Financial and fiscal interaction in the Euro Area crisis: This time was different

Caruso, Alberto; Reichlin, Lucrezia; Ricco, G.

doi:10.1016/j.euroecorev.2019.08.002

Cited by 14 publications

(8 citation statements)

References 49 publications

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“…Following the studies by Carusoa et al [ 19 , Russel et al [ 70 ], and Alderiny et al [ 8 ], the endogenous indicators (SIZE, ROA, NPF, CAR) are forecasted based on their own lagged value and the current value of the GDPG. The VARX equations by bank-specific variables are illustrated as follows: Equations 2 , 3 , 4 , and 5 represent the models to be forecasted for every bank-specific variable across different jurisdictions.…”

Section: Methodsmentioning

confidence: 99%

Regulatory policies in the global Islamic banking sector in the outbreak of COVID-19 pandemic

2021

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This paper forecasts the response of Islamic banks’ dynamics (size, profitability, nonperforming financing, and stability) to the COVID-19 pandemic over the period ranging from 2019Q4 to 2021Q4. Nine jurisdictions are considered based on their Islamic banks’ systemic importance, namely Bahrain, Brunei, Indonesia, Kuwait, Malaysia, Pakistan, Saudi Arabia, Turkey, and UAE. Using the bivariate VARX model, our forecasting exercise shows that the Islamic banks’ response to the COVID-19 pandemic is not uniform across jurisdictions. While the Islamic banks’ dynamics in Saudi Arabia, UAE, and Kuwait are less likely to be impaired, Bahrain, Brunei, Malaysia, Pakistan, and Turkey are expected to be relatively more affected especially in terms of their size growth. Saudi Arabia will continue leading the growth momentum of the global Islamic banking sector, and its Islamic banks’ assets are expected to reach at least $185.4 billion by the end of the fourth quarter of 2021. This paper recommends a prioritization approach for the implementation of the policy measures by the jurisdictions based on their banks-specific responses to the COVID-19 pandemic.

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Section: Methodsmentioning

confidence: 99%

Regulatory policies in the global Islamic banking sector in the outbreak of COVID-19 pandemic

2021

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“…After its occurrence, the cycle became much more dependent on financial variables. Households' and financial corporations' debt deviated from their pre‐crisis trajectories, while the fiscal deficit/GDP ratio (Caruso et al ., 2019) and current account/GDP ratio (Coutinho and Turrini, 2020) skyrocketed in an unprecedented manner.…”

Section: Resultsmentioning

confidence: 99%

Economic Sentiment and Aggregate Activity: A Tale of Two European Cycles*

Sorić

Lolić

Logarušić

2021

J of Common Market Studies

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Departing from the mainstream literature on European monetary integration, we acknowledge the interdependence of economic sentiment synchronisation and business cycle co‐movements for 17 European countries and the euro area (EA). Building on national accounts and survey data, we find non‐negligible evidence that sentiment cycles are the driving force behind general economic cycle synchronization. We demonstrate that recent EA acquisitions have witnessed an intensification of cycle synchronization with the EA core after the introduction of a common currency, corroborating the beneficial effects of the Eurosystem. Our results show a certain degree of dependence on the business cycle. The synchronization of 17 examined countries vis‐à‐vis the EA is mostly of equal magnitude or even more intensive during recessions than in expansions. In other words, the common monetary policy of the European Central Bank (ECB) should be able to effectively act as a countercyclical tool when an individual economy is facing a recession.

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“…The fiscal policy followed by Greece over the economic crisis years was restrictive (Monokroussos 2015;Papadamou and Tzivinikos 2017), resulting in a widening recession and a rise in unemployment (Gechert and Rannenberg 2015), since high debt levels reduced the government's ability to use public expenditure in order to stabilize the economy (Papadimos 2011), for this reason was called on to provide assistance to the financial sector (Caruso et al 2019). The banking crisis and the increase in non-performing-loans (NPLs), in turn, had additional negative effects on unemployment and inflation (Mazreku et al 2018).…”

Section: The Economic Policy In Greece During the Crisismentioning

confidence: 99%

Phillips Curve: The Greek Case

Liargovas¹,

Psychalis²

2020

European Review

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One of the most important problems facing Greece is the long-term and high-level unemployment rate. The Economic Adjustment Programmes (EAPs) focused on the supply side of the economy, aiming at the adjustment of prices and wages, draw on the classical economic model, as it is widely accepted that internal devaluation policies keep inflation low. This article attempts to examine whether the Keynesian theory and the Phillips Curve, which shows the relationship between unemployment and inflation, apply in the case of the Greek economy. We use descriptive statistics, ordinary least squares (OLS) and VAR Analysis to examine the relationship between the variables. According to the results, there is a negative correlation between unemployment and inflation in Greece, thus confirming the Phillips Curve hypothesis. Finally, results show that unemployment is less dependent on inflation compared with the past, and there are numerous other decisive factors affecting unemployment.

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Financial and fiscal interaction in the Euro Area crisis: This time was different

Cited by 14 publications

References 49 publications

Regulatory policies in the global Islamic banking sector in the outbreak of COVID-19 pandemic

Regulatory policies in the global Islamic banking sector in the outbreak of COVID-19 pandemic

Economic Sentiment and Aggregate Activity: A Tale of Two European Cycles*

Phillips Curve: The Greek Case

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