What drives international equity correlations? Volatility or market direction?

We consider impulse response functions to study the impact of both return and volatility on the correlation between international equity markets. Using data on the US (as the reference country), Canada, the UK and France equity indices, empirical evidence shows that without taking into account the effect of return, there is an (asymmetric) effect of volatility on correlation. The volatility seems to have an impact on correlation especially during downturn periods. However, once we introduce the effect of return, the impact of volatility on correlation disappears. These observations suggest that, the relation between volatility and correlation is an association rather than a causality. The strong increase in the correlation is driven by the past of the return and the market direction rather than the volatility.     

Competition among stock exchanges for equity

We consider cross-border competition by stock exchanges for listings from firms that have controlling shareholders who have private benefits. We examine exchanges’ choices of their listing standards and firms’ choices of the exchanges where they cross-list their shares. We show that the share price compensates controlling shareholders for giving up some private benefits and enables firms with growth opportunities to obtain listings on exchanges with different listing standards. In particular, firms with high-growth opportunities tend to obtain listings on stock exchanges with high listing standards. We empirically examine these predictions and find that they are consistent with evidence.     

A proposed configurable approach for recommendation systems via data mining techniques

This study presents a configurable approach for recommendations which determines the suitable recommendation method for each field based on the characteristics of its data, the method includes determining the suitable technique for selecting a representative sample of the provided data. Then selecting the suitable feature weighting measure to provide a correct weight for each feature based on its effect on the recommendations. Finally, selecting the suitable algorithm to provide the required recommendations. The proposed configurable approach could be applied on different domains. The experiments have revealed that the approach is able to provide recommendations with only 0.89 error rate percentage.     

The Dynamic Relationship Between Corruption–Inflation: Evidence From Panel Vector Autoregression

This paper aims to explain the mixed causality nexus between corruption and inflation. For that, we apply a panel vector autoregression model on a large sample of 180 countries over the period 1996–2014. Using two corruption indexes and subsample estimations, results provide evidence that the inflation–corruption nexus is bidirectional. The causal effect is more important from corruption to inflation. Interactions remain significant but heterogeneous across subsamples with different income levels. The corruption effect is persistent only in low–middle income economies and its adverse effect on inflation is weaker in high‐income economies. The two‐way relationship between inflation and corruption reflects the inability to control inflation and the situation of the poverty trap in some countries.     

Access of Tunisian Fruits and Vegetables to the EU Market: Potential Impacts of the Revision of the Entry Price System

Agricultural trade flows worldwide continue to be subject to country restrictions of a tariff and non-tariff nature. This is more so in the case of fruits and vegetables in view of their multiplicity. This hinders the exports of these products, which is an important objective sought by the economy of Tunisia. This article simulates the potential consequences of a possible opening up of the European market borders on fruits and vegetables coming from Tunisia and the rest of the world (ROW), following alternative tariff reduction schemes of the entry price mechanism practiced by the EU, particularly in its ad-valorem duty. The analysis uses a partial equilibrium model that takes into consideration economic aspects related to the exports of these products, regardless of their interactions with other agricultural commodities. The model is composed of a series of behavioral equations describing excess demand and supply of fruits and vegetables of all trading partners and attempts to simulate “international” market equilibrium for these commodities. Tomatoes, oranges and peaches were selected for the analysis and three trading blocs were taken into consideration: The European Union, Tunisia and the ROW. Two policy scenarios were examined (a) reduction by one third of the ad-valorem tariff and (b) its total elimination. The results suggest that the impacts would be concentrated in specific periods, varying with products and regions. In addition to possible trade volumes, Tunisia and other countries may also gain in value from exports. A significant increase in the prices of peaches and tomatoes for Tunisia would result from the liberalization process of the EU market. Volumes and prices of EU domestic supplies would however exhibit moderate reductions.     

Global Liquidity,Current Account Deficit,and Exchange Rate Balance Sheet Effects in Turkey

This study investigates the current account deficit (CAD) of Turkey from the perspective of its capital account. We discuss how global liquidity conditions and monetary policies in Turkey have contributed to higher deficits through real exchange rate appreciations. We analyze the impact and consequences of exchange rate (ER) changes on the investments of non-financial firms. In the case of real ER depreciations, we find that the magnitude of the contractionary effect through balance sheets of firms with dollarized liabilities is significantly higher than the expansionary effect through trade competitiveness. We also analyze the “soft-landing” policies aimed at reducing the CAD in Turkey and estimate the rate of economic growth that must be foregone for a percentage reduction in CAD.