Effect of Remittance Inflows on External Debt in Developing Countries

This paper analyzes the effect of remittance inflows on external debt in developing countries, by identifying international reserves as a potential transmission channel. Using panel data over the period 1970–2017 and covering 50 low-and middle-income countries worldwide, we find a positive and significant effect of remittance inflows on the external debt-to-GDP ratio. We also find a negative and significant effect of international reserves on external debt. After controlling for international reserves, the effect of remittance inflows on external debt increases;it remains positive and significant. The results suggest that the role of international reserves as a self-insurance mechanism, and the Dutch disease effect related to remittance inflows are at play. In addition, we find negative and significant effects of economic growth and savings-investment gap on external debt. We also find positive and significant effects of the nominal exchange rate and the United States lending interest rate on external debt. We discuss the policy implications of these findings, while highlighting factors that policymakers should focus on for containing external debt in developing countries in the post-COVID-19.

A research on the using of bank loans in accommodation companies traded in Borsa Istanbul

The main purpose of this research is to analyze the using of bank loans provided by the banking sector in accommodation companies traded in Borsa Istanbul in terms of type, maturity and cost. The study also examined the impact of the Covid-19 outbreak on the accommodation companies' use of bank loans. In this context, the level of bank loan usage, the type of bank loans, interest rates, maturity and their distribution in currency between the years 2009 and 2021 were tried to be determined by ratio and document analysis. As a result of the analysis, it was determined that 10,84% of the assets in accommodation companies are financed by bank loans, the use of bank loans in total liabilities is 19.92% and short-term bank loans are preferred. It was also detected that accommodation companies mainly benefit from business loans, daily spot loans, revolving loans, current account loans, foreign exchange earning loans, vehicle loans and investment loans in Turkish Lira, Dollar, Euro and Sterling with interest rates varying every year. However, compared to the pre-Covid-19 outbreak period, it was observed that the level of bank loans used by accommodation companies first decreased, but then increased again.

Real Estate Insights The continuing uncertainty of property investment markets – an outlook for the UK in 2023

PurposeThe aim of this Real Estate Insight is to comment upon the outlook for real estate investment in the United Kingdom (UK) at the beginning of 2023 in light of global inflation brought about by the pent-up post-pandemic demand push for goods and services and the exacerbation of the Ukraine/Russia conflict.Design/methodology/approachThis Real Estate Insight will comment upon changes in the investor's view of the UK economy and the relative attractiveness of the different property sectors and the shift in thinking post-pandemic.FindingsThis paper will consider a number of scenarios and possibilities flowing from the current uncertainties in the property market and the wider economy.Practical implicationsAs with all property investment, the value and performance of the property assets is interlinked with the use and demand of different property types. Understanding the supply and demand drivers provides investors with a reasoned conjecture of how the property market may perform going forward.Originality/valueThis is a review of the UK market in relation to post-COVID-19 changes to supply and demand at both an operational and investment level.

How could a new universal code of conduct prevent and resolve sovereign debt crises? Proposals for design and implementation

In response to the COVID‐19 crisis, government spending around the world has increased significantly and will continue to grow as interest rates rise. In view of protracted and costly sovereign debt restructurings in the previous decades, contractual and noncontractual instruments of the Global Debt Governance‐system have been insufficient to prevent and to resolve sovereign debt crisis. While statutory and comprehensive approaches to resolve sovereign debt crises lack the political support such as an insolvency procedure for states incomprehensive contractual approaches including collective action clauses (CACs) cannot fully secure a comprehensive debt resolution. Codes of conduct could constitute an essential instrument to contribute to preventing and resolving sovereign debt crises. There are two main impediments for establishing and adopting such codes of conduct effectively. First, a range of codes of conduct with different institutional settings and principles have been established − and partly implemented − including those of the Institute of International Finance, the United Nations, the G20, the IMF and the OECD. However, differing institutional settings do not contribute to preventing or effectively resolving debt crises when the actors concerned apply different codes of conduct. We suggest a new universal code of conduct in which the elements of the various proposals made by the public and private sectors would be combined. Second, the global economic governance structure lacks incentives for creditors and debtors to adhere to this new universal code of conduct. This paper proposes measures providing incentives for creditors and debtors to apply the nonstatutory code of conduct.

A shot in the arm: The effect of COVID-19 vaccine news on financial and commodity markets

We analyze the impact of COVID-19 vaccine announcements by leading vaccine companies on the financial and commodity markets from January to December 2020. We show that the vaccine announcements had varied and economically significant impacts on asset prices. The announcements moved interest rates, stock markets in the U.S. and numerous other countries as well as commodities used in transportation and some agricultural commodities. We show that the stock and commodity markets that experienced larger declines at the beginning of the pandemic receive a larger boost from good vaccine news. We also find that the vaccine news affects stock returns through changes in the expectations of the corporate cash flows and the expected equity risk premium. © 2023 The Eastern Finance Association.

Household Savings and Negative Interest Rates

This paper analyses determinants of household savings in a model based on an extension of the disequilibrium savings theory. These extensions follow from the life-cycle, permanent-income and Ricardian-equivalence theories. Based on panel data of 20 countries from the period 2000–2020, fixed-effect least squares estimation procedures are used. The analysis provides evidence that negative interest rates lead to a statistically and economic significant increase in savings. This implies that stimulating household consumption with a monetary policy of negative interest rates is counter-productive. The positive effect of income uncertainty and lagged saving rates gets smaller for negative interest rates, weakening the support for the disequilibrium-savings theory. Larger government deficits increase savings even more when rates are negative, strengthening the Ricardian equivalence effect. The effect of negative interest on the predictions of the life-cycle and permanent-income theories is mixed.

Do the macro and global economic factors drive the nonperforming loans in GCC economies?

PurposeThe current study aims to investigate the determinants of nonperforming loans (NPLs) in the GCC economies during the period spanning 2000 to 2018. It also examines whether the worldwide financial crisis of 2007–2008, which brought the issue of non–performing loans to the greater attention of academics and policymakers, had a substantial impact on NPLs in this region.Design/methodology/approachThe sample consists of 53 conventional banks from GCC countries, and the basic data for the study is obtained from various sources such as Bankscope, IMF World Economic Outlook, World Bank and Chicago Board of Options Exchange Market Volatility Index. The estimations were done by dynamic panel data regression modeling using system generalized methods of moments.FindingsThe findings reveal that both, the non-oil real GDP growth rate and inflation have favorable effects on NPLs. On the other hand, domestic credit to the private sector and the volatility index have an adverse effect on NPLs. Furthermore, the period-wise analysis shows that the relevance and significance of the determinants of NPLs vary between the precrisis and postcrisis periods. It is also reflected through the intercept dummy, which is found to be significant, indicating that the financial crisis, as a global economic factor, had a significant impact on NPLs. A number of robustness tests are applied, which indicate that the results are mostly robust and consistent in terms of the significance of the explanatory variables and the direction of their relationship with the dependent variable.Practical implicationsPolicymakers and bank authorities must strive to maintain a healthy economy and implement macroprudential policies to improve the financial stability of banks and reduce credit risk.Originality/valueTo the best of the authors' knowledge, this is likely the first study that empirically investigates the influence of the financial crisis on NPLs in the context of GCC economies. In addition, the research spans 19 years to produce more conclusive results.

The Differential Effects of Oil Prices on the Development of Renewable Energy in Oil-Importing and Oil-Exporting Countries in Africa

The shift to renewable sources of energy has become a critical economic priority in African countries due to energy challenges. However, investors in the development of renewable energy face problems with decision making due to the existence of multiple criteria, such as oil prices and the associated macroeconomic performance. This study aims to analyze the differential effects of international oil prices and other macroeconomic factors on the development of renewable energy in both oil-importing and oil-exporting countries in Africa. The study uses a panel vector error correction model (P-VECM) to analyze data from five net oil exporters (Algeria, Angola, Egypt, Libya and Nigeria) and five net oil importers (Kenya, Ethiopia, Congo, Mozambique and South Africa). The study finds that higher oil prices positively affect the development of renewable energy in oil-importing countries by making renewable energy more economically competitive. Economic growth is also identified as a major driver of the development of renewable energy. While high-interest rates negatively affect the development of renewable energy in oil-importing countries, it has positive effects in oil-exporting countries. Exchange rates play a crucial role in the development of renewable energy in both types of countries with a negative effect in oil-exporting countries and a positive effect in oil-importing countries. The findings of this study suggest that policymakers should take a holistic approach to the development of renewable energy that considers the complex interplay of factors, such as oil prices, economic growth, interest rates, and exchange rates.

Reinstating fiscal policy for normal times: Public investment and Public Jobs Programmes

This paper upholds the classical Keynesian position that a laissez-faire market economy lacks a spontaneous tendency to full employment. Focusing on the UK case, it argues that monetary policy could not prevent the economic collapse of 2008-9 or achieve full recovery from the Great Recession that followed. The paper then outlines the case for fiscal policy to regain a permanent status of primacy in modern macroeconomic management, beyond the pandemic emergency. It distinguishes between public investment and automatic stabilisers, reducing discretionary actions to a minimum. It presents the case for re-empowering the State'spublic investment function and for reforming the system of automatic counter-cyclical stabilisers by means of public jobs programmes.

THE POSITION OF THE GOVERNMENT AND SOCIETY OF THE CZECH REPUBLIC TOWARDS THE WAR IN UKRAINE

The aim of the article is to present the position of the Czech government and the society of this country towards the war in Ukraine. The text is an attempt to conduct a comparative analysis of the position of the Czech government and the part of society that has been opposing the government's policy towards Ukraine for some time. The author presented the main consequences of the Czech government's support for Ukraine, which are related to the post-pandemic crisis. These include, above all, problems with the supply of oil, natural gas and nuclear fuel for Czech nuclear power plants. Social problems include high inflation, rising interest rates and rising prices ofbasic commodities. In the summary, synthetic conclusions were drawn that confirm the discrepancies between the government's policy and the position of that part of society.

Influence of the global environment on capital flows in the London Office market

PurposeThe London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past decade. However, the increase in global uncertainties in recent years due to socio-economic and political trends highlights the need for more insights into the behaviour of international real estate capital flows. The purpose of this study is to evaluate the influence of the global and domestic environment on international real estate investment activities within the London office market over the period 2007–2017.Design/methodology/approachThis study adopts an auto-regressive distributed lag approach using the real capital analytics (RCA) international real estate investment data. The RCA data analyses quarterly cross-border investment transactions within the central London office market for the period 2007–2017.FindingsThe study provides insights on the critical differences in the influence of the domestic and global environment on cross-border investment activities in this office market, specifically highlighting the significance of the influence of the global environment in the long run. In the short run, the influence of factors reflective of both the domestic and international environment are important indicating that international capital flows into the London office market is contextualised by the interaction of different factors.Originality/valueThe authors provide a holistic study of the influence of both the domestic and international environment on cross-border investment activities in the London office market, providing more insights on the behaviour of global real estate capital flows.

The Office Real Estate Market: From COVID Disruption toUncertain Future

The Pre-COVID Decline Prior to the COVID-19 pandemic, the U.S. office real estate market had been subject to contraction for approximately a decade as businesses tried to lower overhead by implementing various "open office" concepts such as hoteling and/or hot-desking. For the tenants that are signing on now, there is evidence that they are asking for even less space-per-worker than prior to the pandemic;with the average being down to 175s.f. of office space per worker.M The nature of most commercial office leases blunted the effect of this COVID work-from-home move, at least for a little while. Certain property owners In especially desirable locations, or with certain marquee tenants who have all in-offlce operations, have been able to take this option and ride though lease renewals In the past three years without any material hit on their bottom-line. Rising Interest rates, which started the pandemic at 1.5% to 1.75% for the federal funds rate, and had dropped to 0% to .25% a few days Into the pandemic, have risen steadily In the last few months to 4.5% to 4.75% as of early February 2023.

The impact of simultaneous shocks to financial markets and mortality on pension buy-out prices

In this paper, we determine the fair value of a pension buyout contract under the assumption that changes in mortality can have an impact on financial markets. Our proposed model allows for shocks to occur simultaneously in mortality rates and financial markets, so that strong changes in mortality rates can affect interest rates and asset prices. This approach challenges the common but very strong assumption that mortality and market risk drivers are independent. A simulation-based pricing framework is applied to determine the buyout premium for a hypothetical fully funded pension scheme. The results of an extensive sensitivity analysis show how buyout prices are affected by changes in mortality and financial markets. Surprisingly, we find that the impact of shocks is similar whether or not these shocks occur simultaneously or not, although there are some differences in annuity prices and buyout premiums. We clearly see that the intensity and severity of shocks, and asset price volatility play a dominant role for buyout prices.

Central Bank Independence: Where Do We Stand?

Central bank independence (CBI) has long been considered a key aspect of effective monetary policy, as it allows central banks to make decisions free from political interference. However, the global financial crisis of 2007–2008 and recent events such as the COVID-19 pandemic and armed conflict in Ukraine have threatened CBI. This article aims to examine the impact of these events on CBI in OECD member countries, both on a de jure and de facto level, using a variety of indicators. The results suggest that CBI has largely remained unchanged in most countries, but there is disturbing evidence of political interference in CBI in the Republic of Türkiye.

Financial stability and monetary policy of the Central Bank of West African Countries: a Markov-Switching model

Purpose This paper aims to examine the response of monetary policy to financial instability in the West African Economic and Monetary Union.Design/methodology/approach Through annual aggregated data from 1970 to 2019, the empirical strategy is based on the Markov regime-switching model with fixed probabilities.Findings The results revealed that the monetary policy of the central bank of the West African Economic and Monetary Union is characterized by two regimes (calm and distress) with respect to the trend of financial stability. The authors also found that the occurrence of the calm regime was likely greater than that of the distress regime. In addition, the calm regime is longer than the distress regime. The authors finally revealed that the central bank reacts to financial instability risk by increasing its short-term interest rate when financial instability reaches a threshold.Research limitations/implications The limitation of this study is the unavailability of monthly or quarterly data that are more suitable for the methodological approach adopted.Originality/value This study is the one to estimate the response of the Central Bank of West African Countries to financial stress using a novel approach based on the Markov-Switching regression.

The Link between Bitcoin Price Changes and the Exchange Rates in European Countries with Non-Euro Currencies

This paper contributes to the literature dedicated to the interlinkages between cryptocurrencies and currencies by investigating whether Bitcoin price movements affect the exchange rates of a sample of nine European countries with non-euro currencies. By resorting to the novel unconditional quantile regression, we show that there is a statistically significant link between Bitcoin price movements and changes in nominal exchange rates. In normal market conditions, an increase in the price of Bitcoin can be associated with an appreciation of the currencies from our sample, while during the COVID-19 pandemic, the relationship inversed. In addition, we find heterogeneities in this relationship, depending on the level of change in the nominal exchange rate. The results emphasize the relevance of Bitcoin price movements to the conduct of monetary policy through the exchange rate channel and that investors in cryptocurrencies and various financial assets denominated in the currencies from our sample can benefit from diversification by including both types of assets in their portfolios.

THE IMPACT OF COVID 19 PANDEMIC ON HIGHER EDUCATION SECTOR IN AFRICA

The wave of Covid 19 that started in 2020 speedily spread from one part of the world to another. It was quickly carried into the African continent by human migrants that have had contacts with infected persons and objects. Consequently, Covid 19 began to threaten lives and properties of many Africans. While the continent faced the dangerous pandemic, individuals and governments struggled to cope with the crisis that the pandemic has introduced. Many sectors of the economy of African states suffered in different forms, from health to tourism to the education sector. This study focused on the impact of Covid 19 pandemic on higher education sector in Africa. The study used documentary analysis and key informant interviews that were interpreted using theories of knowledge in science education to reveal that the pandemic affected physical teaching and learning. It created hunger, fear, death, lockdown, visa, migration, and vaccination problems as well as the introduction of online mode of teaching and learning. The study recommended the strengthening of the online mode of teaching and learning across the higher institutions of learning in Africa through public and private support, as a way of ensuring that the continent is up to date with the realities of the fast-changing world

House purchase intention during pandemic COVID-19 in Surabaya, Indonesia

PurposeSince the COVID-19 occurred, large-scale social restriction (Pembatasan Sosial Berskala Besar-PSBB) has taken place, and that has led family members to carry out their activities at home. This condition impacts both directly and indirectly the intention of house purchase, as a result of lifestyle changes during the pandemic. A house now serves as a residence, office, as well as school. This study aims to determine the influences of physical attributes, neighborhood preferences, financial concerns, financial risk preferences, health risk preferences, and COVID anxiety towards house purchase intention.Design/methodology/approachThis associative study was carried out from February to May 2021 in the residents of Surabaya aged 20–34 years old as prospective first-home buyers, with relatives at risk of contracting COVID-19 (belong in the susceptible group or live with a family member who is prone to the COVID-19 virus, including having a comorbidity, elderly (= 60 years old), having a low immune system or autoimmune disease, obese). Data were gathered using online questionnaires from which 226 respondents were acquired. Data were analyzed using the PLS-SEM 3.0 technique.FindingsThe results showed that physical attributes, neighborhood preferences, financial concerns, financial risk preferences, and COVID anxiety significantly influence house purchase intention. Furthermore, neighborhood preferences, financial risk preferences, and COVID anxiety as moderating variables also significantly influence house purchase intention.Practical implicationsThis study was carried out in Surabaya as the second-largest city after Jakarta with the highest COVID-19 mortality rate, which is useful for exploring the lifestyle changes and property demand as a result of the pandemic;Developers gain a business opportunity by offering properties that are multifunction and health-oriented.Originality/valueThe COVID-19 pandemic becomes a trigger for a change in the property market that needs to be studied further.

Role of monetary policy in economic growth and development: from theory to empirical evidence

PurposeThis article examines the effects of credit to private sector on the business and trade activities. The effectiveness of rapid expansion in public and private borrowing through state's intervention after COVID-19 pandemic has been assessed in this study.Design/methodology/approachThe model to determine the role of credit expansion is based on four equations estimated through panel least square technique on 18 years data of 186 countries.FindingsIt is concluded that credit to private sector and external debt improve the investment in infrastructure, which is a significant determinant of gross domestic product growth. Empirical evidences corroborate that higher number of firms using banks to finance their investment and the volume of broad money determine the magnitude of credit to private sector.Originality/valueThis study explores some new evidences and aspects of the credit financing which have not been discussed in this way before.