Ekonomika
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The Asymmetric Effects of Global Energy and Food Prices, Exchange Rate Dynamics, and Monetary Policy Conduct on Inflation in Indonesia
Full text linkThis research analyzes the asymmetric effects of global energy and food prices and monetary variables, including the exchange rate and money supply, on the consumer price index (CPI). The model is intended to differentiate the influence of increases and decreases in global energy and food prices, exchange rates, and money supply which cause inflation/deflation from changes in the CPI. The analysis uses the Nonlinear Autoregressive Distributed Lag (NARDL) and Quantile Regression models on data from January 2001 to February 2023. The study results show that the decline in global energy prices significantly reduces the CPI in the long run. Energy subsidies allow increases in international energy prices not to increase the CPI significantly. Meanwhile, the increase in global food prices causes inflation in the short run. The exchange rate has the most significant effect on the CPI. Depreciation of the rupiah significantly increases the CPI, which means it causes inflation, while appreciation of the rupiah does not have a significant effect. Finally, increases and decreases in the money supply have a considerable positive effect on the CPI, which confirms the logic of the monetarist view that inflation is a monetary phenomenon. Efforts to reduce dependence on imports of food and energy commodities are the key to reducing risks when importing energy and food due to rupiah depreciation. Efforts to consistently stabilize the exchange rate can support controlling and stabilizing import prices. Energy and food subsidy policies are vital in controlling inflation due to increased world energy and food prices
Assessing the Role of Economic, Financial, and Institutional Dynamics on CO2 Emissions: Comparative Analysis of OECD and Western Balkan Regions
Full text linkThe main purpose of this research is assessing dynamics of economic, financial, and institutional developments on CO2 emissions for the period of twelve years, namely from 2010 to 2022, applying a comparative approach between 38 OECD and 5 Western Balkan countries. Further, the topic was chosen considering the role of environment and the degradation may cause economic, financial, and institutional developments. To specify this impact/correlation, secondary data was extracted from reliable sources. Additionally, the methodological approach in this study employs standard regression techniques adapted for panel data, including OLS, fixed effects (FE), random effects (RE), and Hausman–Taylor model instrumental variables IV. The analysis includes especially the Western Balkans and the OECD countries as well as their comparative aspect, and findings indicate the significant roles of inflation, business freedom, and notably, political stability in influencing CO2 emissions have been highlighted.The study’s contribution to literature is significant in two main ways. Firstly, it addresses a research gap by introducing a unique dataset and methodology for a specific time. Secondly, the importance of comparing the OECD countries with 5 Western Balkan countries is highlighted, providing valuable insights into differing economic, social, and environmental dynamics. This comparative approach of the study offers a practical framework that policymakers can use to develop effective strategies
Does Uncertainty in Climate Policy Affect Economic growth? Empirical Evidence from the U.S.
Full text linkThis study aims to empirically investigate the short- and long-term effects of climate policy uncertainty on economic growth in the U.S. for the years 1990-2020. In the study, total workforce, foreign direct investments, and financial development variables were also selected as control variables, and the effects of these variables on economic growth were examined. The study used the ARDL bounds test approach to investigate the cointegration between the variables. The findings confirm the existence of a positive and statistically significant relationship between climate policy uncertainty and economic growth in the sample period in the U.S. In addition, the effects of total labor force, foreign direct investments, and financial development on economic growth were found to be positive and statistically significant in the study
Predicting Mortgage Loan Defaults Using Machine Learning Techniques
Full text linkMortgage default prediction is always on the table for financial institutions. Banks are interested in provision planning, while regulators monitor systemic risk, which this sector may possess. This research is focused on predicting defaults on a one-year horizon using data from the Ukrainian credit registry applying machine-learning methods. This research is useful for not only academia but also policymakers since it helps to assess the need for implementation of macroprudential instruments. We tested two data balancing techniques: weighting the original sample and synthetic minority oversampling technique and compared the results. It was found that random forest and extreme gradient-boosting decision trees are better classifiers regarding both accuracy and precision. These models provided an essential balance between actual default precision and minimizing false defaults. We also tested neural networks, linear discriminant analysis, support vector machines with linear kernels, and decision trees, but they showed similar results to logistic regression. The result suggested that real gross domestic product (GDP) growth and debt-service-to-income ratio (DSTI) were good predictors of default. This means that a realistic GDP forecast as well as a proper assessment of the borrower’s DSTI through the loan history can predict default on a one-year horizon. Adding other variables such as the borrower’s age and loan interest rate can also be beneficial. However, the residual maturity of mortgage loans does not contribute to default probability, which means that banks should treat both new borrowers equally and those who nearly repaid the loan
A Study on the Effect of Imported Wheat Prices on Türkiye’s Pasta Exports: ARDL Approach
Full text linkTürkiye has possessed significant agricultural opportunities throughout its history. Although the effective utilization of these opportunities is a subject of debate today, the country still plays a significant role in the global trade of some agricultural products. When discussions about Türkiye’s exports are examined, a common complaint is the external dependency of the export industry. However, there are also debates about the diminishing agricultural advantages that have been present since the past. When these discussions are brought together, the trade of certain processed agricultural products, whose raw materials are agricultural products, also becomes a noteworthy research topic due to a similar import dependency. In this study, an analysis was conducted using time series and the ARDL model to investigate whether there is a relationship between Türkiye’s pasta export quantity, as one of the leading pasta exporter’s globally, and the prices of wheat imports from Ukraine, Russia, and Bulgaria. Also robustness checks enhanced the analyzes by employing FMOLS and DOLS methods. The research findings indicate variations in the impact of wheat prices from country to country on the quantity of pasta exported by Türkiye. Recommendations regarding the importance of wheat production in Türkiye are also provided as a result of the research
Novel Analysis on the Impact of FinTech Developments for Monetary Policy: The Case of Türkiye
Full text linkOne of the most noteworthy benefits that new technological opportunities bring to economies is Financial technologies (FinTech), which makes it easier for financial services to be cheap, fast, and accessible, especially by creating more digital payment services. This high rate of digitalization in payment services changes the liquidity preferences of economic agents daily and may affect the demand for central bank money. However, the prerequisite for the central bank to carry out monetary policy and be effective is accurately predicting the demand for its own money. Therefore, the developments in FinTech, in the last decade, are among the most attention-grabbing issues for demand in money, as well as being in the leading position for central banks, which followed intimately. In this context, the aim of this study is to reveal the impacts of developments in FinTech on monetary policy for Türkiye’s real money demand. For this purpose, in order to represent the developments in financial technologies, The FinTech index, which is formed for the first time in the relevant economy using the PCA method over the period 2012:Q1–2021:Q4, is included in the model where national income, interest rate, exchange rate, and inflation are explanatory variables. Results from the ARDL approach show that FinTech developments and demand for money are co-integrated, and also an increase in FinTech reduces money demand both in the short and long-run. The causality analysis handled with the Toda-Yamamoto approach has revealed the existence of a bidirectional causality relationship between FinTech and money demand. Accordingly, Fintech developments in Türkiye have a huge potential to shape economic agents’ liquidity preferences. To maintain the effectiveness of monetary policy, the policymakers in the central bank should closely follow FinTech developments and supervise and regulate activities that will create an alternative to its currency
Role of Innovation on Green Economic Growth: Empirical Analysis from the Countries of the Western Balkans
Full text linkThe impact of innovations on the growth of the green economy is a crucial aspect for a country’s economy. The promotion of these innovations and investments is also vital for sustainable and long-term development. This paper aims to present the role of innovation on green economic growth in the countries of the Western Balkans (Kosovo, Albania, North Macedonia, Montenegro, Bosnia and Herzegovina and Serbia) over a 13-year period, from 2010 to 2022.Data for the research were obtained from the World Bank and the Global Economy Database, where the study data type is Panel. The econometric models used are: the ordinary least squares (OLS) model, the Fixed Effect (FE) model, the Random Effect (RE) model and the Hausman Taylor (HTH) model. The dependent variable is green economic growth, while the independent variables include the innovation index (INV), research and development expenditures (R&D), information technology exports (ITE), patent applications from residents (PA), manufacturing output (MAN), business freedom index (BFI), investment freedom index (IFI), and economic freedom index (EFI). The findings of this paper show that the countries of the Western Balkans should promote key factors such as: innovation as an important driver, with a positive impact on green economic growth; research and development expenses; patent applications, and favorable business and economic environments to facilitate long-term green economic growth and promote environmental sustainability. The results indicate that the coefficient for innovation is positive (B=0.41) and statistically significant at the 1% level, supporting the hypothesis that the increase in innovation has a positive impact on green economic growth in the countries of the Western Balkans
Money Talks: A Holistic and Longitudinal View of the Budget Basket in the Face of Climate Change and Sustainable Finance Matters
Full text linkThis study presents a holistic and longitudinal view of the household budget basket concerning climate change and sustainable finance matters. It aims to understand their impact on the budget basket by examining the relationship between money, climate change and sustainable finance in a global economy for transition countries. Comprehensive CPI data were collected in Kosovo from 2002 to 2022, and data analysis was performed using statistical methods such as t-tests and proximity matrixes in SPSS. The results show significant differences between the average and desired values within the budget basket, indicating changes in consumer behavior, particularly in food expenditures, budget allocations, and climate change impacts. Interesting patterns emerge, such as correlations between bread, cereals, and meat, and the absence of fish in some purchases. Spending on clothing and other goods also deviates from desired values. These findings highlight the complex relationship between money, climate change, sustainable finance, and consumer spending patterns, and underscore the need to address the gap between expected and desired spending values for the global economy in transition economies. Future research should focus on analyzing household spending and its interaction with other factors to improve personal financial management and promote sustainable financial behavior in a larger number of global economies
The Effects of Policy Uncertainty on Stock Prices: Revisiting with Selected Countries
Full text linkReleased by Policy Uncertainty, the economic policy uncertainty (EPU) index is built on newspaper reports that contribute to uncertain conditions. The present study examines the impact of the EPU index on stock price indices on a selected group of countries. Variations in stock price indices are explained in a similar fashion as in previous studies but this study employs a new dataset. To obtain the speeds of adjustment to long-run equilibrium and short-run elasticities in every country, the framework of error correction was applied. This paper concludes that increased uncertainty has unfavorable short-run effects in all countries in the dataset. The present study also reports negative relation in the long run between high uncertainty and stock prices in some countries