Role of Social Media in Socioeconomic Development: Case of Facebook

To study the role of Information and Communication Technology (ICT) on countries’ socioeconomic development, the paper investigates the case of Facebook penetration on improving their standing as measured via GNI per capita PPP (Gross National Income per capita based on purchasing power parity). We use four macro factors categories (political, economic, demographic, and technological) in addition to Facebook penetration per capita in order to measure the potential influence of various factors on the socioeconomic level of countries. While the analyses of ICT effect on development has been the focus of many papers in the past, the specific analysis of social media is scarce. Compared to previous studies investigating social media role, we use a large dataset covering all classes of countries and examine holistically many types of determinants using different models. In addition, we distinguish our paper using the economic classification of countries according to the World Bank. Our study indicates that Facebook penetration has a significant positive role on the socioeconomic level of countries, but such role varies depending on the countries’ classification level. Besides, there is a decreasing marginal effect showing the importance for policy makers to assess the complex dynamic behind the characteristic of each country.

Shape Evolution of the Interest Rate Term Structure

This paper adopts a novel approach to studying the evolution of interest rate term structure over the U.S. business cycles and to predicting recessions. Applying an effective algorithm, I classify the Treasury yield curve into distinct shapes and find the less frequent shapes intrinsically linked to the recessions in the post-WWII data. In forecasting recessions, the median-short yield spread trumps the long-short spread for horizons up to 17 months ahead and the yield curve shape is nearly impressive as the median-short spread. Overall, the yield curve shape is an informative but more succinct indicator than the spreads in studying the term structure. Key words: Business cycle, recession forecast, U.S. Treasury yield curve, yield spreads.

On the Distributional Outcomes of Policy-Induced Entrepreneurial Opportunities

This analysis empirically evaluates the effectiveness of entrepreneurial policies using the number and distribution of firms as outcome variables. The analysis occurs within the context of a natural experiment: the START-UP NY program. Implemented in 2014, START-UP NY created enterprise development zones adjacent to publicly supported universities (i.e., SUNY and CUNY campuses) within the state. New business start-ups operating within these zones, and within a specific set of technology and health-related industries received tax incentives that substantially lowered tax rates for a 5-10 year period. In 2016, the State of New York substantially altered its corporate tax structure; a policy initiative affecting firms, business owners, and households in the state simultaneously, and may also induce entrepreneurship. The results suggest that START-UP NY had a positive effect on the growth of New York's micro and small-sized firms operating in professional, scientific, and technical industries. START-UP NY also negatively affected micro-sized manufacturing firms, while positively affecting small manufacturing firms. The latter finding suggests that START-UP NY is effective in incubating micro-sized manufacturing firms that eventually grow into small manufacturing firms.

Stock Market Investment and Inflation: Evidence from the United States and Canada

This paper examines the long-run relationship between goods prices and stock prices to understand whether stock market investment can help hedge against inflation in the United States (US) and Canada. This study employed an autoregressive distributed lag (ARDL) cointegration test developed by Pesaran, Shin, and Smith (2001), and finds evidence of a positive long-run economic relationship between stock prices and goods prices in both economies over the sample period 1960 to 2019. The long-run elasticity is above one for both economies implying that the developments in the goods market significantly affect the stock market. We undertake a suite of sensitivity checks and find robust evidence that the stock market investment can help hedge against inflation in the United States and Canada.

Real Estate Bubbles and Contagion: Evidence from Selected European Countries

Using quarterly housing price-to-rent ratios from 1970 to 2018, this paper investigated the presence of real estate bubbles at a national level in eight selected European countries, namely Belgium, France, Germany, Italy, the Netherlands, Portugal, Spain, and the United Kingdom. Then, we analyzed bubbles contagion among these countries. We applied the generalized sup ADF test developed by Phillips et al. (2015) to detect explosive behavior in house prices. Subsequently, we implemented the non-parametric model with time varying coefficients developed by Greenaway-McGrevy and Phillips (2016) to estimate bubbles contagion among European real estate markets. We found evidence of at least one historical bubble in all these countries, with Germany, the Netherlands, Portugal, and Spain currently experiencing a rising bubble. The results also suggest that bubbles are contagious between these real estate markets.

Secular stagnation and Google Trends – can we find out what people think?

The main aim of the study was to verify the thesis that the US economy is measured against the spectre of secular stagnation by determining the mood of American society using Google Trends. While performing the analysis, the authors used data on the American market for the years 2004-2018. The study comprised 42 entries, including 19 entries from the category “social” and 23 entries from the category “financial”. The analyses do not allow for a clear statement that the US economy is facing the spectre of secular stagnation, but they allow us to formulate the observation that the mood of the society is moderately pessimistic, which undoubtedly translates into economic activity and may be the cause of the persisting economic stagnation.

Macro-Financial Parameters Influencing Bitcoin Prices: Evidence from Symmetric and Asymmetric ARDL Models

Bitcoins are evolving as a modern class of investment assets and it is crucial for investors to manage their investment risk. This paper examines the impact of macroeconomic-financial indicators on Bitcoin price using symmetric and asymmetric version of autoregressive distributed lag (ARDL) models with structural breaks. The asymmetric long-run association ascertained between Bitcoin prices and the macroeconomic-financial indicators is evident. Our empirical results indicate that the Bitcoin cannot be used to hedge against the inflation, Federal funds rate, stock markets and commodity markets. We further find that Bitcoin can be regarded as a hedging device for the oil prices. Our findings have significant implications for market participants who consider including alternate investment assets in their portfolios.

Economic Policy Uncertainty and the Co-Movement between REITs and Exchange Rate

The REITs market has attracted a lot of interest among the academic, policymakers, and market participants. The linkages between REITs and macroeconomic and financial variables have been adequately explored in the literature, with more emphasis on linear models. This study expands the frontier of knowledge by examining the role of uncertainty in the comovement/spillover between REITs and the currency markets. Some interesting results were observed. First, using the Diebold and Yilmaz (2012) spillover test, we find that there is strong connectedness between the REITs and currency markets. Second, the BDS test shows that nonlinearity is a very crucial factor to be put into consideration when examining the role of EPU in affecting the interactions between REITs and exchange rate markets. Third, the non-parametric causality-in-quantile test confirms that the connectedness between the markets and EPU is stronger around the lower and middle quantiles. These results have important policy implications for policymakers and market participants. The study also offers suggestions for future research.

Structural Funds and Regional Economic Growth: the Greek experience

The impact of structural funds of the European Union (EU) on regional economic growth is a matter of both political and economic importance. The large and regular payments made across the EU to countries and regions within them were and are meant to promote various aspects of growth and development and to encourage structural changes that foster investments and economic reforms. But how much of these aims have they been achieved? In this paper we provide considerable empirical evidence that Greek regions have, for the most part, benefited by the various disbursements of EU structural funds. We shed partial light on where this funding went to and to how it potentially contributed to Greek growth but we also raise a number of questions about the viability of the current productive structure of the Greek economy and its over-reliance on tourism. Our results provide support on the efficacy of the payments but leave open the problem of where these payments should be allocated, the monitoring of their absorption and the end impact in the economic cycle within a country.

Do distributional preferences reverse on a dollar? An experiment

In settings where other-regarding motives are likely to be (and some would argue, should be) at the forefront of our minds, how much of our behavior can still be explained by narrow pecuniary self-interest by itself? In an experiment where subjects are asked to vote between two income distributions that have diametrically opposed effects on the group as a whole, I find that self-interest still appears to dwarf the combined effects of other-regarding motives in influencing the votes of the vast majority of subjects.