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Inflation in Eastern China during the Second Sino-Japanese War
Full text linkAbstract. Although the history of the Japanese invasion of China is well-known and well-taught in China, the history of the currency war between China and Japan during the time is far less known. From 1937-1945, China and Japan engaged in not only a military war but also a "currency war." Japan, in an attempt to generate funds for the war from the war itself and to overthrow the Chinese government, attacked China's currency, the fabi (meaning “legal tender”), by printing counterfeit fabi notes and establishing “puppet” banks in China to issue mass amounts of puppet currencies to displace the fabi. These counterfeit notes and puppet currencies quickly circulated into the economy and led to a period known as the Great Chinese Inflation. Both the Nationalists (the governing party) and the Communists immediately took different actions to control inflation and the influx of counterfeit notes. The inflation was widespread not only in Nationalist and Communist-controlled areas, but also in Japanese-occupied areas of China.Keywords. China, Hyperinflation, Inflation, Second Sino-Japanese War, World War II.JEL. N15, N25, N45
Oil price shock and macroecomomic aggregates: Empirical evidence from Nigeria using the structural vector autogregressive (SVAR) approach
Full text linkAbstract. The continual fluctuation in oil price has continued to be a source of concern for economists and policymakers, both in Nigeria and abroad, given its sudden implications on existing and future policy plans as well as on some macroeconomic indicators. The Nigerian economy is an oil-dependent one and has about 90% of its export earnings come from oil and so is highly vulnerable to the sudden changes in oil prices either positive or negative. This paper evaluates the relationship between this unanticipated changes in oil price and some selected macroeconomic aggregates in Nigeria using the structural vector autoregressive (SVAR) methodology while employing its impulse response functions, to further explore the impact of oil price shock on the Nigerian economy over different time period. The SVAR result shows that oil price shock has a negative impact on all of the selected macroeconomic indicators such as economic growth, import, investment, inflation, and the exchange rate except export in the long term. Furthermore, the impulse response functions shows that the response of all selected macroeconomic indicators in this study to oil price shock were mixed but mostly negative over a time period of 12 months. The ADF unit root test confirmed that all series were stationary at I(1) only except inflation rate which was I(0) and I(1). The autocorrelation LM and White heteroscedasticity test confirms the non-rejection of the null hypothesis concluding that the residuals from the SVAR model were not serially correlated and homoscedastic. Based on the findings the study recommended the diversification of the economy to other key sectors such as agriculture and mining to help reduce the over-reliance on crude oil earnings also, measures should be taken to lower the cost of production for crude oil per barrel to minimize the impact of oil price shock on macroeconomic indicators.Keywords. Oil price shock, Macroeconomic indicators, SVAR Models, GDP, Impulse Response, Exchange rate, Inflation.JEL. C32, E30, F41
The determinants of moonlighting in the context of falling wages in Cameroon: A bivariate structural Probit model analysis
Full text linkAbstract. The aim of this article is to analyse the determinants of moonlighting in the context of falling worker’s wages in Cameroon. From a sample of Cameroonian workers with a main job a bivariate structural probit model analysis shows that the participation in moonlight jobs is inversely correlated with the level of education and the female gender. But it is positively correlated with both the wage of the main job and age. Moonlighting seems to play a different role in the transition from working life to retirement in Cameroon compared to developed countries.Keywords. Main job, Moonlight job, Wages, Participation, Probit model.JEL. C44, D70, D81, D91, H12, M51, Q54
David vs. Diversification: Ricardian trade theory compared to financial principles, in varied designs
Full text linkAbstract. The purpose of this article is to assess the extent, if any, to which trade leads to specialization, as hypothesized by the 19th Century economist David Ricardo, or diversification, as under financial principles, and if so, when does the transition between the two occur? What other political-economic factors lead to diversifying versus specializing trade as related to risk? Were these factors present in the great rise of international trade, during the 19th Century food blights and Corn Laws? Methodologically, this article uses: historical documents, a simple game theory model, an analysis of post-World War II crises, qualitative cases of risk-reducing institutions with descriptive statistics, and a statistical regression of randomly chosen countries, explaining diversification deductively. The results show that: contrary to orthodox, “Ricardian” trade theory, trade is risky, and causes expansion into diverse firms. But, countries may then turn towards specialization, as larger economic nations may be beter able to take-on risks. Still, such states may turn immobile institutionally, while organizations and diversified supply chains have helped mollify international crises. Additionally, the discussion indicates that countries may also trade similar goods, called intra-industry trade, which reduces risk, and also intermediate goods. The conclusion addresses policies for reducing risk in trade.Keywords. International trade, Diversification, Ricardo, Risk, International Monetary FundJEL. B1, B50, F11, F13, G10
Reflections on Zimbabwe’s past and future: Tradeoffs between the Lexus and the Baobab tree
Full text linkAbstract. In early 2018, President Mnangagwa seemingly struck a new tone to the Western world that was welcoming, rather than antagonistic to business investment (Mnangagwa, 2018). Nonetheless, recent and continued land expropriations, continued deficit spending and a severe shortage of cash liquidity have made any recovery a very challenging prospect. Outside observers now have differing outlooks on Zimbabwe, ranging from uniformly “negative” to “mixed”, “neutral” or “cautiously optimistic” (World Bank, 2018; Mining Review Africa, 2018; Mdzungairi, 2018) My recent take on the country in an op-ed for The Wall Street Journal sided with the cautiously optimistic group (Richardson, 2018), but it appears I was too sanguine.Keywords. Reflections, Baobab tree, Zimbabwe, Tradeoffs.JEL. B1, B50, F11, F13, G10
Evaluating the Fijian board of commissioners of currency
Full text linkAbstract. This paper describes the history of Fiji’s currency board, which existed from 1914 to 1973, and analyzes the extent of its orthodoxy through statistical analysis of its annual financial statements. An accompanying spreadsheet workbook contains all related data and analysis.Keywords. Fiji, Currency board, Devaluation, Orthodoxy.JEL. E59, N17
Case analysis: Enron; Ethics, social responsibility, and ethical accounting as inferior goods?
Full text linkAbstract. In 2001 soon after the Asian Crises of 1997-1998, the DotcomBubble, 9/11, the Enron crises triggered a fraud crisis in Wall Street that impacted the market to the core. Since then scandals such as the Lehman Brothers and WorldCom in 2007-2008 and the Great Recession have surpassed it, Enron still remains one of the most important cases of fraudulent accounting. In 2000’s even though the financial industry had become highly regulated, deregulation of the energy industry allowed companies to place bets on future prices. At the peak of the dotcom bubble Enron was named as a star innovator but when the dotcom bubble burst, Enron’s plan to build high speed internet did not flourish and investors started to realize losses. Furthermore, the financial losses of the operations were hid using the market to market accounting technique instead of book value and using special purpose entities to hide debt. The root cause that was identified as a company with a toxic corporate culture focused on officer compensation rather than social responsibility and hence faulty leadership. Is it possible then that; ethical accounting practices, social responsibility and ethics all become inferior goods as income rises in an ‘irrationally exuberant’era?Keywords. Enron (ENE, ENRN), Dotcom bubble, Accounting fraud, Deregulation, Speculation, Corporate culture, Social responsibility, Government intervention, Risk management, Consumer behavior, Energy markets.JEL. N0, M1, M4, M12, M14, G32, K4, K32, H12
Effect of economic growth and inflation on unemployment: An empirical analysis in Senegal from 1991 to 2018
Full text linkAbstract. Nowadays, unemployment is a big issue for policymakers. The high rate of unemployment can lead to instability such as crime and poverty. For this reason, unemployment can be viewed as heartbreaking for the country’s economy. This paper mainly studies the relationship between Senegal’s unemployment rate, economic growth and the inflation rate for the period 1991-2018. In this study, the autoregressive distributed lag (ARDL) modeling approach (Pesaran & Shin, 1999) and the bound test of cointegration were applied. Furthermore, the Augmented Dickey-Fuller Test (ADF) and Phillips Perron (PP) was applied to the test unit root or stationary issue. Finally, the Granger Causality Test also was conducted to check if it exists a unidirectional or bidirectional causality among variables. The findings show a negative long-run and short-run relationship between unemployment, growth, industry and age dependency ratio whereas it appears a positive relationship between unemployment and inflation in both periods. It is also indicated that there is no Granger causality relationship between unemployment, economic growth, and inflation. Whereas unemployment and economic growth have a Granger causality on the industry.Keywords. Unemployment rate, Inflation, Economic growth, ARDL, Granger Causality.JEL. F53, E31, J60
The Hungarian hyperinflation: A look into the production side
Full text linkAbstract. This paper focuses on what happened to industrial production during and after Hungary’s record-breaking hyperinflation of 1945-46 – an angle that has not been covered extensively by previous authors. The industries covered are coal, railways, agriculture and mining. This paper then explores the relationship between post-World War II production and hyperinflation, as well as Hungary’s recovery from hyperinflation and World War II relative to other countries.Keywords. Hungary, hyperinflation, Orthodoxy.JEL. N14, N17