Showing papers on "Purchasing power published in 2016"

Money, Bonds, and Foreign Exchange

Abstract: In the theory of finance, capital markets provide securities which allow the ownership of productive assets to be allocated among investors according to their willingness to bear risk in exchange for return, and independently of their tastes for the productive services provided by the assets This paper uses the theory of finance to study the role of money as a productive asset and the transformation of money into a portfolio asset True to its purpose, the capital market provides securities-nominal bonds-that allow an allocation of the current services of the money supply according to its current productivity and without regard for its future purchasing power risk, and an allocation of the future purchasing power risk of the money supply according to the willingness of investors to bear this risk in exchange for return and without regard for investor needs for the future transactions services of money In open

Cryptocurrencies, network effects, and switching costs

Abstract: "Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions. " --Timothy May, 1992 Recent technological advances have significantly lowered the cost of processing electronic payments. Electronic banking and digital wallets (also called e-wallets) allow individuals to transfer funds securely. Whereas these services were used almost exclusively for remote transactions in the past, the widespread adoption of smartphones has made it easier to make and receive payments in person with electronic bank accounts and digital wallets. More recently, the development of inexpensive card-reading devices has enabled virtually anyone to accept electronic payments. (1) With a simple click, tap, or swipe, individuals can now transact without having to handle physical cash or write checks. At the same time, there has been a growing concern over the safety and stability of some of the most widely used currencies. Successive rounds of quantitative easing in the United States have been met with opposition, as some users of the dollar fear the currency will be worth significantly less in the future. Similarly, instability in Europe prompts fears of devaluation or outright collapse of the euro. Although many continue to put their trust in dollars and euros, uncertainty abounds. In this context, a small but vocal minority has turned to cryptocurrencies. Cryptocurrencies are digital alternatives to traditional government-issued paper monies. Cryptography is used to ensure transactions are secure, to prevent users from spending the same balance more than once, and to govern the supply of digital notes in circulation. Some cryptocurrencies are decentralized, thereby enabling quasi-anonymous transactions and making it difficult for governments to regulate. Moreover, the electronic nature of cryptocurrencies means they are relatively easy to use across international borders. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, why have cryptocurrencies failed to gain widespread acceptance? I offer a simple explanation based on network effects and switching costs. In order to articulate the problem that agents considering cryptocurrencies face, I employ a simple model developed by Dowd and Greenaway (1993). The model demonstrates that agents may fail to adopt an alternative currency when network effects and switching costs are present, even if all agents agree that the prevailing currency is inferior. The limited success of bitcoin--almost certainly the most popular cryptocurrency to date--serves to illustrate. Of course, bitcoin has some properties that many would view as undesirable. For example, it is not supported by a sovereign nation and might be prone to hacker attacks. Its value has also fluctuated significantly over the last few years. (2) Although these features may be all that is required to account for its failure to gain widespread acceptance, proponents of bitcoin often take its superiority for granted. The model explored herein demonstrates that, even if bitcoin is superior, it might still fail to gain widespread acceptance. After briefly surveying episodes of successful monetary transition, I conclude that cryptocurrencies like bitcoin are unlikely to generate widespread acceptance in the absence of either significant monetary instability or government support. I. A MODEL OF CURRENCY ACCEPTANCE WITH NETWORK EFFECTS AND SWITCHING COSTS In order to explore currency competition, monetary unionization, and currency substitution, Dowd and Greenaway (1993) develop a simple model of currency acceptance. Their approach differs from earlier models in two important respects. First, they assume money is subject to a network effect. …

Comparing the Incomes of Nations: A Critique of the International Comparison Project

Abstract: THIS ARTICLE'S MAIN PURPOSE iS to discuss certain key problems that arise in calculating purchasing-power parities (PPPs) when making international comparisons of real product, while reviewing partially the work of Irving Kravis, Alan Heston and Robert Summers (1982). Before beginning the discussion, the author wishes to record his opinion that this work of Kravis, Heston and Summers, carried out and successively published over the past 15 years, represents one of the great contributions to applied economics. In the article that precedes this one, Kravis provides a survey of the applications of this type of data, but it must be emphasized that any such listing can do only partial justice to the scope of new applications which seem to arise almost every day. Apart from applications to various aspects of international economic policy, there is so much greater international variation in basic economic variables, such as real income and relative prices, than is usually found in typical intranational/intertemporal comparisons, that the new data inevitably represent an enormous increment in our science's general capacity for statistical experiment. Thus, the debt owed to this team of research workers, by the economics profession at large, is immeasurable. A PPP is essentially a form of international or interregional price index, complicated, but not essentially changed, by the existence of national currencies. For example, suppose we found, by some kind of index-number calculation, that the general price level in region A was 10 percent higher than in region B of the same country. Given a common currency, the "exchange rate" between the money circulating in the two regions is clearly 1.0, but the PPP for region A, in comparison with region B, is 0.91, this being the number by which it is necessary to multiply a given nominal income in A to give it the same purchasing power as a corresponding income in B. It follows that the PPP must be some average of the ratios among individual commodity prices in the two regions. In the case of two countries with different currencies, one can speak of a "commodity PPP" as being the rate of exchange between the two currencies which would equalize the price of a given commodity; then the general PPP for the two countries is some average of the commodity PPPs. In international, as in intertemporal, comparisons, there is a duality between the problem of measuring price levels and

Cryptocurrency and the Problem of Intermediation

Abstract: Though Bitcoin currently enjoys a healthy niche, the aspirations of many in the project are grander: to supplant the existing regime of fiat currencies with cryptocurrencies, and to do so outside of normal political channels. Its primary practical obstacle is its purchasing power volatility, arising from a rigid money stock in the face of wide swings in demand. Nevertheless, the historical example of gold, another (much more successful) money commodity with a more or less rigid supply, illuminates the institutional prerequisites for purchasing power stability, economic efficiency, and sustained growth – namely a market of financial intermediaries whose liabilities denominated in the base money themselves circulate as media of exchange. This paper discusses potential benefits and hurdles to establishing financial intermediation in cryptocurrency, as well as the possibility of managing the money supply to create a stable purchasing power cryptocurrency without the need for intermediation at all. Such schemes ultimately require an existing market of intermediaries in order to provide any benefits, the emergence of which governments are for the moment well-positioned to prevent.

Global poverty estimates based on 2011 purchasing power parity: where should the new poverty line be drawn?

Abstract: This paper aims to present a new global poverty line based on the 2011 Purchasing Power Parity (PPP). To calculate a new global poverty threshold based on 2011 PPP, this paper moves away from the World Bank’s method of anchoring a single global poverty line on the national poverty lines of the 15 poorest countries. It instead proposes an alternative method of using equivalent poverty lines. Each country is shown to have a different equivalent poverty line. This paper finds that there is no single international poverty line in 2011 PPP that is equivalent to $1.25 in 2005 PPP. Single poverty lines vary for each region because countries have experienced different inflation rates and have different PPP conversion rates between 2005 and 2011. To calculate a single poverty line in 2011 PPP, this paper measures the weighted average of equivalent poverty lines of 101 countries around the globe with weights proportional to their populations. Based on the new method, the corresponding poverty line is estimated at $1.93 in 2011 PPP. The World Bank has officially adopted the poverty line of $1.90 in 2011 PPP. This paper demonstrates that our proposed poverty line performs better than the World Bank’s in terms of preserving the real purchasing power of the previous line of $1.25 in 2005 PPP. Given the new poverty threshold of $1.93, the number of poor worldwide is reduced by 6.42 million, with the reduction largely occurring in South Asia and Sub-Saharan Africa.

The price is not always right : on the impacts of commodity prices on households (and countries)

Abstract: This paper provides an overview of the impact of once-and-for-all changes in commodity prices and other prices on household welfare. It begins with a collection of stylized facts related to commodities based on household survey data from Latin America and Africa. The data uncover strong commodity dependence in both continents: households typically allocate a large fraction of their budget to commodities and they often depend on commodities to earn their income. This income and expenditure dependency suggests sizable impacts and adjustments following commodity-price shocks. The paper explores these effects with a review of the literature. It studies consumption and income responses, labor-market responses, and spillovers across sectors. It ends up providing evidence on the relative magnitudes of various mechanisms through which commodity prices affect household (and national) welfare in developing economies.

Tariffs and the Transfer Problem

Abstract: The transfer problem has attracted much attention in the literature of international trade theory since the famous controversy between Keynes and Ohlin in the late 1920s. Practically, the international transfer of purchasing power is widely observed in various guises such as private remittance, reparation, and economic aid. Theoretically, it poses an interesting question concerning the income effect of income transfers between countries. This question lurks also in the analysis of currency devaluation, often conceived as an attempt to affect the international terms of trade to create a trade surplus. Discussing the German reparation problem, Keynes (1929) held the position that the expenditure of the German people will be reduced, not only by the amount of reparation, but also by a decrease in their gold-rate of earnings. As Ohlin (1929) pointed out quickly, however, Keynes thereby failed to pursue the logic of his own argument: “if ₤ 1 is taken from you and given to me and I choose to increase my consumption of precisely the same goods as those of which you are compelled to diminish yours, there is no transfer problem.” (See Keynes 1929, p. 2.) Later analysis, notably Samuelson (1952, 1954) and Johnson (1955), elucidated the implications of this logic in the context of a two-country, two-commodity model of trade. They showed that the direction of change in the terms of trade depends crucially upon the relative magnitude of the marginal propensities to consume between the two countries. There is, however, no presumption about this relative magnitude under free trade with no trade impediments.

Do all sporting prizes have a significant positive impact on attendance in a European national football league? Competitive intensity in the French Ligue 1 [Действительно Ли Все Спортивные Призы Оказывают Значимое Положительное Воздействие На Посещаемость Игр?]

Abstract: The main task of the paper is to assess income inequality in the light of regional differences in the incomes’ purchasing power and their potential to provide for the needs of individuals in households of varying size and composition. The accuracy of inequality measurements is critical to sound social policymaking on curbing inequality as a hindrance to social progress. The inequality indicators,adjusted to reflect regional variation in the cost of living and in the household size and composition, have allowed us to assess public living standards based on the actual purchasing power of household incomes and their sufficiency to meet the needs of individual household members. We have applied the regional purchasing power parities of the Russian ruble and a modified OECD equivalence scale to adjust the nominal income. The calculations drew on the microdata of a sample survey of household incomes and social program participation. By matching the distribution parameters for adjusted and nominal income values, the authors have built a framework for assessing the impact of regional variations in cost of living and household size as factors in income inequality. The paper presents the results of pilot estimates of the impact on income distribution, adjusted to take into account the regional cost of living variations and the equivalence scales. The authors have demonstrated a viable method of measuring the impact of the aforesaid factors on the drift of income strata across the country, and shown the dependence of national inequality indicators on territorial disparities in consumer price levels and demographic profiles of regional societies

Do microfinance institutions fulfil their promise? Evidence from cross-country data

Abstract: The concept of microfinance promises poverty reduction and economic growth. We empirically challenge this economic and social promise in an attempt to prove its fulfilment. Our multivariate regressions of economic development variables such as per capita gross national income based on PPP converted to international dollars (GNI per capita PPP), GDP growth, as well as gross capital formation and labour participation rate against specific microfinance institutions’ (MFI) variables show that the success and performance of MFIs significantly influence economic development. Microfinance directly influences economic growth through the value that MFI performance adds to purchasing power. An indirect impact comes from an improvement in capital accumulation and employment rates. These insights are valuable as the interdependencies between microfinance and economic development that this article verifies offer new and progressive insights into purposeful action that can be taken to stimulate economic develop...

Finance, foreign (direct) investment and dutch disease: the case of Colombia

Abstract: In recent years Colombia has grown relatively rapidly, but it has been a biased growth. The energy sector (the locomotora minero-energetica, to use the rhetorical expression of President Juan Manuel Santos) grew much faster than the rest of the economy, while the manufacturing sector registered a negative rate of growth. These are classic symptoms of the well-known ‘Dutch disease’, but our purpose here is not to establish whether the Dutch disease exists or not, but rather to shed some light on the financial viability of several, simultaneous dynamics: (1) the existence of a traditional Dutch Disease being due to a large increase in mining exports and a significant exchange rate appreciation, (2) a massive increase in foreign direct investment (FDI), particularly in the mining sector, (3) a rather passive monetary policy, aimed at increasing purchasing power via exchange rate appreciation, (4) more recently, a large distribution of dividends from Colombia to the rest of the world and the accumulation of mounting financial liabilities. The paper will show that these dynamics constitute a potential danger for the stability of the Colombian economy. Some policy recommendations are also discussed.

Competitive Payments Systems: Comment

Abstract: view, Lawrence H. White criticizes several recent proposals for monetary reform, including what we (1983) call the BFH system. Under this system, the government, precluded from issuing money, would merely define a new unit of account and encourage the unit's general adoption by using it in all its own, pricing, contracting, and accounting. The definition would run in terms of so comprehensive a bundle of precisely gradable items with continuously quoted prices that the new unit would have a stable general purchasing power.

Purchasing Power Disparity before 1914

Abstract: Economic historians’ Divergence debates since 2000 have asked a different question from that asked by Angus Maddison. The issue has become “when did countries’ contemporaneous purchasing powers diverge?”, not “when did countries’ productivity grow at different rates?” The two questions have different answers, especially before 1914. Using pre-1914 prices to compare real purchasing powers on six continents, this article sketches some historical geography of the departures from the conventional Maddison estimates. One underlying reason for the divergence between projections back from 1990 and direct price comparisons from long ago is that before the great 1870-1914 wave of trade globalization, consumer staples were not traded over great distances, and regions specialized in narrow luxury trade. Inter-continental price ratios for subsistence goods thus varied more widely than since 1914. The new measures open up a new economic history of international differences in purchasing power before 1914. Northwest Europe was further ahead of Asian countries than earlier measures have shown. The discrepancy stems from a Gerschenkron effect, magnified before 1914 by Engel effects as well as by Balassa-Samuelson. Yet Northwest Europe was behind America and Australia across the nineteenth century, consistent with the same accounting framework but not with Maddison’s estimates.

More than Cash: Societal Influences on the Risk of Material Deprivation

Abstract: This paper considers the societal factors which determine a household’s command over resources aside from cash income. The aim of this paper is to explain why in some European countries the deprivation risk for households is relatively low despite high absolute poverty levels. Two main mechanisms at the societal level are identified that reduce deprivation but which do not directly impact disposable income. The first is the provision of in-kind benefits which increase the purchasing power of households; the second is informal support from networks. An analysis using 2012 EU-SILC data shows that both factors are significant in explaining the cross-country variation in Europe while controlling for national affluence. Households which have higher in-kind benefits from social services as well as non-cash company benefits and their own production show lower levels of deprivation. On the national level, universally provided social services (e.g. housing, healthcare or transport) can substantially improve the living conditions of the income poor and reduce social exclusion. However, the main factor explaining cross-country variation in deprivation is the provision of informal support from networks. When the social context is dominated by low generalised trust, social support for poor households is lower, leading to a marginalisation of the poor. In contrast, when trust is high, support from kin and non-kin networks in terms of lump sum transfers or co-usage of consumer goods significantly improve living conditions.

An Islamic monetary theory of value and equation of exchange: evidence from Egypt (696–1517)

Abstract: Purpose The purpose of this research is to present an Islamic monetary theory of value by analyzing real prices and real money in terms of gold and silver in Egypt from 696 to 1517, a period of 821 years from the Umayyads to the Abbasids. Design/methodology/approach This paper adopts a quantitative empirical investigation derived from a full population of secondary data to deductively evaluate the measure and store of value functions of money, to affirm an Islamic monetary theory of value, which is also inductively researched through a qualitative interpretation of documentary and content analysis of Islamic and numismatic literature. Findings The Islamic monetary theory of value leads to an Islamic equation of exchange that reconfirms the outcome of this research, where a high value of money ensures low constant real prices over the long term. Research limitations/implications The findings are based on an empirical investigation involving a single price of wheat series as a reasonable proxy for changes in wholesale commodity prices generally, which was successfully adopted by other studies. Practical implications The significance for modern monetary policy is that monetary authorities should adopt an Islamic monetary theory of value to achieve genuine monetary and price stability. Social implications Through an Islamic equation of exchange, price stability would ensure real economic growth that protects wealth for holders of money due to a stable purchasing power, and combined with Islamic equity finance, more efficiency in allocating investible resources to increase gross domestic product and employment. Originality/value The Islamic monetary theory of value ensures that there is no transfer or confiscation of wealth through inflation, which would impart gains to the issuer due to the excessive supply of money in relation to demand.

"Like a Cord through the Whole Country": Union Bonds and Financial Mobilization for Victory

Abstract: On September 18, 1863, on the eve of his trial, Union spy Spencer Kellogg Brown wrote from his Richmond jail cell to his sister Kitty, relaying to her the supreme faith he held in the Almighty. "God has been very kind to me, and for the past twelve months I have tried earnestly to please Him," exclaimed Brown. Resigned to his fate, he attempted to put his house in order regarding "some little trinkets." Of greatest importance was his back pay, owed by the Federal government; he left no doubt for his uncle as to where this money should go. "Tell him to invest in United States six per cent bonds," Brown ordered. He left the purchase of such bonds to his Uncle Cozzens in St. Louis, who acted on his wife's behalf. Brown was executed a week later, on September 25, 1863. (1) Given their broadly acknowledged importance to the Union war effort-"The Yankees did not whip us in the field, we were whipped in the Treasury Department," one Confederate leader famously groused--it is odd that the Federal bond drives have not received more scrutiny from historians. To be sure, there is a general, if vague, consensus that the bond drives were unusually "democratic," drawing on a significant portion of the northern populace. (Estimates range somewhat wildly, from five hundred thousand to more than 3 million northerners purchasing bonds.) But this is usually chalked up simply to the indefatigable genius behind them, Jay Cooke. Too frequently, the bond drives seem but an extension of his biography; in this narrative, we learn little of the salesmen of the world--the Willie Lomans, if you will--of the bond trade and even less about the purchasers. $2.28 billion of northern bonds found their way into the hands of millions of individual investors, large and small, strewn across the Atlantic World and at the hands of various financiers, from large bankers to small salesmen. By taking a closer look at these transactions, historians can garner a deeper appreciation for how this war spurred a financial industry that tied the people writ large into the supreme cause of Union. For in doing so, a new chapter in American finance was born, one that brought buyers and sellers together as part of a new national narrative wedded in debt. (2) It is well established that American money markets underwent dramatic evolution in the Civil War period. The repatriation of American securities from Europe, domestic financing of Union bonds in close coordination with the state, the rise of a national banking system, and the abandonment of the gold standard for the fiat currency of greenbacks all fueled the new rise of an American banking class with an urge to push product. Between 1864 and 1870, the number of registered bankers and brokers in New York City alone increased from 167 to 1,800. The national debt rose during the Civil War from $65 million to $2.6 billion by 1866, with American securities sales during the war coming in at a staggering $2.28 billion. Yet the overall capital in railroads increased by only $23 million during the war itself. Thus, capital became quickly and heavily entrenched in government securities before ultimately transferring over into rail in the postwar period. The two chief bond drives were the $500 million 5-20 bond drive of 1862-64 and the $830 million 7-30 drive of 1864-65. Combined, these two drives constituted more than half of all funds raised through borrowing among the American populace. Given the broadly distributed nature of these new products, the Civil War represented what was, up to that time, the most democratic investment scheme in American history. Close coordination between the federal government and various financial firms made Americans across the North American continent believe that their purchasing power was a key to Union success. (3) To be sure, the Civil War did not represent the first foray into bonds and wartime finance for the Treasury. The Revolutionary War had seen Robert Morris rise to fame as a prominent wartime financier, selling bonds on behalf of the fledging independent nation in its war against the British. …

Coin Assaying and Commodity Money

Abstract: When money was made of gold and silver, individuals faced the problem of determining the intrinsic content of coins in many exchange situations. In this paper we look at a well-documented solution to this problem, and a key institution of the commodity money system: coin assaying. To that goal we build a model of search and matching in which agents trade using coins that are imperfectly recognizable, but have access to a coin inspection technology that reveals the intrinsic content of coins for a fee. We consider two sources of imperfect information: counterfeit coins and clipping. With counterfeits we show that coin assaying reduced the extent of inefficiencies associated with imperfect coins recognizability (namely lower traded quantities and lower trading frequencies). Yet it did not necessarily increase welfare because it unmasked counterfeits which then traded at a discount, reducing total output. With clipping, we show that agents clip for two reasons: in the hope of passing an inferior coin for a superior one, and to reduce the purchasing power of coins that are too valuable. While coin assaying could remove the first type of clipping, it had no effect on the second. While framed in the context of the commodity money system, our analysis relates to the more general issue of asset trading under imperfect information.

Looking at Purchasing Development through the Lens of Small Business

Abstract: Buyer-supplier relationships can vary between organizations. In some organizations buyer-supplier relationships are predominately short-term and arms-length in nature. But in other organizations, buyer-supplier relationships have evolved to a more strategic level and primarily consist of long-term cooperative relationships. In such cases, it is difficult to determine where supplier activity and responsibility ends and buyer activity and responsibility begins (Khoja et at., 2010). As organizations progress strategically, I suppliers are no longer viewed as low cost sources of goods and services but as assets that can enhance the capabilities of the buying organization. The integration of key suppliers into the supply chain requires the formation of long-term, customized, partnering arrangements with suppliers (Anderson and Katz, 1998). To distinguish process of transformation from state of transformation, "purchasing development" is defined as the process of transitioning from short-term or opportunistic purchasing approaches to more strategic approaches, and "purchasing maturity" is defined as the level or level to which a firm has progressed in its purchasing development. While there has been significant research on purchasing development and purchasing maturity in large firms and in businesses in general (for example, Ganesan, 1994; Jap, 1999), until recently, not much research has been directed at small business (Paik et ai, 2009; Paik, 2011). Practitioners and researchers often assume that purchasing processes and approaches that predominate in large organizations are also appropriate for, and used by, smaller organizations (Gibb, 2000). In many large organizations purchasing processes are often well developed, and levels of purchasing maturity are well defined and long-standing. But this may not be true for small businesses. Purchasing processes in the latter may simply not be as well-developed because the firms are smaller and therefore lack specialized organizational resources (Quayle, 2003; Ramsey, 2001). For example, small business organizations often lack purchasing power or the ability to influence suppliers to engage in strategic partnerships due to relatively small purchasing volumes, and they often lack the necessary internal resources, such as executive time and expertise. In particular, potentially informal management structures and lack of formal strategic processes in small businesses could imply a relatively ad-hoc approach to, for example, supplier relationship development, strategic thinking and planning, and use of technology as applied to purchasing among other disciplines. The uncertainty of how purchasing processes in small businesses develop and the apparent lack of research in this area provide an important opportunity to address the following research questions: (1) Does the process of purchasing development, as it transforms from a transactional, short-term outlook function to one that is more strategic and long-term differ from that of large businesses? (2) Are there identifiable levels or levels of purchasing development in small business and, if so, do they differ from those of large businesses? (3) What are the implications of these issues for small businesses? As will be discussed in this paper, most existing purchasing development and maturity research posit a purchasing development model that contains four levels or levels of purchasing maturity. This model, as developed in the literature, has been based primarily on purchasing in large enterprises. The focus in this study is to examine the development of the purchasing function in small businesses, compare that to the existing literature, and recommend a model for how purchasing develops and matures in small businesses. Therefore, the empirical data on which this research is based is obtained only from small businesses. Using a survey consisting of Likert-scale questions derived primarily from four well-established conceptual models of purchasing maturity in large businesses, a principal component analysis is performed to identify the key elements of purchasing development in small businesses. …

The Nexus between Exchange Rate Variation and Economic Growth in Nigeria

Abstract: This research paper is centered on the nexus between exchange rate variation and economic growth in Nigeria with emphasis to the purchasing power of the average Nigerians and the level of international transaction. Exchange rate fluctuations have been of serious concern to the monetary authorities, policy makers and business tycoons of developing countries, Nigeria inclusive because of the relevance of exchange rate in international trade, investment and in determining the level of output growth of a country. Therefore it is vital to examine the degree at which exchange rate fluctuates which had called for a lot of attention in Nigeria. This study examined the Impact of Exchange Rate Fluctuation on the Nigerian Economic Growth using an annual data of forty-three (43) years covering the period (1970-2013). The standard deviation method was employed to capture and estimate the fluctuation inherent in the model as regards the research’s objective. The study employed econometric techniques such as; Multiple Regression Model, Augmented Dickey Fuller (ADF) test, Johansen Co-integration test and the Error Correction Model (ECM). Evidence from this study exhibited that there exists a positive but insignificant impact of exchange rate fluctuation on Nigerian economic growth in both the long run and short run. This result is attributed to the ability of the Nigerian government to effectively regulate some other important macroeconomic variables which can infuriate exchange rate which has thereby helped curtail the effects of exchange rate fluctuation during the study period. This is an indication that monetary authorities might have initiated policies that helped absorb the influence of exchange rate fluctuation on economic growth in Nigeria. Therefore, the government should encourage domestic production of goods and services for Naira exchange rate appreciation and generally to promote economic growth in Nigeria- moreover to maintain and sustain exchange rate and economic stability. In the same vein, the government should pay more attention to other more volatile macroeconomic variables like oil price and inflation rate in Nigeria. Research paper Keywords: Exchange Rate, Exchange rate fluctuation, Economic growth, Purchasing power, Macroeconomic variables Reference to this paper should be made as follows: Amassoma, D. (2017). “The Nexus between Exchange Rate Variation and Economic Growth in Nigeria”, Journal of Entrepreneurship, Business and Economics, Vol. 5, No. 1, pp. 1–40.

The reliability of currency and purchasing power parity conversion for international project cost benchmarking

Abstract: Purpose – Project cost is normally a key performance indicator for all projects, and therefore features prominently in benchmarking exercises aimed at identifying best practice. However, projects in different locations first require all costs to be expressed in equivalent units. Failing to do this leads to erroneous and unreliable results. The paper aims to discuss these issues. Design/methodology/approach – Applying international construction as the focus for the study, cost data from 23 cities worldwide are compared using a range of methods including currency conversion and purchasing power parity (PPP). Coefficient of variation (CoV) forms the test for identifying the method with the lowest volatility. Findings – It is found that purchasing power is the preferable theoretical base for international cost conversion, and currency conversion (frequently used by practitioners) is not recommended. The citiBLOC PPP method has the lowest CoV across the data set and therefore more closely reflects the Law of O...

Cash as a Form of Relief

Abstract: The historical form of humanitarian relief is to provide people in need with goods, however, assistance in the form of physical goods is shifting towards providing cash-based assistance instead of goods (Kovacs, Humanitarian logistics: meeting the challenge of preparing for and responding to disasters, pp 275–285, 2014; Heaslip, J Humanit Logist Supply Chain Manag 5(1):2–11, 2015). Cash-based assistance is a new concept, and growing rapidly. While only US$2 million in the form of cash-based assistance was provided as international humanitarian assistance in 2006, the sum increased to US$47.4 million in 2011 (Global Humanitarian Initiative, http://www.globalhumanitarianassistance.org/wp-content/uploads/2012/07/GHA_Report_2012-Websingle.pdf, 2012). Cash-based responses (also known as cash transfer programmes, CTP) are mechanisms to provide resources to a population in two main ways—by providing them directly with cash or by giving them vouchers. Cash and voucher programmes are considered to be a more cost effective solution than the more common in-kind provision of goods and services to beneficiaries and households. A key advantage is that unlike in-kind aid, cash allows households flexibility in deciding their spending needs. Cash can help generate local market activity and restart livelihoods. It is often a more empowering and dignified form of support. However, there is a reluctance to deliver cash transfers. Cash is said to be susceptible to theft, corruption and misuse. It is prone to targeting errors. It can cause inflation and distort local markets. Nevertheless, practitioners are finding solutions to mitigate these risks and have observed that many of the risks also apply to in-kind aid (Creti and Jaspars, Cash-transfer programming in emergencies, 2006). This chapter aims to develop an understanding of cash transfer programmes that will help reduce their risks to humanitarian operations.

The Most Basic Missing Instrument in Financial Markets: The Case for Bonds for Financial Security

Abstract: The move to defined contribution plans has transferred risk to individuals who are least capable of bearing such risk and requires them to make complex decisions for which they are not prepared. Accumulation (investments) and decumulation (annuity purchase) decisions are complex, costly, often with different entities (asset managers and insurance companies), result in illiquid investments (annuities), and still may result in highly uncertain pensions (because of interest-rate volatility). This paper argues that governments globally can address the shortcomings by issuing a new type of bond that matches the needs of investors saving for retirement. This financial instrument is basically an inflation-linked bond that pays coupons when you need it. We call these Bonds for Financial Security (BFFS) and argue that this single instrument can help investors achieve retirement objectives at lower risk, lower cost, and with greater liquidity and greater simplicity than portfolios created through a mix of traditional stocks and bonds followed by annuity purchases. The need for such a bond is simple to understand: A typical saver sets aside resources today to receive a stream of income post-retirement (for a fixed period) and the BFFS is the “riskless asset” because it guarantees the purchasing power post-retirement. The paper goes further to demonstrate that there is a potentially willing supplier of such bonds — governments that need to invest in infrastructure and have a desire to prevent a retirement crisis, thereby completing the market. The cash flows of such a bond are contrasted with those of infrastructure projects to show how such bonds may foster infrastructure financing. The paper also addresses challenges, issues, and opportunities surrounding such an instrument and examines issues relating to the creation of a market for BFFS.

Foreign Investment Promotion Analysis in Sultanate of Oman: The Case of Dhofar Governorate

Abstract: The stiff rate of competition among the developing countries to attract foreign investments in the regions of their countries has created the deeper understanding of the main foreign direct investment (FDI) incentive. It is obvious that the foreign investment became a priority for most of the governments. This research paper aimed at examining the main approaches and factors in foreign investment promotion within Dhofar Governorate in Sultanate of Oman. Data collected from relevant scholarly papers and government reports, interviews with officials in charge of foreign investment promotion and the conclusions from participation in meetings and public debates have been utilized in the analysis. Economic and political stability are among the factors which actually motive foreigners to invest in the region. Additionally, high purchasing power, a big market size and low cost of doing business in the region has been reported to be very desirable. It is evidence that the government from Sultanate of Oman have promoted aspects of foreign investments by offering a number of incentives such as favorable government policies and laws, and offering lower tax rates, creating free zones, business incubators, etc. Keywords: foreign direct investments, Oman, investment incentives, GCC, foreign promotion efficiency, Dhofar, free zone JEL Classifications : O53, P45

Leveraging Social Protection Programs for Improved Nutrition : summary of evidence prepared for the Global Forum on Nutrition-Sensitive Social Protection Programs, 2015

Abstract: The global forum on nutrition-sensitive social protection programs, convened by securenutrition and the Russian Federation, brought together 150 donors, implementers, and country leaders to identify practical ways to link the nutrition and social protection agendas. This paper served as a springboard for discussion at the global forum, and represents a synthesis of evidence from nearly 120 references with a heavy focus on program evaluations. The reach of social protection programs has grown extensively since the 1980s. Recent World Bank estimates show 64 countries running conditional cash transfers as opposed to only two in 1997 and the rapid doubling of countries in Africa implementing unconditional cash transfers - from 20 to 40 in just the last five years. This paper finds that social protection transfers tend to increase household budget devoted to food - often more than other income sources - and highlights evidence that transfers can change diet composition and quality. At the same time, the overall effects of income on nutrition outcomes are not clear and vary by country experience and across studies. Evidence indicates that knowledge of proper hygiene and feeding practices does not necessarily increase alongside purchasing power, hence the rationale to specifically encourage or program behavioral change communication.

The elderly care and domestic services sector during the recent economic crisis. The case of Italy, Spain and France

Abstract: Over the past ten years in Italy, Spain and France, the demographic pressure and the increasing women’s participation in labour market have fuelled the expansion of the private provision of domestic and care services. In order to ensure the difficult balance between affordability, quality and job creation, each countries’ response has been different. France has developed policies to sustain the demand side introducing instruments such as vouchers and fiscal schemes, since the mid of the 2000s. Massive public funding has contributed to foster a regular market of domestic and care services and France is often presented as a “best practices” of those policies aimed at encouraging a regular private sector. Conversely in Italy and Spain, the development of a private domestic and care market has been mostly uncontrolled and without a coherent institutional design: the osmosis between a large informal market and the regular private care sector has been ensured on the supply side by migrant workers’ regularizations or the introduction of new employment regulations . The analysis presented in this paper aims to describe the response of these different policies to the challenges imposed by the current economic crisis. In dealing with the retrenchment of public expenditure and the reduced households’ purchasing power, Italy, Spain and France are experiencing greater difficulties in ensuring a regular private sector of domestic and care services. In light of that, the paper analyses the recent economic conjuncture presenting some assumptions about the future risk of deeper inequalities rising along with the increase of the process of marketization of domestic and care services in all the countries under analysis.

Electronic trading system for cryptocurrency and method thereof

Abstract: An electronic trading system for cryptocurrency and method thereof is disclosed. By receiving a user-initiated request from a client so as to exchange between a cryptocurrency and a fiat currency, and changing the fiat currency to a stored value into a wallet account, so as to use the stored value to exchange the cryptocurrency for shopping, and depositing the fiat currency into a reserve account at a financial server. The mechanism is help to improve the security and the convenience of the transaction under the premise of protecting the purchasing power of customers.