Liquidity problems and policy implications during the recent financial crisis in the Baltic-Scandinavian region: ex ante empirical study. Likviidsusprobleemid ning nende majanduspoliitiline käsitlus viimase finantskriisi ajal Balti ja Skandinaavia regioon

This article provides an empirical examination of the development and determinants of the liquidity position in the financial sector during the past financial crises in the Baltic-Scandinavian region. We look at fiscal and monetary policy implications of the liquidity problems arising in the crisis, using panel data from Datastream and IFS data collection. The results are consistent with the theoretical predictions for a small open economy with the expected sign of changes and developments in common economic indicators. The main finding is that the changes (and the speed of changes) of interest rates, GDP and money supply have occurred relatively fast, meaning that the rising area of the LM-curve has been shorter than theory would predict. Market reactions took place quickly and relatively simultaneously – there was no time for the slow restructuring, thus liquidity needs were higher than generally. The impact of crises on the liquidity position of the financial sector is also studied

Liquidity problems and policy implications during the recent financial crisis in the Baltic-Scandinavian region: ex ante empirical study. Likviidsusprobleemid ning nende majanduspoliitiline käsitlus viimase finantskriisi ajal Balti ja Skandinaavia regioon

This article provides an empirical examination of the development and determinants of the liquidity position in the financial sector during the past financial crises in the Baltic-Scandinavian region. We look at fiscal and monetary policy implications of the liquidity problems arising in the crisis, using panel data from Datastream and IFS data collection. The results are consistent with the theoretical predictions for a small open economy with the expected sign of changes and developments in common economic indicators. The main finding is that the changes (and the speed of changes) of interest rates, GDP and money supply have occurred relatively fast, meaning that the rising area of the LM-curve has been shorter than theory would predict. Market reactions took place quickly and relatively simultaneously – there was no time for the slow restructuring, thus liquidity needs were higher than generally. The impact of crises on the liquidity position of the financial sector is also studied

Do gender, age and education affect herding in the real estate market?

Publisher Copyright: © 2021 The Author(s)The paper analyses how gender, age, education level and field of education affect herding in the real estate market. We use a dataset of residential real estate transactions from 2004–2012 in Estonia that contains demographic and educational information on the individuals in it. We do not identify any gender-based differences in herding but find a low to moderate degree of herding among very young and older individuals. Individuals with a degree in economics tend to herd less than average.Peer reviewe

Can policy improve liquidity during a financial crisis?

This paper empirically examines the development and determinants of the liquidity position in the financial sector during the recent financial crisis in the Baltic-Scandinavian region. We look at fiscal and monetary policy implications of liquidity problems arising in the crisis. The results are consistent with theoretical predictions for a small open economy with the expected sign of changes and developments in common economic indicators. Changes (and the speed of changes) in interest rates, GDP and money supply have occurred relatively rapidly, meaning that the rising area of the LM-curve has been shorter than theory would predict. Market reactions took place quickly and simultaneously – there was no time for slow restructuring, so that liquidity needs were higher than usual.financial crisis, policy implications, liquidity position, capital flows

Explaining asymmetric volatility around the world

Based on the APARCH model and two outlier detection methods, we compute reliable time series of volatility asymmetry for 49 countries with relatively few observations. Results show a steady increase in the asymmetry over the years for most countries. We find that economic development and market capitalization/GDP are the most important factors that increase volatility asymmetry. We also find that higher participation of private investors and coverage by financial analysts increase the asymmetry, suggesting investor sentiment as a driving force. Leverage and feasibility of short selling increase volatility in falling market conditions, although only to a smaller extent.Volatility asymmetry Leverage effect Short selling APARCH model

Academic abilities, education and performance in the stock market

The paper assesses how cognitive abilities and education affect the performance of individual investors in the stock market. We use an exhaustive NASDAQ Tallinn dataset covering two bull markets and one bear market. We show that stronger mathematical and overall academic abilities are associated with more profitable investments and relative outperformance, after trading style, income, experience and a variety of educational characteristics are controlled for. However, the effects are not always linear or monotonic. A similar positive effect on performance is produced by higher education or specialisation in certain subjects. None of these factors is able to explain the performance of investors during bear markets, and none is a substitute for experience. Investors with strong academic abilities tend to have moderate trading frequency and performance seems to be affected more by the ability to find good trades than by the use of any particular trading strategies.Peer reviewe

Asymmetric attention and volatility asymmetry

Analyzing a large sample of U.S. firms, we show that the asymmetry of stock return volatility is positively related to investor attention and differences of opinion. Using the number of analysts following a given firm to capture attention and the dispersion in analyst forecasts as a common proxy for differences of opinion, we show that the two effects are complementary. Furthermore, the effect of attention is strongest among stocks with low institutional ownership and high idiosyncratic volatility. Our results are robust to the traditional “leverage effect” explanation of volatility asymmetry. The findings relate to the previously documented relationship between attention and volatility and suggest that volatility asymmetry is driven by asymmetric attention

Implications of the liquidity crisis in the Baltic-Nordic region

This paper provides a more thorough empirical examination of the development and determinants of the liquidity position in the financial sector during the last financial crisis in the Baltic-Nordic region, which takes into consideration the whole economic cycle. The current study serves as an extension to an ex-ante study which was made in 2010. We look at fiscal and monetary policy implications of the liquidity problems arising in the crisis and stabilization process after that. The results show that the changes (and the speed of changes) of interest rates, GDP and money supply have occurred relatively fast, meaning that the rising area of the LM curve has been shorter than theory would predict. Market reactions took place quickly and simultaneously – there was no time for the slow restructuring, thus liquidity needs were higher than generally