International Monetary Fund

Unlocking efficiency: optimal monetary policy when capital misallocation matters

Retrieved on: 
Friday, April 19, 2024
Commitment, Statistics, European Central Bank, Central bank, Face, Science, Grimm, ECB, Benigno, Journal, Policy, American Economic Journal, TFP, International Monetary Fund, American Economic Association, Business cycle, Fornaro, Interest, Princeton University Press, Directorate, American Economic Review, Literature, New Keynesian economics, Timeless, NBER

While “misallocation of capital” and its detrimental impact on productivity is traditionally beyond the scope of central banks, monetary policy can influence it through firms’ investment decisions.

Key Points: 
  • While “misallocation of capital” and its detrimental impact on productivity is traditionally beyond the scope of central banks, monetary policy can influence it through firms’ investment decisions.
  • Using a New Keynesian model and granular data on Spanish firms, our results show that expansionary monetary policy reduces capital misallocation.

How India’s economy has fared under ten years of Narendra Modi

Retrieved on: 
Thursday, April 18, 2024
Electricity, Employment, Growth, Agriculture, Unemployment, BJP, Welfare, Smoke, Make, Poverty, Bharatiya Janata Party, International Monetary Fund, Parity, GDP, Congress Party, Government, Renewable energy

The ruling Bharatiya Janata Party (BJP), which is led by Prime Minister Narendra Modi, is seeking a third term in office.

Key Points: 
  • The ruling Bharatiya Janata Party (BJP), which is led by Prime Minister Narendra Modi, is seeking a third term in office.
  • If one was to go by economic growth figures alone, the Modi government’s performance has been impressive.
  • A series of high-profile corruption cases led to a loss of investor confidence in the Indian economy.
  • According to the International Monetary Fund, India’s economy is projected to grow at a rate of 6.5% in 2024.
  • That is higher than China’s projected growth of 4.6%, and exceeds that of any other large economy.

All smoke and mirrors?

  • India’s economic performance is hard to assess as the government has not published official data on poverty and employment since 2011.
  • This has led analysts to use alternate data sources that are not as reliable as the large and nationally representative consumption and employment surveys of the Indian government’s statistical agency.
  • The results were based on a large consumption survey carried out by the Indian government.

The new welfarism

  • The Aadhaar rollout, in particular, has allowed national and state governments to distribute benefits to the poor directly through their Aadhaar-linked bank accounts.
  • It has also helped to curb leakage in the delivery of subsidies to poor households, which has long been the bane of India’s welfare delivery.
  • Essential goods such as toilets and cooking cylinders, which are normally privately provisioned, were supplied in large numbers by the government.
  • This led to what Indian economist and the former Chief Economic Advisor to the government, Arvind Subramanian, called “New Welfarism” in India.

The lack of good jobs

  • But it has not been as successful in creating productive jobs for the large proportion of India’s labour force who are unskilled and poor.
  • Around 40% of workers remain in agriculture, and only about 20% work in manufacturing jobs or business services such as IT.
  • The weak record of the Modi government in creating jobs is surprising given that it has floated many initiatives to kickstart manufacturing.


Kunal Sen receives funding from ESRC, British Academy and DFID.

A new measure of firm-level competition: an application to euro area banks

Retrieved on: 
Thursday, April 18, 2024
Glass, RPD, Journal of Economic Perspectives, Goldberg, Employment, Lead, Competition, SCP, Research Papers in Economics, TCF, Intuition, Laboratory, Euromoney, Bank of Canada, Calendar, International political economy, Manufacturing, Oxford Economic Papers, Harvard University Press, Paper, Linearity, R2, Environment, Delicatessen, System, Website, Panzar, Working paper, World Bank, Elzinga, Friends, Madiga, CPB, Investment, Lerner index, Statistics, Croatian National Bank, PDF, Elsevier, ECB, Industrial organization, Policy, Social science, JEL, Operations research, Internet, Journal, Research, Literature, European Central Bank, Journal of Economic Surveys, MRP, Commercial, Section 5, Financial intermediary, Ministry of Social Affairs, Elasticity, National bank, Government, Developed country, Cell, Tarazi, Wealth, Publishing, Springer Nature, Prudential, Marketing, Law, The Economic Journal, Lerner, L16, Business economics, OECD, International Monetary Fund, Section 4, Database, Section 3, Krieger, EMU, Section 2, Pressure, Central bank, Economics Letters, Bank, Jorgenson, Character, Sparkassen-Finanzgruppe, Life, EDS, American Economic Review, K2, Appendix, Applied economics, CEE, Palgrave Macmillan, Livret A, Bell Labs, GDP, Part, Country, Public policy, De Economist, Management, Publication, Motivation, Cooperative, Reproduction, IMF, Edward Elgar Publishing, Housing, Handbook, G21, Real estate

Abstract

Key Points: 
    • Abstract
      This paper extends Boone (2008) by introducing a competition measure at the individual
      firm level rather than for an entire market segment.
    • We apply this extended Boone indicator to individual bank-level competition
      in the loan market in the four largest euro area countries and Austria.
    • Our new measure of firm-level competition enriches and complements
      other competition measures and provides a promising starting point for future market
      power analyses.
    • The only measure among non-structural measures that is based on the
      concept of competition as a process of rivalry is the Boone (2008) indicator.
    • We introduce
      a new performance measure of competition by extending the Boone indicator to the
      individual firm level.
    • Introduction
      The ability to reliably measure competition is valuable to researchers, analysts, and
      policymakers, especially antitrust authorities, financial supervisors, and central banks.
    • One broad
      category of indicators often used to measure competition are structural competition
      measures, such as static concentration measures, and dynamic measures, e.g., entry and
      exit rates.
    • Out of these measures, the only measure based on the
      concept of competition as a process of rivalry is the Boone indicator.
    • This study introduces a new performance measure of competition by extending the
      Boone indicator to the individual firm level.
    • It thus measures the
      increase in profits in percent of one percentage point increase in efficiency, with marginal
      costs as measure of efficiency.
    • We extend the theoretical
      underpinning of the measurement of competition for the entire market of Boone (2008) by
      a new measure of individual firm-level competition.
    • A concern of the literature is the gap
      between the practical application and the theoretical framework of Boone (2008).
    • We introduce within the same theoretical
      framework a new measure of competition on firm level, the MRP.
    • Our new
      measure significantly augments the antitrust evaluative framework by shedding light on
      whether a merger results in a less competitive market.
    • Our novel indicator focuses on
      firms? incentives to enhance their relative efficiency, as manifested in the elasticity
      between relative profits and efficiency.
    • However, an inefficient firm that is foreclosed could be more
      competitive than the larger efficient firm that relies on its scale economies.
    • Our new metric of competition unveils
      banks? ability to influence their profitability in the short term by cutting costs relative to
      their peers.
    • The new MRP indicator provides the ability to assess the impact
      of individual banks? competitiveness on their interest rate-setting behaviour in loan
      markets.
    • Incorporating this information promises a more refined understanding of the impact and
      timing of monetary policy rates changes on the real economy.
    • Section 3 introduces within the Boone
      (2008) theoretical framework our new measure of individual firm-level competition,
      including the interpretation of the MRP.
    • Section 4 provides an application of our new
      ECB Working Paper Series No 2925

      6

      individual firm-level competition measure to the loan market.

    • The StructureConduct-Performance paradigm (SCP) provides a traditional framework in the field of
      industrial organization for analysing competition behaviour in markets.
    • Concentrated
      markets ease the possibilities to collude implicitly or explicitly and therefore concentrated
      markets result in higher prices and profits.
    • For example, a tougher competition
      setup may lead to a reallocation of market shares, potentially forcing some firms to exit
      the market.
    • This approach gives firms? strategic behaviour
      central stage and focuses on the strategic interaction on prices and quantities, known as
      conjectural variation.
    • Another measure from
      this strand of literature is the H-statistic developed by Panzar and Rosse (1987).
    • The only competition measure from this performance literature where competition is the
      outcome from a process of rivalry is the Boone indicator.
    • A continuous and monotonically increasing relationship exists between
      RPD and the level of competition if firms are ranked by decreasing efficiency.
    • (2013) compare the Boone indicator with the price-cost margin
      and conclude that the profit elasticity is a more reliable measure of competition.
    • The high
      elasticity of profits to efficiency unequivocally indicates that the high market shares and
      therefore high profits are due to high efficiency.
    • A firm that quickly passes changes to the input prices is seen as a price
      taker with little market power.
    • Indicators of competition tend to measure different phenomenon and may provide
      conflicting messages, as reported for European banking by Carbo et al.
    • Application 2: Test the ?quiet life? and related market structure hypotheses using the
      MRP as competition or market structure measure.
    • Data
      Our application to individual bank-level competition in the euro area loan market uses
      balance sheet and income statement data from the Moody?s Analytics BankFocus for the
      calendar years 2013-2020.
    • As such, most publications
      on competition in the euro area includes the largest four member states.
    • Due to these restrictions the database was reduced to an unbalanced panel of up to 1862
      banks (depending on the year) from five euro area countries.
    • Application 1: Measure bank competition using MRP
      Looking at the distribution of the MRP for individual banks (Fig.
    • A similar finding for the four largest euro area countries as a group is
      reported in Carbo et al.
    • Application 2: Test of market structure hypotheses using MRP
      Our new measure of individual-bank competition can be used to test market structure
      theories.
    • Euro area banks? market power,
      lending channel and stability: the effects of negative policy rates, European Central Bank
      Working Paper, 2790 (February).
    • A
      new approach to measuring competition in the loan markets of the euro area, Applied
      Economics, 43 (23), 3155?3167.
    • Impact of bank competition on the interest rate pass-through in the euro area, Applied
      Economics, 45 (11), 1359?1380.

Central bank digital currency and monetary policy implementation

Retrieved on: 
Thursday, April 18, 2024
E41, Central bank digital currency, Atlantic Council, Research Papers in Economics, Remuneration, Norges Bank, People's Bank of China, Policy, Central Bank of Myanmar, Bank for International Settlements, Blog, Financial innovation, Sveriges Riksbank, Bank of Canada, Mechanics, Journal of Monetary Economics, Insurance, Bank of England, E42, Corridor, Quarterly Journal of Economics, Report card, Frankfurt, Appetite, American Economic Association, Digital rupee, Rosolin, RBI, PDF, Private, ECB, Committee, Inden, North Rhine-Westphalia, Bank, Canadian International Council, Social science, JEL, JMD, ECCB, Digital, Journal, Research, POC, European Central Bank, ENaira, M.A, Monetary economics, Section 5, Government, ISSN, The, Central bank, Finance, Buffer, Parliament, CBN, EONIA, Asset, ATM, Risk, International Monetary Fund, Interbank, Section 4, Ministry, Press release, Section 3, Human, Waterfall, Cryptocurrency, Economy, Swiss National Bank, PIB, Section 2, Conference, Reserve Bank, Reserve Bank of India, GBP, Progress, Road, American Economic Review, CBB, Digital currency, Agur, European Commission, International Settlement, Constraint, Money, Community business development corporation, City, Equivalence, Eligibility, Ministry of Finance, Report, Control, Civil service commission, EUR, Uncertainty, Eastern Caribbean Central Bank, Abadi, Rest, Reproduction, Fintech, IMF, Federal Reserve, LCR, Data
Key Points: 

    CGTN: China deepens reform and opening up, appeals to global investors

    Retrieved on: 
    Friday, March 29, 2024
    Regional Comprehensive Economic Partnership, Ministry, Speech, Congress, Conference, Growth, Face, NEVS, Carbon, International Monetary Fund, Egotism, Tourism, GDP, Boao Forum for Asia, Optimism, BFA, Renewable energy

    To transform its economy and achieve sustainable development, China now is deepening reforms.

    Key Points: 
    • To transform its economy and achieve sustainable development, China now is deepening reforms.
    • Zhao stressed that peace is a prerequisite for Asia's development in the face of intertwined and complex global security threats.
    • During the 2022 Boao Forum, China proposed the Global Security Initiative, promoting the vision of common, comprehensive, cooperative and sustainable security.
    • In 2021, China proposed the Global Development Initiative, which promotes globalization, multilateralism and free trade, aiming to build a just, equitable, open and inclusive world.

    CGTN: China deepens reform and opening up, appeals to global investors

    Retrieved on: 
    Friday, March 29, 2024
    Regional Comprehensive Economic Partnership, Ministry, Speech, Congress, Conference, Growth, Face, NEVS, Carbon, International Monetary Fund, Egotism, Tourism, GDP, Boao Forum for Asia, Optimism, BFA, Renewable energy

    To transform its economy and achieve sustainable development, China now is deepening reforms.

    Key Points: 
    • To transform its economy and achieve sustainable development, China now is deepening reforms.
    • Zhao stressed that peace is a prerequisite for Asia's development in the face of intertwined and complex global security threats.
    • During the 2022 Boao Forum, China proposed the Global Security Initiative, promoting the vision of common, comprehensive, cooperative and sustainable security.
    • In 2021, China proposed the Global Development Initiative, which promotes globalization, multilateralism and free trade, aiming to build a just, equitable, open and inclusive world.

    Pan Finance Announces the Q1 Award Winners of 2024

    Retrieved on: 
    Wednesday, March 27, 2024
    Electricity, Cyclone, University, Today, EVP, Environment, Business, European University Institute, Wildfire, Seoul National University, CARICOM, Business development, DNB, AI, National Economic Advisory Council, Flood, International Monetary Fund, MENA, Macroeconomics, Oxford University Press, Innovation system, Growth, De Nederlandsche Bank, European Fiscal Board, Economics, Weather, Cryptocurrency

    In this first edition of 2024, Pan Finance Magazine's cover story highlights how AI is shaking up the way we invest our money.

    Key Points: 
    • In this first edition of 2024, Pan Finance Magazine's cover story highlights how AI is shaking up the way we invest our money.
    • "Receiving the Pan Finance award as the most reliable property management firm in Mexico is a profound honour.
    • "FlexFunds is honoured to receive the Pan Finance 2023 Best Asset Securitization Program award.
    • By naming Neosun Energy as the winner of the "Most Innovative Solar Module Product - China & MENA 2024", the Pan Finance award has recognised Neosun's new approach that is changing the way to making solar energy affordable.

    Pan Finance Announces the Q1 Award Winners of 2024

    Retrieved on: 
    Wednesday, March 27, 2024
    Electricity, Cyclone, University, Today, EVP, Environment, Business, European University Institute, Wildfire, Seoul National University, CARICOM, Business development, DNB, AI, National Economic Advisory Council, Flood, International Monetary Fund, MENA, Macroeconomics, Oxford University Press, Innovation system, Growth, De Nederlandsche Bank, European Fiscal Board, Economics, Weather, Cryptocurrency

    In this first edition of 2024, Pan Finance Magazine's cover story highlights how AI is shaking up the way we invest our money.

    Key Points: 
    • In this first edition of 2024, Pan Finance Magazine's cover story highlights how AI is shaking up the way we invest our money.
    • "Receiving the Pan Finance award as the most reliable property management firm in Mexico is a profound honour.
    • "FlexFunds is honoured to receive the Pan Finance 2023 Best Asset Securitization Program award.
    • By naming Neosun Energy as the winner of the "Most Innovative Solar Module Product - China & MENA 2024", the Pan Finance award has recognised Neosun's new approach that is changing the way to making solar energy affordable.

    IFAD and WFP work together to combat hunger in fragile contexts

    Retrieved on: 
    Monday, March 18, 2024
    Climate change, Hunger, Climate, Food, Food security, Poverty, International Monetary Fund, Investment, WFP, Multimedia, Government, Thermal expansion, UN, Weather, Agriculture

    The UN agencies seek to leverage the strengths and expertise of each organization to enhance resilience in fragile environments and improve food security.

    Key Points: 
    • The UN agencies seek to leverage the strengths and expertise of each organization to enhance resilience in fragile environments and improve food security.
    • "We have decades of experience working in fragile contexts, because that is where so many of the rural poor live.
    • Nearly 1 billion people are currently living in such contexts worldwide, according to the International Monetary Fund estimates.
    • "WFP and IFAD teams work in many of the most fragile and challenging regions of the world, where millions of families who live on the frontlines of conflict, climate change and economic turmoil face a daily battle against hunger," said WFP Executive Director Cindy McCain.

    UNDER ARMOUR ANNOUNCES LEADERSHIP TRANSITION

    Retrieved on: 
    Wednesday, March 13, 2024
    University of Cambridge, Growth, Allianz, Financial Times, Chairperson, University, Private sector, Bloomberg L.P., Athlete, Real-time, UAA, Queens' College, Cambridge, International Monetary Fund, PIMCO, Bangladesh Technical Education Board, Lauder, Marketing, Plank, Lead, Management

    BALTIMORE, March 13, 2024 /PRNewswire/ -- Under Armour, Inc. (NYSE: UA, UAA) today announced that Kevin Plank will become President & Chief Executive Officer, effective April 1, 2024. Plank will succeed Stephanie Linnartz, who will be stepping down as President & Chief Executive Officer and member of the Board. In connection with Plank's appointment, Dr. Mohamed A. El-Erian, an independent director since 2018 and Lead Director since 2020, will become the non-executive Chair of the Board. Plank, who will transition from Executive Chair of the Board, will remain a director. Linnartz will remain an advisor to the company through April 30, 2024.

    Key Points: 
    • Plank, who will transition from Executive Chair of the Board, will remain a director.
    • "On behalf of the full team, I want to thank Stephanie for her contributions to Under Armour.
    • "During her tenure, she strengthened the leadership team with executive hires in critical areas, including product, design, supply chain, consumer connectivity, and regional management.
    • Plank founded Under Armour in 1996, and since then, he has been the driving force behind its innovative products and brand.