Banking sector reactions to COVID-19: The role of bank-specific factors and government policy responses

This paper examines the impact of bank-specific factors and variations in the context of stringency of government policy responses on bank stock returns because of the COVID-19 pandemic. A sample of 1,927 publicly listed banks from 110 countries is used for the period of the first major wave of COVID-19, that is, January to May 2020. Our findings indicate that stock returns of banks with higher capitalization and deposits, more diversification, lower non-performing loans, and larger size are more resilient to the pandemic. While banks’ environment and governance scores do not have a significant impact, higher social and corporate social responsibility strategy scores intensify the negative stock price reaction to COVID-19. We further observe that the pandemic-induced reduction in bank stock prices is mitigated as the strictness of government policy responses increases, mainly through economic responses such as income support, debt and contract relief, and fiscal measures from governments.     

Is it still economic to build a new coal-fired power plant in the U.S.? A real option analysis

In the U.S., virtually no new coal-fired power plants have been built in recent years. Both industry experts and academics seem to believe that no rational firm will build a new coal-fired plant. Will such a trend continue in the future? To provide insights into this question, we investigate the optimal decision of an electricity company with an irreversible and deferrable opportunity to build either a new coal-fired or natural gas-fired power plant as its new base-load resource. According to our real option analysis, the optimal decision depends on the location. In the case of the eastern U.S., it is optimal to choose a natural gas plant if a firm is given a choice among a new natural gas plant, a new coal plant and deferring the investment. However, contrary to the common sentiment in the industry and academia, building a new coal plant in the western U.S. is still more economical than building a new natural gas plant in the absence of emission pricing. Furthermore, introducing carbon pricing to western U.S. states, as California did, can substantially increase the probability that a firm will optimally choose a natural gas plant over a coal plant.     

应对新冠疫情冲击的货币政策国际协调*

新冠疫情冲击了世界经济增长和金融市场稳定。很多国家推出极度宽松货币政策应对危机。从经典货币政策国际协调的博弈理论来看，应对本次疫情冲击的各国货币政策协调性不足，“以邻为壑”的非合作均衡效果明显。为数不多的货币政策协调也存在执行力不足、深度与广度不够、新兴市场国家话语权低等问题。在世界经济紧密联系、货币政策溢出效应加强的背景下，为了应对疫情冲击，国际组织需要创设协议和合作剩余分配机制，寻找货币政策刺激效果和防止国际资产泡沫之间的平衡，加强政策沟通和信息共享，提高新兴市场国家话语权，建设有效的应对危机的货币政策国际协调机制。中国应在“一带一路”倡议的框架下建立长期货币政策协调机制，在现有的IMF和G20等平台上发挥发达国家与新兴市场国家之间的协调桥梁作用，通过持续开展央行间技术性合作等措施参与和推进协调进程。     

地方财政政策逆周期调节：财政分权还是债务增发*

财政政策工具实际操作偏离最初设计将会降低政策工具的调控效果，导致宏观经济波动加剧。针对地方政府财政政策的逆周期性调控目标，本文关注财政分权深化和政府债务增发的逆周期性效应。研究发现：地方政府财政政策总体呈现顺周期特征。财政分权程度的提高放大了地方财政政策的顺周期性。地方政府债务增发使地方财政政策呈现逆周期特征。地方政府财政政策及其收入面、支出面均呈现顺周期性，由“顺”转“逆”的债务平衡点分别为0137，0113，0209。当前绝大部分地区的债务规模都在债务平衡点之下。驱动地方政府债务逆周期调控的内在因素是官员晋升激励。晋升激励的程度越高，地方债务逆周期调控的力度就越大。但外部市场融资环境的波动削弱了地方政府债务逆周期调控的力度。本文的政策主张是，不宜过度财政分权，应该扩大地方债发行规模，促使地方财政政策逆周期调节。     

财政政策与货币政策的动态调控效应*——基于时变参数向量自回归模型的检验

本文廓清了财政政策与货币政策搭配动态调控宏观经济的机理，揭示了两者协调影响经济的“黑箱”机制及其在经济不同阶段的搭配方式；运用中国2004—2019年的经济季度数据，构建TVP SV VAR模型探究两类政策对宏观经济的调控效应。研究发现：财政政策与货币政策共同把控流动性“闸门”实现互动协调；财政政策搭配货币政策具有时变性，在整体上“同向发力”推动经济发展；两类政策对产出的影响并非始终如理论一致，在结构层面仍有优化靶向性操作的余地。     

Under threat: Rules-based fiscal policy and how to preserve it

Rules-based fiscal policy is under threat. Over the last two decades, it proved frustratingly complicated to strike the right balance between three essential properties of sound fiscal policy rules: simplicity, flexibility, and enforceability. Simplicity has been sacrificed to ensure that more contingent (i.e. flexible) rules remained enforceable. The resulting arrangements have failed to adequately guide fiscal policy, undermining formal compliance, and ultimately, popular and political support for rules. To mitigate the risk that countries abandon rules-based policymaking, we suggest downplaying enforceability—i.e. the role of formal sanctions through enforcement—and enhancing the reputational costs of breaching rules. At the limit, the rule could consist of a simple quantitative benchmark for a key fiscal indicator. To boost reputational effects, independent fiscal councils should focus on debunking the “fiscal alchemy,” clearing the public debate from partisan smokescreens, and fostering popular support for sound fiscal policies.     

Impact of an urban growth boundary across the entire house price spectrum: The two-stage quantile spatial regression approach

This study provides evidence for the impact of an urban growth boundary (UGB) on house prices. The study employs a two-stage quantile spatial regression method on a dataset that inventories sales transactions of single-family houses within two miles of either side of the eastern boundary of the primary UGB in King County, Washington. The results show that while the UGB decreases house prices across the entire house price spectrum, the impact is uneven; it is most pronounced for houses in the 5th to 8th decile of prices. These findings should encourage policy makers to adopt sub-housing-market-level policy approaches to address UGB and other urban and regional development policies’ potential impacts on house prices.     

Investment decision-making under economic policy uncertainty

It is widely established that economic policy uncertainty (EPU) affects investment decisions and performance, yet research in this area has overlooked the direct property investment market. This article seeks to rectify this and proposes a multistage multilevel analytical framework to offer new insights and a richness of findings. Using a news-based measure of EPU in the United Kingdom, and controlling for economic conditions, a national-level analysis reveals some evidence of Granger-Causality between EPU and total returns, indicating that pricing is responsive to uncertainty. These findings suggest that EPU is an important risk factor for direct property investments, with pricing implications. Differences in data and performance measure are important, however, with income returns unresponsive. A micro-level investigation begins to reveal some of the asset-pricing decisions underpinning the national results, indicating investors’ concerns for income streams are consistently high, regardless of varying EPU. Pricing can also cause changes in EPU, such as in the retail and industrial markets (increasingly linked through logistics) reflecting sector-specific stakeholder groups and newsworthy issues. This evidence highlights how important it is for policy-makers to understand the complex and bi-directional relationship, that indecision can undermine investment confidence and cause investment market volatility, in turn raising EPU.     

Economic Competition,Policy Interdependence,and Labour Rights

Extant scholarship treats national policies concerning labour rights as a function of economic factors and yet neglects influences of policies among economically competing states. Relying on the policy interdependence theory, this study argues that labour rights policy in a state is dependent on its economic competitors’ labour policy decisions. It specifically maintains that the intensifying competition for foreign direct investment and exports as well as against imports channels negative externalities of deteriorating labour protection in competing states which drives expansive downward policy mimicking and leads to a global decline in labour rights – a race to the bottom. Utilising spatial econometric technique to analyse a new data on labour rights for the period 1994–2009, it finds that labour rights practices are interdependent among economic competitors and experience global deteriorations; whereas labour rights laws remain largely independent due to high policy and reputational costs of lowering them and show more fluctuations.     

Development built on crony capitalism? The case of Dangote Cement

This paper critiques the emergence of Dangote Cement as the dominant player in cement manufacturing in Nigeria. It argues that the changed economic environment General Obasanjo met when he became president of Nigeria for a second time in 1999 made it difficult for him to continue the nationalisation policies and the expansion of government involvement in several spheres of economic activity that he helped to promote in the 1970s. The realisation that this strategy, which created numerous crony capitalists, was unsustainable resulted in Obasanjo allying with Dangote and promulgating the Backward Integration Programme (BIP) for the local cement industry. This made it possible for Dangote to risk aggressive investment in the capital-intensive cement production business. This strategy achieved public good by rapidly making Nigeria, an oil rent- and import-dependent economy with enormous limestone reserves, self-sufficient in cement production.