ABSTRACT
The EU fiscal framework has gradually morphed into a regional regime complex through various reforms of the preventive and corrective arms of the Stability and Growth Pact. A regime complex encourages actors to arbitrage between partially overlapping, parallel and nested rules. By drawing on this central insight, this article demonstrates that regime complexity enables member states to respect the letter but not the spirit of the fiscal rules to lower the cost of compliance. It further shows empirically how regime complexity weakens technocratic enforcement capacity when authority is dispersed across multiple levels of governance by focusing on the example of the general escape clauses during the coronavirus pandemic.
ABSTRACT
Market practitioners and speculators attempt to make benefits from the existence of market price gaps and profit opportunities by arbitrage strategies. Although some investors trade stocks based on the available financial and fundamental information of a particular share, there are others who make profits by risk hedging and swing trading opportunities. One of these strategies is pairs trading, which is a sub‐category of statistical arbitrage. Pairs trading can assure reasonably a risk‐free profit gaining. This paper aims to make a hypothetical portfolio composed of pairs of stocks by exploring a significant association between their prices in the Toronto Stock Exchange, TSX. We compare the profitability of distance, co‐integration, and copula functions as the pair's selection and trading strategy devices in TSX over January 2017 to June 2020. Our results show that the highest profitability comes from trading by the copula method. Our time frame includes two heterogeneous pre and post COVID‐19 periods. Although the financial markets are struggling with a hard situation over the COVID‐19 days, the performance of the methodologies is not affected by the crisis.
ABSTRACT
The transformation of the modern global monetary and financial system involves the elimination of institutional and functional contradictions existing at various levels. Some contradictions arose as a result of the asymmetric development of the global financial market (GFM). The aim of the article is to substantiate the asymmetry of the GFM development as an organic phenomenon, which, on the one hand, becomes a serious obstacle to the functioning and progressive development of the world economy, and, on the other hand, is the driving force behind this development. The authors apply general logical, theoretical, empirical, and special research methods. The origins of the asymmetric development of the GFM are determined. Endogenous and exogenous factors of GFM asymmetry were revealed. The article considers examples of asymmetry in various GFM segments. The negative impact of the global financial and economic crisis of 2008–2009 and the coronavirus pandemic on increasing the asymmetry of the GFM development has been determined. Based on the analysis of the key macroeconomic indicators of the top 20 countries in terms of GDP, the asymmetric nature and the absence of stable patterns that determine the country's position in the world ranking are revealed. The authors conclude that the asymmetry of the GFM development is an organic phenomenon, caused by a wide range of causes of endogenous and exogenous nature. Endogenous asymmetries can be partially compensated either through complete economic isolation, which is likely to lead to a slowdown in development and lagging behind other countries in the future or through active involvement in a system of world economic relations based on fair partnerships. Exogenous asymmetry, due to the peculiarities of the historically established world order, is destructive for all participants in the global economic system, including those whose interests must be protected in the first place. © Balyuk I.A., Balyuk M.A., 2022.