Open Economy Dynamics in a Floating Exchange Rate Developing Country Context

ABSTRACT

This article develops a wavelet-based control model to simulate fiscal, monetary, and real exchange rate scenarios in an open economy developing country with an inflation-targeting regime. We use South African macro data to jointly simulate optimal fiscal and monetary policy under varying scenarios for real exchange rate stability with interest rate parity. As real exchange rate stability increases, the model simulates the effects on the trade balance under both a constant and depreciating real exchange rate. We find that short-term cycle stability problems are somewhat mitigated by allowing the real exchange rate to depreciate.     

The economics of markets and platforms

Advances in the study of both markets and platforms contribute to economics. Platforms are typically digital markets, although platforms can designate markets generally. So, the economics of markets and the economics of platforms are one and the same. Platforms show the critical role of intermediaries in endogenous price adjustment and market clearing. The platform model remedies problems with general equilibrium analysis by combining and extending the basic Walrasian and Marshalian market models. The analysis of platforms provides explanations for the bid–ask spread, including market power, search costs, matching costs, adverse selection, and moral hazard. The study of platforms demonstrates the importance of participation and coordination in the formation of markets. The discussion emphasizes that platforms have significant implications for the theory of the firm. The analysis further considers how platforms affect innovation and entrepreneurship.     

Are you really doing good things in your boss's eyes? Interactive effects of employee innovative work behavior and leader–member exchange on supervisory performance ratings

Organizations increasingly depend on employee efforts to innovate. However, the quality of relationships between leaders and employees may affect the recognition that employees receive for their innovative work behaviors. Drawing from a social cognition perspective, we tested a model in which leader–member exchange (LMX) moderates the impact of employee innovative work behavior on supervisory ratings of employee performance. Results from two multisource studies combining self, colleague, and supervisor ratings consistently showed that employees receive more favorable performance ratings by engaging in innovative work behavior when they have high‐quality LMX relationships. Moreover, we found that this interactive relationship was mediated by leader perceptions of innovative employee efforts, providing support for a moderated mediation model. Implications for the literatures on performance appraisal, LMX, and innovation are discussed.     

Monetary policy shocks and exchange rates in Asian countries

In this paper, we empirically investigate the effects of monetary policy shocks on exchange rates in Asian countries. To do so, we use VAR models which impose sign restrictions on impulse responses to identify monetary policy shocks. We find that contractionary monetary policy shocks lead to significant exchange rate appreciation in Malaysia, the People’s Republic of China, and the Republic of Korea. However, in India, Indonesia, the Philippines and Thailand, we find either a significant depreciation or no significant effect. These results suggest that an interest rate increase (or decrease) may not necessarily shield Asian countries from exchange rate depreciation (or appreciation) pressure following a U.S. interest rate increase (or decrease).     

Testing the asymmetric effects of exchange rate pass‐through in BRICS countries: Does the state of the economy matter?

This paper investigates not only the question of whether there is exchange rate pass‐through (ERPT) but also the extent to which the pass‐through is asymmetric or state‐dependent in the BRICS countries. Using monthly data from 1999:M1 to 2019:M12 and non‐linear smooth transition vector autoregressive (STVAR) model, our results provide evidence of period‐specific ERPT between the upper and lower regime periods, governed by the selected transition variables. The results further suggest that the pass‐through of exchange rate is higher when the economy is experiencing large appreciations and expansions as well as large depreciations and recessions. Theimplication for these findings is that ERPT is strongly affected by the state of the economy.     

Double continuation regions for American and Swing options with negative discount rate in Lévy models

In this paper, we study perpetual American call and put options in an exponential Lévy model. We consider a negative effective discount rate that arises in a number of financial applications including stock loans and real options, where the strike price can potentially grow at a higher rate than the original discount factor. We show that in this case a double continuation region arises and we identify the two critical prices. We also generalize this result to multiple stopping problems of Swing type, that is, when successive exercise opportunities are separated by i.i.d. random refraction times. We conduct an extensive numerical analysis for the Black–Scholes model and the jump‐diffusion model with exponentially distributed jumps.     

The impact of (un)conventional expansionary monetary policy on income inequality – lessons from Japan

ABSTRACT

This paper analyzes the impact of conventional and unconventional monetary policy on income inequality in Japan, using hitherto unexplored data from the Japan Household Panel Survey. Empirical evidence shows that expansionary monetary policy in Japan has contributed to diminishing the gender pay gap through an increase in working time of women relative to men, but also to increasing the education pay gap. These effects may have materialized via the aggregate demand channel and the labour productivity channel. In contrast, expansionary monetary policy has had no significant impact on the development of the age pay gap.     

The effectiveness of monetary policy and output fluctuations: An asymmetric analysis

Previous studies have investigated asymmetries in the effects of monetary policy on the real economic activity by using either vector autoregressive (VAR)-based regime-switching models with smooth transition technique or Gaussian functions to parameterise the dynamic effects of structural shocks on the economy. These kinds of VAR models assume asymmetry as a short-run relationship between the series since the long-run neutrality hypothesis of money states that monetary policy can only affect productive capacity of the economy in the short run, but not in the long run. The recent theoretical literature shows that this hypothesis is not quite right. Thus, this paper examines the extent to which monetary policy has a long-run asymmetric effect on output in a number of Organisation for Economic Co-operation and Development countries by using a nonlinear hidden cointegration analysis within a likelihood-based panel framework. The findings indicate that there is a long-run relationship between the real interest rate as an indicator of monetary policy and the growth rate of real output in five countries out of nine under review. This gives support for the view that output has responded asymmetrically to the real interest rate changes. The economic implication of our results is that monetary policy affects positive and negative output fluctuations differently.     

How does the availability and use of flexible leave influence the employer–employee relationship?

In this article, we develop, and empirically test, a moderated mediation model of the effects of flexible leave on employees' organizational attachment. Drawing on a social exchange framework and signaling theory, we explore how the material and non-material nature of exchange between the employer and employee shapes their relationship. First, we show that the relationship between the availability of flexible leave and organizational attachment is shaped by two competing mediators, perceived organizational support (POS) and perceived flexibility stigma. Second, we delineate between availability and use of the policy, to show how the effect of POS is enhanced and perceived flexibility stigma reduced, with use. Our findings demonstrate that the relationship between the availability of flexible leave and organizational attachment is complex, but is enhanced through use of flexible leave. We contribute toward HRM scholarship about the relationship between employees' experience of HR practices and their corresponding impact on employees' subsequent behavior.     

社会互动与家庭金融资产配置

运用中国家庭金融调查(CHFS)数据,研究社会互动与家庭金融资产配置之间的关系。研究发现,适当增强社会互动会促进家庭更多地参与风险金融市场,增加投资风险资产的比例,提高金融资产的分散化程度,优化资产的配置效率。但当社会互动达到一定程度后,过度的社会互动则会抑制家庭参与风险市场,减少风险资产的投资比重,降低金融资产的分散化程度以及资产配置的有效性。因此,家庭需要建立适度而高质量的社会互动,这有助于家庭获得更多的外部资源,缓解信息不对称,降低交易成本,从而优化家庭金融资产配置。