Panoeconomicus

Paranoid Finance by Fabian Muniesa Polity Press, 2024.

Alpar Lošonc — 2025-05-01

The Impact of Fiscal Policy on the Economic Growth of OECD Members Between 1985 and 2015

Oscar Afonso — 2025-05-01

We aim to evaluate the impact of fiscal policy on the OECD countries' economies between 1985 and 2015. We estimate the impact of fiscal policy using econometric estimation based on panel data. We conclude that government spending on primary expenses and government spending on military are fiscal policies that negatively impact economic growth. In turn, government spending on education and tax revenue have a positive effect on economic growth.

JEL: C23, E62, F43.

Economic Growth Determinants in Old and New EU Countries

Miloš Žarković — 2025-05-01

The aim of our paper was to construct a model of economic growth determinants for old and new EU and the EU28 countries. We used a strongly balanced panel in the period from 2000 to 2020 and regression equations. For the old EU group, our results showed a high level of statistical significance and a positive effect of gross fixed capital formation, trade openness, government consumption, and population on GDP growth during the observation period. In the new EU group, trade openness, political stability, and government consumption are significant and positively affect economic growth. When we included the moment of accession of new EU members in the analysis, our results showed that gross fixed capital formation, trade openness, political stability, and government consumption had a statistically significant and positive influence on the GDP growth rate. Interestingly, our results did not confirm the expected positive impact of foreign direct investments and renewable energy consumption on economic growth in our sample countries. We found that the crisis is statistically significant and negatively affected the GDP growth rate in both groups with a stronger impact in new EU countries. We conclude our article with policy implications and recommendations for future research.

JEL: O5, C5.

The Perpetuation of Stratification in Market Environments – Markets and Corporate Power, Institutions, and Complex Systems Dynamics

Henning Schwardt — 2025-01-05

We consider how market environments can perpetuate the stratification of societies and economies. Markets are sets of institutions. These institutions are emergent outcomes of interactions in ongoing socio-economic processes. They entail societies’ rules, norms and values; and market environments and agents’ behavior therein will reflect them. Markets are also complex systems. Complex systems dynamics allow us to identify additional endogenous mechanisms contributing to the perpetuation of stratified structures in market economies. In capitalism’s drive towards concentration and centralization, and the concomitant consolidation of corporate power, further factors leading to stratified socio-economic outcomes emerge. We formulate policy considerations based on the analytical results presented. One focus is what measures may help reduce stratification and change the dynamics that reconstitute it. The other focus draws on the fact that policies are an output of the system, which means that changes to the structure itself may have to be required to advance changes that can have an equitable impact.

JEL: B51, B52, Z13.

Testing the Triple Deficits in the Emerging Economies of Europe

Sibel Özcan — 2025-05-01

In the literature, increases in the ratio of current deficit to gross domestic product (GDP) are considered a crisis indicator, and budget and savings deficits are deemed to be significant causes of the current deficit. This situation, called the triple deficit hypothesis in the literature, is analyzed with the panel dynamic ordinary least square (panel DOLS) and fully modified ordinary least squares (FMOLS) using 2000–2019 data for Bulgaria, Czechia, Estonia, Latvia, Lithuania, Hungary, Malta, Romania, and Slovenia, which are generally referred to as the emerging economies of Europe. The results showed a long-term relationship between the variables. Accordingly, budget and private savings deficits increase the current deficit in the long term. The causality analysis found a reciprocal causal relationship between the variables, such that while budget and private savings deficits cause an increase in the current deficit, increases in the current deficit also increase the budget and private savings deficits. Thus, the triple deficit hypothesis is valid in these countries.

JEL: E60, F30, H62.

Nexus between Economic Freedom and Bank Risk-taking: Evidence from US Commercial Banks

Shoaib Ali — 2025-05-01

Using the two-stage generalized linear modelling (GMM) technique, we examine the connection between economic freedom and its constituents and bank risk-taking in the US. The findings indicate that bank risk-taking restrictions are caused by restrictions on property rights, government honesty and accountability, government expenditure and taxation, and monetary, commercial, and financial independence. But financial institutions benefit from taking more chances when they are free to trade and invest anywhere, they like. The risk of well-capitalized banks is reduced by economic freedom while the danger of undercapitalized banks is increased. Banks with enough capitalization benefit more from economic freedom and its component than do those with insufficient capital. According to the data, risk management contributes more to good governance than any other factor. The findings hold up across different risk metrics and sample sizes. Our findings have ramifications for monetary liberty and the willingness of commercial banks to take risks.

JEL: G21, G28

Efficiency Evaluation of Taiwan’s Commercial Banks after IFRS Adoption: A Two-System Network Data Envelopment Approach

Nan-Hsing Hsiung — 2025-05-01

The objective of this study is to assess the operational efficiencies of Taiwanese commercial banks from 2013 to 2022, following the adoption of the International Financial Reporting Standards (IFRS) in 2013. This study introduces an extended non-convex two-system network data envelopment analysis (DEA) model, which decomposes the production process into two sub-processes: profitability and marketability stages. Additionally, the study categorizes eighteen listed commercial banks into two groups based on their affiliation with financial holding companies (FHCs). The results of the Mann-Whitney U test reveal significant differences in both profitability efficiency and marketability efficiency between FHC banks and non-FHC banks. However, the overall efficiency of FHC banks does not differ significantly from that of non-FHC banks during the sample period. The empirical findings indicate that, on average, banks affiliated with FHCs outperform those not affiliated with FHCs in terms of profitability efficiency, with this effect being statistically significant. Conversely, FHC banks exhibit lower marketability efficiency compared to non-FHC banks. These results suggest that while FHC affiliation can enhance profitability efficiency, it may not necessarily improve marketability efficiency.

JEL: G21,G30