Article
Economics
Joseph Abadi, Markus Brunnermeier, Yann Koby
Summary: The reversal interest rate refers to the rate at which accommodative monetary policy turns contractionary for lending. This study demonstrates its existence in a macroeconomic model with imperfectly competitive banks facing financial frictions. Cutting interest rates too low reduces banks' profit margins, leading to a decrease in their net worth and credit supply. The persistent drag on bank profitability from prolonged low interest rates outweighs their initial capital gains, thus stifling credit supply. The importance of this mechanism is quantified using a calibrated New Keynesian model.
AMERICAN ECONOMIC REVIEW
(2023)
Article
Green & Sustainable Science & Technology
Ebenezer Olamide, Andrew Maredza, Kanayo Ogujiuba
Summary: Due to political and economic uncertainty in the Eastern Africa Community (EAC) region, governments have used monetary policy changes to respond to shocks from macroeconomic variables. However, there is disagreement among scholars regarding the dynamics between monetary policy, external shocks, and macroeconomic activity, both in country-specific analyses and regional assessments. This article contributes to the understanding of how these factors interact in the EAC region by employing the S-VAR method, which is contemporary in the transmission of monetary policy approach.
Editorial Material
Multidisciplinary Sciences
Rose M. Mutiso
Summary: Energy-transition plans neglect African data, models, and expertise, resulting in the exclusion of over one billion people on the continent.
Article
Business, Finance
Hai Jiang, Chao Yuan, Zhitao Lin
Summary: This study examines the liquidity transmission of monetary policy instruments and their impact on bank credit growth in the interbank market in China. The findings indicate that the credit channel of monetary policy varies among banks due to their differing liquidity acquisitions. Open market operations (OMOs) do not stimulate credit growth but affect the net interbank assets of different categories of banks differently. The reduction of the required reserve ratio (RRR) influences non-primary banks' credit growth and interbank assets, and a higher interbank financing ratio weakens the impact of RRR reduction on non-primary banks. Additionally, medium- and small-sized banks rely less on interbank financing and experience increased credit growth due to the growing role of medium-term lending facilities (MLFs).
RESEARCH IN INTERNATIONAL BUSINESS AND FINANCE
(2023)
Article
Green & Sustainable Science & Technology
Deimante Teresiene, Greta Keliuotyte-Staniuleniene, Rasa Kanapickiene
Summary: This study focused on the European central bank's monetary policy and actions taken for COVID-19 risk management, as well as its impact on enterprise credit conditions and banking sector credit risk, financial distress, profitability, and solvency. It found that banks' risk tolerance is a key factor influencing long-term loan credit standards, and that the spread of the COVID-19 pandemic has a significant negative effect on the banking sector.
Article
Economics
Chuanqi Chen, Dongyang Pan, Zhigang Huang, Raimund Bleischwitz
Summary: This research examines the climate-augmented monetary policy, suggesting that monetary policy should take existing climate policy into account, adjust reaction coefficients to enhance welfare, and be cautious about potential dilemmas posed by climate targets in monetary policy rules.
Article
Business, Finance
Maurice Dumrose, Andre Hoeck
Summary: Global efforts to mitigate climate change can create risks and opportunities for companies and investors. This study shows that companies' carbon-risk exposure and management significantly affect their credit-risk, and this relationship is moderated by the regulatory environment.
FINANCE RESEARCH LETTERS
(2023)
Review
Environmental Studies
Francesco Paolo Mongelli, Wolfgang Pointner, Jan Willem van den End
Summary: This survey reviews the literature on the impacts of climate change on the natural rate of interest (r*), emphasizing the potential negative effects but also considering positive effects under certain scenarios. The study finds that climate change can have substantial downward effects on r*, with uncertainty, tipping points, and nonlinear effects exacerbating the economic impacts. However, orderly climate policies and investments induced by transition policies could mitigate the negative effects and even have positive impacts on r*.
WILEY INTERDISCIPLINARY REVIEWS-CLIMATE CHANGE
(2023)
Article
Economics
Javier Bianchi, Saki Bigio
Summary: We have developed a tractable model to study the credit channel of monetary policy, which includes an over-the-counter interbank market for banks' liquidity management. Our research shows how monetary policy affects the banking system by changing the trade-off between profiting from lending and facing greater liquidity risk. We present two applications, one examining the connection between the implementation of monetary policy and the pass-through to lending rates, and another analyzing a quantitative decomposition of the collapse in bank lending during the 2008 financial crisis. Our analysis highlights the importance of liquidity frictions and the functioning of interbank markets for the conduct of monetary policy.
Article
Business, Finance
Sang-yoon Song
Summary: Using comprehensive credit bureau data of South Korea, this paper examines the heterogeneous interest-induced Marginal Propensity to Consume (MPC) for mortgage borrowers based on their liquidity, credit accessibility, and debt burden. The results show that the negative relationship between interest payments and consumption is primarily seen among borrowers with Adjustable-Rate Mortgages (ARMs). Additionally, among the ARMs borrowers, those with low liquidity and credit accessibility exhibit a higher interest-induced MPC.
INTERNATIONAL REVIEW OF ECONOMICS & FINANCE
(2022)
Article
Environmental Studies
Vhalinavho Khavhagali, Diana Reckien, Robbert Biesbroek, Brian Mantlana, Karin Pfeffer
Summary: Climate change is a significant concern in South Africa, and the government has implemented various measures and policies to address it. Different stakeholders, including private and public firms, have played a role in shaping climate change adaptation policy, with support from funding partners such as GEF, C40, and GIZ. The policy landscape has evolved over time, leading to the emergence of different climate policy paradigms and the use of new policy instruments. The current National CC Adaptation Strategy (NCCAS) mandates adaptation across all levels of government and promotes integrated approaches, policy coherence, and clear direction in handling climate risks and impacts.
Article
Business, Finance
Simon P. Lloyd
Summary: OIS rates are commonly used to measure interest rate expectations, providing reliable measures up to a 2-year tenor. However, beyond this timeframe, they contain persistent premiums that complicate their usability.
FINANCE RESEARCH LETTERS
(2021)
Article
Environmental Sciences
S. H. Gebrechorkos, M. T. Taye, B. Birhanu, D. Solomon, T. Demissie
Summary: Climate change is causing impacts on agriculture, water, and energy sectors in East Africa, which are projected to intensify in the future. To assess these impacts and facilitate adaptation and mitigation measures, the study evaluated climate changes and their effects on hydrology and hydrological extremes in the region. Utilizing data from seven global climate models, the study downscaled the outputs to a high-resolution hydrological model. Results indicate that there will be an increase in annual precipitation in Ethiopia, Uganda, and Kenya, but a decrease in Southern Tanzania in the 2050s and 2080s. The study also projects increased precipitation during the long and short rainy seasons, as well as rising temperatures and evapotranspiration, highlighting the need for site-specific adaptation strategies throughout the 21st century.
Article
Economics
Markus Brunnermeier, Darius Palia, Karthik A. Sastry, Christopher A. Sims
Summary: The study using modern US data shows that the negative impact of credit expansion on output is due to the endogenous monetary policy response to credit expansion shocks. On average, credit growth and output growth remain positively correlated, but financial stress shocks on credit spreads can cause declines in output and credit levels. Credit aggregates and spreads did not provide much advance warning of the 2008-2009 crisis, but they did improve within-crisis forecasts.
AMERICAN ECONOMIC REVIEW
(2021)
Article
Business, Finance
Boniface Yemba, Erick Kitenge, Biyan Tang, Neepa B. Gaekwad
Summary: This paper investigates the effectiveness of Chinese monetary policy using the data-rich Factor Augmented VAR (FAVAR) model, and finds that the Divisia monetary aggregate M2 (DMA2) is more effective in boosting economic activities and prices than other instruments such as interest rate, simple money supply M2, and required reserve ratio. The use of DMA2 is recommended to effectively steer the performance of the Chinese economy.
INTERNATIONAL REVIEW OF ECONOMICS & FINANCE
(2024)
Article
Green & Sustainable Science & Technology
Olatunji Abdul Shobande, Joseph Onuche Enemona
Summary: The study investigates the importance of sustainable finance for the natural resource curse in Nigeria and Ghana, confirming the existence of a financial resource curse in these countries. The findings highlight the critical role of sustainable financing in natural resource management, with the human development index identified as a key mediator in how sustainable finance impacts the natural resource curse. This study suggests the need for a vibrant and sustainable financing strategy to support domestic private investors in natural resource exploration and development, while also emphasizing the importance of a strong financial market for promoting effective natural resource management policies.
Article
Green & Sustainable Science & Technology
Olatunji Abdul Shobande, Lawrence Ogbeifun
Summary: This study examined the role of ICT in environmental sustainability using a panel of 24 OECD countries over a 40-year period. The empirical findings suggest the importance of utilizing ICT to promote environmental sustainability, and also identify various mechanisms through which ICT can impact the environment including education, transportation, foreign direct investment, regulatory quality, and institutional quality. The study has critical implications for combating climate change by emphasizing the complementary roles of ICT and other mechanisms in promoting a sustainable environment.
INTERNATIONAL JOURNAL OF SUSTAINABLE DEVELOPMENT AND WORLD ECOLOGY
(2022)
Article
Green & Sustainable Science & Technology
Olatunji Abdul Shobande, Lawrence Ogbeifun
Summary: Financial development and energy consumption significantly affect environmental sustainability in OECD countries, with energy efficiency playing a key role in reducing carbon emissions. Prioritizing financial development and investments in energy efficiency is crucial for promoting environmental sustainability.
INTERNATIONAL JOURNAL OF SUSTAINABLE DEVELOPMENT AND WORLD ECOLOGY
(2022)
Article
Environmental Studies
Olatunji Shobande, Simplice Asongu
Summary: This study provides an analysis of the energy-carbon Kuznets curve hypothesis using a second-generation panel methodology. The results indicate that energy consumption, natural resources, and governance play a critical role in reducing carbon emissions in Africa. The authors recommend improving environmental standards and regulatory systems to promote sustainable development on the continent.
MANAGEMENT OF ENVIRONMENTAL QUALITY
(2022)
Article
Public Administration
Olatunji A. Shobande, Simplice A. Asongu
Summary: The study reveals that South Africa has a higher correlation between knowledge and economic growth, while Nigeria needs to increase investment in education and modern infrastructure to converge to South Africa's growth trajectory.
JOURNAL OF PUBLIC AFFAIRS
(2022)
Article
Business
Olatunji A. Shobande, Simplice A. Asongu
Summary: This research examines the role of education and information communication technology in promoting environmental sustainability in Eastern and Southern Africa. The findings suggest that education and clean technology investment can be used as complementary strategies to mitigate carbon emissions and promote environmental sustainability in the sampled countries.
TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE
(2022)
Article
Environmental Sciences
Olatunji A. Shobande, Simplice A. Asongu
Summary: This article discusses the potential of ICT in Africa, particularly in terms of education and employment, as well as its impact on carbon emissions and environmental sustainability. The study finds that ICT contributes to environmental sustainability in South Africa, but the evidence in Nigeria is more mixed.
ENVIRONMENTAL MODELING & ASSESSMENT
(2023)
Article
Business
Olatunji A. Shobande, Lawrence Ogbeifun
Summary: This study explores whether technological innovation has failed to anticipate the rise in affluence factors that dictate the level of economic activities and associated carbon emissions. The results show that improved technological innovation can not only predict and identify carbon emissions but may also be used to monitor and mitigate their impacts. Strategies for promoting technological innovation to accelerate reductions in carbon emissions without compromising sustainability are recommended.
TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE
(2023)
Article
Business
Olatunji A. Shobande
Summary: This study examines the long-term and short-term effects of electricity and solid fuel use on health in Africa, and finds that access to electricity reduces health risks associated with burning solid fuels.
TECHNOLOGICAL FORECASTING AND SOCIAL CHANGE
(2023)
Article
Environmental Sciences
Olatunji A. Shobande, Lawrence Ogbeifun, Aviral Kumar Tiwari
Summary: This study examines the relationship between green innovation, renewable energy, and carbon emissions in OECD countries from 1994 to 2019. The results show that green innovation and economic growth contribute to increased carbon emissions, while renewable energy and social inclusiveness can help reduce carbon emissions. The findings highlight the importance of promoting renewable energy and social inclusiveness for achieving a net zero emission target.
JOURNAL OF ENVIRONMENTAL MANAGEMENT
(2023)
Article
Business
Katarzyna Piwowar-Sulej, Sakshi Malik, Olatunji A. Shobande, Sanjeet Singh, Vishal Dagar
Summary: This article examines the drivers and practices of sustainable human resource development (S-HRD) in Poland before and during the COVID-19 pandemic. The results show that organizations implemented S-HRD practices driven by external stakeholder expectations and neglected employee well-being and environmental awareness. Despite the pandemic, most companies maintained their approach to S-HRD. This research adds to the literature on the importance of S-HRD for organizational resilience during extreme events.
JOURNAL OF BUSINESS ETHICS
(2023)
Article
Environmental Studies
Olatunji Shobande, Simplice Asongu
Summary: This study examines the role of natural resources and energy consumption in managing the climate crisis in Africa using data from the World Bank. The empirical analysis confirms the existence of a U-shaped relation, known as the Carbon Kuznets Curve, between carbon emissions and economic development in Africa. The study suggests considering environmental factors in the utilization of natural resources and emphasizes the importance of energy efficiency in decoupling carbon emissions from energy usage.
MANAGEMENT OF ENVIRONMENTAL QUALITY
(2023)
Article
Business, Finance
Olatunji Abdul Shobande
Summary: This study investigated the relationship between Foreign Direct Investment (FDI) and the resource curse hypothesis in Nigeria. The findings suggest that FDI and effective natural resource management can improve economic wellbeing, but may also lead to volatility in the exchange rate and resource utilization costs. Thus, it is recommended to manage natural resources efficiently, attract FDI, diversify oil resources, and reduce the vulnerability of the economy to external shocks.
JOURNAL OF RISK AND FINANCIAL MANAGEMENT
(2022)
Article
Business, Finance
Olatunji Abdul Shobande, Lawrence Ogbeifun
Summary: The lack of agreement on climate policies among stock-market investors raises concerns about GHG emissions. This study examines the impact of stock-market investments on GHG emissions in OECD countries using annual data from 1980 to 2019. The results highlight the importance of stock-investor confidence in emissions reduction and identify potential mechanisms through which the stock market can influence emissions. The study recommends investors to re-evaluate emissions criteria and policymakers to redesign stock-market policies to promote environmental preservation.
JOURNAL OF RISK AND FINANCIAL MANAGEMENT
(2022)
Article
Public Administration
Lawrence Ogbeifun, Olatunji Abdul Shobande
Summary: The renewed interest in key drivers of economic growth in OECD countries over the last three decades has focused on the debate between physical and human capital. The study finds that human capital, savings rate, and trade openness play a vital role in economic growth in these countries, while life expectancy and inflation have adverse effects. The study recommends intervention programs tailored towards improving research and development, investing in people's well-being, and effectively utilizing human capital to promote growth and mitigate inflationary pressure.
JOURNAL OF PUBLIC AFFAIRS
(2022)
