Global Economy Journal

Economic uncertainty and monetary uncertainty are two uncertainty measures that are said to affect the demand for money in any country and our region of interest, Africa, is no exception. In this paper, we take an additional step and argue that changes in any uncertainty measure could have asymmetric effects on the money demand. After applying the linear and nonlinear ARDL approaches to each of the 13 African nations, while we find the short-run effects of both uncertainty measures to be asymmetric, long-run asymmetric effects were discovered in limited number of countries. We also discovered that monetary volatility has more long-run effects than output volatility which implies that a steady and not so erratic money growth will have its predictive impact on the African economies.

Using the Diebold and Yilmaz (2012) spillover method, this study attempts to evaluate the strength and direction of cross-country interactions of macroeconomic activity across US, Japan, Germany, China, India and Russia. Apart from a base model, it frames two alternative models; one is based on principal component analysis (PCA) incorporating important macroeconomic variables from each country and another model is based on industrial production index; both evaluate the robustness of our empirical findings. It finds that 62% of variations in growth rates of all six countries are due to their mutual interdependence among them and it also reflects that the emerging economies like China and Russia take the lead in influencing foreign economic activities. It suggests that the concrete policy action is required to diversify the international market interdependency of a domestic economy as it may jeopardise the macroeconomic stability when uncertainty is generated in foreign economies. The empirical analysis is found to be robust.

This paper introduces natural language processing into the study of central banking. It studies the evolution of the ECB’s communication through time, considering its three subsequent presidents (W. Duisenberg, J. C. Trichet and M. Draghi) and the pre- and post-2008 financial crisis era. It helps understand the history of the ECB since its inception. From a methodological standpoint, we study the evolution of the ECB’s speeches. The speech analysis is based on text classification and sentiment/polarity analyses. For that purpose, we have built a unique dataset of the ECB’s speeches. We have coded algorithms to run the text analysis through time. They help us capture the evolution in the ECB’s understanding of the actual economic situation and also measure — for instance — the stress level at the ECB through a polarity analysis through time.

This paper investigates the impact of the recent terrorist attacks on the Turkish banking sector. Specifically, an event study analysis is executed to estimate the abnormal returns of banks’ stocks in Turkey. According to the results, negative and significant abnormal returns were observed on the event dates of terrorist attacks, those of which especially occurred at international points and touristic places. The study continues with a regression analysis that looks into the cross-bank variation of abnormal returns by using important bank characteristics as predictors. The regression analysis exhibits that banks with higher leverage and larger size are prone to getting more negatively affected by the terrorist attack. On the other hand, banks with higher liquidity and higher income level are likely to have less negative abnormal returns.

Portugal policy makers consider the motor vehicle industry to be critical to the country’s economy because of its potential to offer highly skilled job opportunities and incentives for innovation and research, technology transfer, and investment, although the industry remains small by international standards. Little empirical research exists on the Portuguese motor vehicle industry, and we attempt to partially fill this void by estimating an industry cost function. We find strong evidence of scale economies, an expected result given the low industry volume. An unexpected finding is that capital and labor are complements since much of the international literature regarding the industry finds evidence they are substitutes. An exception is the German industry, and the findings here may be related to the fact that the largest Portuguese motor vehicle producer is Volkswagen AutoEuropa. The significance of this finding is that a lower price for either of these inputs would increase the quantity demanded of both of them. The future appears highly uncertain for the motor vehicle assemblers unless they can achieve sufficient synergies with component suppliers and other global motor vehicle manufacturers to become internationally competitive. The component suppliers may be able to enlarge their international markets, particularly that of Spain, because of its proximity to Portugal.

In view of the technological advances made by emerging economies, we revisit the role of technological specializations of different economies in determining their exports. Employing revealed technological advantage (RTA) index and revealed symmetric technological advantage (RSTA) index, this study explores the technological specialization of countries in different fields and its contribution to high-technology exports. Technological specializations are operationalized using patent data and further analyzed in context of country’s exports data of 63 countries during 2000–2013. Using panel quantile regressions analysis, this paper finds that technological specialization determines the export performance of countries in different categories. We find that middle-income countries are among the top countries with respect to few fields of technological specializations. Hence, there is a need to change the perspective whereby developing countries are viewed as mere technological follower. This finding has an implication for the role of patents in technological specialization and export performance, both of which are important factors in international competitiveness.