Pub Date : 2024-09-06DOI: 10.3390/economies12090238
Nahil Ismail Saqfalhait, Omar Mohammad Alzoubi
This research examines the impact of the COVID-19 pandemic on the volatility behavior of Amman Stock Exchange (ASE) returns using ARMA–GARCH-type models for three sub-periods: pre-COVID-19, during COVID-19, and post-COVID-19. The research finds that volatility persistence is significant across all periods, with the pandemic period showing the highest impact of shocks. Bad news has no statistically significant impact on volatility in the pre-COVID-19 period or during the pandemic, while in the post-pandemic period, good news significantly influences volatility. Additionally, there exist notable changes in the autocorrelation and the shock structure of the AR and MA components. Considering these alterations in the asymmetric effects, the AR and MA components suggest significant shifts in market dynamics, investor sentiments, and economic policies in response to pandemic experiences.
本研究使用 ARMA-GARCH 型模型研究了 COVID-19 大流行对安曼证券交易所（ASE）收益波动行为的影响，包括三个子时期：COVID-19 前、COVID-19 期间和 COVID-19 后。研究发现，波动持续性在所有时期都很显著，大流行病时期的冲击影响最大。在 COVID-19 前和大流行期间，坏消息对波动性没有统计意义上的显著影响，而在大流行后，好消息对波动性有显著影响。此外，AR 和 MA 成分的自相关性和冲击结构也发生了明显的变化。考虑到这些非对称效应的变化，AR 和 MA 变量表明市场动态、投资者情绪和经济政策会随着大流行病的发生而发生重大变化。
{"title":"The Impact of COVID-19 Pandemic on the Jordanian Stock Market Returns Volatility: Evidence from ASE20","authors":"Nahil Ismail Saqfalhait, Omar Mohammad Alzoubi","doi":"10.3390/economies12090238","DOIUrl":"https://doi.org/10.3390/economies12090238","url":null,"abstract":"This research examines the impact of the COVID-19 pandemic on the volatility behavior of Amman Stock Exchange (ASE) returns using ARMA–GARCH-type models for three sub-periods: pre-COVID-19, during COVID-19, and post-COVID-19. The research finds that volatility persistence is significant across all periods, with the pandemic period showing the highest impact of shocks. Bad news has no statistically significant impact on volatility in the pre-COVID-19 period or during the pandemic, while in the post-pandemic period, good news significantly influences volatility. Additionally, there exist notable changes in the autocorrelation and the shock structure of the AR and MA components. Considering these alterations in the asymmetric effects, the AR and MA components suggest significant shifts in market dynamics, investor sentiments, and economic policies in response to pandemic experiences.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207799","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-04DOI: 10.3390/economies12090237
Mahmoud Magdy Barbary, Abdalla Ramadan Tawfiq
This study aims to examine the relationship between customs policy and the economic blocs of which Egypt is a member, with a focus on the theory of New Regionalism and modern trends in customs policies. Egypt joined numerous economic blocs following its accession to the world trade organization (WTO) in 1995, yet this membership has not yielded significant positive impacts on the performance of Egyptian exports or the trade balance. The study utilized panel data analysis of Egypt’s international trade from 2001 to 2023. The results indicate that, despite Egypt’s limited success in reaping the benefits of most economic blocs, largely due to the concentration of Egyptian exports in primary and agricultural products and the low tariff rates, factors such as customs clearance processes, tariff barriers, non-tariff barriers, regional trade agreements, and technology adoption still play a crucial role in influencing trade volume among member countries. The findings highlight the significance of effective customs procedures and the reduction of trade barriers in boosting trade volumes within regional trade agreements. The study proposes a strategy for Egypt’s customs policy to maximize benefits from economic blocs, focusing on four key areas: aligning customs policy planning with targeted export sectors to realize trade creation and trade diversion effects; fully implementing trade facilitation programs and liberalizing customs policy procedures; adopting a national strategy to stimulate high value-added export industries as a long-term solution; and adopting regional trade agreements that support cumulative origin as a short-term solution.
{"title":"The Role of Customs Policy in Maximizing the Benefits of Economic Blocs: The Case of Egypt","authors":"Mahmoud Magdy Barbary, Abdalla Ramadan Tawfiq","doi":"10.3390/economies12090237","DOIUrl":"https://doi.org/10.3390/economies12090237","url":null,"abstract":"This study aims to examine the relationship between customs policy and the economic blocs of which Egypt is a member, with a focus on the theory of New Regionalism and modern trends in customs policies. Egypt joined numerous economic blocs following its accession to the world trade organization (WTO) in 1995, yet this membership has not yielded significant positive impacts on the performance of Egyptian exports or the trade balance. The study utilized panel data analysis of Egypt’s international trade from 2001 to 2023. The results indicate that, despite Egypt’s limited success in reaping the benefits of most economic blocs, largely due to the concentration of Egyptian exports in primary and agricultural products and the low tariff rates, factors such as customs clearance processes, tariff barriers, non-tariff barriers, regional trade agreements, and technology adoption still play a crucial role in influencing trade volume among member countries. The findings highlight the significance of effective customs procedures and the reduction of trade barriers in boosting trade volumes within regional trade agreements. The study proposes a strategy for Egypt’s customs policy to maximize benefits from economic blocs, focusing on four key areas: aligning customs policy planning with targeted export sectors to realize trade creation and trade diversion effects; fully implementing trade facilitation programs and liberalizing customs policy procedures; adopting a national strategy to stimulate high value-added export industries as a long-term solution; and adopting regional trade agreements that support cumulative origin as a short-term solution.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207802","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-03DOI: 10.3390/economies12090236
Chien-Van Nguyen
The aims of this study are to evaluate the influence of air transport and tourism on economic growth in selected Southeast Asian countries such as Thailand, Philippines, Vietnam, Indonesia, Malaysia, and Singapore in the period 1970 to 2021. The study applies the ordinary least squares (OLS), fixed effects (FEM), and random effects (REM), especially to robustness test of the research results by deploying the DOLS, and IV-GMM regression for endogeneity and autocorrelation analysis. The research results confirmed that air transport has a significant and positive impact on economic growth, especially because the positive impact increased in normal economic conditions and decreased during the COVID-19 pandemic. Therefore, if the air transport recovers, it is likely to boost economic development. In addition, there is no impact of tourism on economic growth. The research results also confirmed the positive impact of foreign direct investment and international trade on the economic growth of Southeast Asian countries; however, there is a negative impact of renewable energy consumption on economic growth.
{"title":"Air Transport Resilience, Tourism and Its Impact on Economic Growth","authors":"Chien-Van Nguyen","doi":"10.3390/economies12090236","DOIUrl":"https://doi.org/10.3390/economies12090236","url":null,"abstract":"The aims of this study are to evaluate the influence of air transport and tourism on economic growth in selected Southeast Asian countries such as Thailand, Philippines, Vietnam, Indonesia, Malaysia, and Singapore in the period 1970 to 2021. The study applies the ordinary least squares (OLS), fixed effects (FEM), and random effects (REM), especially to robustness test of the research results by deploying the DOLS, and IV-GMM regression for endogeneity and autocorrelation analysis. The research results confirmed that air transport has a significant and positive impact on economic growth, especially because the positive impact increased in normal economic conditions and decreased during the COVID-19 pandemic. Therefore, if the air transport recovers, it is likely to boost economic development. In addition, there is no impact of tourism on economic growth. The research results also confirmed the positive impact of foreign direct investment and international trade on the economic growth of Southeast Asian countries; however, there is a negative impact of renewable energy consumption on economic growth.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-09-03DOI: 10.3390/economies12090235
Federica Alfani, Fabio Clementi, Michele Fabiani, Vasco Molini, Francesco Schettino
The COVID-19 pandemic has exposed individuals to various risks, including job loss, income reduction, deteriorating well-being, and severe health complications and death. In Brazil and the U.S., as well as in other countries, the initial response to the pandemic was marked by governmental underestimation, leading to inadequate public health measures to curb the spread of the virus. Although progressively mitigated, this approach played a crucial role in the impacts on local populations. Therefore, the principal aim of this paper is to evaluate the impact of COVID-19 and, indirectly, of the policies adopted by the U.S. and the Brazilian governments to prevent pandemic diffusion on income distribution. Utilizing available microdata and employing novel econometric methods (RIF-regression for inequality measures) this study shows that growth in COVID-19 prevalence significantly exacerbates economic disparities. Furthermore, the impact of COVID-19 on inequality has increased over time, suggesting that this negative impact has been intensifying. In the U.S., results indicate that working from home, the inability to work, and barriers to job-seeking significantly increase inequalities. Although further data are necessary to validate the hypothesis, this preliminary evidence suggests that the pandemic has significantly contributed to increased inequality in these two countries already characterized by increasing polarization and significant social disparities.
{"title":"Underestimating the Pandemic: The Impact of COVID-19 on Income Distribution in the U.S. and Brazil","authors":"Federica Alfani, Fabio Clementi, Michele Fabiani, Vasco Molini, Francesco Schettino","doi":"10.3390/economies12090235","DOIUrl":"https://doi.org/10.3390/economies12090235","url":null,"abstract":"The COVID-19 pandemic has exposed individuals to various risks, including job loss, income reduction, deteriorating well-being, and severe health complications and death. In Brazil and the U.S., as well as in other countries, the initial response to the pandemic was marked by governmental underestimation, leading to inadequate public health measures to curb the spread of the virus. Although progressively mitigated, this approach played a crucial role in the impacts on local populations. Therefore, the principal aim of this paper is to evaluate the impact of COVID-19 and, indirectly, of the policies adopted by the U.S. and the Brazilian governments to prevent pandemic diffusion on income distribution. Utilizing available microdata and employing novel econometric methods (RIF-regression for inequality measures) this study shows that growth in COVID-19 prevalence significantly exacerbates economic disparities. Furthermore, the impact of COVID-19 on inequality has increased over time, suggesting that this negative impact has been intensifying. In the U.S., results indicate that working from home, the inability to work, and barriers to job-seeking significantly increase inequalities. Although further data are necessary to validate the hypothesis, this preliminary evidence suggests that the pandemic has significantly contributed to increased inequality in these two countries already characterized by increasing polarization and significant social disparities.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-30DOI: 10.3390/economies12090234
Hassan Sherry, Hussein Zeaiter
This study explores the impact of International Monetary Fund (IMF)-linked conditionality on government education expenditures in the Middle East and North Africa (MENA) region. Understanding the impact of conditional lending by international financial institutions on education spending is important due to the pivotal role education plays in fostering social and economic development. We use country-level panel data encompassing a representative set of 10 MENA countries from 1990 to 2020 and employ a cross-national fixed effects regression model. Our findings suggest that IMF conditionality demonstrates a positive relationship with government education expenditures in the MENA region. The proposed explanation is that the application of IMF policy advice can have a catalytic effect on donor financing, including for education. This indicates that the Fund’s financing arrangements in the region can free up fiscal space for social spending, which, in turn, signals a sort of departure of the IMF from the reputation that typically precedes it—its traditional bias for macroeconomic stability irrespective of social costs. We argue that our findings are instructive for policy, especially if one shares the idea that education is a necessary prerequisite for achieving Sustainable Development Goal (SDG) 4: guaranteeing inclusive and equitable quality education and promoting enduring learning opportunities for all.
{"title":"IMF Conditionality and Government Education Spending: The Case of 10 MENA Countries","authors":"Hassan Sherry, Hussein Zeaiter","doi":"10.3390/economies12090234","DOIUrl":"https://doi.org/10.3390/economies12090234","url":null,"abstract":"This study explores the impact of International Monetary Fund (IMF)-linked conditionality on government education expenditures in the Middle East and North Africa (MENA) region. Understanding the impact of conditional lending by international financial institutions on education spending is important due to the pivotal role education plays in fostering social and economic development. We use country-level panel data encompassing a representative set of 10 MENA countries from 1990 to 2020 and employ a cross-national fixed effects regression model. Our findings suggest that IMF conditionality demonstrates a positive relationship with government education expenditures in the MENA region. The proposed explanation is that the application of IMF policy advice can have a catalytic effect on donor financing, including for education. This indicates that the Fund’s financing arrangements in the region can free up fiscal space for social spending, which, in turn, signals a sort of departure of the IMF from the reputation that typically precedes it—its traditional bias for macroeconomic stability irrespective of social costs. We argue that our findings are instructive for policy, especially if one shares the idea that education is a necessary prerequisite for achieving Sustainable Development Goal (SDG) 4: guaranteeing inclusive and equitable quality education and promoting enduring learning opportunities for all.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207805","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 maintenance of a satisfactory quality of life in rural areas is fundamental for sustainable development. One of the ways to improve quality of life indicators is through the gathering of rural workers in solidarity economy organizations as these enterprises aim to integrate development with economic, social, and environmental sustainability. Because solidarity economy organizations have a robust social purpose, their performance must be evaluated based on both social and financial indicators. The objective of this article is to propose a performance evaluation model for rural solidarity economy enterprises, aiming to support decision making in these enterprises based on multicriteria decision analysis (MCDA), particularly the ELECTRE-TRI methodology. In order to demonstrate the applicability of the developed model and to perform sensitivity analyses, the model was applied to a group of eight family agriculture co-operatives in the southwest state of Paraná, Brazil. All the participating co-ops were considered part of the solidarity economy, and they served 2500 rural producer families across at least 15 municipalities. The results showed the applicability and stability of the model, enabling us to identify the dimensions in which each co-op should concentrate their efforts to improve not only their performance but also the outcomes for the farmers that they serve. Based on these results, organizational and improvement activities can be developed and implemented. This analysis contributes to economic and social indicators by offering improvement strategies for the professionalization and strategic management of RSEEs, thus strengthening these enterprises and, consequently, family agriculture
{"title":"ELECTRE-TRI Multicriteria Approach for Measuring Performance of Rural Co-Operatives in Southwest Paraná, Brazil","authors":"Leomara Battisti Telles, Luciano Medina Macedo, Juliana Vitória Messias Bittencourt","doi":"10.3390/economies12090233","DOIUrl":"https://doi.org/10.3390/economies12090233","url":null,"abstract":"The maintenance of a satisfactory quality of life in rural areas is fundamental for sustainable development. One of the ways to improve quality of life indicators is through the gathering of rural workers in solidarity economy organizations as these enterprises aim to integrate development with economic, social, and environmental sustainability. Because solidarity economy organizations have a robust social purpose, their performance must be evaluated based on both social and financial indicators. The objective of this article is to propose a performance evaluation model for rural solidarity economy enterprises, aiming to support decision making in these enterprises based on multicriteria decision analysis (MCDA), particularly the ELECTRE-TRI methodology. In order to demonstrate the applicability of the developed model and to perform sensitivity analyses, the model was applied to a group of eight family agriculture co-operatives in the southwest state of Paraná, Brazil. All the participating co-ops were considered part of the solidarity economy, and they served 2500 rural producer families across at least 15 municipalities. The results showed the applicability and stability of the model, enabling us to identify the dimensions in which each co-op should concentrate their efforts to improve not only their performance but also the outcomes for the farmers that they serve. Based on these results, organizational and improvement activities can be developed and implemented. This analysis contributes to economic and social indicators by offering improvement strategies for the professionalization and strategic management of RSEEs, thus strengthening these enterprises and, consequently, family agriculture","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207570","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-29DOI: 10.3390/economies12090230
Navaneetha Krishnan Rajagopal, Maryam Khalid Ahmed Ba Zanbour, Noor Mohammed Alawi Al Kaaf
This research investigates the intricacies of work–life balance among female staff members (including teaching and non-teaching) in higher educational institutions within the Sultanate of Oman. Despite the increasing participation of women in the workforce, achieving a satisfactory work–life balance remains a challenge. This study delves into the factors influencing work–life balance perceptions, considering individual, organizational, and cultural dynamics within the Omani context. Drawing on a quantitative approach, data were collected through structured questionnaires from 268 female respondents. The study explores the impact of factors such as organizational support, workload, family responsibilities, cultural norms, and career development opportunities on work–life balance. The findings reveal both strengths and areas for improvement within organizational support systems, workload management practices, and family-friendly policies. Additionally, cultural factors significantly influence work–life dynamics, emphasizing the need for culturally sensitive interventions. Career development opportunities also play a crucial role in shaping work–life balance perceptions. Statistical analysis, including mean scores, provides insights into the areas of strength and concern, guiding recommendations for policy and practice improvements tailored to the educational sector in Oman. Overall, this study contributes to a deeper understanding of the work–life balance complexities among female staff members (teaching and non-teaching) and offers insights for enhancing employee well-being and organizational effectiveness in Oman’s higher education institutions.
{"title":"Exploring Work–Life Balance among Female Staff Members (Teaching and Non-Teaching) in Higher Educational Institutions of Oman: A Study","authors":"Navaneetha Krishnan Rajagopal, Maryam Khalid Ahmed Ba Zanbour, Noor Mohammed Alawi Al Kaaf","doi":"10.3390/economies12090230","DOIUrl":"https://doi.org/10.3390/economies12090230","url":null,"abstract":"This research investigates the intricacies of work–life balance among female staff members (including teaching and non-teaching) in higher educational institutions within the Sultanate of Oman. Despite the increasing participation of women in the workforce, achieving a satisfactory work–life balance remains a challenge. This study delves into the factors influencing work–life balance perceptions, considering individual, organizational, and cultural dynamics within the Omani context. Drawing on a quantitative approach, data were collected through structured questionnaires from 268 female respondents. The study explores the impact of factors such as organizational support, workload, family responsibilities, cultural norms, and career development opportunities on work–life balance. The findings reveal both strengths and areas for improvement within organizational support systems, workload management practices, and family-friendly policies. Additionally, cultural factors significantly influence work–life dynamics, emphasizing the need for culturally sensitive interventions. Career development opportunities also play a crucial role in shaping work–life balance perceptions. Statistical analysis, including mean scores, provides insights into the areas of strength and concern, guiding recommendations for policy and practice improvements tailored to the educational sector in Oman. Overall, this study contributes to a deeper understanding of the work–life balance complexities among female staff members (teaching and non-teaching) and offers insights for enhancing employee well-being and organizational effectiveness in Oman’s higher education institutions.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207803","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-29DOI: 10.3390/economies12090232
John G. Ingersoll
The purpose of this work is to examine the nature of the historically observed and empirically described by the Pareto law inequality in the distribution of wealth and income in an economic system. This inequality is presumed to be the result of unequal opportunity by its members. An analytical model of the economic system consisting of a large number of actors, all having equal access to its total wealth (or income) has been developed that is formally represented by a scale-free network comprised of nodes (actors) and links (states of wealth or income). The dynamic evolution of the complex network can be mapped in turn, as is known, into a system of quantum particles (links) distributed among various energy levels (nodes) in thermodynamic equilibrium. The distribution of quantum particles (photons) at different energy levels in the physical system is then derived based on statistical thermodynamics with the attainment of maximal entropy for the system to be in a dynamic equilibrium. The resulting Planck-type distribution of the physical system mapped into a scale-free network leads naturally into the Pareto law distribution of the economic system. The conclusions of the scale-free complex network model leading to the analytical derivation of the empirical Pareto law are multifold. First, any complex economic system behaves akin to a scale-free complex network. Second, equal access or opportunity leads to unequal outcomes. Third, the optimal value for the Pareto index is obtained that ensures the optimal, albeit unequal, outcome of wealth and income distribution. Fourth, the optimal value for the Gini coefficient can then be calculated and be compared to the empirical values of that coefficient for wealth and income to ascertain how close an economic system is to its optimal distribution of income and wealth among its members. Fifth, in an economic system with equal opportunity for all its members there should be no difference between the resulting income and wealth distributions. Examination of the wealth and income distributions described by the Gini coefficient of national economies suggests that income and particularly wealth are far off from their optimal value. We conclude that the equality of opportunity should be the fundamental guiding principle of any economic system for the optimal distribution of wealth and income. The practical application of this conclusion is that societies ought to shift focus from policies such as taxation and payment transfers purporting to produce equal outcomes for all, a goal which is unattainable and wasteful, to policies advancing among others education, health care, and affordable housing for all as well as the re-evaluation of rules and institutions such that all members in the economic system have equal opportunity for the optimal utilization of resources and the distribution of wealth and income. Future research efforts should develop the scale-free complex network model of the economy as a complement t
{"title":"Inequality in the Distribution of Wealth and Income as a Natural Consequence of the Equal Opportunity of All Members in the Economic System Represented by a Scale-Free Network","authors":"John G. Ingersoll","doi":"10.3390/economies12090232","DOIUrl":"https://doi.org/10.3390/economies12090232","url":null,"abstract":"The purpose of this work is to examine the nature of the historically observed and empirically described by the Pareto law inequality in the distribution of wealth and income in an economic system. This inequality is presumed to be the result of unequal opportunity by its members. An analytical model of the economic system consisting of a large number of actors, all having equal access to its total wealth (or income) has been developed that is formally represented by a scale-free network comprised of nodes (actors) and links (states of wealth or income). The dynamic evolution of the complex network can be mapped in turn, as is known, into a system of quantum particles (links) distributed among various energy levels (nodes) in thermodynamic equilibrium. The distribution of quantum particles (photons) at different energy levels in the physical system is then derived based on statistical thermodynamics with the attainment of maximal entropy for the system to be in a dynamic equilibrium. The resulting Planck-type distribution of the physical system mapped into a scale-free network leads naturally into the Pareto law distribution of the economic system. The conclusions of the scale-free complex network model leading to the analytical derivation of the empirical Pareto law are multifold. First, any complex economic system behaves akin to a scale-free complex network. Second, equal access or opportunity leads to unequal outcomes. Third, the optimal value for the Pareto index is obtained that ensures the optimal, albeit unequal, outcome of wealth and income distribution. Fourth, the optimal value for the Gini coefficient can then be calculated and be compared to the empirical values of that coefficient for wealth and income to ascertain how close an economic system is to its optimal distribution of income and wealth among its members. Fifth, in an economic system with equal opportunity for all its members there should be no difference between the resulting income and wealth distributions. Examination of the wealth and income distributions described by the Gini coefficient of national economies suggests that income and particularly wealth are far off from their optimal value. We conclude that the equality of opportunity should be the fundamental guiding principle of any economic system for the optimal distribution of wealth and income. The practical application of this conclusion is that societies ought to shift focus from policies such as taxation and payment transfers purporting to produce equal outcomes for all, a goal which is unattainable and wasteful, to policies advancing among others education, health care, and affordable housing for all as well as the re-evaluation of rules and institutions such that all members in the economic system have equal opportunity for the optimal utilization of resources and the distribution of wealth and income. Future research efforts should develop the scale-free complex network model of the economy as a complement t","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-28DOI: 10.3390/economies12090229
Michael D. Herley, Lucjan T. Orlowski, Mark A. Ritter
We examine the relationship between gold prices and the U.S. dollar exchange rate, arguing that their interactions are state-dependent and asymmetric under different market conditions. State dependency hinges on different short-term interest rate zones. To prove this point, we determine three distinct levels or zones of the effective federal funds rate using SETAR(2,p) tests. Subsequently, we perform conditional least square estimations of log changes in gold prices as a function of log changes in the nominal broad U.S. dollar exchange rate index for each of the obtained zones. Their relationship is consistently inverse, suggesting that gold and the U.S. dollar are risk-hedging substitutes for normal market periods. This also implies that gold is a safe-haven asset against the U.S. dollar exchange rate risk against a broad range of currencies. The substitution is weaker in the low-interest rate zone, more robust in the intermediate zone, and very pronounced in the high zone. We also perform a Markov switching test on the double-log function of gold prices and the exchange rate. The tests show a pronounced inverse relationship, i.e., substitution between assets, at normal market conditions. The relationship becomes significantly positive during episodes of financial distress, indicating complementarity between gold and U.S. dollar assets.
{"title":"US Dollar Exchange Rate Elasticity of Gold Returns at Different Federal Fund Rate Zones","authors":"Michael D. Herley, Lucjan T. Orlowski, Mark A. Ritter","doi":"10.3390/economies12090229","DOIUrl":"https://doi.org/10.3390/economies12090229","url":null,"abstract":"We examine the relationship between gold prices and the U.S. dollar exchange rate, arguing that their interactions are state-dependent and asymmetric under different market conditions. State dependency hinges on different short-term interest rate zones. To prove this point, we determine three distinct levels or zones of the effective federal funds rate using SETAR(2,p) tests. Subsequently, we perform conditional least square estimations of log changes in gold prices as a function of log changes in the nominal broad U.S. dollar exchange rate index for each of the obtained zones. Their relationship is consistently inverse, suggesting that gold and the U.S. dollar are risk-hedging substitutes for normal market periods. This also implies that gold is a safe-haven asset against the U.S. dollar exchange rate risk against a broad range of currencies. The substitution is weaker in the low-interest rate zone, more robust in the intermediate zone, and very pronounced in the high zone. We also perform a Markov switching test on the double-log function of gold prices and the exchange rate. The tests show a pronounced inverse relationship, i.e., substitution between assets, at normal market conditions. The relationship becomes significantly positive during episodes of financial distress, indicating complementarity between gold and U.S. dollar assets.","PeriodicalId":52214,"journal":{"name":"Economies","volume":null,"pages":null},"PeriodicalIF":2.6,"publicationDate":"2024-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142207571","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-08-26DOI: 10.3390/economies12090227
Luyanda Majenge, Sakhile Mpungose, Simiso Msomi
This study examined South Africa’s economic growth rate from 1980 to 2022 through an econometric analysis of fiscal and monetary policies. The study sought to investigate the relationships between the economy’s growth rate and various fiscal and monetary policy variables, taking into account different economic approaches such as Keynesian, monetarist, and Wagner’s perspectives. The methodology used consisted of data preparation, multiple unit root tests, Autoregressive Distributed Lag (ARDL) cointegration analysis, diagnostic tests, and pairwise Granger causality analysis. The empirical analysis found a long-term cointegration among the economic growth rate, government debt, expenditure, and revenue in fiscal policy, though government debt and expenditure were not statistically significant. Contrary to economic theory, increased government revenue had a negative correlation with economic growth. There was no long-term relationship found between the economic growth rate and monetary policy variables such as the official exchange rate, inflation rate, real interest rates, and M3 money supply. Pairwise Granger causality tests revealed a one-way relationship between government spending and economic growth, providing support to the Keynesian approach to fiscal policy. This study also discovered evidence that economic growth Granger-causes inflation, implying that economic growth may have predictive power for inflation, consistent with the demand-pull inflation hypothesis. However, no direct predictive relationships were found between the selected monetary policy variables and economic growth, supporting the long-run theory of monetary neutrality. This study suggests evaluating spending, managing inflation, implementing reforms, closing infrastructure gaps, encouraging investment, and ensuring fiscal sustainability.
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