Bulletin of Monetary Economics and Banking (BMEB) / Buletin Ekonomi Moneter dan Perbankan
Not a member yet
734 research outputs found
Sort by
ARE FINANCIAL INSTITUTIONS TAX AGGRESSIVE? EVIDENCE FROM CORPORATE TAX RETURN DATA
No full textThis study examines how financial firms’ tax aggressiveness differs from their peers in other sectors. Using confidential tax return data of the 5,968 largest Indonesian firms from 2009 to 2017, our study finds financial firms to have lower tax burdens relative to their non-financial counterparts, suggesting more opportunities for tax avoidance. Further, we document simultaneous use of tax shelters and temporary and permanent differences between accounting standards and tax laws, indicating a tendency to use the most sophisticated and less costly techniques in minimising tax burdens. These findings suggest tax aggressiveness may be one important unintended consequence of the government’s conventional prudential policy
THE EFFECTS OF RENT SEEKING ACTIVITIES ON ECONOMIC GROWTH IN MIDDLE-INCOME COUNTRIES
No full textThis study investigates the effects of rent seeking activities on economic growth in 53 middle-income countries. Our data span the period 2011 to 2020. We use the generalized method of moments estimator to examine the effects of rent-seeking activities on economic growth. Our study also includes several control variables, namely democratic accountability, public debt, human capital, foreign direct investment, capital stock, population, research and development expenditure and trade openness. The empirical results suggest that rent-seeking activities impede economic growth in middle-income countries
CREDIT RISK AMID BANKING UNCERTAINTY IN VIETNAM
No full textUsing a new measure of micro uncertainty based on the cross-sectional dispersion of bank-level shocks, we analyze the impact of banking uncertainty on credit risk in Vietnam during the period 2007–2019. We document that a higher level of banking uncertainty may increase credit risk, and this unfavorable impact is mitigated at larger, better capitalized, and more liquid banks. As compared to private-owned banks, state-owned banks experience higher credit risk during periods of uncertainty. Further analysis supports the “search for yield” hypothesis and helps to better understand why credit risk increases amid uncertainty
FISCAL AND MONETARY POLICY INTERACTIONS IN INDONESIA DURING PERIODS OF ECONOMIC TURMOIL IN THE US: 2001Q1-2014Q4
No full textThis study investigates the formation of the interaction between monetary and fiscal policies in Indonesia during periods of economic turmoil in the US (external shock) based on the Hybrid New Keynesian (HNK) model. The study estimates the HNK model using the Full Information Maximum Likelihood and time-series data over the period 2001Q1-2014Q4. The result reveals the form of coordination is a monetary-led policy mix between active monetary policy and passive fiscal policy. The degree of coordination is down when external shock increase
Currency Crises And Contagion Channels In Asian Economies
No full textThis study examines multiple transmission mechanisms that propagate and amplify shocks across Asian nations owing to financial turbulence with emphasis on global shock transmission between economies that prioritise ‘trade’ and ‘financial’ connections in four countries: Indonesia, Korea, Malaysia, and the Philippines. Based on the logit estimation outcomes, a higher degree of trade openness amplifies the implications of shocks on the economy. Relevant implications are drawn for optimal regional monitoring and the coordination of integration as the economic fundamentals associated with the currency crises complements the first-generation models of speculative attacks
TIME AND FREQUENCY DEPENDENCY OF FOREIGN EXCHANGE RATES AND COUNTRY RISK: EVIDENCE FROM TURKEY
No full textThis study examines the time and frequency dependency nexus between foreign exchange (FX) rates and country risk in Turkey. We considered Turkey because it is a negative outlier country in terms of the progress of these indicators. Using quarterly data from 1990/Q1 to 2018/Q4 and the Wavelet Coherence approach, we find that an increase in the country risk causes an increase in the FX rates at different frequencies, especially in the medium and long term and different periods. The results highlight the significance of country risk for the progress of the FX rates. Policy implications are discusse
A NOTE ON PUBLIC DEBT-PRIVATE INVESTMENT NEXUS IN EMERGING ECONOMIES
No full textWe examine the effect of public debt on private investment in selected emerging economies. Using a panel threshold regression model, we estimate a threshold value of about 3 percent, on average, below which public debt stimulates private investment. Our additional analysis involving selected developed economies suggests that the crowding out effect is less evident relative to the emerging economies as higher public debt stocks do not seem to significantly undermine their private investments. These results have implications for debt sustainability and maintaining a reasonable public debt–GDP ratio is crucial for sustainable investment growth
FINANCE AND ENDOGENOUS GROWTH
No full textIn a two-class growth model of Pasinetti (1962), there is no financial intermediary that mobilizes bank deposits to be lent to the capitalist class for physical investment. The absence of a capital market also precludes workers from buying capitalists’ new issues of stocks and bonds to finance investment. Thus, the equilibrium rate of return to capital is independent of the saving rate of the working class—what Samuelson and Modigliani (1966) referred to as the Pasinetti paradox. In this paper’s modified Pasinetti framework with endogenous growth, the equilibrium rate of return to capital is shown to be a function of all structural parameters, including both saving rates of the capitalist and working classes. Additionally, the modified model explains the recessionary dynamics of the 2007/2008 global and regional financial crises. Implications for growth policies are drawn
IS INDONESIA’S CURRENT ACCOUNT BALANCE OPTIMAL? EVIDENCE FROM AN INTERTEMPORAL APPROACH
No full textThis study investigates whether Indonesia’s Current Account (CA) balance is intertemporally solvent. We provide fresh evidence on Indonesia’s CA deficit solvency by considering post-crisis period data and conducting sub-sample analysis. Our findings suggest that Indonesia’s CA is not solvent. We notice evidence of excess lending prior to the global financial crisis of 2008 and excess borrowing in the post-crisis period. Policymakers need to focus on the composition of capital flows and management of volatile capital flows since discouraging foreign capital inflows may serve as a deterrent to economic growth
The Effect Of Corporate Tax Policy On Foreign Direct Investment: Empirical Evidence From Asian Countries
No full textThe phenomenon of Corporate Tax Rate (CTR) reduction to attract Foreign Direct Investment (FDI) has been an interesting subject given the lack of consensus from empirical studies. This study aims to provide empirical evidence on the relationship between CTR and FDI, and examine factors that influence FDI inflows. Using data for 28 Asian countries from 1999 to 2014, we find that CTR has a significant negative effect on FDI inflows. FDI inflows increase by 4.38% due to a 1% CTR reduction. We also find that other economic factors, such as economic openness, market size, and exchange rates play an important role in attracting FDI inflow