Conjuncture Cycles and Monetary Anomalies Are Unwelcome Guests for Sustainability

Economic cycles are not economic evils but rather healing agents for returning to equilibrium,just as inflation and deflation are not economic misfortunes but the sign of bad governance and a bitter medicine for returning to calm monetary.Unfortunately,signs of poor governance are mistaken for unfortunate events,but are instead tools offered to restore economic systems.Politics seeks consensus and does not accept the bitter cure of recession.Monetary policy is therefore called into question even if monetary anomalies also depend on errors in the management of the economy;the result is the gradual increase in interest rates.Is the idea that we can achieve the goal of complete neutrality with nature acceptable in a global economic framework pervaded by inflation and denunciation?Can we similarly argue that economic problems can coexist once the goal of neutrality has been achieved?The answer is negative.We must correct these anomalies and dysfunctions of the economy,which cannot coexist in the new context of complete and indefinite equilibrium of tomorrow.And not even the idea that conflicts can be resolved with war seems to find a place in the renewed scenario of neutrality.In this regard we can remember that,when we have reached the economic optimum of complete neutrality,or at least we are close to it,the most socially and economically advanced territories and continents will benefit from an acceleration of productivity and development.Scarcity itself will give way to the new,long-awaited reality.A condition that approaches the state of abundance and which will produce surpluses to be allocated to countries and territories that are struggling towards the condition of neutrality.The acceleration of lagging continents and the recovery of altered economic systems are therefore preconditions that can allow us to access the state of global neutrality.As we get closer to the great objective,it is to be believed that the pretense of regulating conflicts through war will also disappear.With the new reality of abundance,the economic reason for war disappears,while the aspiration of peoples-inscribed in their DNA-for solidarity and peaceful aggregation towards substantial unity becomes clear.

China’s Monetary Policy Impacts on Money and Stock Markets

This study investigated the impact of China’s monetary policy on both the money market and stock markets,assuming that non-policy variables would not respond contemporaneously to changes in policy variables.Monetary policy adjustments are swiftly observed in money markets and gradually extend to the stock market.The study examined the effects of monetary policy shocks using three primary instruments:interest rate policy,reserve requirement ratio,and open market operations.Monthly data from 2007 to 2013 were analyzed using vector error correction(VEC)models.The findings suggest a likely presence of long-lasting and stable relationships among monetary policy,the money market,and stock markets.This research holds practical implications for Chinese policymakers,particularly in managing the challenges associated with fluctuation risks linked to high foreign exchange reserves,aiming to achieve autonomy in monetary policy and formulate effective monetary strategies to stimulate economic growth.

Monetary Policies versus Regulatory Policies:Management of Peer to Peer Market Interest Rates

This paper studies how monetary and regulatory policies manage peer to peer(P2P)interest rates.Based on selected representative monetary and regulatory policies,this paper finds that easy monetary policies reduce the demand for online loans,thus reducing the market s interest rates.Monetary policies may increase the supply of online loans through rational expectation channels or reduce the demand for online loans through bank risk-taking channels.Normative market-based regulatory policy enables the P2P market to return to rationality,eliminates high-risk investors and borrowers,and subsequently reduces market interest rates.Risk disposal-based regulatory policy reduces market supply to some extent,resulting in a small increase in interest rates.Both easy monetary policies and regulatory policies have a great impact on the normal platforms.The interest rate of high-risk platforms is less affected by the relevant policies,which is evidence that such platforms do not behave in accordance with the financial rules in general.Monetary policies mainly affect platforms with interest rates in a relatively normal range,while regulatory policies mainly focus on platforms with abnormal interest rates.

Is pass‑through of the exchange rate to restaurant and hotel prices asymmetric in the US?Role of monetary policy uncertainty

This study examines the exchange rate pass-through to the United States(US)restaurant and hotel prices by incorporating the effect of monetary policy uncertainty over the period 2001:M12 to 2019:M01.Using the nonlinear autoregressive distributed lag(NARDL)model,empirical evidence indicates asymmetric pass-through of exchange rate and monetary policy uncertainty.Moreover,a stronger pass-through effect is observed during depreciation and a negative shock in monetary policy uncertainty,corroborating asymmetric pass-through predictions.Our results further show that a positive shock in energy prices leads to an increase in restaurant and hotel prices.Furthermore,asymmetric causality indicates that a positive shock in the exchange rate causes a positive shock to restaurant and hotel prices.We found feedback causal effects between positive and negative shocks in monetary policy uncertainty and positive and negative shocks in the exchange rate.Additionally,we detected a one-way asymmetric causality,flowing from a positive(negative)shock to a positive(negative)shock in energy prices.Therefore,these findings provide insights for policymakers to achieve low and stable prices in the US restaurant and hotel industry through sound monetary policy formulations.Highlights.The drivers of restaurant and hotel business in tourism destinations are examined.There is asymmetric pass-through of exchange rate and monetary policy uncertainty.A stronger pass-through is observed during appreciation and a negative shock to monetary policy uncertainty.There is asymmetric causality from positive shock in exchange rate to postive shock in restaurant and hotel prices.

Non-Symmetry of China’s and US Monetary Policy Spillovers:Theoretical Modelling and Empirical Analysis

This study develops a structural vector autoregression(SVAR)framework to empirically examine the reciprocal transmission channels of monetary policies between China and the United States.The primary objective is to discern potential disparities in the spillover effects of monetary policies and ascertain any contrasting mechanisms underlying these effects across the two countries.Based on our research,it appears that there exists a certain level of non-symmetry in the spillover effects of monetary policy between the two countries.Moreover,this paper provides adequate analysis of disparities in the trade framework,capital control,and financial market operations of both countries in constructing a dynamic stochastic general equilibrium(DSGE)model that incorporates financial frictions for the examination of the theoretical rationale.The empirical findings indicate that China’s monetary policy creates a spillover effect primarily through trade.In China,following an increase in its interest rates,the domestic economic activity will experience a contraction,leading to a decline in both investment and output.Consequently,this will result in a decrease in China’s imports of investment goods from the United States,impacting the output of the US economy.In contrast,the US monetary policy exerts a spillover effect primarily through finance.An increase in interest rates by the United States is associated with a notable outflow of capital from China.This leads to a rise in the financing costs for Chinese firms,consequently diminishing their overall net worth.In light of the financial accelerator effect,corporate external financing risk premium will continue to increase,exacerbating the downward trajectory of China’s output.

Monetary policy rules：Forward-looking and backward-looking in an overlapping generations model

In the framework of an overlapping generations model, forward-looking monetary policy roles and backward-looking monetary policy rules were investigated. It is shown that the monetary steady state is more likely to be indeterminate under an active forwardlooking rule than under the corresponding backward-looking rule. It is also shown that backward-looking roles can render the monetary steady state unstable.

Spillovers of US unconventional monetary policy:quantitative easing,spreads,and international financial markets

This study investigates the international spillover effects of US unconventional monetary policy(UMP)-frequently called large-scale asset purchases or quantitative easing(QE)—on advanced and emerging market economies,using structural vector autoregressive models with high-frequency daily data.Blinder(Federal Reserve Bank of St.Louis Rev 92(6):465–479,2010)argued that the QE measures primarily aim to reduce US interest rate spreads,such as term and risk premiums.Considering this argument and recent empirical evidence,we use two spreads as indicators of US UMP:the mortgage and term spreads.Based on data from 20 emerging and 20 advanced countries,our empirical findings reveal that US unconventional monetary policies significantly affect financial conditions in emerging and advanced countries by altering the risktaking behavior of investors.This result suggests that the risk-taking channel plays an important role in transmitting the effects of these policies to the rest of the world.The extent of these effects depends on the type of QE measures.QE measures such as purchases of private sector securities that lower the US mortgage spread exert stronger and more significant spillover effects on international financial markets than those that reduce the US term spread.Furthermore,the estimated financial spillovers vary substantially across countries and between and within the emerging and advanced countries that we examine in this study.

A global perspective on macroprudential policy interaction with systemic risk,real economic activity,and monetary intervention

The study empirically assesses how macroprudential policy interacts with systemic risk,industrial production,and monetary intervention on a global level from January 2006 to December 2018.We adopt the aggregate proxies of these variables,capturing their global effects,and use a novel econometric technique,namely,smooth local projections.The study finds that global macroprudential policy leads the monetary policy,exhibiting a countercyclical pattern concerning industrial production.The latter has an inverse bidirectional linkage with systemic risk.Thus,an ex-ante tight macroprudential policy can indirectly mitigate global systemic risk through its pro-growth effect on industrial production,although no convincing evidence exists for the direct impact of a macroprudential intervention on systemic risk.The study results endure several extensions and a robustness check,which builds on alternative measures of global systemic stress and real economic activity,thereby legitimizing the increased importance attached to the macroprudential policy since the 2007–2009 global financial crisis.

China’s Institutional Strength,Monetary Policy Coordination and Fiscal Crowding-in Effect

As two main tools of macroeconomic policies,coordination and conflict between fiscal and monetary policies have been paid considerable attention by researchers.Under a structural vector autoregressive model that incorporates fiscal and monetary policies,this paper analyzes the monetary policy response to fiscal shocks.Our study finds that during the occurrence of a fiscal shock,the growth rate of broad money supply M2 substantially increased,indicating the adoption of an expansionary monetary policy by the monetary authority to fiscal policy expansion.Based on this empirical finding,this paper improves the dynamic stochastic general equilibrium model to investigate the fiscal policy effects under China’s monetary policy coordination.Our analysis shows that monetary policy coordination will significantly boost the economic stimulus effect of fiscal policy,generating a fiscal crowding-in effect.From the perspective of China’s institutional strength,this conclusion offers a theoretical explanation on the empirical fact of the fiscal crowdingin effect uncovered in the research literature,and offers a policy reference for making the proactive fiscal policy more efficient and effective.This paper suggests that China’s policymakers give full play to the country’s institutional strength by coordinating fiscal and monetary policies for high-quality economic development.

Structural Monetary Policy, Bank Credit and Bank Liquidity—An Empirical Analysis Based on VAR Model

After the outbreak of the international financial crisis,the People’s Bank of China,based on traditional monetary policy tools,launched a series of structural monetary policy tools such as standing lending facility(SLF),medium-term lending facility(MLF),and pledged supplementary lending(PSL)and targeted at liquidity via the commercial banking system.In order to test the credit transmission effect of structured monetary policy,this paper empirically analyzes the relationship between structured monetary policy,bank liquidity and bank credit based on the VAR model.The research shows that the implementation of structured monetary policy reduces the liquidity of commercial banks in the short term and increases in loans to small or micro enterprises and agriculture-related loans,these policies have produced significant short-term effects on credit transmission in steady of long-term effects.Thus,a series of supporting measures are needed to fully exert the effects of structural monetary policy.

Monetary Stability and Crisis Predictions Fallacies

In present days,our instable financial markets,characterized by heavier growing monetary responsibilities,are delivering and enlarging ever growing central banks’functions.The financial stability applied standards have been creating contradictory results in the recent Great Recessions since the year 1987 up to the central banks model,after the 2008 last financial crisis,with major central banks as the FED and the CEB(Diamond,2007,pp.189-200)conflicting main operative areas,monetary and financial goals with unexpected results.We have been living a very difficult and dramatic period,which suggests a lot of reconsiderations about what the monetary policy means and may pursue and in which area,with respect to the financial system restrictions,in particular,during the post-second World War,based initially on the pseudo gold dollar parity,things were relatively stable and major financial crises were happening in emerging peripheral markets only.Financial stability was ever relevant,but it was not something to which governments devoted institutional attention.Based on what happened during the recent crisis,it is now of capital responsibility connecting monetary and economic financial stability jointly.Central banks,on the contrary,seem not able to pursue both functions relying on classical market tools.Up to now,the only obligation,imposed to a central bank as a private agent,has been taking care of monetary stability,to contain inflation rates over upper limits,assumed in entering definitely in the legal tender monetary,regime almost everywhere over the planet.Originally,for specific monetary policy purposes alone,between central banks and possible financial entities,there were no guidelines or structural determined controls,only institutional and statutory single bank’s operational clauses.There were no legal constraints such as formal loan to-value,or loan to cash-flows,or formal capital level limits,based on actual constraints.Free repurchase agreements and sales or purchases of securities(the most relevant tools of monetary policy guidelines),generally based on private financial covenants,were the sole most recurrent tactical interferences in adjusting the economic free activity.The assuming statutory thresholds were casual in the incorporating state,central banks used to monitor the activities of agents through economic incentives,rather than mandating and monitoring specific legal prescriptions.The evolving inconsistency of both activities has become even more manifest;two conditions should be fulfilled simultaneously:To avoid dilemmas in which a central bank might be called to make the autonomous independent management choice between monetary price stability,pursuing at same time,generally incompatible,financial stability,two different policies should be rarely jointly assigned to same bodies,especially central banks.As regards the first issue,the IMF nevertheless,with Brunnermeier and Sannikov(Brunnermeier&Sannikov,2012),has argued that price stability and financial stability are interlinked Short-term debt financing played an important role in the run-up to the financial crisis,as increases in leverage helped boost growth but also made the economy more susceptible to a downturn.Since the recession,private agents have reduced their debt level while many governments have increased borrowing.This deleveraging process appears to be holding back the recovery,and the Japanese experience suggests that such deleveraging can continue over an extended period”,unless in the long run we are all broken at state level,as history seems now to prove.It is true indeed,as reminded by Lamfalussy(Lamfalussy et al.,2010,pp.7-9),and now widely proved by facts,that prices and the growth-employment objectives,run into each other because it is seldom the case that the pursuit of one is consistent with the pursuit of the second in global economies.

Monetary Policy and Profitability of Commercial Banks in Uganda

Background: Economic theory suggests that monetary policy through interest rates affects bank profitability. There is limited empirical evidence on the relationship between monetary policy and profitability of commercial banks in Uganda. Objective: This study seeks to examine the effect of monetary policy on the profitability of commercial banks in Uganda. Methodology: The study adopts a causal relationship research design. Data, covering 9 years from 2010-2018, was collected from all the registered commercial banks which were in operation over the study period. Various monetary policy variables are included in the empirical model as predictor variables. Return on Assets is used as a measure of bank profitability. A dynamic two-step System Generalized Method of Moments panel estimator is applied to estimate the empirical model. Findings: Estimates show that monetary policy in terms of its link to the lending rate has a significant causal effect on Return on Assets, suggesting that interest rate changes predict bank profitability of commercial banks in Uganda. Further, results show that a rise in core inflation has a significant negative causal effect on the banks’ profitability and that there is a significant lagged effect of Return on Assets. The 91-day treasury bill rate and money supply were insignificant in predicting bank profitability. Originality: Unlike previous related studies which have focused on major advanced economies and a limited number of studies which have considered only a few developing countries like Nigeria and Kenya, the current study provides empirical evidence on the link between monetary policy and commercial bank profitability in Uganda. Practical Implications: Policy makers in the financial sector may use the study results as a basis of implementation of appropriate monetary policy actions that enhance the profitability of Uganda’s commercial banks. For instance, the central bank should promote low and stable core inflation in order to enhance bank profitability, and should ensure that the monetary policy transmission to interest rates is efficient.

Monetary Policy and Unemployment:The Case of Romania

The paper aims to analyze the monetary transmission model between the monetary policy and the labor market variable of unemployment.The results of the data show that,the external shocks have an important impact especially on the Romanian interest rates but also on the domestic production;however,the impact is not significant on unemployment,which proves the resilience of the domestic labor market.The central bank policy rate has a stabilizing effect on the unemployment rate in case of an increase in the euro area policy rate.

Analysis of the Relationship between Monetary Policy and Stock Market Liquidity

After the 19th National Congress of the Chinese Communist Party,the introduction of the economic theory has promoted the integration of the global socialist market economy.Thereafter,this integration of the domestic and international market has been preliminarily completed,the role of the factor market in resource allocation has been improved,and a sturdy environment has been established for the development of Chinese enterprises.With the effective implementation of a series of policies after the financial system reform,the roles of the financial market in regulating macro-economy and revitalizing the market have become increasingly prominent.In regard to that,it has effectively promoted the financial market as a trade to"enrich people."This paper analyzes the relationship between monetary policy and stock market liquidity in terms of the influence of the former on the latter and suggests strategies to enhance the liquidity effect of monetary policy.

China to Shift to Prudent Monetary Policy Next Year

China will shift its monetary policy stance from relatively loose to prudent next year,the Political Bureau of the Communist Party of China(CPC) Central Committee decided Friday. The meeting,chaired by President Hu Jintao,also

Rethinking the Rise of Global Central Bank Digital Currencies:A Policy Perspective

This article discusses the impact of central bank digital currency(CBDC)from the perspective of monetary and fiscal policy.We mainly discuss how retail CBDC can improve traditional policy performance.We argue that A CBDC helps existing monetary policies to break through the zero lower bound,shorten the policy time lag,realize selective policy interventions,and make possible the price level target policy system.Similarly,the combination of CBDC and smart contracts can directly affect the performance of the fiscal policy.Compared with the convenience and impact of CDBC as a medium of exchange,its impact as a policy tool is more profound.The current monetary policy is facing a zero lower bound.The fiscal policy is facing a huge sovereign debt crisis and the impact of other private digital currencies on fiat money,which makes the importance of CBDC as a new policy tool more prominent.However,the research on CBDC as a policy tool has many fundamental questions that remain to be answered.This paper contextualizes CBDC with global challenges in policies and new technology advances,and the authors rethink CBDC from a policy perspective,which may provide many new thoughts and have implications for the rise of global CBDC.

Global Spillovers of China's Monetary Policy

Spillovers from China's monetary policy have become increasingly obvious with China's growing importance in the global economy and its close economic and trade ties with the world.This study establishes a proxy structure vector autoregression model to investigate the magnitude and transmission channel of spillovers from China to global and regional economies,taking advantage of high-frequency changes in asset prices in the financial markets to identify monetary policy shocks.The analysis reveals that China's monetary policy can affect the global economy by influencing international trade and commodity prices but there is no evidence of China's monetary policy affecting global financial variables.Tightness in China's monetary policy can cause a decline in world output whereas expansion in monetary policy can support global trade and output.This study also finds that the response of emerging Asian economies to China's monetary policy shock was nearly twice that of developed economies,while the transmission path did not change.The results of this study are consistent with the stylized fact that China's monetary policy plays an important role in the global trade and commodity cycle,although it does not drive the global financial cycle.

The Effectiveness of Structural Monetary Policy and Macro-Prudential Policies——Based on the DSGE Model That Includes Bank Heterogeneous Credit

Structural monetary policy and macro-prudential policies are important parts of the policy system of the People’s Bank of China.By constructing a dynamic stochastic general equilibrium model that includes the heterogeneity of corporate and bank credit,the authors divide the policies of the People’s Bank of China into seven categories,and explores the policy effectiveness of structural monetary policy,macro-prudential policy and traditional aggregate monetary policy.Through simulation of the model,it is found that whether facing technical shocks,interest rate shocks or credit shocks,the structural two-pillar policy tool that uses the deposit reserve interest rate as the target of operation is most conducive to economic stability.Technological progress has the most positive and lasting impact on output.Interest rates and credit policies will leave follow-up problems in the adjustment of the economy,and structural two-pillar policies can alleviate the impact of these problems.

Forecasting investment and consumption behavior of economic agents through dynamic computable general equilibrium model

Much research has been devoted to examination of the financial easing policy of the European Central Bank(ECB).However,this study is one of the first to use a dynamic micro-founded model to investigate empirically the impact of the ECB’s Quantitative Easing(QE)policy on consumption and investment by economic agents in Italy(households,government,firms,and the rest of the world).For this purpose,we constructed a Financial Social Accounting Matrix(FSAM)for the Italian economy for the year 2009 to calibrate a dynamic computable general equilibrium model(DCGE).This model allowed us to evaluate the direct and indirect impact of money flow on the behavior of consumption and investment.The findings of the study confirmed the positive impact of the ECB’s monetary policy on the level of investment and consumption.