Academic literature on the topic 'Fixed Income Markets'

In a context where clean energy has become almost an imperative, investments in renewable energy projects play an important role for achieving the sustainability of scarce resources needed for the well-being of future generations. Driven by the fact of climate change and the very need for reduction of carbon dioxide emissions all around the world, renewable energy economy has expanded with increasing participation of investors and new types of innovative financial techniques. One of the most striking innovative financial techniques is green bonds, started with the issuance of the �climate awareness bond� by the European Investment Bank in 2007. International Capital Market Association�s (ICMA) publication of the Green Bond Principles (GBPs) in 2014, further motivated the expansion of the green bond market. Green bonds, are fixed-income securities which are issued to finance exclusively positive impact generating projects related to environment and climate change. In this study, it is aimed to investigate the development of global green bond markets with their related advantages, disadvantages, and policy implications. A green policy proposal will be made for enhancing the financing of renewable energy projects.

This study delves into the relationship between corruption, government spending, and economic growth in selected Central and Eastern European countries. The high prevalence of corruption and suboptimal allocation of public resources in these countries present a significant obstacle to increasing economic growth. These issues are particularly impactful in low and middle-income countries, where corruption persists longer. The effects of corruption can distort market signals and lead to inefficient allocation of resources, especially in the public sector. In addition to hampering public consumption, corrupt practices negatively impact a country's ability to increase economic growth and bridge the gap between high and low-income countries. By utilising fixed and random effects methods, this paper employs panel regression analysis to examine the impact of government spending and corruption on the economic growth of selected Central and Eastern European countries from 2011 to 2021. The study found that government spending, corruption perception, and control of corruption have a positive and statistically significant influence on economic growth in the selected countries.

The pandemic has had a severe impact on the living standards of the Georgian population, as the spread of the virus and the escalation of the epidemic have deepened the social crisis and increased unemployment. Gender im-balances in the labor market became even more acute during the pandemic as a large proportion of enterprises stopped operating or continued to operate under limited resources. Women were predominantly fired at this time. As a result, labor market imbalances have intensified. The aim of the research was to discuss the peculiarities of the Georgian labor market in terms of gender, identify its main problems, conduct quantitative analysis using statistical methods and draw relevant conclusions. In the article there is used the methods of statistical observation, grouping, and analysis.Results. The pandemic has exacerbated existing imbalances in the labor market. Unemployment has increased and population activity rates have decreased. Against the background of changes in the methodology of labor registration, the difference between employment and unemployment rates by gender has become even more pronounced, there is a sharp gender differentiation in wages, income growth rates are different for men and women.

With the saturation of the labor market due to global competition, information technology, and recent downturns in economies around the world, human capital is gaining particular attention. Humans can learn, change, and innovate and thus enable the organization to survive in the long run. The main reason people are employed in a particular organization is to produce and sell products or services that will generate revenues higher than costs. The generation of higher income than expenses, as well as the reduction of the number of resources consumed for production and other operating processes, makes them contributors to the companies’ profits. The purpose of this paper is to investigate the relationship between human capital and company performance in the Macedonian real sector, by using pooled OLS regression and Fixed and Random Effect models to analyze a cross-sectional sample of 42 Macedonian companies listed on the Macedonian Stock Exchange during 2016-2021(N=252).

Cyprus Island has been divided into two parts since 1974. In April 2003 crossing the Green Line across the borders became possible and both parts of the Island benefited from this; firstly due to resulted domestic tourism in both sides and secondly from new employment opportunities mainly for Turkish Cypriots in South. Besides that, positive expectations over the Cyprus problem accelerated the expenditures in both sides. In the North, demand for land and new dwellings increased, pushing prices upward. Demand for land and a new property by foreigners is busted in recent years. The UK, Israel, Russia and some other countries started to buy land in the North Cyprus by securing resources to their businessmen especially in the areas of Komi Kepir, Kalogrea, Akanthou, Karpass, Risokarpaso, Yialousa and Livera. Such increase in demand by foreigners decreased the supply of land to domestic use. This has many implications on North Cyprus economy which is very small with limited resources in production. In this study, 4- factor, 13-industry a single country general equilibrium model is used to investigate the changes in income, employment, prices, output and inputs required for production resulted from this supply shock. Results show that, under fixed capital and flexible labor market, 10% reduction in land supply increased the value of land by 108.8%, income increased by 2.04 % and prices of skilled labor and capital increased by 1.028% and 1.020% respectively and due to the reduction of land supply, output decreased by 1.53%.

ABSTRACT Background: Tuberculosis (TB) disease in children under 15 years (pediatric TB) is a public health problem of special significance because it is a marker for recent transmission of TB. This study aimed to analyze biological, social, and economic risk factors of child TB. Subjects and Method: A case control study was carried out at 25 villages in Surakarta, from August to September 2019. A sample of 200 chilren aged 0-18 years was selected by fixed disease sampling. The dependent variable was TB. The independent variables were birthweight, BCG immunization, exclusive breastfeeding, nutritional status, family income, smoke exposure, family history of TB. Data on TB cases were obtained from medical record. The other variables were collected by questionnaire. The data were analyzed by a multiple logistic regression. Results: The risk of TB increased with poor house sanitation (OR= 4.50; 95% CI= 1.18 to 17.12; p= 0.027), smoke exposure (OR= 4.13; 95% CI= 1.05 to 16.22; p= 0.042), and had history of TB (OR= 5.54; 95% CI= 1.49 to 20.61; p= 0.011). The risk of TB decreased with normal birthweight ≥2,500 g (OR= 0.18; 95% CI= 0.05 to 0.57; p= 0.003), BCG immunization (OR= 0.18; 95% CI= 0.06 to 0.58 p= 0.004), exclusive breastfeeding (OR= 0.11; 95% CI= 0.02 to 0.55; p= 0.006), good nutritional status (OR= 0.10; 95% CI= 0.02 to 0.48; p= 0.004), and family income ≥Rp1,802,700 (OR= 0.09; 95% CI= 0.02 to 0.36; p= 0.001). Conclusion: The risk of TB increases with poor house sanitation, smoke exposure, and had history of TB. The risk of TB decreases with normal birthweight ≥2,500 g, BCG immunization, exclusive breastfeeding, good nutritional status, and high family income. Keywords: Tuberkulosis, biological, sosial dan ekonomi. Correspondence: Dyah Ayu Saputri. Masters Program in Public Health, Universitas Sebelas Maret. Jl. Ir. Sutami 36A, Surakarta 57126, Central Java, Indonesia. Email: ayusaputridyah7@gmail.com. Mobile: 081353236388. DOI: https://doi.org/10.26911/the7thicph.01.45

A suite of math-based marketing and financial tools has been deployed and exercised within an automated, multidisciplinary parametric design framework. This suite of tools includes a market share estimator based on Cook’s S-Model, a Technical Cost Model for estimating the variable and fixed costs of the vehicle’s body system, a database of cost estimates for other vehicle systems, and a profit estimator developed from a standard accounting template. Development of the S-Model market share estimator included completion of a Demand-Price analysis for the midsize sedan segment and collection of publicly available value curves predominantly covering the powertrain performance and interior roominess disciplines. A flexible input-output interface was developed for the Technical Cost Model to provide a means of propagating changes in body design parameters throughout the framework. A series of exercises including analysis of a baseline vehicle, optimization of a hypothetical vehicle concept for net income, and a hypothetical architectural parameter study were conducted to demonstrate the capabilities of a multidisciplinary parametric design framework enabled with marketing and financial tools. These exercises demonstrate that existing engineering and business discipline tools can effectively interoperate to design for profitability in a multidisciplinary parametric design environment. They also illustrate several key challenges in automated design for profitability, such as those encountered in defining the role of price as a design variable in a tightly coupled design-for-profit system and in generating cost estimates using a continuously variable design representation.

Thinly traded securities exist in both emerging and well developed markets. However, plausible estimations of market risk measures for portfolios with infrequently traded securities have not been explored in the literature. We propose a methodology to calculate market risk measures based on the Kalman filter which can be used on incomplete datasets. We implement our approach in a fixed- income portfolio within a thin trading environment. However, a similar approach may be also applied to other markets with thinly traded securities. Our methodology provides reliable market risk measures in portfolios with infrequent trading.

We explore how Multilateral Development Banks (MDBs) can help to fill a large infrastructure financing gap in developing countries by indirectly mobilizing resources from other entities. The analysis focuses on more than 6,500 transactions in 2005-2020 to developing and emerging markets from the Infrastructure Journal database. Using granular data, we analyze the dynamics of flows from different actors to infrastructure at the country-subsector level, and control for a wide range of fixed effects. MDB lending significantly increases the inflows from other sources. Cross-border and domestic resources are mobilized from both the public and the private sectors. Effects exhibit country heterogeneity. Mobilization occurs in countries of all income levels, though it is stronger in low and lower-middle income countries. In countries that use capital controls frequently mobilization effects are undermined. When the global financial crisis of 2008 hit, no difference in mobilization effects was found, unlike the COVID-19 pandemic when mobilization effects were weakened. The findings survive a long battery of robustness checks, and no evidence of anticipation effects is found.

The COVID-19 pandemic represents a global case of the fragility of the financial markets and vulnerability of natural disasters and exceptional risks. Against the backdrop of the COVID-19 pandemic, this study explores the ‘hedging’ and ‘safe-haven’ potential of green bonds for conventional equity, fixed income, commodity, and forex investments. Our results show that the green bond index could serve as a diversifier asset for medium- and long-term equity investors. It can also serve as a hedging and safe haven instrument for currency and commodity investments. This study is the first to provide evidence on the hedging and safe-haven potential of green bonds during the COVID-19 pandemic. Our findings imply that green bonds could play a constructive role in global financial recovery efforts without compromising the low-carbon transition targets as they can also be a source of finance for green energy.

The use of quantitative methods constitutes a standard component of the institutional investors’ portfolio management toolkit. In the last decade, several empirical studies have employed probabilistic or classification models to predict stock market excess returns, model bond ratings and default probabilities, as well as to forecast yield curves. To the authors’ knowledge, little research exists into their application to active fixed-income management. This paper contributes to filling this gap by comparing a machine learning algorithm, the Lasso logit regression, with a passive (buy-and-hold) investment strategy in the construction of a duration management model for high-grade bond portfolios, specifically focusing on US treasury bonds. Additionally, a two-step procedure is proposed, together with a simple ensemble averaging aimed at minimising the potential overfitting of traditional machine learning algorithms. A method to select thresholds that translate probabilities into signals based on conditional probability distributions is also introduced.

Portfolio flows are an important source of funding for both private and public agents in emerging market economies. In this paper, we study the influence of changes in domestic and US monetary policy rates on portfolio inflows in an emerging market economy and discriminate among fixed income instruments (government securities and other corporate bonds) and variable income instruments (shares). We employ monthly data on portfolio inflows of non-residents in Colombia during the period 2011-2020 and identify the monetary policy shocks using a SVAR model with long-run restrictions. We find a positive and statistically significant response of portfolio inflows in government securities and corporate bonds to changes in both domestic and US monetary policy rates. Portfolio inflows in the stock market react more to changes in the inflation rate and do not react to changes in monetary policy rates. Our findings are consistent with the predictions of the interest rate channel and reestablish the predominant role of inflation rate in driving portfolio inflows. The results suggest that domestic and US monetary policy actions have an important effect on the behavior of portfolio inflows in emerging economies.

Using a common reduced-form regional growth model framework, an expanded geographic classification of counties, additional years of data, a trio of income inequality metrics, and multiple empirical specifications, this analysis confirms and builds upon the notion that the nature of the relationship between income inequality and economic growth varies across geography (Fallah and Partridge, 2007). A positive relationship between an income Gini coefficient and per capita income growth is observed only in central metro counties with population densities greater than 915 people per square mile or in about 5 percent of all counties, whereas previous research found a positive relationship in all metropolitan counties (27 percent of counties) and a negative relationship in nonmetropolitan counties. Where inequality is in the distribution is also shown to impact this relationship. Inequality in the top and bottom halves of the income distribution has a positive relationship with growth within this 5 percent of counties. However, in most locations (the other 95 percent of the counties), inequality in the bottom half of the income distribution has either no statistical relationship with growth or a positive relationship, while inequality in the top half of the income distribution tends to have a negative relationship. These patterns are relatively stable over time but tend to not be robust to the inclusion of county fixed effects. These results provide some evidence that the mechanisms explaining how this relationship varies across places are more likely associated with agglomeration and market incentives rather than social cohesion. This analysis also highlights the need for a robust research agenda focused on further refining the growth model along with incorporating new data sources and concepts of income inequality.

This paper develops a model of sovereign debt where governments are myopic. Instead of focusing on the incentives to repay, as in most of the theoretical literature on the topic (which assumes implicitly that governments have long-term objectives), I therefore consider that governments always repay when they can, but also borrow as much as possible. without paying attention to the burden of future repayments. The pattern of debt is then only determined by the willingness of international investors to lend to the country. I characterize the Rational Expectations Equilibria of the credit market. These equilibria behave like rational bubbles: international investors lend a lot because they anticipate that other investors will lend again in the future. Capital flows are procyclical: the government borrows a fixed proportion of its income until a sudden stop occurs, generating default and an economic crisis. I suggest possible remedies to the high volatility of public expenditures that is generated by such borrowing patterns.

Seguro Popular (SP) was introduced in 2002 to provide health insurance to the 50 million Mexicans without Social Security. This paper tests whether the program has had unintended consequences, distorting workers' incentives to operate in the informal sector. The analysis examines the impact of SP on disaggregated labor market decisions, taking into account that program coverage depends not only on the individual's employment status, but also on that of other household members. The identification strategy relies on the variation in SP's rollout across municipalities and time, with the difference-in-difference estimation controlling for household fixed effects. The paper finds that SP lowers formality by 0.4-0.7 percentage points, with adjustments largely occurring within a few years of the program's introduction. Rather than encouraging exit from the formal sector, SP is associated with a 3.1 percentage point reduction (a 20 percent decline) in the inflow of workers into formality. Income effects are also apparent, with significantly decreased flows out of unemployment and lower labor force participation. The impact is larger for those with less education, in larger households, and with somebody else in the household guaranteeing Social Security coverage. However, workers pay for part of these benefits with lower wages in the informal sector.

In 2024, the macroeconomic adjustment process continued, characterized by a sustained reduction in inflation that began in 2023 and a decline in the current account deficit of the balance of payments. This adjustment took place in the context of a contractionary monetary policy, with a gradual reduction in the monetary policy interest rate. GDP grew by 1.7%, driven by investment and consumption, while employment increased by 2.2%. Foreign reserves remained at adequate levels, and Banco de la República recorded a profit of COP 10,041 billion, benefiting from the returns on foreign reserves. Macroeconomic environment The International Monetary Fund (IMF) and the World Bank estimate that the global economy grew by 3.2% in 2024, a rate similar to that observed in 2023 (3.3%). This occurred in a context of moderating inflation and declining monetary policy interest rates in most countries. Global inflation moderated over the course of 2024. However, inflation rebounded toward the end of the year in some advanced economies, mainly due to rising energy costs. In Latin America, inflation trends were mixed. While some economies experienced sustained price stability, in most cases, inflation remained above the targets set by their respective central banks. Monetary policy interest rates in most Latin American economies continued to decline, reflecting a moderation in inflation and inflation expectations. However, some countries in the region recently raised interest rates in response to renewed inflationary pressures. Oil production increased in 2024, leading to a 3% decrease in oil prices, with Brent crude averaging around USD 80 per barrel. However, geopolitical tensions prevented a more pronounced decline. The U.S. dollar appreciated against most currencies, driven by expectations that the Federal Reserve (Fed) would implement more gradual policy rate cuts. In 2025, global economic growth is projected to be similar to that of 2024, supported by declining inflation, wage recovery, sustained employment growth, and a less restrictive monetary policy stance. However, geopolitical tensions and U.S. trade policies introduce uncertainty. More gradual reductions in the Fed’s interest rate are expected, with the possibility of pauses if inflationary pressures resurface. In Latin America, central banks are expected to continue cutting interest rates, although monetary policy may remain contractionary where inflation has not yet reached target levels. Domestic economic activity Colombia’s GDP grew by 1.7% in 2024, reflecting a moderate recovery compared to the previous year. This occurred in an environment of lower interest rates, improved domestic demand, and an increase in remittances and exports. Private consumption and fixed capital investment—particularly in infrastructure projects such as the Bogotá metro—contributed to economic growth. However, investment in housing declined. Agricultural and services sectors led economic growth, while mining and manufacturing contracted. The loan portfolio experienced low nominal growth, though some segments showed signs of recovery toward the end of the year. For 2025, economic activity is expected to continue recovering, approaching its productive capacity and aligning with the convergence of inflation toward its target. Employment Employment grew by 2.2% in 2024, resulting in the creation of 508,000 jobs. This expansion was driven by rural areas, where employment increased by 3.2%, surpassing the 1.4% growth in urban areas. The commerce, accommodation, manufacturing, public administration, health, and education sectors were the primary contributors to job creation. Wage employment grew by 2.7%, exceeding pre-pandemic levels, while non-wage employment increased by 1.8%, leading to a decline in informality to 55.6%. The national unemployment rate fell by 0.6 percentage points, reaching 9.7%, with a more pronounced reduction in rural areas. For 2025, the unemployment rate is expected to remain stable, supported by a positive economic outlook. Inflation and Monetary Policy Headline inflation in Colombia fell significantly from 9.3% in 2023 to 5.2% in 2024, primarily due to a restrictive monetary policy that moderated domestic demand and contributed to a reduction in the current account deficit. Core inflation (excluding food and regulated products) declined from 8.4% to 5.2%, reflecting the effectiveness of contractionary monetary policy. Inflation of goods dropped sharply, from 7.1% to 0.6%, due in part to the resolution of logistical disruptions and the appreciation of the peso. In contrast, services inflation declined more moderately, from 9% to 7%, influenced by indexation to past inflation and the increase in the minimum wage. Prices of food decreased from 5.0% to 3.3%, driven by lower pressures on processed food prices, benefiting from reduced costs of imported raw materials and a favorable exchange rate. Prices of regulated items dropped to 7.3%, following smaller adjustments in gasoline prices (after the required increases in 2023) and lower electricity and public service tariff increases, except for gas prices, which continued to rise. Inflation is expected to continue converging toward the 3% target in 2025, with headline inflation projected to close the year at around 4.1%, continuing its downward path into 2026. However, new risks have emerged, including a recent rise in producer costs, a significant increase in the minimum wage, and a rebound in inflation expectations. Balance of payments Colombia’s current account deficit narrowed to 1.7% of GDP between January and September 2024, down from 2.5% in the same period in 2023. This improvement was driven by higher remittance inflows, an improved services trade balance, and lower factor income outflows. Remittances reached a record USD 11,848 million, with the United States and Spain as the main sources of these inflows. A decline in the profits of foreign direct investment (FDI) companies, particularly in the oil and coal sectors, also contributed to reducing external imbalances. The trade deficit widened due to a greater imbalance in the trade of goods within a context of lower commodity prices. However, this was partially offset by strong agricultural and industrial exports. Additionally, the good performance of service exports, supported by higher international tourist arrivals, helped contain a larger trade imbalance. The financial account recorded net capital inflows equivalent to 1.1% of GDP, lower than the 2.5% recorded in 2023, primarily due to a decline in foreign direct investment in mining, transportation, and oil. This was partially offset by growth in financial and business services investment. The current account deficit is estimated to have closed 2024 at 1.8% of GDP, with a projected widening to 2.5% in 2025, in line with higher expected economic growth and stronger domestic demand. Public finances According to preliminary figures from the 2025 Financial Plan (PF-25) presented by the Ministry of Finance and Public Credit (MHCP), Colombia’s General Government deficit reached 4.8% of GDP in 2024, marking a 2.1 percentage-point increase compared to 2023. This deterioration was mainly driven by a worsening in the balances of the Central National Government (GNC) (2.6 pp) and the Social Security subsector (0.4 pp), partially offset by a 0.8 pp improvement in Regional and Local Government balances. The reduction in the deficit position of the Fuel Price Stabilization Fund (FEPC for its acronym in Spanish) was notable, following gasoline price adjustments, which closed the gap between the reference price and local market prices. However, fiscal pressures persist due to ongoing subsidies for ACPM (diesel fuel). The total and primary deficits of the Central Government stood at 6.8% and 2.4% of GDP, respectively, driven by a decline in tax revenue—particularly from income and external taxes—alongside increased government spending. The net debt of the Central Government increased to 60% of GDP, exceeding previous forecasts. For 2025, a total and primary deficit of 5.1% and 0.2% of GDP is projected, with tax revenue expected to grow by 22.6%. Compliance with the fiscal rule and the stabilization of public finances will be critical in 2025, given the potential impact of fiscal slippage on the country’s risk premiums. Failure to meet fiscal targets could raise interest rates for both the Government and the broader economy. Maintaining credibility in fiscal policy will be key to preventing macroeconomic adjustments from exerting additional pressure on interest rates. International Reserves As of December 31, 2024, Colombia’s net international reserves stood at USD 62,481 million, reflecting an increase of USD 2,873 million during the year. This growth was primarily driven by returns on reserves, which reached 3.65%, benefiting from higher global interest rates, and Banco de la República's reserve accumulation program, which added USD 1,479.4 million to reserves. According to the IMF’s reserve adequacy methodology, Colombia maintains a reserve ratio of 1.29. This falls within the adequate range (1.0 – 1.5), indicating that Colombia’s reserves are sufficient to withstand extreme external shocks and balance of payments risks. Profits obtained by Banco de la República The Bank's profits reached a record COP 10,041 billion in 2024, resulting from revenues of COP 13,948 billion and expenses of COP 3,907 billion. Profits increased by COP 815 billion compared to 2023, primarily due to lower expenses, although partially offset by a decline in revenues. For 2025, profits are projected at COP 10,512 billion, supported by the high expected profitability of foreign reserves. However, this projection is subject to uncertainty related to reserve performance and monetary base growth.

In the face of the multiple shocks currently experienced by the domestic economy (resulting from the drop in oil prices and the appearance of a global pandemic), the Colombian financial system is in a position of sound solvency and adequate liquidity. At the same time, credit quality has been recovering and the exposure of credit institutions to firms with currency mismatches has declined relative to previous episodes of sudden drops in oil prices. These trends are reflected in the recent fading of red and blue tonalities in the performance and credit risk segments of the risk heatmaps in Graphs A and B.1 Naturally, the sudden, unanticipated change in macroeconomic conditions has caused the appearance of vulnerabilities for short-term financial stability. These vulnerabilities require close and continuous monitoring on the part of economic authorities. The main vulnerability is the response of credit and credit risk to a potential, temporarily extreme macroeconomic situation in the context of: (i) recently increased exposure of some banks to household sector, and (ii) reductions in net interest income that have led to a decline in the profitability of the banking business in the recent past. Furthermore, as a consequence of greater uncertainty and risk aversion, occasional problems may arise in the distribution of liquidity between agents and financial markets. With regards to local markets, spikes have been registered in the volatility of public and private fixed income securities in recent weeks that are consistent with the behavior of the international markets and have had a significant impact on the liquidity of those instruments (red portions in the most recent past of some market risk items on the map in Graph A). In order to adopt a forward-looking approach to those vulnerabilities, this Report presents a stress test that evaluates the resilience of credit institutions in the event of a hypothetical scenario thatseeks to simulate an extreme version of current macroeconomic conditions. The scenario assumes a hypothetical negative growth that is temporarily strong but recovers going into the middle of the coming year and has extreme effects on credit quality. The results suggest that credit institutions have the ability to withstand a significant deterioration in economic conditions in the short term. Even though there could be a strong impact on credit, liquidity, and profitability under the scenario being considered, aggregate capital ratios would probably remain at above their regulatory limits over the horizon of a year. In this context, the recent measures taken by both Banco de la República and the Office of the Financial Superintendent of Colombia that are intended to help preserve the financial stability of the Colombian economy become highly relevant. In compliance with its constitutional objectives and in coordination with the financial system’s security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth functioning of the payment system. Juan José Echavarría Governor