Journal•ISSN: 1062-9769
The Quarterly Review of Economics and Finance
Elsevier BV
About: The Quarterly Review of Economics and Finance is an academic journal published by Elsevier BV. The journal publishes majorly in the area(s): Economics & Volatility (finance). It has an ISSN identifier of 1062-9769. Over the lifetime, 1955 publications have been published receiving 45778 citations. The journal is also known as: QREF.
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TL;DR: In this article, the authors apply vector autoregression (VAR) to firm-level panel data from 36 countries to study the dynamic relationship between firms' financial conditions and investment, and find that the impact of financial factors on investment is significantly larger in countries with less developed financial systems.
Abstract: We apply vector autoregression (VAR) to firm-level panel data from 36 countries to study the dynamic relationship between firms’ financial conditions and investment. By using orthogonalized impulse-response functions we are able to separate the ‘fundamental factors’ (such as marginal profitability of investment) from the ‘financial factors’ (such as availability of internal finance) that influence the level of investment. We find that the impact of financial factors on investment, which indicates the severity of financing constraints, is significantly larger in countries with less developed financial systems. Our finding emphasizes the role of financial development in improving capital allocation and growth.
1,467 citations
TL;DR: In this article, the authors applied recently developed unit root and cointegration models to determine the appropriate Granger relations between stock prices and exchange rates using recent Asian flu data, and found that data from South Korea are in agreement with the traditional approach.
Abstract: This paper applies recently developed unit root and cointegration models to determine the appropriate Granger relations between stock prices and exchange rates using recent Asian flu data. Via impulse response functions, it is found that data from South Korea are in agreement with the traditional approach. That is, exchange rates lead stock prices. On the other hand, data of the Philippines suggest the result expected under the portfolio approach: stock prices lead exchange rates with negative correlation. Data from Hong Kong, Malaysia, Singapore, Thailand, and Taiwan indicate strong feedback relations, whereas that of Indonesia and Japan fail to reveal any recognizable pattern. %JEL classification: F300; G150
815 citations
TL;DR: The authors survey the theory and evidence linking fluctuations in energy prices to those in aggregate economic activity and examine the implications of this research for both monetary policy and energy policy in response to oil price shocks.
Abstract: In this article, we survey the theory and evidence linking fluctuations in energy prices to those in aggregate economic activity. We then examine the implications of this research for both monetary policy and energy policy in response to oil price shocks. The currently available research seems to provide relatively reliable guidance for monetary policy. Because the precise channels through which oil price shocks affect economic activity are only partially known, however, research offers less guidance about how countries should design energy policy should cope with oil price shocks.
536 citations
TL;DR: In this article, the authors studied the impact of oil price shocks on economic activity and consumer price indexes for six Asian countries over the period 1975Q1-2002Q2, and found evidence of asymmetries in the oil prices-macroeconomy relationship for some of the Asian countries.
Abstract: In this paper we study the oil prices–macroeconomy relationship by means of studying the impact of oil price shocks on both economic activity and consumer price indexes for six Asian countries over the period 1975Q1–2002Q2. The results suggest that oil prices have a significant effect on both economic activity and price indexes, although the impact is limited to the short run and more significant when oil price shocks are defined in local currencies. Moreover, we find evidence of asymmetries in the oil prices–macroeconomy relationship for some of the Asian countries.
526 citations
TL;DR: In this article, the role of financial development in accounting for economic growth in low and middle-income countries classified by geographic regions is examined. And the authors find that a well-functioning financial system is a necessary but not sufficient condition to reach steady economic growth.
Abstract: This study provides evidence on the role of financial development in accounting for economic growth in low- and middle-income countries classified by geographic regions. To document the relationship between financial development and economic growth, we estimate both panel regressions and variance decompositions of annual GDP per capita growth rates to examine what proxy measures of financial development are most important in accounting for economic growth over time and how much they contribute to explaining economic growth across geographic regions and income groups. We find a positive relationship between financial development and economic growth in developing countries. Moreover, short-term multivariate analysis provides mixed results: a two-way causality relationship between finance and growth for most regions and one-way causality from growth to finance for the two poorest regions. Furthermore, other variables from the real sector such as trade and government expenditure play an important role in explaining economic growth. Therefore, it seems that a well-functioning financial system is a necessary but not sufficient condition to reach steady economic growth in developing countries.
503 citations