Documents financial market 550 results

"In a European context in which the objectives of climate neutrality and digitalization appear fundamental, the work analyzes the relationships between the price of the main stock market indices and the most representative variables such as carbon emissions, digitalization, use of renewable energy, research and development expenses, environmental taxes, and all economic and management activities aimed at reducing or eliminating any form of pollution. The analysis was developed through three different regressions involving the long period 1995–2020 and the short period 2017–2020. The results show how increasing carbon emissions and environmental taxes positively impact stock indices. The former is linked to an increase in production and, therefore, economic growth, and the latter encourages sustainability. Taxes on transport and energy in the long term generate higher costs, which damage profitability and negatively impact the performance of stock indices. Finally, in the short term, implementing environmental protection measures or the sustainable management of resources may lead to higher operating costs for the companies involved. These cost increases can negatively impact profit margins and reduce the value of companies. These results, therefore, show us how environmental sustainability has a significant impact on European stock markets; consequently, the relevant regulations and policies should also consider the economic and managerial impacts that companies implement to achieve their objectives of the Green Deal."

"This article discusses how law shapes sustainable finance market creation in the European Union (EU). Although markets for environmental, social and governance (ESG) oriented investments have continued to grow, a gap has persisted between fund popularity and real-world impact. The EU has sought to address this through common legal standards for sustainable economic activities. However, there has been limited empirical examination of how industry applies these new measures and how they facilitate further market development. The article seeks to address this by proposing a research agenda for the examination of sustainable finance legislation through a ‘law as constitutive' lens. The approach argues for an empirical inquiry that recognises the political and social conditions of market development, explored through interviews with market participants focusing on their experiences of legislation. The article explains how a ‘law as constitutive' framing best suits the EU context when exploring the potential and limitations of the current policy approach."

"We examine the impact of the last five decades of financial globalization on world GDP and income distribution, using a novel multi-country dynamic general equilibrium model that incorporates a demand system for international assets. We introduce, estimate and validate new country-level measures of inward and outward Revealed Capital Account Openness (RKO), derived from wedge accounting. The implementation of our framework requires only minimal data, which is available as early as 1970 (national income accounts, external assets and liabilities positions). Our RKO wedges reveal enormous heterogeneity in the pace of capital account liberalization, with richer countries liberalizing much faster than poorer ones. We call this pattern Unbalanced Financial Globalization. We then simulate a counterfactual trajectory of the world economy where the RKO wedges are fixed at their pre-globalization levels. We find that unbalanced financial globalization led to a worsening of capital allocation, a 2.8% lower world GDP, a 12% rise in the cross-country dispersion of GDP per capita, lower wages in poorer countries and lower cost of capital in high-income countries. These findings starkly contrast with the predictions of standard models of financial markets integration, where capital account barriers decline symmetrically across countries. In a counterfactual scenario where countries open their capital account in a symmetric or convergent fashion, we find diametrically opposite effects: significant improvements in capital allocation efficiency and lower cross-country inequality, higher wages in poor countries, etc... Our results highlight the pivotal role played by country heterogeneity in shaping the real consequences of capital markets integration."

"Free market, competitive capitalism is dead. The separation between politics and economics can no longer be sustained.
In The Corona Crash, leading economics commentator Grace Blakeley theorises about the epoch-making changes that the coronavirus brings in its wake. We are living through a unique moment in history. The pandemic has caused the deepest global recession since the Second World War. Meanwhile the human cost is reflected in a still-rising death toll, as many states find themselves unable and some unwilling to grapple with the effects of the virus. Whatever happens, we can never go back to business as usual. This crisis will tip us into a new era of monopoly capitalism, argues Blakeley, as the corporate economy collapses into the arms of the state, and the tech giants grow to unprecedented proportions."

"It is no understatement to categorise the UK's decision to leave the European Union as one of the biggest geopolitical events in modern European history. On 23 June 2016, a slight majority of 52% of the UK's voting citizens decided to opt for isolationism and protectionism over globalisation and the free movement of goods, services and people. The European project has never suffered a setback like this, and questions over the very future of the project must be asked in the wake of this reality in which one of the EU's major powers has decided to opt out. Although history is currently being rewritten with the benefi t of hindsight, portraying Brexit as an inescapable inevitability since the UK fi rst entered the EEC in 1973, it is important to remember how much of a shock the result was at the time. While it is too soon to expect detailed studies on the full consequences of Brexit, the situation can be analysed using the data we already have: the economic and legal framework that exists between the UK and the EU. Through this lens, we can look at the possible future relationship between the two actors and perhaps better understand how they grew apart. This Forum examines Brexit from a variety of angles, ranging from London's status as the fi nancial centre of Europe to intra-EU migration to the very future of the European project."

"Certain growth-promoting policies can have negative side-effects by increasing the vulnerability of economies to financial crises. Typical examples are greater openness to financial flows or more liberalised financial markets. This paper investigates whether the growth benefits of policy reforms in these growth-enhancing areas, and others such as trade openness, exceed the possible costs of occasional, albeit potentially severe, crises for a sample of 100 developed and emerging economies from 1970 to 2010. The results suggest that the pro-growth effects of greater capital account openness outweigh the negative effects of a higher propensity to twin crises. Greater domestic financial liberalisation is associated with faster growth, but also with a higher propensity to systemic banking and twin crises. A free floating exchange rate and greater openness to trade, by reducing the likelihood of currency crises, are associated with higher growth. While pro-competitive product market regulations and lower corporate taxes are associated with higher growth, they do not seem to influence financial fragility via higher probability of crises."

"This article analyses the linkages between financial development, labour market institutions and market income inequality for 18 Organisation for Economic Co-operation and Development countries over the 1980 to 2012 period. With the help of a dynamic panel data model with an interacted term, one crucial contribution of this article is to analyse the interacted impact of labour market institutions (i.e. union density and employment protection legislation) on the one hand and financial development on the other hand on the income distribution. Our results indicate that changes in the financial/credit and labour market regulation affect the income distribution. Estimates of the marginal effects show that by increasing labour market regulation one also weakens the impact of the flexibilization in the financial/credit market on the increase in income inequality."