Variables | CCI | GU | FS | S |
---|---|---|---|---|
CCI | 1.000 | −0.39 | −0.31 | 0.23 |
GU | −0.39 | 1.000 | −0.26 | 0.04 |
FS | −0.31 | −0.26 | 1.000 | −0.018 |
S | 0.23 | 0.04 | −0.018 | 1.000 |
ADF test statistic | Results | PP test statistic | Results | |
---|---|---|---|---|
CCI | −1.44 | Nonstationary | −9.02 | Non-stationary |
GU | −6.28 | Stationary I(0) | −9.23 | Non-stationary |
FS | −8.04 | Stationary I(0) | −49.77 | Stationary I(0) |
S | −1.23 | Nonstationary | −8.36 | Non-stationary |
CCI | −4.61 | Stationary I(1) | −51.59 | Stationary (1) |
GU | −0.34 | Nonstationary | −273.01 | Stationary (1) |
FS | −2.82 | Nonstationary | −1.03 | Non stationary |
S | −12.82 | Stationary I(1) | −218.76 | Stationary (1) |
Critical values | 1% – 4.12 | 1% − 19.13 | ||
5% − 3.48 | 5% − 13.40 | |||
10% − 3.17 | 10% − 10.77 |
Variables | statistics | TB1 | TB2 | Result |
---|---|---|---|---|
CCI | −4.64 | September, 2003 | December, 2007 | |
ΔCCI | −6.29 | December, 2006 | October, 2008 | I(1) |
GU | −4.60 | April, 2007 | April, 2008 | |
ΔGU | −6.79 | February, 1997 | December, 2002 | I(1) |
FS | −6.65 | September, 1997 | November, 1999 | I(0) |
ΔFS | −2.18 | December, 1997 | December, 2000 | |
S | −3.73 | September, 2007 | October, 2009 | |
ΔS | −7.14 | December, 2007 | September, 2008 | I(1) |
CCI | −4.24 | September, 2004 | September, 2008 | |
ΔCCI | −6.48 | April, 2007 | October, 2008 | I(1) |
GU | −4.48 | January, 2000 | December, 2007 | |
ΔGU | −6.07 | January, 2000 | November, 2008 | I(1) |
FS | −8.07 | August, 1997 | September, 1999 | I(0) |
ΔFS | −3.40 | April, 2007 | October, 2009 | |
S | −3.40 | October, 1997 | November, 2007 | |
ΔS | −8.34 | September, 1997 | November, 2000 | I(1) |
Panel A -test for ARDL models | Panel B -test results for the NARDL models | ||||
---|---|---|---|---|---|
Cointegration hypotheses | -stat | Result | Cointegration hypotheses | -stat | Result |
(CCI/GU,FS,S) | 2.10 | No cointegration | 7.07 | Cointegration | |
(GU/CCI,FS,S) | 2.84 | 5.58 | |||
(FS/CCI,GU,S) | 1.67 | 2.86 | No cointegration | ||
(S/CCI,GU,FS) | 0.83 | 2.71 |
Dependent variable | |||
---|---|---|---|
Short run estimation | |||
Variables | Coefficient | -statistic | Prob |
Constant | −0.93 | −12.0 | 0.00 |
−0.007 | −3.85 | 0.00 | |
−1.23 | −4.82 | 0.041 | |
−0.80 | −2.98 | 0.009 | |
−1.33 | −3.10 | 0.0092 | |
−5.98 | −5.49 | 0.0013 | |
−0.076 | −3.52 | 0.003 | |
0.22 | 2.14 | 0.04 | |
−0.55 | −6.42 | 0.00 | |
−0.32 | −2.40 | 0.02 | |
−0.31 | −5.36 | 0.007 | |
−3.95 | −3.21 | 0.005 | |
−0.76 | −3.52 | 0.003 | |
−0.32 | −2.40 | 0.02 | |
0.01 | 4.38 | 0.0012 | |
0.06 | 3.71 | 0.0045 | |
0.21 | 6.21 | 0.002 | |
0.003 | 3.21 | 0.02 |
Panel A: Long run coefficients | ||
---|---|---|
Variables | Coefficient | -value |
Constant | −0.86* | 0.01 |
−0.39* | 0.024 | |
−0.040* | 0.00 | |
−0.08* | 0.02 | |
−0.051* | 0.00 | |
−0.06* | 0.01 | |
0.048* | 0.00 |
Symmetry results Wald tests | |||||
---|---|---|---|---|---|
Long-run symmetry Wald statistics | The characteristic of the relationship | Short-run symmetry Wald statistics | The characteristic of the relationship | ||
4.78 (0.002) | Asymmetry | 5.55 (0.001) | Asymmetry | ||
12.78 (0.004) | 2.3 (0.12) | No asymmetry | |||
6.18 (0.001) | 7.18 (0.001) | Asymmetry |
Panel A: Long-run coefficients | ||
---|---|---|
Variables | Coefficient | -value |
Constant | −0.16* | 0.01 |
−0.059* | 0.02 | |
−0.30* | 0.00 | |
−0.18* | 0.03 | |
−0.21* | 0.005 | |
−0.16* | 0.00 | |
0.44* | 0.00 |
Symmetry results Wald tests | |||||
---|---|---|---|---|---|
Long-run symmetry Wald statistics | The characteristic of the relationship | Short-run symmetry Wald statistics | The characteristic of the relationship | ||
14.08 (0.00) | Asymmetry | 15.25 (0.00) | Asymmetry | ||
10.28 (0.002) | 12.3 (0.001) | ||||
16.18 (0.00) | 8.18 (0.00) |
Panel A: Long-run coefficients | ||
---|---|---|
Variables | Coefficient | -value |
Constant | −0.36* | 0.01 |
−1.79* | 0.02 | |
−0.309* | 0.00 | |
−0.77* | 0.03 | |
−0.46* | 0.005 | |
−0.64* | 0.00 | |
0.89* | 0.00 |
Symmetry results Wald tests | |||||
---|---|---|---|---|---|
Long-run symmetry Wald statistics | The characteristic of the relationship | Short-run symmetry Wald statistics | The characteristic of the relationship | ||
6.08 (0.002) | Asymmetry | 6.7 (0.004) | Asymmetry | ||
24.28 (0.0024) | 4.3 (0.001) | ||||
14.12 (0.00) | 19.42 (0.00) |
Note(s): W LR , GU , W LR , FS and W LR , S refer to the Wald test (Null Hypothesis) of asymmetry for the long run for the respective variables, similarly W SR , GU , W SR , FS and W SR , S refer to the Wald test (Null Hypothesis) of asymmetry for the short run for the respective explanatory variables
Source(s): Compilation Author
The datasets available at the public repository.
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The authors are thankful to the reviewers for their insightful comments, which have helped substantially in the improvement of the manuscript. The authors thank the Associate Editor for their valuable suggestions. The usual disclaimer applies.
About the author.
Sudeshna Ghosh has a PhD in Economics and works as an Associate Professor at the Scottish Church College Kolkata, India, in the Department of Economics. She teaches data analysis, development studies and interdisciplinary studies. Her research interests include development economics and time series econometrics. She published over 40 research papers in various national and international journals related to the above fields including in Quality & Quantity ; Arthaniti : Journal of Economic Theory and Practice ; International Journal of Tourism Research ; Asia Pacific Journal of Tourism Research & Tourism Management .
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January 26, 2021
by Estonian Research Council
In current turbulent times, people are concerned not only about their health, but also about their economic situation. While many research papers focus on the economy of the United States, the doctoral thesis defended recently at TalTech investigates the developments in European economies.
At TalTech Department of Economics and Finance, Natalia Levenko defended her doctoral thesis "Uncertainty and Measurement in Macroeconomics," which focuses on the factors behind and the consequences of uncertainty that accompanies the economic downturns in Europe.
Natalia Levenko, lecturer at TalTech Department of Economics and Finance, says, "The thesis consists of three publications covering selected macroeconomic topics with a special focus on economic uncertainty and measurement. The overarching theme of the doctoral thesis was economic uncertainty and data quality , with a focus on the issues related to decomposition of economic growth, household saving, expectations and measurement of perceived uncertainty."
Publication I of the doctoral thesis , "Total factor productivity growth in Central and Eastern Europe before, during and after the global financial crisis ," studies the sources of economic growth in 11 Central and Eastern European (CEE) countries that joined the European Union in 2004 or later. New reliable underlying data were provided, computing also total factor productivity (TFP) figures for a set of CEE countries. It appeared that while TFP growth and capital deepening were the main contributors to output growth in the sample countries before the financial crisis in 2008. During the crisis, the patterns of growth decomposition were quite heterogeneous across CEE countries. Weak output growth after the crisis was paired with sluggish TFP growth in all of the sample countries.
Publication II, "Perceived uncertainty as a key driver of household saving," focuses on household saving behavior in the context of labor income uncertainty. The paper distinguishes between actual and perceived uncertainty. Actual uncertainty arises from the actual realization of an economic shock, perceived uncertainty can be thought of as expectations about possible shocks in the future. The paper uses a dynamic panel of 22 European countries and applies system GMM on aggregate country-level data. The paper finds that the household saving rate is persistent and is mostly driven by potential income growth and labor income uncertainty. Credit availability, interest rates, and inflation have little or no effect on saving. The main findings of the paper are that consumer expectations matter for the saving behavior of households. This knowledge might be of importance for economic policy making of the countries during economic crisis.
Publication III, "Rounding bias in forecast uncertainty," examines a widely-used measure of forecast uncertainty, the mean individual variance of density forecasts, which shows in what range forecasts can vary. The paper shows that the mean individual variance of density forecasts, which is often referred to as a direct measure of uncertainty, is a noisy proxy for uncertainty and is a function of exogenous processes such as developments in the computer software market or improved professional training.
"The findings of all three publications are relevant for empirical studies, particularly in times of recessions, when it might be important to have a precise idea of the dynamics of growth and the movements of uncertainty. It appeared that not only the current state of the market but also the perceived future perspectives have a significant effect on the household saving rates. This can become a problem during an economic downturn, since household savings rate tends to increase more than is economically optimal due to discouraging future perspectives. However, consumers' expectations can be influenced, and through this economic growth can too," Levenko says.
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The economy has repeatedly defied predictions of a downturn since the pandemic recovery began. Now signs of strength contend with shakier readings.
By Ben Casselman
The U.S. economy has spent three years defying expectations. It emerged from the pandemic shock more quickly and more powerfully than many experts envisioned. It proved resilient in the face of both inflation and the higher interest rates the Federal Reserve used to combat it. The prospect many forecasters once considered imminent — a recession — looked increasingly like a false alarm.
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Some economists said investors were overreacting to one weak but hardly disastrous report, since many indicators show the economy on fundamentally firm footing.
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If you eavesdropped on the Home Depot’s earnings call Tuesday morning, you heard a version of the word “uncertainty” at least seven times. That uncertainty is from consumers, and Home Depot expects it to affect sales for the rest of the year.
The company said that customers are deferring big renovation projects , both because interest rates make them expensive to finance and because consumers are feeling unsure about the economy as a whole. So, is this a Home Depot problem or an economy-at-large problem?
A lot of Home Depot shoppers are homeowners who’ve grown wealthier in the past few years because their home values have shot up. This earnings report shows that even they are worried, said Steven Zaccone, a research analyst at Citi.
“So it feels like you’re seeing more widespread weakness amongst the consumer,” he said. “I think that’s what’s really new within the last couple of months.”
And when consumers spend less because they’re concerned the economy might not do so well, that can actually cause the economy to not do so well.
“This loss of confidence can produce its own business cycle, and it’s not a good business cycle. And that’s what the Home Depot folks are talking about,” said Anirban Basu, chief economist for Associated Builders and Contractors.
Professional builders are feeling this too.
Shiloh Travis designs, builds and renovates houses in Austin, Texas — he spends a lot of money at Home Depot. In the past eight months, he’s had two clients postpone big projects indefinitely because of concern about interest rates. He’s also just seeing a kind of hesitancy in the market overall.
“I think that there is a general uneasiness about the future of life in general,” he said. And this makes him feel a bit uneasy as a business owner. “Like, I’m literally right now considering whether I’m going to have to downsize one of my staff,” he said.
For his part, Travis said when he was younger, he would have done what he’d had to do to bring in more work. But now that he’s approaching 50, he’s a little more hesitant to take risks. And that means he’s not sure if growing his business is the prudent thing to do.
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FILE - U.S. and Chinese flags are set up at the Diaoyutai State Guesthouse in Beijing, on July 8, 2023. Lured by the large U.S. market, Chinese businesses are coming to the U.S. with money, jobs and technology, only to find rising suspicion at a time of an intensifying U.S.-China rivalry that has spread into the business world. (AP Photo/Mark Schiefelbein, Pool, File)
FILE - Gov. Gretchen Whitmer speaks during a news conference in Lansing, Mich., Jan. 25, 2022. Whitmer in 2022 welcomed a Chinese lithium-ion battery company’s plan to build a $2.36 billion factory and bring a couple of thousand of jobs to Big Rapids, Mich. But now the project by Gotion High-Tech is in the crosshairs of some U.S. lawmakers and local residents. Chinese businesses are coming to the U.S. are finding rising suspicion at a time of an intensifying U.S.-China rivalry that has spread into the business world. (AP Photo/Paul Sancya)
FILE - Rep. John Moolenaar, R-Mich., questions witnesses during a hearing on Capitol Hill, Feb. 28, 2023, in Washington. Moolenaar, chairman of the House Select Committee on China, is leading the charge against Michigan Gov. Gretchen Whitmer’s plan to bring a Chinese lithium-ion battery company to Big Rapids, Mich. Chinese businesses are coming to the U.S. with money, jobs and technology, only to find rising suspicion at a time of an intensifying U.S.-China rivalry that has spread into the business world. (AP Photo/Alex Brandon, File)
WASHINGTON (AP) — It was billed as the “biggest ever economic development project” in north Michigan when Gov. Gretchen Whitmer in 2022 welcomed a Chinese lithium-ion battery company’s plan to build a $2.36 billion factory and bring a couple thousand jobs to Big Rapids.
But now the project by Gotion High-Tech is in the crosshairs of some U.S. lawmakers and local residents.
Leading the charge is Republican Rep. John Moolenaar of Michigan, chairman of the House Select Committee on China, who accuses the Chinese company of having ties to forced labor and says he fears it could spy for Beijing and work to extend China’s influence in the U.S. heartland. Gotion rejects the accusations.
“I want to see this area have more jobs and investments, but we must not welcome companies that are controlled by people who see us as the enemy and we should not allow them to build here,” Moolenaar said at a recent roundtable discussion in Michigan.
Lured by the large U.S. market, Chinese businesses are coming to the United States with money, jobs and technology, only to find rising suspicion at a time of an intensifying U.S.-China rivalry that has spread into the business world.
U.S. wariness of China, coupled with Beijing’s desire to protect its technological competitiveness, threatens to rupture ties between the world’s two largest economies. That could hurt businesses, workers and consumers, which some warn could undermine the economic foundation that has helped stabilize relations.
“This is a lose-lose scenario for the two countries,” Zhiqun Zhu, professor of political science and international relations at Bucknell University, said in an email. “The main reason is U.S.-China rivalry, and the U.S. government prioritizes ‘national security’ over economic interests in dealing with China.”
Lizhi Liu, an assistant professor of business at Georgetown University, said the trend, along with the decline of U.S. investments in China, could hurt China-U.S. relations.
“Strong investment ties between the two nations are crucial not only for economic reasons but also for security, as intertwined economic interests reduce the likelihood of major conflicts or even war,” she said.
But U.S. lawmakers believe the stakes are high. Sen. Marco Rubio said at a July hearing that China is not only a military and diplomatic adversary for the U.S. but also a “technological, industrial and commercial” opponent.
“The technological and industrial high ground has always been a precursor of global power,” said Rubio, a Republican from Florida. He argued that U.S. foreign policy should take into account the country’s commercial, trade and technological interests.
The bipartisan House Select Committee on China has warned that widespread adoption in the US. of technologies developed by China could threaten long-term U.S. technological competitiveness.
U.S. public sentiment against Chinese investments began to build up during President Barack Obama’s administration, in a pushback against globalization, and were amplified after President Donald Trump came into office, said Yilang Feng, an assistant professor of business at University of Illinois at Urbana-Champaign, who studies economic nationalism and resistance to foreign direct investments in the U.S.
“The scale has increased, so has the intensity,” Feng said.
As President Joe Biden’s administration seeks to revive American manufacturing and boost U.S. technological capabilities, many politicians believe Chinese companies should be kept out.
“Can you imagine working for an American company working tirelessly to develop battery technology and then you find out that your tax dollars are being used to subsidize a competitor from China?” Moolenaar said as he campaigned against the Gotion project in his congressional district in a state that is critical in the presidential election.
Whitmer’s office has declined to comment on the project. The Michigan Economic Development Corporation told The Associated Press it has received “bipartisan support at all levels” to move forward with the project, which will create up to 2,350 jobs.
Danielle Emerson, spokesperson for MEDC, said the project is “critical to onshore the battery supply chain and create thousands of good-paying local jobs, which reduces our reliance on overseas disruptions and further protects our national security.”
Local residents of Green Charter Township, however, revolted against the project over its Chinese connections last year when they removed five officials who supported it in a recall election.
Also in Michigan, a partnership between Ford and CATL, another Chinese battery manufacturer, has been scaled back, following pushback over CATL’s potential connections to China’s ruling party.
In Worcester, Massachusetts, the Chinese biotech company WuXi Biologics paused construction of a large facility a few weeks after lawmakers introduced a bill that would, over data security concerns, ban U.S. entities receiving federal funds from doing business with a number of China-linked companies, WuXi Biologics included.
John Ling, who has helped South Carolina and Georgia attract Chinese businesses for nearly two decades, said geopolitics have been getting in the way in recent years. Chinese companies are less likely to consider South Carolina after the state senate last year approved a bill banning Chinese citizens from buying property, even though the bill has yet to clear the statehouse, Ling said.
Data by the U.S. Bureau of Economic Analysis show the total investments by China in the U.S. fell to just under $44 billion in 2023, from a high point of $63 billion in 2017, although first-year expenditures rose to $621 million in 2023, up from $531 million in 2022 but drastically down from the high of $27 billion in 2016. The figures include acquisitions, new business establishments and expansions.
Thilo Hanemann, a partner at the research provider Rhodium Group, said there’s been an upswing in new Chinese investments in the U.S. following a major decline, prompted by the end of disruptions during the COVID-19 pandemic and the need for Chinese companies to go overseas when margins at home are dwindling.
U.S. policymakers are worried that Chinese companies, beholden to the ruling Chinese Communist Party, could pose national security risks, he said, while Beijing is concerned that overseas investments could lead to Chinese technology leakage.
“Chinese companies are in between a rock and a hard place, dealing with both domestic governments in terms of not letting them go abroad and then the U.S. or host governments that have concerns,” Hanemann said.
Yet, Chinese investors may still find the U.S. market appealing “due to its high consumption levels and judicial independence,” said Liu of Georgetown University.
In 2022, Michigan beat out several other states in luring Gotion, according to the governor’s office. Keen to revive its manufacturing base, the state offered a package of incentives , including $175 million in grants and the approval of a new zone that could save the company $540 million. Local townships approved tax abatements for Gotion to build a factory to make components for electrical vehicle batteries.
In Green Charter Township, the new board dropped support for the project and rescinded an agreement that would extend water to the factory site, only to be rebuked by a U.S. district judge .
The future of the plant remains uncertain, as Moolenaar is rallying support for his bill that would prevent Gotion from receiving federal subsidies. He has accused the company of using forced labor, after congressional staff discovered links between the company and Xinjiang Production Construction Corps., a paramilitary group sanctioned by the U.S. Commerce Department for its involvement in China’s forced labor practice.
Chuck Thelen, vice president of manufacturing of Gotion North America, in recent town hall meetings called the forced labor accusations “categorically false and clearly intended to deceive.”
By allowing the Chinese company to build a plant in Michigan, it would help “onshore a technology that has been vastly leapfrogged” outside of the U.S., he said.
It doesn’t amount to “a Chinese invasion,” Thelen said. “This is a global approach, an energy solution.”
Watch CBS News
By Dave Malkoff
August 12, 2024 / 8:05 PM EDT / CBS News
Joe Swanson, a resident of Perry, Iowa, is no longer working in the town he loves and where his kids go to school. That's because the city's largest employer, a Tyson Foods pork plant, recently shut down.
Swanson says when the company announced in March they were shuttering the plant, he couldn't risk unemployment because of his health issues. So when he found a new job with health benefits, he says he took it and left Tyson around six weeks before it officially closed on June 28.
"None of us picked this, and I just want everybody to be OK. Because I know how hard this is going to be for a lot of people," said Swanson, who worked at the factory for nearly 14 years.
Many of the 1,300 hundred other laid-off employees are now grappling with the same situation — living, but no longer working, in Perry. A new path forward may be somewhere else.
"You have the power to make sure that you find the right opportunity that's going to benefit you and your family," Swanson said.
But the reality in Perry is that the right opportunities left a long time ago. The meat processing plant is not modern enough for the company, and upgrades would simply cost too much.
"Maybe we were hoping for a miracle at first, where we can just turn off the lights on June 28th and turn them back on with a new user. And that's simply not the case," said Rachel Wacker, executive director of the Greater Dallas County Development Alliance.
The Tyson plant employed about 25% of Perry's working-age residents before it shuttered, according to city and county officials. Accounting for workers' families and businesses directly related to the plant, about 60% of the town is affected by the closure.
Two hundred team members relocated to Tyson facilities in Iowa and outside the state, Tyson Foods told CBS News.
The plight of the so-called "one-factory" town is not new.
In the 1970s, Youngstown, Ohio, was a thriving steel city of 140,000 people. The mills closed, and now the population is less than half of what it used to be, according to U.S. Census data. Ohio was hit hard again in 2008, when a shipping hub in Wilmington closed, leaving 42% of the working age population without a job.
In Farmerville, Louisiana, a chicken plant that employed more than a third of the town shut down in 2009, the CBS News data team found.
Back in Perry, people like Nacho Calderon are learning from history. After being laid off at the Tyson plant, he hopes to become a garbage or concrete truck driver.
Driving garbage trucks in Perry requires a commercial drivers license. The local community college is giving trucking classes for free to give workers a shot at staying in town.
Calderon says he's sad he lost his job, and also for his coworkers who may not have cars or much money to help them get back on their feet.
As Calderon is still looking for work, Swanson has this advice: "Take control."
He found a job handling maintenance at an apartment complex out of town.
"[It's] what I feel like is a great opportunity, and I want that for everyone," Swanson said.
It's a hopeful wish for friends who lost their jobs, but against all odds, refuse to quit on their city.
Dave Malkoff is a national correspondent with the CBS Local News Innovation Lab, where his work appears across all CBS News and Station platforms.
The stock market's steep sell-off this week wasn't a freak event, and the recent pullback could be a signal that there is more trouble ahead for the economy, according to billionaire investor Mark Mobius.
The Mobius Capital Partners CEO pointed to the rout in global stocks on Monday, with the S&P 500 notching its worst single-day loss in two years after economic data in the US came in surprisingly weak and the Bank of Japan hiked interest rates , fueling selling pressure among investors.
Some commentators have argued that the sell-off was a healthy pullback in US equities, given how high valuations have climbd. Yet, it's more likely that the rout was caused by deeper issues in the economy and the political climate, Mobius told The Economic Times in an interview on Thursday.
"It was not technical in nature," Mobius said of Monday's sell-off, pointing to rising geopolitical tensions around the world, as well as the upcoming US presidential election. "All of these put together create a great deal of uncertainty. And then the situation in Japan set off a chain reaction, and, of course, the US market came down."
Stocks could have more downside on the way, Mobius suggested. The carry trade unwind — which emerged as a culprit of the sell-off this week — likely has more room to run , he predicted,echoing other Wall Street strategists.
Meanwhile, the economy looks like it could have "more problems going forward." Recession fears spiked this week after the job market slowed more than expected in July.
Warnings of an economic slowdown also reside in the money supply, which the Fed has reduced "dramatically" as it attempted to bring down inflation over the past few years, Mobius added.
"We are now feeling the effects of this reduction. If you look at the money supply growth in America, it is very low now," he said. "That means not much money is going to go into the market or business or in the economy. So, this is a real problem and a longer-term problem going forward. We have more problems in the US and, that will affect the global situation unless the money supply is increased much more than it is now."
For investors, it could be a good time to keep more cash on the sidelines, Mobius said. Disruptions in the stock market are usually the signal "before the actual economic effects are seen," he added.
"I think it is a good idea to have maybe 20% of your portfolio in cash, maybe a little more, because there will be opportunities down the road and it is a good idea to have some dry powder, let us put it that way," he said.
Stocks stabilized this week after the deep rout on Monday, and sentiment on Wall Street still generally optimistic, given solid economic growth and ambitious expectations for Fed rate cuts.
A full-fledged bear market is unlikely, Bank of America said, as the market isn't flashing technical signals that would suggest a peak in stock prices.
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Economic policy uncertainty refers to a risk that is associated with the unpredictability in the development of regulatory-, monetary-, and fiscal regulations (Al-Thaqeb & Algharabali, 2019). Economic policy uncertainty is a subset of economic uncertainty, which has the potential to create market volatility and can affect the economic ecosystem.
This thesis studies the determinants of Economic Policy Uncertainty (EPU), an index based on newspaper coverage frequency (Baker et al., 2016). In particular, the analysis focuses on the relation between EPU, size of jurisdictions, and economic development. I find that size is positively correlated with EPU both across countries and across
economic policy uncertainty strengthens peer effects on investments. In this paper, I. propose a reputation-based theory and information-based theory to support the findings. Peer effects are stronger for less successful firms and financial constrained firms during. periods when economic policy uncertainty is notable.
The authors propose to use as uncertainty measure the common variation in forecast errors for a broad range of macroeconomic and financial variables. Rossi and Sekhposyan ( 2015) agree with Jurado et al. ( 2015) that uncertainty relates to whether the economy is more or less forecastable.
Abstract. After a decade of unprecedented economic growth and relative calmness, the world has faced a new crisis. The recent COVID-19 crisis has induced a massive spike in Economic Policy Uncertainty (EPU). This paper investigates the relationship between EPU and the cross-section of US stock returns.
There has been a growing interest in studying economic uncertainty and its propagation on the economy and financial markets since the last global financial crisis. Literature provides ample evidence of the interconnectedness between major economic, financial, political shocks, economic uncertainty, and economic stagnation. This thesis consists of three essays that extend the literature with a ...
Economic Policy Uncertainty (EPU) Figure 1: Economic Policy Uncertainty (EPU) US Daily News Index Historical Data . This figure shows daily EPU data ranging from January 2020 to April 2022. We can see significant spikes during the financial crises, including the dot-com bubble in the early 2000's, the 2008 crisis and the 2020 pandemic.
economic policy uncertainty (EPU) on firms' innovation performance as well as the contingency conditions of this relationship. Design/methodology/approach: This study collects and combines secondary longitudinal data from multiple sources to test for a direct impact of EPU on firms' innovation performance.
This thesis is a collection of three self-contained chapters that explore external ... Global economic uncertainty shocks induce a 3-4% decline in imports and exports, and trade policy uncertainty shocks cause imports to drop by 4.0% and exports by 4.8%. These effects are persistent, as indicated by impulse ...
Abstract. We examine the impact of economic policy uncertainty on bank stability post-2007-2008 global financial crisis and how bank size, capital, and liquidity influence this relationship. We ...
This thesis examines economic uncertainty from various sources, and studies the impact of uncertainty on the macroeconomy. In Chapter I, I theoretically investigate uncertainty on asset returns and its role in financial fragility using a stylized model where the level of uncertainty is endogenously chosen by banks. The risk behavior of banks ...
This thesis comprises three essays that analyze how uncertainty affects the macroecon-omy. Each essay investigates a particular feature of uncertainty propagation. The first essay studies the effects of uncertainty shocks on economic activity, focusing on inflation. I consider standard New Keynesian models with Rotemberg-type and Calvo-type price
Essays on Economic Uncertainty and Financial Markets Thesis submitted in accordance with the requirements of the University of Liverpool for the degree of Doctor in Philosophy by Semih Kerestecioglu November 2021 . i Acknowledgements
In the new global economy, uncertainty has become a critical determinant of financial and economic stability. This thesis aims to study the impact of uncertainty on a set of macroeconomic variables such as demand for money, investment, and consumption. Different measures of uncertainty are used by scholars in the investigation of money demand, investment, and consumption like monetary and ...
This thesis comprises three essays that analyze how uncertainty affects the macroeconomy. Each essay investigates a particular feature of uncertainty propagation. The first essay studies the effects of uncertainty shocks on economic activity, focusing on inflation. I consider standard New Keynesian models with Rotemberg-type and Calvo-type ...
This study aims to theoretically hypothesize and empirically examine the impact of economic policy uncertainty (EPU) on firms' innovation performance as well as the contingency conditions of this relationship.,This study collects and combines secondary longitudinal data from multiple sources to test for a direct impact of EPU on firms ...
Effects on Key Economic Variables. Most researchers find that uncertainty shocks—or unexpected increases in uncertainty—reduce economic activity, raise unemployment and reduce inflation for several months after the shock, the authors pointed out. In their own analysis, which was based on a 2018 working paper they wrote, the authors examined ...
The data on the economic uncertainty policy index, fiscal policy uncertainty index, monetary policy uncertainty index, trade policy uncertainty index and exchange policy uncertainty index, are compiled from Arbatli et al. (2017). The financial stress index denoted by FS and the share price index denoted by S is the major control variables.
This thesis consists of four essays about "uncertainty" and how markets deal with it. Uncertainty is about subjective beliefs, and thus it often comes with heterogeneous beliefs that may be present temporarily or even forever. The first essay analyzes the effect of uncertainty, and the associated belief heterogeneity, on financial contracts and ...
thesis was economic uncertainty and data quality , with a focus on the issues related to decomposition of economic growth, household saving, expectations and measurement of perceived uncertainty."
The overarching theme of the doctoral thesis was economic uncertainty and data quality , with a focus on the issues related to decomposition of economic growth, household saving, expectations and ...
Uncertainty increases during downturns and a growing literature examines the effects of either economic or policy uncertainty shocks (Bloom, 2014). The interaction between these shocks may amplify uncertainty; for example, government actions to ameliorate downturns can increase policy uncertainty (Pastor and Veronesi, 2013).
Keywords: Earnings management; Discretionary accruals; Uncertainty; Implied volatility; Earnings response coe cient. Stein is an assistant professor of nance at Arizona State University's W. P. Carey School of Business, and can be reached at [email protected]. Wang is an assistant professor of business administration at Harvard Business School ...
The economy has repeatedly defied predictions of a downturn since the pandemic recovery began. Now signs of strength contend with shakier readings. By Ben Casselman The U.S. economy has spent ...
Americans are putting off major upgrades to their homes as they await lower interest rates and amid ongoing unease about the U.S. economy, Home Depot said Tuesday. The company lowered its sales ...
As America teeters between a soft landing and recession, uncertainty is weighing on consumers and businesses.
Shiloh Travis designs, builds and renovates houses in Austin, Texas — he spends a lot of money at Home Depot. In the past eight months, he's had two clients postpone big projects indefinitely ...
Data by the U.S. Bureau of Economic Analysis show the total investments by China in the U.S. fell to just under $44 billion in 2023, from a high point of $63 billion in 2017, although first-year expenditures rose to $621 million in 2023, up from $531 million in 2022 but drastically down from the high of $27 billion in 2016.
The plight of the so-called "one-factory" town is not new. In the 1970s, Youngstown, Ohio, was a thriving steel city of 140,000 people. The mills closed, and now the population is less than half ...
The stock market's steep sell-off this week wasn't a freak event, and the recent pullback could be a signal that there is more trouble ahead for the economy, according to billionaire investor Mark ...