The US Bureau of Economic Analysis (BEA) estimates that the return on investments of foreign subsidiaries of US multinational companies over the period 1982–2006 averaged 9.4 percent annually after ...taxes; US subsidiaries of foreign multinationals averaged only 3.2 percent. BEA returns on foreign direct investment (FDI) are distorted because most intangible investments made by multinationals are expensed. We develop a multicountry general equilibrium model with an essential role for FDI and apply the BEA's methodology to construct economic statistics for the model economy. We estimate that mismeasurement of intangible investments accounts for over 60 percent of the difference in BEA returns.
Bu çalışma, dördüz açık hipotezinin geçerliliğini Türkiye ekonomisi için ampirik olarak değerlendirmeyi amaçlamaktadır. Uygulanması tercih edilen yöntemler sınır testi, ARDL modeli, Toda-Yamamoto ...nedensellik sınaması olmaktadır. Analizler, 2006:1-2022:1 döneminin çeyrek dönemlik verileriyle gerçekleştirilmiştir. Ampirik bulgular değişkenlerin eşbütünleşik olduğunu göstermektedir. ARDL Modellerinin uzun dönem katsayıları, cari açık değişkeni üzerinde bütçe açığının pozitif yönlü, çıktı açığının negatif yönlü etkileri olduğunu ortaya koymuştur. Tasarruf yatırım açığının cari açık üzerindeki uzun dönem etkisi anlamsız olarak bulunurken kısa dönemli etkisinin anlamlı ve pozitif yönlü olduğu tespit edilmiştir. İlaveten, çıktı açığı üzerinde bütçe açığının ve tasarruf yatırım açığının pozitif yönlü, cari açığın ise negatif yönlü etkileri olduğu bulgusuna erişilmiştir. Tasarruf yatırım açığının kısa dönemde de çıktı açığını pozitif yönde etkilediği görülmüştür. Nedensellik sınaması bulgularına göre; çıktı açığı değişkeni bütçe açığıyla, cari açıkla ve tasarruf yatırım açığıyla istatistiksel olarak anlamlı şekilde iki yönlü nedensellik ilişkisi sergilemektedir. İlaveten, cari açığın da bütçe açığıyla ve tasarruf yatırım açığıyla iki taraflı nedensellik ilişkisinde bulunduğu sonucuna erişilmiştir. Bütçe açığıyla tasarruf yatırım açığı arasındaki tek yönlü nedenselliğin yönü ise bütçe açığı değişkenine doğrudur.
This paper intends to empirically analyze the availability of quadruplet deficit hypothesis for Turkish economy. The preferred methods are bound test, ARDL model estimations and Toda-Yamamoto causality test. Analyzes were achieved with quarterly data of 2006:1-2022:1 period. Empirical findings demonstrate that the variables are cointegrated. The long-run coefficients of ARDL models, put forth that budget deficit has positive and output gap has negative effects on current account deficit. The long term influence of saving investment deficit on current account deficit is found to be insignificant while its short term effect is significantly positive. Additionally, it is detected that budget deficit and saving investment gap has positive, current account deficit has negative impact on output gap. It has been observed that the saving-investment gap affects the output gap positively also in the short run. According to the evidences from causality test; output gap shows a statistically significant bidirectional causal relationship with budget deficit, current account deficit and saving-investment gap variables. In addition, it has been determined that current account deficit has a bidirectional causal interaction with budget deficit and saving-investment gap variables. The way of unidirectional causal impact between budget deficit and saving-investment gap is toward to budget deficit variable.
Purpose
This paper examines the relationships between bank switching and both customer vulnerability and consumer-oriented policies (financial education and disclosure practices).
...Design/methodology/approach
The analysis employs microdata from the Special Eurobarometer on Financial Products and Services, for 24 European nations. It carries out a probit estimation on the factors explaining propensity of bank switching, focusing on three characteristics associated with customer vulnerability: an advanced age, low educational attainment and residence in a rural or a relatively poor region.
Findings
The authors report that the probability of bank switching is significantly lower for three groups of vulnerable customers: the elderly, the less educated and those living in deprived regions. Further the authors identify that national financial education policies and disclosure practices have no significant effects on bank switching.
Research limitations/implications
Based on these results, the authors propose more targeted policies recognising customers' heterogeneity are required to increase bank switching behaviour.
Originality/value
This paper exploits a unique source of information on bank switching behaviour and customer characteristics across European nations. These data are complemented with information about consumer financial education policies and disclosure practices from the World Bank and geographical, market and regulatory factors at the regional and national levels. The paper contributes to two academic areas. First, it presents further evidence on heterogeneity of bank customer switching behaviour, addressed at improving the understanding of customer vulnerability in banking services. Second, it examines the efficacy of consumer-oriented policies (financial literacy and disclosure practices) in encouraging bank switching.
In this paper we show that inflation, both in the short and long run, negatively affects durable and non-durable consumption and output, and positively influences the current account balance. In ...particular, the impact of inflation is more pronounced on durable relative to non-durable goods. Using quarterly data from Canada, the UK and the USA, we demonstrate that these findings are consistent and robust across different econometric specifications. An open economy model with durable and non-durable consumption, households with labor/leisure choice and money introduced through cash-in-advance (CIA) constraint on consumption expenditure alone could meaningfully explain these empirical observations. Our empirical findings of non-neutral and negative effects of inflation on real growth are significant for many economic models in the asset pricing literature that support a negative co-movement of stock prices and expected inflation. Moreover, such positive inflation premium in our model could provide economic explanation for a positive slope of the nominal term structure in the data.
Emerging market business cycles exhibit strongly countercyclical current accounts, consumption volatility that exceeds income volatility, and “sudden stops” in capital inflows. These features ...contrast with developed small open economies. Nevertheless, we show that a standard model characterizes both types of markets. Motivated by the frequent policy regime switches observed in emerging markets, our premise is that these economies are subject to substantial volatility in trend growth. Our methodology exploits the information in consumption and net exports to identify the persistence of productivity. We find that shocks to trend growth—rather than transitory fluctuations around a stable trend—are the primary source of fluctuations in emerging markets. The key features of emerging market business cycles are then shown to be consistent with this underlying income process in an otherwise standard equilibrium model.
This study examines the sustainability of the current account deficit using Pakistani data over the period 1974-2013. Employing the intertemporal budget constraint model and using ARDL bound testing ...approach, it is concluded that there is a long run relationship between real exports and imports. However, the hypothesis of one to one relationship between the two variables does not hold in its strong form. This highlights the need for better policies to improve the current account balance in the long run.
This article reviews the most popular restatement of the Triffin dilemma. It holds that the United States must run current accounts to permit the rest of the world to accumulate dollar reserves but ...doing so undermines the U.S. solvency. While the original Triffin dilemma pointed to a clear moment of systemic instability, the current account version points to a more amorphous risk of an unbounded rise in U.S. net international liabilities. The empirical work reviewed suggests that savings-investment fundamentals predict narrower U.S. current account deficits than those observed. However, the link to the reserve currency role of the dollar, rather than the U.S. economy’s size or the depth of its financial markets, remains to be convincingly made. Under the circumstances, the proposition that the future of the renminbi as a reserve currency depends on China’s running current account deficits rather than current account surpluses should not be accepted.
•The contribution of a short-circuit current from a balanced IBDG source is examined.•A method that transfers negative- and zero-sequence networks to a positive-sequence network is proposed.•A method ...that defines new zero-, positive-, and negative-sequence bus-impedance and current-injection matrices is provided.•A method that calculates short-circuit current and zero-, positive-, and negative-sequence induced-voltage matrices is presented.
When a grid-connected inverter-based distributed generation (IBDG) source behaves as a current source that can limit its magnitude in current loop control, the contribution from the inverter to the short-circuit current (SCC) is not as significant as those from conventional synchronous generators. However, the increased IBDG sources can change the magnitude and phase angle of the SCC, so they should not be ignored in SCC calculation. The objective of this study is to present a method for calculating the SCC of an IBDG source of acting as an internally either limited or unlimited current source at balanced conditions. For this purpose, negative- and zero-sequence networks are transferred to a positive-sequence network with balanced IBDG sources. Subsequently, SCCs and zero-, negative-, and positive-sequence induced voltage are determined by using zero- and negative-sequence current injection matrices. Then, new SCC calculation equations for a single line-to ground, line-to-line ground, line-to-line, or three-phase fault are also derived. As a result, the proposed method improves the conventional method in terms of taking the contribution from a balanced IBDG source to SCC into account.
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