Bulletin of Monetary Economics and Banking (BMEB) / Buletin Ekonomi Moneter dan Perbankan
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Do price controlled basic food items affect inflation in Fiji?
No full textThis note examines the effects of price-controlled perishable food items on inflation in Fiji. We study year-on-year changes in headline inflation and disaggregate measures of inflation in the form of food and non-alcoholic beverages and vegetables against three perishable food items used daily by Fijian households, namely, potatoes, onion, and garlic over the period 2019:01-2022:08. We also follow Narayan et al (2023), allowing for the lags and leads framework in examining Fiji’s inflation. Our results show that the leads and lags model explain 22%, 27% and 65% of headline, food and non-alcoholic beverages and vegetables inflation rates, respectively, over the period 2019-2022. However, as expected, none of the price-controlled perishable food items can explain Fiji’s inflation
Entrepreneurship, Financial Development and Economic Growth
No full textThis study adds to the current body of research on economic growth by demonstrating how the interplay between financial development and entrepreneurship fosters economic advancement. By utilizing the two-step Generalized Moment Method (GMM), we have identified three primary outcomes. Firstly, entrepreneurship has a beneficial influence on economic growth. Secondly, financial development has a conditional effect that stimulates economic growth. Lastly, the combined effect of entrepreneurship and financial development on economic growth is largely positive, suggesting that financial development can amplify the already positive but weak entrepreneurship’s influence on economic growth. The research investigation also delves into the empirical significance and policy implications of these finding
INTERLINKAGE OF MACROECONOMIC UNCERTAINTY AND MACROECONOMIC PERFORMANCE: EVIDENCE FROM ASEAN-5 COUNTRIES PANEL VAR
No full textThis paper examines the interrelationship between inflation, inflation uncertainty, growth, and growth uncertainty. We find a negative effect of output uncertainty on output growth and a positive effect of output growth on output uncertainty. Inflation uncertainty has a negative effect on the inflation rate, suggesting that there is a stabilizing motive during high periods of high inflation, where the policy lowers inflation uncertainty to minimize the economic welfare costs of deflationary actions. However, inflation has a positive effect on inflation uncertainty suggesting that agents may devote more resources to inflation forecasting in a rising inflation environment, which reduces uncertainty. We also find a negative relation between inflation and growth, suggesting that a moderate trend of growth and inflation should be maintaine to achieve desirable effects on the economy
THE ECONOMICS OF STARTUP BUSINESS FINANCE: AN INVESTIGATION THROUGH THE LENS OF FINANCIAL GROWTH CYCLE THEORY
Full text linkThe provision of finance is the key to the survival and success of new firms. The current paper examines the startup firms\u27 finance acquisition through the viewpoint of financial growth cycle theory. We used chi-square and Mann-Whitney U tests to examine our hypotheses. Our study uses data for 386 Indian startup entrepreneurs over the period 2019 – 2021. Our results show that the startups access angel finance significantly in the initial years and the venture capital, banks and NBFCs in their later stage of life
THE ASYMMETRIC EXCHANGE RATE PASS-THROUGH TO INFLATION IN THE SELECTED ASEAN COUNTRIES
No full textThis study explains the asymmetric Exchange Rate Pass-Through (ERPT) to inflation in Indonesia, Malaysia, and the Philippines, which adopted the floating exchange rate after the 1998 financial crisis. Our empirical results show the existence of the long-run asymmetric ERPT to inflation such that there is no full transmission of depreciation to inflation in each country. The highest degree of ERPT to inflation occurred in Indonesia, while in Malaysia, and the Philippines depreciation (appreciation) is not completely transmitted in the short run. We find that a depreciation has a stronger impact on inflation than appreciation
A NEW ECONOMIC PERSPECTIVE: UNDERSTANDING THE IMPACT OF DIGITAL FINANCIAL INCLUSION ON INDONESIAN HOUSEHOLDS CONSUMPTION
Full text linkThis study is based on the cross-sectional per capita household consumption data sourced from the Indonesian family life survey (IFLS) in wave 5, 2014. These data are analyzed to determine how digital financial inclusion impacts household consumption in Indonesia. Our findings reveal that the increased household consumption is significantly associated with the internet usage index. We further conclude that household consumption significantly increased due to the digital finance, especially in households with fewer assets, lower financial literacy, and lower incomes
Coin Specific Sentiments Matter For The Non-Fungible Tokens Spillovers: How And When?
No full textThis paper explores the impact of sentiment on return spillovers among seven major Non-Fungible Tokens (NFTs). Using daily sentiment data from Thomson Reuters MarketPysch Indices and controlling for uncertainty factors and NFT sales, we examine the relationship between media sentiment and NFTs return spillovers using a TVP-VAR model. Our findings show that individual NFTs sentiment is important for spillover dynamics and the effect of sentiment changes based on market uncertainty. The study highlights the need for NFTs investors to focus on market sentiment themes rather than overall sentimen
Does Corruption Matter On Corporate Payouts In The Covid Era?
No full textThis article investigates how corruption (COR) and the COVID-19 (COV) pandemic affect corporate payout decisions. The sample contains 13,865 firm-years over 2012-2020 and 1,950 firms from 18 Muslim countries. Empirical findings show that neither COR nor COV drives dividends (DIV) and repurchases (REP). However, COV x COR negatively and significantly influences DIV. Namely, firms in highly corrupted Muslim countries have higher DIV during the pandemic–the picture changes in the COVID era. Particularly, firms in higher corrupt countries have higher DIV, which aligns with the substitute model of agency costs, but COR does not affect REP in the pandemic age. This research is the first study assessing the impact of COVID-19 on corporate payouts in Muslim countries by employing a robust bias-corrected and unbiased estimator (fractional dependent variable–DPF)
An Estimated Open-Economy DSGE Model for The Evaluation of Central Bank Policy Mix
No full textThis paper builds and estimates a small open-economy Dynamic Stochastic General Equilibrium (DSGE) model suitable for the evaluation of central bank policy mix, with a particular application on the Indonesian economy. The model has a rich array of shocks and frictions, including banking and financial frictions. We illustrate how the estimated model can be used to investigate the source of aggregate fluctuations in Indonesia and to evaluate and simulate a policy mix involving monetary and macroprudential policies. Our Bayesian estimation identifies the COVID-19 pandemic shocks as being mainly a combination of adverse supply-side (technology) and demand-side (preference and foreign-output) shocks. We show that a countercyclical capital requirement rule could be a potent addition to Bank Indonesia’s policy mix arsenal. Despite its rich features, the model is scalable and can be readily extended for evaluating other types of central bank policy mix, including monetary-macroprudential-fiscal policy interaction and the inclusion of Central Bank Digital Currency (CBDC)
RISK APPETITE AND FOREIGN EXCHANGE INTERVENTION IN AN INFLATION-TARGETING FRAMEWORK: THE CASE OF INDONESIA
No full textThe use of foreign exchange intervention in an inflation-targeting framework raises the question regarding its role. In addition, in an environment of volatile capital flows, how the risk appetite of foreign investors might impact the economy is worth exploring. This paper examines these issues for Indonesia by developing and estimating a dynamic stochastic general equilibrium model. This study finds that the foreign exchange intervention affects the macroeconomic variables through the portfolio channel. The risk appetite also affects the economy by increasing the price of capital. The foreign exchange intervention helps in stabilizing the economy during the presence of risk appetite shocks and monetary policy shocks