Despite the fact that, banks can withstand the effects of inflation in the short run, since banking system mostly operates with reference to interest rate and maturity of financial instruments with less concern about the purchasing power of money. However, the banking system cannot absorb the shocks in the long run. The objective of this paper is to conceptually expose the effect of inflation o...

In October 2008, Iceland experienced the fastest and deepest financial crisis recorded in modern times when all three major banks went bankrupt in less than 2 weeks. The purpose of this follow-up study is to examine potential changes in participation in 12 different gambling types and in problem gambling before (time 1; year 2007) and after (time 2; year 2011) the economic collapse in 2008. The...

Broadly speaking, the role of the financial sector in all economies is to channel resources from primary savers to investment projects. The importance of this financial sector role has received much attention in the recent literature on economic growth. A strong consensus has emerged in the last decade that well-functioning financial intermediaries have a significant impact on economic growth. ...

In light of the positive growing finance–private sector–economic growth findings, this article examines, from a supply side perspective, obstacles to private sector financing in Fiji, a growth deprived, small island developing state in the Pacific region. A survey of 80 percent of formal financial institutions reveals that, contrary to popular belief, financing the private sector may not be a m...

We adopt a simple Present Value (PV) methodology to investigate the interaction between interest rates, inflation and taxation on the fundamental value of residential real estate for a rational investor with varying degrees of risk-aversion. This approach allows the calculation of the fair present value of residential real estate from only a small number of macro-economic variables, and avoids ...

Most banks hold a capital to asset ratio well above the required minimum level defined by the present capital adequacy regulation (Basel I). Using bank-level panel data from Norway, important hypotheses concerning the determination of the buffer capital is tested. Focus is particularly on the importance of: (i) the buffer as an insurance, (ii) portfolio risk, (iii) the competition effect, (iv) ...

In this paper standard macroeconomic models are combined with the Hayek-Garrison model of the business cycle in order to demonstrate in which way modern central banks are prone to initiate boom-bust-cycles through monetary policy. It is shown under which conditions such a policy will occur and why central bank authorities tend to be misled by an apparently stable price-level. Without central ba...

Support for building agricultural research systems has been a priority of many development assistance agencies, including bilateral and multilateral donors,1 private agencies, and the development banks. On reflection, it isn’t surprising that these agencies have given such attention to agricultural research. First, in the 1960s, it became apparent that in low-income countries, broad-based agric...

Tightening financial regulation squeezes banking activities into the shadow banking sector, which may hurt financial stability and production (Plantin, 2014). Unlike Plantin’s work, we investigate regulations that reduce banks’ leverage and dampen financial amplification effects. Moreover, our paper studies the trade-off between economic growth and financial stability in light of shadow banking...

This paper provides a review of empirical research on the link between financial intermediation by banks and economic growth. Special attention is paid to the issues of causality, non-linearity, time perspective, financial intermediation proxies, and interaction terms. The review shows that there are still quite a few unresolved issues in empirical research, which causes scepticism towards prio...