The Failure of Macroeconomics in America

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Macroeconomic Asymmetries in the Eurozone Countries in the Time of Financial Crisis

This paper seeks to highlight the macroeconomic asymmetries and social impacts among eurozone countries which occurred during the time of the financial crisis,emphasising the urgent need to revise the framework of economic governance.The analysis focuses on the growing macroeconomic and social imbalances on a representative sample of selected eurozone member-states(Euro(€)North and Euro(€)South)which had posed a threat to economic sustainability and social coherence.

An incommensurate fractional discrete macroeconomic system:Bifurcation,chaos,and complexity

This study proposes a novel fractional discrete-time macroeconomic system with incommensurate order.The dynamical behavior of the proposed macroeconomic model is investigated analytically and numerically.In particular,the zero equilibrium point stability is investigated to demonstrate that the discrete macroeconomic system exhibits chaotic behavior.Through using bifurcation diagrams,phase attractors,the maximum Lyapunov exponent and the 0–1 test,we verified that chaos exists in the new model with incommensurate fractional orders.Additionally,a complexity analysis is carried out utilizing the approximation entropy(ApEn)and C_(0)complexity to prove that chaos exists.Finally,the main findings of this study are presented using numerical simulations.

Analysis of financial development and open innovation oriented fintech potential for emerging economies using an integrated decision‑making approach of MF‑X‑DMA and golden cut bipolar q‑ROFSs

The purpose of the paper is to identify the factors of financial development that have the greatest impact on open innovation in 7 emerging countries.The analysis was performed featuring the MF-X-DMA method,as well as its further verification for auto-correlation and heteroscedasticity.The time period covers years from 2002 to 2020.The article states that the main indicators to improve financial development should enhance the process of bank lending and equity market development.An important area is the development of competition by providing equal access to information to all market participants in a continuously refining technical infrastructure.Regression analysis with the MF-X-DMA method confirms the statistical significance of this influ-ence.The article fills the knowledge gap into the link between open innovations and the relatively low capitalization of the modern emerging countries’financial market,low liquidity in small cap stocks at the financial market and concentration of the banking sector,as well as risks arising in the process of globalization.Another analysis has also been conducted by generating a novel fuzzy decision-making model.In the first stage,the determinants of open innovation-based fintech potential are weighted for the emerging economies.For this purpose,M-SWARA methodology is taken into consideration based on bipolar q-ROFSs and golden cut.The second stage of the analysis includes evaluating the emerging economies with the determinants of open innovation-based fintech potential.In this context,emerging seven countries are examined with ELECTRE methodology.It found the most significant factor is the open innovation-based fintech potential.

Examine the Reliability of Econometrics Software: An Empirical Comparison of Time Series Modelling

Researchers must understand that naively relying on the reliability of statistical software packages may result in suboptimal, biased, or erroneous results, which affects applied economic theory and the conclusions and policy recommendations drawn from it. To create confidence in a result, several software packages should be applied to the same estimation problem. This study examines the results of three software packages (EViews, R, and Stata) in the analysis of time-series econometric data. The time-series data analysis which presents the determinants of macroeconomic growth of Sri Lanka from 1978 to 2020 has been used. The study focuses on testing for stationarity, cointegration, and significant relationships among the variables. The Augmented Dickey-Fuller and Phillips Perron tests were employed in this study to test for stationarity, while the Johansen cointegration test was utilized to test for cointegration. The study employs the vector error correction model to assess the short-run and long-term dynamics of the variables in an attempt to determine the relationship between them. Finally, the Granger Causality test is employed in order to examine the linear causation between the concerned variables. The study revealed that the results produced by three software packages for the same dataset and the same lag order vary significantly. This implies that time series econometrics results are sensitive to the software that is used by the researchers while providing different policy implications even for the same dataset. The present study highlights the necessity of further analysis to investigate the impact of software packages in time series analysis of economic scenarios.

Paths out of poverty:An eclectic and idiosyncratic review of analytical approaches

This paper briefly reviews different debates about approaches for paths out of poverty,considering several views,from the analysis of specific policies to more general or systemic considerations.The contribution of this paper is to present a broad outline of those debates and to serve as an illustration of the complexity of analyzing paths out of poverty.It discusses in sequence,the more microeconomic approach of evaluation of individual policies for poverty alleviation;then it moves to broader issues of growth and development strategies,and macroeconomic policies,and their links to the persistence or reduction of poverty;and finally discusses the topic of institutions,related to how policy decisions are made and enforced in societies at the previous three levels.Finally,the concluding section argues that a successful program to eliminate poverty must integrate all levels of individual policies,macroeconomic programs,development strategies and good institutions.This paper hopes to contribute to that crucial work.

Credit Risk Model Taking Account of Inflation and Its Contribution to Macroeconomic Discussion on Effect of Inflation on Output Growth

We use Extended Merton model(EMM)for estimating the firm’s credit risks in the presence of inflation.We show quantitatively that inflation is an influential factor making either a benign or adverse effect on the firm’s survival,supporting at the microeconomic level New Keynesian findings of the nonlinear inflation effect on output growth.Lower inflation increasing the firm’s expected rate of return can raise its mean year returns and decrease its default probability.Higher inflation,decreasing the expected rate return,makes the opposite effect.The magnitude of the adverse effect depends on the firm strength:for a steady firm,this effect is small,whereas for a weaker firm,it can be fatal.EMM is the only model taking account of inflation.It can be useful for banks or insurance companies estimating credit risks of commercial borrowers over the debt maturity,and for the firm’s management planning long-term business operations.

Quantifying the Microeconomic and Macroeconomic Impact of the Recent Crude Oil Price Fluctuations

This study analyzed the potential impact of the increased oil volatility on the industries and the global economy. Specifically, it separated the oil price fluctuations into positive and negative components, and modeled the return of industry portfolios with them. Next, the sensitivity of the airline industry to oil price was investigated to gauge the effectiveness of their hedging strategies, with the hope that the methodology can be extended to other industries. In addition, this paper explored the macroeconomic impact of oil price movements by examining the benchmarks such as GDP and CPI.

BAYESIAN METHOD OF MACROECONOMICAL DECISION

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On the “Generality” of the General Theory. Or Why Keynes Lost His Battle and What to Do to Re-win It Again

The paper emphasizes the true“generality”of the General Theory(GT)in the face of the dominant view,according to which Keynes’s theory is captured by“Keynesian outcomes”in axiomatic general equilibrium models due to market imperfections.However,it argues that the advocates of generality must make a serious effort to re-conceptualize the GT in a very broad perspective.One must understand both its limitations and why the generality debate after the GT has failed to reconsider it in a proper way and what to do to restore Keynes’s generality claim in the present context.This paper’s contribution is twofold.The first is to make a distinction between three different dimensions of the generality issue and suggest that Keynes failed to grasp their full significance because he was facing the Marshallian orthodoxy,rather than general equilibrium.The second contribution is to suggest that one way to restore Keynes’s generality claim is to stress that he belongs to an alternative paradigm that has several features in common with contemporary modernist revolution and with Einstein’s relativity theory in particular.

Tourism as an Exit Strategy at Crisis Times

The contemporary crisis is giving evidence of failing macroeconomic theories and policies, after decades of focusing on the aggregate domestic demand and the role of the public expenditure. The contemporary crisis has shown the weakness of fiscal policy. With very low interest rates, the monetary policy does not seem to provide an alternative exit strategy out of the crisis, too. In this paper we discuss the hypothesis that GDP can still be a reliable estimate of growth. Nevertheless, at crisis times, only if the focus is on the foreign demand like International Tourism Receipts and Exports, and Exports can be an exit strategy. One component of Exports and International Tourism Receipts are worthy of attention. Thanks to a cluster analysis of per year variations of International Tourism Receipts (ITRs), GDP and Exports (World Bank Database) from 2007 to 2011, average positive variations of GDPs are matching with positive ITRs and Exports for “clusters” of countries. Performances of Europe and USA are worse than China, Brazil, India and South Africa and these continents and countries are separated in two different clusters. This result can be related to an increase of trade in emerging economies more than in mature ones, whose exit out of the crisis is much more demanding. The research confirms that Tourism and Exports are having an impact on the growth at different intensities (Europe and America vs. Asia) at crisis times.

Statistical Analysis and Evaluation of Macroeconomic Policies: A Selective Review

In this paper,we highlight some recent developments of a new route to evaluate macroeconomic policy effects,which are investigated under the framework with potential outcomes.First,this paper begins with a brief introduction of the basic model setup in modern econometric analysis of program evaluation.Secondly,primary attention goes to the focus on causal effect estimation of macroeconomic policy with single time series data together with some extensions to multiple time series data.Furthermore,we examine the connection of this new approach to traditional macroeconomic models for policy analysis and evaluation.Finally,we conclude by addressing some possible future research directions in statistics and econometrics.

Vulnerability Analysis in Earthquake Loss Estimate

The adobes in Costa Rica have almost the same vulnerability as the old civil houses in China, which represent vulnerability in the worst case. On the other hand, the high quality buildings in Costa Rica have the same vulnerability as the reinforced concrete buildings in China due to the adoption of state-of-art techniques in design and construction, which represent the vulnerability of the best case. The macroeconomic vulnerability defined by Chen et al. falls in the middle of the two extreme cases of the inventory studied because the total macroscopic loss is the sum of losses of different types of buildings and facilities. Therefore the macroeconomic vulnerability must be greater than that of the best case and less than that of the worst. The use of macroscopic vulnerability in earthquake loss estimate is easy, simple and feasible. The vulnerability plots are preliminary in nature and should be refined with additional earthquake loss data.

A Decision Support System for Economic Development and Price Reform

In this paper, we present a real decision support system applied to China's macroeconomic management. The structure, design and functions of the system are discussed, and the problems occurring in designing and making the system are also studied. A case study for China's petroleum price reform is given at the end of the paper.

The Volatility of High-Yield Bonds Using Mixed Data Sampling Methods

It is well known that economic policy uncertainty prompts the volatility of the high-yield bond market.However,the correlation between economic policy uncertainty and volatility of high-yield bonds is still not clear.In this paper,we employ GARCH-MIDAS models to investigate their correlation with US economic policy uncertainty index and S&P high-yield bond index.The empirical studies show that mixed volatility models can effectively capture the realized volatility of high-yield bonds,and economic policy uncertainty and macroeconomic factors have significant effects on the long-term component of high-yield bonds volatility.

An Analysis of the Influence of Chinese Agriculture on National Economy and the Macroeconomic Effects

As a basic industry,agriculture has a far-reaching impact on national economy. Based on input-output tables of China in 2005 and2010,this paper gives a deep insight into the relationship between agriculture and national economy and its macroeconomic effects by the methods of input-output analysis,industrial correlation and macroeconomic effect analysis. The results show that the agricultural development is highly dependent on the national economy,but makes low contribution; agriculture contributes to promoting employment and improving the structure of national income distribution; despite the government's tax incentive,the agricultural equipments are updated slowly,and the corporate profits are at low level; agricultural export effect is far below the average industry level,but the import effect increases over the years,and final products are often used for domestic consumption. Finally,we set forth recommendations for improving the development of agriculture and national economy.

On the Transmission Mechanism of the Chinese Land Policy in Macroeconomic-control: A Theoretical Study Based on Modified IS-LM Model

The purposes of this paper are to bring land factor into the general fame of national product and develop a new modified‘IS-LM equilibrium model',aiming to find out the impacts of land factor on the effective allocation of capital between total supply and total demand constituting gross national product,to analyze the relation mechanism among land factor and macroeconomic variables,and to discuss the theoretical mechanism under which land,fiscal and monetary policy are integrated. Methods employed include econometrics and model analysis. The results indicate that:( i) on the conditions that the equilibrium of supply and demand in land market,the modified IS-LM model taking into account land factor successfully performs transmission mechanism of land policy participation in macroeconomic-control by means of money capital regulation;( ii) the direction and intensity of land policy control are effected by elasticity of land supply and land price,meanwhile different characteristics of land supply elasticity exit in different stages of economic development;( iii) the realization of IS-LM equilibrium requires the aggregate effects of fiscal,monetary and land policy. It is concluded that land policies for macroeconomic-control drives land price higher,and land supply regulation would diminish financial effect. During the economic expansion or recovery period,the effect of expansionary land policy would be counteracted by high land price. During the economic transition or recession period,the government could control economical operation better through tightening land policy.

Cointegration between macroeconomic factors and the exchange rate USD/CNY

This research paper investigates the effect of macroeconomic variables on the exchange rate USD/CYN using yearly time series data for China economy from 1980 to 2017.ARDL bounds test approach for cointegration is applied to test the long-run relation between the dependent and the independent variables.The results of long-run ARDL indicate that gross domestic product growth and trade openness have a positive effect on the exchange rate USD/CNY while interest and inflation rates have a negative effect on the exchange rate.Based on the results of this study,it is recommended that the policymakers of the Chinese government should implement vital monetary and fiscal policies to determine the less volatile and productive exchange rate for China to manage sustainable economic growth for a long time with its trading partners.

Forecasting directional movement of Forex data using LSTM with technical and macroeconomic indicators

Forex(foreign exchange)is a special financial market that entails both high risks and high profit opportunities for traders.It is also a very simple market since traders can profit by just predicting the direction of the exchange rate between two currencies.However,incorrect predictions in Forex may cause much higher losses than in other typical financial markets.The direction prediction requirement makes the problem quite different from other typical time-series forecasting problems.In this work,we used a popular deep learning tool called“long short-term memory”(LSTM),which has been shown to be very effective in many time-series forecasting problems,to make direction predictions in Forex.We utilized two different data sets—namely,macroeconomic data and technical indicator data—since in the financial world,fundamental and technical analysis are two main techniques,and they use those two data sets,respectively.Our proposed hybrid model,which combines two separate LSTMs corresponding to these two data sets,was found to be quite successful in experiments using real data.

Distributive Disturbance and Optimal Policy in Stochastic Control Model

To investigate the equilibrium relationships between the volatility of capital and income, taxation, and ance in a stochastic control model, the uniqueness of the solution to this model was proved by using the method of dynamic programming under the introduction of distributive disturbance and elastic labor supply. Furthermore, the effects of two types of shocks on labor-leisure choice, economic growth rate and welfare were numerically analyzed, and then the optimal tax policy was derived.