An Asymmetric Analysis of the Influence That Economic Policy Uncertainty, Institutional Quality, and Corruption Level Have on India’s Digital Banking Services and Banking Stability

Investigating the monetary policy risk channel based on the dynamic stochastic general equilibrium model: Empirical evidence from Iran

Investigating the credit channel and monetary policy risk channel in Iran's economy is the aim of this article. According to empirical studies, expansionary monetary policy increases the risk of banks, and on the other hand, the risk of banks affects economic activities and price levels. In order to investigate the mechanism of the credit channel and the risk channel (as a new channel), the effect of monetary policy on real variables and price levels in Iran's economy, the Dynamic Stochastic General Equilibrium (DSGE) model has been used by entering the information of the banking system and considering moral hazard and adverse choices. The obtained results show that there is a credit channel and a monetary policy risk channel for Iran's economy, and the expansionary monetary policy shock causes output, inflation, private sector consumption, investment, net worth in the economy and lending to increase. Also, when a credit shock occurs, with the increase in banks' lending power, production, private sector consumption, investment, net worth and total lending increase and the inflation level decreases. Also, by applying the risk shock caused by the increase in inflation and the decrease in consumption and investment, the volume of lending increases and the level of production does not change much.

Impact of COVID-19 on China's business and economic conditions: the importance of quantile asymmetries

China has remained a growth engine for the global economy for the last several years. In this study, we assess the impact of COVID-19 on China's business and economic conditions; employing the quantile-on-quantile (QQ) regression and the quantile causality approaches. These econometrics batteries suit our research postulation, as they are capable to delineate underlying asymmetries across the whole distribution, based on which we can infer whether the response of China's business and economic conditions towards COVID-19 is heterogenous or homogenous. Utilizing the novel business and economic conditions measures, we observed that COVID-19 had initially disrupted both business and economic conditions in China. However, they showcased recovery over time. Our in-depth analysis allowed us to infer that the effect of COVID-19 on China's business and economic conditions is heterogeneous across different quantiles, and there is reliable evidence of asymmetry. The outcomes of quantile causality in mean and variance corroborate our primary estimations. These findings educate policymakers, companies, and other stakeholders to understand the nuances of China's business and economic conditions vis-a-vis COVID-19 in the short-run and as time elapsed.

Impact of COVID-19 and economic policy uncertainty on China's stock market returns: evidence from quantile-on-quantile and causality-in-quantiles approaches

COVID-19 unexpectedly ensnared the entire world and wreaked havoc on global economic and financial systems. The stock market is sensitive to black swan events, and the COVID-19 disaster was no exception. Against this backdrop, this study explores the impact of COVID-19 and economic policy uncertainty (EPU) on Chinese stock markets' returns for the period spanning January 23, 2020 to August 04, 2021. The outcomes of the novel quantile-on-quantile regression analysis revealed that both COVID-19 and EPU had a significant negative impact on both Shanghai and Shenzhen stock market returns, while COVID-19 aggravated the level of economic uncertainty in both financial markets. The quantile causality approach of Troster et al. (2018) validates our main estimations. We conclude that COVID-19 and a high level of EPU enervated the returns of China's leading stock markets. Our study provides key insights to policymakers and market participants to determine the behavior of China's stock market returns vis-à-vis COVID-19 during the peak of the pandemic and beyond. Specifically, our findings apprise portfolio investors to augment their portfolio diversification fronts.

An empirical analysis of the impact of higher education on economic growth: The case of China

China's domestic labor market has limited demand for tertiary graduates due to an unbalanced industrial structure, with a weak contribution to economic performance over the past decade. This study estimates the asymmetric effects of higher education progress (highly educated employed workforce), higher education utilization (highly educated unemployed workforce), and the separate effects of higher education utilization interactions with high-tech industries on economic growth in China from 1980 to 2020. Using a Nonlinear Autoregressive Distributed Lag (NARDL) model, this study finds that the expansion of higher education progress (the employed workforce with higher education) promotes economic growth, while contraction of higher education progress (employed workforce with higher education) reduces economic growth. Likewise, an increase in higher education utilization (the unemployed labor force with higher education) suppresses economic growth, while a decline in the higher education utilization (the unemployed labor force with higher education) promotes economic growth. The study also found that the expansion of high-tech industries and government spending on education significantly stimulate economic growth. The moderating role of higher education utilization (unemployed labor force with higher education) in the impact of high-tech industries on economic growth is significantly positive. This study strategically proposes that China's higher-educated unemployed labor force can be adjusted to high-tech industries, which need to be developed equally in all regions. Moreover, the country is required to invest more in higher education and the development of high technological industries across all regions, thus may lead to higher economic growth.