Search Results (608)

This study aims to map the scientific knowledge of bank profitability and its determinants. It identifies trends and gaps in existing research through a bibliometric analysis. To this end, 634 documents published in the Web of Science database over the last 54 years were analyzed using the bibliometric package. The results indicate an increase in the volume of publications following the 2008 financial crisis, focusing on analyzing the factors influencing bank profitability and economic growth. The Journal of Banking and Finance is the preeminent publication in this field. The literature reviewed shows that bank profitability depends on internal factors (size, credit risk, liquidity, efficiency, and management) and external factors (such as GDP, inflation, interest rates, and unemployment). In addition to the traditional determinants, the recent literature highlights the importance of innovation and technological factors such as digitalization, mobile banking, and electronic payments as relevant to bank profitability. ESG (environmental, social, and governance) and governance indicators, which are still emerging but have been extensively researched in companies, indicate a need for evidence in this area. This paper also provides relevant insights for the formulation of monetary policy and the strategic formulation of banks, helping managers and owners to improve bank performance. It also provides directions for future empirical studies and research collaborations in this field. Full article

This paper considers the impact of Central Bank Digital Currencies (CBDCs) on the world’s financial systems with a special emphasis on G20 economies. Using quarterly macro-financial data for the period of 2000 to 2024, collected from the IMF, BIS, World Bank, and Atlantic Council, a Global Vector Autoregression (GVAR) model is applied to 20 G20 countries. The results reveal significant heterogeneity across economies: CBDC shocks intensify emerging market financial instability (e.g., India, Brazil), while more digitally advanced countries (e.g., UK, Japan) experience stabilization. Retail CBDCs increase disintermediation risks in more fragile banking systems, while wholesale CBDCs improve cross-border liquidity. This article contributes to the literature by providing the first GVAR-based estimation of CBDC spillovers globally. Full article

Housing prices have recently risen sharply in many countries, primarily linked to the global credit cycle. Although various factors play a role, the ability of developing countries to navigate this cycle and maintain autonomous monetary policies is crucial. This paper introduces a dynamic macroeconomic model featuring a housing production sector within an imperfect banking framework. It captures key housing and economic dynamics in advanced and emerging economies. The analysis shows domestic liquidity policies, such as bank capital requirements, reserve ratios, and currency devaluation, can stabilize investment and production. However, their effectiveness depends on foreign interest rates and liquidity. Stabilizing housing prices and risk-free bonds is more effective in high-interest environments, while foreign liquidity shocks have asymmetric impacts. They can boost or lower the effectiveness of domestic policy, depending on the country’s level of financial development. These findings have several policy implications. For example, foreign capital controls would be adequate in the short term but not in the long term. Instead, governments would try to promote the development of local financial markets. Controlling debt should be a target for macroprudential policy as well as promoting saving instruments other than real estate, especially during low interest rates. Full article

This paper highlights the importance of accounting for both the maturity structure of government debt and the composition of fiscal instruments when studying the macroeconomic effects of fiscal policy. Using a dynamic stochastic general equilibrium (DSGE) model featuring a debt maturity structure and six exogenous fiscal shocks spanning both the expenditure and revenue sides, we show that long-maturity debt systematically weakens the expansionary effects of fiscal policy under dovish monetary policy, particularly in response to increases in government purchases, government investment, and capital income tax cuts, where long-term financing leads to the significant crowding-out of private activity. In contrast, short-term debt financing yields output multipliers that often exceed unity. The maturity structure also alters the relative efficacy of fiscal instruments: while labor income tax cuts produce the largest multipliers under short-term debt, government purchases become more potent under long-term debt financing. We also show that the stark difference between short- and long-term debt becomes muted under a hawkish monetary regime. Our results have important policy implications, suggesting that the maturity composition of public debt should be carefully considered in the design of fiscal policy, particularly in high-debt economies. Full article

This study employs a dynamic stochastic general equilibrium model with Bayesian estimation to rigorously evaluate China’s macroeconomic responses to cost-push, monetary policy, and foreign income shocks. This analysis leverages quarterly data from 2000 to 2024, focusing on critical variables such as the output gap, inflation, interest rates, exchange rates, consumption, investment, and employment. The results demonstrate significant social welfare losses primarily arising from persistent inflation and output volatility due to domestic structural rigidities and global market dependencies. Monetary policy interventions effectively moderate short-term volatility but induce welfare costs if overly restrictive. The findings underscore the necessity of targeted structural reforms to enhance economic flexibility, balanced monetary policy to mitigate aggressive interventions, and diversified economic strategies to reduce external vulnerability. These insights contribute novel policy perspectives for enhancing China’s macroeconomic stability and resilience. Full article

This study aims to analyze the impact of the U.S. Federal Reserve System’s monetary policy on major cryptocurrencies. Specifically, it explores whether the effects differ between volatile cryptocurrencies, such as Bitcoin and Ethereum, and the stablecoin Tether. To this end, we utilize an autoregressive distributed lag (ARDL) bounds testing approach, analyzing monthly data from January 2019 to April 2025. The empirical results indicate that the responses of volatile and stable cryptocurrencies to the Fed’s monetary policy differ. In the long term, the prices of Bitcoin and Ethereum tend to react positively to the Fed’s monetary policy changes, whereas Tether’s prices experience a negative impact. We recommend novel policy implications in this study based on these empirical findings. Full article

Hepatitis C is an infectious liver disease which contributes to an estimated 400,000 deaths each year. The disease is caused by the hepatitis C virus (HCV) and is spread by direct blood contact between infected and susceptible individuals. While the magnitude of its impact on human populations has prompted a growing body of scientific work, the current epidemiological models of HCV transmission among injecting drug users treat risk behaviors as fixed parameters rather than as outcomes of a dynamic, decision-making process. Our study addresses this gap by constructing a game-theoretic model to investigate the implications of voluntary participation in clean needle exchange programs on the spread of HCV among this high-risk population. Individual drug users weigh the (perceived) cost of clean equipment usage relative to the (perceived) cost of infection, as well as the strategies adopted by the rest of the population, and look for a selfishly optimal level of protection. We find that the spread of HCV in this population can theoretically be eliminated if individuals use sterile equipment approximately two-thirds of the time. Achieving this level of compliance, however, requires that the real and perceived costs of obtaining sterile equipment are essentially zero. Our study demonstrates a robust method for integrating game theory with epidemiological models to analyze voluntary health interventions. It provides a quantitative justification for public health policies that eliminate all barriers—both monetary and social—to comprehensive harm-reduction services. Full article

This study investigates cyclical asymmetries in money demand models considering the moderating effect of financial development. Prior research has overlooked this issue in the money demand literature within the Fijian context, where research is outdated. Using annual data from 1983 to 2023, we find that income elasticity is about positive unity, irrespective of recessions or expansions. In expansions, an increase in interest rates reduces money demand. An increase in interest rates reduces money demand nine times more strongly in recessions. These effects are accentuated with financial development. Declining interest rates do not impact money demand. The findings suggest that stable money demand could be achievable, but only once the impact of structural breaks is accounted for. Under ideal conditions—without such breaks—money demand exhibits stability, and its connection to income and interest rates appears predictable. However, in reality, structural disruptions complicate this relationship, making money demand less consistent with its key drivers and undermining the reliability of money supply as a monetary policy instrument. The findings align with the pulling on a string hypothesis that monetary contractions control inflation, but expansions may not impact output. Full article

This study examines the effects of climate mitigation, climate change as quantifiable effects of additional extreme weather events, and adaptation investments on economic growth in Germany. First, on the basis of a comprehensive literature review and further considerations, important impact channels are discussed. Second, the macroeconometric national model PANTA RHEI is used to quantify the effects. To this end, scenarios are refined with and without additional climate change, and with and without additional climate protection to achieve national reduction targets until 2045, and defined for the first time with and without adaptation to climate change. This is also the first combination of all three climate dimensions within the model. The results show that, in the model, the quantifiable effects of extreme weather events have a negative impact on GDP that can be reduced by adaptation. By contrast, climate mitigation has a positive effect. As only monetary effects are accounted for, negative effects of climate change and positive impacts of climate policy are underestimated in broader terms. The model results help to understand the interaction between mitigation and adaptation: without mitigation, the impact of the climate crisis will increase significantly. Adaptation measures may then have less impact or even become ineffective. Full article

This article presents an innovative model for managing cash logistics, grounded in the 4P concept of supply chain management. The 4P framework encompasses four interconnected elements: Product, Players, Processes and Policies. Developed with a focus on sustainability the 4P Cash Logistics Model is based on empirical research conducted in Poland, involving key participants in the cash supply chain—the central bank, commercial banks and cash handling companies. It also incorporates, albeit less explicitly, the perspectives of merchants and consumers as end-users of cash, offering a comprehensive view of the cash cycle management. The 4P Cash Logistics Model has been designed in a country-agnostic manner, employing the concept of a control tower, with the central bank positioned as the integrator of the cash supply chain. This paper proposes several improvements to cash logistics, including the introduction of a standardised electronic bank deposit slip and a multilateral platform for exchanging information on cash stocks and flows and for trading monetary value between banks and cash handling companies. Full article

California’s SB 1014 (Clean Miles Standard) mandates ridehailing fleet electrification to reduce emissions from vehicle miles traveled, posing financial and infrastructure challenges for drivers. This study employs a mixed-methods approach, including expert interviews (n = 10), group discussions (n = 8), and a survey of full- and part-time drivers (n = 436), to examine electric vehicle (EV) adoption attitudes and policy preferences. Access to home charging and prior EV experience emerged as the most statistically significant predictors of EV acquisition. Socio-demographic variables, particularly income and age, could also influence the EV choice and sensitivity to policy design. Full-time drivers, though confident in the EV range, were concerned about income loss from the charging downtime and access to urban fast chargers. They showed a greater interest in EVs than part-time drivers and favored an income-based instant rebate at the point of sale. In contrast, part-time drivers showed greater hesitancy and were more responsive to vehicle purchase discounts (price reductions or instant rebates at the point of sale available to all customers) and charging credits (monetary incentive or prepaid allowance to offset the cost of EV charging equipment). Policymakers might target low-income full-time drivers with greater price reductions and offer charging credits (USD 500 to USD 1500) to part-time drivers needing operational and infrastructure support. Full article

Exchange rate volatility poses significant challenges for emerging markets, influencing trade balances, inflation, and capital flows. South Africa’s Rand is particularly vulnerable to global risk sentiment, gold price fluctuations, and interest rate differentials, yet prior studies often analyse these factors in isolation. This study integrates them within an autoregressive distributed lag framework, using monthly data from 2005 to 2023 to capture both short-term fluctuations and long-term equilibrium effects. The findings confirm that higher global risk sentiment triggers immediate Rand depreciation, driven by capital outflows to safe-haven assets. Conversely, rising gold prices and favourable interest rate differentials stabilise the Rand, strengthening trade balances and attracting capital inflows. These results underscore the interconnected nature of global financial conditions and exchange rate movements. This study highlights the importance of economic diversification, foreign reserve accumulation, and proactive monetary policies in mitigating currency instability in emerging markets. Full article

This paper examines cryptocurrency shock transmission to financial markets and the macroeconomy using a Bayesian structural VAR with Pandemic Priors from 2015 to 2024. By affecting overall risk appetite, cryptocurrency price shocks generate positive financial market spillovers, accounting for 18% of equity and 27% of commodity price fluctuations. Real economic effects are significant in driving investment but remain limited, contributing only 4% to unemployment and 6% to industrial production variance. However, cryptocurrency shocks explain 18% of price-level forecast error variance at long horizons. Narrative analysis reveals sentiment and technology as primary shock drivers. These findings demonstrate cryptocurrency’s deep financial system integration with important inflation implications for monetary policy. Full article

The ability of the agriculture sector, which is exposed to climate hazards, to cope with climate challenges and to strive in spite of them, is conceptualized as the resilience of agriculture. In enhancing climate-resilient agriculture, the cash reserve ratio (CRR) is generally perceived to serve two crucial functions: first, encouraging banks to allocate credit to agriculturalists for climate-resilient agricultural practices; second, enhancing agriculturalists’ ability to sustain agricultural output growth in spite of climate crises. In light of this, we conducted an ex post evaluation of the effect of the currently in-use CRR on bank loans to climate-challenged Nigeria’s agriculture sector for climate-resilient agricultural practices. Additionally, this study investigates the CRR’s impact(s) on agricultural output growth amidst climate challenges. Other additional independent variables include monetary policy rate, government capital expenditures on agriculture, and government recurrent expenditures on agriculture, as well as temperature, precipitation, and the renewable energy supply. Using annual data from 1990 to 2022, the results from an autoregressive, distributed lag approach suggest that the standard CRR stipulated by the Central Bank of Nigeria in the present era of climate change cannot entirely sustain climate-resilient agriculture, evident in the present study’s discoveries on its inability to perform its two major functions (credit and growth) in enhancing agricultural resilience. These findings highlight the need for the green differentiation of the CRR to ensure its effective utilization in enhancing climate resilience. Full article

The forestry sector is increasingly dealing with a significant lack of labor and faces the difficult task of securing a professional, stable and sustainable manpower. In this study, different strategic directions for strengthening forestry workforce sustainability are presented and evaluated. The considered strategic directions were developed with respect to forestry employees’ views on necessary measures for making the forestry occupation more appealing. Those measures were observed in three categories: (I) stronger recruiting, (II) stronger retention and (III) higher work commitment. The findings of the survey and other performed analyses resulted in the creation of four different strategic directions: (1) the direct financial strategy, implying increased direct monetary compensation as the main instrument and putting focus on labor productivity; (2) the indirect financial strategy, stressing worker wellbeing through indirect material benefits and aiming at performance quality; (3) the educational strategy, focusing on worker training and education and (4) the technical–technological strategy, aiming at the increased utilization of modern machinery and advanced technologies in forest operations. The results of the study include a comparison of the defined strategies by SWOT analysis and the construction of An analytic Hierarchy Process (AHP) model as the multi-criteria tool for strategy evaluation. Considering the possibility and conditions of its implementation in the national forestry sector, the technical–technological strategy has been evaluated as best option to pursue. The objective of the study is to contribute to enhancing the sustainability of forestry workforce by defining critical issues and pointing to specific cornerstones that can assist in formulating effective future policies and strategies in the forestry sector. Full article