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Agricultural growth is closely associated with sustainable economic development. This is especially true from the perspective of developing countries, such as Indonesia and Pakistan, where significant portions of the labour force are dependent on agriculture for their livelihood. This paper aims to examine the effects of macroeconomic policy (i.e. monetary policy) on employment, food inflation, and agricultural growth by analysing to what extent monetary policy is effective in controlling food price inflation, the effect of contractionary monetary policy on the agricultural sector’s employment and productivity, and the extent of monetary policy transmission to money market rates and 10-year interest rates. We employed a factor-augmented vector autoregressive model proposed by Bernanke et al. (2005) to agricultural data from 1995 and 1996 to 2016 for Indonesia and Pakistan, respectively. Main findings of the study demonstrate that tight monetary policy significantly reduced food inflation and agricultural production while increasing the rural unemployment rate. Short-term and 10-year interest rates increased owing to the contractionary monetary policies pursued by both countries. An inclusive monetary policy whereby policymakers work alongside governments to achieve price stabilisation and reasonable employment rates is recommended.

Central bank digital currencies (CBDCs) give rise to many possibilities including those of negative interest rates. A two-period decision model is presented between one central bank and one representative household. The central bank applies the Taylor (1993) rule to choose its interest rate. The household allocates its resources strategically to production, consumption, CBDC holding, and non-CBDC holding. The results are determined analytically and illustrated numerically by varying 19 parameter values. Interesting novelties of the article are that the central bank may choose negative CBDC interest rates when the household holds far more CBDC than non-CBDC, for low inflation rates, low real interest rates, low household’s potential production, low weight assigned to inflation in the Taylor (1993) rule, high target inflation rate, and high household’s production parameter. That usually causes the household to decrease its CBDC holding and increase its non-CBDC holding, production and consumption. The central bank may increase its CBDC interest rate to compete with an increasing non-CBDC interest rate if the household’s transaction efficiencies for CBDC and non-CBDC increase, or the household’s transaction efficiency for consumption decreases. Shocks to production, inflation and interest rates are analyzed.

In a two-period decision model, a central bank chooses a CBDC (central bank digital currency) interest rate and a representative household allocates resources into production, consumption, CBDC holding, and non-CBDC holding. The model’s analytical results and a plausible benchmark are compared with the empirics for the US, China and Russia. Interesting novelties of the article are that the model predicts that the US in 2021/2022 should choose  rather than 0.125% CBDC interest to combat its high October 2021 empirical inflation of 6.2%. That would induce households to hold more CBDC, hold less non-CBDC, and produce and consume less. In contrast, the model predicts that China should choose a low  rather than  CBDC interest rate. That would decrease each household’s CBDC holding and increase the low inflation. The model predicts that Russia should choose  rather than  CBDC interest rate. Russia’s strategy is remarkably consistent with the model’s predictions. The model predicts that the central bank should choose negative CBDC interest rate when the inflation and real interest rate are low, and the inflation target is high. The article shows how extremely high inflation, which increases the CBDC interest rate, makes production and consumption nearly impossible, unless the real interest rate is extremely negative.

Almost 2 years, the world has been facing the COVID-19 attack, there is no exception including Indonesia, which incidentally is a developing country. During the pandemic, various industries in all sectors experienced a decline in sales so that they need an injection of funds from investment where with the presence of investors, industry movements, include of small, medium, and large industries could increase and have an influence on national economic growth and development. As a country that has many islands, of course investment as a very important economic sector. Many factors influence developments in an area, some of which are inflation, interest rates, and the economy of each region. To see the development of investment in Indonesia during the COVID-19 pandemic (2020-2021Q3), this study uses panel data to be more specific and detail. The result of the research is that interest rates affect investment developments, while inflation and economic growth have no effect on investment developments in Indonesia.

This study aimed to investigate economic growth (RGDP) and its determinants such as internal debt (INDT), external debt (EXDT), interest rate (RINR), exchange rate (REXR) and trade openness (OPEN). Quarterly data from 1986-2021 used for this investigation were extracted from Central Bank of Nigeria.  Exploratory data analysis (EDA) revealed linear dependence of RGDP and the aforementioned determinants. The EDA and the variance inflation factor revealed the presence of multicollinearity caused by the INDT. As a result of this, the ridge regression method was used and it was found that the multicollinearity problem was addressed with appropriate ridge constant K= 0.29. Hence, ridge regression technique with constant K= 0.29 was a robust method to predict economic growth in Nigeria using the explanatory variables under consideration. Thus, served as a great benefit to the policy makers as the study provided a better understanding of the economic growth and the aforementioned determinants in terms of relationship and in particular the set back caused by EXDT on the economy of Nigeria. Also, the researchers benefited from this study as it engendered the understanding of the appropriate estimation technique to be used when the presence of multicollinearity was established in fitting a linear model. 

This article's main goal is to evaluate the degree of fiscal dominance in Uruguay in 1999-2019 to improve the understanding of economic policy for theoretical reasons and applied needs related to good practices and accountability. Two strategies are followed: one, to quantify the fraction of fiscal expenditures that are financed by monetary liabilities and, the other one, to analyze the effects of fiscal deficit on the price level and inflation because inflationary financing may prevent the central bank from reaching its inflation target. Both situations may subordinate the monetary policy to the fiscal policy, signaling fiscal dominance. In addition, through the analysis performed to assess the degree of fiscal dominance, it is possible to detect the main determining factors of the Uruguayan price level (inflation) formation during the last two decades. So far, preliminary results suggest that inflation is not exclusively a monetary phenomenon and point to some inflationary financing with a mild degree of fiscal dominance.