Template-Type: ReDIF-Article 1.0 Author-Name: Ruta Baneliene Author-Name-First: Ruta Author-Name-Last: Baneliene Author-Email: ruta.baneliene@vgtu.lt Author-Workplace-Name: Vilnius Gediminas technical university Author-Name: Borisas Melnikas Author-Name-First: Borisas Author-Name-Last: Melnikas Author-Email: borisas.melnikas@vgtu.lt Author-Workplace-Name: Vilnius Gediminas technical university Title: THE SHADOW ECONOMY IN THE EASTERN PARTNERSHIP COUNTRIES: MODELLING AND ESTIMATING IN THE CONTEXT OF THE NEEDS TO DEVELOP ECONOMIC COOPERATION BETWEEN THE EUROPEAN UNION AND EASTERN PARTNERSHIP COUNTRIES Abstract: The paper deals with a highly complicated problem related to the development of economic relations between the European Union and the so-called Eastern Partnership countries ? Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The essence of the problem is the extremely excessive level of the shadow economy in the Eastern Partnership countries: the shadow economy considerably affects the situation in the Eastern Partnership countries and it causes in addition a profound negative impact on the economic cooperation with the European Union.The assessment and monitoring of shifts in shadow economies in the Eastern Partnership countries is a crucial issue for the European Union, in particular to make responsible and reasoned policy decisions on the economic cooperation between the European Union and the Eastern Partnership countries. This fact leads to the needs to create and use adequate instruments for modelling and evaluating the shadow economy.The opportunities of using various tools for modelling and evaluating the shadow economy are discussed herein.The main focus of attention is directed to the new integrated approach to shadow economy modelling: this approach is distinguished by the fact that the shadow economy is analyzed and assessed in a holistic manner upon taking into account the different aspects of economic life and economic development processes. A new model applicable to the assessment of the shadow economy in the Eastern Partnership countries is described; this model is based on the idea of the so-called Tanzi model and was developed by covering the traditionally used independent variables such as taxes, wages and salaries, as well as the new modified indicators.The paper describes empirical research on modelling and estimating of the scope and dynamics of the shadow economy in the Eastern Partnership countries, as well as the principal results of the said research. It has been shown that the shadow economy in the Eastern Partnership countries is highly, extensively and even dangerously developed. The results of the research show an existence of a link between the size of the shadow economy and the control of corruption, but this link is very diverse in different countries.The methodological approach and research results presented in the paper can be used to create a decision support system for the development of the economic relations between the European Union and the Eastern Partnership countries. Classification-JEL: C33, D78, E17 Keywords: shadow economy, underground economy, tax evasion, income tax, total taxation, Eastern Partnership countries Journal: International Journal of Economic Sciences Pages: 1-19 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17433 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17433?download=1 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:1-19 Template-Type: ReDIF-Article 1.0 Author-Name: Klára ?ermáková Author-Name-First: Klára Author-Name-Last: ?ermáková Author-Email: klara.cermakova@vse.cz Author-Workplace-Name: University of Economics in Prague Author-Name: Emilie Ja?ová Author-Name-First: Emilie Author-Name-Last: Ja?ová Author-Email: entropa@seznam.cz Author-Workplace-Name: University of Economics in Prague Title: Analysis of the Negative and Positive Impact of Institutional Factors on Unemployment in Visegrad Countries Abstract: The objective of our analysis is to associate V4 Member States indicators with the selected institutional factors of the labour market. In addition, it aims at extending the Sekhon?s standard model for inflation with institutional factors. For the purposes of estimating the NAIRU in V4 countries, we intend to use the Kalman filter method with a higher than common smoothing coefficient. The model?s data will produce a specific period in which the institutional factors actually have a negative effect or positive effect onto the unemployment rate in individual countries. Finally, the analysis of the character and intensity of the impact of institutional factors onto the unemployment rate in individual V4 countries should indicate space for a wider application of institutional characters by economic policymakers. They should be warned about the threat of overusing the institutional factors having a negative effect onto the development of both structural and cyclical unemployment. Classification-JEL: E24, E32, E37 Keywords: Institutional factors, NAIRU, minimum wage, collective agreements, tax wedge, define-term employment Journal: International Journal of Economic Sciences Pages: 20-34 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-6943 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-6943?download=2 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:20-34 Template-Type: ReDIF-Article 1.0 Author-Name: Jun Gao Author-Name-First: Jun Author-Name-Last: Gao Author-Email: jun.gao@ucc.ie Author-Workplace-Name: University College Cork, Ireland Author-Name: Sheng Zhu Author-Name-First: Sheng Author-Name-Last: Zhu Author-Email: sheng.zhu@ucc.ie Author-Workplace-Name: University College Cork, Ireland Title: A New Structural Analysis of Inflation and Economic Activity Abstract: We theoretically investigate the role of expectations in modelling economic activity and the evolution of inflation rates. The New Keynesian Phillips-IS model is extended in our study by having two types of firms with a fraction of firms that uses ?limited? information to develop their expectations. The remaining firms, which are referred to as forward-looking, would use all information available to set prices and make manufacturing budgets. Then we use UK data to examine the robustness of our extension. To estimate our augmented model, we employ the Uhlig (2005) priori restrictions and the Nakajima (2011a) time-varying parameter regression. Our results suggest that the expectations of each type of firms play an important role in explaining the inflation rate and real economic growth in the UK. Classification-JEL: C11, E12, E31 Keywords: Phillips curve, IS curve, expectations, time-varying parameter regression Journal: International Journal of Economic Sciences Pages: 35-51 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17384 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17384?download=3 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:35-51 Template-Type: ReDIF-Article 1.0 Author-Name: Abdul Haque Author-Name-First: Abdul Author-Name-Last: Haque Author-Email: ahaque@cuilahore.edu.pk Author-Workplace-Name: Department of Economics, COMSATS University Islamabad, Lahore Campus Author-Name: Sohaib Asif Author-Name-First: Sohaib Author-Name-Last: Asif Author-Email: sohaibasif@gmail.com Author-Workplace-Name: Department of Management Sciences, COMSATS University Islamabad, Lahore Campus Campus Author-Name: Muhammad Ali Jibran Qamar Author-Name-First: Muhammad Ali Author-Name-Last: Jibran Qamar Author-Email: majqamar@cuilahore.edu.pk Author-Workplace-Name: Department of Management Sciences, COMSATS University Islamabad, Lahore Campus Author-Name: Ammar Abid Author-Name-First: Ammar Author-Name-Last: Abid Author-Email: ammarabid@cuilahore.edu.pk Author-Workplace-Name: Department of Management Sciences, COMSATS University Islamabad, Lahore Campus Title: Financial Distress of Companies and Cash flow-Investment-Sensitivity: Evidence from Panel of Non-Financial Firms Abstract: This paper aims to investigate the effects of cash flow-investment sensitivity over firms facing varying levels of financial distress. For this purpose, cash flow, dividend policy, firm?s age, and size are used to create subsamples of firms facing different degrees of financial constraints. Using an unbalanced panel of 336 non-financial firms listed at Pakistan Stock Exchange over the period from 2006 to 2017, we provide evidence that the prevailing financial constraints affect the investment decisions of sample firms. Financial distress, as identified by cash flow, dividend policy and size of the firm, increases with the rise of cash flow-investment-sensitivity, thus substantiating the use of these measures as indicators of financial distress. Furthermore, evidence of the U-shaped investment curve is found when the sample is split on the basis of cash flow, suggesting a non-linear relation between cash flow and investment. The results shed light on the relation between financial and real cycle downturns suggesting the need for economic policies to be countercyclical with respect to financial and credit conditions. Classification-JEL: C23, E22, G30 Keywords: Corporate Investment, Financial Constraints, Cash Flow Investment Sensitivity Internal Funds, U-Shape Investment Curve Journal: International Journal of Economic Sciences Pages: 52-67 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17441 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17441?download=4 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:52-67 Template-Type: ReDIF-Article 1.0 Author-Name: Arshad Ullah Jadoon Author-Name-First: Arshad Ullah Author-Name-Last: Jadoon Author-Email: arshadjadoon22@gmail.com Author-Workplace-Name: Northeast Normal University Changchun china Author-Name: Yangda Guang Author-Name-First: Yangda Author-Name-Last: Guang Author-Email: arshadjadoon22@gmail.com Author-Workplace-Name: Northeast Normal University Changchun china Title: THE EFFECT OF EXCHANGE RATE FLUCTUATIONS ON TRADE BALANCE OF PAKISTAN Abstract: This main goal of this study is to check the exchange rate fluctuations and its impact on trade balance in Pakistan. The annual time series data from 1971 to 2016 is used to check the short run and long run relationship between Exchange rate fluctuations trade balance of Pakistan. We employed the autoregressive distributed lag approach and results reveal that Exchange rate has positive and significant relationship with balance of trade in long run and short run. Devaluation of Pakistani rupees against USD, would increase the exports and ultimately trade balance will enhance. The inflation and money supply has negative and significant relationship with balance of trade in long run in Pakistan. The excess of money supply will increase inflation which reduces the exports and consequently, balance of trade would decrease. This study has a policy implications for government as well as local and foreign investors. The government should also play an important role to make such strategies which can increase the balance of trade in Pakistan and can boost the economic growth of Pakistan indirectly. Classification-JEL: P33, P34, F10 Keywords: Exchange rate, Balance of Trade, Inflation, Money Supply, exports. Journal: International Journal of Economic Sciences Pages: 68-80 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17429 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17429?download=5 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:68-80 Template-Type: ReDIF-Article 1.0 Author-Name: Ma?gorzata Just Author-Name-First: Ma?gorzata Author-Name-Last: Just Author-Email: malgorzata.just@up.poznan.pl Author-Workplace-Name: Pozna? University of Life Sciences, Faculty of Economics and Social Sciences Author-Name: Agnieszka Kozera Author-Name-First: Agnieszka Author-Name-Last: Kozera Author-Email: akozera@up.poznan.pl Author-Workplace-Name: Pozna? University of Life Sciences, Faculty of Economics and Social Sciences Author-Name: Aleksandra ?uczak Author-Name-First: Aleksandra Author-Name-Last: ?uczak Author-Email: aleksandra.luczak@up.poznan.pl Author-Workplace-Name: Pozna? University of Life Sciences, Faculty of Economics and Social Sciences Title: Conditional Dependence Structure in the Precious Metals Futures Market Abstract: The purpose of this paper was to assess the conditional dependence structure in the precious metals futures market in the period spanning from the beginning of 2000 to mid 2018. These time frames correspond to large fluctuations of quoted contract prices during the financial crisis. The dynamic Kendall?s tau coefficients and the dynamic tail dependence coefficients were used to assess the strength and dynamics of the nexus between rates of return on quoted prices of precious metals futures contracts. The coefficients were determined using the copula-based multivariate GARCH models, whereas the daily changes in the conditional dependence structure (changes in market state) were identified with the fuzzy c-means clustering method. In the study period, the conditional dependence structure in the precious metals futures market changed over time, as confirmed by the three identified market states. Of the contracts considered, gold and silver futures contracts demonstrated the strongest interrelationship and a relatively high likelihood of extreme events being transferred between them. Classification-JEL: C58, C32, Q02 Keywords: precious metals, copula-GARCH, dynamic dependencies, Kendall's tau coefficient, tail dependence, market states, fuzzy clustering method Journal: International Journal of Economic Sciences Pages: 81-93 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17414 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17414?download=6 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:81-93 Template-Type: ReDIF-Article 1.0 Author-Name: Ursula-Christiane Ouaďmon Author-Name-First: Ursula-Christiane Author-Name-Last: Ouaďmon Author-Email: christianegondje@yahoo.com Author-Workplace-Name: Hunan University Author-Name: Yabin Zhang Author-Name-First: Yabin Author-Name-Last: Zhang Author-Email: yabinzhang@hnu.edu.cn Author-Workplace-Name: Hunan University Title: Women?s participation in the labor market and Economic Development: Evidence from ECCAS and ECOWAS Countries Abstract: This paper examines the relationship between women?s participation in the labor market and economic development in ECCAS and ECOWAS over the period 2006-2015 by using dynamic panel data model. The analysis is run from two different perspectives ? on one hand, the relationship is investigated for a sample of 24 countries; and on the other hand ? the evidence is disaggregated and the relationship is re-examined with two regional blocs (ECCAS, ECOWAS). The OLS, fixed effects model, instrumental IV and the generalized method of moments (GMM) estimator developed by Arellano and Bond (1991) are employed to evaluate and account for dynamic effects. The main results show that there is a U-shaped relationship between female labor force participation and the economic development for the encompassing 24 countries. The findings are important for ECCAS and ECOWAS countries policy makers to undertake effective policies that can boost female labor force participation and enhance economic growth in their countries. Classification-JEL: C36, J21, O11 Keywords: Female labor force participation; economic development; panel data model; ECCAS; ECOWAS. Journal: International Journal of Economic Sciences Pages: 94-105 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17377 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17377?download=7 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:94-105 Template-Type: ReDIF-Article 1.0 Author-Name: ONA GRA?INA RAKAUSKIEN? Author-Name-First: ONA GRA?INA Author-Name-Last: RAKAUSKIEN? Author-Email: ona.rakaus@gmail.com Author-Workplace-Name: Mykolas Romeris University Author-Name: LINA VOLODZKIEN? Author-Name-First: LINA Author-Name-Last: VOLODZKIEN? Author-Email: lina.volodzkiene@gmail.com Author-Workplace-Name: Mykolas Romeris University Author-Name: VAIDA SERVETKIEN? Author-Name-First: VAIDA Author-Name-Last: SERVETKIEN? Author-Email: vaida.servetkiene@gmail.com Author-Workplace-Name: Mykolas Romeris University Title: ASSESSMENT OF WEALTH DIVERSITY (CASE OF LITHUANIA) Abstract: The high level of income and wealth distribution in the world is recognized as a phenomenon that leads to negative economic and social consequences. The imperfection of redistribution levers in the economy has created conditions for the concentration of resources, material goods and wealth in small population groups. Today, the economic system is not focused on majority of the population, and therefore the high level of inequality and its consequences for economic growth, well-being and human development cannot be ignored. In this context, too high economic inequality in Lithuania is one of the most sensitive problems of the country; Lithuania is an anti-leader in the European Union according to economic inequality.Conventionally, economic inequality is measured using such methods as distribution of income and consumption of the population, however, to find out the real level of inequality, wealth diversity should be studied as well. The main purpose of this article is to identify and emphasise wealth diversity as an inseparable part of economic inequality in Lithuania and, as a result, the poor quality of life and obstacles in the way of economic progress as well as to compare wealth inequality with income inequality in Lithuania.The authors organised a representative poll of Lithuanian citizens and used a certain survey to collect information about the dwelling-places or other types of assets owned by the respondents as well as to evaluate wealth diversity in the country. The results show that the edge value of the assets owned by the representatives between I and X deciles differs by 16.9 times. However, comparing the average prices of dwelling-places in deciles I and X, the difference amounts to 7.2 times. Assessing all types of assets, including accommodation, land, durable goods, etc., it has been revealed that the distribution of wealth exceeds the limit of income and consumption distribution established by various statistical organisations and by the authors themselves. The decile ratio (in relation to deciles I and X) equals to 40.8, thus, it considerably exceeds the level of income and consumption inequality. Classification-JEL: D63, E21, P46 Keywords: assessment of wealth diversity, assessment methodology, wealth inequality, wealth distribution, economic inequality, income inequality. Journal: International Journal of Economic Sciences Pages: 106-130 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17479 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17479?download=8 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:106-130 Template-Type: ReDIF-Article 1.0 Author-Name: Martha Rodriguez-Villalobos Author-Name-First: Martha Author-Name-Last: Rodriguez-Villalobos Author-Email: martha.rodriguezv@udem.edu Author-Workplace-Name: Universidad de Monterrey Author-Name: Antonio Julián-Arias Author-Name-First: Antonio Author-Name-Last: Julián-Arias Author-Email: jose.julian@udem.edu Author-Workplace-Name: Universidad de Monterrey Author-Name: Alejandro Cruz-Montańo Author-Name-First: Alejandro Author-Name-Last: Cruz-Montańo Author-Email: adrian.cruzm@udem.edu Author-Workplace-Name: Universidad de Monterrey Title: Effect of NAFTA on Mexico´s wage inequality Abstract: One of the benefits that the signing of the North American Free Trade Agreement (NAFTA) would bring to the country was the reduction of large differences in wages as a result of the increase in productivity. The present study measures the effect of demographic, labor, and sector variables on Mexico?s wage inequality during the period 1988 to 2017, as well as the impact that the incorporation to NAFTA has had. Through a fixed effects model, it was found that the increase in the proportion of people working in the service and agricultural sectors increased the wage gap, as well as the people who occupy managerial positions, since they obtained a relative salary higher than the average. Despite the expected results of NAFTA, this economic trade integration increased the wage differential in Mexico and these levels are invariant over time, giving way to proposals to change the minimum wage. Classification-JEL: F13, J31, O15 Keywords: wage inequality; income distribution; occupational analysis; sectorial analysis; NAFTA; fixed effects Journal: International Journal of Economic Sciences Pages: 131-149 Volume: 8 Issue: 1 Year: 2019 Month: June File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17383 File-URL: https://iises.net/international-journal-of-economic-sciences/publication-detail-17383?download=9 Handle: RePEc:sek:jijoes:v:8:y:2019:i:1:p:131-149