The drivers of economic growth and development are among the most important issues explored by economic theory. Sustainability of economic development was previously linked by various economic schools of thought to natural resources (agriculture, land, minerals, metals etc.), labor force (including skills, productivity, and education), entrepreneurship or technology and innovation. Capital was later introduced by classical economic theory as the key element. Without significant capital accumulation, all other production factors remain idle. The value added of the production process is a result of the existence, the accessibility and the cost of capital. Therefore, the development and the sophistication of the financial sector has gradually become very important for any nation interested in sustainable growth. This paper investigates the impact of financial sector development, sophistication and performance on economic growth based on a panel regression methodology. We found statistically significant results that confirm the importance of this connection and that are very consistent with economic theory and previous relevant articles and studies.
The current economic crisis emerged from a particular financial crisis that started in the United States and being rapidly propagated all over the world. It did not affect a limited region or a limited economic sector. This crisis induced significant changes in all management areas, including financial management. This study is focused on financing strategies adopted by shipping companies during the crisis, analyzing relevant factors for a specific issue-the capital structure. The research methodology proposed for this analysis on relevant factors that could explain the capital structure of shipping is OLS regression applied on selected variables derived from the financial statements of the major shipping companies. The dependent variables reflecting capital structure are book value to total liabilities ratio and book value to total debt ratio. The explanatory variables are derived from the theory of capital structure. This study empirically illustrates the relevance of the capital structure theory for the studied economic sector and is a useful tool for the shipping companies, providing relevant information about the optimal capital structure adopted by shipping companies and about factors that influence this decision during a crisis period.
World economy is frequently affected by fluctuations that occur recurrently with a certain periodicity. The predictability of economic fluctuations is low. Frequency and magnitude of cycles is generally reduced. Economy cycles belong to the economy’s DNA. It is measured by different indicators, but the most important is GDP. There are four types of economic cycles: Kitchin (Stocks), Juglar (Investment), Kuznets (Infrastructure), Kondratiev (Technological Innovation). Right now, science and technology are going through major changes that lead to an economic crisis of the Kondratiev model. Fiscal and monetary policy can alleviate fluctuations. Theories explaining economic cycles: overinvestment (misallocation of rare resources), Keynesiana (insufficient aggregate demand), monetarist (lack of monetary discipline), real business cycle (aggregate supply in change), neo Keynesiana (market imperfections), consensus (all factors considered). The financial cycle has been little considered so far. The financial cycle greatly influences the economic cycle, finances allocate resources and creates purchasing power. The financial cycle has a different structure than the economic one. It can use fiscal and monetary policies to direct it. The only paradigm that links the economic and financial cycles is the Austrian economic paradigm. In practice and current economic theory, there is a desire for a coincidence in time between the phases of the economic cycles of the various state entities of the United States and a convergence of evolution towards the same qualitative and quantitative characteristics. This implies an identity of cultural, historical, economic, political, and psychological evolution of the EU, which can not be achieved even between close regions of the same national state. The lack of barriers to the circulation of economic information (goods, services) between regions will lead to an approximate coincidence of economic evolution, but starting from the psychic structure of the inhabitants of a region, the cultural, religious and cultural heritage passing through the capital, the economic zones differ and to force them in different directions will lead to unnecessary fragmentation lines. The anticipated outcome of the study: It is desirable to leave economic areas to evolve in their own terms rather than leveling and uniforming them by economic manipulation techniques. It is preferable to use the method of scientific abstraction and deductive apriorism during the study.
The participation of central banks in the fight against climate change has recently been advanced in several academic articles and policy papers. Since the emerging consensus is that climate change poses financial risks, the envisaged green central banking has a responsibility to address environmental sustainability as a means of promoting financial stability—an increasingly accepted goal of central banks in the post-financial crisis world. Thus far, the pro side of the argument is well represented in the literature, though often the benefits remain implicit: with the help of central banks via monetary and macroprudential policies, a smooth transition to a low-carbon economy would be somehow beneficial to all of us. With this article, we aim to add to this literature by looking at the costs and trade-offs of this course of action in light of the observation that the con side of the proposal has been only marginally addressed. We put forward a framework for the analysis of the costs and trade-offs of green central banking and exemplify the applicability of this framework by studying three cases of central banks for which the transition to green operation has been advanced. We find evidence that if costs and trade-offs are taken into account, the case in favor of greening central banks becomes less straightforward than is currently conveyed in the literature.
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