Vorschau 1 |2012

Vorschau

Vorschau 1 |2012     

Exchange rate management in emerging markets: Intervention via an electronic limit order book

This paper describes and analyzes the implementation of a crawling exchange rate band on an electronic trading platform. The placement of limit orders at the central bank's target rate serves as a credible policy statement that may coordinate beliefs of market participants. We find for our sample that intervention increases exchange rate volatility (and spread) for the next minutes but that intervention days show a lower degree of volatility (and spread) than non-intervention days. We also show for intraday data that the price impact of interbank order flow is smaller on intervention days than on non-intervention days. These stabilizing effects, however, rely on the conditions of large currency reserves and the existence of capital controls; an electronic market seems to support this goal.     

Die Bewertung von Handelsrisiken eines Übertragungsnetzbetreibers anhand einer Monte-Carlo-Simulation

EnBW Transportnetze AG (TNG) is the transmission system operator (TSO) of Energie Baden-Württemberg AG. Due to the Renewable Energy Sources Act, the TSOs are obliged to take-up the (fluctuating) complete amount of electricity made of renewable resources. The TSOs have to transform this feeding into a constant output. Therefore, TNG has started trading on the European Power Exchange. The amount of electricity needed to be bought and sold respectively in order to create a constant output involves risks because of price volatility. As a result of the merit-order-effect, these risks increase. Due to this effect, procurement costs generally exceed sales revenues despite of well-balanced quantitative electricity tradings. For evaluating the procurement and merchandise risk at the intraday market, a Monte-Carlo-Simulation is executed on the basis of historical turnover data.     

Induced innovation and spillover effects of US and Canadian research expenditures in Canadian agriculture

This study examines the induced innovation hypothesis (IIH) from 1958 to 2015 for two Canadian agriculture regions: Central Canada (the provinces of Ontario and Quebec) and Western Canada (the provinces of Alberta, Saskatchewan and Manitoba). There is broadly consistent support for the IIH for Canadian agriculture, especially for Western Canadian agriculture. In addition, there is support for the notion that US, as well as Canadian, research expenditures are important to explain changes in the input ratio in Canadian agriculture in the long run. This indicates the existence of spillover effects from US agricultural research expenditures to Canadian agriculture.     

Regulatory barriers to trade in services: A new database and composite indices

This paper presents new data on services trade regulation for 46 countries in 22 services sectors over 6 years (2014–2019). The data consist of qualitative information which is scored and weighted to produce composite indices. They cover market access and national treatment restrictions with respect to all GATS modes of supply, but also behind the border domestic regulation such as licensing, non-transparent regulatory procedures and competition policy. The database is updated annually. The trade restrictiveness indices (STRIs) are significantly correlated with services trade flows, but also with the performance of the sectors subject to the restrictions including logistics performance indicators, interest spreads, density of ATMs and secure servers, broadband penetration and outcomes such as legal rights and the time to resolve insolvency.     

Should Commodity Exporters Peg to the Export Price?

To account for the specific situation of commodity exporters, pegging to export prices (PEP) has been proposed elsewhere as an alternative to other conventional monetary regimes such as an exchange rate peg or inflation targeting. PEP is supposed to deliver automatic accommodation to terms‐of‐trade shocks, while retaining the credibility gain from a nominal anchor. This paper analyzes the PEP proposal in a dynamic general‐equilibrium model and compares it with a standard Taylor rule, consumer price index (CPI)‐level targeting and a nominal exchange rate peg. Judged by the degree of output stabilization, PEP performs very similar to CPI targeting for export demand as well as domestic demand shocks and underperforms in the case of shocks to the export price. The results suggest that PEP is not superior to conventional CPI targeting from a macroeconomic stabilization perspective.     

Controllers’ use of informational tactics

Controllers typically have a ‘dual accountability’ towards the finance function and operational management, respectively. This dual accountability at times confronts them with conflicting expectations. In this paper, we suggest that ‘informational tactics’ constitute an important resource which controllers rely on so as to handle these expectations and to successfully present themselves vis-à-vis their different internal stakeholders. Drawing upon interview data, we demonstrate that informational tactics relate to different dimensions of information control (i.e. ‘when’, ‘how’ and ‘what’ information is to be exchanged) and that they depend on the respective room for manoeuvre a controller has in a given situation. Overall, our analysis adds a more nuanced picture to the literature on controllers’ handling of information and demonstrates the fundamental role of informational tactics for their everyday work.