Economics Assignment: An Annotated Bibliography on Market Economy

Question

Task: Write an economics assignment presenting an annotated bibliography of 5 articles based on market economy.

Answer

1. Exchange rate volatility in the eurozone
Author: Oscar Bajo-Rubio, BurcuBerke, and David McMillan Date: 11thFebruary 2020
Link: http://www.economics-ejournal.org/economics/journalarticles/2020-5

Summary: According to the research on economics assignment, it is stated that in the past decade there has been a continuous deceleration seen in the international economy. The effect has been even more profound in the Eurozone where there level of exports have sharply fallen and even went to negative in some countries. The paper attempts to correlate the exchange rate volatility with the fall in exports across the Eurozone and especially in four large economies of the Eurozone, i.e. Spain, France, Germany and Italy have been analysed for the period between 1994 to 2014 to assess the volatility for both real and nominal exchange rates. In the analysis it was observed that these economies are not only large but the markets and exchange rates matured enough that there was no visible impact of the exchange rate volatility in the level of exports or to hamper the evolution of exports in any manner.

Reflection: The author(s) have chosen the biggest economies in the Eurozone in order to analyze the impact of the volatility of exchange rates on the level of exports. In opposition to the fixed exchange rates, the floating exchange rates are more reflective of the actual market and economic realities. But they are also subject to fluctuations due to various factors which is why they move from the equilibrium. The paper tried to corelate the movements in the exchange rates with the traded flow patterns after adjusting them for seasonality and other factors.

The empirical analysis showed that there is a strong downwards trend in the levels of international trade but when the exchange rate volatility of the individual countries there was no clear correlation between the two. The economies chosen were in themselves big, closely intertwined with the international market and the free market economy make them closer to the Efficient Market hypothesis and the falling levels of international trade can be attributed to the overall fall of international trade in the internal market due to global conditions which were already discounted in the exchange rates as well.

2. A utility theory of privacy and information sharing
Author: Julia M. Puaschunder
http://juliampuaschunder.com/
Julia.Puaschunder@columbia.edu
Julia.Puaschunder@princeton.edu
Article Published on: 1 Jul 2018

In economics, the basic phenomenon resolves around the attempt of people to maximize their utility. The Utility theory, in economics, is a primary theory about the choices and decisions of the people based on their preferences and choices. People innately wish to communicate but simultaneously, though, privacy stands as the value of core importance for man. Human beings make decision regarding the selection of information that they want to share along with the decision of to whom they want to give the access to the information in addition to this they still wish to protect a certain part of their-selves in the confidentiality. It is a codified virtue to protect the privacy of people all over the world in order to endorse the dignity of individual. The article reflects on the lack of any such utility theory in economics that can illustrate the conflict which arises from individual preference of people regarding communication and their value of privacy.

Reflection:This article binds with the first week of the lectures where we discussed that people make choices and their decisions based on the value of goods towards them. The utility of the good leads their decisions to keep how much good with themselves. In order to maximize their utility they can decide to share a certain part of the good with others. This article explains the same phenomenon of utility theory in a non-conventional way for the determination of the extent of communication and privacy decisions. The article further explains how the utility of the people maximizes with information sharing mechanism. But in this new age of media, behavioural economics observed the novel conflict among the civilized wish of human beings for communicating at the moment against the pooled information apprehended by the potential anonymous big-data compiler. The exponential privacy loss as well as the hyper hyperbolic potential risks of the future specific to the information-sharer is thereby incorporated as the shortcoming of decision making in behavioural economic.

The curve shows the many sets of information sharing value and risks associated with the privacy that is stored in big data compiles. It is to conclude here that the alternative options of extent of communication and privacy are weighted on the basis of the resultant costs which are further dependent upon the uncertain characteristics.

3. Air Pollution and Attendance in the Chinese Super League: Environmental Economics and the Demand for Sport

Authors: Nicholas M. Watanabe * , 1 , Grace Yan * , 1 , Brian P. Soebbing * , 2 and Wantong Fu * , 3
• 1 University of South Carolina
• 2 University of Alberta
• 3 The University of Mississippi
DOI: https://doi.org/10.1123/jsm.2018-0214

Article Published on: July 2019
Summary: The present article is written with the specific perspective of the consumer behaviour which we can tie with the initial lectures of our class. The article is an attempt to fill the gap in understanding the behaviour of sport consumers as a direct reaction to the polluted atmosphere. This article studies the air pollution specifically in relation to the crowd at the soccer sports of Chinese Super League. The researchers reflect that the consumers have adopted the behaviour of polluting the air in urban life by compromising on air quality for themselves as well as for others. The researches utilized the real data of air quality of different locations of China to study the factors that impact the presence of audience in CPL matches of 2014-16. The researchers concluded that the fans of CSL are indifferent to the air pollution level.

Reflection:Consumer behaviour is an important rule on which most of the theories of economics are based on. The consumers’ behaviour reflects on how consumers make decisions in certain conditions for the selection of goods/services, their consumption and their decision of disposing off the commodities. Normally the consumer behaviour is associated with the emotional and mental behaviour responses of the consumers. On the same rule the present study investigated into the factors which are responsible to determine the demand of sports in relation to the air pollution. The researchers with empirical evidences illustrated that the crowd does not reverse or decrease their demand for sports merely because of the issue of air pollution. It can be related with the fact that since the consumers are not facing any apparent harm in present due to the deteriorated air, so they become indifferent to the quality of air which they are breathing in. The fan-interest towards leagues and teams have more significant impact on the demand as well as the level of incomes of the fans and the holidays have direct relation on the demand for sport ignoring the fact that the poor quality of air is affecting badly their mental and physical health.

The figure illustrates the different factors which influences the consumer behaviour in personal, social and economic environments.

4. Developmental Cost Theory Predicts Thermal Environment and Vulnerability to Global Warming Authors: Dustin J. Marshall, Amanda K. Pettersen, Michael Bode & Craig R. White

Published on: 02 March 2020
Summary:This article relates to the cost theory of our initial lectures. But here in this research the researcher did not confined the study to the conventional cost theory but instead they spread the cost mechanism on the broader perspective. The researchers studied the cost of development on the environment. They also illustrated that how the minor changes in thermal environment are affecting the global nesting species which in unfavourable temperatures is required to either change their nest-site choice or their structure of their nests or else face the increasing costs development. The researcher pointed out with evidences that as the temperature rises the developmental costs also rise accordingly even though they show a decreasing trend initially but ultimately the global warming beyond optimal temperature level harms the environment and species which rises the costs of development. The article concluded that the developmental cost have relative systematically relatively association with the changes in temperature from optimal temperature than to survival temperature difference. Dependence upon temperature influences the continued existence as a consequence of global climate change and hence risks the entire population.

Reflection:The present article stresses upon the costs of development with respect to the environmental changes, thermal environment imbalances and issues of global warming. As the development apparently depend upon the rate of utilization of energy which is a direct determinant of the period of development. Hence, the dependency of development on temperature makes it conditioned with the thermal environment of the local area. The researchers are of the view that the small changes in temperature which are boosting the development on one hand are also responsible to rising the costs of development even to the survival of some or all species. The costs of development that are deteriorating the natural thermal balance of the environment put many terrestrial and aquatic species. These costs of development leave impacts even on the performance of post-development era.

5. The importance of trust distance on stock market correlation: evidence from emerging economics
Author: Yuan Liu
Date: 20th September 2019
Link: https://www.sciencedirect.com/science/article/pii/S2214845019302765

Summary: Monetary markets give liquidity as well as impact portfolio assignment and genuine area dynamic. For portfolio supervisors, the knowledge of the capital market linkage determinants boosts the global expansion quest. With respect to arrangement producers, it is one of the primary driver of budgetary guidelines to shield against money related infection and in this way improve monetary strength. The study examination adds to past discoveries by giving a key informative variable, trust separation, to contemplate the force of the relationships between's the securities exchange returns. The study has focused on analyzing the impact of trust separation measure mainly between 2 different nations on the aspect financial exchange connection among developing nations. The control factors are topographical separation, basic area sham; advertise size differential, respective exchange stream, GDP development differential, and showcase chance by unpredictability, and basic religion sham (Liu, 2020).

The outcome highlighted that the trust separation creates a negative impact mainly on the relationship of securities exchange which is the financial exchange returns. In the subsequent stage, the study re-tests the impacts inside the dynamic exchanging and the slight exchanging subgroups.

Reflection: The study presented herein economics assignment has improved my knowledge and also cleared the concept of trust distance on the stock market correlation. I learned that the small trust distance between the two nations is generally linked to higher stock market correlation. I also came to know that the high stock market correlation is higher in the actively trading countries such as the United States, Germany and many more. The study has conducted a very big quantitative analysis and the findings are quite important and valuable contribution to economic segment. The article has allowed me to understand how different formulas are used to the stock market correlation.

I would also state that the trust impact holds in the dynamic exchanging subgroups however not in the flimsy exchanging subgroups, this which affirms that the rare exchanging of the slight exchanging subgroups prompts deluding ends on relationship.