Fintech Entry, Firm Financial Inclusion, and Macroeconomic Dynamics in Emerging Economies

Financial inclusion is strikingly low in emerging economies. In only a few years, financial technologies (fintech) have led to a dramatic expansion in the number of non-traditional credit intermediaries, but the macroeconomic and credit-market implications of this rapid growth of fintech are not known. We build a model with a traditional banking system and endogenous fintech intermediary creation and find that greater fintech entry delivers positive long-term effects on aggregate output and consumption. However, greater entry bolsters aggregate firm financial inclusion only if it stems from lower barriers to accessing fintech credit by smaller, unbanked firms. Decreasing entry costs for fintech intermediaries alone has only marginal effects in the aggregate. While firms that adopt fintech credit are less sensitive to domestic financial shocks and contribute to a reduction in output volatility, greater fintech entry also leads to greater volatility in bank credit, thereby introducing a tradeoff between output volatility and credit-market volatility.

Tariffs and Macroeconomic Dynamics

Este artículo estudia el impacto macroeconómico de aranceles más altos utilizando un modelo DSGE de dos países con comercio endógeno y empresas heterogéneas. El análisis consta de dos escenarios. Primero, asumimos que un país aumenta los aranceles mientras que el otro no. Segundo, ambos países aumentan los aranceles. En el primer caso, el país que no los subió sufre una contracción económica causada por una menor demanda externa. A su vez, el que impuso mayores tarifas termina con una leve ganancia en el producto provocada por un repunte del consumo interno originado por la transferencia de ingresos arancelarios a los hogares. No obstante, en el segundo caso, ambos países sufren una caída significativa de las exportaciones, reduciendo los dividendos y salarios pagados, y disminuyendo el consumo y el producto.

Business Cycles Analysis in Cameroon an overview

This paper aims at conducting a thorough analysis of business cycles in Cameroon by statistically assessing their main characteristics. The analysis is carried out by considering the three dimensions of macroeconomic fluctuations. By assessing output volatility, light on the sensitivity of the economy to exogenous shocks as well as to endogenous sources of instability is shed. Likewise, analysing the co-movements of aggregate variables of interest helps in understanding the extent to which the observed fluctuations relate to other aggregates in the economy and hence, the main forces driving the dynamics of this economy. Eventually, more light could be shed on macroeconomic dynamics by analysing the timing and persistence of business cycles. Overall, such analysis is conducted using basic statistical tools commonly used in the empirical literature on business cycles. These are the standard deviation as a measure of volatility, cross-correlations as a means of analysing co-movements and auto-correlations as measures of persistence. The main limitation in this study is the linear consideration of observed data. In fact, many macroeconomic and financial time-series that are used in quantitative macroeconomic models are subject to a number of regime-switching in reality. This fact needs to be taken into account in the subsequent research

A macroeconomic critique of integrated assessment environmental models: the case of Brazil

This paper surveys integrated assessment models applied to Brazil. We show that these models belong to the environmental economics literature that fails to consider some of the most important aspects of the modern macroeconomic dynamics in Brazil. These features include monetary and financial balances, income distribution, and physical limits to growth. We argue that the most suitable framework for modeling a low-carbon Brazilian economy would incorporate both Post-Keynesian and ecological economics principles. This new modeling method would strengthen our understanding of environmental mitigation action consequences and would allow us to explore new climate-policy packages.