Panoeconomicus

Is Information and Communication Technology a Productivity Drain or Gain? Evidence from the Health Services Sector in China

Philip Arestis — 2025-01-01

This contribution investigates the impact of information and communication technology (ICT) on health service performance and considers the issue of income inequality. It provides empirical evidence that the development of ICT helps to mitigate the negative impact of income inequality on health and thereby providing support for the vigorous development of ICT. Specifically, by using the Driscoll-Kraay standard error estimation, Generalized Method of Moments, and a panel threshold model, a nonlinear relationship is detected, and the results show that: (1) ICT can significantly promote the performance of the health service sector. As income inequality increases, the effects of ICT on health care performance become larger. (2) With the increase from a lower to a higher income inequality level, the positive impact of ICT development on health service enables productivity to increase significantly. Finally, policy recommendations for promoting health service productivity, based on our theoretical contribution and empirical results, are provided.

JEL: H51, I18, O3

Expansionary Monetary Policy vs. Bank Concentration: The Eurozone & Other European Countries

Željko Jović — 2025-01-01

Expansionary monetary policy combined with unconventional measures led to a decline in the profitability of U.S. and European banks. This paper studies whether such measures also affect the asset concentration in the European banking sector. The findings of this research add value to previous research, taking a step deeper into examining the consequences of expansionary monetary policy. It is found that reductions in the European central bank’s (ECB’s) key policy rate can predominantly explain the concentration growth in the eurozone countries. Furthermore, the ECB’s monetary policy had a more substantial influence on the growth of the concentration of banks outside the eurozone than those countries’ own monetary policies. Thus, the expansionary monetary policy poses specific challenges to financial stability in Europe.

JEL: E44, E52, E58, G21

The Influences of the US Stock Market on Virtual Currency Price under US Monetary Policy Threshold

Tzu-Yi Yang — 2025-01-01

This study uses a panel smooth transition regression model to investigate the nonlinear relationship between virtual currency and the stock market under the US monetary policy threshold from 7 August 2015 to 27 October 2020. A statistical test showed a threshold effect and confirmed that the relationship between the US stock market and virtual currency is nonlinear. Furthermore, virtual currency fluctuation has asymmetric responses to the US stock market’s fluctuation based on the threshold value. When the federal fund rate exceeds the threshold value, the changes in the S&P500 with a lag of one positively affect the fluctuation of virtual currency.

JEL: C32, C58, E52.

The Relationship Between Public Debt and Income Inequality in Advanced and Developing Economies: Empirical Evidence on the Difference

Van Bon Nguyen — 2025-01-01

In the context of increasing globalization, income inequality becomes one of the severe problems in both advanced and developing economies. Meanwhile, public spending financed by public debt may be an appropriate instrument of fiscal policy to narrow this inequality in society. However, high public debt can lead to an economic crisis and social instability. Does public debt differently affect income inequality between advanced and developing economies? For the answer, the paper applies the two-step system GMM Arellano-Bond estimator and the PMG estimator to test the effect of public debt on income inequality for a group of 30 advanced economies and a group of 34 developing economies between 2002 and 2020. The paper notes some exciting results. First, public debt narrows income inequality in advanced economies but widens it in developing economies. Second, by contrast, economic growth increases income inequality in advanced economies but decreases it in developing economies. Third, unemployment in advanced economies and education in developing economies enhance income inequality. These findings suggest some policy implications for governments in developing economies in using appropriately spending financed by public debt to narrow income inequality in society.

JEL: D31, E24, H63

Assessing the Impacts of Financial Stress on the Yield Spreads of Poland, Mexico and South Africa

Oguzhan Ozcelebi — 2025-01-01

This study employs a nonlinear vector autoregression (VAR) model and quantile-based analysis to examine the effects of the financial stress index (FSI) of developed countries and the exchange market pressure index (EMPI) on the USD-denominated yield spreads of Poland, Mexico, and South Africa. It was found by the nonlinear VAR that increases/decreases in the FSI of developed countries and in the EMPI raise/lower the yield spreads in each emerging country. Although different results are obtained among each emerging country, it was highlighted that foreign and domestic financial stress can be incorporated in the monetary policy formulation of the central banks of Poland, Mexico, and South Africa. Quantile analysis also revealed the role of different bond market pressure regimes in emerging countries, while the asymmetrical impacts of FSI and EMPI should be considered by the policymakers.

JEL: E44, F31, F41.

Revisiting Monetary Policy Effectiveness in Turkey Using a FAVAR Model

Umurcan Polat — 2025-01-01

This study aims to perform a comparative analysis of the effectiveness of pass-through of policy rates in Turkey. We explore monetary transmission with different choices of instruments, i.e., the Turkish Lira Reference Interest Rate (TRLIBOR rate), BIST overnight rate, and Divisia money, and under different policy regimes, i.e., inflation targeting and new monetary policy regimes. We estimate a two-stage FAVAR model to use all of the available information set and obtain direct responses of disaggregated/sectorial series for the period 2005:12–2018:4. We extend the model setting proposed by Bernanke, Boivin, and Eliasz (2005) by considering the multiple-policy environment in Turkey. Our findings promote arguments that regard policy rate as a poor indicator of the policy stance in Turkey.

Keywords: Monetary transmission, FAVAR model, Policy rate, Divisia index, Turkey.

JEL: E51, E52, E58

They Call It Love: The Politics of Emotional Life by Alva Gotsby Verso Books, 2023.

Mark Losoncz — 2025-01-01