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Mohsen Bahmani-oskooee - One of the best experts on this subject based on the ideXlab platform.

  • The Black-Market Exchange Rate Versus the Official Rate: Which Rate Fosters the Adjustment Speed in the Monetarist Model?
    The Manchester School, 2010
    Co-Authors: Mohsen Bahmani-oskooee, Scott W. Hegerty, Altin Tanku
    Abstract:

    Many less developed countries have currency controls, which can lead to Black-Market trade and cause distortions in the exchange Market. We test the flexible-price monetary model for 25 less developed countries, using both official and Black-Market exchange rates. We find that the model is supported in the long run, particularly when Black-Market rates are used. Measuring the speed of convergence to equilibrium, we find that it is often higher in the Black-Market specification, implying greater efficiency. This could offer justification for exchange-rate unification, particularly in Latin America.

  • Could Changes in Black Market Exchange Rates be Expansionary in LDCs
    Economics Bulletin, 2008
    Co-Authors: Mohsen Bahmani-oskooee, Ilir Miteza, Gour Gobinda Goswami
    Abstract:

    Many of the previous studies that tried to assess the contractionay or expansionary effects of depreciations or devaluations in less developed countries (LDCs) used official exchange rate data and concluded that devaluations are contractionary in LDCs. However, due to capital controls, there is a Black Market for foreign exchange in many of the LDCs. In this paper when we use Black Market rates over the period 1975-1998 from 29 LDCs in a panel model, we find that devaluations are expansionary. Thus, for an effective exchange rate policy the official and Black Market exchange rates should be unified.

  • Black Market Exchange Rate versus the Official Rate in Testing the PPP: An Application of a Non-Linear Test
    Comparative Economic Studies, 2007
    Co-Authors: Mohsen Bahmani-oskooee, Altin Tanku
    Abstract:

    Due to foreign exchange controls in many developing countries, there is a Black Market for foreign exchange. Since the Black Market exchange rates are good proxies for the floating exchange rates, they provide relatively more support for the purchasing power parity theory (PPP). In this paper, we show that in a majority of the developing countries the adjustment of relative prices and the nominal Black Market exchange rate is on a non-linear stationary process, implying that the PPP holds even more when a non-linear test versus a linear test is employed in the analysis.

  • Military spending and the Black Market premium in developing countries
    Review of Social Economy, 2006
    Co-Authors: Mohsen Bahmani-oskooee, Gour Gobinda Goswami
    Abstract:

    Researchers who have been concerned with the economic implications of military spending have mostly concentrated on its impact on economic growth, corruption, real exchange rate and inflation. In this paper we investigate the impact of military spending on Black Market premium, an area that has not been tackled so far. After adding a measure of military spending to a well established model of Black Market premium form the literature, we estimate the model by pooling annual data over the 1985 - 1998 period across 61 developing countries. Results from five panel specifications provide considerable evidence that higher military spending leads to higher Black Market premium.

  • The Impact of Corruption on the Black Market Premium
    Southern Economic Journal, 2005
    Co-Authors: Mohsen Bahmani-oskooee, Gour Gobinda Goswami
    Abstract:

    Recently the impact of institutional factors on macro variables has been gaining momentum. Researchers have investigated the impact of corruption, law and order, and bureaucracy on economic growth, inflation, investment, productivity, and the real exchange rate. In this article, we investigate empirically the impact of institutional factors on the Black Market premium. In many developing nations, because of government restrictions on capital and trade flows, there exists a Black Market for foreign exchange. By using data from 60 developing countries over the 1982-1995 period, we show that the Black Market premium is higher in countries that are plagued by more corruption. This finding seems to be insensitive to five different measures of corruption as well as whether cross-section or panel data are used.

Jose J. Gonzalez - One of the best experts on this subject based on the ideXlab platform.

  • Understanding Hidden Information Security Threats: The Vulnerability Black Market
    2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07), 2007
    Co-Authors: Jaziar Radianti, Jose J. Gonzalez
    Abstract:

    It has been discovered recently that there is a "Black Market" for software vulnerabilities. Criminals and terrorists can launch exploits toward organizations before system administrators have had a chance to apply a corrective patch. To counteract this threat, software vendors and security companies have been establishing a legitimate Market for software vulnerabilities; they offer rewards for software bugs reported. To explain the basic traits of this phenomenon, we develop a system dynamics model showing the growth of the vulnerability Black Market. A simple conceptual model is developed and some simulations using the model are implemented to learn whether the attempt to legalize the vulnerability Market helps to reduce the vulnerability information circulating in the Black Market

  • HICSS - Understanding Hidden Information Security Threats: The Vulnerability Black Market
    2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07), 2007
    Co-Authors: Jaziar Radianti, Jose J. Gonzalez
    Abstract:

    It has been discovered recently that there is a "Black Market" for software vulnerabilities. Criminals and terrorists can launch exploits toward organizations before system administrators have had a chance to apply a corrective patch. To counteract this threat, software vendors and security companies have been establishing a legitimate Market for software vulnerabilities; they offer rewards for software bugs reported. To explain the basic traits of this phenomenon, we develop a system dynamics model showing the growth of the vulnerability Black Market. A simple conceptual model is developed and some simulations using the model are implemented to learn whether the attempt to legalize the vulnerability Market helps to reduce the vulnerability information circulating in the Black Market

Gour Gobinda Goswami - One of the best experts on this subject based on the ideXlab platform.

  • Testing Black Market vs. Official PPP: A Pooled Mean Group Estimation Approach
    2013
    Co-Authors: Gour Gobinda Goswami, Mohammad Zariab Hossain
    Abstract:

    Testing purchasing power parity (PPP) using Black Market exchange rate data has gained popularity in recent times. It is claimed that Black Market exchange rate data more often support the PPP than the official exchange rate data. In this study, to assess both the long run stability of exchange rate and the short run dynamics, we employ Pooled Mean Group (PMG) Estimation developed by Pesaran et al. (1999) on eight groups of countries based on different criteria. Using the famous Reinhart and Rogoff (2002) dataset on Black Market exchange rate in the framework of Bahmani-Oskooee and Goswami (2005), the results are in sharp contrast with the most recent studies. We find very weak and insufficient support for the PPP using both the Black Market and the official exchange rate data. The assumption of long run homogeneity is also invalidated for some groups. Therefore, the results of PPP testing are not conclusive even though we switch from the official rate to the Black Market rate for a global data set. The finding holds even though we swap static panel for dynamic heterogeneous panel in the light of PMG estimation.

  • Could Changes in Black Market Exchange Rates be Expansionary in LDCs
    Economics Bulletin, 2008
    Co-Authors: Mohsen Bahmani-oskooee, Ilir Miteza, Gour Gobinda Goswami
    Abstract:

    Many of the previous studies that tried to assess the contractionay or expansionary effects of depreciations or devaluations in less developed countries (LDCs) used official exchange rate data and concluded that devaluations are contractionary in LDCs. However, due to capital controls, there is a Black Market for foreign exchange in many of the LDCs. In this paper when we use Black Market rates over the period 1975-1998 from 29 LDCs in a panel model, we find that devaluations are expansionary. Thus, for an effective exchange rate policy the official and Black Market exchange rates should be unified.

  • Military spending and the Black Market premium in developing countries
    Review of Social Economy, 2006
    Co-Authors: Mohsen Bahmani-oskooee, Gour Gobinda Goswami
    Abstract:

    Researchers who have been concerned with the economic implications of military spending have mostly concentrated on its impact on economic growth, corruption, real exchange rate and inflation. In this paper we investigate the impact of military spending on Black Market premium, an area that has not been tackled so far. After adding a measure of military spending to a well established model of Black Market premium form the literature, we estimate the model by pooling annual data over the 1985 - 1998 period across 61 developing countries. Results from five panel specifications provide considerable evidence that higher military spending leads to higher Black Market premium.

  • The Impact of Corruption on the Black Market Premium
    Southern Economic Journal, 2005
    Co-Authors: Mohsen Bahmani-oskooee, Gour Gobinda Goswami
    Abstract:

    Recently the impact of institutional factors on macro variables has been gaining momentum. Researchers have investigated the impact of corruption, law and order, and bureaucracy on economic growth, inflation, investment, productivity, and the real exchange rate. In this article, we investigate empirically the impact of institutional factors on the Black Market premium. In many developing nations, because of government restrictions on capital and trade flows, there exists a Black Market for foreign exchange. By using data from 60 developing countries over the 1982-1995 period, we show that the Black Market premium is higher in countries that are plagued by more corruption. This finding seems to be insensitive to five different measures of corruption as well as whether cross-section or panel data are used.

  • Long-run nature of the relationship between the Black Market and the official exchange rates
    Economic Systems, 2004
    Co-Authors: Mohsen Bahmani-oskooee, Gour Gobinda Goswami
    Abstract:

    Abstract Previous research that investigated the relationship between the Black Market and the official exchange rate employed cointegration analysis to establish the long-run relationship and Granger causality to detect the short-run causality between the two rates (for a small number of countries). In this paper, we employ annual data over the 1955–1995 period from 31 developing countries to show that indeed in most cases the two rates are cointegrated. Application of Johansen's weak exogeneity test reveals that in the majority of the countries, the Black Market exchange rate is weakly exogenous, supporting the argument that in the long-run depreciation of domestic currency in the Black Market induces government officials to devalue the domestic currency and unify the two rates.

Jaziar Radianti - One of the best experts on this subject based on the ideXlab platform.

  • Understanding Hidden Information Security Threats: The Vulnerability Black Market
    2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07), 2007
    Co-Authors: Jaziar Radianti, Jose J. Gonzalez
    Abstract:

    It has been discovered recently that there is a "Black Market" for software vulnerabilities. Criminals and terrorists can launch exploits toward organizations before system administrators have had a chance to apply a corrective patch. To counteract this threat, software vendors and security companies have been establishing a legitimate Market for software vulnerabilities; they offer rewards for software bugs reported. To explain the basic traits of this phenomenon, we develop a system dynamics model showing the growth of the vulnerability Black Market. A simple conceptual model is developed and some simulations using the model are implemented to learn whether the attempt to legalize the vulnerability Market helps to reduce the vulnerability information circulating in the Black Market

  • HICSS - Understanding Hidden Information Security Threats: The Vulnerability Black Market
    2007 40th Annual Hawaii International Conference on System Sciences (HICSS'07), 2007
    Co-Authors: Jaziar Radianti, Jose J. Gonzalez
    Abstract:

    It has been discovered recently that there is a "Black Market" for software vulnerabilities. Criminals and terrorists can launch exploits toward organizations before system administrators have had a chance to apply a corrective patch. To counteract this threat, software vendors and security companies have been establishing a legitimate Market for software vulnerabilities; they offer rewards for software bugs reported. To explain the basic traits of this phenomenon, we develop a system dynamics model showing the growth of the vulnerability Black Market. A simple conceptual model is developed and some simulations using the model are implemented to learn whether the attempt to legalize the vulnerability Market helps to reduce the vulnerability information circulating in the Black Market

Siew-voon Soon - One of the best experts on this subject based on the ideXlab platform.

  • Purchasing Power Parity and Efficiency of Black Market Exchange Rate in African Countries
    Emerging Markets Finance and Trade, 2011
    Co-Authors: Ahmad Zubaidi Baharumshah, Siti Hamizah Mohd, Siew-voon Soon
    Abstract:

    This paper investigates the long-run dynamics of Black and official exchange rates for ten African countries. Our major findings are, first, that parity holds more favorably when the Black Market rate is used to validate the purchasing power parity hypothesis. The evidence supports the notion that the speed of adjustment is much faster in the Black Market than in the official Market. Second, the two rates are connected in the long run, with the official rate adjusting toward the Black Market rate for the majority of cases. Finally, we find the long-run informationally efficient hypothesis is supported in the majority of African countries.