Product Market Competition and Corporate Governance Disclosure

Evidence from the UK

Basil Al-Najjar, Rong Ding

Research output: Contribution to journalArticle

Abstract

This paper analyses the implications of macroeconomic policy interactions for
financial stability, proxied by financial assets prices (equity and bonds). The
empirical analysis applies a Vector Autoregressive (VAR) model and our findings
suggest that an accommodating monetary, and disciplined fiscal, stance has
been optimal for both stock and bond markets. There is also ample evidence of
interdependence between policies, as an expansionary fiscal policy could persuade
the monetary authorities to adopt an accommodating stance, whereas a
contractionary monetary policy leads fiscal policy towards consolidation. The
interrelation between monetary and fiscal policy necessitates coordination
between them for the sake of financial stability
Original languageEnglish
Pages (from-to)95-118
Number of pages24
JournalEconomic Issues
Volume19
Issue number1
Publication statusPublished - Mar 2014
Externally publishedYes

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Fiscal policy
Product market competition
Corporate governance
Disclosure
Authority
Financial stability
Fiscal
Stock market
Monetary and fiscal policy
Financial assets
Vector autoregressive model
Monetary policy
Macroeconomic policy
Asset prices
Equity
Interaction
Bond market
Consolidation

Cite this

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abstract = "This paper analyses the implications of macroeconomic policy interactions forfinancial stability, proxied by financial assets prices (equity and bonds). Theempirical analysis applies a Vector Autoregressive (VAR) model and our findingssuggest that an accommodating monetary, and disciplined fiscal, stance hasbeen optimal for both stock and bond markets. There is also ample evidence ofinterdependence between policies, as an expansionary fiscal policy could persuadethe monetary authorities to adopt an accommodating stance, whereas acontractionary monetary policy leads fiscal policy towards consolidation. Theinterrelation between monetary and fiscal policy necessitates coordinationbetween them for the sake of financial stability",
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Product Market Competition and Corporate Governance Disclosure : Evidence from the UK. / Al-Najjar, Basil; Ding, Rong.

In: Economic Issues, Vol. 19, No. 1, 03.2014, p. 95-118.

Research output: Contribution to journalArticle

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