Panoeconomicus is an economic quarterly with a general orientation. We publish original scientific papers, scientific reviews, preliminary reports, conference papers, professional papers, polemics and book reviews.
Macroeconomic Crisis and Reforms in Serbia in the Period 1980-2023: An Econometric Analysis by Pavle Petrović Serbian Academy of Sciences and Arts, 2024.
Solo Struggle: Material Deprivation among Single-Parent Households in Türkiye
Single-parent households, particularly those led by women, face elevated levels of material deprivation. This study examines material deprivation among women-headed single-parent households in Türkiye using panel data from the Statistics on Income and Living Conditions (2018–2021) and employs censored fixed-effects quantile regression to capture distributional heterogeneity. A material deprivation index is constructed to reflect the distinct challenges faced by these households, thereby addressing a notable gap in the literature. The results reveal that the effects of sociodemographic characteristics, such as age, education, and employment status, vary substantially across the material deprivation distribution. In particular, older, less-educated, unemployed, or retired women tend to be more affected at medium-high and high levels of deprivation. These results highlight the necessity of tailored policy interventions that consider the heterogeneity of deprivation experiences among single mothers, especially those experiencing the most severe forms of deprivation. JEL: I32, J12, C23
Making Capital Democratic: A Reconstruction of State, Credit and Finance by Robert C. Hockett Polity Press, 2025.
The Pragmatism Trap: Economics in Crisis
As a discipline grounded in pragmatic methodology, economics has exerted wide interdisciplinary influence through its epistemological framework and research practices. However, despite its strong explanatory capacity, orthodox economics, covering both theory-oriented academic economics and policy-oriented political economics, exhibits limited predictive power. This paper argues that the root cause is the shift since the 1970s toward a more self-contained intellectual enterprise within the economics community. More precisely, the discipline has faced a paradigmatic crisis over the past fifty years, in which instrumental rationality—favoring methodological precision, temporal expediency, and sectoral optimization—has taken precedence over value rationality, with its focus on ethical evaluation, long-term sustainability, and holistic perspectives. Examining four dimensions—disciplinary imbalances, methodological limits, theoretical presuppositions, and socio-institutional implications—this study argues that prioritizing instrumental over value rationality continues an Enlightenment-style scientific hegemony rooted in a misreading of pragmatic epistemology. JEL: A1, B0, E0, H0, P0.
Rethinking Economic Liberalization: A Progressive Approach to Reform by Jonah D. Levy Edward Elgar Publishing, 2025.
The Redistribution of Freedom: Normative Analysis of the Universal Basic Income
Given the rapid structural changes that our societies are experiencing, there is an urgent need to rethink our values and reformulate the social contract. The Universal Basic Income (UBI) is gaining more relevance in academic and public debates as the best alternative for a necessary change. This paper presents an exhaustive evaluation of the UBI in its normative character with an assessment of its convenience according to different theories of social justice and concepts of freedom. It is argued that UBI can be a good tool to improve the freedom and well-being of individuals, but it is not exempt from criticism. The paper puts forward an original financing proposal through the creation of a Sovereign Wealth Fund and a new monetary policy design with the aim of minimizing these criticisms. JEL: H53, D63, I31
Understanding Political Economy, Capitalism, Democracy and Inequality by Bob Hancké, Toon Van Overbeke, and Dustin Voss Edward Elgar, 2025.
Pakistan’s Stock Market Reaction to Large and Small Shocks in Oil Prices: An Assessment with the MT-NARDL Model
This article empirically explores the impact of both small and large fluctuations in the crude oil prices on Pakistan’s stock market utilizing the multiple threshold non-linear autoregressive and distributed lag model from 1997–2021. The empirical results demonstrate that larger shocks to the prices of crude oil have a significant negative impact on Pakistan’s stock market. However, small shocks to the prices of crude oil positively stimulate its activity. Pakistan’s stock market is heavily and asymmetrically impacted by the United States’ stock market: positive shocks, reflected in the Standard & Poor’s 500, have a positive impact on Pakistan’s stock market, while negative shocks have an adverse effect. All estimated coefficients are statistically significant. Pakistan’s stock market is also negatively affected by foreign direct investments (FDI) and exchange rates, but the inflow of remittances has a positive effect. Based on empirical findings, the article recommends that policymakers in both the private and public sectors should estimate the expected fluctuations in the prices of crude oil, FDI, remittance inflows, and exchange rates when investing in the Pakistani stock market. JEL: G0, G1, G2
Non-linear autoregressive distributed lag
The Impact of Financial Access on Income Inequality: Evidence from Panel Data Estimation
As there are limited attempts made by previous studies, this paper examines the impacts of financial access on income inequality using a panel data of 52 developed and developing countries ranging from 2005 to 2020. Initially, the Financial Access Survey (FAS), launched in 2009 suggested that demographic and geographical data of bank branches and automated teller machine (ATM) able to reflect the accessibility of financial service and UN SDG also adopted the demographic data of bank branches and automated teller machine in the SDG target goal as an alternative to expand financial access and strengthen the capacity of domestic financial institution. To measure financial access effectively, indicators such as the number of bank branches and automated teller machines per thousand square feet and hundred thousand adults are employed in this paper to proxy financial access and examine its impact on income inequality. In addition, since the empirical model is largely unexplored, this paper aims to examine the issue thoroughly with secondary data that cover a broader duration and capture changes within the same observation over time. Dynamic panel system generalized method of moments (GMM) estimators is used and the empirical result grounded in real-world data could adopt the outputs, which disclose the relative strength of the influence of financial access on income inequality and identify whether access to finance is useful to narrow down income inequality. The conclusions are also critical for policy design as well. JEL: G20, E25, C33, D31
Paranoid Finance by Fabian Muniesa Polity Press, 2024.
The Oil Market and Macroeconomic Stability: What is the Role of Policy Uncertainty?
We analyse the fluctuating connection between economic policy uncertainty (EPU) and oil prices (OP) in Croatia through sub-sample rolling-window Granger causality analyses. Statistical inference based on Granger causality tests suggests that OP acts as a leading indicator for EPU, with evidence of bidirectional feedback. The negative influence of OP on EPU indicates that OP will affect the government’s economic policy stability and then affect EPU. Conversely, EPU exhibits both positive and detrimental effects on OP. These results align with general equilibrium models, highlighting the interdependence between OP and EPU. Given the increasing financial attributes of oil, gaining insight into the connection between OP and EPU is essential for enabling the government to formulate more effective economic policies to mitigate the impacts of fluctuations in OP. JEL: Q43, C32, E69, H3
Reassessing Jason Hickel's Sustainable Development Index: An Analysis and Insights from Turkiye
This study explores the causal dynamics between Jason Hickel’s Sustainable Development Index (SDI) and renewable energy use in Turkiye (1990-2019). Using Johansen cointegration and Granger causality tests, results reveal a one-way causality from SDI to renewable energy, indicating that sustainability frameworks can drive energy transition, but not vice versa. The study suggests revising SDI to better capture decarbonization dynamics and positive externalities such as air quality and health gains. Findings imply that sustainability demands integrated strategies beyond technological change, offering actionable insights for policy and advancing SDI as both a normative and diagnostic tool. JEL: Q1, Q42, Q56, O13
Behavioural Responses to Taxes and Optimal Taxation of Top Labour Incomes in Croatia
We use a model of optimal labour income taxation and tax records data to determine the optimal marginal tax rate for top labour income earners in Croatia in the period 2014–2021. Behavioural responses to taxation through labour supply and tax evasion, captured by the elasticity of taxable income, are estimated based on several tax reforms. Responses through international migration are also considered. In 2021, for most combinations of the relevant parameters, the optimal top marginal rate of personal income tax is higher than the actual rate. Also, for most parameter combinations, the reductions in the top marginal rate over 2014–2021 cannot be justified from the optimal taxation perspective. Further reductions in the top rate can be justified for only a few parameter combinations. While the literature on the elasticity of taxable income and the optimal taxation of top earners was focused on Western Europe and the US, this paper contributes by considering a Southeast European country. JEL: H21, H31
Advanced AI Models for Future Forecasting of Budget Expenditures via Machine Learning and Deep Learning
This study builds on Türkiye’s long-standing challenges in managing public spending amid political and economic uncertainty. Budget planning plays a vital role in ensuring fiscal sustainability and economic resilience. Therefore, this study proposes a new forecasting framework that utilizes the latest artificial intelligence models. This paper aims to provide data-driven decision support to policymakers by improving the accuracy and robustness of expenditure forecasts under complex temporal dynamics. Accordingly, the use of machine learning and deep learning methods to forecast budget expenditures in Türkiye was proposed and analyzed. Comprehensive datasets extending from January 2008 to May 2024 was considered. Datasets also include various extraordinary periods such as the global financial crisis, the European debt crisis, various major political events in Türkiye, and the COVID-19 pandemic. Model performance was evaluated using the Time Fusion Transform, which has received praised for its superior performance even in complex and volatile time series. The model results show that the MAPE is 0.0658%, MAE is 0.0050%, RMSE is 0.0111%, and R² is 0.993%. The Random Search learning algorithm was implemented to determine the optimal hyperparameters that enable the model to work effectively on the data. According to the findings of the study, the model can perform well despite economic and political changes. Biodiversity in the use of all model types shows that machine learning and deep learning models also offer valuable insights into the budget forecasting process. JEL: C45, C53, C61, H68.
Industrial Policy and Export Productivity: Analysis by Company Size and Microregions
This study aimed to investigate the possible spatial relationship between resources granted by the Brazilian Development Bank (BNDES) disaggregated by company size and export productivity in Brazil’s micro-regions. The study period was between 2009 and 2020. Data showed that most BNDES resources earmarked for the manufacturing industry were concentrated in the South and Southeast, particularly in the microregions close to the main commercial centers. By contrast, a pattern of low intensity in financing and productivity was observed in the microregions located in the country’s central area. The econometric results indicate the spatial spillover effects of BNDES financing on microenterprise export productivity across various microregions. Additionally, network analysis revealed that the microregions with the highest export volumes were not in the main cluster, indicating that they mainly exported simple or low-productivity products. JEL: O47, L52, C31.
Unraveling the Causal Link Between Corruption and Happiness: Insights from Developing and Advanced Economies
In recent years, the concept of the corruption economy has gained significant prominence on the international agenda. Corruption generates numerous adverse effects, including reductions in tax revenues, the exacerbation of income inequality, and the misallocation and waste of public resources. The present study examines the causal relationship between perceptions of corruption and perceptions of happiness at the country level. For this purpose, the study applies panel Granger causality analysis to data from 81 countries for the period 2010–2023. After analysis of the full sample, countries are classified as developing or advanced economies based on the International Monetary Fund (IMF) classification. Causality tests are applied to both groups and are interpreted comparatively. After controlling for macroeconomic variables such as per capita economic growth, unemployment, and inflation, the results reveal a unidirectional causality from perceptions of corruption to perceptions of happiness at the global level. However, subgroup analyses indicate a bidirectional causality in developing economies and no significant causality in advanced economies. These findings underscore the critical role that the level of development plays in shaping the interaction between the perceptions of corruption and happiness. JEL: D73, I31, C23
The Comparative Analysis of the Economic Effects of Competition Law on the United States and China
As there are limited attempts made by previous studies in comparing the effects of antitrust law, this paper examines the economic impacts of competition law between the United States and China, focusing on the distinctive approaches adopted by both countries and the corresponding outcomes for their respective economies. The analysis highlights the key differences in enforcement priorities, methodologies and economic impact. To measure economic effect effectively, consumer price indexes are employed in this paper to investigate the influence of antitrust law on it. In addition, this paper applied a conceptual framework, rooted in existing theories and provided a solid foundation. The theoretical-based method allows the paper to describe the relationship between competition law enforcement and economic outcomes in both countries by highlighting how country-specific factors mediate enforcement effectiveness. The conclusions provided critical insights for policy design as well. JEL: E0, F0, K21, N1
Navigating the Moral Economy An Integrative Review
The concept of the moral economy is yet to reach semantic maturity. This article provides a fresh classification of works in the moral economy literature: the early and late classics, conceptual-historical reviewers, types of case studies, political uses, as well as calls for change in economics. The reopening of the economic to the ethical is looked at briefly, through philosophical and economic classics, as an illustrative scaffolding for the current context of the moral economy concept. The article then turns to specific moral economic directions within the field of economics: incorporating the environmental understanding, applying virtue ethics to economic entities, and obtaining an ethical understanding of human needs. I examine the question of whether the moral economy can embody moral economics, i.e., the incorporation of ethical elements into economic theory. Through presenting forces of both divergence and convergence, I argue for keeping the semantic connection between the moral economy and moral economics open. JEL: B29, D63, P40, Q59
Productivity, Growth and Labour Market Dynamics in Italy (1960-2023)
This article aims to examine the evolution of the Italian economy from the 1960s to the present focusing on wage and labour productivity dynamics. Throughout this period, the issue of containing labour costs emerged. On one hand, it provided a competitive advantage, but on the other exerted downward pressure on employment, aggregate demand, productivity, and economic growth. These contradictions and vulnerabilities began to emerge clearly since the 1980s with the intensification of the processes of economic tertiarization, international market integration and a general reduction in workers' bargaining power, further aggravated by the lack of policy manoeuvrability due to European constraints and austerity. Within a context characterized by small businesses, factors such as outsourcing, the adoption of a two-tier bargaining system, and increasing labour flexibility have been discouraging investments and productivity, thus locking Italy into a development model that risks further decline. JEL: E02, E24, N34, O40.
The Distribution of Tax Burden in Türkiye: An Analysıs of Effective Tax Rates for the 1998–2023 Period
Since tax incentives significantly reduce the tax burden calculated according to statutory tax rates, the statutory tax rate becomes less informative, while the effective tax rate, which represents the actual tax burden on taxpayers, gains prominence as a more accurate measure. Both the reasons behind the implementation of tax incentives and their impact on the tax burden should be evaluated in terms of achieving the objectives of justice and efficiency in taxation. This study estimates average effective tax rates (AETR) using the methodology developed by Carey and Rabesona (2004). According to the estimation results for Türkiye for the 1998–2023 period, the AETR on salaries and consumption is high, whereas the AETR on capital and on personal income other than wages is low. This finding, which undermines the principle of equity in taxation, shows that the principle of efficiency predominantly shapes Turkish taxation and that the tax structure does not adequately reflect individuals’ financial capacity. JEL: H20, H21, H24
On the Robustness of Portfolio Diversification Benefits within MENA Stock Markets
This study aims to examine whether the benefits of diversification within MENA stock markets are robust to changes across volatility regimes over the weekly period spanning from January 2004 to March 2025. The methodology adopted in this paper is based on testing the stability of shock transmission mechanisms across markets in the presence of regime-switching volatility, using a bivariate Markov switching model. The findings show that, in general, intra-MENA market linkages are unstable, with little evidence of robust portfolio diversification benefits during turbulent periods. From the perspective of portfolio strategies, our results highlight differences in portfolio allocation depending on the volatility regime and the country group, due to their heterogeneous characteristics. These findings are of great interest to policymakers, who should consider short-term responses to prevent the spread of contagion during crisis periods. JEL: C32, F42, G15
The Impact of Economic and Institutional Factors on International Migration Flows: Evidence from Turkey
International migration affects the economy, culture, and social life of the destination country. Internal conflicts and wars within countries especially compel people to migrate. Turkey is exposed to a heavy influx of migration as one of the countries most affected by this situation. In this context, the study addresses six different migrant groups: those migrating from Turkey and those migrating to Turkey, those migrating from Turkey to Europe and Asia, and finally, those migrating from Europe and Asia to Turkey. The study investigates economic factors influencing migration together with institutional effects. The results showed that while economic factors are more influential on migration from Turkey to European countries, institutional factors are determinative in migration from Europe to Turkey, and income is the primary determinant in migration from Asia. It was concluded that to strengthen its migration policies, Turkey should pay attention to institutional structures in addition to economic factors. JEL: F22, O15.
Is the Action or Discourse of the Central Bank of the Republic of Türkiye More Effective on Expected Inflation?
This study examines the effects of central bank discourse (tone index), action (policy rate), and actual inflation on expected inflation for Türkiye using monthly data between 2020 and 2024 via the SVAR model. Empirical findings demonstrate that the tone index has a statistically significant negative effect on expected inflation for one month, while actual inflation has a statistically positive effect for two months. These results suggest that the CBRT’s discourse, rather than its action, has a greater impact on expected inflation in the short term. In addition, the findings indicate that actual inflation has a significant impact on expected inflation in the short run. JEL: C32, E52, E58
Women in Politics and Budget Deviations: Evidence from Croatian Cities
This paper examines whether the political representation of women influences budget deviations in local governments. Using a panel dataset of 128 Croatian cities from 2016 to 2021, we investigate the impact of female representation in city councils and among mayors on the accuracy of revenue and expenditure forecasts. Applying a dynamic panel model with system GMM estimation, we find a non-linear relationship: a low share of women is linked to more optimistic and less credible budgets, while surpassing a threshold – around 30% for revenues and 40% for expenditures – leads to more fiscally responsible planning. Specifically, cities with greater female representation tend to underestimate revenues and overestimate expenditures, reflecting stronger adherence to fiscal discipline and more cautious budgeting. No statistically significant effect is observed for female mayors. These findings support theories on gendered governance and suggest that increasing the share of women in decision-making roles may improve fiscal performance in local government. JEL: J16, H71, H72
Examining Driving Forces of Arms Production: Security Demand or Economic Needs—World’s Largest Defense Companies
Arms production differs from that of general products because it involves both government and market factors. The needs of various actors vary; therefore, arms production is driven by internal security demands and external economic needs. This study identifies the complex factors behind arms production using fuzzy-set qualitative comparative analysis (fsQCA) to examine the configurations influencing arms production among the 77 largest defense companies. The results indicate that economic needs alone are neither necessary nor sufficient conditions for arms production. Arms production primarily stems from a country’s security needs, including domestic government procurement and demand for arms imports. Furthermore, a country’s economic scale and R&D strength contribute to increased arms sales. JEL: L64, E2, F14, H56.
Fuzzy-set qualitative comparative analysis (fsQCA)
Do Remittances Affect Foreign Direct Investment? A Comprehensive Analysis of BRICS-T Nations
This study investigates the impact of remittances and the International Property Rights Index on foreign direct investment (FDI) in BRICS-T countries during the period from 2007 to 2023. FDI is employed as the dependent variable, while the independent variables comprise remittances, trade openness, financial development, government consumption, and the International Property Rights Index. The long-term results indicate that remittances exert a positive influence on FDI over the long run. However, contrary to expectations, the International Property Rights Index demonstrates a negative long-term effect on FDI. Although sound governance and strong institutional frameworks are generally considered essential for attracting FDI and strengthening the relationship between FDI and remittances, this pattern does not appear to apply to BRICS-T countries. In the short run, by contrast, the International Property Rights Index has a positive effect on FDI, implying that high governance quality tends to attract FDI over shorter time horizons. JEL: C33, F21, F24
They Call It Love: The Politics of Emotional Life by Alva Gotsby Verso Books, 2023.
Relation between Liquidity Creation, Profitability, and Regulatory Capital in Islamic and Conventional Banks of GCC Countries
This study examines the interrelationship between liquidity creation, regulatory capital, and bank profitability in the Gulf Cooperation Council (GCC) banking sector. Using dynamic panel data and the ‘generalized method of moments’ (GMM) estimator for the period 2009–2023, we explore how these variables influence each other in a region characterised by oil-dependent economies and a dual banking system (comprising both Islamic and conventional banks). Our findings reveal a negative bidirectional relationship between liquidity creation and regulatory capital, supporting the financial fragility hypothesis. However, this relationship varies significantly across bank types. We also find a positive association between liquidity creation and bank profitability, suggesting that banks generating more liquidity tend to perform better, which is contrary to the bankruptcy cost theory. In contrast, regulatory capital negatively affects bank profitability, although the magnitude and direction of this relationship depend on the capital definition used. By focusing on this unique regional and institutional setting while incorporating bank type heterogeneity, this study offers novel insights into the regulatory-performance-liquidity nexus and contributes to the literature on banking in emerging economies. JEL: G21, G28
Energy Intensity in CIS Economies: Insights into Convergence with OECD Benchmarks
This study evaluates energy intensity convergence in Commonwealth of Independent States (CIS) economies in comparison to the OECD average from 2000 to 2019, utilising β-convergence and σ-convergence analyses based on conventional unit root analysis alongside the KSS stationarity approach, which accounts for data nonlinearities, and the Phillips–Sul club convergence procedure. The results indicate that most CIS countries did not achieve energy intensity convergence during the period under review. Furthermore, while the Phillips–Sul test classifies all studied countries, including the OECD-20, into a single convergence club, it only presents weak evidence of significant convergence. This limited convergence is likely hindered by the continued presence of Soviet-era manufacturing infrastructure in many CIS economies. From a policy perspective, the development of comprehensive economic frameworks that incorporate legal, institutional, technical, and financial reforms, supported by targeted investments in research, cutting-edge technologies, and updated standards, is essential to significantly boost energy efficiency and effectively address challenges on both the supply and demand sides. JEL: C10, C12, Q43, Q48
Income Convergence and Divergence in European Regions: Insights and Policy Implications
The allocation of wealth in society has been a fundamental question and challenge in economics. Concentrating most wealth in a small segment of society while leaving the rest with a smaller portion can lead to income inequality and social issues. Income inequality varies across cultures, historical periods, economic structures, and economic systems. Our study tests and analyzes comparative income convergence in Eastern Europe, Western Europe, Central Europe, and the Baltic regions. It is important to note that our model is region-specific rather than country-specific. Our study asserts that income levels converge at an average level and within states, promoting income distribution convergence. The analysis was conducted to examine stochastic convergence in Europe within the panel stationarity (Fourier KPSS) test, revealing that regional economic inequalities in Europe are likely to either persist or even widen. JEL: C23, D31, O18, H20