The (de-)anchoring of inflation expectations: New evidence from the euro area

Well-anchored inflation expectations are a key factor for achieving economic stability. This paper provides new empirical results on the anchoring of long-term inflation expectations in the euro area. In line with earlier evidence, we find that euro area inflation expectations have been anchored until fall 2011. Since then, however, they respond significantly to macroeconomic news. Our results obtained from multiple endogenous break point tests suggest that euro area inflation expectations have remained de-anchored ever since.     

Progressive fragmentation of a traditional Mediterranean landscape by hazelnut plantations: The impact of CAP over time in the Langhe region (NW Italy)

Land use change is strongly modifying the traditional landscape of hilly productive Mediterranean sites. An example of these circumstances is the Langhe region (Piemonte, NW Italy), where woody plantations such as vineyards and orchards have been cultivated on hillslopes for centuries. In this paper we assess landscape changes occurred in the Diano study area (2651 ha) in the 1954–2000 period and we ascertain land use transition paths and rates of this rural ecosystem. Land use mapping obtained from object-oriented analysis of aerial photographs was used to quantify land use changes between 1954 and 2000. To examine the spatio-temporal patterns of land use change over time, a set of spatial statistics capturing different dimensions of landscape change was identified. An increase of landscape heterogeneity from 1954 to the present was observed due to the expansion of orchards and the fragmentation of field crops. A significant portion (55%) of current orchards surface is represented by former field crops, 24% by vineyards and 15% by forests. The strong expansion of hazelnut orchards concurred to the fragmentation of traditional rural landscape was dominated by vineyards, field crops and forests. Hazelnut orchards expansion was mainly located in places where grapes cultivation was less remunerative. A further expansion of hazelnut in the area should be planned, discussed and carefully monitored through change detection studies in order to avoid potential unsustainable use of the land.     

The use of open source internet to analysis and predict stock market trading volume

The objective of this paper is to evaluate the impact of information demand and supply on stock market trading volume. Few studies have demonstrated the role of Google search data in analyzing trading volume activity. In this study, we employ a proxy for information demand which is derived from weekly internet search volume. The latest is from Google Trends database, for 25 of the largest stocks traded on CAC40 index, between April 2007 and March 2014. We use news headlines as a proxy for information supply. We use Garch model to analyze and predict trading volume.The empirical results present new evidences. First, information supply has an impact on trading volume but information demand's impact is much more important. Secondly, by applying MCA to results found, it could be concluded that the impact of public information on transaction volume is conditioned by two elements: the firm and market news disclosure and the second element relates to the characteristics of the market participants, more precisely their news interpretations and their risk aversion. Thirdly, we used Chow structural break test to verify the stability of our model. We found that for securities with structural changes, information demand is the responsible variable of the change in our model. Finally, we found that information variables have a predictive power on transaction volume.This paper contributes to existing literature by incorporating open source internet-based data into the analysis and prediction of transaction volume. Using internet information about the stock market, which has appeared recently as an interesting research for financial empiricists, computer scientists and practitioners, will have a very important utility because quantifying demand and supply of information becomes possible.     

Pure jump models for pricing and hedging VIX derivatives

Recent non-parametric statistical analysis of high-frequency VIX data (Todorov and Tauchen, 2011) reveals that VIX dynamics is a pure jump semimartingale with infinite jump activity and infinite variation. To our best knowledge, existing models in the literature for pricing and hedging VIX derivatives do not have these features. This paper fills this gap by developing a novel class of parsimonious pure jump models with such features for VIX based on the additive time change technique proposed in Li et al., 2016a, Li et al., 2016b. We time change the 3/2 diffusion by a class of additive subordinators with infinite activity, yielding pure jump Markov semimartingales with infinite activity and infinite variation. These processes have time and state dependent jumps that are mean reverting and are able to capture stylized features of VIX. Our models take the initial term structure of VIX futures as input and are analytically tractable for pricing VIX futures and European options via eigenfunction expansions. Through calibration exercises, we show that our model is able to achieve excellent fit for the VIX implied volatility surface which typically exhibits very steep skews. Comparison to two other models in terms of calibration reveals that our model performs better both in-sample and out-of-sample. We explain the ability of our model to fit the volatility surface by evaluating the matching of moments implied from market VIX option prices. To hedge VIX options, we develop a dynamic strategy which minimizes instantaneous jump risk at each rebalancing time while controlling transaction cost. Its effectiveness is demonstrated through a simulation study on hedging Bermudan style VIX options.     

The relationship between risk experience and risk response: a study of farmers and climate change

Within the existing literature, the role of experience of risk on attitudinal and behavioural risk response has been relatively neglected. Recent research that draws on the psychological distance of climate change as a concept notes the importance of local, significant experience as a driver for encouraging appropriate response. The experience of flooding was used as the stimulus in this paper, and emphasis placed on whether direct and/or indirect experience of flood risk is associated with different responses to climate change risk. In order to explore the relationship between climate change risk experience and response in the form of on-farm mitigation and adaptation, this paper draws on a case study of farmers in England, many of whom have experienced flooding. Results from a quantitative survey undertaken with 200 farmers in Gloucestershire, England are discussed. Statistical analysis found experience of flooding to be significantly associated with a heightened concern for climate change. Although also finding an association between experience and behavioural response, the sample were most likely to be taking adaptive behaviour as part of normal practice, with factors such as lack of overall concern for climate change risk and absence of information and advice likely to be the main barriers to action. Risk communication needs to further emphasise the connection between climate change and extreme weather events to allow for farmers to perceive climate change as a relevant and locally salient phenomenon, and subsequent tailored information and advice should be offered to clearly illustrate the best means of on-farm response. Where possible, emphasis must be placed on actions that also enable adaptation to other, more immediate risks which farmers in this study more readily exhibited concern for, such as market volatility.     

Railway development from the Japanese occupation period to the present – using Kaohsiung city as an example​​​​​​​​

This study intended to discuss the interactive influence of the emergence, transformation and decline of the railway in Kaohsiung Port on urban development, the population, the activities and the economy in the region during the period of 1895–2010, from the perspectives of urban planning, railway development, population and industry. This study used the crossover analysis method, and used the factors of railway development and urban planning, within a fixed time period, to explore the chain dependence relationship among the industry, the population, the regional economy and the railway stations in Kaohsiung city. This study found that urban planning, economic development, railway development and industry have an interactive influence on the overall urban development. Urban planning promotes the rapid growth of the population, and economic development propels the growth and shaping of the regional economy, thus increasing employment opportunities. In addition, the railway development process moves forward with urban development.     

Mapping changes in land use/land cover and prediction of future extension of bowé in Benin,West Africa

Desertification and land degradation are worldwide problems affecting soil, vegetation and the livelihoods of rural populations. Bowal (plural bowé) is a particular form of degraded land that occurs in tropical regions and leads to the exposure of ferricretes, which are unsuitable for farming. Bowé are more common on farmland and degraded savanna. Changes in land use/land cover were used to map a region of 6.7 million ha in northern Benin, West Africa in 1975, 1990 and 2010. The changes observed during these periods (1975–1990, 1990–2010 and 1975–2010) were used to predict the occurrence of bowé in the period up to 2050 using Markovian chain analysis. The results showed a considerable change in land use/land cover during the three periods. The types of land on which bowé occur (farmland and degraded savanna) increased in northern Benin by 5.4% per year during the period 1975–1990 and 9.5% per year during the periods 1990–2010, while the natural vegetation (forest, woodland and tree savanna) decreased by the same amount. The future scenarios also predicted the same trend. In the period 1975–1990, 1.28 million ha (26%) of natural vegetation was converted to degraded savanna and farmland while 2.23 million ha (53%) of natural vegetation was converted to degraded savanna and farmland in the period 1990–2010. Based on the dynamics recorded during the period 1975–1990 and 1990–2010 respectively, a total of 1.28 million ha (26% of the natural vegetation that was present in 1975) and 1.29 million ha (31% of the natural vegetation that was present in 1990) will be converted to farmland and degraded savanna in the study area by 2050.Thus bowalization will persist and increase in the period up to 2050. The natural vegetation could disappear if protection and restoration measures are not taken. It is thus important to take measures to stop the degradation and to implement programs to restore soils on bowé based on the soil and water conservation techniques used on highly degraded West African soils, such as zaï pit and stone rows with grass strips. Some native plants species adapted to bowalization and resistant to climate change in northern Benin (e.g. Asparagus africanus, Andropogon pseudapricus and Combretum nigricans) should be used in association with soil and water conservation techniques on bowé.     

The impact of a changing financial climate on a UK local charitable sector: voices from the front line

Forced to compete with private and public sector providers, charities experience tensions as the quest for a more commercially-oriented position may conflict with their social imperative. Little attention has been given to understanding the experiences of local charities as service providers. This paper captures the reactions of those working on the charity front line.     

Mapping mountain diversity: Ethnic minorities and land use land cover change in Vietnam's borderlands

In the complex agro-ecological conditions of Vietnam's northern borderlands, attempts by ethnic minority farmers to create sustainable livelihoods, along with the impacts of state development policies, have direct consequences for land use and land cover (LULC) change. In this paper we analyse the degree to which LULC has changed and diversified from 1999 to 2009 in Lào Cai Province and the underlying relationships with ethnic minority livelihood diversification strategies. We examine the correlation between LULC diversity and various socioeconomic and biophysical proxies using a spatial autoregressive model. Our findings indicate two major changes in LULC: an increase in closed canopy forest and substantial urban growth. LULC diversity increased between 1999 and 2009, suggesting a transition between land uses and/or a diversification of livelihood strategies. Socioeconomic proxies are significant predictors of LULC diversity in both years, while biophysical proxies are only effective predictors in 2009. In-depth interviews regarding state-led policies and ethnic minority livelihoods reveal some of the underlying mechanisms of such LULC transitions and associations.