Governments in developing countries face increasing difficulties in funding public enterprises th... more Governments in developing countries face increasing difficulties in funding public enterprises through government allocations because of budget constraints due to low savings and population explosion. It has also become increasingly difficult to expect an increase in the flow of foreign private and government capital because of the recent debt crises experienced by some developing countries as well as budgetary uncertainties in the developed countries themselves.
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONThe Great Recession (2007-9) had severely ha... more (ProQuest: ... denotes formulae omitted.)INTRODUCTIONThe Great Recession (2007-9) had severely hampered the economic performance of all nations of the world, particularly those of the industrialized nations. The onset of the Great Recession had brought unparalleled coordination among the central banks. Using the G-20 platform, most industrialized and emerging nations have engaged in prolong liquidity expansion and competitive interest rate reductions to stop and reverse the economic carnage of the Great Recession that was triggered by the sub-prime mortgage crisis. A host of fiscal and monetary actions including economic stimulus of more than a trillion dollar at the early stage of the recession as well as decreasing interest rates to the level unheard of in recent memory, increasing liquidity, and decreasing reserve requirement, have been deployed. Nations and regions like Argentina, Australia, Brazil, Canada, China, the eurozone, Iceland, India, Indonesia, Korea, New Zealand, Russia, Taiwan, Switzerland, U.K., the U.S. and others have marshaled and used their resources to soften the blow of the economic crisis. Similarly, many nations have deployed fiscal policies to avert collapse in the banking system and to stimulate the faltering economic activities. On the other hand, it should be recognized that the industrialized and emerging economies had experienced different levels of economic shocks and as such, the degree of economic cooperation and coordination have been tested as was apparent in the G-20 meeting of February of 2014. Interestingly, it seems the level of support and agreement in the G-20 meeting of February 2015 on the role of quantitative easing (QE) to boost the global economy has been elevated.At a time of diverse economic performance between the emerging, developing and industrialized nations, some important research questions need to be addressed as new economic challenge has begun to emerge. Has the QE by industrialized nations and regions, such as the U.S., Japan, Switzerland, and the eurozone, depreciated their currencies and brought the demise of the underpinning of the freely fluctuating exchange rate system? Has the reverse of stimulus expansion or quantitative easing and prelude of interest rate hikes by the U.S. Federal Reserve System (Fed) triggered exchange control and some other forms of indirect interventions by emerging economies? Indeed, interest rate hikes and imposition of exchange control have been imposed by several developed and emerging countries like Argentina, Brazil, India, Indonesia, Korea, South Africa and Turkey. How are the immensely increased balance sheets of central banks of countries, such as the U.S., Japan, Switzerland, and the eurozone that have used QE as a tool for economic expansion as well as to fight currency appreciation and/or to induce currency weakness, going to be maintained? Will the Fed expected interest rate increase give pause to many central banks that were using QE to nudge growth in their economy and lower the exchange rates of their currencies?The increase in money supply and the relatively low return on investments in industrialized nations have made emerging countries attractive investment destinations for hedge fund managers, arbitrageurs and other investors. Interestingly, the sheer mention of tapering of quantitative easing catapulted the arbitrageurs and hedge fund managers to engineer a reverse of capital investments from emerging countries. These emerging countries are now perceived, with expected less liquidity or less money supply floating, to have lower economic growth potential and thus carry high risk to expected relative returns on invested capital. These kind of unreliable capital inflows and outflows, and speculative capital, hamper the long term economic development of nations, and in the short run usher in high volatility in the level of performance of exchange rates and equity markets. Such was the situation observed in several of the emerging markets from May to September of 2013 as shown in Graphs 1 and 2 below. …
... 1299-1314. Gupta, Atul, Carl B. McGowan, Jr., Lalatendu Misra, and Agnes Missirian. &... more ... 1299-1314. Gupta, Atul, Carl B. McGowan, Jr., Lalatendu Misra, and Agnes Missirian. "Gains from Corporate Multinationalism: Evidence from the China Experience," Financial Review, V 26, N 3, Asugust 1991, pp. 387-407. ... 263-279. Rajan, Raghuram G. and Luigi Zingales. ...
Governments in developing countries face increasing difficulties in funding public enterprises th... more Governments in developing countries face increasing difficulties in funding public enterprises through government allocations because of budget constraints due to low savings and population explosion. It has also become increasingly difficult to expect an increase in the flow of foreign private and government capital because of the recent debt crises experienced by some developing countries as well as budgetary uncertainties in the developed countries themselves.
(ProQuest: ... denotes formulae omitted.)INTRODUCTIONThe Great Recession (2007-9) had severely ha... more (ProQuest: ... denotes formulae omitted.)INTRODUCTIONThe Great Recession (2007-9) had severely hampered the economic performance of all nations of the world, particularly those of the industrialized nations. The onset of the Great Recession had brought unparalleled coordination among the central banks. Using the G-20 platform, most industrialized and emerging nations have engaged in prolong liquidity expansion and competitive interest rate reductions to stop and reverse the economic carnage of the Great Recession that was triggered by the sub-prime mortgage crisis. A host of fiscal and monetary actions including economic stimulus of more than a trillion dollar at the early stage of the recession as well as decreasing interest rates to the level unheard of in recent memory, increasing liquidity, and decreasing reserve requirement, have been deployed. Nations and regions like Argentina, Australia, Brazil, Canada, China, the eurozone, Iceland, India, Indonesia, Korea, New Zealand, Russia, Taiwan, Switzerland, U.K., the U.S. and others have marshaled and used their resources to soften the blow of the economic crisis. Similarly, many nations have deployed fiscal policies to avert collapse in the banking system and to stimulate the faltering economic activities. On the other hand, it should be recognized that the industrialized and emerging economies had experienced different levels of economic shocks and as such, the degree of economic cooperation and coordination have been tested as was apparent in the G-20 meeting of February of 2014. Interestingly, it seems the level of support and agreement in the G-20 meeting of February 2015 on the role of quantitative easing (QE) to boost the global economy has been elevated.At a time of diverse economic performance between the emerging, developing and industrialized nations, some important research questions need to be addressed as new economic challenge has begun to emerge. Has the QE by industrialized nations and regions, such as the U.S., Japan, Switzerland, and the eurozone, depreciated their currencies and brought the demise of the underpinning of the freely fluctuating exchange rate system? Has the reverse of stimulus expansion or quantitative easing and prelude of interest rate hikes by the U.S. Federal Reserve System (Fed) triggered exchange control and some other forms of indirect interventions by emerging economies? Indeed, interest rate hikes and imposition of exchange control have been imposed by several developed and emerging countries like Argentina, Brazil, India, Indonesia, Korea, South Africa and Turkey. How are the immensely increased balance sheets of central banks of countries, such as the U.S., Japan, Switzerland, and the eurozone that have used QE as a tool for economic expansion as well as to fight currency appreciation and/or to induce currency weakness, going to be maintained? Will the Fed expected interest rate increase give pause to many central banks that were using QE to nudge growth in their economy and lower the exchange rates of their currencies?The increase in money supply and the relatively low return on investments in industrialized nations have made emerging countries attractive investment destinations for hedge fund managers, arbitrageurs and other investors. Interestingly, the sheer mention of tapering of quantitative easing catapulted the arbitrageurs and hedge fund managers to engineer a reverse of capital investments from emerging countries. These emerging countries are now perceived, with expected less liquidity or less money supply floating, to have lower economic growth potential and thus carry high risk to expected relative returns on invested capital. These kind of unreliable capital inflows and outflows, and speculative capital, hamper the long term economic development of nations, and in the short run usher in high volatility in the level of performance of exchange rates and equity markets. Such was the situation observed in several of the emerging markets from May to September of 2013 as shown in Graphs 1 and 2 below. …
... 1299-1314. Gupta, Atul, Carl B. McGowan, Jr., Lalatendu Misra, and Agnes Missirian. &... more ... 1299-1314. Gupta, Atul, Carl B. McGowan, Jr., Lalatendu Misra, and Agnes Missirian. "Gains from Corporate Multinationalism: Evidence from the China Experience," Financial Review, V 26, N 3, Asugust 1991, pp. 387-407. ... 263-279. Rajan, Raghuram G. and Luigi Zingales. ...
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