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Volume 11 (2022): Issue 2 (May 2022)

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Volume 10 (2021): Issue 2 (May 2021)

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Volume 8 (2019): Issue 2 (May 2019)

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Volume 4 (2015): Issue 3 (September 2015)

Volume 4 (2015): Issue 2 (May 2015)

Volume 4 (2015): Issue 1 (January 2015)

Volume 3 (2014): Issue 3 (September 2014)

Volume 3 (2014): Issue 2 (May 2014)

Volume 3 (2014): Issue 1 (January 2014)

Journal Details
Format
Journal
eISSN
2336-9205
First Published
11 Mar 2014
Publication timeframe
3 times per year
Languages
English

Search

Volume 4 (2015): Issue 2 (May 2015)

Journal Details
Format
Journal
eISSN
2336-9205
First Published
11 Mar 2014
Publication timeframe
3 times per year
Languages
English

Search

5 Articles
Open Access

The Global Crisis of the Late 2000s and Currency Substitution: A Study of Three Eastern European Economies Russia, Turkey and Ukraine

Published Online: 15 May 2015
Page range: 5 - 22

Abstract

Abstract

For the last two decades, most of Eastern European countries moved towards open economies, including Baltic Countries, Ukraine and Russia. Some of these countries adopted the euro such as the case of Montenegro in 2002, Slovakia in 2009, Estonia in 2011, and finally Latvia in 2014. Adoption of the new currency helped these countries further integrate into a larger market, the Eurozone, and stabilize their economies against heavily fluctuating exchange rates. The governments of Ukraine and Russia, on the other hand, did not show interest to join the Eurozone and followed more independent currency policies along with the limited economic liberalization during the period of the 90s and the early 2000s. Similarly, Turkey, not a former Eastern Bloc country, but located geographically very close to these two countries did not peg its currency to the euro or the US dollar. All of these three economies in Eastern Europe had multiple deep financial crises, inflation, devaluations, and weak governments in the last two decades of the 90s and the 2000s (Lissovolik, 2003). For instance, Turkish lira depreciated from 13 TL/$ in 1973 to 1.5 million TL/$ in 2004 (Bahmani-Oskooee, 1996). As a result, of these negative experiences, local people of these countries developed a tendency to keep at least a portion of their savings in a foreign currency (Civcir, 2003). In the case of Turkey, the ratio of reserves held in the foreign currency over the local currency, which is a de facto measure of US dollarization, showed a steady rise during the period from 1983 to 1993, remained steady high around 50% until 2001 and decreased afterwards (Metin-Özcan, 2009). In short, these countries are examples of highly US dollarized countries (Havrylyshyn & Beddies, 2003; Kaplan, 2008).

This paper is to investigate the changes in the currency substitution during and after the global financial crisis between 2007 and 2010 in Russia, Turkey and Ukraine. These three countries with large economies, recent strong US dollarization experience in the last two decades, and relatively open markets, provide good cases for understanding the global trend in the currency substitution and the status of the US dollar as a reserve currency

Keywords

  • Currency Substitution
  • Monetary Policy
  • Reserve Currency
  • Globalization
  • Financial Crisis
Open Access

The Effect of Food Prices on Inflation in the Republic of Serbia

Published Online: 15 May 2015
Page range: 23 - 36

Abstract

Abstract

In the Republic of Serbia, food accounts for a significant share in the consumer price index through which the inflation is statistically expressed. Therefore, in considerations of the basic factors of increase in the general price level, a special emphasis is placed on the specific features of the market of agricultural-food products. The aim of this research is to peruse the effect of the characteristics of the food market in Serbia on the inflation rate. High volatility of food prices is present because of the instability of this market, mainly due to seasonal fluctuations of supply and the effect of natural factors. Bearing in mind that the increase in food prices is the main determinant of the increase in the inflation rate, the indirect state control is very important so as to maintain price stability. Special importance is attached to the following instruments of economic policy: commodity reserves, storage policy, and fiscal and foreign trade policy.

Keywords

  • food market
  • volatility of food prices
  • consumer price index
  • economic policy
  • inflation
  • the Republic of Serbia
Open Access

Revival of Legacy of Tooke and Gibson: Implications for Monetary Policy

Published Online: 15 May 2015
Page range: 37 - 58

Abstract

Abstract

The monetary policy rules used by central banks these days are based on the assumption that inflation could be reduced by increasing interest rate. On contrary, Tooke (1774-1858), the forefather of monetary economics, was of the view that the relationship between interest rate and inflation should be positive. His view was based on simple logic, ‘interest is a part of cost, and therefore, the increase in interest rate should increase inflation by increasing cost of production (Tooke, 1838)’. Tooke’s view has got support from a number of empirical evidence including Gibson (1923) who found positive correlation between two variables for UK data over a period of 200 years. On the other hand, mainstream economic thinking on which the actual monetary practices are based ignored any possibility of positive relationship between interest rate and inflation throughout the history. The existence of Tooke’s cost side effects of monetary policy is a serious concern because if these effects exist than the use of monetary policy would be counterproductive. Using the data from entire globe, I attempt to explore the nature of relationship between the interest rate and inflation. I found that the data supports the perception of Tooke and Gibson and denies that the effectiveness of monetary policy currently adapted by the correlation between interest rate and inflation is positive. The results are robust to sample size, sample period, and various definitions of interest rate and inflation.

Keywords

  • Cost Channel
  • Gibson Paradox
  • Tooke Banking School Theory
Open Access

Inflation Targeting in Serbia

Published Online: 15 May 2015
Page range: 59 - 74

Abstract

Abstract

Serbia introduced inflation targeting regime in August 2006. After nine years of its application, conclusions may be drawn on the (un)successfulness of the regime. Inflation targets have not been achieved during seven of nine observed years. Key difficulties in the application of the regime refer to insufficient efficiency of monetary policy instruments, insufficient confidence in the domestic currency (widely spread informal euroisation), and indexing of prices according to the exchange rate.

The paper consists of four sections. The first section analyses theoretical assumptions of the inflation targeting regime. The second part describes the characteristics of the regime in Serbia. The third section analyses results, while the fourth section analyses the reasons for insufficient efficiency of the regime and gives actual suggestions for improving the existing regime.

Keywords

  • Serbia
  • monetary policy
  • inflation targeting
Open Access

Planning Change in an Organization; MCB Bank Limited, Pakistan

Published Online: 15 May 2015
Page range: 75 - 107

Abstract

Abstract

This paper is primarily based on a case study of a leading bank in Pakistan, that is, MCB Bank Ltd. Four established change models have been applied to the bank to find out how a change comes in/ is brought in, managed, and how it affects organizational environment and its stakeholders, particularly customers and employees. The four established change models applied are the change management approach by Ansoff and McDonnell; the change management model by Kurt Lewin; the 7S framework by Thoman J. Peters and Robert H. Waterman; and the change management model developed by Stephanie Elam. The study covers a change management aspect such as strategic intervention technique; a need for change management; resource implication; planning change; strategies in change management; system effectiveness; managing resistance to change; leadership issues; cultural issues; people issues; external environment issues; workable approach to overcome change resistance; appropriate model and implementing the model.

Keywords

  • Banks and Change Management
  • Technology and Banks
  • Innovation and Banks
5 Articles
Open Access

The Global Crisis of the Late 2000s and Currency Substitution: A Study of Three Eastern European Economies Russia, Turkey and Ukraine

Published Online: 15 May 2015
Page range: 5 - 22

Abstract

Abstract

For the last two decades, most of Eastern European countries moved towards open economies, including Baltic Countries, Ukraine and Russia. Some of these countries adopted the euro such as the case of Montenegro in 2002, Slovakia in 2009, Estonia in 2011, and finally Latvia in 2014. Adoption of the new currency helped these countries further integrate into a larger market, the Eurozone, and stabilize their economies against heavily fluctuating exchange rates. The governments of Ukraine and Russia, on the other hand, did not show interest to join the Eurozone and followed more independent currency policies along with the limited economic liberalization during the period of the 90s and the early 2000s. Similarly, Turkey, not a former Eastern Bloc country, but located geographically very close to these two countries did not peg its currency to the euro or the US dollar. All of these three economies in Eastern Europe had multiple deep financial crises, inflation, devaluations, and weak governments in the last two decades of the 90s and the 2000s (Lissovolik, 2003). For instance, Turkish lira depreciated from 13 TL/$ in 1973 to 1.5 million TL/$ in 2004 (Bahmani-Oskooee, 1996). As a result, of these negative experiences, local people of these countries developed a tendency to keep at least a portion of their savings in a foreign currency (Civcir, 2003). In the case of Turkey, the ratio of reserves held in the foreign currency over the local currency, which is a de facto measure of US dollarization, showed a steady rise during the period from 1983 to 1993, remained steady high around 50% until 2001 and decreased afterwards (Metin-Özcan, 2009). In short, these countries are examples of highly US dollarized countries (Havrylyshyn & Beddies, 2003; Kaplan, 2008).

This paper is to investigate the changes in the currency substitution during and after the global financial crisis between 2007 and 2010 in Russia, Turkey and Ukraine. These three countries with large economies, recent strong US dollarization experience in the last two decades, and relatively open markets, provide good cases for understanding the global trend in the currency substitution and the status of the US dollar as a reserve currency

Keywords

  • Currency Substitution
  • Monetary Policy
  • Reserve Currency
  • Globalization
  • Financial Crisis
Open Access

The Effect of Food Prices on Inflation in the Republic of Serbia

Published Online: 15 May 2015
Page range: 23 - 36

Abstract

Abstract

In the Republic of Serbia, food accounts for a significant share in the consumer price index through which the inflation is statistically expressed. Therefore, in considerations of the basic factors of increase in the general price level, a special emphasis is placed on the specific features of the market of agricultural-food products. The aim of this research is to peruse the effect of the characteristics of the food market in Serbia on the inflation rate. High volatility of food prices is present because of the instability of this market, mainly due to seasonal fluctuations of supply and the effect of natural factors. Bearing in mind that the increase in food prices is the main determinant of the increase in the inflation rate, the indirect state control is very important so as to maintain price stability. Special importance is attached to the following instruments of economic policy: commodity reserves, storage policy, and fiscal and foreign trade policy.

Keywords

  • food market
  • volatility of food prices
  • consumer price index
  • economic policy
  • inflation
  • the Republic of Serbia
Open Access

Revival of Legacy of Tooke and Gibson: Implications for Monetary Policy

Published Online: 15 May 2015
Page range: 37 - 58

Abstract

Abstract

The monetary policy rules used by central banks these days are based on the assumption that inflation could be reduced by increasing interest rate. On contrary, Tooke (1774-1858), the forefather of monetary economics, was of the view that the relationship between interest rate and inflation should be positive. His view was based on simple logic, ‘interest is a part of cost, and therefore, the increase in interest rate should increase inflation by increasing cost of production (Tooke, 1838)’. Tooke’s view has got support from a number of empirical evidence including Gibson (1923) who found positive correlation between two variables for UK data over a period of 200 years. On the other hand, mainstream economic thinking on which the actual monetary practices are based ignored any possibility of positive relationship between interest rate and inflation throughout the history. The existence of Tooke’s cost side effects of monetary policy is a serious concern because if these effects exist than the use of monetary policy would be counterproductive. Using the data from entire globe, I attempt to explore the nature of relationship between the interest rate and inflation. I found that the data supports the perception of Tooke and Gibson and denies that the effectiveness of monetary policy currently adapted by the correlation between interest rate and inflation is positive. The results are robust to sample size, sample period, and various definitions of interest rate and inflation.

Keywords

  • Cost Channel
  • Gibson Paradox
  • Tooke Banking School Theory
Open Access

Inflation Targeting in Serbia

Published Online: 15 May 2015
Page range: 59 - 74

Abstract

Abstract

Serbia introduced inflation targeting regime in August 2006. After nine years of its application, conclusions may be drawn on the (un)successfulness of the regime. Inflation targets have not been achieved during seven of nine observed years. Key difficulties in the application of the regime refer to insufficient efficiency of monetary policy instruments, insufficient confidence in the domestic currency (widely spread informal euroisation), and indexing of prices according to the exchange rate.

The paper consists of four sections. The first section analyses theoretical assumptions of the inflation targeting regime. The second part describes the characteristics of the regime in Serbia. The third section analyses results, while the fourth section analyses the reasons for insufficient efficiency of the regime and gives actual suggestions for improving the existing regime.

Keywords

  • Serbia
  • monetary policy
  • inflation targeting
Open Access

Planning Change in an Organization; MCB Bank Limited, Pakistan

Published Online: 15 May 2015
Page range: 75 - 107

Abstract

Abstract

This paper is primarily based on a case study of a leading bank in Pakistan, that is, MCB Bank Ltd. Four established change models have been applied to the bank to find out how a change comes in/ is brought in, managed, and how it affects organizational environment and its stakeholders, particularly customers and employees. The four established change models applied are the change management approach by Ansoff and McDonnell; the change management model by Kurt Lewin; the 7S framework by Thoman J. Peters and Robert H. Waterman; and the change management model developed by Stephanie Elam. The study covers a change management aspect such as strategic intervention technique; a need for change management; resource implication; planning change; strategies in change management; system effectiveness; managing resistance to change; leadership issues; cultural issues; people issues; external environment issues; workable approach to overcome change resistance; appropriate model and implementing the model.

Keywords

  • Banks and Change Management
  • Technology and Banks
  • Innovation and Banks

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