Due to widespread decentralization of spending responsibilities, increasing revenue power and borrowing capacity of sub-national governments, sub-national borrowing has become an increasingly important source of sub-national finance. While there are arguments for and against giving sub-national authorities room for raising their own financial resources, appropriate sub-national borrowing regulatory framework can reduce chances of defaults and fiscal crises. This dissertation investigates the effectiveness of sub-national borrowing regulations in maintaining fiscal sustainability. More precisely, it tests the hypothesis that is sub-national borrowing is restricted to financing capital investments (the “golden rule”), and if the sub-national governments are provided with some measure of revenue autonomy, then the sub-national borrowing should not endanger fiscal sustainability. Based on the sub-national government panel data for 57 countries between 1990 and 2008 and applying the system GMM estimator and the survival analysis, this dissertation provides support for this hypothesis. The results suggest that the “golden rule” is effective in maintaining fiscal sustainability at both general and sub-national government level. Sub-national tax autonomy, however, seems to have positive but very small marginal effect on fiscal sustainability. The obtained results also emphasize the risk of the soft budget constraint and the moral hazard. Significant central government financing may give encouraging signs to the sub-national governments to over-borrow and to expect being bailed out by the central government. The results obtained in this dissertation imply following policy recommendations. First, sub-national government borrowing does not have to endanger fiscal sustainability if the borrowing regulation framework is well designed and according to specific country circumstances. Second, reducing fiscal dependence on central government financing reduces the risk of moral hazard and improves the effectiveness of borrowing control in maintaining fiscal balance at the sustainable level.

This study analyzes the relationship between financial development and income inequality by using panel data of 60 developing and developed countries for the period 2000-2010. We find evidence for the linear negative relationship between financial development and income inequality which asserts that financial development reduces income inequality. We also find evidence supporting Kuznets inverted u-shaped hypothesis on development-income inequality link, except that for the developed countries where we find evidence for u-shaped hypothesis. It is also concluded that the panel is stationary without unit root, indicating that shocks on income inequality is not persistent.

Due to widespread decentralization of spending responsibilities, increasing revenue power and borrowing capacity of sub-national governments, sub-national borrowing has become an increasingly important source of sub-national finance. While there are arguments for and against giving sub-national authorities room for raising their own financial resources, appropriate sub-national borrowing regulatory framework can reduce chances of defaults and fiscal crises. This dissertation investigates the effectiveness of sub-national borrowing regulations in maintaining fiscal sustainability. More precisely, it tests the hypothesis that is sub-national borrowing is restricted to financing capital investments (the “golden rule”), and if the sub-national governments are provided with some measure of revenue autonomy, then the sub-national borrowing should not endanger fiscal sustainability. Based on the sub-national government panel data for 57 countries between 1990 and 2008 and applying the system GMM estimator and the survival analysis, this dissertation provides support for this hypothesis. The results suggest that the “golden rule” is effective in maintaining fiscal sustainability at both general and sub-national government level. Sub-national tax autonomy, however, seems to have positive but very small marginal effect on fiscal sustainability. The obtained results also emphasize the risk of the soft budget constraint and the moral hazard. Significant central government financing may give encouraging signs to the sub-national governments to over-borrow and to expect being bailed out by the central government. The results obtained in this dissertation imply following policy recommendations. First, sub-national government borrowing does not have to endanger fiscal sustainability if the borrowing regulation framework is well designed and according to specific country circumstances. Second, reducing fiscal dependence on central government financing reduces the risk of moral hazard and improves the effectiveness of borrowing control in maintaining fiscal balance at the sustainable level.

Made available in DSpace on 2016-03-15T19:31:19Z (GMT). No. of bitstreams: 1 Walter Roberto Kuroda.pdf: 533116 bytes, checksum: 5c2d1fc5bb48a65b19555c30cc9b12c7 (MD5) Previous issue date: 2009-03-17 / This study verified the role of intangible assets of commercial banks in developed and developing countries to obtain sustainable competitive advantage, or to testify if the higher amount of intangible assets, the greater sustainability of institutions would be. The research considered not only the superior average returns of the financial sector, which characterizes competitive advantage, but also its persistence over time that typifies sustainability. The rationale was based on the Vision Based on Resources (RBV), although the approach of several empirical researches was made toward economic sector business, generally excluding the financial sector. This study has its relevance represented by the novelty of the theme, whitch approuches the relation between Intangible Assets and the sustainable competitive advantage, specifically in banking institutions. / Este estudo verificou o papel dos ativos intangíveis dos bancos comerciais em países desenvolvidos e em países em desenvolvimento na obtenção de vantagens competitivas sustentáveis, ou seja, constatando se quanto maior a quantidade de intangíveis maior seria a sustentabilidade das instituições. A pesquisa considerou não só os retornos com média superior do setor financeiro, que caracterizam vantagem competitiva, mas, também, a persistência ao longo do tempo o que tipifica a sustentabilidade. A fundamentação apoiou-se na Visão Baseada em Recursos (Resource-Based View - RBV), que, apesar de muito utilizada em pesquisas empíricas dirigidas para diversos setores econômicos empresariais, geralmente excluem o setor financeiro. Desta forma, a relevância da contribuição deste estudo está no ineditismo de uma pesquisa relacionando Ativos Intangíveis e Vantagens Competitivas Sustentáveis em instituições bancárias.

This thesis addresses the question, whether the impact of financial development on the relative and absolute indicators of poverty is dependent on the levels of the human capital present in an economy. To answer this question, first we develop a theoretical framework to explain the growth process in the context of financial development assuming that human capital is heterogeneous in terms of the skills and education people have. Then, by using the data sets based on five-year averages over 1960-2010 and 1980-2010, covering 107 developed and developing countries, we empirically investigate the extensions of the theoretical framework developed earlier. These extensions cover the relationships between: 1. Income inequality and economic growth 2. Financial development, human capital and income inequality, and 3. Financial development, human capital and poverty We provide empirical evidence using modern panel data techniques of dynamic and static GMM. The findings elucidate that income inequality and economic growth are inter-dependent on each other. There exists an inverse relationship between initial inequality and economic growth. The changes in income inequality follow the pattern identified by Kuznets (1955) known as Kuznets’ hypothesis. The results also show that financial development helps in reducing income inequalities and in alleviating poverty, only when there is a sufficient level of human capital available. On the basis of our findings we develop the term "effective financial development" which means that financial development is effective in accelerating growth levels, reducing income inequalities and alleviating poverty only if there is a sufficient level of human capital available. The empirical study covers multiple aspects of financial development like private credit extended by banks and other financial institutions, liquid liabilities and stock market capitalization. The results of the empirical investigations are robust to multiple data sets and various indicators of income inequality, financial development, poverty and human capital. The study also provides marginal analysis, which helps in understanding the impact of financial development on inequality and poverty at different levels of human capital. This research study of effective financial development can be a useful learning paradigm for the academics and researchers interested in growth economics and keen to learn how poverty and income inequality can be reduced effectively. This study can also be useful for the policy makers in the financial institutions, because it provides robust empirical evidence that shows that financial development cannot help in alleviating poverty and in reducing inequalities unless there is a sufficient level of human capital available. The findings can be useful for policy makers, particularly in the developing countries where high levels of income inequalities and poverty are big problems. This study explains the mechanism of how effective financial development can be used to reduce income inequalities and to alleviate poverty. It also explains the process of inter-linkages between financial development, human capital, inequality, economic growth and financial instability. The policy makers can also take advantage from the marginal analyses that illustrate the minimum levels of private credit and primary and secondary schooling above which the effects of financial development and human capital become significant in reducing inequalities and poverty.

This study examines the relationship between financial inclusion and economic growth, more specifically if financial inclusion is an important factor for economic growth. A sub question was stated as well, if the six proxies of the financial inclusion measurement respectively have an impact on economic growth. To help examine this research area we have compiled panel data from 20 countries with different income levels over a time period of 19 years. The time period on which this study is focusing is 2002-2020. The tests conducted in this study are the Dickey-Fuller unit root test and the Arellano-Bond dynamic panel GMM method. Given the result of the dynamic panel estimation, we found that financial inclusion has a positive relation to economic growth. The result also indicated that three of the six proxies for financial inclusion were statistically significant and have a positive relation to economic growth. To conclude, the study found empirical evidence that financial inclusion is an important factor for economic growth.

This thesis investigates the impact of a more digitised economy on the inflation rate. European countries have historically done well in reaching their inflation target. In recent years however, policymakers have been puzzled over low inflation rates that seem to be difficult to stimulate. Just recently the impact of digitisation on price stability has gained some interest in economic research however the lack of empirical evidence on this relationship is severe. Based on scarce literature and existing theories hypotheses were constructed to test certain digitisation channels effect on the inflation rate. By gathering relevant data on inflation and the identified digitisation channels for 17 European countries over an 11- year period, econometric models corresponding to the hypotheses were analysed. The estimated results show that digitisation have a varying net-effect on the inflation rate, demonstrating that digitisation plays a role in determining fluctuations in price stability when controlling for other macroeconomic factors. These findings indicate that policymakers should consider digital technological development when targeting inflation, even though the effects may be temporary.