Finance, Investment and Growth: Evidence for Italy

Capolupo, Rosa

doi:10.1111/ecno.12097

Cited by 12 publications

(9 citation statements)

References 133 publications

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“…where MB is understood to be a change of monetary base due to QE; p and q represents lag order of difference of QE (MB) and other selected variable (X), respectively; r represents specified maximum delay; h represents inverse constant of co-integration equation; and κ, ξ, Φ, and Ψ are coefficients. As a final step, we have developed a growth model designed by [36], which uses the two-stage least squares (2SLS) with instrumental variables to control endogeneity. The model is in the shape of…”

Section: Methodsmentioning

confidence: 99%

“…The final impact of QE on the change in aggregated country production was determined by the expected changes in some variables due to APP (based on previous models). These variables included GOV (due to changes in government bond yields), MB volume, and possibly the amount of investments based on the above-mentioned work of [36], where we determine the changes in investment rates based on the model:…”

Section: Methodsmentioning

confidence: 99%

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The Impact of Monetary Policies on the Sustainable Economic and Financial Development in the Euro Area Countries

et al. 2020

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One of the responses of the monetary policies of central banks to the sustainable development on financial markets, which also affected other markets and economic growth, is the role of non-standard monetary policies, referred to as quantitative easing in the form of Asset Purchase Programme. In this paper, the following main research problem was addressed: How can the Asset Purchase Programme help the European Central Bank fulfill its mandate of supervising the financial stability and financial development? Based on this, we formulated the main objective: to identify the impact of monetary policies on the dynamics of financial markets development, labor markets, and the markets for goods and services. As part of the applied methodology, the impact of the quantitative easing on the government bond yields curve was based on an indirect assessment using the seemingly unrelated regression model, considering the use of parameters from the functional benchmark form. Through the vector error correction model, another additional impact of the application of the monetary policy mechanisms on selected indicators of the considered markets was identified. The relationship between financial markets and economic growth was determined on the basis of the two-stage least square model using endogeneity control instruments. Applying the changes identified by the above models allowed us to determine the expected change in the rate of growth of the aggregate output of the euro area countries. Based on our results, we found out that Asset Purchase Programme had an impact on the growth of government bond yields issued by euro area countries, on lowering the risk rate on corporate bond markets, and increasing the nominal value of shares. In addition, growth in inflation and a decline in interest rates were affected. Finally, the European Central Bank (ECB)’s non-standard monetary policies have positively affected and stimulated the labor market and development in goods and services markets, referred to the sustainable financial development.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

The Impact of Monetary Policies on the Sustainable Economic and Financial Development in the Euro Area Countries

et al. 2020

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“…Likewise, although private loans prevent long-term growth, they increase short-term growth, except in countries with low employment rate (Hou & Cheng, 2017). In relation to the first mentioned priority, the level of the presence and importance of banks in the financial infrastructure is a precondition of economic growth only if a large part of funds is directed toward financing companies and investment, and not crediting households and private property (Capolupo, 2017).…”

Section: Overview Of Previous Researchmentioning

confidence: 99%

Using ANFIS in joint dynamics of monetization, financial development, public debt and unemployment analysis

Valčić

Samodol

Valčić

2021

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Purpose: The modern concepts of contemplating joint dynamics of monetary policy effects on economic growth and its indicators require an indirect approach based on empirical research of mainly financial infrastructure, competitiveness of the financial markets and current economic conditions. Meanwhile, the problems of unemployment and the structure of employment within these concepts are most frequently linked with the polarization of the labor market and two important factors, that is, the effects of growth on unemployment and the fact that technological changes affect the changes in salary ranges. Methodology: By using the Adaptive Neuro-Fuzzy Inference System (ANFIS) and the set of data from 1995 to 2016, this paper analyzes these issues through a prism of established balances between the labor and financial markets, i.e., the monetization of economy (M1/GDP), financial development (Loans/GDP) and the share of gross government debt in GDP (government gross debt/GDP). Results: The proposed model suggests that the rate of unemployment is conditioned by the financial cycle and monetary policy (M1/GDP, Loans/GDP), as well as the business cycle and fiscal policy (gross d/BDP) and that a controlled and properly directed level of monetization of the economy (M1/BDP) and financial development measured as Loans/GDP can be “sufficient” for economic growth. Conclusion: Waiting in the “monetary union lobby”, i.e., waiting for the ERM II exchange mechanism can last longer than the set deadlines, leading to the need for Croatian economic policy to optimize monetary and fiscal policy measures in order to increase economic growth and reduce unemployment.

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“…The issue whether more finance implies more growth, however, has not been settled yet. Indeed, many empirical contributions find mixed or negative impact of finance on long-run growth (Stolbov, 2017;Capolupo, 2017;Nyasha and Odhiambo, 2017). In particular, Kaminsky and Reinhart (1999) and Schularick and Taylor (2012) document that an increase of credit is a good predictor of banking crises, which in turn dampen growth.…”

Section: Related Literaturementioning

confidence: 99%

Innovation, finance, and economic growth: an agent-based approach

Fagiolo

Giachini

Roventini

2019

J Econ Interact Coord

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This paper extends the endogenous-growth agent-based model in Fagiolo and Dosi (2003) to study the financegrowth nexus. We explore industries where firms produce a homogeneous good using existing technologies, perform R&D activities to introduce new techniques, and imitate the most productive practices. Unlike the original model, we assume that both exploration and imitation require resources provided by banks, which pool agent savings and finance new projects via loans. We find that banking activity has a positive impact on growth. However, excessive financialization can hamper growth. Indeed , we find a significant and robust inverted-U shaped relation between financial depth and growth. Overall, our results stress the fundamental (and still poorly understood) role played by innovation in the finance-growth nexus.

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Finance, Investment and Growth: Evidence for Italy

Cited by 12 publications

References 133 publications

The Impact of Monetary Policies on the Sustainable Economic and Financial Development in the Euro Area Countries

The Impact of Monetary Policies on the Sustainable Economic and Financial Development in the Euro Area Countries

Using ANFIS in joint dynamics of monetization, financial development, public debt and unemployment analysis

Innovation, finance, and economic growth: an agent-based approach

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