The relationship between public expenditures and economic growth is a constantly debated topic among researchers. There are five main models used to test Wagner's Law. This study aims to test Wagner's Law for Turkiye's public expenditure and expenditure types within the scope of economic classification by using all models in the literature. We tested the validity of Wagner's Law in the Turkiye case using the ARDL method applied for the years 1950-2020. Study findings prove that Wagner's Law is valid in Turkiye using the Mann and Peacock models for public expenditure. In addition, the findings support Wagner's Law only in transfer expenditures among sub-components. These findings point out that public expenditure, which increases more than gross domestic product, is dominated by transfer expenditures. The fact that social transfers account for approximately 75% of transfer expenditures in the last decade demonstrates that Turkiye prioritizes the social state function.
{"title":"The relationship between public expenditures and economic growth in the scope of economic classification: The case of Turkiye","authors":"Ali Balki, S. Göksu","doi":"10.2298/pan220925006b","DOIUrl":"https://doi.org/10.2298/pan220925006b","url":null,"abstract":"The relationship between public expenditures and economic growth is a constantly debated topic among researchers. There are five main models used to test Wagner's Law. This study aims to test Wagner's Law for Turkiye's public expenditure and expenditure types within the scope of economic classification by using all models in the literature. We tested the validity of Wagner's Law in the Turkiye case using the ARDL method applied for the years 1950-2020. Study findings prove that Wagner's Law is valid in Turkiye using the Mann and Peacock models for public expenditure. In addition, the findings support Wagner's Law only in transfer expenditures among sub-components. These findings point out that public expenditure, which increases more than gross domestic product, is dominated by transfer expenditures. The fact that social transfers account for approximately 75% of transfer expenditures in the last decade demonstrates that Turkiye prioritizes the social state function.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68608138","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This is a heterodox review on macroeconomics according to the Austrian Economics. The Austrian business cycle theory explains the origin of boom-bust cycles based on the difference between natural interest rates and banking rates, which comes from the artificial processes of monetary and credit expansion. This difference is the yield curve, an instrument to detect the deviation of monetary policies, and a forward indicator of business cycles. This article studies the impact of yield curve slope on the requirements for access to bank credit, and the distorting effect of expansionary monetary policies on the capital structure. In an environment of artificially low interest rates, these distortions become an accumulation of long-term failed investments that markets cannot assume, with the consequent readjustment or recession. To detect these distortions and to control the bust, it could be useful the yield curve illustrates here.
{"title":"Yield curve as forward indicator of recession: Austrian economics insights","authors":"Miguel A. Alonso-Neira, Antonio Sánchez-Bayón","doi":"10.2298/pan230217018a","DOIUrl":"https://doi.org/10.2298/pan230217018a","url":null,"abstract":"This is a heterodox review on macroeconomics according to the Austrian Economics. The Austrian business cycle theory explains the origin of boom-bust cycles based on the difference between natural interest rates and banking rates, which comes from the artificial processes of monetary and credit expansion. This difference is the yield curve, an instrument to detect the deviation of monetary policies, and a forward indicator of business cycles. This article studies the impact of yield curve slope on the requirements for access to bank credit, and the distorting effect of expansionary monetary policies on the capital structure. In an environment of artificially low interest rates, these distortions become an accumulation of long-term failed investments that markets cannot assume, with the consequent readjustment or recession. To detect these distortions and to control the bust, it could be useful the yield curve illustrates here.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68608208","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the dominant attribute of housing in China for the period 2000 to 2017 with national monthly data. By employing VAR methodology and Chow test, the empirical results suggest that there is a statistically significant structural breakpoint in February 2009, and that the housing boom before 2009 was driven by self-occupation consumption demand while the rise in house prices since 2009 is a monetary phenomenon. These are consistent with the institutional backgrounds, when the first period encountered the end of housing as a welfare and rapid urbanization and the second period experienced the expansionary monetary policy introduced at the end of 2008. This implies that housing is gradually evolving from a necessity to a financial item, and policymakers should adopt policies that address the dominant attributes of housing at different periods.
{"title":"The role of housing-dominated attributes in housing booms: Evidence from China","authors":"P. Arestis, Mianshan Lai","doi":"10.2298/pan230420009a","DOIUrl":"https://doi.org/10.2298/pan230420009a","url":null,"abstract":"This paper investigates the dominant attribute of housing in China for the period 2000 to 2017 with national monthly data. By employing VAR methodology and Chow test, the empirical results suggest that there is a statistically significant structural breakpoint in February 2009, and that the housing boom before 2009 was driven by self-occupation consumption demand while the rise in house prices since 2009 is a monetary phenomenon. These are consistent with the institutional backgrounds, when the first period encountered the end of housing as a welfare and rapid urbanization and the second period experienced the expansionary monetary policy introduced at the end of 2008. This implies that housing is gradually evolving from a necessity to a financial item, and policymakers should adopt policies that address the dominant attributes of housing at different periods.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68608823","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper finds that an out-of-sample forecast of a monetary model of exchange rate (MMER) in hyperinflation decisively beats a random walk one particularly at the most challenging one step ahead forecast, thus outperforming standard results previously obtained for low inflation episodes. The findings refer to the Serbian hyperinflation at daily frequency, and are robust with respect to various tests. Fast adjustment of the exchange rate to its fundamental value and the low, well below one discount factor found in the Serbian episode, as opposed to low-inflation ones, can account for divergent results in the respective inflation environments. The low discount factor appears in other hyperinflation episodes, while fast adjustment is due to the absence of nominal rigidities in hyperinflation thus both suggesting that reported findings for one episode might generalize.
{"title":"A monetary model of exchange rate beats the random walk forecast even at a short horizon: Evidence from the Serbian hyperinflation at daily frequency","authors":"Pavle Petrovic, Zorica Mladenovic","doi":"10.2298/pan230614020p","DOIUrl":"https://doi.org/10.2298/pan230614020p","url":null,"abstract":"This paper finds that an out-of-sample forecast of a monetary model of exchange rate (MMER) in hyperinflation decisively beats a random walk one particularly at the most challenging one step ahead forecast, thus outperforming standard results previously obtained for low inflation episodes. The findings refer to the Serbian hyperinflation at daily frequency, and are robust with respect to various tests. Fast adjustment of the exchange rate to its fundamental value and the low, well below one discount factor found in the Serbian episode, as opposed to low-inflation ones, can account for divergent results in the respective inflation environments. The low discount factor appears in other hyperinflation episodes, while fast adjustment is due to the absence of nominal rigidities in hyperinflation thus both suggesting that reported findings for one episode might generalize.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135262802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This work investigates the relationships between the retail payment system, monetary aggregates and economic activity in Spain from a long-run perspective. This approach is considered from the perspective of the transformations favored by ICT in the payment system, which incorporates increasingly more and more cashless instruments. The methodology used is based on cointegration analysis and error correction models. Likewise, a new indicator of some trends in the implementation of cashless transactions in payment systems is proposed; this measure has been applied to Spain and other European countries. With respect to long-run relationships, we demonstrate the relevant (and direct) impact of changes in the monetary system and national income on the value of cashless transactions. Regarding the short run, the most important relationships in terms of the value of cashless transactions are those related to the real estate sector. The empirical results evidence the intensive progress of the cashless society in Spain, where the banking sector, regulatory changes and ICT development have played a key role.
{"title":"Toward a cashless society. Cash and non-cash payments in Spain, 1989-2014","authors":"Carles Maixé-Altés, Estefanía Mourelle","doi":"10.2298/pan180213004m","DOIUrl":"https://doi.org/10.2298/pan180213004m","url":null,"abstract":"This work investigates the relationships between the retail payment system, monetary aggregates and economic activity in Spain from a long-run perspective. This approach is considered from the perspective of the transformations favored by ICT in the payment system, which incorporates increasingly more and more cashless instruments. The methodology used is based on cointegration analysis and error correction models. Likewise, a new indicator of some trends in the implementation of cashless transactions in payment systems is proposed; this measure has been applied to Spain and other European countries. With respect to long-run relationships, we demonstrate the relevant (and direct) impact of changes in the monetary system and national income on the value of cashless transactions. Regarding the short run, the most important relationships in terms of the value of cashless transactions are those related to the real estate sector. The empirical results evidence the intensive progress of the cashless society in Spain, where the banking sector, regulatory changes and ICT development have played a key role.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68604779","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The popularity of Foreign Direct Investment (FDI) stimulates research on its determinants. This paper highlights the importance of political determinants in explaining inward FDI variation across countries. Adopting the argument that no single theory exists for FDI, it identifies the political factors based on the results of related empirical studies. The literature review?s primary concern is to provide underpinnings for further research on inward FDI distribution in the contemporary international political scene. It sets up the theoretical links between political regimes, political determinants, and FDI. The paper focuses on the importance of specific political variables established in all political systems to influence foreign investors' decision-making process. The distinguished determinants are property rights protection, the signing of Bilateral Investment Treaties (BITs), human rights, and quality of governance.
{"title":"The political determinants of inward FDI","authors":"Eirini Triarchi, J. Marangos","doi":"10.2298/pan210928008t","DOIUrl":"https://doi.org/10.2298/pan210928008t","url":null,"abstract":"The popularity of Foreign Direct Investment (FDI) stimulates research on its determinants. This paper highlights the importance of political determinants in explaining inward FDI variation across countries. Adopting the argument that no single theory exists for FDI, it identifies the political factors based on the results of related empirical studies. The literature review?s primary concern is to provide underpinnings for further research on inward FDI distribution in the contemporary international political scene. It sets up the theoretical links between political regimes, political determinants, and FDI. The paper focuses on the importance of specific political variables established in all political systems to influence foreign investors' decision-making process. The distinguished determinants are property rights protection, the signing of Bilateral Investment Treaties (BITs), human rights, and quality of governance.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68606760","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Expansionary monetary policy combined with unconventional measures led to a decline in the profitability of U.S. and European banks. This paper studies whether such measures also affect the asset concentration in the European banking sector. The findings of this research add value to previous research, taking a step deeper into examining the consequences of expansionary monetary policy. It is found that reductions in the European central bank?s (ECB?s) key policy rate can predominantly explain the concentration growth in the eurozone countries. Furthermore, the ECB?s monetary policy had a more substantial influence on the growth of the concentration of banks outside the eurozone than those countries? own monetary policies. Thus, the expansionary monetary policy poses specific challenges to financial stability in Europe.
{"title":"Expansionary monetary policy vs. bank concentration: The Eurozone & other European countries","authors":"Zeljko Jovic","doi":"10.2298/pan220303016j","DOIUrl":"https://doi.org/10.2298/pan220303016j","url":null,"abstract":"Expansionary monetary policy combined with unconventional measures led to a decline in the profitability of U.S. and European banks. This paper studies whether such measures also affect the asset concentration in the European banking sector. The findings of this research add value to previous research, taking a step deeper into examining the consequences of expansionary monetary policy. It is found that reductions in the European central bank?s (ECB?s) key policy rate can predominantly explain the concentration growth in the eurozone countries. Furthermore, the ECB?s monetary policy had a more substantial influence on the growth of the concentration of banks outside the eurozone than those countries? own monetary policies. Thus, the expansionary monetary policy poses specific challenges to financial stability in Europe.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68608040","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The United States Dollar (USD) replacement of the sterling as the dominant currency is not only the result of the "invisible hand," but also the "visible hand." This study analyzes the effect of the monetary policy in the United States (U.S.) on the international share of the USD from 1914 to 1945 using the Bayesian technique, to estimate the time-varying parameter vector autoregressive (TVP-VAR) model. The study posits two main findings. First, the time-point impulse response shows that the increase in the U.S. interest rate results in an increase in the international share of the USD, implying that this increase has an expansion effect on the USD, and the effect has no time-varying characteristics. Second, the equal time interval impulse response shows that the effect of the monetary policy on the share of the USD is greater in the short term.
{"title":"Effect of the monetary policy in the United States on the international share of the U.S. Dollar: 1914-1945","authors":"Li Wang, Ronghua Zhang","doi":"10.2298/pan211224017w","DOIUrl":"https://doi.org/10.2298/pan211224017w","url":null,"abstract":"The United States Dollar (USD) replacement of the sterling as the dominant currency is not only the result of the \"invisible hand,\" but also the \"visible hand.\" This study analyzes the effect of the monetary policy in the United States (U.S.) on the international share of the USD from 1914 to 1945 using the Bayesian technique, to estimate the time-varying parameter vector autoregressive (TVP-VAR) model. The study posits two main findings. First, the time-point impulse response shows that the increase in the U.S. interest rate results in an increase in the international share of the USD, implying that this increase has an expansion effect on the USD, and the effect has no time-varying characteristics. Second, the equal time interval impulse response shows that the effect of the monetary policy on the share of the USD is greater in the short term.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68606885","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One of the peculiarities of the Spanish labour market has been the existence of a high share of temporary employment, a result of the 1984 labour reform which made the use of temporary contracts more flexible. Since 1994, various reforms have sought to increase the use of open-ended contracts and discourage the use of fixed-term contracts. Although these reforms, in particular the 2012 and 2021 reforms, have led to a reduction in the share of temporary workers they have also created other unintended problems, such as a reduction in the duration of fixed-term contracts, the proliferation of part-time contracts and atypical open-ended contracts, and a high share of temporary employment in public sector.
{"title":"Undesired consequences of labour market reforms: From temporary to precarious jobs - the case of Spain","authors":"Jesus Ferreiro, Carmen Gomez","doi":"10.2298/pan2304523f","DOIUrl":"https://doi.org/10.2298/pan2304523f","url":null,"abstract":"One of the peculiarities of the Spanish labour market has been the existence of a high share of temporary employment, a result of the 1984 labour reform which made the use of temporary contracts more flexible. Since 1994, various reforms have sought to increase the use of open-ended contracts and discourage the use of fixed-term contracts. Although these reforms, in particular the 2012 and 2021 reforms, have led to a reduction in the share of temporary workers they have also created other unintended problems, such as a reduction in the duration of fixed-term contracts, the proliferation of part-time contracts and atypical open-ended contracts, and a high share of temporary employment in public sector.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68608386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many research state that digitalization is mainly an opportunity, now more than ever. Digital firms are more productive, employ more skilled workers, and foresee more employment growth opportunities ahead. In 2020, the combined health and economic shocks have, however, accelerated the technology driven displacement of jobs, which can exacerbate existing inequalities in the coming years. The goal of this paper is to analyze changes in the scale of income inequalities over the last five years, ending in 2021 with respect to the pre-existing inequalities in access to ICTs (connectivity), differences in digital skills (human capital), integration of digital technology in enterprises and digital public services in EU countries. Our research indicates that in the short-term, the degree of inequality in EU27 nations grew more in countries with greater connectivity, as measured by access to broadband Internet. However, only the integration of digital technology in businesses and fundamental access to the Internet were linked to a greater reduction in the Gini index from 2017-2021.
{"title":"Income inequalities in the accelerating digital era: Evidence from EU countries and COVID-time","authors":"Beata Woźniak-Jęchorek, Sławomir Kuźmar","doi":"10.2298/pan2304551w","DOIUrl":"https://doi.org/10.2298/pan2304551w","url":null,"abstract":"Many research state that digitalization is mainly an opportunity, now more than ever. Digital firms are more productive, employ more skilled workers, and foresee more employment growth opportunities ahead. In 2020, the combined health and economic shocks have, however, accelerated the technology driven displacement of jobs, which can exacerbate existing inequalities in the coming years. The goal of this paper is to analyze changes in the scale of income inequalities over the last five years, ending in 2021 with respect to the pre-existing inequalities in access to ICTs (connectivity), differences in digital skills (human capital), integration of digital technology in enterprises and digital public services in EU countries. Our research indicates that in the short-term, the degree of inequality in EU27 nations grew more in countries with greater connectivity, as measured by access to broadband Internet. However, only the integration of digital technology in businesses and fundamental access to the Internet were linked to a greater reduction in the Gini index from 2017-2021.","PeriodicalId":45222,"journal":{"name":"Panoeconomicus","volume":"1 1","pages":""},"PeriodicalIF":1.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68608554","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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