Global Trends And Debt Relief For Asia, Latin America, And Africa: A Multiple Discriminant Analysis

Emerging country debt levels are at an all time high.  There seems to be a great need to find a solution to the mounting level of external debt in the continents of Asia, South America and Africa.  Utilizing multiple discriminant analysis this study looks at whether indebted countries in the various continents responded differently to macroeconomic factors and whether the level of debt made those economies respond to macroeconomic measures.  This study supports the notion that Asian countries are more affected by debt factors influencing their economies than countries in Latin America or Africa.   The study further shows that various debt levels; e.g.; high, medium, versus low have a significant influence on macroeconomic factors.  Therefore this article strongly supports policies for country debt reduction worldwide.

Gold as a Hedge for Inflation: An Event-Study of Abnormal Inflationary Periods in the Past Five Decades

Historically gold and inflation have had a weak positive correlation; therefore, gold has been considered an inflationary hedge and a “safe haven” in times of high inflation for investors. An event-study of five periods with deviant inflation in the past five decades were examined in this study to determine the abnormal return (AR) of gold in comparison to the U.S. stock market (S&P 500). These findings concluded a deviation in market perception regarding the inflationary hedge that gold has historically adhered to have. Specifically, the recent Russia-Ukraine conflict caused a large shift in investors' sentiment of investing into gold as a hedge, as the event window concluded significant negative abnormal returns. Simultaneously the U.S. experienced economic factors that would historically have caused gold prices to increase, yet the opposite occurred. Although the Ukraine conflict's final outcome is still unknown, early stage-data shows how gold could potentially not be considered a “safe haven” or an inflationary hedge today, given many dynamic factors ruling the world

Developing economy banking: the case of Islamic banks

By 2003, there was a total of 176 Islamic banks around the globe with their total assets close to $147 billion. This article shows that this form of specialized banking may help in promoting growth in these developing economies. During the transition phase of a developing growth economy to a full fledged market based economy many structural changes are required in its financial institutions, especially since the role of a financial intermediary in supplying funds to growing new industries is crucial. At the same time, the potential for destabilization resulting from improper resource allocation, due to either faulty risk assessment or the design of the contract, could be significant. Also, this article examines the implementation of an Islamic banking system and how Islamic banks can provide liquidity and aid in the money creation process through offering transactions accounts with compensation for inflation to risk-avoiding depositors.Banking, Economics, Islam, Law, Risk management