Stock markets accurately reflect countries’ economic health, and stock returns are tightly related to economic indices. One popular area of financial research is the factors that influence stock returns. Several investigations have frequently cited macroeconomic factors, among numerous elements. Therefore, this study focuses on the empirical analysis of the relationship between macroeconomic factors and stock market returns. When a stock market becomes increasingly volatile, it becomes susceptible to economic uncertainty news, and information on social media platforms. Thus, we (...) incorporated a new dimension of economic uncertainty news sentiment for stock return predictions. We employed the daily data ofgold index, crude oil price, interest rate, exchange rate, and stock returns for a set of countries from January 2010 to December 2020. Subsequently, to compute coefficients, we conducted a regression analysis using one of the more sophisticated approaches: single-layer neural networks and ordinary least square regression. In addition, we only computed EUNS for the period of the fiscal budget announcement for the US, Turkey, and Hong Kong. The results indicate that the gold index, interest rate, and exchange rate are highly significant and negative macroeconomic factors for all analyzed countries. These findings also indicate that EUNS is important and detrimental for projecting stock returns. (shrink)

Following recent debates on the New Neoclassical Synthesis, the theory of monetary policy has been renewed. The prevailing method, illustrated by Woodford's version of Interest and Prices, is a Dynamic Stochastic General Equilibrium Model in which the old LM curve is voluntarily substituted by an optimal monetary rule. Such a turning point requires a peculiar set of assumptions, especially regarding monetary prices. The recent debate pays attention to de-emphasis on the nominal monetary aggregate, which does not play any explicit role (...) in monetary policy deliberations. Following Calvo's model, Woodford's neo-Wicksellian framework only considered monetary prices in equilibrium. This article demonstrates that even though the New Neoclassical Synthesis considers it essential to have a monetary theory for policymaking, the former offers the same answers as the traditional static macroeconomics. More precisely, it shows that the use of dynamic optimisation – such as the one developed by Woodford's approach – does not contribute in a decisive way to improving our understanding of the role that money prices play in monetary theory. Woodford's canvas is silent about the mechanisms whereby monetary policy induces agents to adjust individual money prices to the values that generate an equilibrium price level. Thus, if we want to close this gap, it may be useful to consider a 'forward guidance' strategy. By means of such a tool, central bankers are able to shape the public's expectations on economic outcomes by pre-announcing the time path of future policy actions. (shrink)

Motivated by a large literature on how firm-specific resources drive firm performance, we propose and find that heterogeneity in investor optimism regarding firm-specific attributes plays a very important role in influencing the managerial propensity to manipulate financial statements. When firm-level investor optimism is moderate, the incidence of accounting misconduct increases, but it decreases when investors are highly optimistic. Further, market reaction to the announcement of financial restatements is more negative when investors held more optimistic firm-specific beliefs at the time of (...) initial misstatement. These findings are robust to alternative firm-specific optimism measures linked to analysts, general investors and unsophisticated individual investors, controls for market-wide consumer sentiment unexplained by macroeconomic factors, economy-wide and industry-level optimism, potential selection bias and reverse causality. Our analysis highlights the importance of firm-level investor optimism in predicting, preventing and detecting accounting misconduct. (shrink)

In recent years, the project of providing microeconomic foundations for macroeconomics has taken on new urgency. Some philosophers and economists have challenged the project, both for the way economists actually approach microfoundations and for more general anti-reductionist reasons. Reductionists and anti-reductionists alike, however, have taken it to be trivial that the macroeconomic facts are exhaustively determined by microeconomic ones. In this paper, I challenge this supposed triviality. I argue that macroeconomic properties do not even globally supervene on microeconomic (...) ones. This is simply a consequence of the difference in the explanatory goals of the respective fields, which implicitly carve out the microeconomic property set in such a way that it underdetermines macroeconomic properties. It means, however, that microeconomics-based foundations for macroeconomics are inadequate in principle. (shrink)

Macroeconomics: An Introduction, provides a lucid and novel introduction to macroeconomic issues. It introduces the reader to an alternative approach of understanding macroeconomics, which is inspired by the works of Adam Smith, David Ricardo, Karl Marx, John Maynard Keynes, and Piero Sraffa. It also presents the reader with a critical account of mainstream marginalist macroeconomics. The book begins with a brief history of economic theories and then takes the reader through three different ways of conceptualizing the macroeconomy. Subsequently, the (...) theories of money and interest rates, output and employment levels, and economic growth are discussed. The book ends by providing a policy template for addressing the macroeconomic concerns of unemployment and inflation. The conceptual discussion in Macroeconomics is situated within the context of the Indian economy. Besides using publicly available data, the contextual description is instantiated using excerpts from works of fiction by Indian authors. (shrink)

Arbitrary public announcement logic ) reasons about how the knowledge of a set of agents changes after true public announcements and after arbitrary announcements of true epistemic formulas. We consider a variant of arbitrary public announcement logic called positive arbitrary public announcement logic ), which restricts arbitrary public announcements to announcement of positive formulas. Positive formulas prohibit statements about the ignorance of agents. The positive formulas correspond to the universal fragment in first-order logic. As two successive (...) class='Hi'>announcements of positive formulas need not correspond to the announcement of a positive formula, \ is rather different from \. We show that \ is more expressive than public announcement logic \, and that \ is incomparable with \. We also provide a sound and complete infinitary axiomatisation. (shrink)

Causality in Macroeconomics examines causality while taking macroeconomics seriously. A pragmatic and realistic philosophy is joined to a macroeconomic foundation that refines Herbert Simon's well-known work on causal order to make a case for a structural approach to causality. The structural approach is used to understand modern rational expectations models, regime switching models, Granger causality, vector autoregressions, the Lucas critique, and concept exogeneity. Techniques of causal inference based on patterns of stability and instability in the face of identified regime (...) changes are developed and illustrated in two empirical case studies. (shrink)

Argues that ontological reduction of macroeconomics to microeconomics is untenable. Existence of macroeconomic aggregates; Microfoundations of macroeconomics; Examinations of the general price level; Limits of the scientific development of microeconomics.

We propose a multi-agent logic of knowledge, public announcements and arbitrary announcements, interpreted on topological spaces in the style of subset space semantics. The arbitrary announcement modality functions similarly to the effort modality in subset space logics, however, it comes with intuitive and semantic differences. We provide axiomatizations for three logics based on this setting, with S5 knowledge modality, and demonstrate their completeness. We moreover consider the weaker axiomatizations of three logics with S4 type of knowledge and prove (...) soundness and completeness results for these systems. (shrink)

While dynamic epistemic logics with common knowledge have been extensively studied, dynamic epistemic logics with distributed knowledge have so far received far less attention. In this paper we study extensions of public announcement logic ( $\mathcal{PAL }$ ) with distributed knowledge, in particular their expressivity, axiomatisations and complexity. $\mathcal{PAL }$ extended only with distributed knowledge is not more expressive than standard epistemic logic with distributed knowledge. Our focus is therefore on $\mathcal{PACD }$ , the result of adding both common and (...) distributed knowledge to $\mathcal{PAL }$ , which is more expressive than each of its component logics. We introduce an axiomatisation of $\mathcal{PACD }$ , which is not surprising: it is the combination of well-known axioms. The completeness proof, however, is not trivial, and requires novel combinations and extensions of techniques for dealing with $S5$ knowledge, distributed knowledge, common knowledge and public announcements at the same time. We furthermore show that $\mathcal{PACD }$ is decidable, more precisely that it is $\textsc {exptime}$ -complete. This result also carries over to $\mathcal{S 5\mathcal CD }$ with common and distributed knowledge operators for all coalitions (and not only the grand coalition). Finally, we propose a notion of a trans-bisimulation to generalise certain results and give deeper insight into the proofs. (shrink)

Macroeconomic dynamics and the at-risk-of-poverty population in Slovakia This paper deals with analysis and presentation of the core findings under the EU SILC 2009 project. Particularly we are oriented on study of the socially vulnerable groups of population identified according their income situation. As a sorting criterion for this purpose we use the standard methodology set by OECD and Eurostat. It means the 60% of the national median equivalized disposable income is applied for this criterion as the poverty threshold. (...) The national income variable is firstly calculated as a total income for each surveyed household and dived by the equivalized size of household. By this procedure the households of various structures are transformed onto generally accepted scale. The special attention of our study is oriented on the cluster of population living on income below the poverty threshold. For this population we calculate so called social deficit. Through this value we show the volume of financial means needed to upgrade the living standard of the population living bellow poverty threshold at least to the poverty threshold level.Special section of the paper is devoted to study of relation among the core macroeconomic indicators and level and size of the at-risk-of-poverty population during the period of last economic development, including both economic growth and economic recession. According our tentative findings we did not find the significant impact of economic growth on the status of socially vulnerable population. This finding however should be studied in broader context, with longer time series of relevant data and with broader set of explanatory variables. (shrink)

We propose a multi-agent logic of knowledge, public announcements and arbitrary announcements, interpreted on topological spaces in the style of subset space semantics. The arbitrary announcement modality functions similarly to the effort modality in subset space logics, however, it comes with intuitive and semantic differences. We provide axiomatizations for three logics based on this setting, with S5 knowledge modality, and demonstrate their completeness. We moreover consider the weaker axiomatizations of three logics with S4 type of knowledge and prove (...) soundness and completeness results for these systems. (shrink)

In this work, we present a multi-agent logic of knowledge and change of knowledge interpreted on topological structures. Our dynamics are of the so-called semi-private character where a group G of agents is informed of some piece of information $$\varphi $$ φ, while all the other agents observe that group G is informed, but are uncertain whether the information provided is $$\varphi $$ φ or $$\lnot \varphi $$ ¬φ. This article follows up on our prior work where the dynamics were (...) public events. We provide a complete axiomatization of our logic, and give two detailed examples of situations with agents learning information through semi-private announcements. (shrink)

Research on UBI has blossomed in recent years, with a particular focus on conducting experiments with policies that share features with a UBI, microsimulation analysis and public opinion surveys. However, a common drawback with many of these approaches is the difficulty with examining ‘general equilibrium’ or ‘community’ effects. Macroeconomic modelling is one tool used to explore these more difficult questions of what would happen if a UBI was implemented at the national level. In this paper, a review of existing (...) analysis of the macroeconomic effects of a UBI offers an insight into the assumptions, approaches and results of these studies and how these are interlinked. Recommendations are made to increase the diversity of models used and the mechanisms and contexts explored. (shrink)

This paper takes up the question of how videographic public announcements (VPAs)---i.e. videos that a wide swath of the public sees and knows that everyone else can see too--- have functioned to mobilize people politically, and how the presence of deepfakes in our information environment stands to change the dynamics of this mobilization. Existing work by Regina Rini, Don Fallis and others has focused on the ways that deepfakes might interrupt our acquisition of first-order knowledge through videos. But I (...) point out that even where every audience member takes a video to be veridical, where first-order knowledge acquisition is secure, an audience aware of deepfakes in their environment will not acquire higher order knowledge in the way that has erstwhile been characteristic for audiences of VPAs. Engaging with ideas from the literatures on public announcement logic, common knowledge, and convention, I enumerate a variety of ways in which we should expect this absence of higher order knowledge to throw up barriers to political mobilization. I go on to apply my analysis of VPAs to the mechanisms by which an uptick in publicly available videos of police brutality over the last decade, mediated by camera phones and social media, was responsible for the largest mass protests in US history in summer 2020. This makes vivid the stakes of the transformation in our mobilizing environment that I've claimed deepfakes effect: where we lose the common-knowledge-generating effects of VPAs, there are fresh obstacles to this sort of mass mobilization. (shrink)

This book is an investigation of the methodological and epistemological foundations of macroeconomic theory, based on an examination of the theories of Keynes and Lucas. It is divided into two parts. In the first Professor Vercelli discusses the methodological issues which lie behind the conflict among different schools of thought in macroeconomics. These issues are central to the current debate not only in many branches of economics, but also in other scientific disciplines. The traditional point of view of science (...) based on equilibrium, stability and determinism has been increasingly challenged by a new point of view in which disequilibrium, instability and uncertainty play a crucial role. This, the author argues, is bound to put macroeconomics in a new, more promising position. In the second part of the book the author compares the two main alternative research programmes in macroeconomics: that outlined by Keynes in his 'General Theory', and that suggested by Lucas, the leader of the new classical economists. (shrink)

Macroeconomic fluctuations in interest rates, exchange rates, and inflation can be considered sources of good or bad “luck” for corporate performance if management is unable to adjust operations to these fluctuations. Based on a sample of 2,091 US firms, we decompose the impacts of macroeconomic fluctuations on three measures of CEO compensation. Our study provides empirical support for the importance of considering macroeconomic fluctuations in designing CEO incentive schemes. It adds to the managerial power literature on moral (...) hazard and CEO compensation by pinpointing the obvious risk that the CEO in an asymmetric and non-linear reward system will be inclined to prioritize his/her own cash flow at the expense of fulfilling an assumed agency role. The policy conclusion for remuneration committees and board of directors is to filter out macroeconomic influences on performance to be rewarded whenever an asymmetric compensation scheme has been opted for. (shrink)

Jean-Paul Fitoussi needs no introduction as one of the world's foremost Macroeconomists of his generation. This celebration of his work includes contributions from Nobel Prize - winning economists Robert W. Clower and Robert Solow as well as Olivier Blanchard and leading economic theorist, Edmond Malinvaud.

In these two volumes, a group of distinguished economists debate the way in which evidence, in particular econometric evidence, can and should be used to relate macroeconomic theories to the real world. Topics covered include the business cycle, monetary policy, economic growth, the impact of new econometric techniques, the IS-LM model, the labour market, new Keynesian macroeconomics, and the use of macroeconomics in official documents.

In these two volumes, a group of distinguished economists debate the way in which evidence, in particular econometric evidence, can and should be used to relate macroeconomic theories to the real world. Topics covered include the business cycle, monetary policy, economic growth, the impact of new econometric techniques, the IS-LM model, the labour market, new Keynesian macroeconomics, and the use of macroeconomics in official documents.

In this work, we present a multi-agent logic of knowledge and change of knowledge interpreted on topological structures. Our dynamics are of the so-called semi-private character where a group G of agents is informed of some piece of information \, while all the other agents observe that group G is informed, but are uncertain whether the information provided is \ or \. This article follows up on our prior work where the dynamics were public events. We provide a complete axiomatization (...) of our logic, and give two detailed examples of situations with agents learning information through semi-private announcements. (shrink)

In the literature, different axiomatizations of Public Announcement Logic (PAL) have been proposed. Most of these axiomatizations share a “core set” of the so-called “reduction axioms”. In this paper, by designing non-standard Kripke semantics for the language of PAL, we show that the proof system based on this core set of axioms does not completely axiomatize PAL without additional axioms and rules. In fact, many of the intuitive axioms and rules we took for granted could not be derived from the (...) core set. Moreover, we also propose and advocate an alternative yet meaningful axiomatization of PAL without the reduction axioms. The completeness is proved directly by a detour method using the canonical model where announcements are treated as merely labels for modalities as in normal modal logics. This new axiomatization and its completeness proof may sharpen our understanding of PAL and can be adapted to other dynamic epistemic logics. (shrink)

Ricoeur’s hermeneutics provides us with an important and original account of the meaning and the implications of the “ontological turn” that has taken place in hermeneutics since Heidegger’s work. By means of the pair ontologisation and hermeneutisation, which is borrowed from Jean Grondin, this paper examineshow Ricoeur rethinks the relation between being and language. Distancing itself from Nancy’s critique of Ricoeur’s hermeneutics, this paper first shows thatRicoeur’s hermeneutic ontology should not be understood as a “secondary” form of hermeneutics. Rather, it (...) provides us with a critical revision of Heidegger’s “primordial” hermeneutics that is centered on the notion of announcement. Secondly, it shows how, by this revision, Ricoeur does not only develop an alternative to Heidegger’s accounts of announcement and attestation, but also to Derrida’s account of equivocity. (shrink)

We develop intuitionistic public announcement logic over intuitionistic \({\textbf{K}}\), \({{\textbf{K}}}{{\textbf{T}}}\), \({{\textbf{K}}}{{\textbf{4}}}\), and \({{\textbf{S}}}{{\textbf{4}}}\) with distributed knowledge. We reveal that a recursion axiom for the distributed knowledge is _not_ valid for a frame class discussed in [ 12 ] but valid for the restricted frame class introduced in [ 20, 26 ]. The semantic completeness of the static logics for this restricted frame class is established via the concept of pseudo-model.

ABSTRACTWe investigate the applicability of Rodrik’s accounts of model selection and horizontal progress to macroeconomic DSGE modelling in both academic and policy-oriented modelling contexts. We argue that the key step of identifying critical assumptions is complicated by the interconnectedness of the common structural core of DSGE models and by the ad hoc modifications introduced to model various rigidities and other market imperfections. We then outline alternative ways in which macroeconomic modelling could become more horizontally progressive.

This article investigates the announced refusal to answer as a form of dispreferred and challenging response in broadcast political interviews. The aim is to study how the rightness and wrongness of conduct is dealt with in situations of announced refusal. More specifically, the paper focuses on: announced refusal as a particular type of conduct; the orientation to norms and accountability in situations of announced refusal; how the legitimacy of politics and journalism is negotiated in broadcast interviews. The data consist of (...) 23 cases from Swedish election campaigns, and the analysis is based on Conversation Analysis, focusing on how the participants treat themselves and others as normatively accountable. The study indicates that the politicians understand themselves as accountable and avoid hostile actions in the interviews. Their refusals are designed mainly to be understood as appropriate distancing actions without explicitly complaining about the interviewers’ conduct. (shrink)

This paper has two goals. The first is to fill a gap in the literature on inductive risk by exploring the relevance of the notion of inductive risk to macroeconomics and monetary policy. The second goal is to draw some general lessons about inductive risk from the case discussed. The most important of these lessons is that the notion of inductive risk is no less relevant to the relationship between the proximate and distal goals of policy than it is to (...) the relationship between policies and their goals. (shrink)

Macroeconomic events often require individuals and policy-makers to make decisions that they are not accustomed to making. For example, a sovereign debt crisis makes it necessary to either default on government debt, increase taxes, cut public spending or to impose a mixture of these measures. I argue that decisions on such matters are not derived from deep preferences; they require reflections and judgement under uncertainty. Past experiences and the interaction with other individuals are likely to influence the salience of (...) preferences in the situations of decision making. Using a simple model, I illustrate how the salience of preferences changes with different degrees of individuality and conformity. Individuality is associated with the importance of private habits, while conformity is related to the perceived dissonance between initial intuitions and social opinions. The results obtained from simple simulation exercises stress that a high degree of conformity or a low degree of individuality may lead to overreactions when social opinion makers err for a short period of time. At the same time, a low degree of conformity or a high degree of individuality or leads to delayed adjustments to new circumstances. (shrink)

The outline of modern macroeconomics took shape in Britain in the early nineteenth century thanks, in part, to David Ricardo, one of the most influential economists of the time. Britain was challenged by monetary inflation, industrial unemployment and the loss of jobs abroad. Ricardo pointed the way forward. As a financier and Member of Parliament, he was well versed in politics and commercial affairs. His expertise is shown by the practicality of his proposals, including the resumption of the gold standard, (...) which was essential given the destabilizing policy of the Bank of England. Ricardo's expertise appears also in his debate with T. R. Malthus about whether an industrial economy can suffer a prolonged depression. Say's Law of Markets and the Quantity Theory of Money figure prominently in his works, but not in an extreme form. He was instead a subtle theorist, recognizing the non-neutrality of money, trade depressions and unemployment. (shrink)

Source: Author: Mohsen Mehrara, Yazdan Gudarzi Farahani, Farzan Faninam, Abbas Rezazadeh Karsalari This paper examines the relationship between stock market index and macroeconomic policies on Iran's economy using quarterly data in the period 1999-2013. This study employed cointegration test and vector autoregressive models to examine relationships between the stock market index and the macroeconomic variables. The empirical results reveal that a positive money shock can increase stocks return. According to impulse responses, the government expenditure had a slight impact (...) on stocks return in the short term. But the government expenditure has a positive effect on exchange index in long run. Also the effect of taxes on the stock's price index is negative, so that it reaches its maximum level after the third lag and then alleviates. The GDP shock has positive effect on the stock's price index. Increase in production level leads to increase in earnings and profitability, leading to a positive response from stocks index. Therefore the results showed that the macroeconomic variables such as inflation, exchange rate and GDP have significant effects on Tehran exchange price index. So the hypothesis that the improving economic factors can have a useful role in the booming capital market is confirmed. Also the effect of fiscal policy factors such as tax revenues and government expenditures is more than monetary policy factors on stock returns. ]]>. (shrink)

This is a survey of bounded rationality, an area of theoretical macroeconomics which is receiving increased attention. The book is written by a leading macroeconomist who outlines the issues involved, describes some of the analytic tools that are being used, and shows how they can be applied in a range of models. It points to further potential positive developments of the theory as well as some of its limitations.

The Methodology of Empirical Macroeconomics stakes out a pragmatic middle-ground between traditional, prescriptive economic methodology and recent descriptive methodology. The former is sometimes seen as arrogantly telling economists how to do their work and the latter as irrelevant to their practice. The lectures are built around a case study of a concrete example of macroeconomic analysis. They demonstrate that economic methodology and the philosophy of science offer insights that help to resolve the genuine concerns of macroeconomists. Some examples of (...) questions addressed include: What is the relationship between theoretical models and empirical observations? What is the relevance of macroeconomics to policy? Should macroeconomics be viewed as a special case of microeconomics? What is the place of long-standing philosophical issues in macroeconomics, such as the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality? (shrink)

We formalize what it means to have permission to say something. We adapt the dynamic logic of permission by van der Meyden (J Log Comput 6(3):465–479, 1996 ) to the case where atomic actions are public truthful announcements. We also add a notion of obligation. Our logic is an extension of the logic of public announcements introduced by Plaza ( 1989 ) with dynamic modal operators for permission and for obligation. We axiomatize the logic and show that it (...) is decidable. (shrink)

Macroeconomics is evolving in an almost dialectic fashion. The latest evolution is the development of a new synthesis that combines insights of new classical, new Keynesian and real business cycle traditions into a dynamic, stochastic general equilibrium model that serves as a foundation for thinking about macro policy. That new synthesis has opened up the door to a new antithesis, which is being driven by advances in computing power and analytic techniques. This new synthesis is coalescing around developments in complexity (...) theory, automated general to specific econometric modeling, agent-based models, and non-linear and statistical dynamical models. This book thus provides the reader with an introduction to what might be called a Post Walrasian research program that is developing as the antithesis of the Walrasian DSGE synthesis. (shrink)

Prior stock repurchase studies have found evidence that the announcement of a repurchase program sends a positive signal to the market. Firms engaging in open-market repurchase programs do not have to report how, when, and if they actually repurchased any shares. Evidence following the stock market crash of 1987 indicates that many firms announcing repurchase plans did not actually repurchase any share and, by their own admission, had no intention of repurchasing shares. Companies announcing plans and not following through are (...) apparently within the letter of the law. However, we argue that companies announcing plans with no intention of repurchasing shares are guilty of either lying or sending false signals. These companies create distrust in the investment community and intentionally mislead the public in violation of the SEC's antifraud provisions. Changes in the reporting procedures concerning repurchase plans are ethically and legally warranted. (shrink)

This note focuses on George Soros's challenge to macroeconomics and finance theory that any valid methodology of social science must explicitly recognize fallibility in a Knightian sense. We use a simple algebraic example to sketch how extant models formalize fallibility. We argue that contemporary theory's epistemological and empirical difficulties can be traced to assuming away fallibility in a Knightian sense. We also discuss how imperfect knowledge economics provides a way to open mathematical models to such fallibility, while preserving economics as (...) an empirical science. (shrink)