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20 pages, 1392 KiB  
Article
Parallel Currencies under Free Floating Exchange Rates: A Model Setting Out the Conditions for Stable Currency Competition
by Juan E. Castañeda, Sebastian Damrich and Pedro Schwartz
Economies 2024, 12(10), 257; https://doi.org/10.3390/economies12100257 - 24 Sep 2024
Viewed by 1500
Abstract
We use a theoretical model to set up the conditions for a country to attain monetary stability by allowing for two freely tradable currencies to circulate in parallel. For this parallel system to function properly, confidence in the good behavior of the monetary [...] Read more.
We use a theoretical model to set up the conditions for a country to attain monetary stability by allowing for two freely tradable currencies to circulate in parallel. For this parallel system to function properly, confidence in the good behavior of the monetary authorities in charge of the two currencies is key. Our model shows how a floating exchange rate between the two can keep the issuers of the local currency in check. The results from our model show the conditions under which a parallel currency system disciplines the issuers of the currencies and thus maintains their purchasing power. In non-volatile economies, it also discourages governments (or private issuers) from inflating one of the currencies as a means to raise seigniorage, as this policy results in the displacement of the currency from the market. When foreign payments shortfall—such as in Greece and Cyprus during the ‘euro crisis’ in the mid-2010s, or intractable hyperinflation—leave the country without a medium of exchange, our model shows how currency choice can restore monetary circulation and offer a path to achieving and maintaining monetary stability. Full article
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17 pages, 2531 KiB  
Article
Realized Volatility Spillover Connectedness among the Leading European Currencies after the End of the Sovereign-Debt Crisis: A QVAR Approach
by Michail Nerantzidis, Nikolaos Stoupos and Panayiotis Tzeremes
J. Risk Financial Manag. 2024, 17(8), 337; https://doi.org/10.3390/jrfm17080337 - 5 Aug 2024
Viewed by 1191
Abstract
This paper examines the time-varying spillover effects and connectedness between the euro and other EU and non-EU currencies after the end of the sovereign-debt crisis. We employ the Quantile Vector Autoregression connectedness approach using intraday data for seven currencies (the euro, the British [...] Read more.
This paper examines the time-varying spillover effects and connectedness between the euro and other EU and non-EU currencies after the end of the sovereign-debt crisis. We employ the Quantile Vector Autoregression connectedness approach using intraday data for seven currencies (the euro, the British pound, the Swiss franc, the Polish zloty, the Hungarian forint, the Czech koruna, and the Norwegian krone) spanning from 1 January 2016 to 30 November 2022. The results indicate that, almost in all quantiles, the currencies of Eastern European Group countries (i.e., Czech Republic, Hungary, and Poland) are net contributors of information spillovers to other currencies, while currencies of non-EU countries (Switzerland, UK, and Norway) are net takers. Further, we find that the euro is the highest transmitter of net information spillovers to all other currencies until 2021. Interestingly, after 2021, the euro changes to net information spillover taker from all other currencies; highlighting that external shocks (e.g., COVID-19, the energy crisis) have significant risk spillover effects on the European currency market. Policymakers and market participants could benefit from knowing which currency drives developments to avoid unexpected consequences. Full article
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21 pages, 3328 KiB  
Article
Lebanon’s Economic Development Risk: Global Factors and Local Realities of the Shadow Economy Amid Financial Crisis
by Samar F. Abou Ltaif, Simona Mihai-Yiannaki and Alkis Thrassou
Risks 2024, 12(8), 122; https://doi.org/10.3390/risks12080122 - 31 Jul 2024
Viewed by 1331
Abstract
The shadow economy’s size and impact remain subjects of extensive research and debate, holding significant implications for economic policy and social welfare. In Lebanon, the ongoing crisis since 2019 has exacerbated severe economic challenges, with the national currency’s collapse, bank crisis, and foreign [...] Read more.
The shadow economy’s size and impact remain subjects of extensive research and debate, holding significant implications for economic policy and social welfare. In Lebanon, the ongoing crisis since 2019 has exacerbated severe economic challenges, with the national currency’s collapse, bank crisis, and foreign reserve deficits. The World Bank reports Lebanon’s financial deficit surpassed $72 billion, three times the GDP in 2021. Despite a drastic decline in GDP, imports have surged to near-pre-crisis levels, exacerbating economic woes and indicating a constant outflow of foreign currencies. Considering such contracting facts, this paper aims to investigate global factors influencing the shadow economy and discern their manifestations in Lebanon during financial crises. Our methodology involves a comprehensive literature review, alongside a case study approach specific to Lebanon. This dual-method strategy ensures a detailed understanding of the shadow economy’s impact and the development of actionable insights for policy and economic reform. Through this approach, we seek to contribute to a nuanced understanding of Lebanon’s economic landscape and provide valuable guidance for policy decisions aimed at reducing corruption, promoting transparency, and fostering a robust formal economy. The increase in the shadow economy raises the formal economy risk, as resources and activities diverted to informal channels hinder the growth and stability of the official economic sector. Although focusing on Lebanon, this analysis deepens the comprehension of the economic landscape and provides valuable guidance for policymakers, researchers, and stakeholders, aiming to address the root causes of informal economic activities and promote sustainable growth in developing countries in general. Full article
(This article belongs to the Special Issue Financial Analysis, Corporate Finance and Risk Management)
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22 pages, 2241 KiB  
Article
Exploring the Impact of Quantitative Easing Policy on the Business Performance of Construction Companies with the Debt Ratio as a Moderator
by Kuo-Cheng Kuo, Wen-Min Lu and Ching-Hsiang Cheng
Systems 2024, 12(5), 152; https://doi.org/10.3390/systems12050152 - 29 Apr 2024
Viewed by 1377
Abstract
During the 2008 financial crisis, central banks (such as the Fed) adopted a quantitative easing (QE) policy to stimulate their countries’ economies and overcome severe economic and financial recessions. However, apart from stimulating the economy by issuing a substantial amount of currency to [...] Read more.
During the 2008 financial crisis, central banks (such as the Fed) adopted a quantitative easing (QE) policy to stimulate their countries’ economies and overcome severe economic and financial recessions. However, apart from stimulating the economy by issuing a substantial amount of currency to purchase long-term bonds and suppress interest rates, QE policy also contributed to a boom in the real estate and construction sectors. Therefore, this study employs data envelopment analysis to measure the business performance (BP) of construction companies, and explore the impact of QE policy on the BP of construction companies, between 2004 and 2015, using hierarchical regression. We also examine the moderating role of the debt ratio on the relationship. Focused on publicly listed construction companies in Taiwan, this research reveals three encouraging findings. Firstly, QE policy indeed enhanced the BP of Taiwanese construction companies. Secondly, performance improvements in construction companies due to QE policy show a time-diminishing trend, suggesting the importance of seizing the initial policy benefits of QE implementation. Lastly, construction companies with appropriate financial leverage may exhibit better BP. These findings can provide valuable insights for relevant government entities and decision-makers in the industry for policy and investment decisions. Full article
(This article belongs to the Special Issue Managing Complexity: A Practitioner's Guide)
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14 pages, 774 KiB  
Article
Exploring the Dynamic Nexus between Cross-Border Dollar Claims and Global Economic Growth
by Constantinos Alexiou, Sofoklis Vogiazas and Alex Benbow
Economies 2024, 12(3), 69; https://doi.org/10.3390/economies12030069 - 15 Mar 2024
Cited by 1 | Viewed by 1823
Abstract
This paper addresses the role of the U.S. dollar in fostering global economic growth during the post-war period. The existing literature lacks a comprehensive understanding of the true implications of the U.S. dollar’s status as a reserve currency and a dearth of studies [...] Read more.
This paper addresses the role of the U.S. dollar in fostering global economic growth during the post-war period. The existing literature lacks a comprehensive understanding of the true implications of the U.S. dollar’s status as a reserve currency and a dearth of studies examining its impact. In this study, we explore the dynamic long-run and short-run relationships between cross-border U.S. dollar claims, global GDP, and global trade while gauging the impact of the Global Financial Crisis (GFC) and the COVID-19 pandemic. In doing so, we use ARDL methodology for a data set that spans the period of 1980 to 2022. The estimation results reveal a robust long-run relationship between U.S. dollar claims, global GDP and global trade and no clear evidence of asymmetric effects. Our findings are of great significance for monetary authorities, emphasising the need for a nuanced understanding of the implications of the U.S. dollar’s conducive role in shaping global economic dynamics and fostering growth. Full article
(This article belongs to the Special Issue The Political Economy of Money)
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15 pages, 1348 KiB  
Article
Investor Behavior in Gold, US Dollars and Cryptocurrency during Global Pandemics
by Yoochan Kim, Erkan Topal, Apurna Kumar Ghosh and Mohammad Waqar Ali Asad
Economies 2024, 12(3), 64; https://doi.org/10.3390/economies12030064 - 6 Mar 2024
Viewed by 2306
Abstract
COVID-19 and SARS are epidemics which have influenced the largest global economic crisis in recent years. This research reveals that both SARS and COVID-19 have led to fluctuations in the prices of gold and the US dollar index; however, there is no direct [...] Read more.
COVID-19 and SARS are epidemics which have influenced the largest global economic crisis in recent years. This research reveals that both SARS and COVID-19 have led to fluctuations in the prices of gold and the US dollar index; however, there is no direct causal relationship be-tween COVID-19 and the price of bitcoin. The USD index saw a significant increase during the SARS outbreak, while gold prices surged during the COVID-19 pandemic. The notion that cryptocurrency will surpass the value of gold or traditional currencies seems improbable, given the lack of evidence linking bitcoin prices to COVID-19. Gold is expected to maintain its value in the long term, offering lower risk compared to other currencies. Full article
(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)
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22 pages, 408 KiB  
Article
Does Economic Policy Uncertainty Explain Exchange Rate Movements in the Economic Community of West African States (ECOWAS): A Panel ARDL Approach
by Maud Korley and Evangelos Giouvris
Int. J. Financial Stud. 2023, 11(4), 128; https://doi.org/10.3390/ijfs11040128 - 1 Nov 2023
Cited by 2 | Viewed by 2734
Abstract
Research proposes that economic policy uncertainty (EPU) leads to exchange rate fluctuations. Given that African countries experience higher levels of uncertainty in developed/emerging markets, we examine the extent to which domestic and foreign EPU affect exchange rates for a panel of 12 ECOWAS [...] Read more.
Research proposes that economic policy uncertainty (EPU) leads to exchange rate fluctuations. Given that African countries experience higher levels of uncertainty in developed/emerging markets, we examine the extent to which domestic and foreign EPU affect exchange rates for a panel of 12 ECOWAS countries covering the period 1996–2018. In order to account for non-stationarity, cross-sectional dependence, and heterogeneity, the paper employs the dynamic heterogeneous panel approach. The ECOWAS has a dual currency arrangement ranging from a common currency union (CFA) to floating exchange rates (Non-CFA). To account for this, this study splits the sample data into CFA and Non-CFA areas. In addition, this study considers the role of the global financial crisis in the exchange rate-EPU nexus. Our results show that domestic EPU has a positive effect on exchange rates in the long run for Non-CFA areas. Different from the existing literature, our results suggest that domestic EPU does not explain exchange rate fluctuations in the short run. For all countries, foreign EPU leads to appreciation in the long run and depreciation in the short run. Interestingly, foreign EPU has a more dominant effect on exchange rate fluctuations in the selected countries than domestic EPU. This may reflect the weak institutional framework in these countries, which allows external fluctuations to have a greater impact. Moreover, this could be attributed to the increase in foreign capital flows during the sample period. Thus, these countries must develop effective policies to effectively absorb these external shocks. Results are robust to different proxies of EPU. Full article
15 pages, 2763 KiB  
Article
Ag and Sn Implications in 3-Polker Coins Forgeries Evidenced by Nondestructive Methods
by Ioan Petean, Gertrud Alexandra Paltinean, Adrian Catalin Taut, Simona Elena Avram, Emanoil Pripon, Lucian Barbu Tudoran and Gheorghe Borodi
Materials 2023, 16(17), 5809; https://doi.org/10.3390/ma16175809 - 24 Aug 2023
Cited by 3 | Viewed by 1277
Abstract
Several forged 3-Polker coins have been reported in historical sources on the financial crisis that occurred between 1619 and 1623 at the start of the 30-year-long war. Supposedly, belligerent countries forged other countries’ coins which were then used for external payments as a [...] Read more.
Several forged 3-Polker coins have been reported in historical sources on the financial crisis that occurred between 1619 and 1623 at the start of the 30-year-long war. Supposedly, belligerent countries forged other countries’ coins which were then used for external payments as a war strategy. Thus, a lot of 3-Polker coins (e.g., Sigismund-III-type) were forged, and the markets became flooded with poor currency. In the present day, these pre-modern forgeries are rare archeological findings. Only five forged 3-Polker coins randomly found in Transylvania were available for the current study. There are deeper implications of silver and tin in the forgery techniques that need to be considered. Thus, the forged 3-Polker coins were investigated via nondestructive methods: SEM microscopy coupled with EDS elemental spectroscopy for complex microstructural characterization and XRD for phase identification. Three distinct types of forgery methods were identified: the amalgam method is the first used for copper blank silvering (1620), and immersion in melted silver (1621) is the second one. Both methods were used to forge coins with proper legends and inscriptions. The third method is the tin plating of copper coins (with corrupted legend and altered design) (1622, 1623, and 1624). The EDS investigation revealed Hg traces inside the compact silver crusts for the first type and the elongated silver crystallites in the immersion direction, which are well-attached to the copper core for the second type. The third forgery type has a rich tin plating with the superficial formation of Cu6Sn5 compound that assures a good resistance of the coating layer. Therefore, this type should have been easily recognized as fake by traders, while the first two types require proper weighing and margin clipping to ensure their quality. Full article
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24 pages, 3472 KiB  
Article
A Wavelet-Decomposed WD-ARMA-GARCH-EVT Model Approach to Comparing the Riskiness of the BitCoin and South African Rand Exchange Rates
by Thabani Ndlovu and Delson Chikobvu
Data 2023, 8(7), 122; https://doi.org/10.3390/data8070122 - 24 Jul 2023
Viewed by 1916
Abstract
In this paper, a hybrid of a Wavelet Decomposition–Generalised Auto-Regressive Conditional Heteroscedasticity–Extreme Value Theory (WD-ARMA-GARCH-EVT) model is applied to estimate the Value at Risk (VaR) of BitCoin (BTC/USD) and the South African Rand (ZAR/USD). The aim is to measure and compare the riskiness [...] Read more.
In this paper, a hybrid of a Wavelet Decomposition–Generalised Auto-Regressive Conditional Heteroscedasticity–Extreme Value Theory (WD-ARMA-GARCH-EVT) model is applied to estimate the Value at Risk (VaR) of BitCoin (BTC/USD) and the South African Rand (ZAR/USD). The aim is to measure and compare the riskiness of the two currencies. New and improved estimation techniques for VaR have been suggested in the last decade in the aftermath of the global financial crisis of 2008. This paper aims to provide an improved alternative to the already existing statistical tools in estimating a currency VaR empirically. Maximal Overlap Discrete Wavelet Transform (MODWT) and two mother wavelet filters on the returns series are considered in this paper, viz., the Haar and Daubechies (d4). The findings show that BitCoin/USD is riskier than ZAR/USD since it has a higher VaR per unit invested in each currency. At the 99% significance level, BitCoin/USD has average values of VaR of 2.71% and 4.98% for the WD-ARMA-GARCH-GPD and WD-ARMA-GARCH-GEVD models, respectively; and this is slightly higher than the respective 2.69% and 3.59% for the ZAR/USD. The average BitCoin/USD returns of 0.001990 are higher than ZAR/USD returns of −0.000125. These findings are consistent with the mean-variance portfolio theory, which suggests a higher yield for riskier assets. Based on the p-values of the Kupiec likelihood ratio test, the hybrid model adequacy is largely accepted, as p-values are greater than 0.05, except for the WD-ARMA-GARCH-GEVD models at a 99% significance level for both currencies. The findings are helpful to financial risk practitioners and forex traders in formulating their diversification and hedging strategies and ascertaining the risk-adjusted capital requirement to be set aside as a cushion in the event of the occurrence of an actual loss. Full article
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39 pages, 1562 KiB  
Article
‘Safe Assets’ during COVID-19: A Portfolio Management Perspective
by Julien Chevallier
Commodities 2023, 2(1), 13-51; https://doi.org/10.3390/commodities2010002 - 31 Jan 2023
Cited by 2 | Viewed by 4087
Abstract
The pandemic crisis of COVID-19 hit the financial markets like a shockwave on 16 March 2020. This paper attempts to capture which ‘safe assets’ asset managers could have fled during the first wave of the pandemic. From an investment manager’s perspective, candidate assets [...] Read more.
The pandemic crisis of COVID-19 hit the financial markets like a shockwave on 16 March 2020. This paper attempts to capture which ‘safe assets’ asset managers could have fled during the first wave of the pandemic. From an investment manager’s perspective, candidate assets are stocks, bonds, exchange rates, commodities, gold, and (gold-backed) cryptocurrencies. Empirical tests of the ‘Safe-Haven’ hypothesis are conducted, upon which the selection of assets is performed. The methodological framework hinges on the Global Minimum Variance Portfolio with Monte Carlo simulations, and the routine is performed under Python. Other optimization techniques, such as risk parity and equal weighting, are added for robustness checks. The benchmark portfolio hits a yearly profitability of 7.2% during such a stressful event (with 3.6% downside risk). The profitability can be enhanced to 8.4% (even 14.4% during sub-periods) with a careful selection of ‘Safe assets’. Besides short- to long-term U.S. bonds, we document that investors’ exposure to Chinese, Argentinian, and Mexican stocks during COVID-19 could have been complemented with Swiss and Japanese currencies, grains, physical gold mine ETFs, or gold-backed tokens for defensive purposes. Full article
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22 pages, 953 KiB  
Article
Do Financial Crises Matter for Nonlinear Exchange Rate and Stock Market Cointegration? A Heterogeneous Nonlinear Panel Data Model with PMG Approach
by Mosab I. Tabash, Umaid A. Sheikh, Ali Matar, Adel Ahmed and Dang Khoa Tran
Int. J. Financial Stud. 2023, 11(1), 7; https://doi.org/10.3390/ijfs11010007 - 23 Dec 2022
Cited by 3 | Viewed by 2347
Abstract
The existing literature has explained the causality flow from the exchange rates toward the stock market without explaining the role of the economic crisis in effecting this nexus. This study examines the role of the financial crisis in affecting the nonlinear causality flowing [...] Read more.
The existing literature has explained the causality flow from the exchange rates toward the stock market without explaining the role of the economic crisis in effecting this nexus. This study examines the role of the financial crisis in affecting the nonlinear causality flowing from the exchange rates toward the stock market indexes of the ASEAN-5 region. The precrisis, postcrisis, and overall sample duration comprised 365, 650, and 1085 observations over the periods from January 2002 to January 2008, January 2010 to January 2020, and January 2002 to January 2020, respectively. The results showed that the conventional symmetrical panel ARDL (PARDL) model was not able to formulate long-run cointegration between currency value fluctuations and stock market indexes for both regimes, i.e., the post recessionary and pre recessionary periods. However, asymmetrical cointegration was established between the currency values and stock market indexes for the pre recessionary period and the overall sampling time frame by utilizing the panel-based NARDL framework (PNARDL). The study suggests practical implications for the exporters and importers to consider the regime as well as both the negative and positive shocks in the international dollar values while making forward contractual agreements. Full article
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20 pages, 2136 KiB  
Article
How Well Do Contemporary Theories Explain Floating Exchange Rate Changes in an Emerging Economy: The Case of EUR/PLN
by Adrian Marek Burda
Economies 2022, 10(11), 282; https://doi.org/10.3390/economies10110282 - 11 Nov 2022
Cited by 1 | Viewed by 2522
Abstract
The purpose of this paper is to investigate how well contemporary exchange rate theories explain fluctuations in exchange rates of emerging economies, before and after the Global Financial Crisis (GFC). As an example, the EUR/PLN exchange rate in 1999–2015 was selected as the [...] Read more.
The purpose of this paper is to investigate how well contemporary exchange rate theories explain fluctuations in exchange rates of emerging economies, before and after the Global Financial Crisis (GFC). As an example, the EUR/PLN exchange rate in 1999–2015 was selected as the currency pair that was the most liquid in the region; it had a stable exchange rate regime in the given period. The whole analysis was performed within the selected linear vector error correction (VEC) model framework. VEC models incorporate such well-known theories as purchasing power parity (PPP), the uncovered interest rate parity (UIP), the Harrod–Balassa–Samuelson (HBS) effect, the terms of trade (TOT), the net financial asset (NFA) theory and risk premium. The results indicate the greater importance of external factors—in particular, the Euro Area (EA) short-term interest rates and EA price shocks after the GFC. The main sources of EUR/PLN variability were found to be exchange rate shocks, terms of trade shocks and foreign and domestic short-term interest rate shocks, as well as foreign price shocks. These results are of particularly high importance for our own exchange rate shocks and indicate that a large part of exchange rate fluctuations in EUR/PLN still remains unexplained. Full article
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15 pages, 1408 KiB  
Article
The Impact of the Ukrainian War on Stock and Energy Markets: A Wavelet Coherence Analysis
by Charalampos Basdekis, Apostolos Christopoulos, Ioannis Katsampoxakis and Vasileios Nastas
Energies 2022, 15(21), 8174; https://doi.org/10.3390/en15218174 - 2 Nov 2022
Cited by 28 | Viewed by 6279
Abstract
This study attempts to examine the existence of interdependencies between specific stock market indices, exchange rates and crude oil for the period January 2021 to July 2022 with daily data. In the period we have chosen, the post-vaccination phase against COVID-19, as well [...] Read more.
This study attempts to examine the existence of interdependencies between specific stock market indices, exchange rates and crude oil for the period January 2021 to July 2022 with daily data. In the period we have chosen, the post-vaccination phase against COVID-19, as well as the war in Ukraine, is covered. The variables selected for this study are RTSI, Eurostoxx, S&P 500, EUR/USD and RUB/USD exchange rates and crude oil prices. The selection of the specific variables was made because they are directly related to the pre-war period that coincides with the post-vaccine period of the pandemic, which allowed us to characterize it as the normal period and to characterize the period of the war in Ukraine that coincides with the energy crisis as the unstable period. In this way, the present study covers the markets of Russia and other developed economies. For empirical purposes, we applied a wavelet coherence approach in order to investigate the possible existence of simultaneous coherence between the variables at different times and scales for all the considered times. The findings of the study reveal the existence of strong correlations between all variables, during different time periods and for different frequencies during the period under review. Of particular interest is the finding that shows that during the crisis period, the RTSI significantly affects both the European and American stock markets, while also determining the evolution of the Russian currency. In addition, it appears that capital constraints in the Russian stock market, combined with increased demand for crude oil, determine the interdependence between RTSI and crude oil. Finally, an interesting finding of the study is the existence of a negative correlation between the US stock index and crude oil in low-frequency bands and the RTSI and Eurostoxx with crude oil for the post-vaccination and pre-war periods in the medium term. These findings can be used by both investors and portfolio managers to hedge risks and make more confident investment decisions. In addition, these findings can be used by policy makers in the planning of regulatory policies regarding the limitations of the systemic risks in capital markets. Full article
(This article belongs to the Special Issue Challenges in the Energy Sector and Sustainable Growth)
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29 pages, 1373 KiB  
Article
The Impact of Oil Price and Oil Volatility Index (OVX) on the Exchange Rate in Sub-Saharan Africa: Evidence from Oil Importing/Exporting Countries
by Maud Korley and Evangelos Giouvris
Economies 2022, 10(11), 272; https://doi.org/10.3390/economies10110272 - 1 Nov 2022
Cited by 8 | Viewed by 4706
Abstract
The Theory demonstrates that oil price and oil volatility (OVX) are significant determinants of economic activity; however, studies seldom consider both variables in the oil–exchange rate nexus and ignore the distributional heterogeneity of the exchange rate. We investigate their joint effect and employ [...] Read more.
The Theory demonstrates that oil price and oil volatility (OVX) are significant determinants of economic activity; however, studies seldom consider both variables in the oil–exchange rate nexus and ignore the distributional heterogeneity of the exchange rate. We investigate their joint effect and employ both the quantile regression and Markov switching models to address this. We differentiate between positive/negative shocks and control for the effect of the global financial crisis in 2008 and the COVID-19 pandemic in 2020. We observe that OVX shocks significantly impact the exchange rate for all countries whereas, oil price shocks only affect the exchange rate of oil importing countries. Rising (falling) OVX causes the local currency to depreciate (appreciate). The impact of rising or falling OVX is the same for oil importing and oil exporting countries whereas the impact of rising and falling oil price varies. The impact of oil price and OVX on exchange rate is affected by market conditions. The exchange rate responds to oil price and OVX mostly at lower quantiles (bearish markets) for all countries, which reveals investors sensitivity. In contrast, a weak to no significant response is observed at the higher quantiles (bullish market). Our results are robust in model selection (Markov switching models). Full article
(This article belongs to the Section Macroeconomics, Monetary Economics, and Financial Markets)
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15 pages, 4704 KiB  
Article
Silver Depreciation in 3-Polker Coins Issued during 1619–1627 by Sigismund III Vasa King of Poland
by Ioan Petean, Gertrud Alexandra Paltinean, Emanoil Pripon, Gheorghe Borodi and Lucian Barbu Tudoran
Materials 2022, 15(21), 7514; https://doi.org/10.3390/ma15217514 - 26 Oct 2022
Cited by 5 | Viewed by 2013
Abstract
The present research is focused on the 3-Polker coins issued during 1619–1627 by Sigismund III Vasa, King of Poland. A major financial crisis took place at that time due to the 30-year War, which started in 1619. There are two theories among historians [...] Read more.
The present research is focused on the 3-Polker coins issued during 1619–1627 by Sigismund III Vasa, King of Poland. A major financial crisis took place at that time due to the 30-year War, which started in 1619. There are two theories among historians concerning the silver depreciation of these coins. The most common theory (generally accepted without proof) is that the later years of issue are depreciated below 60% Ag. The second theory is based on the medieval sources that indicate inflation during the years from 1621–1625, but the medieval source only refers to the inflation of the type of coins and does not mention the issuer. Therefore, in this study, we use modern investigation techniques and materials science methods to help historians elucidate the aforementioned aspects regarding the medieval period. The XRD investigation results are in good agreement with the SEM-EDX elemental analysis. The coins from 1619 and 1620 have high silver content, namely, 86.97% and 92.49%, which corresponds to good silver. The amount of Ag found in the coins from 1621–1625 issituated in the range of 63.2–74.6%. The silver titleis suddenly restored in 1626 at about 84.3% and is kept in a good range until the end of this decree under Sigismund III in 1627. In conclusion, the second theory was partly validated by our experimental results, certifying the currency depreciation during 1621–1625, but the silver title was not lower than 54.2%. Notably, even this depreciated silver title assures a good quality of the 3-Polker coins compared to similar coins issued in other countries that were copper–silver-plated. Therefore, the 3-Polker coins were preferably hoarded at that time.Small alterations in the mint mark’s design were observed in all the depreciated coins compared to the good ones. This might be a sign for an expert to identify the depreciated coins, a fact which requires supplementary investigations. The silver title’s restoration in 1626 also came with a complete change of the mintmark. Full article
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