Bank Lending, Housing and Spreads

The framework presented in this paper takes its cue from recent financial events and attempts to develop a tractable framework for policy analysis of macro-linkages, in particular a first attempt at the integration of an independent profit-maximising banking sector that lends to and borrows from agents in the economy, and through which changes in the monetary policy rate by the central bank are transmitted. The inter-linkages between housing and the role of the banking sector in the transmission of monetary policy is emphasized. Two competing effects are highlighted: (i) a financial accelerator channel, due to the presence of collateralized borrowers, and (ii) a banking attenuator effect, which crucially arises from the spread in interest rates caused by the introduction of monopolistically competitive financial intermediaries. We show how the classical amplification mechanism explored in models of private borrowing between collaterally-constrained 'impatient' households and unconstrained 'patient' households, such as those put forward by Kiyotaki and Moore (1997) and Iacoviello (2005), is counteracted by the banking attenuator effect, given an endogenous steady state spread between loan and savings rates. Attenuation occurs therefore even under the assumption of flexible interest rates. This effect is further magnified when sluggishness in the interest rate-setting mechanism is introduced.bank lending; housing; liquidity; credit; staggered interest rate-setting; collateral constraints

Tec(h)tonic shifts: taxing the “digital economy”

The ever-increasing digitalization of businesses has accelerated the need to address the many shortcomings and unresolved issues within the international corporate income tax system. In particular, the customer or “user”—through their online activities—is now considered by many as being a critical driving force behind the value of digital services. This paper argues that a plausible conceptual case can be made to tax the value generated by users under the corporate income tax. However, a number of issues need to be tackled for user-based tax measures to become a reality, which include agreement among countries on whether user value justifies a reallocation of taxing rights, establishing the legal right to tax income derived from user value, as well as an appropriate metric for valuing user-generated data if it is ever to be used as a tax base. Furthermore, attempting to tax only certain types of business is ill-advised, especially as user data is now being exploited widely enough for it to be recognized as an input for almost all businesses. Several options present themselves for consideration—from a modified permanent establishment definition combined with taxation by formulary apportionment, to user-based royalty-type taxes—each with their own merits and misdemeanors. Whatever the outcome, it is clear that changes to the international tax system have the potential to be tec(h)tonic

Equilibrium Non-Oil Current Account Assessments for Oil Producing Countries

This paper introduces a methodology for assessing external balance in countries with large stocks of non-renewable resources based on oil stock data, and applies it to selected oil producing countries. The methodology uses a stock approach (instead of the more traditional flow approach) to estimate the equilibrium non-oil current account consistent with optimal consumption smoothing. One of the benefits of the stock approach is that geological data for oil reserves can be used to estimate oil wealth; however, the methodology makes the estimated non-oil current account norm very sensitive to oil price projections. Based on an oil price about US$70 per barrel prevailing in the summer of 2007, the baseline estimates indicate that the non-oil current accounts for most of the countries in the sample are broadly in equilibrium. By the same token, using oil price projections as of the summer of 2008 implies large disparities between the equilibrium non-oil current account position and the medium term forecast for all countries in the sample except for Malaysia.Nonoil sector;Oil producing countries;Current account balances;Oil prices;Economic models;current account, current account balance, current accounts, current account deficit, current account deficits, current account position, current account surpluses, current account surplus

Afghanistan: Balancing Social and Security Spending in the Context of a Shrinking Resource Envelope

For Afghanistan, the dual prospect of declining donor support and high ongoing security spending over the medium term keeps its government budget tight. This paper uses a general equilibrium model to capture the security–development trade-off facing the government in its effort to rehabilitate growth and fiscal sustainability. In particular, it considers strategic policy options for counteracting and minimizing the negative macroeconomic impact of possible aid and revenue shortfalls. We find that the mobilization of domestic revenues through changes in tax policy is the preferred policy response for the Afghan central government. Such a response helps to place its finances on a sustainable path in the near term and preserve most of the growth potential. Cutting expenditures balances public finances but causes the economy to permanently shrink. Debt financing helps to preserve much of the economy size but can quickly put the sustainability of public finances at risk

On Zagreb coindices and Mostar index of TiO2TiO_2 T i O 2 nanotubes

Abstract Topological indices are valuable tools in predicting properties of chemical compounds. This study focuses on degree-based topological indices, which have shown strong correlations with various physico-chemical properties such as boiling points and strain energy. Specifically, we applied these indices to titania nanotubes $$TiO_2$$ T i O 2 and explored the vertex and edge versions of the Mostar index. These findings provide insights into the properties of $$TiO_2$$ T i O 2 nanotubes and contribute to the development of topological indices for predicting the behavior of other chemical compounds

Numerical analysis of double-diffusive natural convective flow of Ostwald-de Waele fluid in an irregular enclosure with a circular obstacle

Purpose: The current study aims to enhance the double diffusive natural convection in an Ostwald-de Waele fluid filled in a hexagonal enclosures using non-uniform magnetic field embedded with circular obstacle. The upper wall has maximum temperature Th∗ and concentration (Ch∗) whereas the lower wall is kept at minimum temperature Tc∗ and concentration Cc∗. The parameters that play a significant role in the heat and mass transfer are evaluated, including Hartmann number, power law index, Rayleigh number and buoyancy ratio. Design/Methodology/approach: In two-dimensions, the governing formulation is written as a set of balancing equations for velocities, pressures, energies and concentrations. The nonlinear governing PDEs are solved using numerical approach based on Finite Element Method (FEM). The discretization is performed using the stable finite element pair ℘2/℘1. Code validation and results are ensured by conducting a grid convergence and comparison test respectively. Findings: The influence of flow on velocity, isotherms and iso-concentration field is examined by analyzing a broad variety of variables such as power-law index 0.7≤n≤1.2, Hartmann number 0≤Ha≤50, Rayleigh number 104≤Ra≤106, inclination angle 0°≤γ≤90° and buoyancy ratio -2≤N≤2. The findings are displayed graphically, including the flow, temperature and concentration fields. Heat and mass transfer rates are maximum for shear thinning fluids while for shear thickening fluids it reduces, whereas it is maximum for concentration dominated assistant flow and minimum for concentration dominant counter flow. Application: The novel aspects of the research include its thorough examination of solar thermal power conversion and its inventive energy deficiency devices and a wide range of electrical design applications

Numerical Investigation of Double-Diffusive Convection in an Irregular Porous Cavity Subjected to Inclined Magnetic Field Using Finite Element Method

Purpose—This study aims to perform an in-depth analysis of double-diffusive natural convection (DDNC) in an irregularly shaped porous cavity. We investigate the convective heat transfer process induced by the lower wall treated as a heat source while the side walls of the enclosure are maintained at a lower temperature and concentration, and the remaining wall is adiabatic. Various factors, such as the Rayleigh number, Darcy effects, Hartmann number, Lewis number and effects of magnetic inclination are evaluated for their influence on flow dynamics and heat distribution. Design/methodology/approach—After validating the results, the FEM (finite element method) is used to simulate the flow pattern, temperature variations, and concentration by solving the nonlinear partial differential equations with the modified Rayleigh number (104 ≤ Ra ≤ 107), Darcy number (10−4 ≤ Da ≤ 10−1), Lewis number (0.1≤Le≤10), and Hartmann number 0≤Ha≤40 as the dimensionless operating parameters. Findings—The finding shows that the patterns of convection and the shape of the isotherms within porous enclosures are notably affected by the angle of the applied magnetic field. This study enhances our understanding of how double-diffusive natural convection (DDNC) operates in these enclosures, which helps improve heating and cooling technologies in various engineering fields. Research limitations/implications—Numerical and experimental extensions of the present study make it possible to investigate differences in thermal performance as a result of various curvatures, orientations, boundary conditions, and the use of three-dimensional analysis and other working fluids. Practical implications—The geometry configurations used in this study have wide-ranging applications in engineering fields, such as in heat exchangers, crystallization, microelectronics, energy storage, mixing, food processing, and biomedical systems. Originality/value—This study shows how an inclined magnetic field affects double-diffusive natural convection (DDNC) within a porous system featuring an irregularly shaped cavity, considering various multiphysical conditions

Measuring Tailwind in an Emerging Market Economy: The Case of Argentina

This paper introduces an index that seeks to objectively measure the intensity of favorable external conditions that can lead to improved macroeconomic performance in Argentina. The country is a net exporter of commodities and a net importer of capital, therefore it benefits from rising prices in international commodity markets and the availability of low cost long-term capital. The index is partly based on the framework of "push" and "pull" factors developed in the early 1990s to explain international capital flows into emerging markets economies and my own experience as an international investment banker during the nineties