Addressing four persistent problems, namely human-induced environmental change, financial instability, inequality and unemployment has now become an urgent necessity. To better grasp complex ...interactions between technological, financial and energy systems, we propose a formal behavioral-evolutionary macroeconomic model. It describes the coevolution of four populations, namely of heterogeneous consumers, producers, power plants and banks, interacting through interconnected networks. We examine how decisions by all these economic agents affect financial stability, the direction of technological change and energy use. The approach generates non-trivial, even surprising insights, such as that brand loyalty, captured by a network externality on the demand side, can increase the likelihood of bankruptcies of banks. Cascades of such bankruptcies are found to be more likely under greater income inequalities and higher electricity prices. We employ the model to assess macroeconomic impacts of sustainability policies along three dimensions: environmental effectiveness, financial stability and socio-economic consequences.
•We propose a formal macro-evolutionary model.•It captures interactions between technological, financial and energy systems.•We discuss channels through which systemic risk spreads between networks.•We employ our model to study impacts of sustainability policies on the economy.
This paper investigates demand response to crude oil price movements before and after the recent global financial and economic crisis. It employs several market power indices to structurally estimate ...price elasticities. A newly developed market power index for crude oil markets is implemented. In this approach OPEC is the central player and acts as a dominant producer in the global oil market. We quantify how a change in market structure (such as changes in marginal cost of production) would contribute to market power exercise of OPEC and have an ultimate impact on price elasticity of demand for oil. Our price elasticity predictions fall in a range reported in the literature, however estimates for pre-crisis deviate from the post-crisis ones. In fact, demand response to crude oil prices has almost doubled during the crisis. This severe change in price response can be associated with record price levels caused by supply shortages and surge in alternative renewable energy resources. The key advantages of this methodology over the existing literature are that it is simple to use and estimates price elasticity using a competition framework without specifying demand/supply function(s), and utilizes commonly observable market variables that can be applied to any admissible data frequency.
•We investigate demand response to crude oil price before and during the recent crisis.•We estimate price elasticities structurally using market power indices.•A newly developed market power index for crude oil markets is implemented.•We quantify how a change in market structure would contribute to market power exercise of OPEC.•Demand response to crude oil prices has almost doubled during the crisis.
La Autorización de Residencia para Inversores (ARI) o visado dorado en su denominación coloquial es una iniciativa que posibilita la adquisición del estatuto de residente a cambio de una inversión en ...el país de acogida. Portugal, desde 2012, y España, desde 2013, ofrecen este programa a quien lo desee y reúna las condiciones exigidas. El objetivo de este artículo es desarrollar un análisis comparado de los visados dorados en los dos países concretado en cuatro momentos diferentes. Inicialmente se ofrece una caracterización de la medida y sus requisitos y se describe su evolución. A continuación, se aborda su conceptualización sociológica a través de la noción de migraciones de capital y más concretamente como un fenómeno a medio camino entre la migración de negocios y la inversión externa extranjera. Después analizamos la racionalidad política que estructura este tipo de inversiones a partir del enfoque neofoucaltiano de la gubernamentalidad. Por último, abordamos las implicaciones cívicas y científicas de los visados dorados.
Purpose
The purpose of this paper is to identify the capital structure determinants through an analysis of 74 All-Equity REITs listed in the US market from 2005 to 2014. Furthermore, the paper aims ...at understanding the impact of the financial economic crisis (FEC) among the identified explanatory variables.
Design/methodology/approach
A fixed effect panel regression model is performed based on Trade-off Theory (TOT) and Pecking Order Theory as a starting point to provide expectations on the relationships incurring among the identified variables.
Findings
First, while tangibility of assets and crisis evidenced a positive relationship with REITs’ financial leverage, operating risk and growth opportunities variables displayed a negative relationship. Meanwhile, size and profitability did not appear to influence the capital structure. Second, it appears that the positive effects of tangibility of assets and profitability variables on US REITs’ capital structure increased as a consequence of the FEC. Operating risk and growth opportunities variables slightly increased their negative relationship with US REITs’ capital structure after the FEC. The TOT prevails when explaining the economic reality underlying US REITs.
Practical implications
The paper contributes to the understanding of US REITs’ financing decisions within the US market. The FEC also had a substantial indirect impact on the financial leverage determinants of US REITs, the latter being nowadays more oriented to maintaining a flexible capital structure.
Originality/value
The paper provides a comprehensive view of the medium-term effect of the FEC on US REITs’ capital structure.
► The current economic crisis can be viewed as a symptom of persistent unsustainability. ► Broad landscape changes will continue to accelerate regime destabilization, inevitably leading to ...transitions. ► Responses to the crisis that seek to restabilise regimes only strengthen lock-in and deepen systemic problems. ► To increase the likelihood and tempo of a sustainability transition, new ‘glocal’ principles and mechanisms are needed.
This article explores the current economic crisis from a transition management perspective. We argue that it is a symptom of underlying persistent unsustainability in socio-economic systems which may result in profound systemic changes, i.e. transitions. Dominant regime responses to the economic crisis so far seem to focus primarily on restoring the old equilibrium. Adopting a transition management perspective, we argue that we can see the economic crisis as an accelerator in a process of fundamental systemic change and need to identify options to increase the chance that it will lead to sustainability. We note that general patterns and mechanisms can be identified in distinct transition domains (currencies, resources and governance) that enable and help scale-up sustainability alternatives. Transition management research and practice should focus on identifying and providing the necessary generic – ‘glocal governance’ – conditions under which the unsustainable regimes are discouraged and emerging sustainability transitions accelerated.
Purpose
The global financial crisis hit the economy of the Kyrgyz Republic by the third wave of its transmission in early 2009. The purpose of this study is to examine the impact of the global ...financial economic crisis on the transition economy of the Kyrgyz Republic. As there is a low level of the Kyrgyz Republic’s integration into the global financial and economic processes, it is obvious that channels of transmissions are different.
Design/methodology/approach
The empirical model is the vector autoregression approach. The quarterly data from 2005 to 2013 of the remittances from abroad, trade volumes, exchange rates, credits, deposits and liquidity of the banking system, gross domestic product (GDP) and foreign direct investment (FDI) were used in the empirical analysis.
Findings
The authors found a significant positive relation between transmission channels such as remittances flow, banking sector, international trade and GDP within the first six months. Thus, a decline in the aforementioned variables has a significant affirmative effect on the country’s GDP. Notwithstanding, the exchange-rate channel adversely influences GDP. Thereby, the depreciation of the national currency leads to an increase in GDP.
Originality/value
The study findings allow the Kyrgyz policymakers to foresee the global crisis transmission through the primary channels of transmission mechanism. Nevertheless, a decrease of the deposit level by 1 per cent leads to 2.91 per cent decline in FDI inflows. On the contrary, an increase of the exchange rate by 1 per cent leads to 1.54 per cent decrease in imports.
The Brazilian sugarcane-ethanol industry has undergone substantial changes after the 2008 financial and economic crisis. The industry has seen a large decrease in production and policy changes ...concerning gasoline, the main substitute for ethanol. In this context, price linkages of commodities in this industry, including Brazilian ethanol, gasoline, and sugar prices, international crude oil prices, and prices of U.S. ethanol are investigated. The results indicate Brazilian ethanol and sugar, oil, and U.S. ethanol prices form a longrun relationship. Moreover, Brazilian ethanol prices respond to price shocks in other commodity markets and adjust to correct the disequilibrium error induced by those shocks, maintaining the long-run relationship. Corresponding industry and policy implications are also discussed.
The Global financial crisis hit the economy of the Kyrgyz Republic by the third wave of its transmission in the early of 2009. The article examines the impact of the Global financial economic crisis ...on the public budget and unemployment of the Kyrgyz Republic. We analyzed the transmission of the crisis on the public budget firstly and its effect on unemployment level by using the vector autoregression approach (VAR) and quarterly data for 2005–2013 within the framework of IS-LM model for small open economies with floating exchange rate. There is an inverse relationship between the public budget and remittances inflow, liquidity level, volume of deposits, and exchange rate. As a result of the study, the fall in remittances inflows, liquidity level of the banking system, depreciation of the national currency lead to an increase in public revenue. Therefore, the increase in public spending during the crisis period, with the aim of unemployment reduction, may be considered as a crucial policy. The study result allows to policy-makers to exactly know what channels of transmission mechanism transfer the Global crisis on the public budget and its effect on unemployment level of the republic in order to undertake anticrisis macroeconomic policy. The final result of the study indicates that the increase of unemployment level by 1 % requires the increase of public spending by 0.63 %.
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