The scope of tax evasion in developing countries represents cause for extreme fiscal concern. To combat this, a host of conventional and unconventional strategies are being deployed by fiscal authorities around the world. This paper examines the practitioner and academic context in which tax evasion whistleblowing can be made into an effective strategy for minimizing tax evasion in developing countries, seeking specific application to the context of Pakistan, where the Federal Board of Revenue (FBR) has announced a policy of rewarding whistleblowers with a portion of the recovery proceeds from tax evasion cases.
{"title":"Tax Evasion & Whistleblowers: Curious Policy or Durable Strategy?","authors":"Usman W. Chohan","doi":"10.2139/ssrn.3529340","DOIUrl":"https://doi.org/10.2139/ssrn.3529340","url":null,"abstract":"The scope of tax evasion in developing countries represents cause for extreme fiscal concern. To combat this, a host of conventional and unconventional strategies are being deployed by fiscal authorities around the world. This paper examines the practitioner and academic context in which tax evasion whistleblowing can be made into an effective strategy for minimizing tax evasion in developing countries, seeking specific application to the context of Pakistan, where the Federal Board of Revenue (FBR) has announced a policy of rewarding whistleblowers with a portion of the recovery proceeds from tax evasion cases.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125357265","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Virtual currencies (VC’s) also known as crypto currencies and particularly Bitcoin have been deliberated globally as having the potential to disrupt the way financial services currently operate. They bring about secure, always available, peer to peer and decentralized payment methods that have some distinct advantages over the traditional methods of payments. Virtual currencies (VC’s) are a variant of digital assets that are designed to operate as a medium of exchange that makes use of very strong encryption and cryptographic algorithms in order to secure financial transactions at lower transaction fees and eliminates the need for a central intermediary such as an exchange, central Bank or a clearing house.
The initial set up costs for these virtual currencies are usually cheaper than traditional brick and mortar banking services because they make use of already existing internet and telecommunications infrastructure. Africa and Asia are flourishing at these initiatives as these financial services are believed to greatly benefits the underserved in the near future. This study interrogated the current regulatory challenges of virtual currencies and the inadequacies of the current banking, financial and ICT regulations in Zambia. This study further compared Zambia’s regulatory challenges on virtual currencies with similar jurisdictions in other world Bank Findex ranked developing countries in Africa.
Currently, there is a lot of virtual currencies publicity and activity going on in Zambia and citizens are currently trading in these virtual currencies through peer-to-peer using social media platforms and websites. Regrettably, the illiteracy surrounding virtual currencies are not just for general public because they are also found among the people who are charged with the mandate of regulating the financial systems landscape and fighting cybercrimes which may have its background in the utilisation and misappropriation of these crypto currencies. The regulators are currently playing catch up and only issuing cautioning statements to citizens on the risk of these virtual currencies instead of exploring exhaustive research and development to get the most out of these technologies.
The research results will aim towards comparing the current state of virtual currencies and the rate of adoption and usage in Zambia. The study will further provide recommendations on the need for virtual currency policies and regulations that are consolidated, interoperable and harmonized between different financial, ICT and consumer protection regulators to avoid restrictive regulations that might stifle and kill digital financial services initiatives and allow for continued innovations, growth and adoption of the virtual currency landscape in Zambia.
{"title":"An Interrogation into the Regulatory Challenges of Virtual Currencies on the Zambian Economy","authors":"Kombe Kaponda","doi":"10.2139/ssrn.3509503","DOIUrl":"https://doi.org/10.2139/ssrn.3509503","url":null,"abstract":"Virtual currencies (VC’s) also known as crypto currencies and particularly Bitcoin have been deliberated globally as having the potential to disrupt the way financial services currently operate. They bring about secure, always available, peer to peer and decentralized payment methods that have some distinct advantages over the traditional methods of payments. Virtual currencies (VC’s) are a variant of digital assets that are designed to operate as a medium of exchange that makes use of very strong encryption and cryptographic algorithms in order to secure financial transactions at lower transaction fees and eliminates the need for a central intermediary such as an exchange, central Bank or a clearing house.<br><br>The initial set up costs for these virtual currencies are usually cheaper than traditional brick and mortar banking services because they make use of already existing internet and telecommunications infrastructure. Africa and Asia are flourishing at these initiatives as these financial services are believed to greatly benefits the underserved in the near future. This study interrogated the current regulatory challenges of virtual currencies and the inadequacies of the current banking, financial and ICT regulations in Zambia. This study further compared Zambia’s regulatory challenges on virtual currencies with similar jurisdictions in other world Bank Findex ranked developing countries in Africa. <br><br>Currently, there is a lot of virtual currencies publicity and activity going on in Zambia and citizens are currently trading in these virtual currencies through peer-to-peer using social media platforms and websites. Regrettably, the illiteracy surrounding virtual currencies are not just for general public because they are also found among the people who are charged with the mandate of regulating the financial systems landscape and fighting cybercrimes which may have its background in the utilisation and misappropriation of these crypto currencies. The regulators are currently playing catch up and only issuing cautioning statements to citizens on the risk of these virtual currencies instead of exploring exhaustive research and development to get the most out of these technologies.<br><br>The research results will aim towards comparing the current state of virtual currencies and the rate of adoption and usage in Zambia. The study will further provide recommendations on the need for virtual currency policies and regulations that are consolidated, interoperable and harmonized between different financial, ICT and consumer protection regulators to avoid restrictive regulations that might stifle and kill digital financial services initiatives and allow for continued innovations, growth and adoption of the virtual currency landscape in Zambia.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"244 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122113737","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Effective central bank communication is useful for anchoring market expectations and enhancing macroeconomic stability. In this paper, the communication strategy of the Bank of Ghana (BOG) is analysed using BOG’s monetary policy committee press releases for the period 2018-2019. Specifically, we apply text mining techniques to investigate the readability, sentiments and hidden topics of the policy documents. Our results provide evidence of increased central bank communication during the sample period, implying improved monetary policy transparency. Also, the computed Coleman and Liau (1975) readability index shows that the word and sentence structures of the press releases have become less complex, indicating increased readability. Furthermore, we find an average monetary policy net sentiment score of 3.9 per cent. This means that the monetary policy committee expressed positive sentiments regarding policy and macroeconomic outlooks during the period. Finally, the estimated topic model reveals that the topic proportion for “monetary policy and inflation” was prominent in the year 2018 while concerns regarding exchange rate were strong in 2019. The paper recommends that in order to enhance monetary policy communication, the Bank of Ghana should continue to improve on the readability of the monetary policy press releases.
{"title":"Central Bank Communication in Ghana: Insights from a Text Mining Analysis","authors":"Babatunde S. Omotosho","doi":"10.2139/ssrn.3526451","DOIUrl":"https://doi.org/10.2139/ssrn.3526451","url":null,"abstract":"Effective central bank communication is useful for anchoring market expectations and enhancing macroeconomic stability. In this paper, the communication strategy of the Bank of Ghana (BOG) is analysed using BOG’s monetary policy committee press releases for the period 2018-2019. Specifically, we apply text mining techniques to investigate the readability, sentiments and hidden topics of the policy documents. Our results provide evidence of increased central bank communication during the sample period, implying improved monetary policy transparency. Also, the computed Coleman and Liau (1975) readability index shows that the word and sentence structures of the press releases have become less complex, indicating increased readability. Furthermore, we find an average monetary policy net sentiment score of 3.9 per cent. This means that the monetary policy committee expressed positive sentiments regarding policy and macroeconomic outlooks during the period. Finally, the estimated topic model reveals that the topic proportion for “monetary policy and inflation” was prominent in the year 2018 while concerns regarding exchange rate were strong in 2019. The paper recommends that in order to enhance monetary policy communication, the Bank of Ghana should continue to improve on the readability of the monetary policy press releases.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124494294","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-10-21DOI: 10.21511/bbs.14(4).2019.15
I. Chugunov, M. Pasichnyi, A. Nepytaliuk
The article assessed the treatment effects of targeting inflation regime on the real output and consumer inflation persistence in both advanced and emerging market economies. An empirical analysis is based on data from 35 OECD and 40 emerging countries and covers inflation and non-inflation targeters over the period 1990–2017. The results showed that inflation targeting (henceforth – IT) had no significant impact on the GDP per capita growth rate but slightly reduced the output volatility. This study founded out that full-fledged IT had the effect of slowing down consumer inflation and reducing its volatility. Moreover, in the OECD countries, the monetary framework had certain advantages during the Great Recession. The authors argued that in order to maintain price stability in emerging economies, a high level of central bank independence and accountability is required.
{"title":"Macroeconomic Effects of Inflation Targeting in Advanced and Emerging Market Economies","authors":"I. Chugunov, M. Pasichnyi, A. Nepytaliuk","doi":"10.21511/bbs.14(4).2019.15","DOIUrl":"https://doi.org/10.21511/bbs.14(4).2019.15","url":null,"abstract":"The article assessed the treatment effects of targeting inflation regime on the real output and consumer inflation persistence in both advanced and emerging market economies. An empirical analysis is based on data from 35 OECD and 40 emerging countries and covers inflation and non-inflation targeters over the period 1990–2017. The results showed that inflation targeting (henceforth – IT) had no significant impact on the GDP per capita growth rate but slightly reduced the output volatility. This study founded out that full-fledged IT had the effect of slowing down consumer inflation and reducing its volatility. Moreover, in the OECD countries, the monetary framework had certain advantages during the Great Recession. The authors argued that in order to maintain price stability in emerging economies, a high level of central bank independence and accountability is required.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127985331","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We lay out what Nigeria could do to get the economic, fiscal, and financial narratives back to positive. It is indeed very surprising how Nigeria’s impressively positive economic narrative from 1999 to 2014 has given way to an unflattering post-2014 narrative in which the economic terrain is about recession, inflation, unemployment, poverty, restiveness, and insecurity; the financial terrain is about foreign exchange rationing, devaluation, multiple exchange rates, low loan-deposit ratio, and high interest rates; while the fiscal terrain is about low revenue, low capital spending, large deficits, high debt service, rising debt, and concerns about solvency/bankruptcy. With huge windfalls from the commodity price surge from 1999 to 2014, Nigeria enjoyed economic expansion- growth accelerated and commercial services, led by telecommunications and information services, outgrew agriculture and oil- that saw Nigeria’s rank rise phenomenally from the 52nd to 22nd economy in the world; financial expansion- deepening of banks, bonds and equity markets, as well as government revenue and spending; and stability- single digit inflation and interest rates, and a strong exchange rate; and, a marked reduction in misery- falling unemployment and poverty rates. With shortfalls replacing windfalls since the crash of commodity prices in July 2014, Nigeria’s economy has endured economic contraction- growth reversal, recession, and a sluggish recovery to now rank as 30th economy in the world; financial contraction- especially bank deposits, equity market capitalization, and foreign exchange supply, as well as government revenue and spending, and instability- the Naira lost about two thirds of its value against US dollar, while inflation and interest rates jumped into double digits; with the growing misery reflected in growing number of unemployed, poor, and disenchanted. We present data that reveals that the common thread between the two eras is the quantum of external liquidity at the country’s disposal. External liquidity surge from windfalls fuelled the era of expansion and stability, just as external liquidity shortages from shortfalls inflicted contraction and instability. We show that unfolding global realities now mean that Nigeria could easily adopt policies to raise external liquidity thresholds enough to switch from contraction to expansion. Global liquidity glut has seen a doubling of long-term capital inflows to developing countries in the last decade and Nigeria is very well-placed to strategically reposition itself to get a fair share of that. Despite negative external income shock, domestically, Nigeria remains prodigiously asset rich. Nigeria’s large population spread in scores of urban centres and past oil booms combine to bequeath her with valuable public assets. However, while Nigeria’s economic, fiscal and financial struggles resulting from the decline in income have been conspicuous in news headlines, the solutions that the value of a
{"title":"Unlocking Liquidity in Nigeria","authors":"Ayo Teriba","doi":"10.2139/ssrn.3454652","DOIUrl":"https://doi.org/10.2139/ssrn.3454652","url":null,"abstract":"We lay out what Nigeria could do to get the economic, fiscal, and financial narratives back to positive. It is indeed very surprising how Nigeria’s impressively positive economic narrative from 1999 to 2014 has given way to an unflattering post-2014 narrative in which the economic terrain is about recession, inflation, unemployment, poverty, restiveness, and insecurity; the financial terrain is about foreign exchange rationing, devaluation, multiple exchange rates, low loan-deposit ratio, and high interest rates; while the fiscal terrain is about low revenue, low capital spending, large deficits, high debt service, rising debt, and concerns about solvency/bankruptcy. \u0000 \u0000With huge windfalls from the commodity price surge from 1999 to 2014, Nigeria enjoyed economic expansion- growth accelerated and commercial services, led by telecommunications and information services, outgrew agriculture and oil- that saw Nigeria’s rank rise phenomenally from the 52nd to 22nd economy in the world; financial expansion- deepening of banks, bonds and equity markets, as well as government revenue and spending; and stability- single digit inflation and interest rates, and a strong exchange rate; and, a marked reduction in misery- falling unemployment and poverty rates. \u0000 \u0000With shortfalls replacing windfalls since the crash of commodity prices in July 2014, Nigeria’s economy has endured economic contraction- growth reversal, recession, and a sluggish recovery to now rank as 30th economy in the world; financial contraction- especially bank deposits, equity market capitalization, and foreign exchange supply, as well as government revenue and spending, and instability- the Naira lost about two thirds of its value against US dollar, while inflation and interest rates jumped into double digits; with the growing misery reflected in growing number of unemployed, poor, and disenchanted. \u0000 \u0000We present data that reveals that the common thread between the two eras is the quantum of external liquidity at the country’s disposal. External liquidity surge from windfalls fuelled the era of expansion and stability, just as external liquidity shortages from shortfalls inflicted contraction and instability. We show that unfolding global realities now mean that Nigeria could easily adopt policies to raise external liquidity thresholds enough to switch from contraction to expansion. Global liquidity glut has seen a doubling of long-term capital inflows to developing countries in the last decade and Nigeria is very well-placed to strategically reposition itself to get a fair share of that. \u0000 \u0000Despite negative external income shock, domestically, Nigeria remains prodigiously asset rich. Nigeria’s large population spread in scores of urban centres and past oil booms combine to bequeath her with valuable public assets. However, while Nigeria’s economic, fiscal and financial struggles resulting from the decline in income have been conspicuous in news headlines, the solutions that the value of a","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"232 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132488983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-09DOI: 10.9734/AJEBA/2019/V12I230145
Rasel Rasel, Sajjad Hosain, Ayrin Sultana, H. Kabir
The aim of this paper is to discuss the motives and after effects of demonetization decision taken by the Indian Government on November 10, 2016. In addition, it has tried to highlight the demonetization effects in some other countries. The opinions of economists, financial analysts and intellectuals have been highlighted on this paper based solely on published information collected from previous articles, newspapers and books related to the subject matter. The paper will hopefully come to the help of those academicians seeking to investigate more and the policy makers who want some academic references.
{"title":"Demonetization in India: An Evaluation","authors":"Rasel Rasel, Sajjad Hosain, Ayrin Sultana, H. Kabir","doi":"10.9734/AJEBA/2019/V12I230145","DOIUrl":"https://doi.org/10.9734/AJEBA/2019/V12I230145","url":null,"abstract":"The aim of this paper is to discuss the motives and after effects of demonetization decision taken by the Indian Government on November 10, 2016. In addition, it has tried to highlight the demonetization effects in some other countries. The opinions of economists, financial analysts and intellectuals have been highlighted on this paper based solely on published information collected from previous articles, newspapers and books related to the subject matter. The paper will hopefully come to the help of those academicians seeking to investigate more and the policy makers who want some academic references. ","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122430112","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper estimates the broad money multiplier for Thailand using monthly data from 1997M1 to 2017M12. It is found that there is nonlinear relationship between money supply and monetary base. An increase in monetary base causes the broad money supply to increase proportionally, and vice versa. This implies that the estimated money multiplier is stable during the period of investigation. This finding suggests that the Bank of Thailand has the ability to control the broad money supply. The finding also points to the soundness of the current monetary policy regime.
{"title":"Does the Bank of Thailand Have the Control Over the Money Supply?","authors":"Komain Jiranyakul","doi":"10.2139/ssrn.3417005","DOIUrl":"https://doi.org/10.2139/ssrn.3417005","url":null,"abstract":"This paper estimates the broad money multiplier for Thailand using monthly data from 1997M1 to 2017M12. It is found that there is nonlinear relationship between money supply and monetary base. An increase in monetary base causes the broad money supply to increase proportionally, and vice versa. This implies that the estimated money multiplier is stable during the period of investigation. This finding suggests that the Bank of Thailand has the ability to control the broad money supply. The finding also points to the soundness of the current monetary policy regime.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122741626","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We quantitatively analyse the monetary policy statements of the Reserve Bank of India (RBI) between 1998–2018, across five governor regimes. Using natural language processing tools, we show that there has been a persistent semantic shift in RBI’s monetary policy communication since adoption of inflation targeting. We construct measures of linguistic and structural complexity that capture governor-specific trends in communication. RBI’s communication is linguistically complex on average, but the length of monetary policy statements has gone down and readability has improved significantly recently. Our results indicate that lengthier statements are linked to higher volatility in equity and currency markets, but not bond markets.
{"title":"Analysing Monetary Policy Statements of the Reserve Bank of India","authors":"Aakriti Mathur, Rajeswari Sengupta","doi":"10.2139/ssrn.3383869","DOIUrl":"https://doi.org/10.2139/ssrn.3383869","url":null,"abstract":"We quantitatively analyse the monetary policy statements of the Reserve Bank of India (RBI) between 1998–2018, across five governor regimes. Using natural language processing tools, we show that there has been a persistent semantic shift in RBI’s monetary policy communication since adoption of inflation targeting. We construct measures of linguistic and structural complexity that capture governor-specific trends in communication. RBI’s communication is linguistically complex on average, but the length of monetary policy statements has gone down and readability has improved significantly recently. Our results indicate that lengthier statements are linked to higher volatility in equity and currency markets, but not bond markets.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124568095","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper traces the history of China’s reform of its monetary policy framework and analyzes its success and problems. In the context of financial marketization and the failure of the quantity-targeting framework, the People’s Bank of China transformed its monetary policy framework toward one that targets interest rates. The reform includes two important institutional changes: establishing an interest rate corridor and decreasing the difficulty the Open Market Operations room faces in estimating the market demand for reserves. The new monetary policy framework successfully stabilizes the interbank offered rate. However, this does not mean that the new framework is sufficient. One important problem remaining to be solved is how to manage the effects of fiscal activities on monetary policy operations. This paper analyzes the fiscal effects on reserves in China’s Treasury Single Account system. The missing role of the Treasury in monetary policy operations increases the difficulty for the central bank to achieve its interest rate target. A further reform is therefore needed to provide a coordination mechanism between the Treasury and the People’s Bank of China.
{"title":"An Institutional Analysis of China’s Reform of their Monetary Policy Framework","authors":"He Zengping, Jia Genliang","doi":"10.2139/ssrn.3368531","DOIUrl":"https://doi.org/10.2139/ssrn.3368531","url":null,"abstract":"This paper traces the history of China’s reform of its monetary policy framework and analyzes its success and problems. In the context of financial marketization and the failure of the quantity-targeting framework, the People’s Bank of China transformed its monetary policy framework toward one that targets interest rates. The reform includes two important institutional changes: establishing an interest rate corridor and decreasing the difficulty the Open Market Operations room faces in estimating the market demand for reserves. The new monetary policy framework successfully stabilizes the interbank offered rate. However, this does not mean that the new framework is sufficient. One important problem remaining to be solved is how to manage the effects of fiscal activities on monetary policy operations. This paper analyzes the fiscal effects on reserves in China’s Treasury Single Account system. The missing role of the Treasury in monetary policy operations increases the difficulty for the central bank to achieve its interest rate target. A further reform is therefore needed to provide a coordination mechanism between the Treasury and the People’s Bank of China.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"82 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130193628","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We quantify the Monetary Policy Board (MPB) minutes of the Bank of Korea (BOK) using text mining. We propose a novel approach using a field-specific Korean dictionary and contiguous sequences of words (n-grams) to better capture the subtlety of central bank communications. We find that our lexicon-based indicators help explain the current and future BOK monetary policy decisions when considering an augmented Taylor rule, suggesting that they contain additional information beyond the currently available macroeconomic variables. Our indicators remarkably outperform English-based textual classifications, a media-based measure of economic policy uncertainty, and a data-based measure of macroeconomic uncertainty. Our empirical results also emphasize the importance of using a field-specific dictionary and the original Korean text.
{"title":"Deciphering Monetary Policy Board Minutes Through Text Mining Approach: The Case of Korea","authors":"K. Park, Young Joon Lee, Soohyon Kim","doi":"10.2139/ssrn.3312561","DOIUrl":"https://doi.org/10.2139/ssrn.3312561","url":null,"abstract":"We quantify the Monetary Policy Board (MPB) minutes of the Bank of Korea (BOK) using text mining. We propose a novel approach using a field-specific Korean dictionary and contiguous sequences of words (n-grams) to better capture the subtlety of central bank communications. We find that our lexicon-based indicators help explain the current and future BOK monetary policy decisions when considering an augmented Taylor rule, suggesting that they contain additional information beyond the currently available macroeconomic variables. Our indicators remarkably outperform English-based textual classifications, a media-based measure of economic policy uncertainty, and a data-based measure of macroeconomic uncertainty. Our empirical results also emphasize the importance of using a field-specific dictionary and the original Korean text.","PeriodicalId":178626,"journal":{"name":"ERN: Monetary & Fiscal Policies in Emerging Markets (Topic)","volume":"164 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134465330","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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