina. L'analisi empirica verr\ue0 effettuata utilizzando l'approccio multisettoriale Macro Multiplier sull'ultima tabella input-output disponibile costruita per l'anno 2014, successivamente pubblicato nel 2016 da WIOD. Gli economisti mainstream hanno criticato la raccomandazione sulla politica ambientale per la riduzione delle emissioni di CO2, che si basa sul principio del trade-off tra la riduzione delle emissioni di CO2 e la riduzione della produzione per i diversi settori dell'economia. Lo studio attuale identifica la struttura conveniente per la Cina per affrontare la limitazione e raccomanda una delle politiche appropriate per ottenere entrambi gli obiettivi contemporaneamente. JEL Classification: O13, P28, P48, Q43 Key Words: Oil Prices; China; Input-Output; Macro Multiplier Analysis \u2003 2 Struttura conveniente per i settori petrolifero e del gas per l'economia russa: approccio moltiplicatore per macro basato su SAM L'economia della Russia dipende in modo significativo dai prodotti legati all'energia come petrolio e gas. La quota di esportazione di petrolio e gas nell'economia russa \ue8 di circa il 58%. Oggigiorno, i paesi produttori di petrolio stanno affrontando il problema del mantenimento della bilancia dei pagamenti perch\ue9 il basso prezzo del petrolio \ue8 influenzato negativamente dai loro proventi da esportazione. Il deficit fiscale nell'economia russa \ue8 stato aumentato in modo significativo, il confronto dei primi nove mesi del 2016 e del 2015 mostra i dati rispettivamente del 2,6% e dell'1,1%. Nel complesso, l'economia russa si \ue8 contratta del 3,4% a causa della caduta dei prezzi del petrolio. L'obiettivo del presente studio \ue8 identificare la struttura conveniente dell'economia per analizzare il trade-off tra il settore petrolifero e quello del gas con la politica ambientale. Il significativo dello studio ha utilizzato l'approccio moltiplicatore Macro basato su SAM per l'anno 2015 per raggiungere gli obiettivi richiesti. L'analisi empirica si basa sull'approccio Macro moltiplicatore proposto da Ciaschini e Socci (2007a & b). L'approccio MM basato su SAM consiste nel trovare l'insieme appropriato di profili di policy "endogeni". Inoltre, l'approccio MM \ue8 quello di collegare tra loro le diverse interazioni economiche con variabili macroeconomiche, che sono anche attive o non attive (Ciaschini et al., 2010). JEL Classification: O13, P28, P48, Q43 Key Words: Oil, Gas, Russia, Social Accounting Matrix, Macro Multiplier Analysis \u2003 3 Valutazione degli shock dei prezzi petroliferi e delle risposte di politica monetaria nell'economia russa: un'analisi di equilibrio generale computabile finanziaria L'economia della Russia dipende in modo significativo dai settori legati all'energia come petrolio e gas. La quota totale delle esportazioni di petrolio e gas nell'economia russa \ue8 di circa il 58%. Inoltre, il 70% del PIL russo e il 50% delle entrate federali dipendono dalle esportazioni di prodotti energetici. Oggigiorno, i paesi produttori di petrolio stanno affrontando il problema del mantenimento della bilancia dei pagamenti perch\ue9 i loro proventi delle esportazioni sono influenzati dal basso prezzo del petrolio. In effetti, il deficit fiscale della Russia \ue8 aumentato in modo significativo, se confrontato i primi nove mesi del 2016 con il 2015. Nel complesso, il PIL russo ha subito un calo del 3,4% a causa della caduta dei prezzi del petrolio. L'obiettivo principale del presente studio \ue8 quello di esplorare il contributo delle industrie legate all'energia (petrolio e gas) rispetto alle industrie non energetiche sulla generazione di reddito dell'economia russa e di quantificare ulteriormente i proventi delle esportazioni, con l'obiettivo di fornire energia solida raccomandazioni politiche per la Russia. Il secondo obiettivo di studio \ue8 di accedere agli shock dei prezzi petroliferi e alle risposte di politica monetaria per l'economia russa. A tal fine, lo studio attuale costruir\ue0 la Financial Accounting Matrix (FSAM) per la Russia per il 2015, che manca ancora negli studi esistenti. L'FSAM rappresenta l'integrazione tra il lato reale e quello finanziario dell'economia e descrive l'interazione tra produzione, generazione di reddito, distribuzione e uso, accumulazione di capitale e conti finanziari. Pi\uf9 specificamente, l'FSAM per la Russia fornisce una disaggregazione di 59 settori, derivati dalle tabelle delle risorse e degli impieghi e dai conti nazionali dei servizi federali statali della Federazione russa (ROSSTAT). Lo scopo principale della costruzione del FSAM russo \ue8 sviluppare il modello di Equilibrio Computabile Generale (CGE) per valutare gli shock dei prezzi petroliferi e la politica monetaria e per verificare l'impatto diretto e indiretto delle politiche orientate alle industrie legate al petrolio e al gas. Keywords: Russia; Social Accounting Matrix; Computable General Equilibrium; Oil JEL classification: C68, E16, O13, P28, P48, Q4

Essays on an ASEAN Optimal Currency Area

Many regions of the world would like to replicate the financial and monetary integration of the European Monetary Union (EMU). Member countries of the Association of Southeast Asian Nations (ASEAN) have shown an interest in such an arrangement. ASEAN is a political, cultural, and economic association that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Many of these nations are experiencing rapid economic development while others are still relatively poor and under developed. As such, they appear to be an unlikely group for currency unification. Older studies suggest that multiple currency union groupings may be possible in the short run that could be unified into a whole at an unspecified time in the future. The issue has been studied for some time and appeared defunct with the onset of the Asian Financial Crisis. More than a decade has passed and another more global financial crisis has ensued leaving many Asian countries in better shape than their highly developed trading partners in the west. This leads to the need for further examination of the possible unification of some or all ASEAN members into a Regional Currency Arrangement. This dissertation evaluates the readiness of the ASEAN nations for monetary union using data from the post Asian Financial Crisis period. Results of a formal G-PPP test show the area is an optimum currency area. Analysis of other criteria shows incredible diversity across the countries in the region that would make unification a challenge. Coordination of monetary policy would be most difficult given the variety of inflation rates and differences in depth of financial system development as explored in chapter 2. Trade has increased in the region leading to better linkages among economies but the data shows that reaching full integration of all countries by the 2020 deadline without disruptions in some economies may still be difficult