Bulletin of Monetary Economics and Banking (BMEB) / Buletin Ekonomi Moneter dan Perbankan
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Spillover Effects of Capital Controls: A Critical Review and New Agenda for the Future Directions
Full text linkThis study tries to undertake a critical review of the spillover effects of capital controls and their welfare implications. We provide a synthesis of the literature on both the theoretical and empirical literature on the spillover effects of capital controls. Furthermore, the role of similar economies (geographical region, and economic characteristics), direction-specific capital controls, global financial crisis (GFC), asset-specific capital controls and the compositional effect of capital flows are discussed to explore the degree and extent of spillover effects of capital controls policy. Similarly, the welfare implications of capital controls depend on the policy motive behind the imposition of capital controls, the state of coordination between the source and destination countries, and among the destination countries. Our study indicates that the imposition of capital controls should be flexible, competitive or prudential and should take into account domestic conditions and circumstances. Also, there is a need for complementarity between conventional macroeconomic policies and capital control actions, and multilateral coordination between source and capital-receiving countries. Finally, we propose a future research agenda for this issue
Reinvigorating GVA Nowcasting in the Post-pandemic Period: A Case Study for India
Full text linkWe reinvigorate nowcasting models considering structural changes caused by the COVID-19 pandemic. It emphasizes the need to understand the heterogeneous impact of shocks on agriculture, industry, and services sectors in an emerging market economy (e.g., India). Our findings advocate a bottom-up approach that tracks sectors separately rather than a headline number. Our results suggest including digital-activity index and supply-side disruption index in the post-pandemic period could improve nowcast performance. Expectation-Maximization (E-M) algorithm is used to combine data series based on their availability. Among bridging methods, the averaging method is preferred due to its simplicity and flexibility
Did COVID-19 Disrupt the Stock Market Return and Volatility? A Meta-Analytic Approach
Full text linkWe provide a quantitative synthesis of the literature utilizing meta-regression analysis on the measurable effect of the combined health and economic crisis due to the COVID-19 pandemic on stock market returns and volatility. This study is conducted based on 104 studies published during the period 2020 to 2022. We find strong evidence of a negative publication bias for COVID-19 impacts on stock market returns and a positive bias on volatility. We document that COVID-19 has a moderate negative effect on stock market returns. Estimates based on intraday stock returns show a greater effect compared to those using daily returns, whereas estimates using weekly returns exhibit the opposite trend . The market reacts more negatively to the COVID-19related news than the number of COVID-19 cases/deaths. Overall, this study confirms the disruptive effect of COVID-19 pandemic on stock market performance
Does Infrastructure Investment Remain an Effective Expansionary Tool? Based On the Green Economy Growth Perspective
Full text linkIn the post-COVID-19 pandemic era, boosting the economy through infrastructure investment has emerged as an imperative tool. Apart from coping with the downward pressure on the economy caused by the pandemic, governments are concerned about green economic growth. Using data for 30 provincial-level administrative regions in China, we examine the impact of infrastructure investment on green economic growth. Our findings are as follows. Infrastructure investment significantly inhibits green economic growth; we discover this outcome to be robust. The impact of infrastructure investment on green economic growth differs for different regions. The negative effect of infrastructure investment on green economic growth is substantial in the central-western region, but it is found to be statistically insignificant in the eastern region
Indian Mutual Fund Industry: Is 2014 a Turning Point?
Full text linkIndian Mutual Fund Industry has experienced a nearly 40-fold increase in assets under management since the start of the 21st century, which has implications for the financial sector and the wider economy. Using structural break models, we identify 2003-08 as a nascent growth phase followed by a tepid growth phase in the post-global financial crisis period. Since 2014, the industry has experienced accelerated growth, outpacing global peers, driven by consistent individual investor inflows in equity and hybrid categories. Supportive regulatory policies introduced in 2012-13, we argue, have boosted the industry’s growth
Unravelling Dynamics and Connectedness: Distinguishing The Influence of Sustainable Finance and Artificial Intelligence on Energy Sustainability in China
Full text linkThis article examines the significant roles of sustainable finance and Artificial Intelligence (AI) in advancing China’s energy sustainability by employing the TVP-VAR-SV model to track dynamic interactions among the Green Bond Index (GBI), New Economy Index (NEI), and Energy-related Uncertainty Index (EUI). Findings indicate that both GBI and NEI reduce EUI, with GBI exerting a stronger influence due to its direct link to sustainable finance, underscoring its role in mitigating energy market uncertainties. EUI, however, negatively affects GBI, revealing that high energy uncertainty may impede sustainable finance progress. Interestingly, EUI has a mixed effect on NEI, suggesting that energy uncertainties can either drive or hinder AI development. GBI and NEI show a positive relationship, moving in tandem, emphasizing how sustainable finance and AI could collectively address energy challenges amid climate concerns and technological advancement
Earthquakes and Housing Rental Prices in Urban Indonesia: A Hedonic Price Analysis
Full text linkThis paper examines the influence of earthquakes on housing rental prices in the urban areas of Indonesia. We employ the household and community data from the Indonesian Family Life Surveys (IFLS) 4 and 5 and estimate a hedonic price model of housing rental prices. We also add a set of variables representing housing attributes and a set of variables related to the community attributes. We find that current earthquakes have had a statistically significant impact on the housing rental prices, confirming the shortterm impact of the earthquakes. There is no evidence that earthquakes have long-term impacts on housing rental prices. We find that earthquakes have a short-term effect on the housing rental prices for self-owned houses only. This finding confirms that different statuses of houses respond differently to earthquake disasters
Do Digital Payments SPUR GST Revenue: Indian Experience
Full text linkThis paper measures the effect of digital payments on enhancing goods and services tax (GST) revenue in India using monthly time-series information on tax collections and digital payments. By employing an autoregressive distributed lag cointegration framework, we find that the GST elasticity concerning digital transactions is about 0.54. The implication is that a one-standard-deviation increase in the value of digital transactions spurs GST revenue of about INR 62 billion, and a one-standard-deviation increase in index of industrial production (IIP) enhances GST revenue by about INR 8 to 12 billion. These results suggest that enhancing digital transactions is an effective way of increasing tax revenue
Digital Currencies and Macroeconomic Performance: A Global Perspective
Full text linkIn this study, we explore the IS-LM-BP framework in analysing the effect of digital currencies on macroeconomic performance from a global perspective. We augment the global macroeconomic dataset by Mohaddes and Raissi (2020) with digital currencies, and analyse the relationship between 2010Q1 and 2019Q4. Overall, we find digital currencies to have significantly positive short-run and no long-run impact on global output, inflation rate, interest rate, and equity stock return. Our results suggest that digital currencies have enhanced global macroeconomic performance, on average. Thus, we recommend that appropriate regulations, rather than an outright ban on digital currencies, should be implemented
Monetary Policy Uncertainty and Agricultural Climate Risk: Does the Agricultural Kuznets Curve Exist?
Full text linkThis study explores the impact of Monetary Policy Uncertainty (MPU) on Agricultural Climate Risk (AGCR) in China, particularly in light of recent climate vulnerabilities in the agricultural sector, highlighted by recent floods. Using balanced panel data from 31 provinces between 2010 and 2022, diagnostic tests confirm cross-sectional dependence and slope heterogeneity, and the Westerlund cointegration test indicates a long-term relationship among variables. Results from generalized panel quantile regression show that MPU positively affects AGCR, especially at lower quantiles, but this effect can be moderated by agricultural insurance. The findings also confirm an agricultural Kuznets curve, where agricultural productivity initially increases AGCR before reaching a turning point that reduces it. Furthermore, a unidirectional causality flows from MPU to AGCR, while a bidirectional causality exists between AGCR and productivity, underscoring the need for targeted resilience strategies for vulnerable provinces