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Applied Macroconomics and Sustainability—Macroeonomic Policy Presepective

A special issue of Sustainability (ISSN 2071-1050). This special issue belongs to the section "Economic and Business Aspects of Sustainability".

Deadline for manuscript submissions: closed (31 December 2022) | Viewed by 11875

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Guest Editor
Department of Economics, Northeastern Illinois University, Chicago, IL 60625, USA
Interests: applied macroeconomics; economic development; financial economics; time-series econometrics
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

Macroeconomic developments of the last decade and a half have highlighted the central role of financial and housing markets. This has posed unique challenges for a sustainable macroeconomic policy design and altered the field of applied economics and sustainability. This Special Issue is a step forward in this direction. 
Academic researchers, policymakers, and the business community are interested in analyzing sustainable macroeconomic policies in the presence of financial risks and economic uncertainty. One challenge is the increased interconnections, both domestically and globally, between macrofinancial variables. Studies find that risks and uncertainty drive the impact of policy shocks on asset markets—stocks, bonds, housing, real estate investment trusts (REIT), and commodities. Higher risk and uncertainty reduce the extent to which policy actions affect the macrofinancial variables. Further, there is a significant spillover of economic shocks due to increased integration of asset markets, both within and across countries, particularly in the case of housing and REIT markets. New research is also emerging by applying different econometric approaches, such as machine learning, to understand model policy design. 
Design of a robust and sustainable policy design benefits both developed and emerging market economies. This Special Issue aims to publish high-quality applied economic research papers from academia, business, and other stakeholders on topics that include but are not limited to:
1) Applying econometric frameworks to understand economic and financial integration at domestic and international level;
2) Alternative approaches to model sustainable policies, including but not limited to monetary policy;
3) Time-varying impact of economic policies on financial asset markets and the role of economic and financial uncertainties;
4) National and international linkages of housing and other asset markets with macroeconomic fundamentals;
5) Policies evaluating the impact on real estate investment trusts;
6) Using financial market information for understanding macroeconomic dynamics and policy design.

Dr. Hardik Marfatia
Guest Editor

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Published Papers (5 papers)

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Research

16 pages, 618 KiB  
Article
Decommodify the 2030 Agenda: Why and How to Finance What Is Not Profitable?
by Telma Barrantes-Fernández, Esteban Cruz-Hidalgo, José Francisco Rangel-Preciado and Francisco Manuel Parejo-Moruno
Sustainability 2023, 15(5), 3966; https://doi.org/10.3390/su15053966 - 22 Feb 2023
Cited by 1 | Viewed by 2085
Abstract
The 2030 Agenda serves as a guide for current economic policy. Despite this, the dominant political and economic discourse still relies on the market for success. Incentives are being developed to create business opportunities that align with the sustainable development goals. However, funding [...] Read more.
The 2030 Agenda serves as a guide for current economic policy. Despite this, the dominant political and economic discourse still relies on the market for success. Incentives are being developed to create business opportunities that align with the sustainable development goals. However, funding for these projects ultimately depends on their potential profitability. As a result, economic growth is seen as a necessary condition for achieving the 2030 Agenda. This approach leaves culture and the arts behind, as they are difficult to commodify. The artist job market highlights the tension between the democratic value of the arts and the values of the capitalist system. This challenge is seen in both the field of cultural economics and in discussions of culture’s role in meeting the 2030 Agenda’s sustainable development goals. To address this, the study proposes incorporating culture into a funding strategy not based on the private market by using the employer of last resort or job guarantee policy for future applications. This will redirect focus from the economic value of the arts to their value for human development, ultimately realizing the goals set by the 2030 Agenda. Full article
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13 pages, 467 KiB  
Article
Sustainable Employment in Developing and Emerging Countries: Testing Augmented Okun’s Law in Light of Institutional Quality
by Asma Raies
Sustainability 2023, 15(4), 3088; https://doi.org/10.3390/su15043088 - 8 Feb 2023
Cited by 3 | Viewed by 1895
Abstract
This article is motivated by the recent debate raised on Okun’s Law regarding the divergence of the magnitude of Okun’s coefficient across countries and time horizons, its asymmetry and non-linearity, and the methodological issues associated with the estimate of this law. We tested [...] Read more.
This article is motivated by the recent debate raised on Okun’s Law regarding the divergence of the magnitude of Okun’s coefficient across countries and time horizons, its asymmetry and non-linearity, and the methodological issues associated with the estimate of this law. We tested the proposition that institutional quality—as measured by governance indicators—can explain this divergence and non-linearity. We estimated an augmented version of Okun’s Law showing the non-linear responsiveness of unemployment to fluctuations in GDP in the presence of institutional quality in a sample of 88 developing and emerging countries over the 1985–2019 period. Estimates are run using the 3sls regressor. We found evidence confirming that the responsiveness of unemployment to changes in output is all the more remarkable in countries with stronger institutions. We show that improving the institutional environment—as proxied by Government Effectiveness (GE), Control of Corruption (CC), Regulatory Quality (RQ), the Rule of Law (RL), and Voice and Accountability (VA)—is as important as increased economic growth in the strategy of reducing unemployment and reaching full employment in these countries, which is one of the 17 Sustainable Development Goals (SDGs) issued by the United Nations. Full article
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21 pages, 3025 KiB  
Article
Fiscal Policy Effects on Private Expenditure for Sustainable Economic Growth: A Panel VAR Study from Selected Developing Countries
by Iszan Hana Kaharudin and Mohammad Syuhaimi Ab-Rahman
Sustainability 2022, 14(17), 10786; https://doi.org/10.3390/su141710786 - 30 Aug 2022
Cited by 8 | Viewed by 1837
Abstract
This study examines the effects of fiscal policy on private expenditure using a panel VAR for the sample of 60 developing countries from 1990 to 2020. The VAR panel model framework was used to focus on the disaggregated government expenditures which included the [...] Read more.
This study examines the effects of fiscal policy on private expenditure using a panel VAR for the sample of 60 developing countries from 1990 to 2020. The VAR panel model framework was used to focus on the disaggregated government expenditures which included the defense, economic and social expenditure. The main findings showed a positive shock effect of defense expenditure which led to crowding out effect on private expenditure and domestic income. Conversely, economic and social expenditure had the crowding in effect on private consumption and domestic income. To detail out the analysis, the composition of government spending was divided into two, namely productive expenditures and non-productive expenditures. Therefore, the findings indicate that defense expenditure is non-productive since it does not stimulate an increase in private spending and national income while economic expenditure and social expenditure are classified as productive expenditure with the ability to increase economic activity. The policy implication suggests that the government should carefully examine and identify the sectors or composition that have greater potential, capacity and relevance in stimulating sustainable economic growth. Full article
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18 pages, 1155 KiB  
Article
Does Counter-Cyclical Monetary Policy Promote Enterprise R&D Investment in a Recession? Empirical Evidence from China
by Tingxi Wang and Hui Zhang
Sustainability 2022, 14(10), 6076; https://doi.org/10.3390/su14106076 - 17 May 2022
Cited by 1 | Viewed by 2138
Abstract
Using the continuous difference-in-difference (DID) model, this paper analyzes the Chinese listed companies’ panel data from 2013 to 2019 by taking the rapid monetary policy easing in mid-2015 as the policy shocks to test the impact of loose monetary policy on enterprise R&D [...] Read more.
Using the continuous difference-in-difference (DID) model, this paper analyzes the Chinese listed companies’ panel data from 2013 to 2019 by taking the rapid monetary policy easing in mid-2015 as the policy shocks to test the impact of loose monetary policy on enterprise R&D investment. The results show that loose monetary policy significantly weakened the negative impact of high leverage on enterprise R&D investment. After considering the heterogeneity and fixed effects of enterprise and industry characteristics, loose monetary policy still significantly improved highly leveraged enterprises’ R&D investment and showed a greater innovation-driving role in a competitive market environment. Based on this, this paper believes that The People’s Bank of China should continue to guide the decrease of medium- and long-term interest rates and promote benign competition among enterprises to improve the effectiveness of the monetary policy. Full article
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19 pages, 2805 KiB  
Article
The Impact of Macroeconomic Sustainability on Exchange Rate: Hybrid Machine-Learning Approach
by Hüseyin İlker Erçen, Hüseyin Özdeşer and Turgut Türsoy
Sustainability 2022, 14(9), 5357; https://doi.org/10.3390/su14095357 - 29 Apr 2022
Cited by 6 | Viewed by 3028
Abstract
This paper constructed a robust methodology to investigate the impact of news regarding macroeconomic policies on exchange rate fluctuations, and to examined the applicability of qualitative information alongside historical data to predict exchange rates. To do so, hybrid machine learning algorithms comprised of [...] Read more.
This paper constructed a robust methodology to investigate the impact of news regarding macroeconomic policies on exchange rate fluctuations, and to examined the applicability of qualitative information alongside historical data to predict exchange rates. To do so, hybrid machine learning algorithms comprised of natural language processing, fuzzy logic, and support vector regression have been constructed. This study emphasizes the significance of qualitative information on investors’ subjective consideration, the decision-making process, and causality on exchange rate volatility. To perceive the causality of expected and unexpected macroeconomic news on exchange rate fluctuations, news regarding the inflation rate, interest rate, unemployment rate, balance of trade, and credit ratings has been extracted from the web. Learning automata has been adopted to construct a unique lexicon for textual analysis. Subjective considerations of decision makers based on news have been evaluated by processing using the prospect theory and composing fuzzy antecedents for the fuzzy logic phase. The fuzzy logic method attained the correlation value between the macroeconomic news and the exchange rate. Finally, support vector regression predicted the exchange rate on a daily basis. The statistical test results indicated a strong correlation between recently published macroeconomic news on daily exchange rate fluctuations and their usability for predicting exchange rates in the short term, while emphasizing the significance of sustainable macroeconomic policies on exchange rate stability. Full article
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