Stock market and exchange rate information in the Taylor rule: Evidence from OECD countries

Abstract

Taxes have become an issue of corporate social responsibility (CSR), but the role of taxation is to some extent an ambiguous and controversial issue in the CSR framework. Similarly, another unclear question is what role investors who are committed to sustainable and responsible investment (SRI) see taxes as having on their environmental, social, and governance (ESG) agenda. Corporate taxes have an inverse relationship with the return of the investors: taxes paid directly affect what is left on the bottom line, reducing the return of investors. However, investors are now more aware of tax-related risks, which can include different forms of reputation risk. Corporate tax planning may increase the returns, but those increased returns are riskier. This study focuses particularly on the relationship between SRI and taxation. We find that tax matters are considered to be on the ESG agenda, but their role and significance in the ESG analysis is unclear.

Taylor Principle under Inflation Targeting in Emerging ASEAN Economies: GMM and DSGE Approaches

“…Among these studies, Belke and Cui (2010), Botzen and Marey (2010) and Papadamou et al (2018) prioritized their analyses on the policy rule governed by European Central Bank in Euro area, which were different from individual countries' policy rules. Botzen and Marey (2010) and Heimonen et al (2017) targeted their Taylor-rule analyses on the responses to stock market, which had rather different scope from this study's target. Thus this section focuses on the comparison in estimated policy rules between ASEAN IT adopters in this study and the US Fed based on Belke and Polleit (2007).…”

“…Regarding the studies on the Taylor rules of advanced economies, there has been relatively a larger volume of recent literature since the initially seminal works of Clarida and Gertler (1997) and Clarida et al (1998a and1998b), such as Belke and Polleit (2007), Belke and Cui (2010), Botzen and Marey (2010), Heimonen et al (2017) and Papadamou et al (2018). Among these studies, Belke and Cui (2010), Botzen and Marey (2010) and Papadamou et al (2018) prioritized their analyses on the policy rule governed by European Central Bank in Euro area, which were different from individual countries' policy rules.…”

Exchange Rate, COVID‐19, and Stock Returns in Africa: Insights from Time‐Frequency Domain

“…us, these markets need to be "up and running" to facilitate consumption, capital investments, aggregate demand [3], savings, and overall macroeconomic performance and a uence. He et al [1] noted that the comovement between the markets for STK and EXR presents critical consequences to economies.…”

“…As Owusu Junior et al [6][7][8] and Tweneboah et al [9] posit, the co-movement between exchange rate and stock market returns is critical for an efficient allocation of scarce resources since it influences portfolio management. As contended by Heimonen et al [3] and He et al [1], the fundamental constituents of the financial system are stocks and exchange rates.…”

“…e USD exchange rate is utilised in this study because it is the most acceptable and tradable legal tender for most international transactions (Salisu & Mobolaji, 2013) irrespective of high interdependencies with other currencies (see [8]). ere is a need to ensure the efficient running of these markets to facilitate a sound financial system [3] since decisions made by economic agents and policy implementation [1] heavily require a strong connection between the EXR and STK markets. Additionally, Heimonen et al [3] suggested that a strong connection between the two markets facilitates consumption, capital investments, aggregate demand, savings, and overall macroeconomic performance.…”