Changing International Financial Architecture: Growing Chinese Influence?

It is often said that the 21st century will be the Asian century. Based on population and gross domestic product projections, it certainly looks as if this will be so. Will the existing international financial institutions give more voices, votes, and top positions to Asia? Or will Asia create its own institutions that would rival the old architecture? This present paper argues, first, that China, and possibly India, will be in a position to be so influential that the international financial architecture may have to go through significant changes. Second, the three large crises in the last 20 years have made Asian countries more confident that they can manage capital flows by accumulating large foreign reserves and by adopting sound macrofinancial policies. After 2009, China started to push various initiatives that will amount to creating its own sphere of influence with new regional institutions in the future.     

The Asymmetric path of Economic Long Waves

The purpose of this paper is to analyze the pattern and behavior of Economic Long Waves over time, using the long-wave chronologies of two driving economies, the USA and the UK. The statistical evidence seems in general to support the hypothesis that Long Waves are not symmetric and their regularity is based on longer periods of upwave than downwave (contraction-skewed), which implies a negative asymmetric path of these waves over time.     

Optimal monetary policy regime for oil producing developing economies: Implications for post-war Iraq

This paper theoretically investigates optimal monetary policy regime for oil producing developing countries. We analyze credibility and reputation of the Central Bank and macroeconomic dynamics under alternative monetary policy regimes. We construct a detailed and realistic model that can be used to analyze macroecomic structure and expectation dynamics of an oil producing open economy. We take into account the asymmetric information between the public and the central bank and theoretically investigate how this asymmetric information impacts the real economy and the credibility of the central bank. The simulation results indicate that central bank achieves higher credibility and lower inflation under dollarization and higher output levels under currency board regime. The model constructed in this paper has many policy implications for oil producing open economies. Using the implications of the model, we make monetary policy regime recommendations for post-war Iraq.     

37Mn5钢石油套管热处理工艺的研究

针对37Mn5钢分别对不同的回火温度、回火保温时间、淬火温度和淬火保温时间对37Mn5钢组织性能的影响规律进行了研究,确定了了实验室条件下的套管热处理工艺。试验结果表明,37Mn5钢此经过调质工艺处理后,力学性能达到了API 5CT标准要求,可用来生产N80Q钢级和P110钢级的石油套管。     

Emerging markets and heavy tails

Emerging countries are held to be subject to more frequent and more pronounced external and internal shocks than their developed counter-parts. This suggests that key variables pertaining to their markets, including their exchange rates, will be marked by greater likelihood of extreme observations and large fluctuations. We focus on the hypothesis that compared to developed country exchange rates, emerging country exchange rates will be more pronouncedly heavy-tailed. We find support for the hypothesis using recently proposed robust tail index estimation methods which, in particular, perform well under heavy-tailed dependent GARCH processes that are often used for modeling exchange rates. According to the estimation results reported in the paper, variances may be infinite for several emerging country exchange rates. Tail index values ζ = p ∈ (2.6, 2.8) appear to be at the dividing boundary between the two sets of countries: while the moments of order p ∈ (2.6, 2.8) are finite for most of the developed country exchange rates, they may be (or are) infinite for most of the emerging country exchange rates. We also study the impact of the on-going financial and economic crisis, and find that heavy-tailedness properties of most exchange rates did not change significantly with the onset of the crisis. At the same time, some foreign exchange markets have experienced structural changes in their heavy-tailedness properties during the crisis.     

The term structure of sovereign default risk in EMU member countries and its determinants

We analyze the determinants of sovereign default risk of EMU member states using government bond yield spreads as risk indicators. We focus on default risk for different time spans indicated by spreads for different maturities. Using a panel framework we analyze whether there are different drivers of default risk for different maturities. We find that lower economic growth and larger openness increase default risk for all maturities. Higher indebtedness only increases short-term risk, whereas net lending, trade balance and interest rate costs only drive long-term default risk.     

GDP in the Dutch Cape Colony: The National Accounts of a Slave‐Based Society

New estimates of the gross domestic product of the Dutch Cape Colony (1652‐1795) suggest that the Cape was one of the most prosperous regions during the eighteenth century. This stands in sharp contrast to the perceived view that the Cape was an “economic and social backwater,” a slave economy with slow growth and little progress. Following a national accounts framework, we find that Cape settlers' per capita income is similar to the most prosperous countries of the time – Holland and England. We trace the roots of this result, showing that it is partly explained by a highly skewed population structure and very low dependency ratio of slavery, and attempt to link the eighteenth‐century Cape Colony experience to twentieth‐century South African income levels.     

International portfolio reallocation: Diversification benefits and European monetary union

We investigate the determinants of bilateral international equity and bond portfolio reallocation across a large cross-section of countries spanning over two sample periods: 1997-2001 and 1997-2005. We find that the strongest drivers are the marginal diversification benefits arising from the pure asset component and the initial degree of underweight. This evidence suggests that global portfolio reallocations over the asset boom and bust period were determined by optimal diversification considerations. We also find that due to economic and monetary union (EMU) the weight assigned by euro area investors to investment in euro area countries increased significantly in equity and fixed income portfolios, with a trade diverting effect against the British bond market.     

“Rules of thumb” for sovereign debt crises

This paper investigates the economic and political conditions that are associated to the occurrence of a sovereign debt crisis. We use a new statistical approach (Classification and Regression Tree) that allows us to derive a collection of “rules of thumb” that help identify the typical characteristics of defaulters. We find that not all crises are equal: they differ depending on whether the government faces insolvency, illiquidity, or various macroeconomic risks. We also characterize the set of fundamentals that can be associated with a relatively “risk-free” zone. This classification is important for discussing appropriate policy options to prevent crises and improve response time and prediction.     

Do Macroforecasters Herd?

We show that typical tests of whether forecasters herd will falsely indicate herding behavior for a variety of types of behavior and forecasting environments that give rise to disagreement among forecasters. We establish that forecasters will appear to herd if differences between them reflect noise as opposed to private information, or if they arise from informational rigidities. Noise can have a behavioral interpretation and if so will depend on the behavioral model under consideration. An application of the herding tests to U.S. quarterly survey forecasts of inflation and output growth data 1981–2013 does not support herding behavior.