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Germany’s role in the eurozone crisis is a subject of debate. Does Europe’s largest economy act pragmatically and lend a helping hand to the crisis countries or does its fixation on austerity and structural reforms prevent their discovery? This article discusses this question using the business cycle theory of the Austrian School of Economics as normative benchmark. It is argued that Germany’s insistence on fiscal discipline and market-oriented reforms is basically in line with the normative conclusions of this theory, while the reforms suggested for the monetary system fail to adequately solve the crucial problem which is seen in the high politicization of this sector. It is shown that Germany only partially succeeded in implementing its policy preferences in the eurozone’s anti-crisis policy. This only holds for its claim for austerity and structural reforms, whereas it has not been influential enough to prevent the European Central Bank’s counterproductive ultra-loose monetary policy and its enlargement of power. It is contended that in the eurozone crisis Germany has so far performed the role of a pragmatic rescuer rather than of a merciless tormentor.
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The article examines the scientific and methodological basis of the presence of risks in banks. Analyzes the nature and essence of economic risk. The author gives a classification of risks in the monetary system.The study revealed that to date there is no single understanding of the risk. We give a few different concepts of risk of economic doctrines. At risk in the banking practice we understand the danger (possibility) of the bank loss of their resources, revenue or work extra costs as a result of certain financial transactions. Banking risks as a kind of economic risks are specific factors and bases of formation. Therefore, in their determination, assessment and management requires the use of specific methods. Features the activities of banks, their relationship with the population, the level of financial sector development and public sector manifest themselves in the formation of various types of risks and uncertainties. Therefore, in order to identify, evaluate and select the methods of risk reduction and management it is necessary to determine first of all the scientific and methodological basis of their formation.
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The article addresses the issues of the banking union from point of view of Poland faced with a dilemma whether to join its structures, in particular were presented: the target elements of the project Economic and Monetary Union, regulations and major elements of banking union, the ECB’s supervision, the arguments for and against the Polish accession to banking union. Presented challenges for banking union, indicates the advantages and disadvantages of proposed solutions, opportunities and threats arising from the accession to the Polish banking sector. It is hypothesized that at the current stage of development of the banking union, accession to it is disadvantageous for Poland and contain uncertainty.
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Studies of coffee production and consumption are dominated by emphases on Latin American production and American consumption. This paper challenges the Atlantic perspective, demanding an equal emphasis on the Indian Ocean world of Eastern Africa, the Middle East, South Asia, and Southeast Asia. A geographical approach to historical as well as contemporary patterns of coffee production and consumption provides an opportunity to rethink the nature of coffee as a global commodity. The Indian Ocean world has a much deeper history of coffee, and in recent decades, has witnessed a resurgence in production. The nature of this production is distinct, providing an opportunity to rethink dependency theories. Coffee in the Indian Ocean world is more likely to be produced by smallholders, countries are less likely to be economically dependent on coffee, farmers are more likely to harvest polycultures, and countries represent both consumers and producers. A balanced emphasis of Atlantic and Indian Ocean worlds allows us to better understand coffee production and consumption, together telling a more balanced, global story of this important commodity.
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The purpose of this article is the analysis of the impact of information asymmetry in the financial stability of the banking system of Ukraine and the definition of the measures to leveling in the context of crisis management.In the article systematized the main sources of information for the bank and potential customers, the theoretical bases causes and features of display of information asymmetry in the banking sector. There is revealed the influence of information asymmetry on the financial stability of the banking system. The basic measures for prevention of the crisis minimize information asymmetry in banking of Ukraine and improving financial stability of the banking system of Ukraine were suggested.One of the most important functions of crisis management is the development and implementation of information policy at all levels of the banking system of Ukraine, which will increase the level of confidence (increase economic activity), and in times of crisis - will localize and neutralize crises. Further researches need further development of scientific-methodical approaches to implement anti-crisis information policy of the banking system.
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The impact of the global world economy increases the relevance and significance of the debt policy, contributing to consolidation of the state guarantees for the national economy. The internal and external policy implemented by the state and failing to provide the balance of budget revenue and expenditure is a cause of the national debt. Alongside with that, it is impossible to identify any specific country which would not have faced such a problem in any of the periods in its history. The correlation analysis employed in studying the composition and structure of the external debt of the world countries’ leading economies enabled to characterize and prove most likely the assumption of export growth depending on the increase in the external debt in the analyzed subjects, and the extent of impact on the growth of the corporate sector activity before everything else. At the same time the study revealed the negative trends of increasing the national debt ratios in comparison to the corporate one when producing medium- term forecasts for an individual country of the world. This, in turn, allowed formulating the main directions for the identification of further reserves in improving efficiency of the state’ external debt management.
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There are a number of economic and mathematical models designed for mass appraisal of residential real estate at the moment, which take into account their construction and performance characteristics but do not take into account the evolving macroeconomic situation in the country and in the world. The drawback of such static models is their rapid obsolescence, the need for constant updating and unsuitability for medium-term forecasting. On the other hand, there are dynamic models that take into account the current macroeconomic situation but are designed for predicting and studying the overall price situation on the market rather than for mass appraisal of real estate with their variety of construction and performance characteristics. This paper proposes a technique of creating integrated models with properties of such static and dynamic models, i.e. taking into account both construction and performance characteristics of residential facilities and evolving macroeconomic situation in the country and in the world. Development of the technique and creation of models is carried out with the use of neural network technology on the basis of statistical data for the period from 2006 to 2016. In addition to its main purpose – the mass appraisal of urban apartments, the model is suitable for medium-term forecasting and identification of the patterns of the housing market. For example, the model was used to study the effect of the state financial policy on the housing market in Yekaterinburg. Computer experiments have shown that in case of growth in housing lending, the apartment prices will rise, and the rate of growth of luxury apartments with larger area will be about 2.2 times higher than the growth rate of cheaper apartments with smaller area. It was found that an increase in housing construction in Yekaterinburg up to 2,550 thous. sq.m. would lead to a further increase in value of apartments. However, with the increase in new housing above the 2,550 thous. sq.m. mark, the model predicts market saturation, prices growth cessation and their further decline. Similar studies and forecasts can be made for the real estate market in other countries and cities using the proposed technique.
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This paper presents a model for evaluating the effectiveness of the pension insurance companies. The main components of the model: criteria, indicators and evaluation technique have been characterized. It has been proved practical applicability of the model by testing it under real conditions and with real data. As a result, the effectiveness of the pension insurance companies in Bulgaria for 2007-2015 has been evaluated. It has been made appropriate conclusions.
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The article discusses the theoretical aspects of the concept and peculiarities of formation of regional finance, approaches to learning and assessment; it reveals the importance of regional finances for the budgetary system of a federal type. Also, the peculiarities of formation of the finance of the second- tier in the Russian budget system and its differences from other countries with a similar budget arrangement have been studied. With the help of statistical and mathematical methods of analysis, the main factors affecting the finances of regions have been revealed. The influence of return of certain types of duties, macroeconomic indicators, peculiarities of debt and expenditure policies, and particular qualities of socio- economic development of returns from the federal budget have been evaluated. The conclusions about the state of regional finance in Russia have been made, and the methods of levelling the influence of factors adversely and significantly affecting finances of regions having the theoretical and practical significance have been proposed.
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In this article, we set ourselves a task to test financial decupling hypothesis by studying 18 national credit cycles in developed and developing countries, using monthly data on growth rates of loans to nonfinancial sector for the period from January 2002 to January 2015. The purpose of this article is empirical testing of two hypotheses: validity of financial decoupling for developing economies and empirical testing of Russian credit market’s sensitivity to shocks in other national economies. In result, we come to the following conclusions. Firstly, the relationship between credit cycles of countries in the sample over the studied period exists and persists in the short, and is absent in the long run. Secondly, testing the financial decoupling hypothesis between developed and developing countries does not confirm it in its classic state. In the short run, a number of sampled developing countries are sensitive to external credit shocks from developed countries. Third, we have found presence of both long and short-term sensitivity of Russian credit market to shocks in both developed and developing countries. These results confirm the necessity of reconsidering conventional theory of credit market and international finance, and also have tobe taken into account when conducting national monetary policy.
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The activity of the entities activating on capital markets is exposed directly to liquidity risk. When we approach this type of entities the liquidity risk has two main components: (a) the internal liquidity risk, which refers to the possibility that the financing capacity and largely, the cash flow of a specific enterprise that acts on capital markets, to be affected; (b) the market liquidity risk that covers the capacity of reselling financial assets on capital markets. Even though, during the time, these two components of liquidity risk were approached independently, recent studies consider them interdependent. We want to emphasize with this study that in the actual framework of capital markets the two components of liquidity risk should always be analyzed together, in order to provide the best premises for decision makers.
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Corruption crackdowns have tended to fizzle out in Ukraine. Will this one be any different?
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We analyse an impact of systematic and unsystematic risks on the performance of production systems in the period of 2003- 2015 by creating of novel enterprise risk models, with focus on Slovakia within the euro area. The method of this paper is based on the methodology of Capital asset pricing model in comparison with Building- up I Model and Building- up II Model (proposed in Czech Republic), used by the valuation Cost of Equity and its applications on Slovak conditions. For the risk analysis we used and compared data of food sectors in selected countries of the EU. By testing hypotheses was confirmed Hypothesis 1 that the valuation Cost of Equity with application of systematic risks using historical data (based on CAPM) was lower than the valuation with application of business and financial risks using expected market data (based on Building-up I). Results proved that systematic risks have a lower impact on the enterprise performance than unsystematic risks. Finally, we constructed novel 3- dimensional Enterprise Risk Models according to Slovak market conditions using our approach to modelling, scoring of risks and prediction models. We confirmed Hypothesis 2 that the enterprise performance reached the better position with the application of systematic risks and forecasting of risk parameters using prediction methods and ex ante data (in ERM2) than with the application of risk parameters based on historical data (in ERM1). Models can be applied by the modelling and strategic planning as early warning models worldwide.
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This paper aims to analysis the impact of entrepreneurial financial activities on financial indicators of all sectors as industrial, financial and services listed in Muscat Security Market from 2008 to 2014. The sample of 109 firms has been selected from a total population of 115 firms. The model of study consist of five main financial activities related to entrepreneurial activities as independent variables, which include output of employment and prices, oil and gas, public finance, money, banking and financial institutions, foreign trade and balance of payments wherein every activity is measured by three variables. The dependent variable is financial indictors consisting of market and profitability indicators. The results show there is a statistical significant impact of three entrepreneurial activities of output of employment and prices, money, banking and financial institutions, foreign trade and balance of payments on market indicator and in all entrepreneurial activities on profitability indicator. Researchers strongly recommends to adoption of entrepreneurship in the government's planning and long term strategy at the country level and special attention for all economic activities that contribute to the promotion of entrepreneurial concept directly or indirectly through the influence in all economic sectors and this interaction could add effective economic value that will reflect positively on economic growth.
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The problem of the need for internal financial control is common to businesses of all types and volumes, but is especially acute in corporations due to the fact that in our time they were able to achieve such a scale in which the collapse of a corporate system may have an impact on the economy of many countries. In addition, at the moment the relevance of the chosen topic is determined by the transition to the reporting tool that is new for Russian economic agents – International Financial Reporting Standards (IFRS), as well as Russia's accession to the World Trade Organization (WTO) and intensification of globalization processes. Together, this makes it possible to integrate the Russian economy into the new systems, including international experience in their practice, taking into account national specificities. However, scientific research pays not enough attention to the disclosure of the principles and mechanisms of internal corporate financial control in a market economy, which is capable of operating in the management system of Russian corporations. In addition, the lack of systematization of existing knowledge and methodological approaches is observed, which determined the choice of the topic, goal and objectives of the study, its logic and structure. The article examines the methods and elements of financial control, financial fraud and ways to identify and prevent it. The article also discloses principles of financial control systems and proposes measures aimed at creating an effective system of internal financial control in the Russian corporations.
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Expanding the existing literature regarding the relationship between fiscal policy and stock market, this paper will analyse the response of stock markets from Central and Eastern Europe (Bulgaria, Check Republic, Slovakia, Poland and Romania), to a deviation in fiscal policy by using a Vector Autoregressive model (VAR) for quarterly data, for the period 2004-2015. The effect of crisis over stock market performance is significantly negative for all analysed countries, while governmental expenditure increased in Bulgaria, Check Republic, Slovakia and Romania, and governmental revenues increased only in Check Republic, Hungary and Slovakia. The paper highlights that an increase of stock market performance leads to a decrease of governmental expenditure in Slovakia, Romania, Check Republic and Bulgaria, due to the existence of a performant private sector which comes and compensates the investments. The Romanian’s governmental expenditure decreased considerably in comparison with other countries. Also, in Poland case, there is no relation between stock market performance and governmental expenditure.
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