EU sovereign ratings lags prior and after the great recession

Mestrado em Economia Monetária e FinanceiraEstudamos as variáveis que mais afetam a alteração dos ratings soberanos na UE para as agências de classificação de crédito Fitch e S&P. Utilizando um modelo de painel probit, avaliamos o impacto de diferentes variáveis econômicas e políticas nas mudanças gerais dos ratings soberanos, aumentamos e diminuímos antes e depois da Grande Recessão. Mais importante, também analisamos o tempo de espera para cada agência de classificação nesses dois períodos, cobrindo especificamente 1997: 12-2018: 12. Nossos resultados mostram que as variáveis econômicas e políticas são consideradas diferentemente nos dois períodos e que o atraso na liderança das mudanças de rating diminui após a crise, especialmente quando essa mudança é uma diminuição no rating. Ainda, trazemos alguns conceitos comportamentais para o raciocínio dessa mudança nas variáveis e comportamento nos lags.We study the variables that most affect the sovereign ratings change in the EU for Credit Rating Agencies Fitch and S&P. Using a panel probit model we assess the impact of different economic and political variables on sovereign ratings general change, increase and decrease before and after the Great Recession. Most importantly, we also analyse the lead lag time for each rating agency in these two periods, covering specifically 1997:12-2018:12. Our results show that economic and political variables are considered differently in both periods and that the lead lag for rating changes decreases after the crisis, especially when this change is a decrease in the rating. We then enrich the discussion by bringing some behavioural concepts into the reasoning of that change in the variables and lead lag behaviour.info:eu-repo/semantics/publishedVersio

A review of the leader approach for delivering the rural development programme for England: a report for Defra

This report, commissioned by the Rural Communities Policy Unit at Defra, sets out the findings of a review of the Leader approach in England. The focus of the review is the impact of Leader in contributing to the delivery of the Rural Development Programme (RDP) in England, in order to inform the future Leader approach to delivering rural policy. The research is primarily based on a review of existing literature and in-depth qualitative research with Local Action Groups and other stakeholders involved in delivering or benefiting from the Leader approach. The review focuses on four key issues: 1) Evidence to support the rationale for use of EU resources to enable rural development – justifying intervention for the current programme and informing choices about interventions in the next programme 2) Evidence on the extent to which interventions have been effective to date and where future resources can be targeted 3) Evidence to provide an assessment of the impact of RDPE spend (2007-13) on outcomes – with reference to delivery mechanisms 4) Evidence to support prioritisation of activities to be funded under the next programme mapped against the six EU wide priorities for 2014-2020 and inform decisions about future delivery models

The response of corporate investments in the US to oil price changes: the role of asymmetries

This paper investigates the influence of oil price changes on corporate investment in the US using a large sample of 15,411 companies from 1984 to 2017. It adds to the literature by showing an asymmetric response of capital investments to oil price changes for non-oil companies. Particularly, positive oil price changes have a larger adverse impact on investments than the positive impact created by negative oil price changes. These results are important in assessing the impact of energy price fluctuations on the long-term investment decisions of US companies

Factors influencing net investment decision making for a group of lower North Island sheep and beef farmers : a thesis presented in partial fulfilment of the requirements for the degree of Master of Agricultural Economics at Massey University

This study investigated the process of net investment decision-making on a group of New Zealand sheep and beef farmers. A review of previous theoretical and empirical research led to the study's objectives, namely to test that investment decision making on New Zealand farms could be incorporated in two dimensions: the determination of a desired level of capital stock and a description of the rate of adjustment of actual capital stock to the desired level. A study of net investment decision-making was chosen because net investment was seen by policy-makers in the 1970's to be an ingredient in planned growth in output. Information on net investment at the individual farmer level was not, however, available to policy-makers at the time. The study was at the individual farmer level to complement previous reserarch at the macro-level on investment in the New Zealand pastoral sector. An investment model was tested using ordinary least squares combining time-series and cross-section data. The initial specification included individual farm dummy variables to account for cross-sectional differences in net investment decision-making. Later, candidate variables hypothesised as explaining cross-section differences were included in the model. The regression results led support to the study's objective. Demand for desired capital stock was viewed as determined by Government policy measures, farm size, farmer age and the initial development state of the farm. Adjustment of actual capital stock to the desired level was viewed as determined by the level of cash at the beginning of each period and windfall gains or losses in net income in the current period. The results provide some basis for the better targeting of future policy measures to the farm sector. The study was limited by lack of a priori knowledge of inter-farm differences in the desire for capital, by the lack of a precise measurement of actual capital stock and the failure to account for interdependencies in the consumption-investment decisions that take place on farms. These limitations could provide avenues for future research

Do Optimists Grow Faster and Invest More?

The paper discusses a two-period model of an economy with two industries, positive production externalities and random shocks to production functions. Multiple equilibria that arise in such a framework can be ranked according to agent's optimism. The equilibria with higher levels of optimism are characterized by higher economic growth, higher production growth and higher proportion of investments in externality yielding industries. Using the U.S. data, it is shown that changes in sentiment predict economic growth. Sentiment has significant positive impact on industry growth, aggregate economic growth and relative levels of investment in industries. Externality yielding industries also appear to be more affected by shifts in sentiment than non-externality yielding industries.

An Alternative Model of Business Investment Spending

macroeconomics, business investment

Keynesian government spending multipliers and spillovers in the euro area

The global financial crisis has lead to a renewed interest in discretionary fiscal stimulus. Advocates of discretionary measures emphasize that government spending can stimulate additional private spending — the so-called Keynesian multiplier effect. Thus, we investigate whether the discretionary spending announced by Euro area governments for 2009 and 2010 is likely to boost euro area GDP by more than one for one. Because of modeling uncertainty, it is essential that such policy evaluations be robust to alternative modeling assumptions and different parameterizations. Therefore, we use five different empirical macroeconomic models with Keynesian features such as price and wage rigidities to evaluate the impact of fiscal stimulus. Four of them suggest that the planned increase in government spending will reduce private spending for consumption and investment purposes significantly. If announced government expenditures are implemented with delay the initial effect on euro area GDP, when stimulus is most needed, may even be negative. Traditional Keynesian multiplier effects only arise in a model that ignores the forward-looking behavioral response of consumers and firms. Using a multi-country model, we find that spillovers between euro area countries are negligible or even negative, because direct demand effects are offset by the indirect effect of euro appreciation

Why Hasn’t the US Economic Stimulus Been More Effective? The Debate on Tax and Expenditure Multipliers

Recent dissatisfaction with the impact of expenditure stimulus on economic activity in the United States, along with the results of academic research, have once again raised questions about the effectiveness of fiscal stimulus policies and about whether stimulus to a recessionary economy should be in the form of tax cuts or expenditure increases. This paper considers alternative methods for evaluating the impacts of stimulus policy strategies. We discuss conceptual challenges involved in effectiveness measurement, and we review alternative empirical approaches applied in recent studies. We then present our own estimates of policy multipliers based on simulations of the IHS Global Insight model of the US economy. Based on this review and analysis, we address the question of why recent US stimulus programs have not been more effective.United States (US) recession and recovery; fiscal and monetary policy; tax and expenditure multipliers; econometric model forecast simulation.