Equity prices and the real economy - A vector error-correction approach

We assess the impact of equity prices on the level of output in the Europe Union economies and the US using Vector Error Correction (VECM) time series techniques. The distinction between impacts in bank based and equity market based economies is shown to be important, with equity prices having a greater impact on output in market-based economies. Share prices are shown to be largely autonomous in variance decompositions, whilst equity price do have a strong impact on output in the UK and US in their variance decompositions. An analysis of impulse responses suggests that large market based economies have more effective fiscal and monetary policy instruments

The evolution of the financial crisis of 2007–8

The financial crisis that started in August 2008 reached a climax in the autumn of 2008 with a wave of bank nationalisations across North America and Europe. Although banking crises are not uncommon, this is the largest since 1929–33. This paper discusses the build-up to the crisis, looking at the role of low real interest rates in stimulating an asset price bubble. That bubble was stocked by financial innovation and increases in lending. New financial products were not stress tested and have failed in the downturn. After discussing the bubbles we look at the collapse of the complex asset structure, and then put the crisis in the context of the literature. The paper concludes with a discussion of policy implications of the crisis, and advocates a significant improvement in the regulatory structure

Shocks and shock absorbers: The International Propagation Of Equity Market Shocks and the design of appropriate policy responses

Equity prices are major sources of shocks to the world economy and channels for propagation of these shocks. We seek to calibrate macroeconomic effects of falls in share prices and assess appropriate policy responses, using the National Institute Global Econometric Model NiGEM. Based on estimated relationships, falls in US equity prices have significant impacts on global activity; potential for liquidity traps suggest a need for complementary monetary and fiscal policy easing. However, fiscal easing boosts long-term real interest rates and hence moderates one of the automatic shock absorbers provided by the market mechanism

Consumer confidence indeces and short-term forecasting of consumption

Recently there has been growing interest in examining the potential shortterm link between survey-based confidence indicators and real economic activity, notably for macroeconomic policy making. This paper builds on previous studies to establish whether there is a short-term predictive relationship between measures of consumer confidence and actual consumption, that could be used for forecasting, in a range of major industrial countries. It then extends such previous analyses by assessing whether this relation has changed over time, and whether we can attribute any time-varying relation to structural developments in the economy, such as financial deepening and the increasing role of house prices in determination of consumption

Consumer confidence indices and short-term forecasting of consumption

Recently there has been growing interest in examining the potential shortterm link between survey-based confidence indicators and real economic activity, notably for macroeconomic policy making. This paper builds on previous studies to establish whether there is a short-term predictive relationship between measures of consumer confidence and actual consumption, that could be used for forecasting, in a range of major industrial countries. It then extends such previous analyses by assessing whether this relation has changed over time, and whether we can attribute any time-varying relation to structural developments in the economy, such as financial deepening and the increasing role of house prices in determination of consumption

Bank regulation, property prices and early warning systems for banking crises in OECD countries

Early warning systems (EWS) for banking crises generally omit bank capital, bank liquidity and property prices. Most work on EWS has been for global samples dominated by emerging market crises where time series data on bank capital adequacy and property prices are typically absent. We estimate logit crisis models for OECD countries, finding strong effects from capital adequacy and liquidity ratios as well as property prices, and can exclude traditional variables. Higher capital adequacy and liquidity ratios have a marked effect on the crisis probabilities, implying long run benefits to offset some of the costs that such regulations may impose

Household debt and foreign currency borrowing in new member states of the EU

In the light of rapidly rising household debt, we undertake panel estimation of determinants of debt-income ratios in new EU member states of Central and Eastern Europe and interpret the results in the light of indicators of housing bubbles, estimates of equilibrium debt ratios from Western Europe and information on foreign currency borrowing in the CEE. We conclude that there are potential risks from overindebtedness in some of these countries, while in others where debt-income ratios appear sustainable, there remain risks related to high levels of foreign currency debt, notably where there is a floating exchange rate. Important issues are raised for future economic performance as well as the structure of banking regulation

The ultimate tactics of self-referential systems

Mathematics is usually regarded as a kind of language. The essential behavior of physical phenomena can be expressed by mathematical laws, providing descriptions and predictions. In the present essay I argue that, although mathematics can be seen, in a first approach, as a language, it goes beyond this concept. I conjecture that mathematics presents two extreme features, denoted here by {\sl irreducibility} and {\sl insaturation}, representing delimiters for self-referentiality. These features are then related to physical laws by realizing that nature is a self-referential system obeying bounds similar to those respected by mathematics. Self-referential systems can only be autonomous entities by a kind of metabolism that provides and sustains such an autonomy. A rational mind, able of consciousness, is a manifestation of the self-referentiality of the Universe. Hence mathematics is here proposed to go beyond language by actually representing the most fundamental existence condition for self-referentiality. This idea is synthesized in the form of a principle, namely, that {\sl mathematics is the ultimate tactics of self-referential systems to mimic themselves}. That is, well beyond an effective language to express the physical world, mathematics uncovers a deep manifestation of the autonomous nature of the Universe, wherein the human brain is but an instance.Comment: 9 pages. This essay received the 4th. Prize in the 2015 FQXi essay contest: "Trick or Truth: the Mysterious Connection Between Physics and Mathematics

E.P. Thompson and cultural sociology: questions of poetics, capitalism and the commons

There is currently a need for cultural sociology to readdress the work of humanistic and cultural Marxism. While more recently much of this work has been dismissed the appearance of more radical social movements and the on-going crisis of neoliberalism suggests that it still has much to tell us. In this respect, this article seeks to readdress the writing of historian E.P.Thompson arguing that his work on the class based and other social movements, poetics, critique of positivism and economic reason, utopia and work on the idea of the commons all has much to offer more contemporary scholarship. While the article recognises that the cultural Marxism of figures like Thompson can-not simply be resurrected it does continue to offer a number of critical insights lacking from other traditions within cultural sociology. By readdressing the internal complexity of Thompson’s writing the argumentative strategy of this article suggests that cultural sociology needs to move beyond more simplistic understandings of cultural Marxism and more carefully explore what it has to offer

Pengaruh Current Ratio (Cr), Debt To Equity Ratio (Der), Return On Assets (Roa), dan Return On Equity (Roe) terhadap Harga Saham (Studi pada Perusahaan Sub Sektor Telekomunikasi yang Terdaftar di Bursa Efek Indonesia Periode 2013-2016)

Telecommunication that researcher works at consists of 4 companies. In the last four years, the average price of sub sector of telecommunication shares in the period 2013-2016 has increased but if we look at the stock price obtained by each company, we will see that there are companies in the sub sector of telecommunication continues to decline stock price during the period 2013-2016. The condition of stock price which has been decreasing is the concern for the researcher to review the financial condition of the telecommunications company. This type of research is explanatory research, with population that can be studied in 4 companies sub sector of telecommunication. The data source of the research is the secondary data obtained not direct. The data types used in this research are time-series data and cross section data or often referred to as panel data. Methods of data analysis used classical assumption test, correlation, determination, simple regression, multiple regression, and significance by using SPSS application. The result of research stated that ROA and ROE have an effect on stock price, which means that if ROA and ROE increase, stock price increases partially. While CR and DER have no effect on stock prices. Testing simultaneously shows CR, DER, ROA, and ROE have an influence on stock prices. If CR, DER, ROA, and ROE increase, then stock price increases as well. Based on this, the researcher suggested that sub sector of telecommunication\u27s company pays attention to indicator on CR, DER, ROA, and ROE to increase stock price. So that investors are interested to invest in the company