An important benefit of monetary unions is the potential for some countries to "import monet... more An important benefit of monetary unions is the potential for some countries to "import monetary credibility" from other member countries with reputation for prudent monetary policy (e.g. Germany in the eurozone). However, a number of monetary unions have been proposed among groups of developing countries that lack a history of stable prices or simply have a short history of independent monetary policy. In this paper we show that a monetary union can enhance monetary stability for its member states even in this environment. An application of our theory to the proposed East African monetary union (between Kenya, Tanzania, Uganda, and possibly Burundi and Rwanda) indicates that only three out of the five countries would benefit from the union. However, the net benefit for each country depends on the institutional structure for decision-making that would be adopted in an East Africa monetary union. Furthermore, all five countries would benefit from a monetary union that is anc...
At the time it voted to exit in 2016, the UK was a leading economy within the EU. It contributed ... more At the time it voted to exit in 2016, the UK was a leading economy within the EU. It contributed about 16 percent of the EU GDP, while the other EU countries accounted for almost half of UK's total trade. This study attempts to answer two research questions: First, how Brexit affected the EU–UK trade and second, how it affected the trade between remaining 27 EU members. To answer these questions, quarterly data are exploited for the period from 2005Q1 to 2022Q3 covering a total of 53 trading partners including the EU members. A gravity model that controls for unobserved bilateral heterogeneity and multilateral resistance is estimated by PPML. Three phases of Brexit (the referendum, transition, and post transition [under the TCA]) are analysed. The results indicate that the Brexit referendum phase depressed UK–EU trade by around 10.5%, and transition phase by around 15%. In both cases, particularly for the transition phase, the effect is greater on the UK imports from EU than the...
The study analyzes the impact of terrorism on Malaysia’s tourism demand. Panel data from the 25 t... more The study analyzes the impact of terrorism on Malaysia’s tourism demand. Panel data from the 25 top source countries, covering the period from 2000Q4 to 2017Q4 is obtained from the Global Terrorism Database, and the Malaysian Tourism Board (MyTourismData). For analysis, a panel Fully Modified OLS (FMOLS) procedure is employed. The results indicate that an increase in terrorism activity in Malaysia depresses international arrivals to the country. Furthermore, spillover effects from terrorism activity in neighboring South East Asian countries are identified. Increased terrorism activity in Thailand is found to boost tourist arrivals in Malaysia from each of the four source continents (Europe, North America, Oceania, and Asia) as well as overall. However, increased terrorism activity in Indonesia depresses arrivals from each of the four source continents as well as overall, possibly due to closer physical and cultural proximity. Increase in terrorism activity in Philippines generally c...
We use event study approach to assess the effects of the early stages of COVID-19 on global marke... more We use event study approach to assess the effects of the early stages of COVID-19 on global markets. A large sample of stock markets (66) covering all key global markets and regions is included. The findings indicate that the Wuhan lockdown induces negative spillover effects on markets in Europe, North America and other global markets that have yet to introduce domestic restrictions and have minimal infections at the time. Increasing cases outside China particularly in Europe and the introduction of containment measures result in severe market decline. Our findings highlight the need for quick, globally coordinated response to contagious diseases.
This article uses a dynamic panel data model to analyse the effects of terrorism on demand for to... more This article uses a dynamic panel data model to analyse the effects of terrorism on demand for tourism in Kenya. We use annual data from 2010 to 2013 for a widely dispersed set of 124 countries of origin covering Europe, Asia, the Americas and Africa. The result suggests that a 1% increase in fatalities significantly reduces tourist arrivals by about 0.13%. This translates to a reduction of about 2507.5 visitors per year and roughly 157.1 million Kenya Shillings lost in tourism revenue per year for every one unit increase in fatality. Other proxies for terrorism, such as incidence or casualties, have a similar effect, indicating the robustness of the results. On the other hand, previous visits have a strong and positive effect on the level of current arrivals.
ABSTRACT The paper applies dynamic panel modeling to investigate the impact of terrorism and trav... more ABSTRACT The paper applies dynamic panel modeling to investigate the impact of terrorism and travel advice on global tourism. Annual arrivals data for 49 destinations and 15 leading countries of origin for the period 2010–2014 are used. Results indicate that casualties or fatalities from terrorism, absent travel advice, significantly reduce tourism demand. However, casualties (fatalities) combined with travel advice have a relatively larger adverse impact on tourism demand. The effects identified, however, are sensitive to country characteristics. Casualties (fatalities) as well as travel advice significantly weaken tourism demand for low-income countries but have no significant effect in high-income countries.
The paper investigates the public's attitude towards monetary union arrangements associated w... more The paper investigates the public's attitude towards monetary union arrangements associated with different levels of monetary policy autonomy. The results indicate that support for monetary union declines significantly with expected loss of autonomy. Survey data from Kenya shows that public support for the proposed East African Community monetary union is highest in an arrangement where the country assumes the role of anchor and lowest where the country assumes a client role. A more favorable appraisal of the effects of monetary union by the public increases the likelihood of voting for a multilateral monetary union but decreases the likelihood of voting for a client role in a unilateral dollarization arrangement. This suggests that for countries without clear differences in monetary policy credibility, but with political systems where voter preferences matter, multilateral monetary union would be a more stable arrangement.
Public support is crucial for the success of a monetary union. An aspect of the monetary unificat... more Public support is crucial for the success of a monetary union. An aspect of the monetary unification process that could influence public support is how the decision to participate is made. This article analyzes the determinants of the public's preference for a referendum on the adoption of a common currency. The survey data used is from Kenya, a member of
This study explores how the US stock market reacted to the news of a successful development of va... more This study explores how the US stock market reacted to the news of a successful development of vaccine by Pfizer and Biontech on November 9, 2020. In particular, the study analyses the effect of the vaccine announcement on 11 sector indices and 79 subsector indices. A key contribution of the present study is to provide a deeper subsector level of analysis lacking in existing literature. An event study approach is applied in identifying abnormal returns due to the November 9th vaccine announcement. Several event periods (-1, 0, 1, 2, 3, 0-1, 0-3) are analysed to provide a more complete picture of the effects. Based on analysis, it is established that there are considerable inter and intra sectoral variations in the impact of the vaccine news. The results show that the impact follows a clear pattern. The sectors that were hit hardest by the pandemic such as energy, financials, as well as subsectors like hotels and casinos, benefited the most from positive vaccine news. Subsectors that...
The COVID-19 pandemic continues to batter the world economy, strain the limited global health res... more The COVID-19 pandemic continues to batter the world economy, strain the limited global health resources and dominate the world media. Even with the emergence of vaccines, there is still a substantial level of uncertainty. The study analyses the effects of COVID-19 incidence, government intervention and level of development on media coverage, and investor sentiments. The study uses daily data from the Ravenpack finance for the period January 2020 to November 2020 for 75 countries. The results show that NPIs increase the media attention, increase panic and depress market sentiment. Furthermore, higher number of COVID-19 cases and deaths affect promote panic and depress sentiment. We also show that a higher human development index increases media coverage, and depresses the sentiment, while a higher level of digital adoption reduces panic and depresses the market sentiment. Keywords: COVID-19, Ravenpack Indices, Media Attention, Stringency Index. JEL Classification: G40, G41.
An important benefit of monetary unions is the potential for some countries to "import monet... more An important benefit of monetary unions is the potential for some countries to "import monetary credibility" from other member countries with reputation for prudent monetary policy (e.g. Germany in the eurozone). However, a number of monetary unions have been proposed among groups of developing countries that lack a history of stable prices or simply have a short history of independent monetary policy. In this paper we show that a monetary union can enhance monetary stability for its member states even in this environment. An application of our theory to the proposed East African monetary union (between Kenya, Tanzania, Uganda, and possibly Burundi and Rwanda) indicates that only three out of the five countries would benefit from the union. However, the net benefit for each country depends on the institutional structure for decision-making that would be adopted in an East Africa monetary union. Furthermore, all five countries would benefit from a monetary union that is anc...
At the time it voted to exit in 2016, the UK was a leading economy within the EU. It contributed ... more At the time it voted to exit in 2016, the UK was a leading economy within the EU. It contributed about 16 percent of the EU GDP, while the other EU countries accounted for almost half of UK's total trade. This study attempts to answer two research questions: First, how Brexit affected the EU–UK trade and second, how it affected the trade between remaining 27 EU members. To answer these questions, quarterly data are exploited for the period from 2005Q1 to 2022Q3 covering a total of 53 trading partners including the EU members. A gravity model that controls for unobserved bilateral heterogeneity and multilateral resistance is estimated by PPML. Three phases of Brexit (the referendum, transition, and post transition [under the TCA]) are analysed. The results indicate that the Brexit referendum phase depressed UK–EU trade by around 10.5%, and transition phase by around 15%. In both cases, particularly for the transition phase, the effect is greater on the UK imports from EU than the...
The study analyzes the impact of terrorism on Malaysia’s tourism demand. Panel data from the 25 t... more The study analyzes the impact of terrorism on Malaysia’s tourism demand. Panel data from the 25 top source countries, covering the period from 2000Q4 to 2017Q4 is obtained from the Global Terrorism Database, and the Malaysian Tourism Board (MyTourismData). For analysis, a panel Fully Modified OLS (FMOLS) procedure is employed. The results indicate that an increase in terrorism activity in Malaysia depresses international arrivals to the country. Furthermore, spillover effects from terrorism activity in neighboring South East Asian countries are identified. Increased terrorism activity in Thailand is found to boost tourist arrivals in Malaysia from each of the four source continents (Europe, North America, Oceania, and Asia) as well as overall. However, increased terrorism activity in Indonesia depresses arrivals from each of the four source continents as well as overall, possibly due to closer physical and cultural proximity. Increase in terrorism activity in Philippines generally c...
We use event study approach to assess the effects of the early stages of COVID-19 on global marke... more We use event study approach to assess the effects of the early stages of COVID-19 on global markets. A large sample of stock markets (66) covering all key global markets and regions is included. The findings indicate that the Wuhan lockdown induces negative spillover effects on markets in Europe, North America and other global markets that have yet to introduce domestic restrictions and have minimal infections at the time. Increasing cases outside China particularly in Europe and the introduction of containment measures result in severe market decline. Our findings highlight the need for quick, globally coordinated response to contagious diseases.
This article uses a dynamic panel data model to analyse the effects of terrorism on demand for to... more This article uses a dynamic panel data model to analyse the effects of terrorism on demand for tourism in Kenya. We use annual data from 2010 to 2013 for a widely dispersed set of 124 countries of origin covering Europe, Asia, the Americas and Africa. The result suggests that a 1% increase in fatalities significantly reduces tourist arrivals by about 0.13%. This translates to a reduction of about 2507.5 visitors per year and roughly 157.1 million Kenya Shillings lost in tourism revenue per year for every one unit increase in fatality. Other proxies for terrorism, such as incidence or casualties, have a similar effect, indicating the robustness of the results. On the other hand, previous visits have a strong and positive effect on the level of current arrivals.
ABSTRACT The paper applies dynamic panel modeling to investigate the impact of terrorism and trav... more ABSTRACT The paper applies dynamic panel modeling to investigate the impact of terrorism and travel advice on global tourism. Annual arrivals data for 49 destinations and 15 leading countries of origin for the period 2010–2014 are used. Results indicate that casualties or fatalities from terrorism, absent travel advice, significantly reduce tourism demand. However, casualties (fatalities) combined with travel advice have a relatively larger adverse impact on tourism demand. The effects identified, however, are sensitive to country characteristics. Casualties (fatalities) as well as travel advice significantly weaken tourism demand for low-income countries but have no significant effect in high-income countries.
The paper investigates the public's attitude towards monetary union arrangements associated w... more The paper investigates the public's attitude towards monetary union arrangements associated with different levels of monetary policy autonomy. The results indicate that support for monetary union declines significantly with expected loss of autonomy. Survey data from Kenya shows that public support for the proposed East African Community monetary union is highest in an arrangement where the country assumes the role of anchor and lowest where the country assumes a client role. A more favorable appraisal of the effects of monetary union by the public increases the likelihood of voting for a multilateral monetary union but decreases the likelihood of voting for a client role in a unilateral dollarization arrangement. This suggests that for countries without clear differences in monetary policy credibility, but with political systems where voter preferences matter, multilateral monetary union would be a more stable arrangement.
Public support is crucial for the success of a monetary union. An aspect of the monetary unificat... more Public support is crucial for the success of a monetary union. An aspect of the monetary unification process that could influence public support is how the decision to participate is made. This article analyzes the determinants of the public's preference for a referendum on the adoption of a common currency. The survey data used is from Kenya, a member of
This study explores how the US stock market reacted to the news of a successful development of va... more This study explores how the US stock market reacted to the news of a successful development of vaccine by Pfizer and Biontech on November 9, 2020. In particular, the study analyses the effect of the vaccine announcement on 11 sector indices and 79 subsector indices. A key contribution of the present study is to provide a deeper subsector level of analysis lacking in existing literature. An event study approach is applied in identifying abnormal returns due to the November 9th vaccine announcement. Several event periods (-1, 0, 1, 2, 3, 0-1, 0-3) are analysed to provide a more complete picture of the effects. Based on analysis, it is established that there are considerable inter and intra sectoral variations in the impact of the vaccine news. The results show that the impact follows a clear pattern. The sectors that were hit hardest by the pandemic such as energy, financials, as well as subsectors like hotels and casinos, benefited the most from positive vaccine news. Subsectors that...
The COVID-19 pandemic continues to batter the world economy, strain the limited global health res... more The COVID-19 pandemic continues to batter the world economy, strain the limited global health resources and dominate the world media. Even with the emergence of vaccines, there is still a substantial level of uncertainty. The study analyses the effects of COVID-19 incidence, government intervention and level of development on media coverage, and investor sentiments. The study uses daily data from the Ravenpack finance for the period January 2020 to November 2020 for 75 countries. The results show that NPIs increase the media attention, increase panic and depress market sentiment. Furthermore, higher number of COVID-19 cases and deaths affect promote panic and depress sentiment. We also show that a higher human development index increases media coverage, and depresses the sentiment, while a higher level of digital adoption reduces panic and depresses the market sentiment. Keywords: COVID-19, Ravenpack Indices, Media Attention, Stringency Index. JEL Classification: G40, G41.
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