Does development finance pose an additional risk to monetary policy?

Issahaku, Haruna; Harvey, Simon K.; Abor, Joshua Yindenaba

doi:10.1016/j.rdf.2016.06.001

Cited by 18 publications

(12 citation statements)

References 41 publications

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“…First, the panel unit root tests had more predictive power relative to their respective time-series counterparts. This study used the four-panel unit root tests, listed above, because the traditional ADF is reported to have low predictive power when identifying stationarity in short panels (Issahaku et al , 2016), as in our case. Second, panel unit root tests do not restrict but permit for country-level fixed effects and variations in time for the parameters across the panels.…”

Section: Resultsmentioning

confidence: 99%

Financial inclusion and migrant remittances in Sub-Saharan Africa: a panel VAR approach

Anarfo

Amewu

Dzeha

2020

IJSE

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PurposeThis study examines the causal and dynamic link between financial inclusion and migrant remittances in sub-Saharan Africa.Design/methodology/approachThe study employed a panel vector autoregressive (VAR) framework to examine the dynamic relationship between financial inclusion and migrant remittances in sub-Saharan Africa.FindingsThe findings indicate that there is a reverse causality between financial inclusion and migrant remittances in sub-Saharan Africa.Practical implicationsThe practical implications of these findings are that central governments and economic policymakers in sub-Saharan African countries should formulate and implement policies aimed at fostering financial inclusion if they are to attract more migrant remittances to promote economic growth and financial sector development. This suggests that these two variables are complementary and not contradictory. The results also suggest that central banks and other financial institutions can leverage the positive effect of financial inclusion of financial sector development to enhance the development of the financial sector instead of pursuing financial sector development as a policy objective. This means policies aimed at promoting financial inclusion will not impede or sacrifice migrant remittances, economic growth and financial sector development.Originality/valueThis paper is the first to construct a financial inclusion index to examine the link between financial inclusion and migrant remittances from the sub-Saharan Africa perspectivePeer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2019-0612/

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Section: Resultsmentioning

confidence: 99%

Financial inclusion and migrant remittances in Sub-Saharan Africa: a panel VAR approach

Anarfo

Amewu

Dzeha

2020

IJSE

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“…Furthermore, Issahaku et al, (2016) investigated the potential risk posed by remittances for macroeconomic management and also examined the effect of remittances on monetary policy in 106 developing countries from 1970 to 2013 using panel vector autoregressive model. Results showed that volatility in remittances reduced macroeconomic risk in developing countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances, financial development and the effectiveness of monetary policy transmission mechanism in Nigeria: a DSGE approach (1986–2018)

Apanisile

2021

Ind. Econ. Rev.

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The study examines the effect of remittance inflows on the effectiveness of monetary policy transmission channels in Nigeria using the New-Keynesian DSGE model. The study employs quarterly data spanning from 1986:1 to 2018:4. Four different channels are considered namely interest rate, exchange rate, credit and expectation channels. Results show that remittance inflows hinder the effectiveness of monetary policy channels. This implies the bulk of remittance inflows into the country do not pass through the financial system. Rather, the inflow is through the informal channels thereby making it difficult for the monetary authority to control the amount of inflow. Furthermore, given the impact of remittance on output gap, it shows that remittance has low persistence in the economy despite the inflow. This implies the bulk of remittance inflow is spent on consumption and not investment. Considering the effect of remittance inflow on inflation, the inflow is not inflationary. The study concludes that to better sterilize the effect of remittance inflow in the country, monetary policy authority should encourage the inflow through the financial system.

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“…Rolling window on performance metrics and the statistical test is widely used in literature, for instance, (Issahaku, Harvey, & Abor, 2016) uses rolling window model over standard deviation macroeconomics variables to evaluate de volatility risk associated to monetary policy through a panel vector autoregressive (PVAR) for 106 developing countries. Likewise, (Balcilar, Ozdemir, & Shahbaz, 2019) applied a Granger causality recursive rolling test to find linkages between oil and gold prices.…”

Section: Brief Review Ff the Risk-return Trade-offmentioning

confidence: 99%

Bull vs. Bear Oil & Gas Leveraged Exchange Traded Fund: A Rolling Risk-Performance

Mendoza-Rivera

García-Pérez

Preciado

2020

REMEF

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El objetivo de esta investigación es capturar la exposición riesgo-rendimiento de 4 ETFs de energía apalancados populares: GUSH, DRIP, DGAZ y UGAZ, que son una opción de inversión atractiva cuando el mercado de capitales (acciones y bonos específicamente) no presenta un buen desempeño debido a la incertidumbre inherente del mercado. Se utiliza un modelo de riesgo-rendimiento de ventanas móviles para estudiar la dinámica de tres de los principales componentes de inversión: volatilidad, rendimiento y beta del mercado (β) en diferentes horizontes de tiempo sobre ETF alcistas (bull) y bajistas (bear) que replican índices y commodities basadas en petróleo y gas. El ETF de energía apalancado proporciona de 200% a 300% (para bull) y -200% a -300% (para bear) de rendimiento diario a partir de su índice de referencia, permitiendo implementar estrategias donde se pueden obtener altos rendimientos (así como las altas pérdidas) a partir de la volatilidad del mercado. Los resultados permiten caracterizar la dinámica riesgo-rendimiento de los ETFs energéticos apalancados (bull y bear). En general, los ETF son un mecanismo para que los inversionistas puedan prever la estructura de precios de los energéticos, con el fin de tomar decisiones sobre una asignación eficiente de los recursos.

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Does development finance pose an additional risk to monetary policy?

Cited by 18 publications

References 41 publications

Financial inclusion and migrant remittances in Sub-Saharan Africa: a panel VAR approach

Financial inclusion and migrant remittances in Sub-Saharan Africa: a panel VAR approach

Remittances, financial development and the effectiveness of monetary policy transmission mechanism in Nigeria: a DSGE approach (1986–2018)

Bull vs. Bear Oil & Gas Leveraged Exchange Traded Fund: A Rolling Risk-Performance

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