Abstract This paper examines interest rate pass-through in an economy characterised by persistent structural liquidity in the banking sector, using North Macedonia as an analytically informative case. Excess liquidity reduces commercial banks' reliance on central bank and interbank funding, potentially weakening monetary transmission. Using a dynamic autoregressive distributed lag and error-correction (ARDL/ECM) framework augmented with a liquidity conditioning variable, we jointly estimate both stages of transmission: from the policy rate to interbank rates and from interbank rates to lending rates. The results show that elevated liquidity dampens both the strength and speed of pass-through by reducing interbank rate responsiveness and moderating lending rate adjustments. These findings indicate that in banking systems with structural liquidity surpluses, conventional interest rate policy alone may be insufficient, highlighting the importance of complementary instruments to strengthen transmission effectiveness.
Local government attention to green development (LGAGD) can signal to firms about their work priorities and resource allocation, prompting them to implement more pollution-reduction actions. Taking the listed manufacturing firms in China from 2010 to 2020 as the research sample, this study employs textual analysis techniques to quantify LGAGD and examines how LGAGD affects firm pollution emissions. Our research indicates that LGAGD can substantially reduce firm pollution emissions. The underlying mechanism is that LGAGD can promote firm pollution reduction through enhancing green innovation and increasing environmental protection investment. Heterogeneity analysis reveals that the pollution-reduction effect of LGAGD is more significant in the eastern regions, in firms with high digitalisation levels, high levels of equity incentives, and in non-state-owned firms. This study not only expands the body of research on firm pollution reduction by introducing the novel lens of LGAGD, but also offers policy insights for nations aiming to foster environmentally sustainable business practices.
This study investigates the determinants of economic growth by comparing advanced (G7) and emerging (E7) economies over the period 1995-2023. Employing the Method of Moments Quantile Regression (MM-QR), the research captures distributional heterogeneity that conventional mean-based estimators often overlook. The analysis focuses on a broad set of growth drivers, including institutional quality, capital formation, education, trade openness, taxation, natural resource dependence, unemployment, fertility, and CO2 emissions. The results reveal a pronounced divergence between the two groups. In G7 economies, robust institutional frameworks and the successful decoupling of growth from emissions underpin sustainable development, while trade openness has negative effects associated with deindustrialization pressures.In contrast, E7 economies continue to rely on resource- and carbon-intensive growth paths, constrained by weaker institutions and structural deficiencies in education that generate significant skill mismatches. Capital formation and natural resource rents emerge as primary drivers of growth in the E7, though with diminishing returns at higher growth levels. The findings also indicate asymmetric causal relationships: institutions reinforce growth in advanced economies, whereas in emerging economies, growth precedes institutional strengthening. Overall, the study contributes to debates on regional disparities by highlighting the structural asymmetries that shape heterogeneous growth trajectories and outlining policy implications for fostering inclusive and sustainable development.
This paper explores how different forms of government intervention relate to life satisfaction. To examine this connection, we use World Happiness Report scores (2005-2022) for 46 high-income and upper-middle-income countries classified by the World Bank. To assess the impact of government intervention, we measure it through public expenditure, divided into ten subcomponents according to the International Monetary Fund (IMF)'s classification of functional public expenditures. Employing the two-step system generalized method of moments (GMM), we analyse the impact of each expenditure category on average life satisfaction. Our regression analysis reveals a positive relationship between increased government spending and higher life satisfaction, challenging the idea of government failure. In particular, government spending in education, healthcare, and social protection-sectors that generate positive externalities and are integral to the welfare state-appears to improve life satisfaction. These findings lend support to market failure theory, emphasising the role of government in addressing positive externalities. Regarding other control variables, we find that government effectiveness and GDP per capita are both positively linked to life satisfaction. However, population follows an inverted U-shaped pattern, meaning that beyond a certain point, further population growth may negatively affect well-being. Additionally, rising unemployment is associated with a decline in life satisfaction. This study contributes to the literature by showing that different forms of government intervention are associated with life satisfaction in different ways. In policy terms, the findings suggest that prioritising education, health, and social protection may improve well-being.
There have been ongoing gender inequalities regarding labour market attainment. This study aims to explore and provide fresh insights into the predictive association between female labour force participation and its main determinants, including economic well-being, fertility rate, educational enrollment, and economic risk, in Turkey over the period 1990Q1-2020Q4. The causal relationship between the variables is investigated using the frequency-domain causality test proposed by Breitung-Candelon (2006) and the time-varying causality test developed by Shi et al. (2018, 2020). According to the empirical results, there is a statistically significant predictive association between female labour market attainment and the main determinants considered in the study. The causality is apparent across different spans and frequencies. Empirical findings have implications for policy-making to improve female labour-market attainment in Turkey and for research in the field. To inform potential policy frameworks to improve female labour force participation in Turkey, the results of the time-varying causality test suggest that policies should be dynamic rather than static, accounting for economic and social structural changes at the country and global levels.
