Stock Markets and Central Bankers: The Economic Consequences of Alan Greenspan

2002 ◽  
Author(s):  
Stephen H. Wright ◽  
Andrew R.W. Smithers
Keyword(s):  
Stock Markets ◽  
Economic Consequences ◽  
Central Bankers

scholarly journals South Africa’s economic response to monetary policy uncertainty

2017 ◽  
Vol 44 (2) ◽  
pp. 282-293 ◽  
Author(s):  
Mehmet Balcilar ◽  
Rangan Gupta ◽  
Charl Jooste
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Stochastic Volatility ◽  
Stochastic Volatility Model ◽  
Economic Consequences ◽  
Policy Uncertainty ◽  
Dsge Model ◽  
Content Type ◽  
Volatility Model ◽  
Central Bankers

Purpose The purpose of this paper is to study the evolution of monetary policy uncertainty and its impact on the South African economy. Design/methodology/approach The authors use a sign restricted SVAR with an endogenous feedback of stochastic volatility to evaluate the sign and size of uncertainty shocks. The authors use a nonlinear DSGE model to gain deeper insights about the transmission mechanism of monetary policy uncertainty. Findings The authors show that monetary policy volatility is high and constant. Both inflation and interest rates decline in response to uncertainty. Output rebounds quickly after a contemporaneous decrease. The DSGE model shows that the size of the uncertainty shock matters – high uncertainty can lead to a severe contraction in output, inflation and interest rates. Research limitations/implications The authors model only a few variables in the SVAR – thus missing perhaps other possible channels of shock transmission. Practical implications There is a lesson for monetary policy: monetary policy uncertainty, in isolation from general macroeconomic uncertainty, often creates unintended adverse consequences and can perpetuate a weak economic environment. The tasks of central bankers are incredibly difficult. Their models project output and inflation with relatively large uncertainty based on many shocks emanating from various sources. It matters how central bankers react to these expectations and how they communicate the underlying risks associated with setting interest rates. Originality/value This is the first study that looks into monetary policy uncertainty into South Africa using a stochastic volatility model and a nonlinear DSGE model. The results should be very useful for the Central Bank as it highlights how uncertainty, that they create, can have adverse economic consequences.

Managing reputation loss in China: in-depth analyses of financial restatements

2016 ◽  
Vol 10 (2) ◽  
pp. 312-345 ◽  
Author(s):  
Peng Wu ◽  
Lei Gao ◽  
Zhibin Chen ◽  
Xiao Li
Keyword(s):  
Crisis Management ◽  
Significant Relationship ◽  
Stock Markets ◽  
Financial Distress ◽  
State Ownership ◽  
Economic Consequences ◽  
Content Type ◽  
Financial Restatement ◽  
Financial Restatements ◽  
Crisis Responses

Purpose This paper aims to investigate, in China stock market, whether the reputation loss of a firm caused by financial restatements will lead to significant economic consequences such as financial distress and how a firm should respond to such a crisis. Design/methodology/approach This paper uses Chinese A-share listed firms from 2004 to 2013 as research samples to test research hypotheses using regression analyses. Findings This paper finds a significant relationship between restatements and financial distress, and such a relationship will be affected by both the type and the magnitude of restatements. More importantly, we find joint effects of restatements and state ownership on financial distress, which provides a unique contribution to the extant literature in restatement, financial distress and crisis management using Chinese stock markets data. It shows that ownership structure, affecting the firm reputation and crisis responses strategies, plays a significant role in consequences of restatements, and it is more important for state-owned enterprises (SOEs) to undertake an appropriate crisis response strategy to reduce the negative impact of restatements. Practical implications The results suggest that the damage to a firm’s reputation caused by restatements is affected by restatement type and state ownership. To reduce the negative consequences and avoid financial distress, firms should consider both the restatement type and their firm characteristics when deciding different actions to respond to restatements. In particular, SOEs should act in a more timely manner and take reputation-rebuilding actions such as taking the responsibility and making apologies and taking prompt remedial actions after restatements to regain the public trust and avoid more serious economic consequences. The Chinese government should strengthen their supervisions of SOEs and put more effort to help SOEs reduce administrative procedures, and to improve the efficiency of the implementation of recovery plans after restatements to reinstate firm credibility. Originality/value First, this paper is among the first to link financial restatement, including the type and magnitude of restatements, with financial distress, and the authors find a significant relationship between restatement type and financial distress in China stock markets. Second, this paper is the first to examine whether there is a joint effect of state ownership and restatements on financial distress. Third, this study examines how the magnitude and pervasiveness of restatements influence financial distress and find that both result in an increase of financial distress. Finally, this paper is among the first to connect crisis management and accounting literature to explain how a reputation loss caused by financial restatement may damage a firm’s value and subsequent performance, and based on which to suggest crisis-responses strategies.

Deflation, Monetary Policy Responses, and the Boj

2018 ◽  
pp. 9-42
Author(s):  
Gene Park ◽  
Saori N. Katada ◽  
Giacomo Chiozza ◽  
Yoshiko Kojo
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Economic Consequences ◽  
Supply Side ◽  
Monetary Policies ◽  
Goods And Services ◽  
Policy Responses ◽  
Forward Guidance ◽  
Negative Interest Rates ◽  
Central Bankers

This chapter discusses deflation, monetary policy responses against deflation, and the Bank of Japan's (BOJ) reluctance to try bolder measures to reflate the economy. Deflation, when the price of goods and services declines, is attributable to a number of causes. It can result from supply-side improvements such as enhanced productivity and thus can coincide with economic growth. However, deflation can also occur through demand-side shocks. These shocks can be the result of policy mistakes. Under such circumstances, deflation can have potentially damaging economic consequences. Some of the monetary policy responses against deflation include forward guidance, quantitative easing (QE), interest rate targeting, negative interest rates, and helicopter money. There are several possible explanations for the BOJ Policy Board's resistance to adopting unconventional monetary policies. It could be that central bankers at the BOJ did not believe that they would be effective. Another explanation is that the BOJ was more hesitant to use QE because of the country's fiscal position.

Еnforcement of Property Rights and Conractual Obligations

2003 ◽  
pp. 83-100 ◽  
Author(s):  
A. Radygin ◽  
R. Entov
Keyword(s):  
Property Rights ◽  
Legal Framework ◽  
Economic Consequences ◽  
Theoretical Approaches ◽  
Contractual Obligations ◽  
Regional Authorities ◽  
Practical Recommendations

The paper deals with theoretical approaches to the problems of property rights and contractual obligations and with analysis of economic consequences of the imperfect enforcement system. In particular, the authors consider Russian experience in the sphere of corporate conflicts. Legal and practical recommendations related to the improvement of legal framework, judiciary reform, executory process and different federal and regional authorities are also presented.

Growing Russian Economy against Growing External Tension

2012 ◽  
pp. 4-32
Author(s):  
I. Borisova ◽  
B. Zamaraev ◽  
A. Kiyutsevskaya ◽  
A. Nazarova ◽  
E. Sukhanov
Keyword(s):  
Economic Growth ◽  
Stock Markets ◽  
Negative Effects ◽  
Russian Economy ◽  
Investment Demand ◽  
The World

Conditions and features of the Russian economy development in 2011 are considered in the article. Having caused unprecedented outflow of the capital abroad, rising tension and turbulence on the world financial and stock markets have not broken off recovery of the Russian economy. Crisis recession was overcome. Record-breaking low inflation, rapid credit restoration and active government adjustment neutralized negative effects of the external tension and supported economic growth, having encouraged consumer and investment demand.

Budget as an Instrument of Reproduction of Bureaucracy in Russia

2006 ◽  
pp. 87-96
Author(s):  
Yu. Shvetsov
Keyword(s):  
The State ◽  
Economic Consequences ◽  
Material Base ◽  
Characteristic Features

The article considers the problem of bureaucratisation of the state and the most important social and economic consequences of this phenomenon. The essence of bureaucracy has been revealed, characteristic features of its functioning in Russia have been analyzed; the material base of bureaucracy and its dominating status in the society have been substantiated. The conclusion has been made that the process of changing the role of the budget to serve the interests of bureaucracy is being accomplished.

The Role of Threat and Economic Uncertainty in Support for Scottish Independence

2014 ◽  
Vol 23 (1) ◽  
pp. 103-124 ◽  
Author(s):  
Daniel Kopasker
Keyword(s):  
Economic Consequences ◽  
Perceived Threat ◽  
Constitutional Change ◽  
Lack Of Information ◽  
Economic Expectations ◽  
Scottish Independence ◽  
The Individual ◽  
The Impact ◽  
Levels Of Support

Existing research has consistently shown that perceptions of the potential economic consequences of Scottish independence are vital to levels of support for constitutional change. This paper attempts to investigate the mechanism by which expectations of the economic consequences of independence are formed. A hypothesised causal micro-level mechanism is tested that relates constitutional preferences to the existing skill investments of the individual. Evidence is presented that larger skill investments are associated with a greater likelihood of perceiving economic threats from independence. Additionally, greater perceived threat results in lower support for independence. The impact of uncertainty on both positive and negative economic expectations is also examined. While uncertainty has little effect on negative expectations, it significantly reduces the likelihood of those with positive expectations supporting independence. Overall, it appears that a general economy-wide threat is most significant, and it is conjectured that this stems a lack of information on macroeconomic governance credentials.

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