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Implementing Monetary Policy in Hungary Under Flexible Inflation TargetingFr

From a paper by Istvan Abel & Pierre L. Siklos:

“Stabilising properties have always been an important aspect of monetary policy implementation, albeit with due recognition of the economic environment. We develop a simple theoretical model to evaluate the main elements in the choice of policy strategy aimed at inflation control. While the analytical framework is useful to assess different monetary policy frameworks, our focus is the flexible inflation targeting framework that provides a role for exchange rate fluctuations. Empirical evidence, relying on Taylor rules, suggests that monetary policy has been practiced with considerable flexibility in Hungary and has contributed to business cycle stabilisation.”

From a paper by Istvan Abel & Pierre L. Siklos:

“Stabilising properties have always been an important aspect of monetary policy implementation, albeit with due recognition of the economic environment. We develop a simple theoretical model to evaluate the main elements in the choice of policy strategy aimed at inflation control. While the analytical framework is useful to assess different monetary policy frameworks, our focus is the flexible inflation targeting framework that provides a role for exchange rate fluctuations.

Read the full article…

Posted by at 10:10 AM

Labels: Inclusive Growth

Asymmetric effect of Oil Prices on Inflation in South Africa: An Econometric Approach

From a paper by Hlalefang Khobai, Ponalo Xinishe, Mpho Lenoke:

“The surge in oil price levels remains a world-wide concern, more specifically to oil-importing countries such as South Africa. The dependence on crude oil from these net exporters makes the country vulnerable to external shocks, such as geopolitics. These effects have a pass-through effect to domestic headline inflation, induced by imported inflation. The general objective of the study is to investigate the asymmetric effect that the price of oil has on inflation in South Africa. To achieve these objectives, the study applied the Nonlinear Autoregressive Distributed Lags (NARDL), Error Correction Model (ECM), Pairwise Granger Causality, Impulse Response Function and Variance Decomposition. The bounds test of cointegration revealed that cointegration exists between the observed variables of the study. After estimating the error correction model, the study found that in the short-run, the relationship between a positive change in oil price and inflation is negative and significant. However, the relationship between a negative change in oil price and inflation in the short-run is now positive and significant. Therefore, the correction of disequilibrium will take place in the long run by means of short-run adjustments, with the speed of 1.71%. Pairwise Granger Causality test revealed that a unidirectional relationship occurs from oil prices to inflation. The Variance Decomposition results show that a shock to oil price accounts for a greater percentage of fluctuation in inflation. The Impulse Response Function reveals that within a 10-year period there is a positive response of inflation to oil prices, specifically from year three to year five. The study recommends the South African oil import diversification policy to source oil from multiple exporting countries to ensure steady supply and reduce dependence on any single source. This strategy improves security and reduces vulnerability to oil price shocks and supply disruptions caused by various factors.”

From a paper by Hlalefang Khobai, Ponalo Xinishe, Mpho Lenoke:

“The surge in oil price levels remains a world-wide concern, more specifically to oil-importing countries such as South Africa. The dependence on crude oil from these net exporters makes the country vulnerable to external shocks, such as geopolitics. These effects have a pass-through effect to domestic headline inflation, induced by imported inflation. The general objective of the study is to investigate the asymmetric effect that the price of oil has on inflation in South Africa.

Read the full article…

Posted by at 7:20 AM

Labels: Energy & Climate Change

Inclusive growth: Gender equality and economic development in Bangladesh’s RMG sector – why aren’t there enough women in leadership?

From Business Standard:

Flip through any magazine or coverage of Bangladesh’s RMG sector, and you’ll inevitably spot a smiling woman—representing the heart and soul of the industry. Yet, the lived experiences of these women tell a different story—one where their representation on factory floors and in leadership roles is steadily shrinking.

The ready-made garments (RMG) sector has been the driving force behind Bangladesh’s economic rise, propelling the country to become the world’s second-largest garment exporter. Women have been at the heart of this success, making up 80% of the workforce in the 1980s. Fast forward to today, and that figure has dropped to just 53.65% (Jenns, 2023). The situation is even more concerning in leadership, with only 9% of managerial roles held by women between 2010 and 2018 (Uddin, 2021).

This raises a crucial question: Why, after contributing so much to the sector’s growth, are women still not moving up the ladder? Societal norms, family expectations, and organizational barriers have created a glass ceiling, preventing women from reaching their full potential. To truly unlock the sector’s power, we need to break down these barriers and open the door for women to step into leadership roles.”

Continue reading here.

From Business Standard:

“Flip through any magazine or coverage of Bangladesh’s RMG sector, and you’ll inevitably spot a smiling woman—representing the heart and soul of the industry. Yet, the lived experiences of these women tell a different story—one where their representation on factory floors and in leadership roles is steadily shrinking.

The ready-made garments (RMG) sector has been the driving force behind Bangladesh’s economic rise, propelling the country to become the world’s second-largest garment exporter.

Read the full article…

Posted by at 9:47 AM

Labels: Inclusive Growth

The macroeconomic effects of carbon pricing at a subnational level: evidence from California’s cap and trade

From a paper by Baioni Tomás:

“This paper addresses the macroeconomic effects of subnational carbon pricing initiatives, fo- cusing on California’s cap and trade. Using high-frequency data and regulatory news, I construct a carbon policy surprise series to understand the aggregate effects of a carbon policy shock using impulse response functions from a SVAR model. Results on a monthly basis suggest that a shock tightening the carbon pricing regime leads to an immediate significant reduction in carbon emis- sions by 0.05%, albeit this reduction in emissions comes at the expense of an immediate temporary fall in economic activity by 0.01%. On the other hand, results suggest that increasing carbon prices do not transmit to either household energy prices or consumer prices. Likewise, estimations suggest that a positive shock to carbon prices decreases the monetary policy rate and increases unemploy- ment, albeit not statistically significant at the 10%. I resort to local projections as robustness checks and find that the prior conclusions hold, i.e., that the California’s cap and trade initiative has significant macroeconomic effects. I check as well my prior results on a weekly basis and find strong support of my initial results: higher carbon prices decrease California’s economic activity by 0.5% after 17 weeks (4 months). Similar content being viewed by others”

From a paper by Baioni Tomás:

“This paper addresses the macroeconomic effects of subnational carbon pricing initiatives, fo- cusing on California’s cap and trade. Using high-frequency data and regulatory news, I construct a carbon policy surprise series to understand the aggregate effects of a carbon policy shock using impulse response functions from a SVAR model. Results on a monthly basis suggest that a shock tightening the carbon pricing regime leads to an immediate significant reduction in carbon emis- sions by 0.05%,

Read the full article…

Posted by at 9:45 AM

Labels: Energy & Climate Change

The rise and fall of inflation in the Euro Area (2021-2024): A heterodox perspective

From a paper by Vicente Ferreira, Alexandre Abreu, and Francisco Louçã:

“Over the period of 2021–2024, inflation has resurged and then retreated in most industrialized countries. Economists were divided into two main camps: team transitory, which argued that inflationary pressures were primarily cost-push and would tend to fade away as supply disruptions eased, and team permanent, which viewed it as a predominantly demand-pull process and warned about the risks of persistent second-round effects associated with an overheated labor market. This paper covers this theoretical debate on the origins of inflation and contrasts it to the available empirical evidence for the Euro Area, laying out several inconsistencies in the New Keynesian argument proposed by team permanent. Since that was, nevertheless, the predominant interpretation among central bankers, including the ECB, this paper also discusses the impacts of monetary policy decisions informed by the New Keynesian view, arguing that there is good reason to believe that it has had regressive consequences in terms of the functional distribution of income as well as differentiated impacts across Euro Area core and periphery countries.”

From a paper by Vicente Ferreira, Alexandre Abreu, and Francisco Louçã:

“Over the period of 2021–2024, inflation has resurged and then retreated in most industrialized countries. Economists were divided into two main camps: team transitory, which argued that inflationary pressures were primarily cost-push and would tend to fade away as supply disruptions eased, and team permanent, which viewed it as a predominantly demand-pull process and warned about the risks of persistent second-round effects associated with an overheated labor market.

Read the full article…

Posted by at 9:44 AM

Labels: Inclusive Growth

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