Global vs Local Ethics of Official Statistics
The paper explores the philosophical underpinnings of the ethics of official statistics and provides a basic conceptual classification. It distinguishes between universal ethics, supranational codifications, and national/local ethics, and examines these distinctions through various philosophical perspectives. The paper emphasizes that ethics of official statistics can only be fully understood in the context of their foundational objective(s), whether universal or alternative. It proposes that the process of discovering ethics involves critique and reformulation to address deficiencies, given that local approaches often lead to statistical quality that is inconsistent with the demands of globalization and integration for highly reliable and internationally comparable statistics produced as a global public good.
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Global Imbalances After COVID and WarGlobal imbalances as reflected by current account balance of payments deficits in some countries and surpluses in others increased sharply during 2019–23. Conventional balance of payments theory that emphasizes aggregate demand and factors affecting expenditure and the monetary sector do not provide a complete explanation of the imbalances. Supply side factors associated with the COVID 19 pandemic and the Russia/Ukraine war played a key role through their impact on commodity prices and transportation costs. A full understanding of global imbalances requires political factors and natural events to be incorporated. There is a need to look, beneath, behind and beyond the economics. Projecting future imbalances is difficult since many of the determining factors carry a high degree of uncertainty and interact with one another. In principle, greater international macroeconomic policy coordination could help to reduce future imbalances, but political economy factors make this difficult to achieve.
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The Political Economy of ChoiceThe article aims to explore the relationship between the misery index and voter decisions, positioning the misery index as a tool to assess macroeconomic policy effectiveness. It employs analysis and synthesis for voter behaviour patterns, the index method for calculating the misery index, and comparison methods to link macroeconomic processes with voter behaviour. Macroeconomic indicators significantly influence voter decisions, demonstrating the misery index's utility in evaluating macroeconomic indicators. The misery index for 2019–2022 shows Venezuela, Zimbabwe, and Sudan in the worst positions, while Ireland, China, Switzerland, and Japan are the best. The coronavirus pandemic and the Russian-Ukrainian war exacerbated the misery index, causing economic recessions and inflationary pressures globally, particularly in Eastern and Central Europe.
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A Note on the Lódz Ghetto HyperinflationPrimary data reveals one new instance of hyperinflation occurring in the Lódz Ghetto in 1944. Two instances of hyperinflation in the Lódz Ghetto occurred during World War II; in March of 1942 and February of 1944, monthly inflation in the ghetto reached 232.42% and 321.16%, respectively. The 1944 episode of hyperinflation is the 67th episode in world history and the sixth instance of hyperinflation documented in Poland, making Poland the country with the most hyperinflations in world history. Changes in corporate bond yields explain 7 of the past 10 major bull and bear phases of the stock market. One of these three exceptions is the current bull market, which depends on the rise in household liquidity.
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Premature DeindustrializationThe article investigates premature deindustrialization in 13 countries in the Middle East and North African region from 2007 to 2019. Premature deindustrialization occurs when countries experience a decline in manufacturing employment/output before reaching advanced income levels, as coined by Rodrick in 2016. The study uses a System Generalized Method of Moments (GMM) analysis and finds that higher population and higher per capita GDP influence industrialization patterns. To prevent premature deindustrialization, MENA region governments need to address institutional weaknesses and structural challenges through appropriate policies.
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The Shadow Economy and Its DeterminantsThe shadow economy includes economic activities that are not recognized and unregulated by public authorities. These activities cause significant challenges for policymakers by reducing tax revenue and weakening regulatory frameworks. Understanding the factors that influence the shadow economy is crucial for developing effective policies to mitigate its adverse effects. This study aims to compile, explore, and analyze previous studies on the shadow economy and identify its determinants. This study uses the PRISMA methodology (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) to conduct a systematic literature review on the shadow economy. 25 articles that fit these objectives were selected and analyzed. The study results indicate that eight determinants affect the shadow economy: corruption, Institutional Quality, Economic Development, Taxes, Government, Financial Development, Globalization, and Industrial Development. To tackle the shadow economy, a comprehensive approach that includes institutional improvements, fair tax policies, enhanced transparency, strong law enforcement, and inclusive economic development is necessary. Further research and in-depth analysis of these factors can help develop more effective strategies to reduce the shadow economy's adverse impacts.
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The International Liquidity Concept and Developing Economies’ Foreign Exchange MarketsThe concept is introduced and its importance for macroeconomic analysis in developing and emerging economies is highlighted. International liquidity is defined as the sum of: i) Central bank’s gross international reserves, ii) Resident banks’ international liquid assets, iii) International currency notes held by resident agents. The paper discusses the unique characteristics of foreign exchange markets in developing and emerging economies, emphasizing their local nature. It is argued that the exchange rate in these economies is determined by the country’s international liquidity market.
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The Components of the International Property Rights Index that Matter for Economic GrowthThe International Property Rights Index (IPRI) is considered a credible source of information for the public and policymakers, focusing on its components’ impact on economic growth. The study analysed the GDP per capita of 13 EU countries over 13 years (2009–2021) to assess the significance of IPRI components on economic growth. The research utilized correlation and regression analyses, particularly the Hausman-Taylor method, to evaluate the relationship between IPRI components and economic growth. The study found a positive correlation between IPRI and GDP per capita, highlighting the crucial role of IPRI components in driving economic growth.
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How Share Prices FluctuateThe stationarity of the stock market’s value (q) and the mean reversion of its real return are its most obvious and exceptional characteristics. • These characteristics allow the cost of capital to be calculated, and the results are incompatible with the consensus growth model. The Stock Market Model (SMM) includes these features. It is testable and robust when tested; it is therefore the model used in this paper. The ex-post identity of investment and savings requires an ex post identity of the flow of savings available to finance the equity and debt proportions of new investment. This identity pulls q to fair value. Only temporary fluctuations in q around fair value are possible because net issues of equity will either depress net worth, relative to share prices, if q is above fair value, or boost it, if it is below. Changes in nominal corporate bond yields, profit margins and household liquidity cause fluctuations in q. Sustained misevaluations of the stock market require continuing changes in at least one of these three variables. Changes in these variables, which depend partly on endogenous political decisions, cannot be predicted, but past changes in q can be explained by their past fluctuations. The current prolonged excessive level of q has been driven by a rise in household liquidity, in response to the current secular liquidity trap. A similar experience in the 1930s ended in 1937 with the second worst recession in US history. Changes in corporate bond yields explain 7 of the past 10 major bull and bear phases of the stock market. One of these three exceptions is the current bull market, which depends on the rise in household liquidity.
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Predicting Probability of Soft-Landing, Stagflation and Monetary Policy PivotsThe study introduces a new framework to predict the probability of stagflation, soft-landing, and recession. It identifies 13 episodes each of stagflation and soft-landings in the U.S. economy post-1950, and notes 11 recessions as suggested by the NBER. An ordered probit framework is used to generate one-year-out probabilities for stagflation, recession, and soft-landing, with accurate predictions in the post-1980 period. A new method identifies 26 episodes of monetary policy pivots post-1990, and a probit model predicts the six-month-out probability of such pivots. The study presents a framework to predict the fed funds rate up to four FOMC meetings out, comparing its accuracy with FOMC and Blue-Chip forecasts.
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The Impact of Brexit on International Trade and InvestmentThe study examines the historical economic trends of Great Britain, particularly the impact of the two world wars and the changes in trade dynamics before and after joining the European Economic Partnership. Following the Brexit referendum (2016–2019), trade between the UK and the EU increased from £570 billion to £678 billion. The Agreement on Trade and Cooperation led to new trade barriers but also increased exports of certain goods by 10-30%. There has been a notable shift from goods to services in exports to EU countries like France, Germany, and the Netherlands. In 2023, service exports grew significantly, while goods exports saw minimal growth or decline. The investment market experienced a significant drop in capital investments from 2017-2020, followed by a recovery. Business investment growth returned to pre-Brexit levels by 2022-2023, despite initial damage to investment confidence.
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Global Examination of Corporate Taxation and Economic ActivityIn virtually every country of the world, taxation is a major issue. Taxes of course are essential for governments to operate. Yet, if excessive, taxation can be onerous for taxpayers to accumulate the funds for payment. This study provides a full-scale global examination of the relationship of corporate income tax and economic activity, as measured by GDP per capita. In addition, the study examines the relationship of corporate income tax to public debt as a percentage of GDP. Findings indicate that lower corporate income tax rates are associated with significantly higher real GDP growth. In addition, lower corporate income tax rates are associated with lower, but not significantly lower public debt as a percentage of GDP.
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Formal-Informal Dichotomy of Work in IndiaThis study tries to comprehend the facets of the increasing informalisation of work in India. It uses a deductive approach to analyse the secondary data and literature on the subject. Informalisation of the workforce is not a unique phenomenon restricted to India. Reforms have expedited the informalisation of work in India, which has a detrimental impact on the nature of newly created jobs. The empirical evidence from the National Sample Survey (2017–2018), Annual Survey of Industries (2016–2017 and 2021–2022), India Human Development Survey rounds (2003–2004 and 2011–2012), and International Labour Organisation (2018) showcases increasing informalisation of work. This has made the situation for workers and working conditions highly precarious with the changing nature of employment.
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Wealth Extraction and the Evolution of a Rentier EconomyThe paper highlights the importance of a fair distribution of wealth among the economic agents of a country so that the benefits of a free-market economy work efficiently and create new wealth that fosters economic welfare are at work and functioning efficiently. Extreme inequality and a dysfunctional banking system deprives the market economy from entrepreneurial skills and innovation. In addition, the risk aversion attitudes of the wealthy lead to an elusive pursuit of return without the risk, but which inevitably, through a dysfunctional banking system, results in the transfer of existing wealth from the many to the very few rather than creating new wealth. The real economy is thereby trapped in a vicious circle which further exaggerates wealth concentration and inequality.
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A Panel Analysis of Inequality and Driving Factors of Economic Growth Across EconomiesThe paper examines the relationship between income inequality and economic growth, using various factors like the Gini index, initial per capita GDP, trade and financial openness, financial deepening, population growth, skill premium, energy use, price level ratio, and adult female mortality from 1990 to 2020. Statistical techniques such as ordinary least squares, fixed effects, and random effects regression were used to estimate these relationships. There is a positive relationship between income inequality and economic growth, indicating that higher levels of inequality tend to boost economic growth. Population growth and adult female mortality are consistently and negatively associated with economic growth.
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The Debt-Openness PuzzleThe ‘debt-openness puzzle’ is investigated in this research by determining the effect of trade liberalisation on rising debt levels and if BRICS nations trade openness and government debt have a different connection than advanced economies. Using panel generalised method of moments (PGMM) regressions, we investigate the causes of debt in the advanced, developing, and BRICS economies. The study provides a robustness check using the pooled mean group (PMG) / panel autoregressive distributive lag (ARDL) approach. The research uncovered three primary results. Firstly, in developed economies, there is an initial positive correlation between openness to trade and debt in the short term, but in the long run, this relationship becomes negative, suggesting a nonlinear connection. Secondly, in the short and long term, the BRICS exhibit a notable trend where trade openness and debt positively correlate. Lastly, panel Granger causality studies indicate a one-way relationship between trade openness and debt. The study infers that countries should approach trade openness cautiously, implement appropriate policies and measures to protect indigenous firms and local jobs, and maintain fiscal health without incurring excessive debt. Such policies should enhance productivity and competitiveness and support innovation to promote long-term sustainable economic growth.
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The Determinants to Finance the Fiscal DeficitBolivia faces a shortage of foreign currency, especially dollars, due to a decline in natural gas exports. This decline leads to reduced foreign exchange income and savings, impacting the productive community’s social economic model and causing macroeconomic imbalance. The research identifies independent variables affected by this shortage, all denominated in dollars: gas exports, international reserves, external debt, trade balance, foreign remittances, and the pension portfolio. These variables are essential for meeting obligations and expenses in the General State Budget, with the fiscal deficit being the dependent variable. The study covers the period from 2006 to 2023, during which the economic model was applied. Polynomial projections of each variable were made to identify cyclical patterns or trends. Multiple regression analysis showed a multiple correlation coefficient of 97%. The trade balance and the pension portfolio had negative and significant coefficients, while the other variables had positive and significant coefficients, except for gas exports.
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