Financial Development, Integration and Stability

Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

doi:10.4337/9781847203038

Cited by 13 publications

(6 citation statements)

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“…Thus, the interdependencies of markets provide the crux to x-ray the contagion nature of shocks propagation inherent in the world economic system (Gimet, 2009). One form of financial integration is the liberalization of capital flows (Liebscher et al 2006). Financial openness can be measured from three positions namely; de-jure, de-facto, and hybrid indicators (Quinn, Schindler, and Toyoda, 2011).…”

Section: Empirical Reviewmentioning

confidence: 99%

The Implication of Financial Derivable from Abroad on West African Monetary Zone’s ECO Currency

Amaefule

Ibekwe

2021

EUR J SUSTAIN DEV RE

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This study aims to determine the extent to which the West African Monetary Zone (WAMZ) can fulfill the Expost conditions for achieving convergence. This study, therefore, evaluates the pattern of shock symmetry and convergence in connection to WAMZ's Pillar III policy strategy. Time series data sourced from the World Bank for the period covering 1970 to 2017 were utilized for this study. Two basic econometric tools such as Impulse Response Function (IRF) and the ADF convergence test were employed to determine whether WAMZ can achieve selected Macroeconomic Convergence Criteria (MCC) in the long-run. From the study, we found that WAMZ is not a full potential candidate for ECO Economic and Monetary Union (EMU) due to the inability of the available results to show overall shock asymmetry in the entire models studied. Also, the study found that WAMZ could attain convergence in its inflation targets, but could not attain convergence in its GDP targets. Thus the results imply that in the long-run, WAMZ does not practically possess the attribute to achieve its MCC. Hence, it is imperative that for the adoption of the ECO currency, WAMZ should design and implement a short-run adjustment method to manage country-wise shocks and implement structural buffers to guard the WAMZ economies against structural shocks. Hence, we recommend that ECO currency be a reserve currency managed by the West African Currency Board (WACB) while the EMU member maintains its domestic currency. WAMZ is basically a quasi EMU.

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Section: Empirical Reviewmentioning

confidence: 99%

The Implication of Financial Derivable from Abroad on West African Monetary Zone’s ECO Currency

Amaefule

Ibekwe

2021

EUR J SUSTAIN DEV RE

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“…Following Dutt (1992), capacity utilisation will be calculated as the ratio of Y/K. Financial development will be defined via the following indicators: 1) stock market turnover ratio (SMTR), calculated as the total value of shares traded during the period divided by average market capitalisation, measuring the concentration, volatility, size and impacts upon the real sector (El-Wassal, 2005), 2) monetisation ratio (MR) calculated as M2/Y, measuring the depth of money supply within the economy and 3) domestic credit (DC) calculated as private sector credit, expressed as DC/Y, often incorporated to analyse the 'backflow of financial resources to corporate sectors' (Liebscher et al, 2006). Fiscal policy is defined as government expenditure (GE), expressed as GE/Y.…”

Section: The Empirical Modelmentioning

confidence: 99%

Productivity Growth Recovery Mechanisms: An ARDL Approach Lessons from the United States, Japan and South Korea

Koczyrkewycz¹,

Chaiechi²,

Beg³

2021

Bulletin of Applied Economics

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Productivity growth is an essential ingredient for achieving long-term economic growth and sustainable development. In the absence of such growth, economic growth is not achievable. Accordingly, this paper examines economic resilience through multiple productivity channels within the United States, Japan and South Korea. Adopting a Kaleckian post-Keynesian approach, productivity growth is constructed as a function of investment, capacity utilisation, indicators of financial development, and an indicator of fiscal policy. Utilising annual historical data from 1980-2019, this paper adopts Autoregressive Distributed Lag (ARDL) models, Vector Autoregressive-based Impulse Response Functions (IRF) and Variance Decompositions (VD) to examine the resilience of productivity growth through the speeds of adjustment after an external shock. Results show that long and short-run unidirectional causality between productivity growth and the explanatory variables exists amongst all economies through the errorcorrection terms (ECT) and ARDL models. When imposing a simulated one-time S.D. shock upon the explanatory variables, differing speeds of adjustment and recovery processes in the long-run are present. As such, the strength of causal relationships amongst productivity growth and the explanatory variables ultimately affects speeds of adjustment and hence recovery.

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“…These forms do not need to be linked and are not necessarily incremental steps in the integration process. According to Liebscher et al (2007), integration can take many forms and have different aspects such as: (1) Monetary union through currency union or dollarization; (2) Liberalization of capital movement; (3) Outsourcing financial services or infrastructure abroad; (4) International entry of financial institutions; (5) Regulatory convergence and harmonization. Recently, many countries have been working towards adhering to EU standards in order to improve political stability and economic growth.…”

Section: Introductionmentioning

confidence: 99%

The impact of regulatory quality on deepens level of financial integration: Evidence from the European Union countries (NMS-10)

Ahmić

Isović

2023

Economics

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This study seeks to empirically explore whether the regulatory quality in the NMS-10 impacts deepening international financial integration and whether the strengthening of regulatory quality for NMS-10 has a causal effect on the level of international financial integration (IFI) in NMS-10. The study covers NMS-10 between 1995 and 2020. The estimation of parameters was made with descriptive statistics, the Breusch-Pagan test, the Pesaran test, the Granger causality test, and OLS regression to analyze the impact of REQ on IFI. The findings of the study reveal that regulatory quality has a statistically significant effect in deepening the process of financial integration for both periods, in the pre-accession and post-accession EU process. In addition, the results demonstrate that the regulatory quality of NMS-10 provides sound laws and policies that support the business environment, encourage cross-bordering financial transactions. Moreover, the results of the Granger causality test show that the level of global financial integration is causally impacted by the improvement in NMS-10 regulatory quality. This indicates that regulatory effectiveness might predicts international financial integration.

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Financial Development, Integration and Stability

Cited by 13 publications

References 0 publications

The Implication of Financial Derivable from Abroad on West African Monetary Zone’s ECO Currency

The Implication of Financial Derivable from Abroad on West African Monetary Zone’s ECO Currency

Productivity Growth Recovery Mechanisms: An ARDL Approach Lessons from the United States, Japan and South Korea

The impact of regulatory quality on deepens level of financial integration: Evidence from the European Union countries (NMS-10)

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