• The Journal of Asian Finance, Economics and Business
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• v.9 no.2
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• pp.1-14
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• 2022

The implications of bank-specific risks and macroeconomic risks on the growth, profitability, and stability of Islamic and conventional banks are examined and compared in this article. The study also investigates whether corporate governance mitigates the effects of both bank-specific and macroeconomic risks on Islamic and conventional banks' development, profitability, and stability. For the period 2007-2019, we examined a panel data set of 22 banks in Pakistan, including both Islamic and conventional banks. We discovered considerable evidence that both bank-specific risks and macroeconomic risks have negative effects on the growth, profitability, and stability of Pakistani banks using a dynamic panel data estimator, the two-step Generalized Method of Moments (GMM) approach. Furthermore, the findings show that bank-specific and macroeconomic risks have different consequences in both types of banking. The impacts of liquidity risk, operational risk, capital risk, inflation risk, and exchange rate risk are higher for Islamic banks than for conventional banks. Conventional banks, on the other hand, are more vulnerable to credit risk and interest rate risk. Finally, the findings show that good corporate governance reduces the negative consequences of both categories of risks on bank development, profitability, and stability. This is true for Islamic and conventional banks alike.

• Analyses & Alternatives
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• v.3 no.1
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• pp.135-157
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• 2019

The linkages between asset prices and macroeconomic outcomes are long-standing issue to both economists and monetary authorities. This paper explores the impact of asset prices on output and price in China. It focuses on the impacts of asset prices on the low quantiles of GDP gap and high quantiles of price gaprespectively. The main findings are the following: the influence of stock price gap, stock returns, and money growth on the different quantile of GDP gap and price gap are noticeable different, and there are significant impacts on the left tail of GDP gap distribution and on the right tail of price gap distribution. This implies that the results coming from simple regression will underestimate the economic risk imposed by asset price volatility. Moreover, these results also provide the caveat that one should cautiously distinguish the meaning of asset price gap and asset price growth rate and use them, through their contents are similar in some sense. One implication for monetarypolicy is that authority should interpret the relationship between asset prices and macro-economy in wider perspectives, and make the policy decision taking the impacts of asset prices on the tails of economy.

• Journal of Korea Trade
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• v.23 no.3
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• pp.118-137
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• 2019

Purpose - As global trade disputes intensify and global trade uncertainty increases due to the prevailing trade protectionism all over the world, mega-FTAs such as the RCEP and CPTPP are suggested as strategic trade policy options for export-driven small open economies, such as Korea. This paper aims to provide a comprehensive analysis of Korea's mega-FTA participation and the induced implications for the Korean economy. Design/methodology - We use a multi-region, multi-sector global CGE model, and investigate the different effects of both the US-China and US-EU trade wars on the relative changes in GDP, welfare, and trade under different trade policy regimes; (i) Korea does not participate in any mega-FTA, (ii) Korea participates in the RCEP, and (iii) Korea participates in the CPTPP. Findings - We show, among others, that though industrial effects might be largely varied, the overall enlarging of free trade zones through multilateral mega-FTA participation may contribute significantly to the macroeconomic soundness and stability of Korea, even when global trade protectionism prevails. Under RCEP and CPTPP trade regimes, Korea's GDP may increase even when the global trade environment deteriorates as trade wars occur and intensify between the US and China, or between the US and EU. It is also estimated that RCEP participation increases Korea's GDP, welfare (measured in equivalent variation), and total trade by 1.12%, $1.09 billion, and 2.54%, respectively, while CPTPP participation increases them by 0.19%, $0.92 billion, and 0.13%, respectively. Originality/value - Existing studies usually focus on the direct impacts of mega-FTA participation on macroeconomic variables such as GDP, welfare, and trade, and do not consider the possible buffer effects of a mega-FTA when the global trade environment worsens. In this paper, we analyze and quantify not only the direct impacts of RCEP and CPTPP on the main macroeconomic variables but also the possible buffer effects of the RCEP and CPTPP in the cases of the US-China and US-EU trade wars.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.6
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• pp.173-183
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• 2020

The paper investigates the determinants of foreign direct investment (FDI) in Vietnam in 2000-2019 period. This study uses difference Generalized Methods of Moments (GMM) and Pooled Mean Group (PMG) to analyse panel data officially provided by General Statistical Office of Vietnam. The results show that market size impacts positively significant on FDI attraction: 1% -1.45% (PMG) and 1% -1.25% (GMM). Besides, some other factors have positive influences as labor force, macroeconomic policy, macroeconomic stability and skilled labor. Meantime, the trade openness negatively affects FDI inflows in the short-term, while not being statistically significant in the long-term. Moreover, economic shocks often have a negative impact on FDI inflows. The findings of this study lead to the following recommendations. First, authorities should pay special attention to encourage economic growth rate in Vietnam to expand market size because this is the first priority of foreign investors. Second, authorities need to continue increasing the rate of skilled labor, especially highly qualified management force, engineers and well-skilled workers. Third, the authorities should adjust trade openness to boost the role of its determinant in attracting FDI inflows. Fourth, macroeconomic stability needs to be governed by international standards in order to secure the belief of foreign investors in the long-term.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.1113-1119
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• 2021

This study aims to determine the impact of the news coverage of the COVID-19 pandemic on the composite stocks' movement (IHSG) in Indonesia. This study used secondary data of daily time series with an observation range of March 2020-June 2020. This study used three main variables, namely, COVID-19 news, the daily price of a composite stock market index (IHSG), and interest rate. This study clarifies pandemic news into two forms to facilitate quantitative analysis, namely, good news and bad news. Both pandemic news conditions, which have been clarified, are then processed into the index and reprocessed along with two other variables using vector autoregressive (VAR). The results showed that the good news have a dominant effect on developing the composite stock price index (IHSG) in Indonesia during the COVID-19 pandemic. Although the good news dominates the composite stock price index (IHSG) movement in Indonesia, the bad news must also be anticipated. By implementing a series of macroeconomic policies that follow the conditions of the composite stock price index (IHSG) movements on the stock exchange floor, the bad news response can decrease the potential for a decline in investor confidence, so that the financial system's macroeconomic stability is maintained.

• The Korean Journal of Health Service Management
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• v.6 no.3
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• pp.219-229
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• 2012

In these days, the interest on medical industry is increasing around the world. This paper attempts to estimate the economic effects of the medical and measuring instrument industry through the Input-Output Analysis. Especially, 78*78 Sector Tables were used as the first analysis tool. So then, 79*79 Sector Tables adjusted were used for that industry. The main analysis tools of this study are comparing and analyzing backward and forward linkage effect, the induced effect of the self industry and other industries and the induced coefficients such as products, value-added, employee's pay, sales surplus, employment. According to the result of analysis, the medical and measuring instrument industry has great economic impacts which affects the major macroeconomic factors such as production and backward linkage effect. And the induced effects of the self medical and measuring instrument industry are significant compared to other industries in aspects of production, employee's pay and sales surplus.

• The Korean Journal of Health Service Management
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• v.7 no.3
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• pp.57-69
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• 2013

In these days, the interest on health industry is increasing around the world. This paper attempts to estimate the economic effects of the Cosmetic Industrydusing the Input-Output Analysis. Especially, 78*78 Sector Tables were used as the first analysis tool. So then, 79*79 Sector Tables adjusted were used for that industry. The main analysis tools of this study are comparing and analyzing backward and forward linkage effects, the induced effects of the self industry and other industries and the induced coefficients such as product, value-added, job and employment. According to the result of analysis, the cosmetic industry has great economic impacts which affects the major macroeconomic factors such as product, value added and backward linkage effect. And the induced effects of the self cosmetic industry are significant compared to other industries in aspects of product, value-added, and employment.

• KDI Journal of Economic Policy
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• v.34 no.4
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• pp.91-116
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• 2012

This paper analyzes how the adverse impacts of the global financial crisis on Korea's employment could be mitigated in comparison with the Asian crisis period. The results from error-correction models suggest that the less severe impacts during the global financial crisis could be attributed to (i) smaller GDP reduction, (ii) better maintenance of domestic demand despite a sharp fall of export, (iii) less serious over-employment during the run-up to the crisis, and (iv) less severe credit crunch. Analyses of OECD cross-country data provide corroborating evidence. In order to mitigate adverse impacts on employment, therefore, priority should be given to expansionary macroeconomic policies to keep aggregate domestic demand from collapsing once a crisis is triggered. Also crucial, however, is to maintain sound economic structures such as flexible labor market and adequately supervised financial market.

• KDI Journal of Economic Policy
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• v.36 no.4
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• pp.171-205
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• 2014

This paper investigates the manner in which house prices affect macroeconomic variables through a house price channel by applying the method of Iacoviello (2005) to Korean data, and establishing a DSGE model with complementarity. This paper found that higher LTV ratio coupled with stronger complementarity results in the co-movement in both consumption and housing. For instance, the results show that when the LTV ratio and complementarity stands respectively at 50% and 0.42, an 1% rise in house prices increases consumption by 0.057%, and when the complementarity parameter increases to 0.52 with LTV remains unchanged at 50%, consumption rises by 0.047% per 1% increase in house prices. An increase in house prices leads credit constraints for borrowers to become more loose as value of a house rises as a collateral. The increase in household credit enables more consumer spending, eventually leading to increased consumption. A key link in which house prices are connected to macroeconomic variables is change in consumption. To put it simply, a rise in house prices leads to an increase in consumption, which consequently impacts the overall macro-economy. At this point, complementarity is found, in that the elasticity of intra-temporal substitution between housing and consumption is estimated at 0.42, which plays an important role in the house price channel by amplifying the effects of house prices on consumption.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.17 no.10
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• pp.39-45
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• 2016

This study analyses the macroeconomic effects of the direct payment system (DPS) for environment-friendly agriculture in Korea. We utilized the applied general equilibrium model (AGE model) for the general agricultural sector as well as the environmentally-friendly agricultural sector. We considered several scenarios based on various direct payment amounts to measure and analyze economic impacts. Scenario 1 considers the current direct payment system. Scenario 2 examines an additional 5% increase from the direct payment amount in scenario 1. Scenario 3 reviews an increase of 10% in direct payment amount while Scenario 4 considers an additional increase of 15% compared with Scenario 1. Lastly, scenario 5 examines a 20% increase in direct payment amounts compared with scenario 1. In addition, the baseline considers conditions prior to the introduction of the direct payment system. The simulation analysis results show that capital formation, production volume, and labor productivity increased in the environment-friendly agricultural sector. In contrast, employment in the environment-friendly agricultural sector decreased. The price of environment-friendly agricultural products following the introduction of the DPS remain consistent with the price of environment-friendly agricultural product before introducing the DPS. This results from price elasticity of supply and demand are inelastic, and there is no change in the income of consumers during the analysis period. However, additional research is necessary for improvement of the model using complementary statistical data for the environmental-friendly agriculture sector.