scholarly journals Short-Term Credit Costs and U.S. Entrepreneurship

2019 ◽  
Author(s):  
Jorge Guzman ◽  
Yupeng Liu
Keyword(s):  
Economic Policy ◽  
Policy Uncertainty ◽  
New Firms ◽  
Short Term ◽  
Firm Formation ◽  
Economic Policy Uncertainty ◽  
Percentage Point Increase ◽  
Point Increase ◽  
Do So

We study how variation in short-term credit costs shapes U.S. entrepreneurship. To do so, we implement identification through heteroskedasticity on a new index of daily U.S. firm formation from 1988 to 2014. A one percentage point increase in the 3-month T-Bill is associated with a 6.4% drop in the number of new firms founded, and a 3.2% drop in the quality-adjusted quantity of new firms founded, seven days later. The results are robust to economic policy uncertainty, recession periods, and to multiple heteroskedasticity regimes. The rate of firm formation gets back to baseline six weeks after the shock, and there is no corresponding overcompensation, suggesting the loss is permanent.

Connectedness Among Economic Policy Uncertainties: Evidence from the Time and Frequency Domain Perspectives

2020 ◽  
Vol 8 (5) ◽  
pp. 401-433
Author(s):  
Jinxin Cui ◽  
Huiwen Zou
Keyword(s):  
Economic Policy ◽  
Financial Crisis ◽  
Spillover Effects ◽  
The United States ◽  
Practical Significance ◽  
Policy Uncertainty ◽  
The Novel ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
Crisis Period

AbstractThis paper investigates the frequency connectedness among economic policy uncertainties of G20 countries using the novel frequency connectedness proposed by Barunik and Krehlik (2018) which can depict the dynamic connectedness not only over time but also across different frequencies. The empirical results obtained in this paper demonstrate that, firstly, the connectedness among economic policy uncertainties is significant, and the spillover effects during the financial crisis and the post-financial crisis period are stronger than the pre-financial crisis period. Secondly, the United States, France, and Australia are the main net-transmitters of the economic policy uncertainty spillovers while Brazil, Italy, Mexico, and Russia act as the main net-recipients of the spillovers. Thirdly, the major international events may significantly enhance the spillover transmissions of economic policy uncertainty among different countries, thus increasing the magnitude of the total connectedness. Finally, the economic policy uncertainty spillovers are mainly transmitted in the short term, i.e., 1∼4 months instead of longer time horizons in terms of the magnitude of the frequency connectedness measures. The findings of this paper not only have profound theoretical and practical significance but also provide several significant implications for the policymakers, supervision agents, international traders, and various investors.

scholarly journals The Impact of Economic Policy Uncertainty on Capital Structure: Evidence from Russia

2019 ◽  
Vol 13 (4) ◽  
pp. 7-19
Author(s):  
Brigitte Granville ◽  
Roman Matousek ◽  
Egor Sokolov
Keyword(s):  
Economic Policy ◽  
Capital Structure ◽  
Sample Size ◽  
Policy Uncertainty ◽  
Economic Uncertainty ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
Tax Shield ◽  
Effect Model ◽  
The Status

This paper is a study of the influence of economic policy uncertainty on the capital structure of companies operating in the Russian market. The sample size is particularly notable (over 16,000 companies and 230,000 observations are included) insofar as previous studies have invariably used smaller selections due to the complexities of data processing. Several hypotheses are proposed and treated which concern the interrelations between company debt policies and the status of individual, sectoral, or industry relevant commercial activity, where the constant threat of economic uncertainty due to political or other external machinations affects the market. This research paper examines the following capital structure determinants: profitability, asset structure, company size, tax shield, non-debt tax shield, growth opportunity, and risk. The following methods are applied to test a series of nine hypotheses proposed as the most salient indicators of the present state of academic consensus: the Pool model (Pool), the fixed effect model (FE), and the random effect model (RE). In this context, the influence of economic uncertainty on the status of different debt types in 16,882 Russian companies between 2000 and 2017 was studied using the economic policy uncertainty index calculated in 2012. The results serve to confirm many of the extant hypotheses in the academic literature in the area of capital structural evaluation. For example, it is immediately apparent that the influence of uncertainty is of less significance for large companies as regards all types of debt (joint, short-term and long-term), due to their greater stability and lower risks for creditors. Among other conclusions, it is confirmed that as long as serious government participation is characteristic of the Russian banking system, the efficacy of the debt financing system is not equal for all sectors, and those sectors which are of strategic importance for the state are particularly resilient in troubled economic periods. However, interestingly, in the case of a short-term debt leverage such influence does not materialise. From a theoretical point of view this paper will be useful for researchers studying the fluctuating market conditions of developing or transitional markets (the large sample size will make this study particularly attractive for further evaluation at all levels of academic analysis). An understanding of the multivariate interrelations described in this paper may also be useful to company managers and investors who will gain insight into the consequences of fluctuations in levels of economic uncertainty for different types of companies.

scholarly journals Research on the Effectiveness of China’s Macro Control Policy on Output and Technological Progress under Economic Policy Uncertainty

2021 ◽  
Vol 13 (12) ◽  
pp. 6844
Author(s):  
Ganwen Zheng ◽  
Songping Zhu
Keyword(s):  
Economic Policy ◽  
Technological Progress ◽  
Control Policy ◽  
Output Growth ◽  
Policy Uncertainty ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
Macroeconomic Regulation And Control ◽  
And Control

The uncertainty of economic policy, a specific form of uncertainty, can affect both economic growth, and the effectiveness of the macroeconomic regulation and control policy. Existing studies have analyzed the impacts of economic policy uncertainty on investment, consumption, trade, and total factor survival, but there is no analysis of the effectiveness of macroeconomic regulation and control policies on output and technological progress in a deterministic environment. Output growth and technological progress show the performance of economic growth in gross and efficiency, respectively, which is the external performance and internal driving force of economic growth. To achieve long-term sustainable economic development, it is necessary to consider both the aggregate problem and technological progress. In this context, this paper attempts to explore the effectiveness of China’s macroeconomic regulation and control policy on output growth and technological progress under the economic policy uncertainty. Specifically, this paper first analyzes the effectiveness of macroeconomic regulation and control policy on China’s output growth and technological progress in an uncertain environment, and then makes an empirical study by constructing a time-varying parameter vector autoregression model (TVP-VAR). Furthermore, the simulation test of the relevant results is carried out using the counter-fact analysis method. The empirical results show that: (1) under the uncertainty environment, the direction of the effect of price monetary policy on output has not changed, the effect of interest rate increase on output growth is negative, and the impact is stronger in the short term than in the medium and long term; the effect of rising interest rates on technological progress is positive, and the effect intensity is also significant in the short term, but weak in the medium and long term, the effect of price monetary policy on output is stronger under moderate uncertainty. (2) Credit growth can promote output growth, and the regulation effect of credit growth on output growth is mainly reflected in the short term under the TVP-VAR model, the effect of credit growth on technological progress is not significant. Further research using counterfactual analysis shows that the uncertain environment will reduce the effect of credit policy on output growth, but the effect is not significant.

scholarly journals PENGARUH KETIDAKPASTIAN KEBIJAKAN EKONOMI AMERIKA SERIKAT, TIONGKOK, DAN JEPANG TERHADAP JAKARTA ISLAMIC INDEX

2021 ◽  
Vol 11 (1) ◽  
pp. 95
Author(s):  
Maulidia Royhana ◽  
Titi Dewi Warninda
Keyword(s):  
Economic Policy ◽  
Time Series Data ◽  
Series Data ◽  
Policy Uncertainty ◽  
Long Term Effects ◽  
Short Term ◽  
Economic Policy Uncertainty ◽  
United State ◽  
Long Term Effect

This research aims to analyze the influence of United State Economic Policy Uncertainty, Tiongkok Economic Policy Uncertainty, and Japan Economic Policy Uncertainty on the Jakarta Islamic Index. This study used time-series data from January 2001 to December 2019 and Error Correction Model (ECM) to analyze the short-term and long-term effects of United State, Tiongkok and Japan Economic Policy Uncertainty on the Jakarta Islamic Index. The results of this research show that United State EPU and Tiongkok EPU have no short-term and long-term effect on Jakarta Islamic Index. Meanwhile, in the short-term, Japan EPU has a significant influence on the Jakarta Islamic Index but has no long-term influence.

scholarly journals Economic policy uncertainty and Bitcoin. Is Bitcoin a safe-haven asset?

2020 ◽  
Vol 29 (3) ◽  
pp. 347-363 ◽  
Author(s):  
Jessica Paule-Vianez ◽  
Camilo Prado-Román ◽  
Raúl Gómez-Martínez
Keyword(s):  
Economic Policy ◽  
Regression Models ◽  
Significant Contribution ◽  
Policy Uncertainty ◽  
Simple Linear Regression ◽  
Safe Haven ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Daily Data ◽  
Do So

PurposeThe goal of this work is to determine whether Bitcoin behaves as a safe-haven asset. In order to do so, the influence of Economic Policy Uncertainty (EPU) on Bitcoin returns and volatility was studied.Design/methodology/approachIt is evaluated whether, when compared with the evolution of EPU, Bitcoin's returns and volatility show behaviours typical of safe havens or rather, those of conventional speculative assets. When faced with an increase in EPU, safe havens – such as gold – can be expected to increase their returns and volatility, while conventional speculative assets will increase their volatility and reduce their returns. This study uses simple linear regression and quantile regression models on a daily data sample from 19 July 2010 to 11 April 2019, to analyse the influence of EPU on the returns and volatility of Bitcoin and gold.FindingsBitcoin's returns and volatility increase during more uncertain times, just like gold, showing that Bitcoin acts not only as a means of exchange but also shows characteristics of investment assets, specifically of safe havens. These findings provide useful information to investors by allowing Bitcoin to be considered as a tool to protect savings in times of economic uncertainty and to diversify portfolios.Originality/valueThis study complements and expands current research by aiming to answer the question of whether Bitcoin is a simple speculative asset or a safe haven. The most significant contribution is to show that Bitcoin is not a mere speculative asset but behaves like a safe haven.

Momentum strategies in times of economic policy uncertainty

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jessica Paule-Vianez ◽  
Júlio Lobão ◽  
Raúl Gómez-Martínez ◽  
Camilo Prado-Román
Keyword(s):  
Economic Policy ◽  
Policy Uncertainty ◽  
Momentum Effect ◽  
Economic Cycle ◽  
Momentum Strategies ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
Point Increase ◽  
The Us ◽  
The Impact

Purpose This paper aims to evaluate the influence of economic policy uncertainty (EPU) on the momentum effect, analysing its influence depending on the economic cycle and in different quantiles. Design/methodology/approach To determine the influence of EPU in the momentum effect taking into account the economic cycle and the level of the quantile, linear regression and quantile regression have been applied for the period from 2 January 1985 to 30 April 2019 for the US stock market. Findings It is shown that an increased feeling of insecurity associated with EPU reduces the momentum effect, especially in times of recession. Distinguishing by quantiles, an asymmetry in the impact of EPU in the momentum effect is discovered, finding that EPU reduces (increases) the profits of momentum strategies in the lowest (highest) quantiles. In the highest quantiles, an investor can obtain higher extraordinary returns with this strategy. For example, in the highest quantile, a one-point increase in the EPU levels would have increased the daily profitability by 12.7 basis points. These findings have important implications for investors and policymakers. Originality/value To the best of the authors’ knowledge, this is the first paper that evaluates the influence of EPU on the momentum effect by conducting an analysis based on the economic cycle and different quantiles, demonstrating how these factors are relevant in the influence of this uncertainty in the momentum anomaly.

scholarly journals Economic Policy Uncertainty (EPU) and China's Export Fluctuation in the Post-pandemic Era: An Empirical Analysis based on the TVP-SV-VAR Model

2021 ◽  
Vol 9 ◽  
Author(s):  
Guoheng Hu ◽  
Shan Liu
Keyword(s):  
Economic Policy ◽  
Var Model ◽  
Export Trade ◽  
Policy Uncertainty ◽  
Time Varying ◽  
Short Term ◽  
Monthly Data ◽  
Economic Policy Uncertainty ◽  
Risk Monitoring ◽  
Trade Control

In the COVID-19 pandemic, the bidirectional policy adopted by the governments to stimulate domestic economy and reinforce foreign trade control is making the trade environment abnormally complex. China is facing a new challenge in export trade growth. Based on the continuous monthly data from January 2002 to April 2021, this paper uses the time-varying TVP-SV-VAR model to study the impulse response of China's export trade to economic policy uncertainty (EPU). It is found that (1) on the whole, the shock of global EPU and China's EPU on China's export to the OBOR/RCEP member countries is time-varying, different, and structurally significant; (2) during the pandemic, EPU has a significant short-term negative shock on China's gross exports and export to OBOR/RCEP members, and this shock is especially big in the case of global EPU. In the post-pandemic era, China should strengthen pandemic control and economic risk monitoring, continue with execution of multilateral FTAs and create a sustainably stable export trade environment.

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