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Financial contagion : An empirical investigation of the relationship between financial-stress indexes of Australia and the US

- Mukulu, Sandra, Hettihewa, Samanthala, Wright, Christopher

  • Authors: Mukulu, Sandra , Hettihewa, Samanthala , Wright, Christopher
  • Date: 2014
  • Type: Text , Journal article
  • Relation: Journal of Applied Business and Economics Vol. 16, no. 3 (2014), p. 11-34
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  • Description: A key departure in this study from many earlier studies is that, on the continuum of financial stress from nil to very high, both very high levels of stress and very low levels are seen as being harmful and potential harbinger of a financial-market crisis. Specifically, a surfeit of stress can act as a tipping point into crisis and a dearth of stress can encourage hubris and increase a nation’s susceptibility to financial contagion from another nation; even one that is far removed by geographic and/or economic distance. This paper focuses on developing financial stress indices for the US and Australia using composite market indices, trade weight indices and yields on securities with different maturity dates. Monthly data from January 1989 to December 2011 was sourced from the Australian Bureau of Statistics (ABS), the Reserve Bank of Australia (RBA), the Federal Reserve Bank (FRB), the Bureau of Economic Analysis (BEA), the Federal Reserve Bank of St Louis website, Bank of Canada, Reserve Bank of New Zealand and Yahoo finance website. For purposes of this study the aggregate measures of stress consists of inverted yield spreads, volatility measures for market indices, volatility measures of trade weighted indexes, risk spreads, credit risk spreads and a measures of risk in the equity market.

Tracking macroeconomic responses to accumulated alpha and changing currency dominance

- Wright, Christopher, Hettihewa, Samanthala

  • Authors: Wright, Christopher , Hettihewa, Samanthala
  • Date: 2009
  • Type: Text , Journal article
  • Relation: Journal of Applied Business and Economics Vol. 9, no. 1 (2009), p. 81-94
  • Full Text: false
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  • Description: This paper examines the empirical outcomes of the policies of nine monetary authorities (eight OECD nations and the Euro zone) so as to infer the strength and stability of the economic relationships behind those policies. Governments, responding to earlier rampant inflation, have in recent decades avowed to pursue monetary policies to maintain inflation at a low stable rate. In recent decades, the relationship between inflation and money supply, that is postulated in the received wisdom and confirmed by decades of observation, appears to be breaking down. In examining possible causes of this instability, this paper sees on-going changes in the velocity-of-money to be less plausible than shifting dominance in world currencies or the creative destruction of technological progress. This paper suggests the relative monetary stability of recent decades may be less achievable in the future.
  • Description: 2003007347

Junior Mining Sector capital-raisings: The effects of information asymmetry and uncertainity issues

- Iddon, Casey, Hettihewa, Samanthala, Wright, Christopher

  • Authors: Iddon, Casey , Hettihewa, Samanthala , Wright, Christopher
  • Date: 2013
  • Type: Text , Journal article
  • Relation: Journal of Applied Business and Economics Vol. 15, no. 3 (2013), p. 56-67
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  • Reviewed:
  • Description: While prospecting by junior mining companies (JMCs) is a vital contributor to modern wealth creation, attributes of the junior mining sector (JMS) limit JMC-fund raisings to external equity (shares). In considering responses by JMC principals to deep discounting and other JMC-investor strategies, potential responses were found to: increase returns to principals, increase JMS moral-hazard issues, and further deepen price discounts on JMC share offerings, especially IPOs. It is suggested that the attractiveness and moral-hazard consequences of these potential responses can be greatly diminished if mining-tenement fees are raised and JMC prospecting costs are allowed as an offset against those fees
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