Search Results (19)

This paper focuses on an empirical analysis of the relationship between investing and saving, taking into account various economic regions. The economic aggregates are selected following the International Monetary Fund (IMF) standard classification. The investigation is developed within the theoretical frameworks proposed by the debate between the mainstream neoclassical school of thought and the post-Keynesian school. Our approach differs from other empirical works on the subject in that we apply innovative Granger non-causality panel tests to four datasets covering a wide range of countries over the period 1980 to 2024. This is the very first time these advanced panel tests have been applied to such data. The information is valuable for defining macroeconomic policy and supporting potential credibility of one theory over another in the debate. Our empirical results are coherent with the post-Keynesian interpretation of the relationship between the variables when applied to an international context in which trade and capital movements are liberalized. Full article

This paper examines how International Monetary Fund (IMF) lending affects financial markets across emerging and developed economies from 2002 to 2023 using an event study approach. Our findings indicate that IMF loans are typically granted during periods of global financial distress. While aggregate effects on debt, currency, and equity markets appear limited, a more detailed analysis reveals significant shifts in currency and stock markets around loan announcements. Notably, markets often react up to seven days before an official IMF announcement, with the strongest effects seen in the interest rate markets of emerging economies. These findings highlight the importance of tailoring IMF programs to account for market heterogeneity and structural differences between developed and emerging economies. Full article

The rapid economic growth in major coal-consuming countries has often come at the cost of environmental quality and social well-being. This study is urgently needed to provide empirical evidence on how such growth impacts sustainable development, helping policymakers balance economic progress with environmental protection and social welfare in an era of increasing climate concerns. Despite growing attention on sustainability, few studies have examined how key economic-environmental transformation drivers, such as coal consumption, financial development, globalization, urbanization, and economic growth, affect social sustainability. This study addresses this gap by analyzing the impact of these drivers on social sustainability in the world’s leading coal-consuming countries, as classified by Global Firepower. Using data from ten major coal-consuming nations between 1991 and 2022, sourced from the International Monetary Fund (IMF), KOF Swiss Economic Institute, the BP Statistical Review of World Energy, the World Bank’s World Development Indicators (WDIs), and the United Nations Development Programme (UNDP), the study applies advanced estimation techniques, including the Augmented Mean Group (AMG) and Feasible Generalized Least Squares (FGLS), to address cross-sectional dependence and slope heterogeneity. The results indicate that coal consumption has a negative and significant effect on social sustainability. In contrast, financial development, globalization, urbanization, and economic growth all show positive and significant effects. These findings highlight the urgent need for deliberate policy reforms to support a socially inclusive energy transition. Policymakers in major coal-consuming countries should invest in clean energy, fund worker retraining and community health, promote green innovation, and encourage private sector and stakeholder collaboration for a just, sustainable transition. Such measures are vital for coal-dependent countries to balance economic progress with social well-being. This study is the first to quantify social sustainability using the HDI, addressing a gap in the literature concerning the relationship between coal consumption and social development, thereby providing a quantitative basis for formulating policies that balance equity and decarbonization. Full article

Amid escalating concerns over air pollution and demographic shifts, industrial robots have emerged as a key solution to enhancing energy efficiency, reducing emissions, and fostering economic growth. However, existing research often overlooks their role in shaping green total factor productivity (GTFP), a critical measure of environmentally sustainable economic performance. This study investigates the relationship between industrial robot applications (IRAs) and high-quality economic development (HQED) by integrating theoretical modeling and empirical analysis. Using panel data from 32 countries (16 developed and 16 developing) over the period of 1993–2019, classified according to the 2023 International Monetary Fund (IMF) standards, this study employs fixed-effects models, system generalized method of moments (SYS-GMM), and threshold regression models to assess IRA-induced impacts on HQED. The findings reveal that IRAs significantly contribute to HQED, with a stronger effect observed in developing economies. Moreover, a threshold effect exists, wherein environmental regulations (ERs) mediate the effectiveness of IRAs in improving GTFP. Additionally, IRAs drive HQED through foreign direct investment (FDI) and technological innovation (TI). These results provide empirical evidence and policy insights for leveraging industrial automation to promote sustainable economic growth across different national contexts. Full article

This study evaluates the impact of digital systems and IT audit frameworks on tax performance and integrity within tax administrations. Using international data from organizations like the World Bank, OECD (Organisation for Economic Co-operation and Development), and IMF (International Monetary Fund), the research examines the relationship between tax revenue as a percentage of GDP, digital infrastructure, corruption perception, e-government development, and cybersecurity readiness. Quantitative analysis, including correlation, regression, and clustering methods, reveals a strong positive relationship between digital maturity, e-governance, and tax performance. Countries with advanced digital governance systems and robust IT audit frameworks, such as COBIT, tend to show higher tax revenues and lower corruption levels. The study finds that e-government development and anti-corruption measures explain over 40% of the variance in tax performance. Cluster analysis distinguishes between digitally advanced, high-compliance countries and those lagging in IT adoption. The findings suggest that digital transformation strengthens fiscal integrity by automating compliance and reducing human contact, which in turn mitigates bribery risks and enhances fraud detection. The study highlights the need for adopting international best practices to guide the digitalization of tax administrations, improving efficiency, transparency, and trust in public finance. Full article

This study explores the impact of International Monetary Fund (IMF)-linked conditionality on government education expenditures in the Middle East and North Africa (MENA) region. Understanding the impact of conditional lending by international financial institutions on education spending is important due to the pivotal role education plays in fostering social and economic development. We use country-level panel data encompassing a representative set of 10 MENA countries from 1990 to 2020 and employ a cross-national fixed effects regression model. Our findings suggest that IMF conditionality demonstrates a positive relationship with government education expenditures in the MENA region. The proposed explanation is that the application of IMF policy advice can have a catalytic effect on donor financing, including for education. This indicates that the Fund’s financing arrangements in the region can free up fiscal space for social spending, which, in turn, signals a sort of departure of the IMF from the reputation that typically precedes it—its traditional bias for macroeconomic stability irrespective of social costs. We argue that our findings are instructive for policy, especially if one shares the idea that education is a necessary prerequisite for achieving Sustainable Development Goal (SDG) 4: guaranteeing inclusive and equitable quality education and promoting enduring learning opportunities for all. Full article

This study aims to evaluate the effect of global energy transformation and systematic energy change on climate change. The model is constructed from dynamic panel data which comprises 26 world regions from the World Database Indicators (WDIs), International Energy Atomic (IEA), and International Monetary Fund (IMF), with a span from 2005 to 2022. The Generalized system Method of Moment (sys-GMM) and pooled OLS and random effect models have been used to empirically evaluate the linked effect of global transformation and systematic change on climate change. The sys-GMM approach is used to control the endogeneity of the lagged dependent variable when there is an association between the exogenous variable and the error term. Furthermore, it omits variable bias, measurement errors in the estimation, and unobserved panel heterogeneity. The econometric applications allow us to quantify the direct effect of global transformation and systematic change on climate change. The empirical analysis revealed that renewable energy, alternative energy, technology and innovation, and financial climate have a negative effect on climate change. It means that increasing consumption of the transformation energies leads to reducing the effect of climate change. However, fossil energy is statistically significant and positively affects climate change. Increasing the consumption of fossil energy raises the effect of climate change. There is a global need for massive decarbonization infrastructure that will help minimize the global warming that leads to climate change. Policies that take an endogenous approach through global transformation and systematic change should be implemented to reduce the effect of climate change. The policy should reduce the consumption of non-renewable energy and increase the consumption of renewable energy. Full article

The aim of our paper is to construct a multidimensional financial inclusion (FI) index to measure the level of FI in 91 countries across different income groups. In order to address our research problem, we use the principal component analysis method. This approach addresses the criticism of the arbitrary selection of weights and reflects the degree of financial inclusion in depth. The data are drawn from the International Monetary Fund (IMF) Financial Access Survey (FAS), the World Development Indicators (World Bank) and the Global Findex Database during the period of 2004–2020. This paper is the first to consider so many indicators of financial inclusion (13 indicators), belonging to three different dimensions of FI, in order to take into account the maximum number of aspects related to this concept. In addition, unlike previous work, this paper considers both developing and developed countries, which makes it possible to identify differences between them. The proposed index has some advantages. First, it is robust, comparable across countries and has good predictive power in tracking household microeconomic indicators (accounts and savings). It is also well correlated with macroeconomic variables such as literacy rate, poverty, GINI index, real interest rate and employers. Second, our results clearly show that, as a country’s income level grows higher, its level of financial inclusion also grows higher. Full article

While technological innovation and financial development are broadly credited as important drivers of economic growth of developed nations, their impact on inequality (especially in emerging economies) remains understudied. Thus, the objective of this study is to investigate the impact of technological innovation and financial development on income inequality in BRICS (Brazil, Russia, India, China and South Africa) countries using panel dynamic ordinary least squares (PDOLS) and panel fully modified ordinary least squares (PFMOLS) with annual data sourced from the Standardized World Income Inequality Database, International Monetary Fund (IMF) and World Bank (1990–2017). The results suggest that technological innovation increases income inequality in the BRICS nations, while financial development has an income reducing effect on inequality. Our results are robust, using alternative estimation with various sub-indicators of financial development (such as financial markets and financial institution), including other measures proxied by access to credit provided by commercial banks. The study’s results have important implications for policy and practice in the BRICS countries. By providing a nuanced understanding of the relationship between technological innovation, financial development and inequality, the study will inform the design and implementation of policies aimed at reducing inequality and promoting inclusive growth in these emerging economies. Full article

The COVID-19 crisis and the war between Russia and Ukraine affects the world economy badly. The western countries’ economic sanctions on Russia and the Russian government’s reverse sanctions on western countries create pressure on the world economy. This study was conducted to investigate how the economic performance is responding to COVID-19 and the geopolitical crisis of the era. In doing so, both theoretical and numerical data reviews have been performed. The objective of the study is to investigate the short-term risks and long-term strategic challenges of the crisis. The study used a bibliometric approach with the help of RStudio software. The Web of Science database was used for extracting the resources in line with the grey literature from the Google Search engine. A total of 895 documents were utilized in this bibliometric analysis. At the same time, secondary panel data extracted from the international monetary fund (IMF) for a period of 4 years (2019–2022) were utilized for reviewing numerical implications. The purposive sampling technique is used for data selection and main economic variables. The findings of the study imply that countries over the world registered less economic growth, high inflation rate, and high government debt in 2022 compared to the fiscal period of 2019–2021. The emerging economies and developing countries of Europe were badly affected by the crisis as the level of inflation rate hit 27 percent and the economic growth of the region registered a negative 2.9 percent. The study also found rising interest rates, exchange rate volatility, risk of stagflation, and rising energy prices are the short-term risks to economies. The issue of sustainable development goals and green aspects, risk of hyperinflation, and risk of economic recession are the long-term strategic challenges or risks to economies. Bailout and debt relief were found to be necessary for those countries badly affected by the crisis. Policymakers should facilitate financial policies and should switch from general assistance to targeted support of viable enterprises. Full article

This paper presents an energy management strategy for secondary energy sources and their optimization in the context of the tax gap on mineral oils represented by the tax gap on petrol and diesel. Energy companies face drastic economic and environmental challenges; therefore, this area necessarily requires the setting up of transparent economic instruments and, of course, production. The tax gap in VAT collection represents the gap between how much the state could potentially collect from VAT in accordance with the law and how much VAT really comes into the state coffers. The loss of tax revenues is caused by unpaid and undeclared tax liability. The Estimation of the Gap on Corporate Tax in Slovakia is a pilot project of the International Monetary Fund (IMF) in cooperation with the Institute for Financial Policy (IFP). The results present the estimation of the tax gap within a two-year delay. It is necessary to consider the estimation of the tax gap in the last two years as preliminary due to possible revisions of the national accounts data. Estimations of the tax gap from 2010 to 2017 indicate a decreasing trend. The significant part of the tax gap decrease can be observed from 2014. The main factor, which determines this decrease, is the improving condition of the Slovak economy. From the point of view of the tax gap, the volume of losses is decreasing and the volume of profit, from which the tax is paid, is increasing. Full article

This paper investigates the determinants behind persistent and prolonged stays under the International Monetary Fund (IMF) program and its effectiveness, using panel data consisting of 70 countries that have requested IMF support multiple times, during the period 1980–2018. By employing panel survival analysis, we conclude that weak economic indicators, e.g., current account deficit, high debt service ratio, low GDP, are the main reasons that force a country to reach out to the IMF support program. We further extend our analysis to investigate the effectiveness of the IMF program by dividing our sample into two groups, based on income level. To overcome the issue of endogeneity, we implement the panel instrumental two-stage least squares (2SLS) fixed-effect model. In the light of our analysis, we find a contemporaneous positive impact of the IMF fund program on the economic growth of upper middle-income countries, while, for low-income countries, its contemporaneous impact is insignificant, but becomes visible over time. Full article

This paper analyses Foreign Direct Investment (FDI) investment in Ireland and Iceland from other European countries during two periods, i.e., the pre-financial crisis period of 2000–2007 and the financial crisis period of 2008–2010. The aim of this research is to determine what made the countries interesting to foreign investors in both good and bad times; and, secondly, to examine whether European Union membership (and the Euro) made a difference in this respect. The results were obtained by using data from the OECD, the World bank, and other sources. The model constructed for the study applies the inverse hyperbolic sine transformation of the gravity model, which is a novel approach. The results demonstrate that before the financial crisis of 2008, European Union (EU) membership did not help Ireland attract more FDI from other EU countries. However, once it had been hit by the crisis, Ireland attracted more FDI from other EU countries. Iceland, on the other hand, which is not an EU country, attracted FDI from non-EU countries rather than from EU countries before the financial crisis. After the crisis, however, the origin within Europe, of FDI in Iceland had no significant effect on the flow of FDI into the country. Full article

This paper used the Johansen Cointegration test and system Generalised Method of Moments (sysGMM) to examine the dynamic relations between external debt and economic growth in 43 African countries over the period 2001–2018. The study used data from World Development Indicators (WDI) as published by the World Bank and the World Economic Outlook database as provided by the International Monetary Finance (IMF). The study provides an understanding of how the importance of external debt could be short-lived due to its misapplication. The result reveals evidence to support a long-run equilibrium relationship between external debt and economic growth in Africa. The result demonstrates that beyond a specific capacity, the short-run converges to equilibrium in the long-run and external debt would start to have a deteriorating impact on economic growth in Africa. The findings of this study reinforce the need for policymakers to ensure proper application of external debt on economic activities that would lead to sustained long-term economic performance. Moreover, the government and development partners must put in place a monitoring mechanism to ensure the efficient use of borrowed funds. Full article

This paper presents an analytical framework for the identification of vulnerabilities arising from the liquidity and funding profile of banks. It is composed of two pillars—estimation of liquidity needs and the counterbalancing capacity of the total liquid assets—that determine a liquidity surplus or shortfall and the drivers for a range of plausible scenarios. Granular bank-level data on the structure of liabilities, maturation profile, liquid assets quality composition, and asset encumbrance are used for that purpose, also taking into account associated commonality effects. A new liquidity metric is introduced—the distance to liquidity stress indicator (DLSI)—which measures the required stress factor for banks to become illiquid. The novelty of the approach (i.e., taking into account asset encumbrance to determine counterbalancing capacity) provides empirical evidence that asset encumbrance has a significant impact on a bank’s liquidity position, leading to the non-linear behavior of liquidity shortfalls, even in the case of linear stress factors. Full article