Tijjani Muhammad, Adetunji Timilehin Temidayo, A. Bukar
Objective: Small and medium enterprises (SMEs) are essential in stabilizing and developing emerging economies. Access to finance and credit is vital in sustaining livelihoods and developing microenterprises. Methods: The study adopted both descriptive and chi-square to evaluate the impact of Gashua microfinance banks on small- and medium-scale enterprises in Bade Local Government, Yobe state. For this purpose, the study used representative random sampling and administered two hundred and fifty (250) questionnaires that were correctly filled out and returned. The data was analysed using regression and structural equation modeling analyses. Results: The findings revealed that Gashua microfinance banks do not significantly impact small and medium-scale businesses in the Local Government. Conclusion: The study recommended that the local government and the Gashua microfinance bank join each other and organize a workshop or seminar to educate the small and medium-scale enterprise owners and the Local Government members on the importance of microfinance. Furthermore, ethical finances should also be introduced to address those who are financially excluded due to religious reasons.
{"title":"Gashua Microfinance Bank and Its Impact on Small and Medium Scale Enterprises: A Mix Analyses","authors":"Tijjani Muhammad, Adetunji Timilehin Temidayo, A. Bukar","doi":"10.53964/mem.2024015","DOIUrl":"https://doi.org/10.53964/mem.2024015","url":null,"abstract":"Objective: Small and medium enterprises (SMEs) are essential in stabilizing and developing emerging economies. Access to finance and credit is vital in sustaining livelihoods and developing microenterprises. Methods: The study adopted both descriptive and chi-square to evaluate the impact of Gashua microfinance banks on small- and medium-scale enterprises in Bade Local Government, Yobe state. For this purpose, the study used representative random sampling and administered two hundred and fifty (250) questionnaires that were correctly filled out and returned. The data was analysed using regression and structural equation modeling analyses. Results: The findings revealed that Gashua microfinance banks do not significantly impact small and medium-scale businesses in the Local Government. Conclusion: The study recommended that the local government and the Gashua microfinance bank join each other and organize a workshop or seminar to educate the small and medium-scale enterprise owners and the Local Government members on the importance of microfinance. Furthermore, ethical finances should also be introduced to address those who are financially excluded due to religious reasons.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"14 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141813622","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}
Objective: Contemporary research on monetary policy does not account for the loss/gain in efficiency during the adjustment of the market and the after-policy vis-a-vis pre-policy equilibrium in the money market. After a central bank exercises a monetary policy, the central bank’s cost as a supplier of money rises to pre-policy cost plus the per unit money cost incurred due to monetary policy, which affects money supply and pushes the money market out of equilibrium. Demand and supply of money along with the interest rate follow certain adjustment mechanism until the final equilibrium arrives. The basis of adjustment is lack of coordination regarding decisions of consumers and suppliers of money at the prevailing interest rate. For the design of an optimal monetary policy, efficiency considerations both during the adjustment of the market as well as in final equilibrium are important to be taken care of. This research designs a dynamic money market model and derives an optimal monetary policy. Methods: A perfectly competitive money market with five agents has been modeled. The equations maximizing their objectives have been derived and solved simultaneously to solve the model. An optimal monetary policy has been derived by minimizing the objective function of efficiency loss, i.e., supply or consumption of money lost in post-policy equilibrium vis-a-vis the pre-policy one, and the loss during the time market is adjusting subject to central bank’s cost constraint. Results: Derived mathematical expressions outline the optimal expansionary and contractionary monetary policies considering the adjustments in demand and supply over time. Conclusion: The expressions are functions of demand, supply, and inventory curves’ slopes as well as initial pre-policy equilibrium quantity of funds.
{"title":"Dynamics of Money Market and Monetary Policy","authors":"Muhammad Ashfaq Ahmed, Nasreen Nawaz","doi":"10.53964/mem.2024014","DOIUrl":"https://doi.org/10.53964/mem.2024014","url":null,"abstract":"Objective: Contemporary research on monetary policy does not account for the loss/gain in efficiency during the adjustment of the market and the after-policy vis-a-vis pre-policy equilibrium in the money market. After a central bank exercises a monetary policy, the central bank’s cost as a supplier of money rises to pre-policy cost plus the per unit money cost incurred due to monetary policy, which affects money supply and pushes the money market out of equilibrium. Demand and supply of money along with the interest rate follow certain adjustment mechanism until the final equilibrium arrives. The basis of adjustment is lack of coordination regarding decisions of consumers and suppliers of money at the prevailing interest rate. For the design of an optimal monetary policy, efficiency considerations both during the adjustment of the market as well as in final equilibrium are important to be taken care of. This research designs a dynamic money market model and derives an optimal monetary policy. Methods: A perfectly competitive money market with five agents has been modeled. The equations maximizing their objectives have been derived and solved simultaneously to solve the model. An optimal monetary policy has been derived by minimizing the objective function of efficiency loss, i.e., supply or consumption of money lost in post-policy equilibrium vis-a-vis the pre-policy one, and the loss during the time market is adjusting subject to central bank’s cost constraint. Results: Derived mathematical expressions outline the optimal expansionary and contractionary monetary policies considering the adjustments in demand and supply over time. Conclusion: The expressions are functions of demand, supply, and inventory curves’ slopes as well as initial pre-policy equilibrium quantity of funds.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"95 20","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141657976","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}
Objective: This paper analyzes the factors affecting China’s digital product exports to Regional Comprehensive Economic Partnership (RCEP) countries, and puts forward relevant suggestions on this basis. It is hoped that China’s digital product exports to RCEP countries can be improved, and china’s international competitiveness in the digital field can be enhanced. Methods: This paper constructs a stochastic frontier gravity model to calculate the export efficiency, and analyzes the relevant factors affecting export efficiency based on the export efficiency model. Results: China’s overall export efficiency of digital products to RCEP countries is relatively high. China’s digital product trade with RCEP countries is positively affected by the GDP of the two countries, the population size of the RCEP countries, whether the two countries have a common language and whether they are adjacent to each other, and negatively affected by China’s population size and the geographical distance between the two countries. In addition, signing a free trade agreement, improving the level of digital infrastructure, intellectual property rights, tariff freedom, and government spending can effectively improve the efficiency of digital product export trade, while commercial freedom and monetary freedom have a suppressive effect on the efficiency of digital product trade. Conclusion: China can promote the export of digital products by signing free trade agreements and strengthening investment cooperation in digital infrastructure and intellectual property assistance with RCEP countries. Exporting countries can promote trade cooperation with other countries by moderately reducing tariffs and increasing government investment.
{"title":"Analysis of China's Export Efficiency and Potential of Digital Products to RCEP Countries-based on the Stochastic Frontier Gravity Model","authors":"Wen Zhang","doi":"10.53964/mem.2024013","DOIUrl":"https://doi.org/10.53964/mem.2024013","url":null,"abstract":"Objective: This paper analyzes the factors affecting China’s digital product exports to Regional Comprehensive Economic Partnership (RCEP) countries, and puts forward relevant suggestions on this basis. It is hoped that China’s digital product exports to RCEP countries can be improved, and china’s international competitiveness in the digital field can be enhanced. Methods: This paper constructs a stochastic frontier gravity model to calculate the export efficiency, and analyzes the relevant factors affecting export efficiency based on the export efficiency model. Results: China’s overall export efficiency of digital products to RCEP countries is relatively high. China’s digital product trade with RCEP countries is positively affected by the GDP of the two countries, the population size of the RCEP countries, whether the two countries have a common language and whether they are adjacent to each other, and negatively affected by China’s population size and the geographical distance between the two countries. In addition, signing a free trade agreement, improving the level of digital infrastructure, intellectual property rights, tariff freedom, and government spending can effectively improve the efficiency of digital product export trade, while commercial freedom and monetary freedom have a suppressive effect on the efficiency of digital product trade. Conclusion: China can promote the export of digital products by signing free trade agreements and strengthening investment cooperation in digital infrastructure and intellectual property assistance with RCEP countries. Exporting countries can promote trade cooperation with other countries by moderately reducing tariffs and increasing government investment.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"138 17","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141656020","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}
Bernhard Köelmel, Tanja Brugger, Ansgar Kuehn, Max Borsch, Marcel Rath, Maximilian Maier, Moritz Peter, Katharina Kilian-Yasin, Viola Galler
Objective: Business-to-business (B2B) platforms in the manufacturing sector have a profound impact on the digital transformation of small and medium-sized enterprises (SMEs). However, there is still a lack of research on this topic. The primary objective of this study is to explore the existing landscape of B2B platforms and thoroughly assess the benefits and challenges for companies using them, in order begin to fill the identified research gap. This paper presents a comprehensive investigation of B2B platforms in the German manufacturing sector and their profound influence on the digital transformation of SMEs. Methods: Within the scope of our in-depth analysis of the current state of B2B platforms, a meticulous review of relevant literature is conducted following the approach of Brocke et al. and a comprehensive analysis of both industry-specific and cross-industry best practices on B2B platforms is performed. In addition, the research includes in-depth interviews with platform providers, partners, and academic experts to enhance the depth of understanding. We identify the factors that contribute to their adoption as well as those that hinder their integration, providing the basis for successful innovation. The viability of the concept is assessed through a comprehensive evaluation methodology involving platform operators. Results: By providing an in-depth assessment of the benefits and challenges faced by companies using B2B platforms, this work contributes to filling existing research gaps. It identifies factors that contribute to their adoption and those that hinder their integration, thus laying the foundation for successful innovation. Finally, it proposes forward-looking guidelines that will enable SMEs to capitalize on the transformative capabilities of these platforms in the future. Conclusion: The findings of this study show that SMEs can reap numerous benefits from B2B platforms, such as increades efficiency, optimal use of resources, and access to previously untapped markets. However, certain barriers, including the high costs associated with implementation and a prevailing lack of trust among platform users, serve as obstacles to their widespread adoption. The results of this research provide important insights into the current state of B2B platforms and their potential to drive digital transformation. This research advances academic understanding in this area, and provides valuable knowledge for companies seeking to navigate the landscape of B2B platforms and their role in driving digital transformation as a foundation for innovation.
{"title":"Exploring Innovation Success Factors and Strategies for B2B Platforms in the Manufacturing Sector in Germany","authors":"Bernhard Köelmel, Tanja Brugger, Ansgar Kuehn, Max Borsch, Marcel Rath, Maximilian Maier, Moritz Peter, Katharina Kilian-Yasin, Viola Galler","doi":"10.53964/mem.2024012","DOIUrl":"https://doi.org/10.53964/mem.2024012","url":null,"abstract":"Objective: Business-to-business (B2B) platforms in the manufacturing sector have a profound impact on the digital transformation of small and medium-sized enterprises (SMEs). However, there is still a lack of research on this topic. The primary objective of this study is to explore the existing landscape of B2B platforms and thoroughly assess the benefits and challenges for companies using them, in order begin to fill the identified research gap. This paper presents a comprehensive investigation of B2B platforms in the German manufacturing sector and their profound influence on the digital transformation of SMEs. Methods: Within the scope of our in-depth analysis of the current state of B2B platforms, a meticulous review of relevant literature is conducted following the approach of Brocke et al. and a comprehensive analysis of both industry-specific and cross-industry best practices on B2B platforms is performed. In addition, the research includes in-depth interviews with platform providers, partners, and academic experts to enhance the depth of understanding. We identify the factors that contribute to their adoption as well as those that hinder their integration, providing the basis for successful innovation. The viability of the concept is assessed through a comprehensive evaluation methodology involving platform operators. Results: By providing an in-depth assessment of the benefits and challenges faced by companies using B2B platforms, this work contributes to filling existing research gaps. It identifies factors that contribute to their adoption and those that hinder their integration, thus laying the foundation for successful innovation. Finally, it proposes forward-looking guidelines that will enable SMEs to capitalize on the transformative capabilities of these platforms in the future. Conclusion: The findings of this study show that SMEs can reap numerous benefits from B2B platforms, such as increades efficiency, optimal use of resources, and access to previously untapped markets. However, certain barriers, including the high costs associated with implementation and a prevailing lack of trust among platform users, serve as obstacles to their widespread adoption. The results of this research provide important insights into the current state of B2B platforms and their potential to drive digital transformation. This research advances academic understanding in this area, and provides valuable knowledge for companies seeking to navigate the landscape of B2B platforms and their role in driving digital transformation as a foundation for innovation.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"122 18","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141667612","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}
Objective: This article aims to investigate the impact of China’s capital account openness (OPEN) on cross-border capital flows (CCF). Methods: The research utilizes the ARDL-ECM model for empirical analysis. It begins by summarizing existing literature on the topic and then proceeds to analyze the data spanning from 1998 to 2023. The study explores the long-term cointegration relationship between OPEN and CCF. Additionally, it investigates the correlation between the direction of openness and its effect on CCF. Notably, the research introduces the concept of the volatility of OPEN as an explanatory variable to understand its impact on various types of capital flows. Results: The findings reveal a significant long-term cointegration relationship between OPEN and CCF. This relationship is significantly influenced by the direction of openness. Moreover, the study identifies that the volatility of OPEN notably affects different categories of capital flows. Furthermore, it observes that structural changes in net foreign securities investment are comparatively higher than those in net foreign direct investment. Conclusion: This study underscores several recommendations for the ongoing process of capital account liberalization in China. Firstly, adjust OPEN flexibly to promote or restrict specific types of capital flows. Adopt elastic capital control measures for different types of capital flows to balance the stability of domestic capital markets and the activity of international capital flows. Secondly, careful adjust capital outflow openness to maintain economic environmental stability and prevent capital flight. Lastly, encourage long-term investment, particularly in the real economy and infrastructure sectors, and provide incentives for investors committed to long-term investment.
{"title":"The Impact of China’s Capital Account Liberalization on the Direction of Cross-border Capital Flows","authors":"Zhengyang Zhang, Xiaogang Zhang","doi":"10.53964/mem.2024009","DOIUrl":"https://doi.org/10.53964/mem.2024009","url":null,"abstract":"Objective: This article aims to investigate the impact of China’s capital account openness (OPEN) on cross-border capital flows (CCF). Methods: The research utilizes the ARDL-ECM model for empirical analysis. It begins by summarizing existing literature on the topic and then proceeds to analyze the data spanning from 1998 to 2023. The study explores the long-term cointegration relationship between OPEN and CCF. Additionally, it investigates the correlation between the direction of openness and its effect on CCF. Notably, the research introduces the concept of the volatility of OPEN as an explanatory variable to understand its impact on various types of capital flows. Results: The findings reveal a significant long-term cointegration relationship between OPEN and CCF. This relationship is significantly influenced by the direction of openness. Moreover, the study identifies that the volatility of OPEN notably affects different categories of capital flows. Furthermore, it observes that structural changes in net foreign securities investment are comparatively higher than those in net foreign direct investment. Conclusion: This study underscores several recommendations for the ongoing process of capital account liberalization in China. Firstly, adjust OPEN flexibly to promote or restrict specific types of capital flows. Adopt elastic capital control measures for different types of capital flows to balance the stability of domestic capital markets and the activity of international capital flows. Secondly, careful adjust capital outflow openness to maintain economic environmental stability and prevent capital flight. Lastly, encourage long-term investment, particularly in the real economy and infrastructure sectors, and provide incentives for investors committed to long-term investment.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"97 12","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141359414","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}
Objective: This study investigates how the strength of risk-averting and gamble-intending dilemmas can affect the risk-dominant equilibrium in chicken and stag-hunt games. The focus is on deriving conditions under which the risk-dominant equilibrium can maximize group benefit. Methods: Basic concepts of game theory were used to determine the Nash equilibria of each game.The Harsanyi-Selten theory was applied to determine the risk-dominant equilibrium. By manipulating the parameters related to risk-averting and gamble-intending dilemmas, different game scenarios are sim-ulated to observe the resulting equilibria. Results: The study found that for a given strength of the risk-averting dilemma, the risk-dominant equilibrium in the chicken game continuously shifts towards mutual cooperation as the strength of the gamble-intending dilemma decreases. In the SH game, the degree of cooperation of the risk-dominant equilibrium for a given strength of the gamble-intending dilemma decreases with increasing strength of the risk-averting dilemma and takes the discrete values: 1, 0.5 and 0. The results show the importance of understanding individual risk preferences to predict strategic decisions and equilibrium outcomes in these game settings. Conclusion: The risk-dominant equilibrium in chicken and stag-hunt games depends on the relative strength of the risk-averting and gamble-intending dilemmas. By taking these factors into account, researchers and policy makers can better predict the likely outcomes of strategic interactions in scenarios with conflicting interests and different risk tolerances. The risk-dominant equilibrium can provide reasonable solutions to real-world conflict situations, such as the Iran-Iraq conflict over shared oil and gas resources.
研究目的本研究探讨了风险规避困境和赌博意图困境的强度如何影响 "捉鸡游戏 "和 "猎鹿游戏 "中的风险主导均衡。重点是推导出风险主导均衡能使群体利益最大化的条件。方法：运用博弈论的基本概念来确定每个博弈的纳什均衡。通过操纵与风险规避和赌博意图困境相关的参数，模拟不同的博弈情景，观察由此产生的均衡。研究结果研究发现，在一定的风险规避困境强度下，随着赌博意图困境强度的降低，鸡博弈中的风险主导均衡会不断转向相互合作。在 SH 博弈中，在给定的赌博意图困境强度下，风险主导均衡的合作程度随着风险规避困境强度的增加而减小，取离散值为 1、0.5 和 0：结果表明，了解个人风险偏好对于预测这些博弈环境中的战略决策和均衡结果非常重要。结论吃鸡和猎鹿博弈中的风险主导均衡取决于风险规避困境和赌博意图困境的相对强度。考虑到这些因素，研究人员和政策制定者就能更好地预测在利益冲突和风险容忍度不同的情况下战略互动可能产生的结果。风险主导均衡可以为现实世界的冲突局势提供合理的解决方案，例如两伊关于共享石油和天然气资源的冲突。
{"title":"Risk-dominant Equilibrium in Chicken and Stag-hunt Games with Different Dilemma Strengths","authors":"A. Elgazzar","doi":"10.53964/mem.2024008","DOIUrl":"https://doi.org/10.53964/mem.2024008","url":null,"abstract":"Objective: This study investigates how the strength of risk-averting and gamble-intending dilemmas can affect the risk-dominant equilibrium in chicken and stag-hunt games. The focus is on deriving conditions under which the risk-dominant equilibrium can maximize group benefit. Methods: Basic concepts of game theory were used to determine the Nash equilibria of each game.The Harsanyi-Selten theory was applied to determine the risk-dominant equilibrium. By manipulating the parameters related to risk-averting and gamble-intending dilemmas, different game scenarios are sim-ulated to observe the resulting equilibria. Results: The study found that for a given strength of the risk-averting dilemma, the risk-dominant equilibrium in the chicken game continuously shifts towards mutual cooperation as the strength of the gamble-intending dilemma decreases. In the SH game, the degree of cooperation of the risk-dominant equilibrium for a given strength of the gamble-intending dilemma decreases with increasing strength of the risk-averting dilemma and takes the discrete values: 1, 0.5 and 0. The results show the importance of understanding individual risk preferences to predict strategic decisions and equilibrium outcomes in these game settings. Conclusion: The risk-dominant equilibrium in chicken and stag-hunt games depends on the relative strength of the risk-averting and gamble-intending dilemmas. By taking these factors into account, researchers and policy makers can better predict the likely outcomes of strategic interactions in scenarios with conflicting interests and different risk tolerances. The risk-dominant equilibrium can provide reasonable solutions to real-world conflict situations, such as the Iran-Iraq conflict over shared oil and gas resources.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":" 21","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141374421","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}
Viet Nam surpassed the Philippines in terms of per capita gross domestic product (GDP, in constant 2015 USD) in 2021. This paper analyzes the reasons Viet Nam has overtaken the Philippines despite both countries experiencing challenging transitions in 1986, with Viet Nam significantly lagging behind the Philippines at that time. Qualitative methods are applied through a hermeneutic analysis to understand post-war economic development in Asia. Along with selected quantitative indicators, policy lessons from the history of Asian development are used to analyze and explain how Viet Nam overtook the Philippines. The study shows that many factors can explain the economic surge of Viet Nam between 1986 and 2021: an aggressive outward-oriented strategy, favorable topography that contributed to higher productivity in the agriculture sector, better energy security, and earlier onset of demographic transition. Although the Philippines made important strides in these areas, some experts argue that plans and programs are more effectively implemented in Viet Nam. One reason is the relative lack of accountability in the Philippines, which can be traced to a soft state, weak institutions, a dominant oligarchy, and persistent political dynasties. Meanwhile, revolutionary disruptions after the Second World War may have led to the establishment of a relatively disciplined and inclusive political organization in Viet Nam, the Communist Party. Viet Nam and the Philippines have indeed been an integral part of the remarkable transformation of Asia over the past six decades. Their divergent paths after 1986 may be attributed to factors cited earlier. A cursory survey of the future, however, indicates that institutions in both countries may have to be reformed or transformed to at least achieve the same level of success going forward.
{"title":"Viet Nam Overtook the Philippines in 2021: A Microcosm of Asian Development","authors":"Josef T. Yap","doi":"10.53964/mem.2024006","DOIUrl":"https://doi.org/10.53964/mem.2024006","url":null,"abstract":"Viet Nam surpassed the Philippines in terms of per capita gross domestic product (GDP, in constant 2015 USD) in 2021. This paper analyzes the reasons Viet Nam has overtaken the Philippines despite both countries experiencing challenging transitions in 1986, with Viet Nam significantly lagging behind the Philippines at that time. Qualitative methods are applied through a hermeneutic analysis to understand post-war economic development in Asia. Along with selected quantitative indicators, policy lessons from the history of Asian development are used to analyze and explain how Viet Nam overtook the Philippines. The study shows that many factors can explain the economic surge of Viet Nam between 1986 and 2021: an aggressive outward-oriented strategy, favorable topography that contributed to higher productivity in the agriculture sector, better energy security, and earlier onset of demographic transition. Although the Philippines made important strides in these areas, some experts argue that plans and programs are more effectively implemented in Viet Nam. One reason is the relative lack of accountability in the Philippines, which can be traced to a soft state, weak institutions, a dominant oligarchy, and persistent political dynasties. Meanwhile, revolutionary disruptions after the Second World War may have led to the establishment of a relatively disciplined and inclusive political organization in Viet Nam, the Communist Party. Viet Nam and the Philippines have indeed been an integral part of the remarkable transformation of Asia over the past six decades. Their divergent paths after 1986 may be attributed to factors cited earlier. A cursory survey of the future, however, indicates that institutions in both countries may have to be reformed or transformed to at least achieve the same level of success going forward.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"8 1‐2","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141377562","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}
The main contribution of this research is that based on a model much simpler than Solow growth model, it shows how countries can achieve a persistent economic growth and show a convergence or divergence pattern in per capita income, which can get affected through flow of savings, productive labor and / or capital across countries. It shows that output growth is independent of population growth rate (i.e., opposite to what Solow growth model suggests; according to which national income, saving, investment, and consumption, all grow at the rate of population growth), and rather depends on fractions of savings’ feedback into labor and capital to get more output. The existing literature has the underlying assumption that savings equal capital investment, whereas this article is based on the assumption that a fraction of savings gets invested into labor, which becomes a contributing factor in the long-term economic growth, a result which contradicts Solow growth model’s conclusion that a change in saving rate has no effect on the rate of growth in the long run. The model predicts convergence of per capita output for countries depending on their parameter values, such as savings fraction invested for more output, labor and capital productivity, population growth rate, etc., and it also predicts divergence for different sets of parameter values for two countries.
{"title":"A New Theory of Economic Growth: Why Countries’ Per Capita Income Converge or Diverge","authors":"Muhammad Ashfaq Ahmed, Nasreen Nawaz","doi":"10.53964/mem.2024003","DOIUrl":"https://doi.org/10.53964/mem.2024003","url":null,"abstract":"The main contribution of this research is that based on a model much simpler than Solow growth model, it shows how countries can achieve a persistent economic growth and show a convergence or divergence pattern in per capita income, which can get affected through flow of savings, productive labor and / or capital across countries. It shows that output growth is independent of population growth rate (i.e., opposite to what Solow growth model suggests; according to which national income, saving, investment, and consumption, all grow at the rate of population growth), and rather depends on fractions of savings’ feedback into labor and capital to get more output. The existing literature has the underlying assumption that savings equal capital investment, whereas this article is based on the assumption that a fraction of savings gets invested into labor, which becomes a contributing factor in the long-term economic growth, a result which contradicts Solow growth model’s conclusion that a change in saving rate has no effect on the rate of growth in the long run. The model predicts convergence of per capita output for countries depending on their parameter values, such as savings fraction invested for more output, labor and capital productivity, population growth rate, etc., and it also predicts divergence for different sets of parameter values for two countries.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"69 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140748641","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}
The return to economic normalcy is predicted to be a mystery tour. Economies must be intentional about their effort to restore economic recovery and must be done expeditiously. A common channel to maintain a resilient economy and promote growth is industrialization. Unfortunately, the story is Africa on the subject, despite wide coverage in research, seems stunted. In this paper, we express our opinion on the subject highlighting the essence of “intentional” effort as key to the industrialization process. We raise awareness that the most successful path to economic development is through industrialization and that it is only achievable through conscious efforts. We limit our discussions to a few selected policies and strategies premised on their unique importance to the debate, in our opinion. We show that numerous policies have been unsuccessful due to a “lack of intentional and deliberate efforts” and a failure to give ample time to the process. For each policy we discuss, we demonstrate that a bold, aggressive, and “whatever-it-takes” approach will yield thriving results.
{"title":"Closer to the Reality: An Opinion on Africa’s Industrialization Drive","authors":"Cosmos Amoah, Behrooz Asgari","doi":"10.53964/mem.2024002","DOIUrl":"https://doi.org/10.53964/mem.2024002","url":null,"abstract":"The return to economic normalcy is predicted to be a mystery tour. Economies must be intentional about their effort to restore economic recovery and must be done expeditiously. A common channel to maintain a resilient economy and promote growth is industrialization. Unfortunately, the story is Africa on the subject, despite wide coverage in research, seems stunted. In this paper, we express our opinion on the subject highlighting the essence of “intentional” effort as key to the industrialization process. We raise awareness that the most successful path to economic development is through industrialization and that it is only achievable through conscious efforts. We limit our discussions to a few selected policies and strategies premised on their unique importance to the debate, in our opinion. We show that numerous policies have been unsuccessful due to a “lack of intentional and deliberate efforts” and a failure to give ample time to the process. For each policy we discuss, we demonstrate that a bold, aggressive, and “whatever-it-takes” approach will yield thriving results.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"40 ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140753740","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}
Objective: Previous literature on optimal savings relies on specific utility and production technology functional forms which might not be able to produce robust results as different utility / production functions may lead to dramatically different or opposing results. This paper derives an optimal savings policy based on parameters (such as slopes of demand and supply curves) which can be empirically estimated and provides a unique and robust result irrespective of shape and form of individual utilities / production functions. Furthermore, existing literature does not consider welfare loss when savings market is adjusting to final equilibrium after a shock while deriving an optimal savings policy. In addition to that, number of savers (all public and private saving entities, including households, firms, etc.) and saving rate are vital parameters for savings in an economy, and while deriving an optimal savings policy, it is necessary to take into consideration these parameters to ensure that quantum of savings due to interest rate movement gets adjusted in target time duration, without which there may be additional efficiency loss than that envisioned while deriving an optimal savings policy for an economy. Methods: This research project designs a dynamical model for savings market and extends that to a three-dimensional savings system in an economy by taking into consideration number of savers, saving rate, and interest rate; and based on that derives an optimal comprehensive savings policy while accounting for efficiency losses when savings market, saving rate, and number of savers are adjusting to final equilibrium, in addition to the welfare loss on account of equilibrium shift. Results: Without consideration of welfare loss / gain while savings market is adjusting after implementation of a savings policy, welfare picture remains incomplete, and the optimal savings policy based on partial welfare cannot be considered as optimal in true sense. Traditionally, welfare of only producer and consumer is taken into consideration without accounting for welfare of production factors. An expression of efficiency loss / gain as a result of savings policy based on welfare including those of production factors has been presented and optimal savings policies have been derived by minimizing efficiency losses and presented as a final result in the form of mathematical expressions. This paper demonstrates that both supply and demand shocks operate through a common channel, i.e., inventory of funds in savings market as both kinds of shock affect inventory of funds and hence can be categorized just as an inventory shock. Conclusion: For optimal welfare gains, practitioners / policy makers must estimate theoretically derived optimal savings policies based on the dynamic model developed in this paper and presented in the form of mathematical expressions from real world relevant data for implementation.
{"title":"Policy Formulation for an Optimal Level of Savings in a Dynamic Setting","authors":"Muhammad Ashfaq Ahmed, Nasreen Nawaz","doi":"10.53964/mem.2024001","DOIUrl":"https://doi.org/10.53964/mem.2024001","url":null,"abstract":"Objective: Previous literature on optimal savings relies on specific utility and production technology functional forms which might not be able to produce robust results as different utility / production functions may lead to dramatically different or opposing results. This paper derives an optimal savings policy based on parameters (such as slopes of demand and supply curves) which can be empirically estimated and provides a unique and robust result irrespective of shape and form of individual utilities / production functions. Furthermore, existing literature does not consider welfare loss when savings market is adjusting to final equilibrium after a shock while deriving an optimal savings policy. In addition to that, number of savers (all public and private saving entities, including households, firms, etc.) and saving rate are vital parameters for savings in an economy, and while deriving an optimal savings policy, it is necessary to take into consideration these parameters to ensure that quantum of savings due to interest rate movement gets adjusted in target time duration, without which there may be additional efficiency loss than that envisioned while deriving an optimal savings policy for an economy. Methods: This research project designs a dynamical model for savings market and extends that to a three-dimensional savings system in an economy by taking into consideration number of savers, saving rate, and interest rate; and based on that derives an optimal comprehensive savings policy while accounting for efficiency losses when savings market, saving rate, and number of savers are adjusting to final equilibrium, in addition to the welfare loss on account of equilibrium shift. Results: Without consideration of welfare loss / gain while savings market is adjusting after implementation of a savings policy, welfare picture remains incomplete, and the optimal savings policy based on partial welfare cannot be considered as optimal in true sense. Traditionally, welfare of only producer and consumer is taken into consideration without accounting for welfare of production factors. An expression of efficiency loss / gain as a result of savings policy based on welfare including those of production factors has been presented and optimal savings policies have been derived by minimizing efficiency losses and presented as a final result in the form of mathematical expressions. This paper demonstrates that both supply and demand shocks operate through a common channel, i.e., inventory of funds in savings market as both kinds of shock affect inventory of funds and hence can be categorized just as an inventory shock. Conclusion: For optimal welfare gains, practitioners / policy makers must estimate theoretically derived optimal savings policies based on the dynamic model developed in this paper and presented in the form of mathematical expressions from real world relevant data for implementation.","PeriodicalId":499848,"journal":{"name":"Modern Economy and Management","volume":"93 8","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140752625","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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