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Journal articles on the topic 'Equilibrium of savings and investments'
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Ferrer-Comalat, Joan Carles, Dolors Corominas-Coll, and Salvador Linares-Mustarós. "A Fuzzy Economic Dynamic Model." Mathematics 9, no. 8 (April 10, 2021): 826. http://dx.doi.org/10.3390/math9080826.
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In the study presented here, fuzzy logic was used to analyze the behavior of a model of economic dynamics that assumes income to be in equilibrium when it is composed of consumption and investment, that is, when savings and investment are equal. The study considered that consumption and savings depend on the income of the previous period through uncertain factors, and, at the same time, that investment is an uncertain magnitude across various periods, represented as a fuzzy number with a known membership function. Under these conditions, the model determines the factor of income growth and investments required to maintain equilibrium, as well as the uncertain values of income for the different periods, expressed through fuzzy numbers. The study also analyzes the conditions for their convergence and the fuzzy value that income represents in equilibrium.
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Famielec, Józefa. "Sustainable Development as Equilibrium Between Investments and Savings – An Attempt Towards a New Conception." Problemy Zarzadzania 16, no. 3 (75) (July 17, 2018): 55–71. http://dx.doi.org/10.7172/1644-9584.75.3.
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N. Kirori, Dr Gabriel. "KRA Second University Symposium, 9th October 2020—Impact of Technology on Tax Administration." International Journal of Accounting and Finance Studies 3, no. 2 (November 25, 2020): p92. http://dx.doi.org/10.22158/ijafs.v3n2p92.
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This study investigates the theoretical basis for revenue mobilization and the role of technology in tax administration. Public finance theory supports the growth of the share of government expenditures to GDP with implications of constraints for public investment financing. The equilibrium predicted in the theory of loanable funds is no longer sustainable because of shortage of domestic savings creating a situation of excess demand for funds to finance public investments. Leveraging on technology can be an important administrative policy for boosting revenue mobilization. The study concludes that both tax administration reforms and quality of governance are complementary to technology in tax revenue mobilization in the developing economies.
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Chen, Hong, and Murray Frank. "Are Direct Investments by the Federal Reserve a Good Idea? A Corporate Finance Perspective." Quarterly Journal of Finance 06, no. 03 (August 4, 2016): 1650007. http://dx.doi.org/10.1142/s2010139216500075.
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Due to the crisis of 2007–2009, financial friction macro models are being used to provide a theoretical foundation for the evaluation of ‘unconventional policy’. In these models, banks take deposits from households and lend to firms. Empirically, other financial channels that are missing in the models, such as corporate bonds and equity, are also important. This paper analyzes a model in which bank loans and equity are both feasible. Households have limited ability to enforce their claims. If either the bank or the equity market are undistorted, the equilibrium is socially efficient. If both are distorted, the equilibrium is inefficient. In that case, government policy aimed at the bank or at the firm can be helpful. Suitably chosen equity injections, loans, or interest rate subsidies can all work. Interest rate subsidies have the advantage that they occur later and there is less concern about cheating. Equity injections have the advantage that they minimize the necessary level of tax imposed on households that is needed to achieve optimality. Optimal equity injections and optimal loan subsidies induce reductions in household savings (‘crowding out’). Optimal interest rate subsidies induce increases in household savings (‘crowding in’).
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Ezeji E, Chigbu, Ubah Chijindu Promise, and Chigbu Uzoamaka S. "Impact of Capital Inflows on Economic Growth of Developing Countries." International Journal of Management Science and Business Administration 1, no. 7 (2015): 7–21. http://dx.doi.org/10.18775/ijmsba.1849-5664-5419.2014.17.1001.
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This study examines the impact of capital inflows on economic growth of developing economies; the case of Nigeria, Ghana and India from 1986-2012. This is necessitated by the doubts being raised as whether the huge inflows of foreign capital in developing economies over the years have transmitted to real economic growth. Augmented Dickey Fuller unit root test was employed to evaluate the stationarity of the data, while Johansen Co-integration was used to estimate the long-run equilibrium relationship among the variables. The casual relationship was tested using Granger Causality, and Ordinary Least Square method was used to estimate the model. The findings reveals that capital inflows have significant impact on the economic growth of the three countries. In Nigeria and Ghana, foreign direct and portfolio investment as well as foreign borrowings have significant and positive impact on economic growth. Workers’ remittances significantly and positively related to the economic growth of the three countries. The enabling environment should be created in the developing countries to encourage more inflow of foreign investments and workers remittances. This will help in closing the savings-investment gap and encourage economic growth in these countries. The study signifies that capital inflows is indispensable in closing the savings-investment gap required for economic growth of developing countries.
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Adedokun, Adeniyi J., Olabusuyi R. Falayi, and Adebowale M. Adeleke. "An autoregressive analysis of the determinants of private savings in Nigeria." Review of innovation and competitiveness 6, no. 1 (February 12, 2020): 5–20. http://dx.doi.org/10.32728/ric.2020.61/1.
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Purpose. Despite the increasing trend of private savings in Nigeria, the country is still characterised by low investment and output growth, thus, suggesting that the average saving rate is still far from being impressive. This study investigates the determinants of private savings in Nigeria. Methodology. Autoregressive Distributed Lag (ARDL) Model using annual time series data from 1981 to 2016 within the theoretical framework derived from the life-cycle hypothesis is employed in this study. The key variables under investigation are private savings, income, dependency ratio, real interest rate, social security payment, financial development and macroeconomic stability. The data used for analysis are sourced from Central Bank of Nigeria Statistical Bulletin (2016) and World Development Indicator (2016). Findings. The results show that lifetime income and social security payment have significant positive relationship with private saving in the long-run, while adult dependency has significant negative relationship. In the short-run, adult dependency and social security payment have significant positive relationship with private savings. In addition, the result shows that 62% of deviation from the long-run equilibrium level of private savings is annually corrected for by the model estimated. Originality. This research investigates both the long-run and short-run effects of the various determinants of private savings in Nigeria. Thus, the study can serve as eye opener to the important variables that can improve the level of private savings in Nigeria.
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Ferrer-Comalat, Joan Carles, Salvador Linares-Mustarós, and Ricard Rigall-Torrent. "Incorporating Fuzzy Logic in Harrod’s Economic Growth Model." Mathematics 9, no. 18 (September 8, 2021): 2194. http://dx.doi.org/10.3390/math9182194.
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This paper suggests the possibility of incorporating the methodology of fuzzy logic theory into Harrod’s economic growth model, a classic model of economic dynamics for studying the growth of a developing economy based on the assumption that an economy with only savings and investment income is in equilibrium when savings are equal to investment. This model was the first precursor to exogenous growth models, which in turn gave rise to endogenous growth models. This article therefore represents a first step towards introducing fuzzy logic into economic growth models. The study concerned considers consumption and savings to depend on income by means of uncertain factors, and investment to depend on the variation of income through the accelerator factor, which we consider uncertain. These conditions are used to determine the equilibrium growth rate of income and investment, as well as the uncertain values for these variables in terms of fuzzy numbers. As a result, the new model is shown to expand the classical model by incorporating uncertainty into its variables.
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Hillebrand, Marten, Tomoo Kikuchi, and Masaya Sakuragawa. "BUBBLES AND CROWDING-IN OF CAPITAL VIA A SAVINGS GLUT." Macroeconomic Dynamics 22, no. 5 (July 4, 2017): 1238–66. http://dx.doi.org/10.1017/s1365100516000699.
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This paper uncovers a mechanism by which bubbles crowd in capital investment. If capital formation is initially depressed by a binding credit constraint, a bubble triggers a savings glut. Higher returns in a new bubbly equilibrium attract additional savings, which are channeled to expand investment at the extensive margin, leading to permanently higher capital, output, and wages. We demonstrate that crowding-in through this channel is a robust phenomenon that occurs along the entire time path.
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K., Otiwu, Peter A. Okere, and Uzowuru L.N. "DETERMINANTS OF PRIVATE DOMESTIC SAVINGS IN NIGERIA (1981- 2015)." International Journal for Innovation Education and Research 6, no. 2 (February 28, 2018): 21–40. http://dx.doi.org/10.31686/ijier.vol6.iss2.938.
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This study empirically evaluates the determinants of private domestic savings in Nigeria (1981- 2015). Secondary data were sourced from CBN statistical bulletin and bureau of statistics. Hypotheses were formulated and tested using vector error correction model (VECM) and the test for stationarity proves that the variables are integrated in 1(1) order which implies that unit roots do not exist among the variables. There is also long-run equilibrium relationship between the variables and the result also confirms about 29 percent short-run adjustment speed from long-run disequilibrium. The coefficient of determination indicates that about 78 percent of the variations in private domestic savings are explained by changes in its determinants in Nigeria. The results show that per capita income and financial inclusion are major determinants of private domestic savings in Nigeria. The study therefore recommends that concerted and well articulated efforts should be made to make available and affordable credits to productive investments like small scale industries/businesses as they constitute an integral part of the growth and transformation process of an agro based economy like that of Nigeria this will induce employment, increase financial access and income of the various economic agents which will have a spillover effect on private savings. Secondly, since Per capita income and financial inclusion are the important factors that influence private savings in Nigeria, policy makers can promote growth of per capita income by improving productivity of workers and greater effort should be geared towards sustaining or improving on the financial inclusion strategies.
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de La Grandville, Olivier. "WHY IS OPTIMAL GROWTH THEORY MUTE? RESTORING ITS RIGHTFUL VOICE." Macroeconomic Dynamics 22, no. 1 (January 2018): 77–100. http://dx.doi.org/10.1017/s1365100516000742.
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Optimal growth theory as it stands today does not work. Using strictly concave utility functions systematically inflicts on the economy distortions that are either historically unobserved or unacceptable by society. Moreover, we show that the traditional approach is incompatible with competitive equilibrium: Any economy initially in such equilibrium will always veer away into unwanted trajectories if its investment is planned using a concave utility function. We then propose a rule for the optimal savings-investment rate based on competitive equilibrium that simultaneously generates three intertemporal optima for society. The rule always leads to reasonable time paths for all central economic variables, even under very different hypotheses about the future evolution of population and technical progress.
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Kovalev, Aleksandr. "Natural Interest Rate: Sraffa Vs. Hayek Debates." Moscow University Economics Bulletin 2019, no. 3 (June 30, 2019): 3–16. http://dx.doi.org/10.38050/01300105201931.
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This article deal with the discussion between F. Hayek and P. Sraffa in the 1930s. This piece of the history of economic thought is not presented in the Russian-speaking literature. The main method is a content analysis. The directions of criticism Hayek’s business cycle theory by Sraffa and the response towards is analyzed in the paper. The author compared the opponents’ approaches to the essence of the equilibrium, to the savings-investments equality, to the possibility to lose capital as a result of malinvestments, to the role of expectations, and to the natural rate of interest. A version was offered for explaining the ineffectiveness of Hayek's answer to the question on the multiplicity of natural interest rates and the reasons why the barter economy has been perceived as theoretical basis of the Hayekian analysis. It is the inaccurate wording of the natural interest rate and the representation the theory within the framework of the equilibrium paradigm. The findings of the research may be applied to analyze the impact of interest rate regulation on the economic.
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Araujo, Ricardo Azevedo, and Joanílio Rodolpho Teixeira. "Decisions on investment allocation in the post-keynesian growth model." Estudos Econômicos (São Paulo) 42, no. 3 (September 2012): 615–34. http://dx.doi.org/10.1590/s0101-41612012000300007.
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In this article the growth models of Feldman (1928) and Mahalanobis (1953) are extended to consider the analysis of decisions of investment allocation in the context of the Post Keynesian Growth Model. By adopting this approach it is possible to introduce distributive features in the Feldman-Mahalanobis model that allows us to determine the rate of investment allocation according to the equilibrium decisions of investment and savings. Finally, an additional condition is added to the Post Keynesian Growth Model in order to fully characterise the equilibrium path in an extended version of this framework, where capital goods are also needed to produce capital goods.
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Joy, Justin, and Prasant Kumar Panda. "Pattern of public debt and debt overhang among BRICS nations: an empirical analysis." Journal of Financial Economic Policy 12, no. 3 (September 19, 2019): 345–63. http://dx.doi.org/10.1108/jfep-01-2019-0021.
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Purpose This paper aims to analyze the pattern of public debt in Brazil, Russian Federation, India, China and South Africa (BRICS) in a comparative perspective. Besides, an attempt is made to verify the existence of debt overhang as suggested by Krugman (1988) among BRICS nations. Design/methodology/approach Annual panel data for BRICS for the period 1980-2016 has been used for the analysis. Percentage ratio method has been used to analyze the pattern of debt. Panel covariate augmented Dickey–Fuller (pCADF) test has been used to verify the time series properties of the variable, while panel cointegration test of Pedroni (1999) is used to check the existence of any co-integrating vector among the variables. Panel Granger causality test is used to check the causality between the variables. Findings Co-integration result suggests that there exists a strong long-run equilibrium relationship between debt service, domestic savings, capital formation and economic growth of BRICS nations. From Granger causality test, it is observed that domestic savings and capital formation are Granger caused by debt servicing. The coefficients from fully modified ordinary least squares measure a negative impact of debt service on gross capital formation and gross domestic saving. This suggests that the payment for debt service affects capital formation and gross domestic savings adversely. Thus, it gives primary signals for debt overhang effect in BRICS nations. Practical implications Allowing debt service to negatively affect the investment and potential investment will result in slowdown or stagnation in economic growth in the long run, so strategies need to be taken in BRICS nations to check the adverse effects of rising level of debt-service-payment-to-gross national income ratio on domestic savings and capital formation. BRICS nations need to reduce their debt service payment by undertaking appropriate strategy of debt overhaul and fiscal management so that domestic savings and capital formation in the country will not be adversely affected. Besides, BRICS nations need to take measures to augment its domestic savings and capital formations. Originality/value To the best of the authors’ knowledge, no published works have analyzed the pattern of public debt for BRICS (major developing nations). Debt servicing is also not checked for BRICS in recent papers, considering overhang approach.
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van Riet, Ad. "Monetary Policy and Unnatural Low Interest Rates: Secular Stagnation or Financial Repression?" Review of Economics 70, no. 2 (September 25, 2019): 99–135. http://dx.doi.org/10.1515/roe-2019-0015.
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Abstract Market interest rates have been on a declining trend over the past 35 years in all advanced economies, even reaching negative territory in some European jurisdictions. This article reviews two competing explanations for the occurrence of unnatural low interest rates. The secular stagnation hypothesis of Keynesian origin maintains that persistent non-monetary factors have caused a structural excess of desired savings over planned investments which steadily pushed down the equilibrium real interest rate that is consistent with a balanced economy. Major central banks in turn failed to sufficiently lower their monetary policy rates to revive aggregate demand, leading to anaemic economic recoveries and hysteresis effects. By contrast, the financial repression doctrine argues that central banks pursued low interest rates to ease the government budget constraint and serve political objectives. The Austrian School of Economics states that this monetary easing bias sowed the seeds of repeated boom/bust cycles and created economic distortions that dragged down potential growth and the equilibrium real interest rate. The core of the debate appears to be the long-standing controversy about the desirable role for the state in guiding the economy on a higher potential growth path as opposed to relying on the efficiency of market processes in generating prosperity.
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Xie, W., N. Li, J. D. Wu, and X. L. Hao. "Modeling the economic costs of disasters and recovery: analysis using a dynamic computable general equilibrium model." Natural Hazards and Earth System Sciences 14, no. 4 (April 8, 2014): 757–72. http://dx.doi.org/10.5194/nhess-14-757-2014.
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Abstract. Disaster damages have negative effects on the economy, whereas reconstruction investment has positive effects. The aim of this study is to model economic causes of disasters and recovery involving the positive effects of reconstruction activities. Computable general equilibrium (CGE) model is a promising approach because it can incorporate these two kinds of shocks into a unified framework and furthermore avoid the double-counting problem. In order to factor both shocks into the CGE model, direct loss is set as the amount of capital stock reduced on the supply side of the economy; a portion of investments restores the capital stock in an existing period; an investment-driven dynamic model is formulated according to available reconstruction data, and the rest of a given country's saving is set as an endogenous variable to balance the fixed investment. The 2008 Wenchuan Earthquake is selected as a case study to illustrate the model, and three scenarios are constructed: S0 (no disaster occurs), S1 (disaster occurs with reconstruction investment) and S2 (disaster occurs without reconstruction investment). S0 is taken as business as usual, and the differences between S1 and S0 and that between S2 and S0 can be interpreted as economic losses including reconstruction and excluding reconstruction, respectively. The study showed that output from S1 is found to be closer to real data than that from S2. Economic loss under S2 is roughly 1.5 times that under S1. The gap in the economic aggregate between S1 and S0 is reduced to 3% at the end of government-led reconstruction activity, a level that should take another four years to achieve under S2.
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Chemingui, Mohamed A., and Chokri Thabet. "Economy-Wide Analysis of Alternative Water Management Policies: A Comparative Analysis for Morocco and Tunisia." Water Economics and Policy 02, no. 04 (December 2016): 1650030. http://dx.doi.org/10.1142/s2382624x16500302.
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The main objective of this paper is to compare the impacts of alternative water policy management scenarios on the Tunisian and Moroccan economies. A dynamic computable general equilibrium model has been developed for each country and is used to explore the likely effects of alternative water policies on a variety of macroeconomic and sectoral variables. Results show that the low cost of water has encouraged farmers to adopt more water-intensive activities. Reducing public subsidies for water will directly affect farmers’ incomes which, under the current conditions, are expected to drop by about 1% by 2020 compared to the baseline scenario. However, the reduction of farmers’ incomes will be largely compensated for by the level of public savings from more efficient water resources management. Moreover, farmers will progressively increase their incomes as a result of introducing more appropriate activities with lower water demand. Finally, the ultimate economic outcomes of public management policies of water resources depend also on the type of fiscal policies to be followed in financing additional investments.
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Xie, W., N. Li, J. D. Wu, and X. L. Hao. "Modeling economic costs of disasters and recovery involving positive effects of reconstruction: analysis using a dynamic CGE model." Natural Hazards and Earth System Sciences Discussions 1, no. 6 (November 8, 2013): 6357–98. http://dx.doi.org/10.5194/nhessd-1-6357-2013.
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Abstract. Disaster damages have negative effects on economy, whereas reconstruction investments have positive effects. The aim of this study is to model economic causes of disasters and recovery involving positive effects of reconstruction activities. Computable general equilibrium (CGE) model is a promising approach because it can incorporate these two kinds of shocks into a unified framework and further avoid double-counting problem. In order to factor both shocks in CGE model, direct loss is set as the amount of capital stock reduced on supply side of economy; A portion of investments restore the capital stock in existing period; An investment-driven dynamic model is formulated due to available reconstruction data, and the rest of a given country's saving is set as an endogenous variable. The 2008 Wenchuan Earthquake is selected as a case study to illustrate the model, and three scenarios are constructed: S0 (no disaster occurs), S1 (disaster occurs with reconstruction investment) and S2 (disaster occurs without reconstruction investment). S0 is taken as business as usual, and the differences between S1 and S0 and that between S2 and S0 can be interpreted as economic losses including reconstruction and excluding reconstruction respectively. The study showed that output from S1 is found to be closer to real data than that from S2. S2 overestimates economic loss by roughly two times that under S1. The gap in economic aggregate between S1 and S0 is reduced to 3% in 2011, a level that should take another four years to achieve under S2.
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Fougère, Maxime, Simon Harvey, and Bruno Rainville. "What Are the Economic and Labour Market Effects of an Income Tax Reduction Targeted at Older Workers?" Economics Research International 2012 (July 5, 2012): 1–12. http://dx.doi.org/10.1155/2012/461597.
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This paper explores the economic and labour market effects of implementing a tax reduction targeted at older workers. The analysis is conducted with a life-cycle computable general equilibrium model calibrated on Canadian data. The analysis shows that implementing a permanent income tax reduction for workers aged 60 and over has only small macroeconomic effects because the labour supply increase of older workers is partly offset by a reduction in the labour supply at core ages. This induced effect also discourages savings and generates crowding out through private investment but has a favourable impact on lifetime economic welfare. The macroeconomic impact is much larger when the income tax reduction is temporary because workers no longer reduce their hours at core ages and there is no reduction in savings. However, since only current middle-aged and older workers benefit from the tax cut, a temporary income tax cut reduces intergenerational equity.
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Tewolde, Melake. "Performances of the Least Developed Countries under Neo-liberal Regimes: Implications for the implementation of Agenda 2030 for Sustainable Development." IRA-International Journal of Management & Social Sciences (ISSN 2455-2267) 6, no. 3 (April 3, 2017): 467. http://dx.doi.org/10.21013/jmss.v6.n3.p12.
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<p><em>The Least Developed Countries (LDCs) have implemented neoliberal policies such as trade liberalization, privatization of public enterprises, and currency devaluation with the expectation to promote their economic growth and development by capturing the gains from international trade through a more efficient allocation of resources and increased private investment. Twenty one countries (constituting 44%) have been designated LDCs since 1971, the introduction of the category for the first time by the United Nations (UN). Development experiences of the LDCs indicate that neoliberal policies are not adequately addressing their development challenges. The LDCs are still locked into a low equilibrium trap characterized by fragile economic growths, distorted structural transformation, low domestic resource, high dependence on external financing , high dependence on primary commodity exports, high external debt burden and debt services and low human development. The LDCs must thus shift to a developmental state approach to strategically integrate into the world economy and to build their productive capacities and to enhance their structural transformation which could lead the countries along the path of sustained economic growth to meet the Sustainable Development Goals (SDGs) by 2030.</em><em> </em></p><p><em>The implications for the implementation of Agenda 2030 for sustainable development are that: </em></p><p><em>(i) The LDCs have to extensively tap their domestic savings potentials and investments to reach 25% or more of their Gross Domestic Product(GDP) to sustain 7% -8% growth rates per annum that will have a great impact on poverty reduction in line with the sustainable development goal 1 (SDG1) . (ii) The LDCs have to select a few SDGs which are of high national priorities and synchronize them with their respective national development plans and determine the financing needs for the implementation of the selected SDGs. (iii) cancellation of external debt of the LDCs by the creditors in order to release resources needed for their investments to achieve the SDGs (iv) replacement of foreign aid by market access for the LDCs products to increase their foreign exchange earnings needed for building their productive capacities. (v) Maintaining peace and stability and resolving conflicts to release resources needed for their productive investment.<br /></em></p>
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Lee, Hongshik, and Backhoon Song. "Quantitative Estimates of the Economic Impacts of a Korea–United States Free Trade Agreement." Asian Economic Papers 7, no. 2 (June 2008): 52–73. http://dx.doi.org/10.1162/asep.2008.7.2.52.
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This paper investigates the bilateral trade pattern between South Korea and the United States and examines the economic impact of a Korea–United States (KORUS) free trade agreement (FTA). Three related general equilibrium approaches were used to investigate the effects of a KORUS FTA. The static general equilibrium model estimates the efficiency gains from resource allocation. The capital accumulation general equilibrium model includes the growth bonus from the increased incentives for savings and investment created by the static efficiency gains. The productivity enhancement general equilibrium model augments the capital accumulation model by taking into consideration the dynamic efficiency improvements from competitive effects in the economies over time. The last welfare gain turns out to be the biggest gain from the KORUS FTA, dwarfing the static efficiency gains. The results indicate that Korea could gain an estimated 0.32 to 5.97 percent in GDP from a KORUS FTA. Much of the gains that would accrue to Korea from the FTA with the United States would be productivity gains from increased competition between U.S. producers and domestic Korean producers. Another important area of gain for Korea would be increased efficiency from lower non-tariff barriers. This provides a strong argument for ensuring that an FTA between Korea and the United States is comprehensive and facilitates regulatory cooperation and the reduction of non-tariff barriers.
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KRIUCHKOVA, Iryna. "BORYS E. KVASNYUK ON THE DEPENDENCE OF ECONOMIC GROWTH ON THE LEVEL OF SAVINGS." Economy of Ukraine 2019, no. 5 (June 11, 2019): 79–86. http://dx.doi.org/10.15407/economyukr.2019.05.079.
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The article is devoted to outstanding scientist Boris E. Kvasniuk, who in his research focused on a wide range of topical issues of economic growth, increased efficiency of the state regulation of the economy, made a significant contribution to the theory of economic growth, and scientifically substantiated the basic structural proportions of GDP to ensure a stable investment in Ukraine’s economic growth. The theoretical and methodological foundations of the formation of the national savings, their specifics for various institutional sectors of the economy, the impact of government policies on the level of consumer spending in GDP and gross capital accumulation were presented in his works at a high scientific level. Borys E. Kvasnyuk identified the reasons for the volatility of gross savings and the high dependence of the economy on external financing and external shocks in Ukraine. Long before the new crisis of 2009, he warned about the need for the state support of domestic producers until they improve their competitiveness to a level ensuring a balance in foreign trade in goods and foreign exchange stability. He also foresaw that subsequently the overseas income of Ukrainians would become a factor in balancing the current account of the balance of payments, while the revenues from foreign direct investment would be a factor in its deterioration and would increase the dependence of Ukraine’s economy on external factors. Kvasnyuk’s works remain relevant for new generations of researchers as they reveal the fundamental principles of economic development and the role of the state in supporting the macroeconomic equilibrium.
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Dávila, Julio. "OUTPUT EXTERNALITIES ON TOTAL FACTOR PRODUCTIVITY." Macroeconomic Dynamics 21, no. 6 (August 1, 2016): 1389–425. http://dx.doi.org/10.1017/s1365100515000905.
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The impact that output has on future total factor productivity is not internalized by competitive agents. As a result, the allocation that a planner would choose cannot be reached as a competitive equilibrium outcome (neither for infinitely lived agents nor for overlapping generations): the market remuneration to capital and labor is too low. The planner's allocation can nonetheless be implemented by a fiscal policy subsidizing the returns to savings and the wage rate as needed. The exact policy differs depending on whether only past investment or total output influences productivity: in the first case only capital returns need to be subsidized, whereas in the second case labor income needs to be subsidized too. The policy is balanced period by period by means of a lump-sum tax.
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Muhammad, Lawal, and Victor Ushahemba Ijirshar. "Empirical Analysis of the Relationship between Foreign Direct Investment and Economic Growth in Developing Countries- Evidence from Nigeria." International Journal of Business Administration and Management Research 1, no. 1 (June 15, 2015): 15. http://dx.doi.org/10.24178/ijbamr.2015.1.1.15.
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This study examines the effect of Foreign Direct Investment (FDI) on economic growth of Nigeria. The main objective of the study is to explore and quantify the contribution of Foreign Direct inflows to economic growth in Nigeria and other macro-economic variable(s). The model built for the study proxy real gross domestic product as the endogenous variable measuring economic growth as a function of Foreign Direct Investment,Domestic capital, Government Expenditure, real exchange rate and Inflation rate as the exogenous variables in the first model while unemployment was expressed as a function of Foreign Direct Investment, Governmentexpenditure and real GDP. Annual time series data was gathered from Central Bank of Nigeria Statistical bulletin, National Bureau of Statistics (NBS) and the World Economic Outlook spanning 1970 to 2013. The study used econometric techniques of Augmented Dickey-Fuller (ADF) unit root test, pairwise granger causality test,Johansen co-integration test and error correction model (ECM) for empirical analysis. The results of unit rootrevealed that, all the variables in the model were integrated at first difference while pairwise granger causality revealed a unidirectional relationship between Foreign Direct Investment (FDI) and Economic growth (GDP) in Nigeria and no causal relationship between Foreign Direct Investment and unemployment rate. The co-integration test shows that, long-run equilibrium relationship exists among the variables captured in model but model 2 revealed no hypothesized co-integrating equation. FDI had positive but not statistically significantrelationship with Nigerians economy growth in both the short and long run. The findings from the error correction method show that, the distortion in will adjust itself to equilibrium at 0.3% in each period which is very slow in adjusting to equilibrium in case of any distortion. The study recommends that, the government need to aggressively initiate policies to channel the Nation's domestic savings for investment purposes and enact policies to train human capital to argument increasing FDI into the country to stimulate the economy towards rapid and sustained economic growth.
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KAHSAY, TEWODROS NEGASH, ONNO KUIK, ROY BROUWER, and PIETER VAN DER ZAAG. "THE ECONOMY-WIDE IMPACTS OF CLIMATE CHANGE AND IRRIGATION DEVELOPMENT IN THE NILE BASIN: A COMPUTABLE GENERAL EQUILIBRIUM APPROACH." Climate Change Economics 08, no. 01 (February 2017): 1750004. http://dx.doi.org/10.1142/s201000781750004x.
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A multi-country, multi-sector computable general equilibrium (CGE) model is employed to evaluate the economy-wide impacts of climate change under the IPCC’s A2 and B1 scenarios and existing irrigation development plans in the Nile basin. The study reveals that climate change adversely affects mainly downstream Egypt and to a lesser extent Sudan, while it results in a limited impact in the upstream countries Ethiopia and the Equatorial Lakes region, where irrigated agriculture is still limited. The economic consequences for Egypt are especially substantial if the river basin countries pursue a unilateral irrigation development strategy. In order to prevent water use conflicts and ease water scarcity conditions, a cooperative water development strategy is needed as well as economic diversification in favor of less water-intensive sectors, combined with investments in water-saving infrastructure and improved irrigation efficiency.
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Amusa, HA. "A macroeconomic approach to estimating effective tax rates in South Africa." South African Journal of Economic and Management Sciences 7, no. 1 (July 23, 2004): 117–31. http://dx.doi.org/10.4102/sajems.v7i1.1432.
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Using data contained in South Africa's national accounts and revenue statistics, this paper constructs time-series of effective tax rates for consumption, capital income, and labour income. The macroeconomic approach allows for a detailed breakdown of tax revenue accruing to general government and the corresponding aggregate tax bases. The methodology used also yields effective rate estimates that can be considered as being consistent with tax distortions faced by a representative economic agent within a general equilibrium framework. Correlation analysis reveals that savings (as a percentage of GDP) is negatively correlated with both capital income and labour income tax rates. Investment (as a percentage of GDP) is positively correlated with the capital income tax rate, an outcome suggestive of the direct relationship between volatile capital inflows into South Africa and capital tax revenue
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Brooks, Wyatt, and Kevin Donovan. "Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua." Econometrica 88, no. 5 (2020): 1965–97. http://dx.doi.org/10.3982/ecta15828.
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We measure the impact of increasing integration between rural villages and outside labor markets. Seasonal flash floods cause exogenous and unpredictable loss of market access. We study the impact of new bridges that eliminate this risk. Identification exploits variation in riverbank characteristics that preclude bridge construction in some villages, despite similar need. We collect detailed annual household surveys over three years, and weekly telephone followups to study contemporaneous effects of flooding. Floods decrease labor market income by 18 percent when no bridge is present. Bridges eliminate this effect. The indirect effects on labor market choice, farm investment, and savings are quantitatively important and consistent with the predictions of a general equilibrium model in which farm investment is risky, and households manage labor market risk and agricultural risk simultaneously. In the calibrated model, the increase in consumption‐equivalent welfare is substantially larger than the increase in income due to the ability to mitigate risk.
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Narayan, Paresh Kumar. "An econometric model of the determinants of private investment and a CGE model of the impact of democracy on investment and economic growth in Fiji." International Journal of Social Economics 35, no. 12 (October 17, 2008): 1017–31. http://dx.doi.org/10.1108/03068290810911525.
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PurposeThe purpose of this paper is to construct an econometric model of the determinants of private investment with a particular focus on the impact of democracy on investment.Design/methodology/approachThe first step was to econometrically derive the long‐run elasticities; then to modify the Fiji computable general equilibrium (CGE) model to incorporate the investment function. Also the econometrically derived long run elasticities in the CGE model were used.FindingsIt was found that democracy has a positive and statistically significant impact on private investment in Fiji. The paper's simulation of Fiji becoming a fully democratic country on investment and other macroeconomic fundamentals, based on a CGE model, reveals that real gross domestic product and real national welfare increase by around 0.01 and 0.05 per cent, respectively; government savings and revenue performance improves; there is a trade balance surplus; and both private consumption and disposable income increase by around 0.05 and 0.12 per cent, respectively.Originality/valueThis is the first study that uses a CGE model to examine the impact of democracy, via investment, on other macroeconomic fundaments. No other study is known to have modelled democracy in a CGE framework.
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Nafisa, Adita, and Doni Teguh Wibowo. "PENGGUNAAN CAPITAL ASSET PRICING MODEL DALAM MENENTUKAN REQUIRED RETURN DAN SYSTEMATIC RISK SAHAM INDIVIDUAL." DIALEKTIKA : Jurnal Ekonomi dan Ilmu Sosial 5, no. 1 (March 18, 2020): 95–109. http://dx.doi.org/10.36636/dialektika.v5i1.418.
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ABSTRAK
Dalam upaya mengembangkan industri pasar modal di Indonesia, BEI senantiasa mengedukasi dan mengembangkan industri ke arah yang lebih baik, tujuan BEI tidak semata fokus pada penambahan jumlah investor baru, namun juga berupaya untuk menanamkan kebutuhan berinvestasi di pasar modal, yang secara tidak langsung akan meningkatkan jumlah investor aktif di pasar modal Indonesia. Yuk Nabung Saham merupakan bentuk kampanye untuk mengajak seluruh masyarakat menjadi calon pemodal untuk berinvestasi dengan membeli Saham secara rutin dan berkala. Sehingga, masyarakat Indonesia mulai bergerak dari saving society menjadi investing society. Penelitian ini dilakukan dibidang kajian analisisi investasi dan portofolio, pada pasar modal. Penelitian ini bersifat explanatory yang menjelaskan analisis investasi dan portofolio dengan menggunakan metoda capital asset pricing model sebagai alat untuk pengambilan keputusan investasi pada saham individual dengan populasi penelitian saham yang tergabung pada indeks IDX30 BEI. Model CAPM dapat menentukan minimum required return harga suatu asset dari investasi yang berisiko pada kondisi ekuilibrium. Dalam penelitian ini pengambilan sampel dilakukan dengan teknik non random sampling pada metoda purposive random sampling dikumpulkan melalui data sekunder dengan teknik pengumpulan data cross section. Penelitian ini mengacu kepada dua variabel yaitu, required return yang merupakan tingkat pengembalian yang diharapkan akan direalisasikan dari suatu investasi, dan Systematic risk sebagai suatu ukuran risiko yang tidak dapat dihilangkan melalui diversifikasi, yang mana merupakan risiko yang masih menjadi masalah bagi investor. Hasil penelitian diperoleh bahwa, semakin besar nilai required return, semakin besar pula nilai ?i saham tersebut begitu pula sebaliknya semakin kecil nilai required return semakin kecil pula nilai ?i saham tersebut.
Kata Kunci: Capital Asset Pricing Model, Systematic Risk, Required Return
ABSTRACT
In an effort to develop the capital market industry in Indonesia, the BEI continues to educate and develop the industry in a better direction, the purpose of the BEI is not merely to focus on adding new investors, but also to invest in the capital market, which will indirectly increase the amount active investor in the Indonesian capital market. Yuk Savings Stock is a form of campaign to invite all people to become prospective investors to invest by buying shares regularly and periodically. Thus, Indonesian people began to move from saving society to investing society. This research was conducted in the field of investment analysis and portfolio studies, on the capital market. This research is an explanatory study that explains investment and portfolio analysis using the capital asset pricing model as a tool for investment decision making on individual shares with a stock research population incorporated in the IDX30 BEI index. The CAPM model can determine the minimum required return on the price of an asset from investments that are at risk under equilibrium conditions. In this study the sampling was done by non-random sampling technique in the purposive random sampling method collected through secondary data with cross section data collection techniques. This study refers to two variables namely, required return which is the expected rate of return of an investment, and Systematic risk as a measure of risk that cannot be eliminated through diversification, which is a risk that is still an issue for investors. The results showed that, the greater the value of required return, the greater the value of the stock ?i and vice versa the smaller the value of the required return the smaller the value of the stock ?i.
Keyword: Capital Asset Pricing Model, Systematic Risk, Required Return
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Ashour, Mohamed A., Tawab E. Aly, and Yousra A. Eldegwee. "An Investigation Concerning the Impact of Climate Changes on the Water Equilibrium in the Egyptian Nile Delta." Annals of Valahia University of Targoviste, Geographical Series 17, no. 1 (April 1, 2017): 58–69. http://dx.doi.org/10.1515/avutgs-2017-0006.
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AbstractIn such problematic water situation in Egypt, control and saving of the available limited quantity takes great importance from both technical and national points of view. In addition to all the well-known traditional reasons of the problem such as pollution, over usage, and bad traditions of dealing with water, a new very important reason is added nowadays, called “Climate Changes” which has a direct impact on sea water rising, that causes a serious attack of the salt water to the fresh water especially in River Deltas., Not only the surface water, but also the ground water. Since that process proved some acceleration, several investigations have recently considered the worst impacts of climate change and sea water level rise on sea water intrusion. Most of them have revealed the severity of such problem, and the significance of the land movement of the dispersion zone under the sea water level rise situation. In this paper, we try to introduce a technical review and study for the most popular studies concerning our topic, and its most important conclusions, as an approach for preparing the Ph.D. thesis about the Nile Delta water equilibrium in the light of the expected Mediterranean Sea water level rise. Nile Delta, which located between Damietta Branch on the East, and Rosetta Branch on the west, occupies about 20000 square kilometers of the most rich, productive land in Egypt. About 50% of Egyptian population live in that area, agriculture is the main human activities on them, so water is the prime factor in their life, and their agriculture investments. The great amount of this investment depends on the ground water, which faces a serious challenge due to, two reasons, first, is the overuse, and over pumping, while the second is the attack of the salt water due to the Mediterranean Seawater level rise, because of the climate changes. These two reasons must be overcome, if the first reason can be controlled by law, and technical roles, the second reason needs intensive studies and investigations concerning the interaction between seawater and fresh ground water.
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Possas, Mario Luiz. "An Interpretation of Controversial Points in Keynes's General Theory." Brazilian Keynesian Review 1, no. 1 (May 11, 2015): 71–95. http://dx.doi.org/10.33834/bkr.v1i1.31.
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The paper offers an interpretation of the General Theory based on two main assumptions: (i) that its core is heterodox (meaning far from Neoclassical references) and (ii) that, while not working out a dynamic model, it is neither static nor based on the notion of equilibrium in the usual sense, i.e. as an attractor. It amounts rather to a foreword to a dynamic theory, given its emphasis on (future) time and expectations. The exposition is centered on the division between short and long run (period) with corresponding particularities and distinctions. In the first case, a more general concept of the principle of effective demand is proposed, from which the relation investment/savings, supply and demand functions at the Micro level – where basic variables are determined -, the “point of effective demand” and corresponding aggregative versions are interpreted. In the second case, investment decisions are examined on the light of chap. 17, concerning investment in capital assets, i.e. individual demand for assets. The central concept of uncertainty is introduced here, giving place to money as an asset as well as to liquidity preference and the rate of interest theories. Long term expectations under uncertainty give rise to other two key concepts – the state of confidence and the convention. As a result, his peculiar and crucial notion of instability of investment follows, as well as its extension to the capitalist economy as a whole.
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Roy, Debasish. "IS – LM model revisited in the perspective of underground economy." Journal of Money Laundering Control 20, no. 3 (July 3, 2017): 311–19. http://dx.doi.org/10.1108/jmlc-08-2016-0039.
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Purpose The purpose of this paper is to review the investment-savings, liquidity-money (IS–LM) model used in the traditional macroeconomic theory as an important tool to analyze the dynamics of product and money market. The IS curve represents product market equilibrium condition and the LM curve represents money market equilibrium condition. However, the traditional IS–LM model was formulated mainly keeping in mind the dynamics of the product and money markets of developed economies. Thus, there was an urgent need to explore the pre-established IS–LM model in the light of existing enormous, illicit underground economies prevalent all around the world. Design/methodology/approach In this paper, an exploratory attempt has been made to review the IS–LM model in the light of various illicit practices and by incorporating some assumptions that are relevant to this discussion. In this model, ISil curve could be defined as a locus of points each representing a combination of evaded tax and output of the illicit economy that will keep the illicit economy in equilibrium and, the LMil curve could be defined as a locus of points each representing a combination of illicit supply of money and output of the illicit economy that will keep the illicit economy in equilibrium. Findings This paper is aimed at analyzing the traditional IS–LM model from a different perspective, namely, the pervasive underground economy thriving all around the world regardless of the stages of growth and development. A sincere attempt has been made to keep the assumptions simple and closest to the real-world scenario as well as pertinent to the logic of economic theory. In this paper, two major factors of illicit practices, i.e. tax evasion and bribery, are given prime importance and the discussion is focused on those two factors of corruption. Originality/value This paper has been prepared keeping in view the standard technical procedures and findings that are described in the relevant academic materials like textbooks and journal publications (mentioned under the “References” column). The analysis and findings appearing in the article are based on logical explanations and are completely free from plagiarism.
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Mahood, Ramona, and Sharon L. Van Oteghen. "Tax Savings and Investments." Journal of Physical Education, Recreation & Dance 57, no. 3 (March 1986): 84–88. http://dx.doi.org/10.1080/07303084.1986.10606078.
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Karim, Firdos, Sudipa Chauhan, Sumit Kaur Bhatia, and Joydip Dhar. "Hopf Bifurcation in an Augmented IS-LM Linear Business Cycle Model with Two Time Delays." International Journal of Mathematical, Engineering and Management Sciences 5, no. 3 (June 1, 2020): 518–28. http://dx.doi.org/10.33889/ijmems.2020.5.3.043.
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This paper deals with the amalgamated basic IS-LM business cycle model with Kaldor’s growth model to form an augmented model. Pertaining to substantial evidence, IS-LM model in paradigm with a specific economic extension (Kaldor-Kalecki Business cycle model in our case) provides an adept explanation of a developing but strong economy like that of our country. Occurring in the equation of capital accumulation, the two time delays are a result of the assumption in the investment function being both income and capital stock dependent in past period and maturity period. Investigating a model combined with capital accumulation is both interesting and important. From economist point of view, production without capital is impossible to even imagine. Moreover capital accumulation is impeccable to large-scale production, specialisation and creation of employment opportunities. In our model ‘I’ the investment function, ‘S’ the savings function and ‘L’ the demand for money are depending linearly on their arguments. We adhere to a linear model, contrary to the popular belief of non- linear models being the undisputed style for modern economics. The model is first shown to be mathematically and economically poised. The local stability of boundary and interior equilibrium points has been investigated. Three cases arise, pertaining to two time delays. System dynamics exhibits mutation under the influence of time delays and may clinch or discharge its local stability when subjected to the latter. Hopf bifurcation occurs when the delay parameter crosses a critical value.
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Erdős, T. "Inflation targeting in Hungary: A case study." Acta Oeconomica 58, no. 1 (March 1, 2008): 29–59. http://dx.doi.org/10.1556/aoecon.58.2008.1.2.
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In the present article the author examines how to develop economic and monetary policy in order to efficiently apply inflation targeting. In Hungary, an inflation targeting system has been applied since 2001. As a result of the current monetary policy, consumer price level must regularly be kept stable at least in a mid-term approach in the middle but possibly also in the long run, or else it should be rising slowly, two per cent per year, at the most. Should the monetary authority have to deal with an already existing fast inflation rate, a considerable reduction of the rate of inflation must be aimed at year by year. Once monetary policy succeeds in bringing down inflation, the low rate achieved must permanently be secured. However, it is not sure that monetary policy has to prefer inflation targeting under any circumstances whatsoever.This policy has a favourable effect only if two substantial preconditions are given: public finances are near the equilibrium and nominal wages are regularly adjusted to the growth rate of GDP. Otherwise, inflation targeting may also have harmful effects such as excessive overvaluation of the national currency, excess of domestic use over GNP, increase of domestic and external debt, decreasing trend of the savings and investment rate, lower economic growth potential.
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Anthony-Orji, Onyinye I., Anthony Orji, and Jonathan E. Ogbuabor. "Analysis of Stock Market Development, Foreign Private Investment and Economic Growth in Nigeria." Journal of Infrastructure Development 10, no. 1-2 (June 2018): 1–17. http://dx.doi.org/10.1177/0974930618773254.
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The study estimated the impact of stock market development and foreign private investment on economic growth in Nigeria over the period of 1985–2016, using secondary data from various publications of the Central Bank of Nigeria. The ordinary least square (OLS) technique was employed in this study, while the Engel and Granger co-integration approach was applied to determine the long-run relationship between the variables. The result showed that market capitalisation, all share index and real exchange rate have statistically significant impact on economic growth, while foreign direct investment, trade openness and gross national savings have insignificant impact on growth. The study also showed that there is a long-run relationship among stock market development, foreign private investment and economic growth in Nigeria. The error correction model (ECM) results showed that the model adjusts to equilibrium in the short run and that about 51 per cent of the disequilibrium between gross domestic product and the independent variables is corrected each year. The study recommended that policymakers and monetary authorities should gear efforts towards formulating policies that will fine-tune stock market performance and reduce issues, such as, unpaid dividends, delay in dividend payments and unhealthy transfer of stocks. This is pertinent to encourage greater population of the citizenry to invest in the stock market. Finally, the study concluded that provision and improvement of infrastructure and power as well as enforcement of investor-friendly policies by the government is needed as these will encourage the establishment of more firms and industries that will participate in the stock market, thereby contributing to the growth of the economy. JEL Classification: E22, F21, F43, O16
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Anoruo, Emmanuel. "Saving-Investment Connection: Evidence from the Asean Countries." American Economist 45, no. 1 (March 2001): 46–53. http://dx.doi.org/10.1177/056943450104500104.
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The relationship between saving and investment has been sharply debated in the literature following the pioneering work of Feldstein and Horioka (1980). This paper extends this debate to the ASEAN countries by using cointegration procedure in time-series analysis. Specifically, three analyses are conducted. First, saving and investment are tested to determine the order of integration using both the Dickey–Fuller (DF) and augmented Dickey–Fuller (ADF) approaches. Second, the long-run equilibrium relationship between saving and investment is explored by utilizing the cointegration tests proposed by Johansen and Juselius (1990). Third, Granger–causality tests based on vector error-correction models (VECM) are undertaken to ascertain the direction of causality between the two series. The results indicate that saving and investment are integrated of order one [1(1)]. Based on the cointegration results, saving and investment are found to share long-run equilibrium association. The Granger-causality tests reveal that investment causes saving in the cases of Indonesia and Singapore. For the Philippines, causality runs from saving to investment. As for Malaysia and Thailand, the results suggest bi-directional causality between saving and investment.
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Магдеева, Марина, Marina Magdeeva, Надежда Жилина, Nadezhda Zhilina, Владимир Игнатьев, and Vladimir Ignatiev. "SAVINGS AND INVESTMENTS: THEORETICAL ASPECT." Russian Journal of Management 7, no. 1 (June 19, 2019): 11–15. http://dx.doi.org/10.29039/article_5d0a4295a087d0.39824458.
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Mergenbaeva, A. T., K. K. Nurasheva, D. A. Kulanova, G. I. Abdikerimova, A. U. Abishova, and A. Alibek. "IPO MARKET: TRANSFORMATION OF SAVINGS INTO INVESTMENTS." BULLETIN 1, no. 377 (February 15, 2019): 119–25. http://dx.doi.org/10.32014/2019.2518-1467.14.
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Imegi, JC, and SU Okanta. "Building Savings and Investments Culture among Nigerians." African Research Review 9, no. 3 (July 9, 2015): 139. http://dx.doi.org/10.4314/afrrev.v9i3.12.
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Palát, Milan. "Evaluation of relation between investments and savings in Central European countries." Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 58, no. 3 (2010): 175–82. http://dx.doi.org/10.11118/actaun201058030175.
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The paper is aimed at the evaluation of a relationship between the rate of investments and the rate of savings in selected Central European countries. A reference period for the analysis is 1995–2009. In all analysed Central European countries, the rate of investments permanently exceeded (but exceptions) the rate of savings in the period under investigation. Through fitting the development series of a calculated indicator as a difference of the rate of investments and the rate of savings in monitored countries by a polynomial of the second degree it was possible to compare developmental trends of this indicator in particular countries involved in this analysis. Polynomial trends of the difference indicator of the rate of investments and the rate of savings in Central European countries in the monitored period indicate similar developmental tendencies characterized (at the beginning of the reference period) by increasing the imbalance of the rate of investments and the rate of savings (on average until about 2003) and then by follow-up tendencies towards the gradual return to the balance. For the purpose of comparison, a difference was also monitored between the rate of investments and the rate of savings in EU15 countries as a whole, which permanently fluctuated around zero. The mean value of this indicator amounted to 0.11% for the period 1995–2009. Thus, in EU15 countries, the rate of investments roughly corresponded to the rate of savings (on a long-term basis). Based on this analysis, it follows that there is a correlation between the rate of investments and the rate of savings. Calculated parameters of particular regression functions are presented as Results in this paper. Indices of correlation and types of a regression function were calculated for particular countries. For the Czech Republic, these results are statistically highly significant using all three types of regression functions. In Poland, they can be indicated as statistically significant using the polynomial of the second and third degrees similarly as in Slovakia. In Hungary, already the use of a polynomial of the first degree results in statistically significant results. Using a polynomial of the third degree gives statistically highly significant results. The intertemporal analysis of investments and savings presented in this paper can be also used and developed as part of the problem of an intertemporal approach to the balance of payments.
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Leonov, M. "Regulation of Deposit Interest Rates in Hong Kong." World Economy and International Relations, no. 10 (2015): 77–83. http://dx.doi.org/10.20542/0131-2227-2015-10-77-83.
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In 1960s, the regulation of deposit interest rate was introduced to maintain stability of the banking system in Hong Kong. Local regulatory mechanism was characterized by direct involvement of banks into determination of the maximum level of interest rates. As deposit rates might be fixed at below market equilibrium level, banks were unbounded to earn rents at the expense of undrawn interest payments to depositors. Unlike to people in other countries, the depositors in Hong Kong had limited access to alternative investment opportunities like mutual funds or deposit institutions. As long as retail deposits were accounted for a significant share of borrowed funds, Hong Kong Association of Banks developed some incentives to discipline banks: in particular, if bank offered deposits with above the maximum permissible rate, it could be excluded from the national clearing and settlement infrastructure. The binding level of rates led to the emergence of new financial products (swap-deposits and NOW accounts) because banks tried to retain dissatisfied customers. To avoid the negative consequences of rate regulation on industry competition and allocation of financial resources within the economy, Hong Kong Monetary Authority took decision to liberalize deposit rates using gradual reform approach in the mid-1990s – early 2000s. The deregulation caused the significant reduction of gap between deposit and market rates and that evidence gave support to the idea of restrictive nature of regulation regime in Hong Kong. At the time of increasing competition in the deposit market, banks were able to increase operating efficiency and maintain profitability. The main benefits were obtained by banks with risky business model that attracted retail deposits to increase the scope of activity. Deposit rate liberalization helped to improve the efficiency of the transmission mechanism of monetary policy. As banks more actively responded to the market situation by adjusting interest rates, the monetary policy actions increased influence on the investment and savings behavior of economic agents. Finally, intensified interest rate competition among banks resulted into the growth of depositors’ welfare, contributing to the sustainable socio-economic development of Hong Kong.
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Moyo, Clement, and Pierre Le Roux. "INTEREST RATE REFORMS AND ECONOMIC GROWTH IN SADC COUNTRIES: THE SAVINGS AND INVESTMENT CHANNEL." Scientific Annals of Economics and Business 66, no. 4 (2019): 507–23. http://dx.doi.org/10.47743/saeb-2019-0039.
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The 2008/2009 global financial crisis has re-ignited the debate around financial reforms with contrasting views with regards to the impact of financial reforms on economic growth. This study examines the impact of interest rate reforms on economic growth through savings and investments in SADC countries for the period 1990-2015. Three specifications are used for the analysis; the first one determines the influence of interest rate reforms on savings, the second one analyses the effect of savings on investments while the third one examines whether investments have a positive impact on economic growth. The Pooled Mean Group (PMG) estimation technique is employed for analysis. The results show that interest rate reforms have a positive impact on economic growth through savings and investments. The study therefore recommends that market forces should be allowed to determine real interest rates and furthermore, real interest rates maintained at artificially low levels may harm economic growth.
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Gotschi, Thomas. "Costs and Benefits of Bicycling Investments in Portland, Oregon." Journal of Physical Activity and Health 8, s1 (January 2011): S49—S58. http://dx.doi.org/10.1123/jpah.8.s1.s49.
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Background:Promoting bicycling has great potential to increase overall physical activity; however, significant uncertainty exists with regard to the amount and effectiveness of investment needed for infrastructure. The objective of this study is to assess how costs of Portland’s past and planned investments in bicycling relate to health and other benefits.Methods:Costs of investment plans are compared with 2 types of monetized health benefits, health care cost savings and value of statistical life savings. Levels of bicycling are estimated using past trends, future mode share goals, and a traffic demand model.Results:By 2040, investments in the range of $138 to $605 million will result in health care cost savings of $388 to $594 million, fuel savings of $143 to $218 million, and savings in value of statistical lives of $7 to $12 billion. The benefit-cost ratios for health care and fuel savings are between 3.8 and 1.2 to 1, and an order of magnitude larger when value of statistical lives is used.Conclusions:This first of its kind cost-benefit analysis of investments in bicycling in a US city shows that such efforts are cost-effective, even when only a limited selection of benefits is considered.
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Akeny, Emmanuel, and David Mwesigwa. "Personal savings and household investments: a cohort study among primary school teachers." Annals of Management and Organization Research 1, no. 4 (May 25, 2020): 261–70. http://dx.doi.org/10.35912/amor.v1i4.468.
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Purpose: This study aimed to determine the relationship between personal savings and household investments among a cohort of primary school teachers in lira city. Research methodology: The study used a cross-sectional survey design with a quantitative research approach. Data were collected from a sample of 103 respondents with the period between October 2020 and January 2021 using self-administered questionnaires. The Content Validity Index was used to establish validity, while the Cronbach's Alpha Coefficient was used to test reliability. Results: Using descriptive and inferential statistics, the results suggest that civil servants' personal financial planning is high due to personal savings. Also, the level of household investment is high and the correlation reveals that the relationship between private savings and household investment is very weak and negative. Limitations: This study focused on personal savings only, yet other constructs affect household investments. Contribution: This study's results help civil servants in Lira city and Uganda in general since personal savings are an essential factor to household investments. Keywords: Personal savings, Household investment, Primary teacher, Financial planning, Lira
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Diamond, Peter, and John Geanakoplos. "Social Security Investment in Equities." American Economic Review 93, no. 4 (August 1, 2003): 1047–74. http://dx.doi.org/10.1257/000282803769206197.
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This paper explores the general-equilibrium impact of social security portfolio diversification into private securities, either through the trust fund or private accounts. The analysis depends critically on heterogeneities in saving, production, assets, and taxes. Limited diversification weakly increases interest rates, reduces the expected return on short-term investment (and the equity premium), decreases safe investment, increases risky investment, and increases a suitably weighted social welfare function. However, the effects on aggregate investment, long-term capital values, and the utility of young savers hinges on assumptions about technology. Aggregate investment and long-term asset values can move in opposite directions.
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Kopylyuk, O. I., and O. М. Muzychka. "Conceptual Approaches to the Transformation of Household Savings into Investment." Business Inform 6, no. 521 (2021): 65–71. http://dx.doi.org/10.32983/2222-4459-2021-6-65-71.
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The article is aimed at substantiating the conceptual principles of transformation of household savings into investments to activate economic processes. It is proved that the transformation of organized household savings into investments is a process of accumulating the savings and turning them into working assets through financial market instruments on the basis of assessment of both profitability and risks. It is noted that investments are exclusively organized savings, which are being accumulated on the accounts of financial institutions, banks, insurance companies, non-state pension funds, collective investment institutions, credit unions, which are attracted through the banking and parabank systems on the basis of order of priority, payment of interest, and riskiness. The article argues that the savings-investment behavior of households has changed significantly in the context of the COVID-19 pandemic. It is specified that the most attractive for households is the growth of financial assets in the form of deposits in banks of Ukraine in both national and foreign currencies, as well as the tendency to reduce long-term investment resources for terms up to two years and over two years. The conceptual principles of transformation of household savings into investments, which will allow to solve the declared tasks, are proposed, which is based on clearly defined principles and is directed towards achieving the economic and social effectiveness. Prospects for further research in this area are the substantiation of mechanisms for the formation of long-term investment resources of households and their involvement in financial assets in the context of risk assessment and systematization. It is necessary to develop a methodological instrumentarium for assessing profitability and risks to activate the savings-investment behavior of households, taking into account the alternative investments and their diversification as to various instruments of the financial market.
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Stroutchenevski, Anton. "The Performance of Savings and Investments in Russia." Russian Economic Trends 11, no. 2 (June 28, 2008): 31–36. http://dx.doi.org/10.1111/1467-9426.00229.
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Goodfellow, John H. "Consumer Perceptions and Attitudes towards Savings and Investments." International Journal of Bank Marketing 5, no. 3 (March 1987): 32–48. http://dx.doi.org/10.1108/eb010810.
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Yeboah, Samuel Asuamah, and Boateng Kwadwo Prempeh. "An econometric modelling of the savings – investments nexus for Ghana." Economic Consultant 33, no. 1 (February 25, 2021): 40–56. http://dx.doi.org/10.46224/ecoc.2021.1.5.
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Introduction. The problem under discussion is whether savings are associated with investments in the long-term and whether savings predict investment with feedback or not. Addressing the problem is important since it informs policy formulation in the financial sector in ensuring efficient financial intermediation. The purpose of the article is looks at the savings-investment relationship for Ghana during the period 1960 to 2016. Methodology. Utilizing ARDL (with bounds testing) approach, the Granger predictive test, the Generalised Impulse Response Function, and Variance decomposition function. Results. The results indicate that a 1% increase in savings, GDP and financial development would result in a 0.069%, 0.266% and 0.125% increase respectively in investment in the short-term. It is discovered that savings do not cause investment in the long-run but rather in the short-run. The Granger causality test establishes a unidirectional causality running from savings to investment in the short-run. Discussion and Conclusion. The ramifications of the finding are that there is capital fixed status globally. Future examinations ought to consider structural break(s) issues as well as panel analysis to determine if the findings of the current study would be reproduced.
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Erasmus, Coert Frederik, and Johan van Huyssteen. "Pension fund regulation: Unintended consequences of foreign investment restrictions in an emerging market economy." Risk Governance and Control: Financial Markets and Institutions 6, no. 4 (2016): 485–93. http://dx.doi.org/10.22495/rgcv6i4siart6.
Full textAbstract:
Retirement savings allow investors to earn income after retirement by saving while being part of the workforce. Retirement savings comprise the largest portion of retirement savings and should be safeguarded by effective regulation. To safeguard retirement savings, exposure to foreign asset investments is limited. However, in an emerging economy, limiting foreign asset investments, especially investment in developed markets, could hamper the potential investment returns due to the translation risk. To assess the effect of translation risk, a preservation provident fund was used in the present study to determine whether the returns of this preservation provident fund would be adversely affected by investment allocation regulation. The findings indicated how the translation effect affected the preservation provident fund, illustrating the adverse unintended consequences of investment regulation in emerging market economies. Consequently, regulators should reconsider the maximum allowed foreign asset investment in pension fund regulations to enhance investment returns from foreign asset investments