Research background: This paper researches the relationship between financial depth (private credit to GDP ratio) and the subsequent response of GDP to the 2007+ financial crisis. The prevailing view in the finance-volatility of growth nexus literature is that financial depth reduces production volatility, but this holds true only up to a certain level of financial depth. Another stream of research documents that rapid growth in credit is a financial crisis predictor. Purpose of the article: We ask: did financial depth or its change have any impact on the post-crisis response of the real sector? Methods: Cross-sectional regression, 144 countries. Findings & value added: The post-crisis GDP response corresponds to a change of financial depth prior to the crisis, rather than to the financial depth itself. The increase of financial depth prior to the crisis is statistically significant to the extent of GDP drop; in countries where the credit-to-GDP ratio surged prior to the crisis, the post-crisis response of the real sector was more pronounced. There is no evidence that financial depth negatively affected the extent of the GDP drop after the 2007+ financial crisis; some calculations suggest that the effect is slightly positive (i.e. the collapse was less severe in the countries with higher financial depth). The variables relating to financial depth affected the response of GDP mainly in countries where financial depth is relatively high.
{"title":"Financial depth and post-2008 change of GDP","authors":"J. Pietrucha, Jan Acedański","doi":"10.24136/EQ.V12I3.25","DOIUrl":"https://doi.org/10.24136/EQ.V12I3.25","url":null,"abstract":"Research background: This paper researches the relationship between financial depth (private credit to GDP ratio) and the subsequent response of GDP to the 2007+ financial crisis. The prevailing view in the finance-volatility of growth nexus literature is that financial depth reduces production volatility, but this holds true only up to a certain level of financial depth. Another stream of research documents that rapid growth in credit is a financial crisis predictor. Purpose of the article: We ask: did financial depth or its change have any impact on the post-crisis response of the real sector? Methods: Cross-sectional regression, 144 countries. Findings & value added: The post-crisis GDP response corresponds to a change of financial depth prior to the crisis, rather than to the financial depth itself. The increase of financial depth prior to the crisis is statistically significant to the extent of GDP drop; in countries where the credit-to-GDP ratio surged prior to the crisis, the post-crisis response of the real sector was more pronounced. There is no evidence that financial depth negatively affected the extent of the GDP drop after the 2007+ financial crisis; some calculations suggest that the effect is slightly positive (i.e. the collapse was less severe in the countries with higher financial depth). The variables relating to financial depth affected the response of GDP mainly in countries where financial depth is relatively high.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47405687","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}
Research background: The probabilistic setup and focus on evaluation of uncertainties and risks has become more widespread in modern empirical macroeconomics, including the analysis of business cycle fluctuations. Therefore, forecast-based indicators of future economic conditions should be constructed using density forecasts rather than point forecasts, as the former provide description of forecast uncertainty. Purpose of the article: We discuss model-based probabilistic inference on business cycle fluctuations in Poland. In particular, we consider model comparison for probabilistic prediction of growth rates of the Polish industrial production. We also develop a class of indicators of future economic conditions constructed using probabilistic information on the rates (that make use of joint predictive distribution over several forecast horizons). Methods: We use Bayesian methods (in order to capture the estimation uncertainty) and consider two groups of models. The first group consists of Dynamic Conditional Score models with the generalized t conditional distribution (with conditional heteroskedasticity and heavy tails, being important for modelling of extreme observations). Another group of models relies on deterministic cycle modelling using Flexible Fourier Form. Ex-post density forecasting performance of the models is compared using the criteria for probabilistic pre-diction: Log-Predictive Score (LPS) and Continuous Ranked Probability Score (CRPS). Findings & value added: The pre-2013 data support the deterministic cycle models whereas more recent observations can be explained by a simple mean-reverting Gaussian AR(4) process. The results indicate a structural change affecting Polish business cycle fluctuations after 2013. Hence, forecast pooling strategies are recommended as a tool for further research. We find rather limited support in favor of the first group of models. The probabilistic indicator of future economic conditions considered here leads actual phases of the growth cycle quite well, though the effect is less obvious after 2013.
{"title":"Probabilistic predictive analysis of business cycle fluctuations in Polish economy","authors":"Błażej Mazur","doi":"10.24136/EQ.V12I3.23","DOIUrl":"https://doi.org/10.24136/EQ.V12I3.23","url":null,"abstract":"Research background: The probabilistic setup and focus on evaluation of uncertainties and risks has become more widespread in modern empirical macroeconomics, including the analysis of business cycle fluctuations. Therefore, forecast-based indicators of future economic conditions should be constructed using density forecasts rather than point forecasts, as the former provide description of forecast uncertainty. Purpose of the article: We discuss model-based probabilistic inference on business cycle fluctuations in Poland. In particular, we consider model comparison for probabilistic prediction of growth rates of the Polish industrial production. We also develop a class of indicators of future economic conditions constructed using probabilistic information on the rates (that make use of joint predictive distribution over several forecast horizons). Methods: We use Bayesian methods (in order to capture the estimation uncertainty) and consider two groups of models. The first group consists of Dynamic Conditional Score models with the generalized t conditional distribution (with conditional heteroskedasticity and heavy tails, being important for modelling of extreme observations). Another group of models relies on deterministic cycle modelling using Flexible Fourier Form. Ex-post density forecasting performance of the models is compared using the criteria for probabilistic pre-diction: Log-Predictive Score (LPS) and Continuous Ranked Probability Score (CRPS). Findings & value added: The pre-2013 data support the deterministic cycle models whereas more recent observations can be explained by a simple mean-reverting Gaussian AR(4) process. The results indicate a structural change affecting Polish business cycle fluctuations after 2013. Hence, forecast pooling strategies are recommended as a tool for further research. We find rather limited support in favor of the first group of models. The probabilistic indicator of future economic conditions considered here leads actual phases of the growth cycle quite well, though the effect is less obvious after 2013.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48830594","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}
Research background: The ongoing digitisation process in the banking sector, coupled with widespread remote provision of services, is leading to the advent of new solutions in the field of broadly understood security. The increasingly sophisticated forms of attacks on banks’ IT systems and their users have engendered the need to implement authentication methods that would ensure high security levels, but would also be convenient for banks' clients and suited to the requirements of mass service. Biometric technology seems to be a solution to this issue. The two factors that may boost its proliferation are: the fact that banks need to adjust to more rigid regulations, and technological advancements leading to cost reduction and increased availability of biometric solutions in mobile devices. Purpose of the article: The purpose of the article is to assess the prospects for the application of biometrics by the banking sector in Poland in individual customer service channels. Methods: The basis for theoretical considerations comprises the analysis of literature on authentication techniques and research on the processes whereby consumers accept new technologies. The empirical part of the paper was based on the results of the authors’ questionnaire survey among representatives of the Polish banking sector. Findings & value added: The banking sector in Poland is on the verge of a sweeping bio-metric revolution in the coming years, because most traditional identity verification and authorisation methods currently available in banking do not comply with strict security and user convenience requirements and RTS regulations. Biometric technologies will be of use in all customer service channels, with the experts indicating authentication in bank branches, ATMs, and mobile banking as the primary implementation areas. Solutions which are most likely to be applied are those based on biometrics of fingerprints and finger veins, as well as voice biometrics.
{"title":"Prospects for the application of biometrics in the Polish banking sector","authors":"A. Piotrowska, Michał Polasik, D. Piotrowski","doi":"10.24136/EQ.V12I3.27","DOIUrl":"https://doi.org/10.24136/EQ.V12I3.27","url":null,"abstract":"Research background: The ongoing digitisation process in the banking sector, coupled with widespread remote provision of services, is leading to the advent of new solutions in the field of broadly understood security. The increasingly sophisticated forms of attacks on banks’ IT systems and their users have engendered the need to implement authentication methods that would ensure high security levels, but would also be convenient for banks' clients and suited to the requirements of mass service. Biometric technology seems to be a solution to this issue. The two factors that may boost its proliferation are: the fact that banks need to adjust to more rigid regulations, and technological advancements leading to cost reduction and increased availability of biometric solutions in mobile devices. Purpose of the article: The purpose of the article is to assess the prospects for the application of biometrics by the banking sector in Poland in individual customer service channels. Methods: The basis for theoretical considerations comprises the analysis of literature on authentication techniques and research on the processes whereby consumers accept new technologies. The empirical part of the paper was based on the results of the authors’ questionnaire survey among representatives of the Polish banking sector. Findings & value added: The banking sector in Poland is on the verge of a sweeping bio-metric revolution in the coming years, because most traditional identity verification and authorisation methods currently available in banking do not comply with strict security and user convenience requirements and RTS regulations. Biometric technologies will be of use in all customer service channels, with the experts indicating authentication in bank branches, ATMs, and mobile banking as the primary implementation areas. Solutions which are most likely to be applied are those based on biometrics of fingerprints and finger veins, as well as voice biometrics.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47362550","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}
Research background: Regions that are able to use their resources in the most efficient way could be perceived as valuable benchmarks when shaping socio-economic policy. The concept of efficiency, however, may be related not only to pure economic categories but to social goals as well. The economic and social spheres overlap and often have some common origins, among which, the sectoral structure of employment seems to be an important one. Purpose of the article: The aim of the study was to compare the social efficiency of employment in three sectors in Polish voivodeships. Not only were we evaluating the relative performance of each region, but we were also paying attention to the efficiency of engagement of human resources in the agricultural, industrial and service sectors. Methods: We adopted the DEA method to assess the social efficiency of Polish regions. We have evaluated social cohesion concerning its two output dimensions: positive, which may be described by social activity, and negative, which may be reflected in the form of social exclusion stemming from material sources. We took into account the level of employment in agricultural, industrial and service sectors as inputs in the model and thus focused our attention on the three sectoral structure of the regional economies. Our model assumed non-radial developmental paths and was input oriented (NR-CCR). The data described the 16 Polish voivodeships in the year 2015, and were extracted from the Central Statistical Office of Poland’s databases. Findings & value added: The research conducted indicates that Polish regions which were the most efficient in terms of social integration were simultaneously those with the best economic results in terms of GDP per capita. The highest social efficiency level was characteristic for employment in the service sector, while agriculture was placed at the lowest level. The same pattern was revealed when social activity and the danger of poverty were considered separately. Thus, structural development appears to be favourable for regional economies also in terms of social cohesion, which is a factor often neglected in the literature.
{"title":"Social Efficiency of Employment in Three Sectors - a Comparison of Polish Regions","authors":"Magdalena Cyrek","doi":"10.24136/EQ.V12I3.22","DOIUrl":"https://doi.org/10.24136/EQ.V12I3.22","url":null,"abstract":"Research background: Regions that are able to use their resources in the most efficient way could be perceived as valuable benchmarks when shaping socio-economic policy. The concept of efficiency, however, may be related not only to pure economic categories but to social goals as well. The economic and social spheres overlap and often have some common origins, among which, the sectoral structure of employment seems to be an important one. Purpose of the article: The aim of the study was to compare the social efficiency of employment in three sectors in Polish voivodeships. Not only were we evaluating the relative performance of each region, but we were also paying attention to the efficiency of engagement of human resources in the agricultural, industrial and service sectors. Methods: We adopted the DEA method to assess the social efficiency of Polish regions. We have evaluated social cohesion concerning its two output dimensions: positive, which may be described by social activity, and negative, which may be reflected in the form of social exclusion stemming from material sources. We took into account the level of employment in agricultural, industrial and service sectors as inputs in the model and thus focused our attention on the three sectoral structure of the regional economies. Our model assumed non-radial developmental paths and was input oriented (NR-CCR). The data described the 16 Polish voivodeships in the year 2015, and were extracted from the Central Statistical Office of Poland’s databases. Findings & value added: The research conducted indicates that Polish regions which were the most efficient in terms of social integration were simultaneously those with the best economic results in terms of GDP per capita. The highest social efficiency level was characteristic for employment in the service sector, while agriculture was placed at the lowest level. The same pattern was revealed when social activity and the danger of poverty were considered separately. Thus, structural development appears to be favourable for regional economies also in terms of social cohesion, which is a factor often neglected in the literature.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41697319","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}
Research background: Economic crisis hit all the European Union Member States hard, with the impact of crisis varying considerably. The low growth performance in the EU has increased concerns regarding an increasing wage dispersion, income inequality at large, and social exclusion in line with poverty. Inequality should be seen as a cornerstone of both sustainable and inclusive growth under the Europe 2020 Strategy. Social inequality in the EU is a real problem, which hampers sustainable economic growth. Purpose of the article: The purpose of this study is to introduce evaluation of social development convergence and divergence trends between the EU Member States in the context of the Europe 2020 Strategy. The study gives an outline of the issues of the labour market and income disparities and poverty. Policymakers must be clear about what social objectives they are aiming to achieve, therefore special attention is paid to headline national goals of the Europe 2020 Strategy. Methods: The main task of this study is to assess social dimension and inequalities problems in the EU27 by applying Data Envelopment Analysis method, resp. time-series dynamic efficiency analysis in the form of output-oriented Malmquist Productivity Index. This study contains changes of key social equality indicators related to the Europe 2020 Strategy and compares objectives and general outlines of period 2010-2015, as well as the impact on national economics and living conditions. Findings & value added: Results contain elements of typology premises of the EU28 and point to a large diversity in inequality patterns, as the Author observes both increases and decreases in inequality at the EU level. Recent changes in social inequality have been associated with the business cycle, particularly with the accessibility of the labour market and, of course, with income inequality. Additionally, the development challenges are discussed for improvement of the socioeconomic well-being of the EU and to avoid social disparities.
{"title":"Can the Implementation of the Europe 2020 Strategy Goals Be Efficient? The Challenge for Achieving Social Equality in the European Union","authors":"M. Staníčková","doi":"10.24136/EQ.V12I3.20","DOIUrl":"https://doi.org/10.24136/EQ.V12I3.20","url":null,"abstract":"Research background: Economic crisis hit all the European Union Member States hard, with the impact of crisis varying considerably. The low growth performance in the EU has increased concerns regarding an increasing wage dispersion, income inequality at large, and social exclusion in line with poverty. Inequality should be seen as a cornerstone of both sustainable and inclusive growth under the Europe 2020 Strategy. Social inequality in the EU is a real problem, which hampers sustainable economic growth. Purpose of the article: The purpose of this study is to introduce evaluation of social development convergence and divergence trends between the EU Member States in the context of the Europe 2020 Strategy. The study gives an outline of the issues of the labour market and income disparities and poverty. Policymakers must be clear about what social objectives they are aiming to achieve, therefore special attention is paid to headline national goals of the Europe 2020 Strategy. Methods: The main task of this study is to assess social dimension and inequalities problems in the EU27 by applying Data Envelopment Analysis method, resp. time-series dynamic efficiency analysis in the form of output-oriented Malmquist Productivity Index. This study contains changes of key social equality indicators related to the Europe 2020 Strategy and compares objectives and general outlines of period 2010-2015, as well as the impact on national economics and living conditions. Findings & value added: Results contain elements of typology premises of the EU28 and point to a large diversity in inequality patterns, as the Author observes both increases and decreases in inequality at the EU level. Recent changes in social inequality have been associated with the business cycle, particularly with the accessibility of the labour market and, of course, with income inequality. Additionally, the development challenges are discussed for improvement of the socioeconomic well-being of the EU and to avoid social disparities.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45506829","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}
W. Lizińska, R. Marks-Bielska, K. Babuchowska, M. Wojarska
Research background: The theory of endogenous regional development indicates in par-ticular the role of local authorities in creating the conditions for socio-economic development. Among the factors that shape institutional efficiency of local government, the ones referring to the administrative sphere should be especially analyzed. Purpose of the article: The aim of the paper was the assessment of the activities shaping institutional efficiency in the administrative area with respect to the activities pursued by local governments in Poland, and to assess the effects of such activities. The analysis includes activities aimed at streamlining service provision, implementation of a system of self-control of provided services, and measures related to the adjustment of the organizational structure of an office to the implemented tasks. Methods: For the purpose of performing the study a questionnaire was prepared and sent to local authorities in Poland. The research was conducted between 2015 and 2016 on a sample of 1,220 municipalities from 2,479. Identification of activities implemented by local gov-ernments was made on the basis of an analysis of the task implementation index. The evalu-ation of effects of tasks was made on the basis of the values of effect index of implemented tasks. Findings & Value added: Many local governments do not fully apply the available tools that streamline the provision of administrative services. The value of the task performance index had a low average level in Poland (0.42). Representatives of local authorities were convinced of the relatively high efficiency of undertaken activities. The value of the task implementation index in the area of self-control of the provided services remained at the level of 0.48. The average value of effects of activities amounted to 0.55. The average index of task implementation of activities adjusting the organizational structure to the implemented tasks and provided services amounted to 0.64 in Poland.
{"title":"Factors Contributing To The Institutional Efficiency Of Local Governments In The Administrative Area","authors":"W. Lizińska, R. Marks-Bielska, K. Babuchowska, M. Wojarska","doi":"10.24136/EQ.V12I2.18","DOIUrl":"https://doi.org/10.24136/EQ.V12I2.18","url":null,"abstract":"Research background: The theory of endogenous regional development indicates in par-ticular the role of local authorities in creating the conditions for socio-economic development. Among the factors that shape institutional efficiency of local government, the ones referring to the administrative sphere should be especially analyzed. Purpose of the article: The aim of the paper was the assessment of the activities shaping institutional efficiency in the administrative area with respect to the activities pursued by local governments in Poland, and to assess the effects of such activities. The analysis includes activities aimed at streamlining service provision, implementation of a system of self-control of provided services, and measures related to the adjustment of the organizational structure of an office to the implemented tasks. Methods: For the purpose of performing the study a questionnaire was prepared and sent to local authorities in Poland. The research was conducted between 2015 and 2016 on a sample of 1,220 municipalities from 2,479. Identification of activities implemented by local gov-ernments was made on the basis of an analysis of the task implementation index. The evalu-ation of effects of tasks was made on the basis of the values of effect index of implemented tasks. Findings & Value added: Many local governments do not fully apply the available tools that streamline the provision of administrative services. The value of the task performance index had a low average level in Poland (0.42). Representatives of local authorities were convinced of the relatively high efficiency of undertaken activities. The value of the task implementation index in the area of self-control of the provided services remained at the level of 0.48. The average value of effects of activities amounted to 0.55. The average index of task implementation of activities adjusting the organizational structure to the implemented tasks and provided services amounted to 0.64 in Poland.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49178662","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}
Research background: Most of the modern central banks (CBs) acknowledge the role of economic agents’ expectations in monetary policy. To shape these expectations and to over-come the lags occurrence, CBs produce and reveal macroeconomic forecast and declare that it is the input into their deliberations and monetary policy adjustments. This is how central banks implement inflation forecast targeting. The formal assessments of actual forecast importance in central banks’ decisions is not presented in the literature — to the best author’s knowledge. Purpose of the article: The paper is of methodological nature. It presents the index that compares inflation forecast importance in the central banks decisions. The elaboration of such index is the main goal of the paper. The index is tested empirically for Czechia and Sweden. Methods: Comparably to other research presenting the tools that approximate some qualitative variables, the methodological part of the paper offers the description of the factors covered by the index with their justification and point attribution. The index is suitable to assess CBs decision’s accordance with the forecast produced under constant rate assumption as well as under endogenous interest rates. It is designed to cover low quality data as the time series on the central path of the forecast are not always accessible. In this cases only the relation of the forecast to the inflation target is revealed on the fan charts. Findings & Value added: The index elaboration and its calculation for Czechia and Sweden is presented in the paper. It thus contributes to the literature on ex post assessment of the central bank’s actions. This formalized assessment opens the field for making further con-clusions on inflation forecast targeting implementations and possible impact of the forecast on the economic agents' expectations.
{"title":"How the central bank makes decision on interest rates? A comparative analysis of forecast importance","authors":"Magdalena Szyszko","doi":"10.24136/EQ.V12I2.15","DOIUrl":"https://doi.org/10.24136/EQ.V12I2.15","url":null,"abstract":"Research background: Most of the modern central banks (CBs) acknowledge the role of economic agents’ expectations in monetary policy. To shape these expectations and to over-come the lags occurrence, CBs produce and reveal macroeconomic forecast and declare that it is the input into their deliberations and monetary policy adjustments. This is how central banks implement inflation forecast targeting. The formal assessments of actual forecast importance in central banks’ decisions is not presented in the literature — to the best author’s knowledge. Purpose of the article: The paper is of methodological nature. It presents the index that compares inflation forecast importance in the central banks decisions. The elaboration of such index is the main goal of the paper. The index is tested empirically for Czechia and Sweden. Methods: Comparably to other research presenting the tools that approximate some qualitative variables, the methodological part of the paper offers the description of the factors covered by the index with their justification and point attribution. The index is suitable to assess CBs decision’s accordance with the forecast produced under constant rate assumption as well as under endogenous interest rates. It is designed to cover low quality data as the time series on the central path of the forecast are not always accessible. In this cases only the relation of the forecast to the inflation target is revealed on the fan charts. Findings & Value added: The index elaboration and its calculation for Czechia and Sweden is presented in the paper. It thus contributes to the literature on ex post assessment of the central bank’s actions. This formalized assessment opens the field for making further con-clusions on inflation forecast targeting implementations and possible impact of the forecast on the economic agents' expectations.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47389860","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}
Research background: Payout policy has attracted a great deal of research, how-ever it still has not been satisfactorily explained why corporations repurchase their shares. The most popular explanation for share repurchases is their signaling power. An alternative explanation for share repurchases is related to free cash flow. We assume that both theories are not competitive, due to the fact that the motives for share repurchases may differ depending on the firm’s life cycle stage. Purpose of the article: The aim of the paper is to test the hypotheses that companies in growth stage are more prone to repurchase their shares due to the their undervaluation. Methods: Our analysis focuses on 116 repurchase on WSE and 47 repurchase on NewCon-nect in Poland during the period 2004–2016 to test the hypothesis. We assume that companies listed on WSE are in their mature stage while listed on NewConnect are in the growth stage. We use market value to book the value ratio (M/BV) and the relation of M/BV ratio for the repurchasing company to the M/BV ratio for the whole market at the date of implementing share repurchase program as a proxies for firm valuation. Findings & Value added: Our study does not confirm that repurchased companies at a growth stage are more undervalued than repurchased companies at a mature stage (at statistically significant level), however there are more repurchased companies at a growth stage with lower M/BV value than repurchase companies in mature stage. Adding corporate life cycle theory into the study, our result can contribute to the literature by more distinctly understanding the motivation of share repurchases. The results might be helpful for companies to determine their financial policies and for investors to determine their investment decisions.
{"title":"Signaling hypotheses of share repurchase – life cycle approach. The case of Polish listed companies","authors":"Elżbieta Wrońska-Bukalska, B. Kaźmierska-Jóźwiak","doi":"10.24136/EQ.V12I2.13","DOIUrl":"https://doi.org/10.24136/EQ.V12I2.13","url":null,"abstract":"Research background: Payout policy has attracted a great deal of research, how-ever it still has not been satisfactorily explained why corporations repurchase their shares. The most popular explanation for share repurchases is their signaling power. An alternative explanation for share repurchases is related to free cash flow. We assume that both theories are not competitive, due to the fact that the motives for share repurchases may differ depending on the firm’s life cycle stage. Purpose of the article: The aim of the paper is to test the hypotheses that companies in growth stage are more prone to repurchase their shares due to the their undervaluation. Methods: Our analysis focuses on 116 repurchase on WSE and 47 repurchase on NewCon-nect in Poland during the period 2004–2016 to test the hypothesis. We assume that companies listed on WSE are in their mature stage while listed on NewConnect are in the growth stage. We use market value to book the value ratio (M/BV) and the relation of M/BV ratio for the repurchasing company to the M/BV ratio for the whole market at the date of implementing share repurchase program as a proxies for firm valuation. Findings & Value added: Our study does not confirm that repurchased companies at a growth stage are more undervalued than repurchased companies at a mature stage (at statistically significant level), however there are more repurchased companies at a growth stage with lower M/BV value than repurchase companies in mature stage. Adding corporate life cycle theory into the study, our result can contribute to the literature by more distinctly understanding the motivation of share repurchases. The results might be helpful for companies to determine their financial policies and for investors to determine their investment decisions.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46233017","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}
Research background: Since the introduction of the concept in 1972 Autopoiesis has enjoyed great popularity among academicians representing various fields of science. However, the number of studies devoted to the investigation of factors that have an impact on the formation of autopoietic economic structures is quite limited. This paper addresses the gap in scientific research on autopoiesis of economic structures in small open markets, specifically in the Baltic States. Purpose of the article: The paper aims to identify and evaluate factors that turn on self-organization mechanisms of autopoietic economic structures in the Baltic States, in particular in Latvia. Methods: Expert survey was used to identify the most important factors affecting the for-mation of meso-economic entities in the Baltic States. The factors’ assessments provided by seven experts were analyzed. Analytic Hierarchy Process (AHP) with fuzzy numbers was employed to process the data. Two different scales of evaluation (inverse linear and balanced) were used. Findings & Value added: The factors influencing the process of formation of business groups were evaluated by experts. Research results allow for making conclusions regarding the causes of the business integration, and impact of diversified integrated business structures on the country's business system in Central Europe.
{"title":"Development Of Autopoietic Economic Structures In The Baltic States: Analysis Of Factors","authors":"M. Mork̄unas, Viktorija Skvarciany, J. Titko","doi":"10.24136/EQ.V12I2.17","DOIUrl":"https://doi.org/10.24136/EQ.V12I2.17","url":null,"abstract":"Research background: Since the introduction of the concept in 1972 Autopoiesis has enjoyed great popularity among academicians representing various fields of science. However, the number of studies devoted to the investigation of factors that have an impact on the formation of autopoietic economic structures is quite limited. This paper addresses the gap in scientific research on autopoiesis of economic structures in small open markets, specifically in the Baltic States. Purpose of the article: The paper aims to identify and evaluate factors that turn on self-organization mechanisms of autopoietic economic structures in the Baltic States, in particular in Latvia. Methods: Expert survey was used to identify the most important factors affecting the for-mation of meso-economic entities in the Baltic States. The factors’ assessments provided by seven experts were analyzed. Analytic Hierarchy Process (AHP) with fuzzy numbers was employed to process the data. Two different scales of evaluation (inverse linear and balanced) were used. Findings & Value added: The factors influencing the process of formation of business groups were evaluated by experts. Research results allow for making conclusions regarding the causes of the business integration, and impact of diversified integrated business structures on the country's business system in Central Europe.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46808929","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}
Research background: In our paper we have analyzed the influence of the crisis on the financial integration in the European Monetary Union. We have analyzed EMU capital market to show the impact of the crisis, with the focus on the bonds market. The determinants of the research are yields and standard deviations on medium-term and long-term triple-A bond markets, as well as CDS medium-term premiums. Purpose of the article: The aim of this paper is to show the volatility of researched deter-minants in periods of crisis in EMU zones. Methods: As a model we used a modified theoretical CAL portfolio model. In the last fifteen years Europe has been faced with two major crises: the world economic crisis and sovereign debt crisis. Findings & Value added: We believe that the sovereign crisis hit EMU more, leaving the deeper implications on the financial integration. Our analysis has showed that the crisis had a major impact on the financial integration. Yields and standard deviations increased multiply in periods of crisis and left the impact of volatility on the capital market. However, the degree of convergence of euro area bond markets largely stabilized in last two years.
{"title":"Financial Integration in the European Union - the Impact of the Crisis on the Bond Market","authors":"Darko B. Vuković, Edin Hanic, H. Hanić","doi":"10.24136/EQ.V12I2.10","DOIUrl":"https://doi.org/10.24136/EQ.V12I2.10","url":null,"abstract":"Research background: In our paper we have analyzed the influence of the crisis on the financial integration in the European Monetary Union. We have analyzed EMU capital market to show the impact of the crisis, with the focus on the bonds market. The determinants of the research are yields and standard deviations on medium-term and long-term triple-A bond markets, as well as CDS medium-term premiums. Purpose of the article: The aim of this paper is to show the volatility of researched deter-minants in periods of crisis in EMU zones. Methods: As a model we used a modified theoretical CAL portfolio model. In the last fifteen years Europe has been faced with two major crises: the world economic crisis and sovereign debt crisis. Findings & Value added: We believe that the sovereign crisis hit EMU more, leaving the deeper implications on the financial integration. Our analysis has showed that the crisis had a major impact on the financial integration. Yields and standard deviations increased multiply in periods of crisis and left the impact of volatility on the capital market. However, the degree of convergence of euro area bond markets largely stabilized in last two years.","PeriodicalId":45768,"journal":{"name":"Equilibrium-Quarterly Journal of Economics and Economic Policy","volume":null,"pages":null},"PeriodicalIF":5.7,"publicationDate":"2017-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43303031","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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