60853 research outputs found
Sort by
Nonlinear Macroeconomic Granger Causality: An ANN Input Occlusion Approach on MSSA-Denoised Data
Get PDFThis paper introduced a novel methodology for measuring nonlinear Granger causality in macroeconomic time series by combining Multivariate Singular Spectrum Analysis (MSSA) for data denoising with Artificial Neural Network (ANN) input occlusion for causal inference. We applied this framework to five countries, analyzing key macro-financial variables, including yield curve latent factors, equity indices, exchange rates, inflation, GDP, and policy rates. MSSA enhanced data quality by maximizing signal-to-noise ratios while preserving structural patterns, resulting in more stable ΔMSE values and reduced error variability. ANNs were trained on MSSA-denoised data to predict each target variable using lagged inputs, with input occlusion evaluating the marginal predictive contribution of each input to derive causality p-values. This approach outperformed traditional VAR-based Granger causality tests, identifying 38 significant causal relationships compared to 24 for VAR. Cross-country analysis of variables revealed differences in transmission mechanisms, monetary policy effectiveness, and growth-inflation dynamics. Notably, feature importance rankings showed that policy rates and stock market indices predominantly drove macroeconomic outcomes across countries, underscoring their critical role in economic dynamics. These findings demonstrated that combining MSSA and ANN input occlusion offered a robust framework for analyzing nonlinear causality in complex macroeconomic systems
Modern Economy and Reconsideration of the Equilibrium Assumption : Is it possible to reconstruct "effective" economics?
Get PDFThis paper challenges traditional economics' reliance on Adam Smith's "invisible hand" and its assumption of equilibrium derived from nominal variables, arguing that this hinders economists' understanding of modern economies. It proposes "dynamic equilibrium," where stability arises from interactions between agents' internal characteristics and external factors.
A key equation derived from the paper is "R_t-ρ=n+D_a-(U_(θa)θ)/U_c". Its left-hand side, the discrepancy between asset return (R_t) and time preference rate (ρ), is balanced by two forces on the right-hand side: retaining capital within the economy (the marginal utility of assets compared to consumption) and promoting its diffusion and dilution (capital outflow (D_a) and population growth (n)). That suggests that if time preference is an inherent trait, economies with a lower time preference will have a funds surplus, but this will be partially offset by capital outflow or a weak asset preference, so the decline in the real interest rate will be limited, and vice varsa.
The paper argues that while conventional economics has focused on the left-hand side of this equation, understanding the right-hand side is crucial. This mechanism will be able to pragmatically explain various modern economic phenomena through the immobilization of the relations between debtor and creditor even when agents are rational and markets are efficient : for example, long-term global imbalances, deflationary equilibrium in developed economies, and inequalities of income and assets and so on. Ultimately, the paper reinterprets modern economic disequilibrium as a result of rational agent behavior, offering insights for more effective macroeconomic policy
Public Investment Financed by Seigniorage, Money Supply Control and Inflation Dynamics in Sub-Saharan African Countries
Get PDFIn this study, we attempt to construct an overlapping generations model designed to theoretically analyze the macroeconomic situation of sub-Saharan African countries. Our aim is to examine the conditions necessary for the effective functioning of infrastructure development financed by seigniorage and monetary control policies in some sub-Saharan African countries with stagnant macroeconomic performance. We also consider the implications of our model in terms of inflation and population aging. As a result, when the government selects the monetary growth rate that maximizes the long-term growth rate of gross domestic product (GDP), the absolute value of the monetary growth rate elasticity of the private capital--public capital ratio must be equal to the reciprocal of the private capital elasticity of GDP, which is greater than 1. Thus, seigniorage per se is not the cause of economic stagnation in some sub-Saharan African countries. If maximizing social welfare is equivalent to maximizing the long-term growth rate of GDP in terms of selecting the public investment share, then the public investment share elasticity of the private capital--public capital ratio is zero. Moreover, when the initial value of the private capital--public capital ratio is sufficiently low (high) level, inflation (deflation) occurs during the transition process to a steady state. Furthermore, population aging does not necessarily constitute a bottleneck for economic growth in sub-Saharan African countries
Import tariff transmission in a production network
Get PDFWe find evidence that US manufacturing sectors experience US import tariffs
either as supply-side or demand-side shocks, depending on the location of the sector and the affected products in the US production network. Using local projections in a panel of US manufacturing sectors, we find that US import tariffs – in particular including the 2018-19 tariff hikes – led to sectoral output contractions via two different channels: (1) Tariff increases act as negative supply shocks for sectors that use the affected goods as input in production and thus face rising input costs. (2) Tariff increases act as negative demand shocks for sectors whose customers experience the tariff increase as a negative supply shock and reduce their production. Though the aim of tariffs often is to protect local industries, we find only limited evidence of such a protective effect. Overall, our finding suggests that tariffs markedly reduce US manufacturing production and that the role of input-output linkages is key for understanding the transmission of import tariff shocks
Praxis Core: A Multi-Layered Structural Intelligence Engine for Foreign Exchange Execution Under Entropic Regime Shifts
Get PDFForeign exchange markets are not merely venues for speculative profit—they are systemic transmitters of macroeconomic stability and instability. Volatile currency regimes can exacerbate trade imbalances, distort capital flows, and trigger policy interventions that carry long-term consequences for national economies. Yet, much of the existing algorithmic trading infrastructure remains tethered to predictive fragility, relying on static indicators that collapse under regime shifts and volatility clustering.
Praxis Core introduces a structural intelligence framework that reframes FX execution as an adaptive, state-aware process directly aligned with macroeconomic stability objectives. By integrating a four-state Markov-Switching GARCH model—Bayesian-smoothed to stabilize rare transitions—with dual volatility and orderflow memory processes, Praxis Core detects and responds to regime mutations before they cascade into macro-level dislocations.
Execution is anchored not to arbitrary price triggers, but to structural market topology—liquidity-depth contours, volatility surface curvature, and macro-sentiment alignment—ensuring trades are positioned where they absorb, rather than amplify, systemic stress. Risk is adaptively modulated using non-Gaussian tail modeling, regime-weighted sizing, and memory-aware throttling, preserving capital during high-impact macro events such as central bank interventions or geopolitical shocks.
With a compliance-grade cryptographic audit layer, atomic-time synchronization, and fully transparent decision logic, Praxis Core offers a verifiable, institution-ready mechanism that bridges microstructure precision with macroeconomic responsibility. In doing so, it positions FX execution not only as a profit engine but as a stabilizing force—capable of mitigating spillover volatility that would otherwise propagate through global trade and investment channels
Rational Expectations in Economic Theory
Get PDFThis paper examines the rational expectations hypothesis, a central concept in modern macroeconomics. It explores the theoretical foundations, methodological implications, applications in macroeconomic models, empirical evidence, criticisms, and relevance for contemporary policy analysis. The analysis highlights both the strengths and limitations of rational expectations, situating it as a benchmark assumption that continues to shape modern economic thought
What Can Drive Socioeconomic Development in MENA High Income and Upper-Middle-Income Countries? A Panel Causality Analysis
Get PDFThis study investigates the short- and long-run causality linkages between the socioeconomic development (SED) measured by the GNI per capita and 4 groups of selected factors including information and communications technology (ICT), political, demographic, and macroeconomic indicators in a panel of 19 countries classified as High Income (HIC) countries or Upper-Middle-Income countries (UMIC) from MENA zone between 2008-2021. For comparison analysis between groups/countries, the research design is based on three Granger non causality tests type. The first is the (Dumitrescu & Hurlin, 2012) panel non-causality test, the second is the panel VAR Block Exogeneity Wald Tests, and the third is the panel ARDL ECM-based Granger non causality tests. The results suggest that each group of the considered factors is a predictor with effects depend on the type of factors or the income level of the country. Based on the descriptive analysis and more sophisticated econometric techniques, the difference is obvious in the short- and long-term. Indeed, in the short-run, besides agriculture indicator, the GNI for each group is affected by at least one of the ICT indicators in addition to tourism for the HIC and demographic and political factors for the UMIC. In the long-run, GNI is caused by demographic factors for HIC (except for Kuwait and Libya) and economic factor (except for Oman), ICT factors for Iran, Kuwait, Oman, and Lebanon and all UMIC except Jordan. In addition, the political (demographic) factors for Lebanon, Saudi Arabia, and Turkey (for all UMIC except Syria), and the economic (political) factors for Jordan, Egypt, and Tunisia (Algeria and Morocco) contribute to the GNI prediction in the long-run. The findings come in help for Governments and policymakers to adjust their policies and to design the most adequate policy according to the causality linkages between GNI and the selected factors.
I didn’t know either: how beliefs about norms shape strategic ignorance
Get PDFPeople often avoid information to evade social obligations and justify selfish behavior. However, such behavior unfolds within a social context, where beliefs about others’ actions shape individual choices. This study examines how social expectations, shaped by perceived norms and decision framing, influence individuals’ willingness to avoid information. In a modified moral wiggle-room game, participants first predict how often others acquired information, then receive feedback about others’ information-seeking behavior before making their own decision as the dictator. The experiment manipulates (1) the feedback on norms participants receive, reflecting varying rates of information avoidance, and (2) whether they know in advance that they will be making the decision themselves, thereby inducing either a \textit{self-referential} or \textit{socially} framed perspective. Individuals were more likely to acquire information when exposed to norms favoring transparency, with pessimistic participants—those who believed ignorance was common—responding most strongly. Optimistic individuals showed little adjustment. Contrary to expectations, there was little evidence that participants distorted their beliefs about others to justify selfish behavior. However, a notable gender difference emerged: female participants, when primed with self-referential framing, were significantly less responsive to normative cues than males. Finally, an exploratory comparison with previous experiments suggests that belief elicitation itself, even in the absence of normative cues, significantly reduces information avoidance, highlighting a promising and scalable intervention for promoting transparency
Market uncertainty developments and the minerals industry
Get PDFThis paper analyses the reaction of the minerals industry to market uncertainty developments in South Africa. This is achieved by augmenting a Taylor1993 rule type central bank monetary policy reaction function with the Chicago Board Options Exchange's (CBOE's) Volatility Index (VIX), or market uncertainty, index. The empirical results provide evidence of a statistically significant effect of an increase in market uncertainty on output of the minerals industry, which decreases and bottoms out after 3 months, where this effect is statistically significant up to 6 months. The results further show that following an increase in output of the minerals industry, the market uncertainty index decrease slightly and bottoms out after 2 months, with a statistically significant effect up to 2 months, which indicates a weak feedback effect between market uncertainty and output of the minerals industry. Market uncertainty is, thus, important economic activity, hence policymakers should continue to monitor the developments in market uncertainty to support economic activity as well as the minerals industry
Innovative Climate Finance in Ghana: A Systematic Review of Green Bonds, Blended Finance, and Climate Funds
Get PDFThis systematic review investigates the potential of innovative climate finance instruments, specifically green bonds, blended finance, and international climate funds, to support Ghana’s climate resilience goals without compromising fiscal sustainability. Drawing on literature from 2000 to 2025 and guided by the Environmental Kuznets Curve (EKC), Sustainable Development Finance Theory, and Debt Sustainability Analysis (DSA), the study synthesises evidence from academic articles, policy documents, and institutional reports. The findings indicate that although these instruments offer strategic pathways for mobilising investment and diversifying Ghana’s financing mix, their effectiveness is undermined by regulatory fragmentation, limited institutional capacity, and procedural inefficiencies. Green bonds are constrained by governance and disclosure gaps, blended finance suffers from weak coordination and legal ambiguities, and access to international climate funds is hindered by administrative bottlenecks. The review’s originality lies in its integration of fiscal sustainability and climate finance through a multi-theoretical lens, offering a novel synthesis of how Ghana can strategically scale climate finance amid debt constraints. To enhance the impact of these mechanisms, the study recommends a comprehensive green finance framework, institutional reform, and integration of climate-risk assessments into public financial management systems. This work contributes to bridging research and policy by outlining actionable reforms and calling for econometric research to evaluate fiscal-environmental outcomes