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1.
IUP Journal of Applied Finance ; 28(2):5-23, 2022.
Article in English | ProQuest Central | ID: covidwho-1905127

ABSTRACT

Many research studies related to the impact of monetary policy and macroeconomic variables have already been conducted, but studies on combining this with global factors and its shocks are very few. To fill this research gap, the paper tries to find out the combined effect of global factors, macroeconomic variables, and monetary policy on 10-year Indian government bond yield using Structural Vector Autoregression (SVAR) and Autoregressive Distributive Lag (ARDL) model. This paper is designed to analyze the impact of various variables on 10-year Indian government bond yield, in the context of its continuous exposure to global factors like oil price shocks and changes in macroeconomic variables. The empirical findings, based on monthly data relating to the period January 2001 to April 2021, suggest that monetary policy has had a considerable impact on bond yields over a long-term horizon, which appears to be consistent with the prevailing Keynes theory. However, the output has the least impact on bond yield. This may be because the monthly data that is used in the study restricts to use GDP. Hence the Index of Industrial Production (IIP) data is used. Further, inflation shocks increase bond yields and global factors like oil price shocks have detrimental effects on bond yields for a long-time horizon of 24-36 months, whereas an increase in the 10-year US government bond yield results in an increase in 10-year Indian government bond yield.

2.
Globsyn Management Journal ; 15(1/2):241-253, 2021.
Article in English | ProQuest Central | ID: covidwho-1905032

ABSTRACT

"Due to the rapid development of data and communication technologies, multiple conditioning in our daily life have been intermingled online and they become more adaptable and more effective. A huge growth in number of online users has activated virtual term concepts and created a new business miracle which is cryptocurrency to ease the financial conditioning similar as buying, dealing and trading. The application of virtual currency has come broad in numerous different systems in recent times. Virtual money isn't completely controlled and regulated hence utmost of the countries haven't acknowledged this currency in their profitable conditioning. This document investigates about cryptocurrency present legitimacy as well as future government moves impact on these currencies. The paper also analyses investment risks in both Bitcoin and Gold countries have responded in terms of regulations & legislations towards crypto currencies to develop a crystal-clear picture of its impact on various laws in India in order to function it".

3.
Journal of Applied Corporate Finance ; 34(2):82-99, 2022.
Article in English | ProQuest Central | ID: covidwho-1891587

ABSTRACT

The U.S. Federal Reserve System has recently added very large additional supplies of its own money, in the form of deposits (cash reserves) held by member banks with the Fed. The first injection of central bank money offered in exchange for Treasury Bonds and MBS (QE) was intended to overcome the Global Financial Crisis (GFC) of 2008‐09. The second infusion of extra cash was intended to relieve the impact on the economy of the COVID lockdowns of 2020.The increase in the money base—defined as commercial bank deposits with the FED plus currency in issue—after 2008 did not lead to any acceleration in what had become a very low rate of inflation. Nor did it lead to any notable acceleration in the supply of money, broadly defined. But both the money supply and spending reactions to the additional central bank money after 2020 have been very different. And the growth in the money supply accelerated sharply and, along with it, inflation.The author explains these different outcomes in terms consistent with the monetarist and quantity theory traditions. A tradition that focuses on the importance of the demand for as well as the supply of money—including central bank money. The article shows that the demand for as well as the supply of cash reserves increased markedly after the GFC, reflecting the worldwide risk aversion and surfeit of capital. The exposed banks were reluctant to lend more and preferred to shore up their leveraged balance sheets holding extra cash which slowed down deposit growth. Banks in the wake of the COVID lockdowns have proved more willing to exchange cash for overdrafts, leading to rapid increases in the supply of deposits and money. Such increases have in turn led predictably to more spending as the extra money was exchanged for goods, services, and assets that caused prices to rise sharply.To reverse these inflation trends, the Fed will need to control the supply of money and bank lending. To do so effectively, the Fed should attempt to estimate the demand for large (excess) cash reserves of the banking system and set the interest rate it offers on these cash reserves accordingly. But this Fed is not monetarist;it takes little notice of money or bank credit supplies and will continue to rely on its interest rate tool to limit demand. Nevertheless, monetarists and the market will be watching closely how well the Fed manages a transition not only to higher interest rates, but back to non‐inflationary increases in the supply of money.

4.
Eurasian Journal of Business and Management ; 10(1):19-26, 2022.
Article in English | ProQuest Central | ID: covidwho-1876243

ABSTRACT

The aim of this study was to investigate overreaction and underreaction from the six main sectors in the Johannesburg stock exchange due to the significant impact of Covid-19 on economic activities and financial markets globally. Using a Threshold GARCH model, the findings revealed the presence of overreaction mostly in the healthcare, industrial and telecom sector. However, very few stocks in the banking and tech portrayed overreaction while none of the stocks in the consumer goods sector revealed the presence of overreaction or underreaction because the coefficient of the leverage term was statistically insignificant. From these findings, there is a high risk of investing in healthcare, industrial and telecom stocks, which is not compensated by additional returns. Investors can minimize risk in this sectors by adding healthcare, industrial and telecom stocks in a well- diversified portfolio and assigning a risk coefficient to their pricing. This study adds to the body of knowledge on market anomalies by looking at overreaction and underreaction during the coivid-19 pandemic, which is an important concept in behavioral finance. This study is significant to market participants that are willing to trade on the Johannesburg stock exchange as it provides valuable insights on behavioral pattern and anomalies.

5.
Harvard Law Review ; 135(7):1885, 2022.
Article in English | ProQuest Central | ID: covidwho-1870576

ABSTRACT

In the twenty-first century, central banks' ability to conduct monetary policy through conventional means (namely, changes to interest rates) has proven limited, forcing central banks to resort to novel and controversial tools to combat economic downturns. In March 2020, when economic activity in the United States came to a screeching halt, the Fed was forced to test out its post-2008 crisis-response toolkit for the first time. In concert with Congress and the Department of the Treasury, the Fed would make more than $454 billion available to financial and nonfinancial businesses, states, and municipalities. Miraculously, leveraging its emergency powers under section 13(3) of the Federal Reserve Act, the Fed would loosen calcifying credit markets across the economy and restore the functioning of the financial system. Almost as quickly as the Fed mounted its heroic response, skepticism surrounding the intervention permeated academic and policy circles alike. With the benefit of hindsight, however, this Note aims to problematize some of the qualms and critiques surrounding the Fed's actions in 2020.

6.
Prajnan ; 49(1):9-28, 2020.
Article in English | ProQuest Central | ID: covidwho-1857653

ABSTRACT

We analysed the macroeconomic policy responses to COVID-19 pandemic and the impact of the pandemic on economic growth, and the level of consumption. The COVID-19 crisis is a dual crisis - public health crisis and a macroeconomic crisis. The policy responses to this crisis have been a 'life versus livelihood' sequencing and the findings are such that global cooperation, and domestic macroeconomic policies complementing with exit strategy to solve the economic disruptions in supply chains can be helpful.

7.
International Journal of Finance & Banking Studies ; 11(2):16-24, 2022.
Article in English | ProQuest Central | ID: covidwho-1849184

ABSTRACT

Almost 2 years, the world has been facing the COVID-19 attack, there is no exception including Indonesia, which incidentally is a developing country. During the pandemic, various industries in all sectors experienced a decline in sales so that they need an injection of funds from investment where with the presence of investors, industry movements, include of small, medium, and large industries could increase and have an influence on national economic growth and development. As a country that has many islands, of course investment as a very important economic sector. Many factors influence developments in an area, some of which are inflation, interest rates, and the economy of each region. To see the development of investment in Indonesia during the COVID-19 pandemic (2020-2021Q3), this study uses panel data to be more specific and detail. The result of the research is that interest rates affect investment developments, while inflation and economic growth have no effect on investment developments in Indonesia.

8.
Real Estate Issues ; 45(7):1-12, 2021.
Article in English | ProQuest Central | ID: covidwho-1848508

ABSTRACT

In the face of sudden economic stops, monetary policy has demonstrated its limitations, and successive waves of fiscal relief packages disbursed by governments have provided critical liquidity support to help shore up balance sheets for households and for companies hard-hit by the pandemic.2 As multiple vaccines are disseminated across the globe, an uneven economic recovery has taken shape, with countries such as Italy, Spain, and the U.K. having experienced severe contractions in 2020, and with China actually posting real GDP growth in 2020.3 While investors remain exuberant about the prospects of additional stimulus measures-fueling the unleashing of pent-up demand and the onset of the 'roaring twenties'-expectations for higher inflation have sent shudders through bond and equity markets in the U.S. Nevertheless, considerable slack in the labor market remains in the U.S., with segments of the economy still far behind recovery.4 In early 2021, the real unemployment rate hovered around 10%.5 The aggregate unemployment rate for those at the bottom part of the wage quartile far exceeds that of the top-with many minimum wage jobs in sectors such as leisure and hospitality having been decimated during the crisis, whilst higher-earning white-collar workers have, for the most part, been able to retain their jobs working from home.6 Indeed, even thinking beyond unemployment numbers and focusing on income, many households within the bottom three quintiles of the income distribution came into the crisis in a situation of stagnation, or deep distress. [...]these opportunities are also to be found across global markets. [...]with central banks and governments committed to expansionary monetary policy in the wake of the pandemic, a lower interest rate-induced surge in buying homes (for those who can afford to) has unfolded within advanced economies across the globe, including Singapore, Canada, and the U.K.18, 19, 20 In December 2020, U.S. housing starts jumped to their highest level in 13 years.21 In early 2021, U.S. existing home sales reached the highest level in 14 years.22 Similarly, with the rush of pent-up demand emerging from initial lockdowns, house prices in the U.K. hit a six-year zenith.23 Looking beyond lower interest rates as a causal factor, purchases have been stepped up throughout the pandemic by those who have been able to work from home, and might have transitioned into a more amenable living arrangement, potentially with more space to live and work and play. [...]homeowners in the U.S. spent an average of $17,140 on their homes in the first eight months of the pandemic.24 Due to the surge in demand, a shortage of supply, and ongoing tariffs and disruptions to supply chains, the price of lumber has spiked by 180% since the spring of 2020, eating into developers' margins, and also contributing to the rise in house prices.25 It is important to note in the debates about the potential return of high inflation, house prices are not included in

9.
Public Finance Quarterly ; 66(1):50-67, 2021.
Article in English | ProQuest Central | ID: covidwho-1836580

ABSTRACT

There is no uniform theoretical standpoint on the effects of changing interest rates and the role of money among economists. Though these disputes exercise a great influence on the economic policy measures adopted as well. For the management of the 2008 global financial crisis many central banks entered into forceful interest rate cuts to contribute to the revitalisation of the economy. The economic recession caused by the pandemic of 2020 again raises the issue how central banks can stimulate growth. In this study we deal with the liquidity trap issue attributed to Keynes. Keynes pointed out that there might exist a lower interest rate limit under which money demand becomes infinite. His conceptions put the foundations to the question, at what interest rate levels might the liquidity trap – a term coined later by Robertson – phenomenon become effective. He was followed by numerous renowned economists dealing with the conception. In this paper we are discussing the most important theoretical approaches – among others the views of Hansen, Hicks, Tobin, Patinkin, Krugman, Brunner and Meltzer and Eggertson. We provide an overview on the effects of low interest rate levels adopted by Japan, by the central banks of Japan, the USA and the ECB aimed at stimulating the economy. Based on the study it can be confirmed that central banks can contribute to economic growth keeping interest rates low and therewith fostering investment. Nevertheless, beyond keeping short-term interest rates low, it might be adequate to control interest rates of other maturities and, especially under deflationary expectations, central banks should express their prolonged commitment to low interest rates.

10.
Journal of Risk and Financial Management ; 15(4):178, 2022.
Article in English | ProQuest Central | ID: covidwho-1809995

ABSTRACT

This work examines three frameworks for responding to economic disruption: risk mitigation, systemic recovery, and economic resilience. Specifically, by reviewing the metatheoretical commitments, analytic contexts, and implications of two economic perspectives, represented by risk mitigation and systemic recovery, we argue that current approaches to understanding resilience in academic economics have failed to address ongoing and emergent disruptions in the economic and social world. In response, this work also reviews a possible synthesis of economic and communication frameworks. This review places the economic resilience framework, inspired by the communication theory of resilience, in conversation with extant literature in economics, communication studies, and other disciplines and concludes with an outline for further theoretical, methodological, and practical development.

11.
Journal of Risk and Financial Management ; 15(4):151, 2022.
Article in English | ProQuest Central | ID: covidwho-1809993

ABSTRACT

The quantity equation is a well-established, theoretic, long-run concept that has been criticized for a variety of reasons, i.e., that no precise statements about causality or dynamics between money growth and inflation can be inferred from its components. These shortcomings can be tackled by estimating inflation based upon a holistic approach and the performance of a ceteris paribus analysis for various levels of quantity and velocity of money, as well as GDP. By testing the validity of the quantity equation, it is possible to evaluate possible effects of elevated budget deficits, unprecedented expansions of the monetary base caused by global lockdowns, and a crash in global productivity, on inflation. The main findings of this paper suggest that the level of productivity is the main driver of inflation. The quantity and velocity of money only play a subordinate role in the determination of the inflation level. If inflation is holistically seen as a function of the quantity and velocity of money, as well as general economic productivity, the level of inflation can be very well explained by comparing the supply side with general economic productivity.

12.
Journal of Economic Studies ; 49(1):159-184, 2022.
Article in English | ProQuest Central | ID: covidwho-1806839

ABSTRACT

Purpose>To investigate the complex relationship between inflation, inflation uncertainty and equity returns.Design/methodology/approach>This paper uses a bivariate VARMA, GARCH-in-mean, asymmetric BEKK model to investigate the relationship between inflation, inflation uncertainty and equity returns.Findings>Using monthly inflation and equity returns data for the G7 and EM7 economies, we find that the effects of inflation and inflation uncertainty on equity returns vary across countries.Research limitations/implications>The mixed evidence we find potentially reflects the changing dynamics, policy regimes, economic shocks and country-specific factors (such as differences in the financing patterns of enterprises and the legal and financial environments) across the G7 and EM7 countries.Practical implications>We contribute to the empirical literature in the following ways. First, we rely on a wide sample of countries, including both developed and emerging economies. Second, we extend previous research by estimating a GARCH-in-mean model of monthly equity returns in which both realized returns and their conditional volatility are allowed to vary with inflation. Previous articles that studied the relationship between inflation and stock market returns generally sought time-invariant effects of inflation on stock returns.Social implications>The paper helps to reconcile the divergent results of previous empirical studies and distinguish between alternative explanations of the relationship between inflation and equity returns.Originality/value>Our study provides an improved comprehension of the ambiguous relationship between inflation, inflation uncertainty and equity returns under various central bank mandates and different levels of central bank independence. The mixed empirical evidence across countries we present provides insights for the macroeconomic models that consider the relationship between uncertainty and macroeconomic performance as a fundamental building block. Therefore, our empirical study calls for further work on the relationship between inflation, inflation uncertainty and equity returns.

13.
International Journal of Islamic and Middle Eastern Finance and Management ; 15(2):425-440, 2022.
Article in English | ProQuest Central | ID: covidwho-1794903

ABSTRACT

Purpose>COVID-19 has disrupted the economic development of both advanced and emerging markets. In addition to the stimulus packages to adjust the economic shock from COVID-19, regulators around the world are searching for innovative mechanisms to rebuild the economy. The purpose of this paper is to explore the potential of SRI Sukuk to serve as an Islamic social finance solution for development projects to mitigate the adverse economic effects of COVID-19.Design/methodology/approach>This study uses a mixed-method research framework. The authors use a systematic literature review following the recommendations of Bowen (2009) to identify critical challenges financing PPP projects using SRI Sukuk. In the next phase, the authors interview participants involved in an SRI Sukuk financed PPP project to get more significant insights on the challenges identified through the literature review process.Findings>The authors identify the need for greater transparency for SRI financed PPP projects. Also, organisational and legislative challenges are limiting the attractiveness of SRI Sukuk as a financing mechanisms for post-COVID development projects.Practical implications>SRI Sukuk is an emerging financing concept, and the use of such an Islamic financial instrument in financing development projects can serve as a viable alternative for policymakers in a post-COVID economic environment.Social implications>The successful completion of the development projects integrating the concept of Social Maslahah through SRI Sukuk in Malaysia could encourage other emerging economies to use such innovative Islamic financial instrument for economic development in post-COVID environment.Originality/value>This paper is unique, as it provides evidence on the potential of SRI Sukuk to finance large scale public-private partnership projects.

14.
Equilibrium ; 17(1):11-29, 2022.
Article in English | ProQuest Central | ID: covidwho-1789868

ABSTRACT

Research background: The contribution of banks' non-interest income to the total income becomes particularly important in the face of a severe financial crisis, usually accompanied by burdensome restrictions in economic activity, insolvencies of enterprises and households and low interest rates of central banks. Purpose of the article: This study investigates banks in 40 European countries to determine whether non-interest income had a significant impact on the bank's profitability and whether the severity of the COVID-19 pandemic influences the form of this relationship. Methods: This study used a linear cross-section model using bank-level data. In the model, the bank's profitability was regressed with the measure of income diversification, controlling for the pandemic's intensity and the state of the country's economy and bank characteristics. Banking data were obtained from the S&P Global MI. The Oxford COVID-19 Government Response Tracker (Hale et al., 2021, pp. 529?538) was the source of pandemic-related variables. Findings & value added: The obtained results indicate that the increases in non-interest income share in the bank's total income have a statistically significant positive impact on profitability for the European banking sector. The dependence of profitability on diversification was stronger with the growing adverse effects of the pandemic. Our results are in line with those for the US banks (Li et al., 2021) and the European Central Bank Banking Supervision's assessment that higher non-interest income has allowed banks' profitability in the euro area to be maintained at a pre-pandemic level (ECB, 2021). In addition, the study contributes to previous literature by testing the impact of the severity of the COVID-19 pandemic on the relationship between income diversification and bank profitability in 40 European countries.

15.
The Review of Finance and Banking ; 13(2), 2021.
Article in English | ProQuest Central | ID: covidwho-1782102

ABSTRACT

This paper investigates the implication of bank revolving credit in the form of credit card loans as a channel of monetary policy targeting the federal funds rate since 1980. Credit cards have become increasingly popular and a necessity for many transactions and purchases in the United States. The revolving credit nature of credit card loans makes them an instant tool for consumer loans that can facilitate consumption. Using instrumental variable and two-stage least squares (2SLS) methodology, we analyze the implication of credit card loans to modern monetary policy that targets interest rates.

16.
Intereconomics ; 57(2):87-92, 2022.
Article in English | ProQuest Central | ID: covidwho-1782834

ABSTRACT

To gauge the breadth of current inflation and prospects for inflation returning to target, we consider disaggregated measures of CPI infl ation to evaluate trends and then consider diff erent scenarios for the realisation for wages and prices.

17.
Intereconomics ; 57(2):69-75, 2022.
Article in English | ProQuest Central | ID: covidwho-1782832

ABSTRACT

There is hope that the Russian war on Ukraine could expedite the energy transition in Europe leading to a new and more environmentally sustainable steady state.

18.
Istanbul Ticaret &Uuml ; niversitesi Sosyal Bilimler Dergisi; 20(42):1269-1291, 2021.
Article in Turkish | ProQuest Central | ID: covidwho-1766389

ABSTRACT

Çin'in Wuhan kentinde 2019 yılının sonunda başlayan Covid-19 salgını 2020 yılının mart ayında pandemi durumuna dönüşerek tüm dünyayı etkisi altına almıştır. Küresel boyutta yaşanan bu salgının 2020 yılında ve devamında tüm dünya ekonomilerinde daralmaya neden olacağı tahmin edilmektedir. Salgına karşı gelişmiş ve gelişmekte olan tüm ülkelerin merkez bankaları faiz oranlarında değişikliklere giderek piyasalara likidite desteği sağlamış ve kredi koşullarını desteklemeye yönelik genişleyici para ve maliye politikaları uygulamaya başlamışlardır. Bu bağlamda Türkiye'de TCMB tarafından 17 Mart 2020 tarihli Para Politikası Kurulu toplantısında politika faiz oranında indirime gidilmiş ve bu karara ek olarak, 17 Mart, 31 Mart ve 17 Nisan 2020 tarihlerinde Covid-19 salgının ekonomik ve finansal etkilerini sınırlamak amacıyla alınan tedbir paketleri duyurulmuştur. Bu çalışmada Covid-19 salgınının küresel ekonomik göstergeleri ve Türkiye'de bankacılık ve finans sektörü üzerine etkileri, kapsamlı bir alan yazın araştırması ile uzman kurumların raporları ve sektörel veriler kullanılarak analiz edilmiştir. Amaç: Covid-19 pandemi sürecinde ortaya çıkan ekonomik koşulların küresel göstergeleri ile birlikte Türkiye'de bankacılık ve finans sektörüne olan etkilerini tespit etmektir. Yöntem: Alan yazın taraması eşliğinde bankacılık ve finans sektöründe faaliyet gösteren ulusal ve uluslararası uzman kuruluşlardan elde edilen nitel ve nicel sektörel verilerin MicrosoftOffice programlarında işlenerek çıktılarının kullanıldığı Covid-19 pandemi süreci içerisinde bir çalışmadır. Bulgular: Tüm dünya ekonomilerinde ve ülkemizde ekonomik daralmaların yaşanacağı ve Türkiye'de daralma etkisini sınırlandırmak amacıyla merkez bankasının piyasalara likidite desteği sağladığı görülmüştür. Özgünlük: Covid-19 pandemisi dünyadaki tüm ülke ekonomilerinin hazırlıksız yakalandıkları ve geçmişte yaşanan ekonomik krizlerden farklı olarak direkt insan sağlığına yönelik olması nedeniyle çok daha kapsamlı etkileri olan bir sağlık ve ekonomik krizdir. Salgının ve neden olduğu krizin etkileri çalışmanın yapıldığı dönem itibariyle devam etmekte olup ne kadar süreceği belirsizlik içermektedir. Dolayısıyla devam eden süreç içerisinde nihai sonuçları tespit etmek için salgının sona ermesini beklemek gereklidir. Bu çalışma salgının başladığı andan itibaren Türkiye' de bankacılık ve finans sektöründe yarattığı etkiler ve sermaye piyasalarının buna karşı geliştirdiği tepkiler belirlenmiş, incelenmiş ve değerlendirilmiştir. Çalışma bu bakımdan ileride salgından kaynaklı oluşabilecek kriz dönemlerinde uygulanacak ekonomi politikaları için bir kaynak rehber ve arşiv olma amacını taşımaktadır.Alternate :The Covid-19 outbreak, which started in Wuhan, China at the end of 2019, turned into a pandemic in March 2020 and affected the whole world. It is estimated that this global epidemic will cause a contraction in all world economies in 2020. Against the epidemic, the central banks of all developed and developing countries have changed their interest rates, providing liquidity support to the markets, and have begun to implement expanding monetary and fiscal policies to support credit conditions. In this context, by the Central Bank in Turkey, March 17, 2020 the Monetary Policy Committee reductions policy interest rate at meetings and in addition to this decision March 17, March 31 and April 17, 2020 date in the Covid-19 outbreak of the package of measures taken to limit the economic and financial impact has been announced. In this study, global economic indicators of the Covid-19 epidemic and its effects on the banking and financial sector in Turkey were analyzed using a comprehensive field researh and reports and Industry data from expert institutions. Purpose: Covid - 19 is to investigate the effects of the economic onditions arising in the pandemic process on the banking and financial sector in Turkey along with global indicators. Method: It is a study within the Covid-19 pandemic process in which the outputs of qualitative and quantitative sectoral data obtained from national and international expert organizations operating in the banking and finance sector are processed in MicrosoftOffice programs, accompanied by a literature review. Findings: Economic contraction will occur in the entire world economy and in our country, and the central bank has provided liquidity support to the market in order to limit the impact of the contraction in Turkey. Originality: The Covid-19 pandemic is a health and economic crisis that has far more comprehensive effects, as all countries in the world are caught unprepared and, unlike the previous economic crises, it is directly aimed at human health. The effects of the epidemic and the crisis it caused continue as of the period of the study and it is uncertain how long it will last. Therefore, it is necessary to wait for the end of the epidemic in order to determine the final results in the ongoing process. In this study, the effects of the epidemic on the banking and finance sector in Turkey and the reactions of the capital markets against it were determined, examined and evaluated. In this respect, the study aims to be a source guide and archive for the economic policies to be implemented in the crisis periods that may arise from the epidemic in the future.

19.
Journal of Economic Studies ; 49(3):435-452, 2022.
Article in English | ProQuest Central | ID: covidwho-1764763

ABSTRACT

Purpose>This paper aims to assess whether the coronavirus disease 2019 (COVID-19) pandemic has encouraged governments to take actions towards fostering digital means of payments and financial transactions to stimulate economic activities and achieve higher financial inclusion.Design/methodology/approach>Using a logit model, this paper tests the impact of the level of income and GDP per capita, government effectiveness, digital adoption, number of commercial banks and the pandemic-related closure of business and stores due to full lockdowns on governments’ policy response regarding digital means of payments.Findings>The author finds that low- and lower-middle-income countries had significantly responded to the surged need for digital means of payment during the pandemic compared to the upper-middle-income and high-income countries. The author also finds that government effectiveness and the number of commercial banks were predictors of government policy response, while the full lockdown of countries and the overall digital adoption were not.Research limitations/implications>Data of the post-COVID-19 pandemic are limited, and the sample size is small.Originality/value>This is the first paper to empirically model governments' response during the pandemic to promote digital means of payments. This paper gives insight into post-crisis potential changes in digital payment adoption in the upcoming years.

20.
Economic and Social Development: Book of Proceedings ; : 161-174, 2022.
Article in English | ProQuest Central | ID: covidwho-1762524

ABSTRACT

The financial crisis triggered by the pandemic of COVID-19 significantly curtailed the activities of world financial systems. With the onset of the crisis in 2020, there has been a deterioration in macroeconomic indicators: a drop in GDP, an increase in the unemployment rate and an increase in public debt. Unlike the previous, expected debt crisis of 2008, the sudden corona crisis was welcomed by financial systems with significantly higher liquidity and capitalization. Despite positive expectations based on better performance of financial systems, uncertainty and the need for financial stability were present. Therefore, the highest expectations were directed towards economic policymakers, regulation and supervision of the financial systems. The impact of the emerging crisis is particularly pronounced in small and open economies such as Republic of Croatia, where there is a strong dependence on international market trends and thus a sensitivity to crises and external shocks. With the onset of the COVID-19 crisis, Republic of Croatia faced the problem of depreciation pressure on the domestic currency. It was stopped rapidly by the interventions of the Croatian National Bank, which achieved monetary and macroeconomic stability and provided assistance to the economy. Although central banks and other financial system supervisors and regulators have played an important role in overcoming the crisis and supporting the economy, uncertainty about macroeconomic stability remains. Following the COVID-19 lockdown of economies and their reopening in mid-2021, demand for goods and services has increased, leading to rising prices and inflation in Europe and the United States of America. The aim of this paper is to present the effects of the crisis caused by COVID-19 and to analyze the measures introduced to financially stabilize and support the economy.

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