Cross-country connectedness in inflation and unemployment: measurement and macroeconomic consequences

Pham, Binh Thai; Sala, Héctor

doi:10.1007/s00181-021-02052-0

Cited by 19 publications

(7 citation statements)

References 24 publications

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“…They then use the short-run Phillips curve to build a model that describes the inverse relationship between the number of COVID-19 infections and economic inactivity. Pham and Sala [ 44 ] studied the effect of inflation and unemployment rates on cross-country connectedness for the G7 countries. They found that the connectedness of inflation is high, but unemployment is low.…”

Section: Introductionmentioning

confidence: 99%

A cross-country analysis of macroeconomic responses to COVID-19 pandemic using Twitter sentiments

et al. 2022

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The COVID-19 pandemic has had a devastating impact on the global economy. In this paper, we use the Phillips curve to compare and analyze the macroeconomics of three different countries with distinct income levels, namely, lower-middle (Nigeria), upper-middle (South Africa), and high (Canada) income. We aim to (1) find macroeconomic changes in the three countries during the pandemic compared to pre-pandemic time, (2) compare the countries in terms of response to the COVID-19 economic crisis, and (3) compare their expected economic reaction to the COVID-19 pandemic in the near future. An advantage to our work is that we analyze macroeconomics on a monthly basis to capture the shocks and rapid changes caused by on and off rounds of lockdowns. We use the volume and social sentiments of the Twitter data to approximate the macroeconomic statistics. We apply four different machine learning algorithms to estimate the unemployment rate of South Africa and Nigeria on monthly basis. The results show that at the beginning of the pandemic the unemployment rate increased for all the three countries. However, Canada was able to control and reduce the unemployment rate during the COVID-19 pandemic. Nonetheless, in line with the Phillips curve short-run, the inflation rate of Canada increased to a level that has never occurred in more than fifteen years. Nigeria and South Africa have not been able to control the unemployment rate and did not return to the pre-COVID-19 level. Yet, the inflation rate has increased in both countries. The inflation rate is still comparable to the pre-COVID-19 level in South Africa, but based on the Phillips curve short-run, it will increase further, if the unemployment rate decreases. Unfortunately, Nigeria is experiencing a horrible stagflation and a wild increase in both unemployment and inflation rates. This shows how vulnerable lower-middle-income countries could be to lockdowns and economic restrictions. In the near future, the main concern for all the countries is the high inflation rate. This work can potentially lead to more targeted and publicly acceptable policies based on social media content.

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Section: Introductionmentioning

confidence: 99%

A cross-country analysis of macroeconomic responses to COVID-19 pandemic using Twitter sentiments

et al. 2022

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“…Also, the interconnectedness of macroeconomic variables in a globalized world can lead to endogeneity issues [109][110][111]. Endogeneity occurs when the variables under investigation are interdependent, making it difficult to determine which variable is driving changes in the others.…”

Section: Internal Validity Limitations and Macroeconomic Trendmentioning

confidence: 99%

Do Trade Agreements Enhance Bilateral Trade? Focus on India and Sri Lanka

Akram,

Ahmad,

Dana

et al. 2024

Sustainability

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This article examines bilateral trade relations between the two important countries of South Asia, India and Sri Lanka, in light of the South Asian Free Trade Area (SAFTA) and the India–Sri Lanka Free Trade Agreement (ISFTA). The analysis period spans the years 1995 to 2020. The primary analysis found that bilateral trade has been sluggish and that the SAFTA and ISFTA agreements have had no discernible effect on these two countries’ bilateral trade performance. The causes of lackluster trade performance were investigated using the “revealed comparative advantage” and the “trade complementarity” indices. Clear evidence was found demonstrating that the reason for the bilateral trade’s consistent lackluster performance is due to both countries’ lack of revealed comparative advantage in the majority of product groups, followed by export similarity in the product groups where they do have a comparative advantage. The findings also confirm the suspicion of many observers that they are competitors rather than natural trading partners. Although any substantial future increase in their bilateral trade is improbable and fanciful, the paper reflects on methods of strengthening bilateral trade.

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“…• Unemployment -Unemployment refers to the number of people out of work and actively seeking employment (Pham & Sala, 2021). Unemployment can impact the insurance sector in several ways.…”

Section: • Factors Onmentioning

confidence: 99%

Dependence relationship between insurance demand and some economic, financial, and socio-demographic factors: Evidence from different groups of European countries

Athanasiadis,

Šulista,

Mrkvička

2023

Insurance Markets and Companies

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The insurance sector is a significant component of the economy and its financial system. Therefore, sound growth and protection of the insurance industry against systemic risks are critical requirements for any country’s social and economic development. The paper analyzes the dependence between insurance demand represented by insurance penetration and various factors from economics, finance, socio-demographics, and institutions. The analysis is conducted within certain clusters of European countries, which are determined by functional clustering analysis concerning the magnitude and shape of the insurance penetration curves. The dependence is analyzed via linear mixed-effect models. The analysis shows significantly different dependencies between the clusters, proving the existence of different conditions for different European insurance markets, especially concerning economic growth, income, financial development, and unemployment. In contrast, interest rates, inflation, urbanization, and education do not play a significant role in these insurance markets. The institutional development seems insignificant for all clusters except for certain economies in transition. The findings imply that there is a need for countries across Europe to identify country-specific determinants of insurance. In that respect, European policymakers and managers can direct specific policies based on the identified determinants’ relationship with insurance, especially in developing countries.

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Cross-country connectedness in inflation and unemployment: measurement and macroeconomic consequences

Cited by 19 publications

References 24 publications

A cross-country analysis of macroeconomic responses to COVID-19 pandemic using Twitter sentiments

A cross-country analysis of macroeconomic responses to COVID-19 pandemic using Twitter sentiments

Do Trade Agreements Enhance Bilateral Trade? Focus on India and Sri Lanka

Dependence relationship between insurance demand and some economic, financial, and socio-demographic factors: Evidence from different groups of European countries

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