{"title":"From debt arithmetic to fiscal sustainability and fiscal rules: Taking stock and policy lessons","authors":"George Economides , Giota Koliousi , Natasha Miaouli , Apostolis Philippopoulos","doi":"10.1016/j.jeca.2024.e00393","DOIUrl":"10.1016/j.jeca.2024.e00393","url":null,"abstract":"<div><div>We start by clarifying the role of the interest rate-growth rate differential for long-term fiscal sustainability with numerical examples for the Greek economy. In turn, building upon this popular approach, which is based on the intertemporal government budget constraint only, we make a number of methodological points that question the quantitative usefulness of standard calculations. Among other things, we argue that a structural approach is needed and this reveals the necessity of fiscal rules according to which fiscal instruments systematically react to public debt imbalances. This naturally enables us to evaluate the EU’s fiscal rules and to suggest simple and implementable alternatives. Throughout, we confront our arguments with data from the Euro Area.</div></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"31 ","pages":"Article e00393"},"PeriodicalIF":0.0,"publicationDate":"2024-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142743938","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}
{"title":"The asymmetric impact of leisure externalities on economic growth","authors":"Spyridon Boikos , Alberto Bucci","doi":"10.1016/j.jeca.2024.e00388","DOIUrl":"10.1016/j.jeca.2024.e00388","url":null,"abstract":"<div><div>Leisure generates externalities for the economy as a whole, as individuals generally get some (dis-)utility from their leisure-time. However, the sign and the extent of the effect that these externalities have on a specific worker's productivity and on the productivity of all other factors used in combination with labor (hence on long-term economic growth) may be asymmetric across different economic activities. The objective of this paper is to shed light on the impact that sector-specific leisure-time externalities have on the innovation rate, on the sectorial allocation of (skilled) labor, and eventually on the long-run economic growth rate, without making any prior assumption on their sign and magnitude. In the baseline model the growth rate of per capita income moves together with all types of leisure externalities, whereas the innovation rate moves together with (and depends solely on) the R&D-sector-specific leisure externality. From numerical analyses, we conclude that sector-specific leisure-time externalities provide asymmetric effects on the growth rate of real per capita GDP and on the way skilled labor is allocated across different economic activities. The robustness of these conclusions is analyzed by using various definitions of leisure along with different utility functions (including leisure as an argument).</div></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00388"},"PeriodicalIF":0.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554543","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Special issue: Asymmetries in the global economy","authors":"Costas Siriopoulos, Dionisis Philippas","doi":"10.1016/j.jeca.2024.e00365","DOIUrl":"10.1016/j.jeca.2024.e00365","url":null,"abstract":"","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00365"},"PeriodicalIF":0.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142704433","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}
Ibrahim Lanre Ridwan , Abdul Rahman Bin S. Senathirajah , Mamdouh Abdulaziz Saleh Al-Faryan
{"title":"Investigating the asymmetric effects of financial development on trade performance in Africa: Can digitalization, transport services, and regulatory quality drive the vision 2063?","authors":"Ibrahim Lanre Ridwan , Abdul Rahman Bin S. Senathirajah , Mamdouh Abdulaziz Saleh Al-Faryan","doi":"10.1016/j.jeca.2024.e00390","DOIUrl":"10.1016/j.jeca.2024.e00390","url":null,"abstract":"<div><div>One of the key goals of the United Nations Sustainable Goals focuses on nations pursuing sustainable growth (SDG-2) and notable strands of studies have emphasized the fundamental roles financial development plays in its attainment. However, there is limited understanding regarding how financial development influences trade performance and competitive advantage. Consequently, this study aims to provide the first empirical evidence of the asymmetric effects of financial development on trade performance in Africa from 1996 to 2022. Additionally, the empirical model that controls for market size, transport services, and digitalization is evaluated through various methodologies, including Mean Group (MG), Pooled Mean Group (PMG), Dynamic Fixed Effects (DFE), and Quantile Regression (QR). The results indicate that while negative shocks adversely affect trade performance, positive shocks stemming from financial development enhance it. Moreover, trade performance is positively influenced by digitalization, market size, and trade openness, whereas it is negatively affected by transportation services. These findings carry important implications for policy-making.</div></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00390"},"PeriodicalIF":0.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142656233","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}
Hercules Haralambides , Iman Bastanifar , Kashif Hasan Khan , Zahra Shahryari
{"title":"Asymmetric distance and business cycles (ΑDBC): A new understanding of distance in international trade models through the example of Iran's trade corridors","authors":"Hercules Haralambides , Iman Bastanifar , Kashif Hasan Khan , Zahra Shahryari","doi":"10.1016/j.jeca.2024.e00389","DOIUrl":"10.1016/j.jeca.2024.e00389","url":null,"abstract":"<div><div>We introduce a new concept of distance, and the way this could affect gravity-based trade modeling. Our motivation is twofold: a) global uncertainty in trade relations allows us to treat distance as an asymmetric shock in economic modeling; b) economies of scale in seaborne trade make geographical distance less relevant in trade models, substituted by economic distance, as this can be proxied by ocean freight rates. This, for instance, allows China to import iron ore from Brazil, at three times the distance compared to Australia. We enhance the New Keynesian Dynamic Stochastic General Equilibrium Model (DSGE) by incorporating a distance shock parameter into the transaction costs function. We test this on Iran's participation in the Shanghai Cooperation Organization as well as in the International North-South Transport Corridor. We conclude that longer physical distances do not necessarily have a negative impact on trade.</div></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00389"},"PeriodicalIF":0.0,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554542","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Relative prices and relative supplies in the UK beef meat industry: A wavelet cross-correlation analysis","authors":"Panos Fousekis","doi":"10.1016/j.jeca.2024.e00387","DOIUrl":"10.1016/j.jeca.2024.e00387","url":null,"abstract":"<div><div>The objective of the paper is to assess the contemporaneous and temporal links between the relative beef prices and the composition of beef supply (slaughters) in the UK, using weekly data and wavelet cross-correlation analysis. For female bovine animals (heifers and adult cows) and for most of the frequencies considered, the price ratio has a negative contemporaneous association with the supply ratio while for male bovine animals (steers and young bulls) it has a positive one. The difference in the sign of the contemporaneous link is in line with the argument in the Animal Economics literature that, while bovines (female or male) are both consumption and capital goods, the value of females as capital tends to be greater than that of males. Moreover, the contemporaneous links are asymmetric (i.e., their absolute magnitude depends on the frequency they are calculated). The temporal links are strong. For female bovines and for small frequencies, the relative prices are likely to lead relative supplies; for male bovines, it holds the opposite.</div></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00387"},"PeriodicalIF":0.0,"publicationDate":"2024-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142359006","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}
{"title":"Ricardian equivalence and positively sloped IS curve: (Dis)equilibrium insights","authors":"Xakousti Chrysanthopoulou , Moise Sidiropoulos , Alexandros Tsioutsios","doi":"10.1016/j.jeca.2024.e00385","DOIUrl":"10.1016/j.jeca.2024.e00385","url":null,"abstract":"<div><p>In the New-Keynesian model augmented with non-Ricardian households (breakdown of the Ricardian equivalence), the elasticity of aggregate demand to changes in real interest rate is linked non-linearly to the share of non-Ricardian households. Importantly, this dependence may result in an upward-sloping dynamic New-Keynesian IS curve. Using an extended fractionally cointegrated VAR model in a recursive framework, we empirically test this for the US from 1959 to 2024, finding a positive long-run relationship between consumption and interest rates from 1980 to 1992, and a negative one from 1993 onwards, with a stronger negative correlation after 2000. These results suggest shifts in asset market participation, altering equilibrium dynamics in the goods market. We analytically show that when non-Ricardian households surpass a certain threshold, output adjusts to excess supply rather than demand, imposing novel restrictions on the New-Keynesian Phillips curve to maintain equilibrium determinacy. These bounds on the New-Keynesian Phillips curve slope under varying inflation targeting rules offer a new perspective on monetary policy design.</p></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00385"},"PeriodicalIF":0.0,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142243974","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}
{"title":"Financial inclusion, integration, and stability asymmetries in the Mediterranean region","authors":"Simon Neaime, Isabelle Gaysset","doi":"10.1016/j.jeca.2024.e00386","DOIUrl":"10.1016/j.jeca.2024.e00386","url":null,"abstract":"<div><p>Using Panel data, GMM and GLS econometric models, and a sample of six Mediterranean (MED) countries (Algeria, Egypt, Jordan, Lebanon, Morocco and Tunisia) over the period 2002–2023, this paper assesses empirically the impact of financial inclusion on income inequality, poverty, and financial stability asymmetries in the MED region. While the empirical literature covering the region is relatively scarce, this paper adds to that literature by bridging a significant existing gap, especially in the aftermath of the recent financial and debt crises and the recent political and social turmoil that have been unfolding in several MED countries. Our empirical results show that financial inclusion decreases inequality but has no significant effect on poverty. Other empirical results show that while the empirical evidence indicates that enhanced financial integration is a contributing factor to financial instability in the MED region, an increase in financial inclusion and in population contributes positively to financial stability.</p></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00386"},"PeriodicalIF":0.0,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142243975","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}
{"title":"Monetary policy rules and the ECB rotation model","authors":"Jens Klose","doi":"10.1016/j.jeca.2024.e00384","DOIUrl":"10.1016/j.jeca.2024.e00384","url":null,"abstract":"<div><p>In this article, we apply three different specifications of a monetary policy rule to reveal the interest rate preferences of the national central bank governors of the euro area. These preferences are combined with information from the ECB rotation model to determine whether a central bank governor was allowed to vote at a certain meeting. Finally, we empirically test whether non-voting governors or specific countries are worse off when not allowed to vote compared to a situation where they have a voting right. Our results indicate that there are only very few occasions where this is indeed the case. Thus, we conclude that the current form of the rotation model in the euro area does not discriminate any national governor or country.</p></div>","PeriodicalId":38259,"journal":{"name":"Journal of Economic Asymmetries","volume":"30 ","pages":"Article e00384"},"PeriodicalIF":0.0,"publicationDate":"2024-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S1703494924000331/pdfft?md5=06d7c86790dd0911777de794afdee29d&pid=1-s2.0-S1703494924000331-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142243973","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}