The Dynamics of Fundamentals in Currency Crisis in Indonesia and Malaysia

2012 ◽  
Author(s):  
Guan Choo Lim
Keyword(s):  
Currency Crisis ◽  
Adaptive Expectations ◽  
General Belief ◽  
Speculative Attack ◽  
Macroeconomic Fundamentals ◽  
Domestic Credit ◽  
Market Expectations ◽  
Generalized State ◽  
The Impact ◽  
Market Pressure

Kesan makroekonomi fundamental ke atas tekanan pasaran (MP) ditafsir menggunakan model generasi ketiga berasaskan jangkaan ‘adaptif’ Dusenberry. Hasil kajian ini tekal dengan anggapan umum bahawa fundamental makroekonomi yang lemah telah mengakibatkan serangan ke atas matawang negara–negara Asia. Walau bagaimanapun, variabel makroekonomi serta dinamik variabel tersebut yang membawa kepada krisis agak berbeza di Malaysia dan Indonesia. Serangan spekulatif terhadap rupiah berlaku dalam keadaan makroekonomi yang lemah manakala tekanan terhadap Ringgit Malaysia dikaitkan dengan pertumbuhan kredit, defisit fiskal dan kadar pertukaran benar. Kesimpulannya, fundamental yang mempengaruhi jangkaan pasaran dan seterusnya tekanan pasaran (MP) mungkin sama tetapi dinamik yang membentuk jangkaan pasaran amat berbeza. Oleh yang demikian, anggapan bahawa ekonomi Asian mempunyai ciri–ciri yang sama sehingga mengakibatkan krisis matawang 1997 mungkin tidak benar. Kata kunci: krisis matawang; Indonesia; Malaysia; fundamental The impact of selected macroeconomic fundamentals on the market pressure (MP) is assessed using the third generation models based on ‘Dusenberry’ adaptive expectations. The findings are consistent with the general belief that weak macroeconomic fundamentals had triggered the speculative attacks against the Asian currencies. However, the macroeconomic variables and their dynamics that set the groundwork for a currency crisis differ considerably in Malaysia and Indonesia. A speculative attack against the Rupiah occurred in a generalized state of macroeconomic weakness while domestic credit growth, the fiscal balances–GDP ratio and the real exchange rate exerted strong influence on the exchange market pressure for Malaysia. In conclusion, while there are some common fundamentals matter for shifting market expectations and hence, market pressure in both countries, the dynamics that formed market expectations are divergent. Therefore, the belief that the Asian economies had the same characteristics that triggered the currency crisis in 1997 may be incorrect. Key words: currency crisis; Indonesia; Malaysia; fundamentals

Determinants of Inflation in Vietnam: A VECM Approach

2015 ◽  
Vol 22 (04) ◽  
pp. 26-50
Author(s):  
Ngoc Tran Thi Bich ◽  
Huong Pham Hoang Cam
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Error Correction ◽  
Budget Deficit ◽  
Oil Prices ◽  
Crude Oil Prices ◽  
Domestic Credit ◽  
Short Run ◽  
The Impact

This paper aims to examine the main determinants of inflation in Vietnam during the period from 2002Q1 to 2013Q2. The cointegration theory and the Vector Error Correction Model (VECM) approach are used to examine the impact of domestic credit, interest rate, budget deficit, and crude oil prices on inflation in both long and short terms. The results show that while there are long-term relations among inflation and the others, such factors as oil prices, domestic credit, and interest rate, in the short run, have no impact on fluctuations of inflation. Particularly, the budget deficit itself actually has a short-run impact, but its level is fundamentally weak. The cause of the current inflation is mainly due to public's expectations of the inflation in the last period. Although the error correction, from the long-run relationship, has affected inflation in the short run, the coefficient is small and insignificant. In other words, it means that the speed of the adjustment is very low or near zero. This also implies that once the relationship among inflation, domestic credit, interest rate, budget deficit, and crude oil prices deviate from the long-term trend, it will take the economy a lot of time to return to the equilibrium state.

scholarly journals The Relationship between Economic Growth and Pollution in Some New European Union Member States: A Dynamic Panel ARDL Approach

Energies ◽  
2021 ◽  
Vol 14 (9) ◽  
pp. 2363
Author(s):  
Mihaela Simionescu ◽  
Carmen Beatrice Păuna ◽  
Mihaela-Daniela Vornicescu Niculescu
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Ghg Emissions ◽  
Kuznets Curve ◽  
Renewable Energy Consumption ◽  
Panel Ardl ◽  
Domestic Credit ◽  
The Impact ◽  
The Relationship

Considering the necessity of achieving economic development by keeping the quality of the environment, the aim of this paper is to study the impact of economic growth on GHG emissions in a sample of Central and Eastern European (CEE) countries (V4 countries, Bulgaria and Romania) in the period of 1996–2019. In the context of dynamic ARDL panel and environmental Kuznets curve (EKC), the relationship between GHG and GDP is N-shaped. A U-shaped relationship was obtained in the renewable Kuznets curve (RKC). Energy consumption, domestic credit to the private sector, and labor productivity contribute to pollution, while renewable energy consumption reduces the GHG emissions. However, more efforts are required for promoting renewable energy in the analyzed countries.

Macroeconomic fundamentals and dynamics of the Indian rupee-dollar exchange rate

2015 ◽  
Vol 7 (4) ◽  
pp. 301-326 ◽  
Author(s):  
Chandan Sharma ◽  
Rajat Setia
Keyword(s):  
Exchange Rate ◽  
Structural Break ◽  
Cointegration Analysis ◽  
Least Square ◽  
Dollar Exchange Rate ◽  
Content Type ◽  
Macroeconomic Variables ◽  
Indian Rupee ◽  
Macroeconomic Fundamentals ◽  
The Impact

Purpose – This paper aims to examine the relationship between Indian rupee-US dollar exchange rate and the macroeconomic fundamentals for the post-economic reform period. Design/methodology/approach – The authors have used an empirical model which includes a range of important macroeconomic variables based on the basic monetary theories of exchange rate determination. At the first stage of the analysis, they have tested structural break in the data. Subsequently, they have employed the fully modified ordinary least square, Wald’s coefficient restriction and impulse response functions (IRF) to estimate the monetary model in the long- and short-run horizons. Findings – Results of analyses indicate that the macroeconomic fundamentals determine exchange rate in a significant way, but their effect varies sizably across the periods. The IRF illustrate the importance of interest rate in controlling exchange rate volatility. Practical implications – The analysis of the behavior of inter-relationship among macroeconomic variables will help policymakers in a deep-rooted understanding of this complex and time-varying relationship. Originality/value – Most of the existing studies have tested the impact of a single or a few macroeconomic fundamentals on exchange rate. But in the present study, we have tested the impact of a range of important variables, i.e. money supply, real income or output, price level and trade balance. Further, considering the importance of structural breaks in data, they authors have employed standard tests of structural break and incorporated the issue in the cointegration analysis.

Introduction

2000 ◽  
Author(s):  
William B. Meyer
Keyword(s):  
New England ◽  
Nathaniel Hawthorne ◽  
Daily Life ◽  
Daily Temperature ◽  
General Belief ◽  
The Past ◽  
Winter Cold ◽  
The Impact

IN THE MID-1830s, the young Nathaniel Hawthorne sat reading "what once were newspapers"—a bound volume of New England gazettes ninety-odd years old. Comparing the daily life that they portrayed with his own, Hawthorne was struck by how different and how much more severe the weather appeared to have been in the past. "The cold was more piercing then, and lingered farther into the spring," he decided; "our fathers bore the brunt of more raging and pitiless elements than we"; "winter rushed upon them with fiercer storms than now—blocking up the narrow forest-paths, and overwhelming the roads. 1 He was not alone in thinking so. Another resident of Salem, Dr. Edward Holyoke, had been of the same opinion. In his later years, the doctor spoke as the classic authority on the weather, the Oldest Inhabitant. Born in 1728, he lived until 1829, the full span of the century that Hawthorne judged mostly at secondhand, and he had kept a daily temperature log for the better part of it. A newspaper in 1824 reported a general belief that the seasons were "more lamb-like" than in earlier times. An English visitor a few years later was frequently told that the climate was moderating. Cold and snowstorms had grown less intense and less frequent: such had been, wrote John Chipman Gray in the 1850s, "and is perhaps still a prevailing impression among the inhabitants of New-England." All the same, that impression of the century gone by was wrong. Gray, who maintained that the winters had not changed, also tried to explain why intelligent observers could have supposed that they had. On one point, he granted, they were correct. Certainly the effects of the weather were not what they had once been. But there was no evidence that a shift in the weather was responsible. Holyoke's own records, analyzed after his death, did not bear out his belief that winter cold and storms had weakened in his lifetime. As Gray pointed out, if the impact of weather on New Englanders had changed, it was because New England society had changed.

Economic Development and Its Impact on Turkish Banking Sector

2015 ◽  
pp. 246-259
Author(s):  
Hatice İpek ◽  
Özlem Olgu
Keyword(s):  
Economic Development ◽  
Financial Crises ◽  
Banking Sector ◽  
Financial Liberalization ◽  
Currency Crisis ◽  
Regulatory Changes ◽  
The Impact ◽  
The Imf

This chapter aims to understand the impact of major macroeconomic and regulatory changes on the Turkish banking sector. The authors specifically focus on the financial liberalization program of 1980s, inherent banking problems of 1990s, the 1994 currency crisis, the IMF stabilization program, the 2000-2001 financial crises, and the banking sector restructuring program of May 2001.

Health Consequences of the Asian Currency Crisis: Continuing Imperatives for a Primary Health Care Approach

1998 ◽  
Vol 4 (4) ◽  
pp. 60
Author(s):  
Simon Barraclough ◽  
Martha Morrow
Keyword(s):  
Health Care ◽  
Primary Health Care ◽  
Currency Crisis ◽  
Health Consequences ◽  
International Agencies ◽  
The Poor ◽  
Primary Health ◽  
Asian Currency Crisis ◽  
National Governments ◽  
The Impact

The Asian currency crisis and its attendant socio-economic problems in several Asian countries have had serious health consequences, especially for the poor. The scale of these problems has varied between countries due to their differing levels of economic development. Indonesia faces a malor emergency with the threat of widespread malnutrition and rapidly increasing rates of poverty. In this article, some of these health issues are discussed and the response of national governments and international agencies described. To date, the most significant players have been the supra-national financial institutions, which have urged national governments to maintain real levels of expenditure on essential health and education services. These institutions have provided substantial loans to prop up the ailing economies of South Korea, Thailand and Indonesia. Social development programmes, including health, have been an element in each of these loan schemes. It is argued that pressure should be maintained on the IMF, World Bank and Asian Development Bank to support measures to reduce the impact of the crisis on the poor. Such measures must include protection of public expenditure on primary health care. The currency crisis will also provide opportunities to reassert the vital importance of primary health care and to carry out reforms to strengthen it.

Economic success will elude Macri in Argentina

2018 ◽  
Keyword(s):  
Interest Rates ◽  
Private Consumption ◽  
Currency Crisis ◽  
Economic Success ◽  
Content Type ◽  
Cyclical Pattern ◽  
One Year ◽  
The Impact

Significance The 2018 currency crisis left the economy in one of the deepest downturns of the last decade, repeating the cyclical pattern in place since 2011 of one year of growth followed by one year of downturn. Lower real incomes and rising interest rates discouraged private consumption and investment, hitting the performance of industries including manufacturing, construction and services. Impacts A larger soya harvest will not be enough to prompt significant economic rebound. Lack of confidence in the peso will keep interest rates high. With exports accounting for 20% of GDP, the impact of depreciation will not be significant.

Capital Market Pressure, Disclosure Frequency-Induced Earnings/Cash Flow Conflict, and Managerial Myopia (Retracted)

2005 ◽  
Vol 80 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Sanjeev Bhojraj ◽  
Robert Libby
Keyword(s):  
Stock Market ◽  
Cash Flow ◽  
Capital Market ◽  
Cash Flows ◽  
Mandatory Reporting ◽  
Managerial Myopia ◽  
Near Term ◽  
The Impact ◽  
Market Pressures ◽  
Market Pressure

We examine the effects of increased capital market pressure and disclosure frequency-induced earnings/cash flow conflict on myopic behavior. In our experiments, experienced financial managers choose between projects where a conflict exists between near-term earnings and total cash flow. Managers more often choose projects that they believe will maximize short-term earnings (and price) as opposed to total cash flows in response to increased capital market pressure resulting from a pending stock issuance, holding constant agency frictions and other stock market pressures. When faced with increased capital market pressure, changes in disclosure frequency cause managers to behave more or less myopically depending on the impact of the change on the pattern of earnings and the resulting earnings/cash flow conflict. Our study provides insights into managers' beliefs about stock market pressures, mandatory reporting, and the availability of alternative communications channels, and contributes to literature on managerial myopia and earnings management, as well as current debates over disclosure frequency.

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