Suchergebnisse

The famous 'Two Gap' economic theory suggests that an injection of foreign aid raises investment and savings of a country. However, a number of empirical studies have found that foreign aid has actually supplanted savings in many countries. The paper investigates the relationship between aid and gross domestic savings in Bangladesh and finds that these two variables are independent and have no effects on each other, which are different findings compared to other studies. Moreover, this paper concentrates on the capacity of Bangladesh economy to bear the obligation of foreign aid. Unlike some other papers, this one finds out that although the interest payment and total debt service charge of the loan are increasing, it is not a mishap because export earnings and income of economy of Bangladesh are increasing sufficiently enough to bear the burden. So, against the conventional characteristics of foreign aid to Bangladesh, this paper introduces some new issues about it.

PurposeThis study aims to investigate the nature and degree of US economic policy uncertainty spillover on the stock markets of a group of non-conventional economies like the Gulf Cooperation Council (GCC) countries, where a risk-sharing-based financial system is prominent and foreign investment, risk-free interest, derivatives, etc. are not as widespread as in the western economies.Design/methodology/approachthe monthly data of 1992–2018, linear and nonlinear structural vector autoregression (VAR) model, and an impulse response-based test to explore the nature and degree of US economic policy uncertainty spillover on the stock markets of the GCC countries.FindingsThis study finds that an unexpected increase in the US economic policy uncertainty significantly decreases the stock market index of all the GCC countries. This study also gets this relationship symmetric, meaning that the GCC stock market indices decrease and increase by the same amount when the US economic policy uncertainty increases and decreases, respectively.Originality/valueThis study investigates the characteristics of economic policy uncertainty spillover from the biggest economy of the world to the stock markets of the GCC region, which is new to the literature. The study results provide the first evidence that a risk-sharing based financial system does not necessarily protect the stock market from US uncertainty shock. However, the abundance of local investors, risk-sharing investment activities, the absence of derivatives, etc. may be responsible for the symmetric behavior of a stock market.

PurposeThe purpose of this paper is to investigate the possible asymmetric response of inflation expectations to oil price and policy uncertainty shocks.Design/methodology/approachThe authors used the test of asymmetric impulse responses proposed by Kilian and Vigfusson (2011) to explore the issue of asymmetry.FindingsUnlike other studies that assume symmetric effects, this study finds asymmetric effects of oil price and policy uncertainty on inflation expectations for positive and negative shocks and for pre- and post-financial-crisis periods. In particular other things being same, a same magnitude oil price shock has greater effect on inflation expectations in post-crisis period than in pre-crisis period. Moreover, in post-crisis period a positive increasing oil price shock has greater effect on inflation expectations than a negative decreasing oil price shock.Practical implicationsThe paper concludes that FED's greater focus on output stabilization since financial crisis has made inflation expectations less anchored and a sudden surge in oil price may quickly trigger inflation through inflation expectations.Originality/valueExploring the issue of the possible asymmetric effects of oil price and economic policy uncertainty on inflation expectations is a relatively new topic (as other studies only assumed symmetry and did not investigate the possible asymmetry in this regard).