The transmission of international shocks to CIS economies: A global VAR approach

This paper employs a Global Vector Auto Regressive (GVAR) model to study the evolution of the response of the Commonwealth of Independent States (CIS) to foreign output and oil price shocks. During an observation period of two decades, cross-country trade and financial linkages experience notable changes. We find CIS countries to be highly sensitive to global and regional shocks, with that sensitivity increasing after the global financial crisis. CIS countries show the strongest responses to output shocks originating in the US, Russia and within the region itself, but their sensitivity to euro area shocks also increases substantially. Despite growing trade relations with China, the responses of CIS countries to output shocks originating in China are still relatively moderate.     

The transmission of foreign shocks to South Eastern European economies: A Bayesian VAR approach

The paper analyses the macroeconomic effects of foreign shocks in three South-East European (SEE) economies: Croatia, Macedonia and Bulgaria. In this regard, we investigate the transmission of several eurozone shocks (output gap, money market rates and inflation) on various macroeconomic variables in the aforementioned countries (output, inflation, money market rates and budget deficits). We trace the effects of foreign shocks on the basis of impulse response functions obtained from the Bayesian Vector Auto Regressions (VARs) separately for each country. The main findings from our study are: first, economic expansion in the eurozone has strong output and inflation effects on SEE economies, implying some degree of synchronization of business cycles; second, eurozone inflation is instantly and to a great extent transmitted to domestic inflation, suggesting that inflation in the SEE economies is mostly driven by foreign inflation; third, domestic money market rates are not closely linked with eurozone money markets; fourth, monetary policy in the SEE countries does not seem to be responsive to eurozone inflation shocks; and fifth, the fiscal authorities attempt to offset the spillover effects from both economic expansion and monetary tightening in the eurozone.     

Macroeconomic responses of emerging market economies to oil price shocks: An analysis by region and resource profile

We analyze the impact of oil price shocks on the macroeconomic fundamentals in emerging economies in three regions that have different resource endowments. The existing literature on emerging economies remains inconclusive on how regional factors and resource characteristics affect the response of macroeconomic variables to oil price shocks. We show that (1) exports in Europe and Central Asia are driven by oil more than East Asia and the Pacific and that (2) policy makers in East Asia and the Pacific should be concerned about real exchange appreciation following a positive oil shock to mitigate losses in the non-oil export market. Analysis by resource endowment further reveals that, in less-resource-intensive economies, an oil price shock causes large variations in consumption and has a negative and persistent impact on the real gross domestic product (GDP). In mineral-exporting economies, real GDP and interest rates are driven largely by oil price shocks. The response of real GDP in mineral-exporting economies is short lived. In oil-exporting economies, only real GDP has a large variation in response to oil price shocks. Our findings highlight the need for customized policy responses to oil price shocks, depending on resource endowments, as we show that a “one size fits all" policy does not exist.     

Identifying credit demand,financial intermediation,and supply of funds shocks: A structural VAR approach

In this paper, we identify three exogenous shocks to credit market: demand for credit, supply of funds into the financial system, and the willingness to lend of financial institutions (financial intermediation), and also, determine the contribution of these shocks to fluctuations in the credit market and overall economic activity. We estimate a structural vector autoregression model where the three credit shocks are identified with a set of sign restrictions motivated by a simple partial equilibrium model of financial intermediation. We find that the credit demand shock explains significantly the variations in the long-term loan rate proxied by the Moody’s Baa corporate bond yield, while the supply of funds shock contributes to most of the fluctuations in the short-term commercial paper rate. The financial intermediation shock drives most of the fluctuations in the quantity of loans as well as the spread between the Baa and commercial paper rates. Of the credit shocks, we find that the financial intermediation shock has the largest impact on real economic activity. In fact, our analysis implies that the sharp decline in output during the 2007–2009 financial crisis is largely attributable to the financial intermediation shock, along with shocks originating outside of the financial system.     

Unemployment shocks and material deprivation in the European Union: A synthetic control approach

This paper analyzes how material deprivation responds to drastic changes in unemployment levels. We explore unemployment shocks registered in some European Union countries during the so-called Great Recession. To do so, we apply the synthetic control methodology, which has been rarely used in the field of distributive analyses. We use this approach to identify the impact of unemployment shocks on material deprivation and conduct different sensitivity analyses to test the results. We find that contrary to the traditional assumption of the low sensitivity of material deprivation measures to changes in the economic cycle, unemployment shocks have a significant and rapid impact on material deprivation. This conclusion holds even when extending the period of analysis, changing the indicator of material deprivation, or modifying the definition of unemployment shock.     

Oil price shocks and credit spread: Structural effect and dynamic spillover

This study analyzes the heterogeneous response of U.S. credit spread to global oil price shocks by building an extended structural vector autoregressive model (SVAR), which can distinguish among the U.S. and non-US oil supply shocks, aggregated demand shocks and oil market-specific demand shocks behind the real oil prices. Meanwhile, a spillover index model developed by Diebold and Yilmaz (2012) (hereafter D.Y. (2012)) is used to estimate the link between oil price shocks and the U.S. credit spread over time. The results show that (i) the credit spread does not respond to global oil supply shocks and non-US oil supply shocks, but has a negative reaction to the U.S. oil supply shocks, aggregate demand shocks, and oil-market-specific demand shocks. (ii) There exists a close connectedness between oil price shocks and the U.S. credit spread, and the link fluctuates cyclically and relates to the economic cycle and the U.S. shale oil revolution. (iii) The spillover from different oil price shocks to the U.S. credit spread shows significant heterogeneity over time. Our findings suggest that policymakers and investors can better track the U.S. credit spread changes using oil price information.     

Public spending and economies of scale in partial fiscal decentralized governments: The case of Chile

This article evaluates economies of scale in local public spending in Chile, emphasizing the country's geographical features and high fiscal heterogeneity. We leverage balanced panel data for ten years and 307 municipalities in order to estimate the population level at which a reduction in the average cost of local public goods provision occurs and to differentiate between levels of market potential. We follow a theoretical model of cost efficiency that considers spatial interactions and spillover effects among neighboring jurisdictions. Our findings suggest that Chilean municipalities reach an optimum population level at around 700,000 inhabitants, which is high considering that only two cities qualify. When differentiating for levels of economies of scale according to levels of market potential, municipalities with a low potential reach their optimum at around 28,000 inhabitants, those with a medium potential reach it at approximately 124,000, and those with a high potential reach it at approximately 680,000.     

Allowing for uncertainty in exogenous shocks to CGE models: the case of a new renewable energy sector

The paper explores the importance of allowing for uncertainty in the magnitude of exogenous shocks in Computable General Equilibrium (CGE) models. The shock examined is the introduction of a new onshore wind sector in North East Scotland. A simple analytical model is developed to show how, a priori, the size of the new sector (the model shock) is uncertain and asymmetrically distributed as a result of spatial correlation in costs and returns across potential development locations. The importance of allowing for this uncertainty is tested by comparing the results from a CGE model where the sector size is assumed known with certainty to those from a model where the sector size is a random variable with an asymmetric distribution. The results show the extent to which allowing for uncertainty can influence the magnitude of estimated impacts with some variables more sensitive to the uncertainty than others.     

Oil structural shocks,bank-level characteristics,and systemic risk: Evidence from dual banking systems

By performing a structural VAR analysis on oil price shocks, we provide an evidence on how the origins of oil price shocks impact the risk level of banks in oil-exporting countries and whether bank-level characteristics can influence the sensitivity of risk to oil shocks. When conducting panel regression analysis, we document the following findings. First, not all shocks have the same effect on bank risk. Due to oil supply shocks, the increase in oil price raises bank risk, whereas the similar increase in price due to economic expansion or oil-market specific demand reduces that risk. Second, the business model (whether the bank is Islamic or conventional), size, income diversification, profitability, and financial leverage influence the bank risk exposure to oil shocks differently. Third, the two major recent crises (global financial crises and COVID-19 pandemic) magnified bank risk exposure to oil supply shocks and speculative oil demand shocks. Overall, the structural oil shocks explain a large fraction of the variation in financial stability in GCC countries.     

How to respond to competitors' green success for improving performance: The moderating role of organizational ambidexterity

With increasing environmental competitions between companies, there is a pressing need to explore how the environmental pressures from rivals influence focal firms' actions and the subsequent performance consequences. On the basis of social contagion theory and upper echelons theory, we examine whether firms respond to competitors' green success through green supplier integration, which further improves firm performance, and the moderating effect of organizational ambidexterity. The research explores hypothesized relationships adopting hierarchical regression analysis and bootstrapping method by collecting survey data from 206 Chinese manufacturers. Our findings suggest that competitors' green success positively influences green supplier integration. Green supplier integration mediates the impacts of competitors' green success on financial and environmental performance. In addition, the combined dimension of organizational ambidexterity plays a positive moderating role in the impacts of green supplier integration on financial and environmental performance. This study expands previous literature and managers' practices on green supply chain management.     

预算机会主义、预算治理构造和预算审计——国家审计嵌入公共预算的理论架构

各国的国家审计在公共预算中的作用呈现不同特色.沿着预算机会主义、预算治理构造到预算审计这个逻辑路径,建立一个关于国家审计在公共预算中作用的理论架构,并以美国和中国作为案例来验证这个理论构架,具有重要意义.各个国家针对预算机会主义会有一个由预算文化、预算制衡和预算问责组成的预算治理构造,预算审计属于预算问责,预算审计如何嵌入预算治理构造的决定因素是剩余预算机会主义,剩余机会主义决定预算审计体制、预算审计重点和预算审计模式.     

Shocks and final straws: Using exit‐interview data to examine the unfolding model's decision paths

The unfolding model emphasizes the role of shocks (jarring events that initiate exit cognitions) in the turnover process. In contrast to earlier survey‐based research, we used exit interviews to classify organizational leavers along the model's paths. The data provide support for the model but highlight several aspects of shocks not addressed by previous research. Employees on the same path may experience distinctly different shock subgroups (e.g., work or nonwork), some employees require shock combinations (e.g., push and pull shocks) to motivate leaving, and some dissatisfied employees experience shock‐like events (final straws) that confirm previous exit cognitions rather than initiate them. The research demonstrates how organizations can use exit interviews to better understand their employee exit patterns. © 2012 Wiley Periodicals, Inc.     

Us Debt and Deficits: Time to Reverse the Trend

This article provides a primer on budget deficits from the creation of the federal government. Today federal government spending is 24% of GDP (compared with its historical average of 8.8%), fuelling debt of historic levels. The only effective way to reduce debt levels is to cut entitlement programmes and then set a tax rate sufficient, over the course of the business cycle, to fund government spending.     

“金砖国家”预算透明度的比较与启示 ——兼论预算透明度提升的动力机制

公开透明是现代预算的基本特征,也是各国财政管理的重要准则.“金砖国家”作为新兴经济体的代表,在预算透明方面表现出诸多共性和差异.在“金砖国家”预算透明问题总体考察的基础上,系统分析这些国家提升预算透明度的动力机制,对于中国预算透明度改进的路径选择,具有一定的启示价值.     

Dividends and leverage: How to optimally exploit a non-renewable investment

In this paper we model the situation where a non-renewable investment is given, for instance a resource reservoir, and show how to optimally trade-off between dividends and leverage, in order to maximize a performance indicator for shareholders, up to the bankruptcy time. We then study the way market risk (the volatility of the market price of the resource) impacts the optimal policies and the default risk of the company. The moments when the policies are rebalanced are analyzed and we give a measure of the agency costs which appear between the shareholders and the debt-holders.     

Psychological barriers to adjustment and how they affect coping strategies: Western business expatriates in China

Business expatriates currently assigned to the Chinese mainland, mainly from the USA, France, Germany, Australia and Great Britain participated in a survey examining two sets of psychological barriers to adjustment and their association with problem-focused and symptom-focused coping strategies. As presumed, there is a negative relationship between expatriates' perceived inability to adjust and problem-focused coping, while this psychological barrier had no significant association with symptom-focused coping. Unwillingness to adjust has a negative relationship with only one of the problem-focused coping variables, social involvement with host country nationals, whereas the same psychological barrier correlated only negatively with parent-country escapism of the symptom-focused strategies. Implications for Western business expatriates on the Chinese mainland and for their assigning companies are discussed as well as possible avenues for further research.     

How to understand, and deal with dictatorship: an economist's view

This paper explains in simple English some of the main ideas about autocracy first developed elsewhere (e.g., in my book, The Political Economy of Dictatorship (Cambridge University Press, 1998). I use rational choice theory to explain the behavior of dictatorships and develop policy toward them. Issues discussed in this paper include: How do successful regimes stay in power? What determines the repressiveness of a regime? Which type of regime redistributes more, dictatorship or democracy? Can dictatorships be good for economic growth and efficiency? The starting point of my analysis is The Dictator's Dilemma-the insecurity every dictator necessarily experiences about how much support he really has. Because of this, the dictator finds that the tool of repression is not enough to maintain his regime, and successful dictators typically rule with the loyal support of at least some groups of subjects (while repressing others). The levels of repression and support and the nature of the groups that give their support (labor, business, ethnic group, etc.) determine the character of the dictatorship. Among other results discussed, I show that some types of dictators – tinpots and timocrats – respond to an improvement in economic performance by lowering repression, while others – totalitarians and tyrants – respond by raising it. Finally I discuss optimal policy by the democracies toward dictatorships and I show that a single standard-aid or trade with a progressively tightening human rights constraint- is desirable if aid or trade with dictatorships of any type is to lower, not raise, repression. Submitted: February 1999 / Accepted: 10 November 1999     

How to identify leadership potential: Development and testing of a consensus model

Building on two studies, the current article responds to urgent calls in the literature for more empirical research on how to identify leadership potential. Based on an extensive review of the 1986–2010 literature, and applying a combination of qualitative and quantitative techniques, we developed a model of leadership potential consisting of four quadrants: Analytical skills (containing the factors Intellectual curiosity, Strategic insight, Decision making, and Problem solving); Learning agility (containing the factors Willingness to learn, Emotional intelligence, and Adaptability); Drive (containing the factors Results orientation, Perseverance, and Dedication); and Emergent leadership (containing the factors Motivation to lead, Self‐promotion, and Stakeholder sensitivity). Notably, the developed model steers clear from some of the typical issues that tend to hinder valid assessments of leadership potential (i.e., the confound between performance and potential, as well as that between leadership potential and successful, mature leadership). Furthermore, high consensus was found between top managers, line managers, and HR managers about the practical relevance of the proposed model. The article concludes with some specific future avenues for research and practice. © 2012 Wiley Periodicals, Inc.     

The fiscal and monetary response to COVID‐19: What the Great Depression has – and hasn't – taught us

Although some regard the New Deal of the 1930s as exemplifying an aggressive fiscal and monetary response to a severe economic crisis, the US fiscal and monetary policy responses to the COVID‐19 crisis have actually been far more substantial – and, so far, much more effective in reviving aggregate spending. Although many fear that these responses, and the large‐scale increase in bank reserves especially, must eventually cause unwanted inflation, the concurrent sharp decline in money's velocity has thus far more than offset any inflationary effects of money growth, while forward bond prices reflect a general belief that inflation will remain below 2 per cent for at least another decade. Notwithstanding the growth of the Fed's balance sheet, Fed authorities can always check inflation by sufficiently raising the interest return on bank reserves. Nonetheless, recent developments have heightened the risk of ‘fiscal dominance’ of monetary policy at some point in the future.     

中国企业的服务意识：怎样从觉醒、增强到优良

服务意识淡漠是制约中国企业成为优秀企业和走向国际化的"瓶颈"之一.中国改革开放20多年来,企业的服务意识已从觉醒到不断增强,但远未达到优良的程度.中国企业要达到优良的服务质量,一是要克服服务意识口头化、服务质量单一化、服务观念狭隘化的误区;二是要重视服务制度建设与服务文化建设;三是要重视服务现代化手段的应用与创新.