Panama: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Panama
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Fragmentation in Global Trade: Accounting for Commodities
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Calibrating Macroprudential Policies in Europe Amid Rising Housing Market Vulnerability
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European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options
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FEDS Note: From-Whom-to-Whom Relationships in the Financial Accounts of the United States: A New Methodology and Some Early Results
Michael Batty, Elizabeth Holmquist, Robert KurtzmanThe Financial Accounts of the United States (the Accounts or FAUS) provide data on the financial assets and liabilities of major sectors of the United States economy, disaggregated by financial instrument. The Accounts can thus serve many purposes, such as sizing sectors and instruments, analyzing changes in credit flows, and assessing the net worth of households.
US Fed
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Michael Batty, Elizabeth Holmquist, Robert KurtzmanThe Financial Accounts of the United States (the Accounts or FAUS) provide data on the financial assets and liabilities of major sectors of the United States economy, disaggregated by financial instrument. The Accounts can thus serve many purposes, such as sizing sectors and instruments, analyzing changes in credit flows, and assessing the net worth of households.
US Fed
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www.federalreserve.gov
From-Whom-to-Whom Relationships in the Financial Accounts of the United States: A New Methodology and Some Early Results
The Federal Reserve Board of Governors in Washington DC.
FEDS Note: Gender Gaps in the Labor Market Widen Every Summer
Brendan M. Price and Melanie WassermanGender gaps in labor market activity are pervasive, longstanding, and a regular subject of policy debates. Relative to men, women tend to work fewer hours per week, more conventional hours, and fewer years over the course of their lives.
US Fed
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Brendan M. Price and Melanie WassermanGender gaps in labor market activity are pervasive, longstanding, and a regular subject of policy debates. Relative to men, women tend to work fewer hours per week, more conventional hours, and fewer years over the course of their lives.
US Fed
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🔮 @c0ldness
www.federalreserve.gov
Gender Gaps in the Labor Market Widen Every Summer
The Federal Reserve Board of Governors in Washington DC.
FEDS Note: Nonresidential construction spending is likely not as weak as it seems
Eirik Brandsaas, Daniel Garcia, Joseph Nichols, and Kyra SadoviUnlike any other major component of GDP, private investment in nonresidential structures excluding drilling and mining (henceforth "NRS") has steadily declined since the start of 2020. Figure 1 shows the evolution of GDP as well as the main components of private domestic final demand since 2019.
US Fed
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Eirik Brandsaas, Daniel Garcia, Joseph Nichols, and Kyra SadoviUnlike any other major component of GDP, private investment in nonresidential structures excluding drilling and mining (henceforth "NRS") has steadily declined since the start of 2020. Figure 1 shows the evolution of GDP as well as the main components of private domestic final demand since 2019.
US Fed
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🔮 @c0ldness
www.federalreserve.gov
Nonresidential construction spending is likely not as weak as it seems
The Federal Reserve Board of Governors in Washington DC.
Is South Africa falling into a fiscal-dominant regime
The sustainability of fiscal policy has been at the forefront of policy analysis since the global financial crisis and subsequent debt crises. With the elevated government debt levels observed globally, the emergence of fiscal dominance has caused some concern. In this paper we assess whether there was or is evidence of fiscal dominance in South Africa by determining periods in which fiscal and monetary policy was passive or active. By estimating a Markov switching model on the reaction functions of a fiscal and monetary policy rule, we find that there has been some evidence of fiscal dominance in South Africa since 2016.
🇿🇦 South African Reserve Bank
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The sustainability of fiscal policy has been at the forefront of policy analysis since the global financial crisis and subsequent debt crises. With the elevated government debt levels observed globally, the emergence of fiscal dominance has caused some concern. In this paper we assess whether there was or is evidence of fiscal dominance in South Africa by determining periods in which fiscal and monetary policy was passive or active. By estimating a Markov switching model on the reaction functions of a fiscal and monetary policy rule, we find that there has been some evidence of fiscal dominance in South Africa since 2016.
🇿🇦 South African Reserve Bank
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Non-Tax Incentives and Agricultural Output in Nigeria
This study investigates the impact of non-tax incentives on agricultural sector output in Nigeria from 1981 to 2019, using Autoregressive Distributed Lag (ARDL) Model/Bounds test technique. The findings of this study show that non-tax incentives have a significant positive impact on agricultural sector output growth in the long-run; however, the effect was negative and statistically insignificant in the short run. On the other hand, government expenditure on agriculture was negative and significant on agricultural sector output growth in the short-run, while its long-run impact was also negative but not significant. Therefore, the study recommends targeted expansion of non-tax incentives to the entire agricultural value chain with appropriate monitoring and evaluation to boost output in the sector.
Elias A. Udeaja et al.
🇳🇬 Bank of Nigeria
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This study investigates the impact of non-tax incentives on agricultural sector output in Nigeria from 1981 to 2019, using Autoregressive Distributed Lag (ARDL) Model/Bounds test technique. The findings of this study show that non-tax incentives have a significant positive impact on agricultural sector output growth in the long-run; however, the effect was negative and statistically insignificant in the short run. On the other hand, government expenditure on agriculture was negative and significant on agricultural sector output growth in the short-run, while its long-run impact was also negative but not significant. Therefore, the study recommends targeted expansion of non-tax incentives to the entire agricultural value chain with appropriate monitoring and evaluation to boost output in the sector.
Elias A. Udeaja et al.
🇳🇬 Bank of Nigeria
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Effect of Public Debt on Private Investment in Nigeria: Evidence from an Asymmetric Dynamic Model
This study examines the effect of public debt on private investment in Nigeria. The linear and non-linear ARDL models are employed to analyse the series spanning the period 1981 to 2018. The estimation results show that an increase in total debt, external debt, and debt service payment adversely affects private investment, with the effects being symmetric. On the other hand, the effect of domestic debt on private investment is found to be asymmetric. Although a negative shock in domestic debt greatly improves private investment, a positive shock leads to a meagre positive effect on private investment. This finding indicates that although domestic debt reduction is more beneficial to private investment, domestic public debt accumulation does not negatively affect private investment in Nigeria. The study recommends curtailing excessive public borrowing and reducing the stock of public debt to improve private investment in Nigeria.
A. B. Abubakar et al.
🇳🇬 Bank of Nigeria
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This study examines the effect of public debt on private investment in Nigeria. The linear and non-linear ARDL models are employed to analyse the series spanning the period 1981 to 2018. The estimation results show that an increase in total debt, external debt, and debt service payment adversely affects private investment, with the effects being symmetric. On the other hand, the effect of domestic debt on private investment is found to be asymmetric. Although a negative shock in domestic debt greatly improves private investment, a positive shock leads to a meagre positive effect on private investment. This finding indicates that although domestic debt reduction is more beneficial to private investment, domestic public debt accumulation does not negatively affect private investment in Nigeria. The study recommends curtailing excessive public borrowing and reducing the stock of public debt to improve private investment in Nigeria.
A. B. Abubakar et al.
🇳🇬 Bank of Nigeria
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An Empirical Assessment of Liquidity Management Instruments in Nigeria
The paper assesses the response of monetary policy target variables to liquidity management instruments, using a Non-linear Autoregressive Distributed Lag (NARDL) model. The analysis focuses on the short end of liquidity management and provides evidence of long-run asymmetric effects of liquidity management instruments, notably, the monetary policy rate (MPR) and excess reserves of banks on the inter-bank rate. The findings show that the impact of discretionary and autonomous liquidity factors remains symmetric. In addition, the policy target rate is more sensitive to a monetary contraction than accommodation.
Ezra U. Kure et al.
🇳🇬 Bank of Nigeria
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The paper assesses the response of monetary policy target variables to liquidity management instruments, using a Non-linear Autoregressive Distributed Lag (NARDL) model. The analysis focuses on the short end of liquidity management and provides evidence of long-run asymmetric effects of liquidity management instruments, notably, the monetary policy rate (MPR) and excess reserves of banks on the inter-bank rate. The findings show that the impact of discretionary and autonomous liquidity factors remains symmetric. In addition, the policy target rate is more sensitive to a monetary contraction than accommodation.
Ezra U. Kure et al.
🇳🇬 Bank of Nigeria
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Pass-Through Effects of Standing Facilities on Bank Interest Rates in Nigeria
The paper investigates the pattern of pass-through effects of standing facilities rates on commercial bank retail interest rates in Nigeria. Monthly data spanning 2007:06 to 2019:12 and the Gregory-Hansen cointegration method that accounts for structural breaks are used in the empirical analysis. The adjustment parameters for the standing deposit and lending facilities are found to be significant, but with a low speed of adjustment. This provides some evidence on the nature of the interest rate channel of monetary policy transmission in the country. Furthermore, the study could not confirm asymmetry in the adjustment of retail rates to their long-run equilibria. Lastly, we find that when the cost of funds rises, following a hike of the upper bound of the policy rate corridor by the CBN, banks tend to cut costs by reducing interest expense rather than raising deposit interest rates to aggressively pursue deposit mobilisation.
Victor Ezeora Eleam et al.
🇳🇬 Bank of Nigeria
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The paper investigates the pattern of pass-through effects of standing facilities rates on commercial bank retail interest rates in Nigeria. Monthly data spanning 2007:06 to 2019:12 and the Gregory-Hansen cointegration method that accounts for structural breaks are used in the empirical analysis. The adjustment parameters for the standing deposit and lending facilities are found to be significant, but with a low speed of adjustment. This provides some evidence on the nature of the interest rate channel of monetary policy transmission in the country. Furthermore, the study could not confirm asymmetry in the adjustment of retail rates to their long-run equilibria. Lastly, we find that when the cost of funds rises, following a hike of the upper bound of the policy rate corridor by the CBN, banks tend to cut costs by reducing interest expense rather than raising deposit interest rates to aggressively pursue deposit mobilisation.
Victor Ezeora Eleam et al.
🇳🇬 Bank of Nigeria
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Are Nigerian banks vulnerable to oil price shocks? A stress test approach
This study empirically examines the vulnerability of the Nigerian banking industry to extreme, but plausible, adverse oil price shocks. A structural vector autoregressive (SVAR-X) is adopted to achieve this objective. The study period covers 2007Q1 – 2020Q4. The simulations assess the asset quality performance of DMBs, using the NPLs, under three scenarios (baseline, adverse and severely adverse). The findings suggest that the entire banking industry, as well as individual DMBs, are vulnerable to adverse oil price shocks. Accordingly, the study recommends, strict compliance with the single obligor limit, by commercial banks, to mitigate adverse effects of volatilities in crude oil prices. However, due to data limitations the study cannot extend the analysis, to the impact of oil price shocks, on the capital adequacy of DMBs. Consequently, the need for further studies on this issue cannot be overemphasised.
A. T. Odu et al.
🇳🇬 Bank of Nigeria
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This study empirically examines the vulnerability of the Nigerian banking industry to extreme, but plausible, adverse oil price shocks. A structural vector autoregressive (SVAR-X) is adopted to achieve this objective. The study period covers 2007Q1 – 2020Q4. The simulations assess the asset quality performance of DMBs, using the NPLs, under three scenarios (baseline, adverse and severely adverse). The findings suggest that the entire banking industry, as well as individual DMBs, are vulnerable to adverse oil price shocks. Accordingly, the study recommends, strict compliance with the single obligor limit, by commercial banks, to mitigate adverse effects of volatilities in crude oil prices. However, due to data limitations the study cannot extend the analysis, to the impact of oil price shocks, on the capital adequacy of DMBs. Consequently, the need for further studies on this issue cannot be overemphasised.
A. T. Odu et al.
🇳🇬 Bank of Nigeria
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Measuring the impact of loan-to-deposit ratio (LDR) on Banks' liquidity in Nigeria
The study measures the impact of loan to deposit ratio (LDR) on Banks' liquidity in Nigeria between 2000Q1 and 2019Q3. The paper applied the Factor-Augmented Vector Autoregressive (FAVAR-X) methodology for estimation and forecasting. The result suggests that an LDR of 70.0 per cent, which reduces Banks' liquidity from N187.95 billion in 2019Q4, through N153.09 billion in 2020Q2 to close at N135.15 billion in 2020Q4, may require cautious acceptance. Thus, increasing LDR beyond 70.0 per cent may impact Banks' liquidity negatively. Furthermore, a direct relationship is established between LDR and inflation. The findings conform to a priori expectations as higher LDRs translate to increases in lending by Banks' which could boost output and ultimately cause a spike in inflation. The study emphasises the importance of caution by not increasing the LDR above 70.0 per cent, as this could cause excessive credit growth, increased inflation, and erosion of Banks' liquidity.
A. O. Adenuga et al.
🇳🇬 Bank of Nigeria
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The study measures the impact of loan to deposit ratio (LDR) on Banks' liquidity in Nigeria between 2000Q1 and 2019Q3. The paper applied the Factor-Augmented Vector Autoregressive (FAVAR-X) methodology for estimation and forecasting. The result suggests that an LDR of 70.0 per cent, which reduces Banks' liquidity from N187.95 billion in 2019Q4, through N153.09 billion in 2020Q2 to close at N135.15 billion in 2020Q4, may require cautious acceptance. Thus, increasing LDR beyond 70.0 per cent may impact Banks' liquidity negatively. Furthermore, a direct relationship is established between LDR and inflation. The findings conform to a priori expectations as higher LDRs translate to increases in lending by Banks' which could boost output and ultimately cause a spike in inflation. The study emphasises the importance of caution by not increasing the LDR above 70.0 per cent, as this could cause excessive credit growth, increased inflation, and erosion of Banks' liquidity.
A. O. Adenuga et al.
🇳🇬 Bank of Nigeria
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Budget deficit and economic growth in Nigeria
This paper examines the relationship between budget deficit and economic growth in Nigeria, from a linear and non-linear perspective, using annual time series data from 1981 to 2019. The linear model, which involves the use of an autoregressive distributed lag (ARDL) approach, was compared with a non-linear analysis, using a threshold autoregressive (TAR) model. The ARDL analysis reveals that the growth of national output is positively driven by the persistent budget deficit in Nigeria. This was substantiated by the TAR model which indicates that though budget deficit drives economic growth in Nigeria, the positive relationship holds only if the deficit does not exceed the optimal threshold, which is 2.02 per cent of GDP. Our analysis on the control variables shows that interest rate has negative and significant impact on economic growth, while exchange rate has no impact. We recommend that, government should lower interest rate and that expansionary fiscal policy should ensure that fiscal deficits do not exceed 2.02 per cent of the gross domestic product.
A. D. Umaru et al.
🇳🇬 Bank of Nigeria
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This paper examines the relationship between budget deficit and economic growth in Nigeria, from a linear and non-linear perspective, using annual time series data from 1981 to 2019. The linear model, which involves the use of an autoregressive distributed lag (ARDL) approach, was compared with a non-linear analysis, using a threshold autoregressive (TAR) model. The ARDL analysis reveals that the growth of national output is positively driven by the persistent budget deficit in Nigeria. This was substantiated by the TAR model which indicates that though budget deficit drives economic growth in Nigeria, the positive relationship holds only if the deficit does not exceed the optimal threshold, which is 2.02 per cent of GDP. Our analysis on the control variables shows that interest rate has negative and significant impact on economic growth, while exchange rate has no impact. We recommend that, government should lower interest rate and that expansionary fiscal policy should ensure that fiscal deficits do not exceed 2.02 per cent of the gross domestic product.
A. D. Umaru et al.
🇳🇬 Bank of Nigeria
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Revisiting the finance and industrial growth nexus in Nigeria
This paper re-examines the relationship between finance and industrial growth in Nigeria by including aggregate credit to the industrial sector and financial development index as additional variables into the industrial growth model. Using data spanning the last four decades, we apply the Autoregressive Distributed Lag (ARDL) bounds testing approach to estimate an industrial growth model that accounts for the role of finance-related variables, while also controlling for the impact of electricity consumption and structural breaks. The key findings in the study are threefold. First, our results confirm that finance is a significant driver of industrial growth in Nigeria. Second, the use of aggregate credit to the private sector in an industrial growth model tends to underestimate the impact of finance on industrial performance in the long-run, compared with the use of a sector-specific measure such as aggregate credit to the industrial sector. Third, accounting for structural breaks provides a higher long-run estimate for the impact of aggregate credit on the industrial sector. These results highlight the need to cautiously interpret results of industrial growth models that fail to (i) incorporate sector-specific credit, and (ii) account for structural breaks. To accelerate industrial growth in Nigeria, it is vital to sustain policies aimed at expanding credit to the industrial sector, such as the minimum Loan-to-Deposit ratio initiative.
E. A. Udeaja et al.
🇳🇬 Bank of Nigeria
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This paper re-examines the relationship between finance and industrial growth in Nigeria by including aggregate credit to the industrial sector and financial development index as additional variables into the industrial growth model. Using data spanning the last four decades, we apply the Autoregressive Distributed Lag (ARDL) bounds testing approach to estimate an industrial growth model that accounts for the role of finance-related variables, while also controlling for the impact of electricity consumption and structural breaks. The key findings in the study are threefold. First, our results confirm that finance is a significant driver of industrial growth in Nigeria. Second, the use of aggregate credit to the private sector in an industrial growth model tends to underestimate the impact of finance on industrial performance in the long-run, compared with the use of a sector-specific measure such as aggregate credit to the industrial sector. Third, accounting for structural breaks provides a higher long-run estimate for the impact of aggregate credit on the industrial sector. These results highlight the need to cautiously interpret results of industrial growth models that fail to (i) incorporate sector-specific credit, and (ii) account for structural breaks. To accelerate industrial growth in Nigeria, it is vital to sustain policies aimed at expanding credit to the industrial sector, such as the minimum Loan-to-Deposit ratio initiative.
E. A. Udeaja et al.
🇳🇬 Bank of Nigeria
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Foreign Private Investment in Nigeria 1979-1981
This paper has analysed the results of the survey o f foreign private investment in Nigeria for the period 1979 to 1981. The results show that net inflow o f foreign private investment into Nigeria fell by 12.6 per cent from N331.8 million in 1978 to N289.9 million in 1979. but rose by 61.1 per cent to N467.0 million in 1980 and fell again by 70. 5 per cent to N137.8 million in 1981. The sharp fall in net inflow of foreign private investment in 1981 was due to an outflow of N447. I million in 1981 as against outflows o f N414. I and N319.4 million in 1979 a nd 1980 respectively.
Central Bank of Nigeria CBN
🇳🇬 Bank of Nigeria
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This paper has analysed the results of the survey o f foreign private investment in Nigeria for the period 1979 to 1981. The results show that net inflow o f foreign private investment into Nigeria fell by 12.6 per cent from N331.8 million in 1978 to N289.9 million in 1979. but rose by 61.1 per cent to N467.0 million in 1980 and fell again by 70. 5 per cent to N137.8 million in 1981. The sharp fall in net inflow of foreign private investment in 1981 was due to an outflow of N447. I million in 1981 as against outflows o f N414. I and N319.4 million in 1979 a nd 1980 respectively.
Central Bank of Nigeria CBN
🇳🇬 Bank of Nigeria
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Foreign Exchange Flows through the Central Bank during the 3rd Quarter of 1983
Movement of foreign exchange through the Central Bank during the third quarter of 1983 resulted in a net inflow of N 11.9 million compared with the net outflow of N 103.0 million and a net inflow of N 13.2 million during the preceding quarter and the corresponding period of l 982.
Central Bank of Nigeria CBN
🇳🇬 Bank of Nigeria
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Movement of foreign exchange through the Central Bank during the third quarter of 1983 resulted in a net inflow of N 11.9 million compared with the net outflow of N 103.0 million and a net inflow of N 13.2 million during the preceding quarter and the corresponding period of l 982.
Central Bank of Nigeria CBN
🇳🇬 Bank of Nigeria
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