Bulletin of Monetary Economics and Banking (BMEB) / Buletin Ekonomi Moneter dan Perbankan
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THE CRUDE OIL PRICE–STOCK RETURN CONNECTEDNESSAND THE IMPACT OF THE RUSSIAN-UKRAINE WAR ONSTOCK RETURNS IN EAST ASIAN COUNTRIES
Full text linkWe contribute to the literature by investigating the connectedness between crude oil prices and stock returns and the impact of the Russia-Ukraine war on stock returns in selected East Asia countries. Using the TVP-VAR model, we find that, on average, 42.52% of shocks to an asset spill over to all other assets, whereas, on average, 57.48% of the shocks affect the asset itself. We also find that the major transmitters of shocks are the Singapore Exchange (SGX) and the Korea Exchange (KRX); they transmit at least 54% of shocks. Using the GARCH model augmented with a war dummy, we find that the recent Russia- Ukraine war has significantly impacted the Indonesian stock market
SYNERGY OF ECONOMIC POLICIES AND INNOVATIONIN DRIVING MOMENTUM FOR SUSTAINABLE GLOBALECONOMIC RECOVERY IN THE ERA OF DIGITALTRANSFORMATION
Full text linkDo Financial Technology Firms Influence Labour Force Outcomes in Indonesian Banks?
No full textIn this paper, we examined the influence of technology growth on labour outcomes. Using a sample of 37 Indonesian banks and data on financial technology (FinTech) firms from 1998 to 2017, we discovered that technology growth negatively influences the number of employees and positively impacts employee compensation. The role of technology in these labour market outcomes are both statistically and economically meaningful. Economically, for instance, with an increase of 1 standard deviation in the number of FinTech establishments, the number of Indonesian bank employees decreases by up to 2.30% of mean employees (equivalent to 58 employees) and employee compensation improves by up to 17.83% of mean compensation (equivalent to US$1,830). Furthermore, we showed that bank characteristics affect technology growth–labour outcomes relation. The effect of technology growth on labour outcomes is stronger for banks that have a bigger market value, are more mature, and are private
How are Fuel Prices Linked to Fiji’s Macroeconomy?
No full textUnderstanding how well the fuel market (or its prices) are linked to a country’s macroeconomy has both fiscal and monetary policy coordination implications. This note attempts to provide an understanding of how shocks from the fuel market impact the macroeconomy and vice versa. Our results are novel: we show that Fiji’s macroeconomy only absorbs a maximum of 31% of shocks from the system, implying that most movements in the macroeconomy are due to fundamentals and not the fuel market. The key policy message is that pricing behavior and any price controls associated with the fuel market will not have negative macroeconomic connotations
Trend Inflation In Moderate And Low Inflation Periods: The Implication Of Thai Monetary Policy
No full textThis paper examines the effects of trend inflation on the conduct of monetary policy during moderate and low inflation environments in Thailand. It extends the New Keynesian model by introducing a positive trend inflation. It finds that the response of inflation and output are lower during the moderate inflation period. A high level of trend inflation magnifies the welfare loss. The optimal policy is to lower weight on output volatility when the target level for inflation is higher. To adjust the inflation targeting rate, the central bank should consider the response of inflation and output gap to preserve the determinacy
THE DYNAMIC OF INDONESIA’S SECTORAL ECONOMIC CYCLES
Full text linkThe purpose of this study is to observe the dynamic of Indonesia’s economic cycles for six main sectors. In constructing the cycles, we use quarterly gross domestic product (GDP) for six Indonesian sectors over the period 2000-2021. We obtain the economic cycles for each of the six sectors using Hodrick-Prescott filter and Christiano-Fitzgerald filter techniques. We find evidence that five of six sectors have relatively strong correlation with the aggregate GDP growth cycle. Additionally, by using the concordance index, we further conclude that three sectors are pro-cyclical with the aggregate GDP growth cycle
Monetary Policy And Aggregate Demand In India: An Analysis Of Post-Reform Period
No full textThis study attempts to quantify the influence of monetary policy on aggregate demand in India during the economic reform period (1998-2019). The New Keynesian approach is adopted as the framework for the study. The structural vector auto regression model used in the study revealed that a shock in the monetary policy leaves its outcome in the macroeconomic variables, viz., output and inflation in inverse order. A shock in policy rate leaves its initial transmission effect on output after two quarters and subsequently influences the price level. The effects of monetary aggregate are confined to the price level. Monetary policy shocks are transmitted to output through asset channel, while credit and exchange channel are found neutral
How Effective are Price Regulator’s Price Control Measures?
No full textThe Fijian Competition and Consumer Commission (FCCC) is Fiji’s price regulatory. If price control measures are effective, they should not contribute to inflation. This note tests the effectiveness of FCCC’s price controlling role by proposing that it does not lead to inflation. Using time-series regression models, we establish the effect of FCCC’s regulatory effectiveness and show that it contributes to a reduction in prices at least five months after regulated prices come into force. We find that inflation declines by 0.5% or 26% of the sample annualized inflation (which is 1.93%)
IS THE AUTOMATIC STABILIZER POLICY EFFECTIVE INCOMBATING AN ECONOMIC RECESSION?A CASE STUDY OF THE INDONESIAN STATE BUDGET
Full text linkThis paper examines the effectiveness of an automatic fiscal policy in dealing with an economic recession in Indonesia. By using a mixture of quantity and quality approaches, we find that the automatic stabilizer policy can be used in Indonesian state finances, whereby several components of state revenue, namely income tax, consumption tax, excise, and non-tax revenue, have elasticity of more than one. In comparison, only one component of government spending, namely interest payment, has an elasticity of more than one. We also find that activating the automatic stabilizer policy requires a particular article in the State Finance Law, that regulates when the automatic stabilizer instrument, to be used. These findings open an additional avenue for understanding the effectiveness of policy stimulus to combat the COVID-19 pandemic
CREDIT CARD DELINQUENCY IN MALAYSIA
Full text linkThe objective of this paper is to investigate the influence of economic conditions and regulatory interventions as potential drivers of credit card delinquency in Malaysia. Using quarterly data from 1999 to 2021 and the autoregressive distributed lag model, we find that national income, wealth, expectations of future economic conditions, and the supply of credit determine credit card delinquency. We also find evidence in favour of regulatory interventions as a solution to curbing the deteriorating credit card debt situation in Malaysia