Fixing the currency: analysing the implications for property investment performance

This paper analyses the historic effects of exchange rate movements on returns, risk and diversification of office markets within the Euro zone in order to gain insights into the investment consequences of conversion to a fixed rate currency regime. The data used in the study represents annual office rental growth rates for 22 European cities from nine European Union countries between 1985 and 1996. Relative performance is reported in terms of domestic currency and in terms of deutsche marks. The evidence presented suggests that Euro zone property investors in ‘southern’ countries are now protected from short term jump risk associated with flexible peg currency arrangements and medium/long-term currency volatility. Historically exchange rate movements have produced decreases in returns and increases in volatility. For northern ‘bloc’ cities, the effects of fixing the exchange rate are minimal. For these cities, national exchange rate fluctuations against the deutsche mark have been minor and the resultant implications for property risk and return to non-domestic SCA investors have been negligible. Moreover, although previous research would suggest that the effect of currency volatility is to decrease market correlation, this cannot be observed within the Euro zone.

Economic transformation in Ghana: where will the path lead?

In the context of the Ghanaian government’s objective of structural transformation with an emphasis on manufacturing, this paper provides a case study of economic transformation in Ghana, exploring patterns of growth, sectoral transformation, and agglomeration. We document and examine why, despite impressive growth and poverty reduction figures, Ghana’s economy has exhibited less transformation than might be expected for a country that has recently achieved middle-income status. Ghana’s reduced share of agriculture in the economy, unlike many successfully transformed countries in Asia and Latin America, has been filled by services, while manufacturing has stagnated and even declined. Likely causes include weak transformation of the agricultural sector and therefore little development of agroprocessing, the emergence of consumption cities and consumption-driven growth, upward pressure on the exchange rate, weak production linkages, and a poor environment for private-sector-led manufacturing.

Finite sample weighting of recursive forecast errors

This paper proposes and tests a new framework for weighting recursive out-of-sample prediction errors according to their corresponding levels of in-sample estimation uncertainty. In essence, we show how to use the maximum possible amount of information from the sample in the evaluation of the prediction accuracy, by commencing the forecasts at the earliest opportunity and weighting the prediction errors. Via a Monte Carlo study, we demonstrate that the proposed framework selects the correct model from a set of candidate models considerably more often than the existing standard approach when only a small sample is available. We also show that the proposed weighting approaches result in tests of equal predictive accuracy that have much better sizes than the standard approach. An application to an exchange rate dataset highlights relevant differences in the results of tests of predictive accuracy based on the standard approach versus the framework proposed in this paper.

Economic Transformation in Ghana: Where Will the Path Lead?

In the context of the Ghanaian government’s objective of structural transformation with an emphasis on manufacturing, this paper provides a case study of economic transformation in Ghana, exploring patterns of growth, sector transformation, and agglomeration. We document and examine why, despite impressive growth and poverty reduction figures, Ghana’s economy has exhibited less transformation than might be expected for a country that has recently achieved middle-income status. Ghana’s reduced share of agriculture in the economy, unlike many successfully transformed countries in Asia and Latin America, has been filled by services, while manufacturing has stagnated and even declined. Likely causes include weak transformation of the agricultural sector and therefore little development of agro-processing, the emergence of “consumption cities” and consumption-driven growth, upward pressure on the exchange rate, weak production linkages, and a poor environment for private-sector-led manufacturing.

Observations of the inter-ocean exchange around South Africa

There is growing evidence that the interocean exchange south of Africa is an important link in the global overturning circulation of the ocean, the so‐called ocean conveyer belt. At this location, warm and salty Indian Ocean waters enter the South Atlantic and are pulled by currents that eventually reach the North Atlantic, where water cools and sinks. A major contributor to the exchange is the frequent shedding of ring eddies from the termination of the Agulhas Current south of the tip of Africa. This shedding is controlled by developments far upstream in the Indian Ocean, and variations in this ‘Agulhas Leakage’ can lead to changes in the rate and stability of the Atlantic overturning, with possible associated global climate variations [Weijer et al., 1999]. Regional climate variations in the tropical and subtropical Indian Ocean are known to affect the whole system of the Agulhas Current, including the interocean exchanges. This article reports on some of the seminal results of ongoing multinational, multidisciplinary projects that explore these issues.

Gas-phase kinetics of chlorosilylene reactions. I. ClSiH + Me3SiH: absolute rate measurements and theoretical calculations for prototype Si−H insertion reactions

Time-resolved studies of chlorosilylene, CISiH, generated by the 193 nm laser flash photolysis of 1-chloro-1-silacyclopent-3-ene, have been carried out to obtain rate constants for its bimolecular reaction with trimethylsilane, Me3SiH, in the gas phase. The reaction was studied at total pressures up to 100 torr (with and without added SF6) over the temperature range 297-407 K. The rate constants were found to be pressure independent and gave the following Arrhenius equation: log(k/cm(3) molecule(-1) s(-1)) = (-13.97 +/- 0.25) + (12.57 +/- 1.64) kJ mol(-1)/RT In 10. The Arrhenius parameters are consistent with a mechanism involving an intermediate complex, whose rearrangement is the rate-determining step. Quantum chemical calculations of the potential energy surface for this reaction and also the reactions of CISiH with SiH4 and the other methylsilanes support this conclusion. Comparisons of both experiment and theory with the analogous Si-H insertion processes of SiH2 and SiMe2 show that the main factor causing the lower reactivity of ClSiH is the secondary energy barrier. The calculations also show the existence of a novel intramolecular H-atom exchange process in the complex of ClSiH with MeSiH3.

A model for exchange rates with crawling bands: an application to the Colombian peso

This paper builds upon previous research on currency bands, and provides a model for the Colombian peso. Stochastic differential equations are combined with information related to the Colombian currency band to estimate competing models of the behaviour of the Colombian peso within the limits of the currency band. The resulting moments of the density function for the simulated returns describe adequately most of the characteristics of the sample returns data. The factor included to account for the intra-marginal intervention performed to drive the rate towards the Central Parity accounts only for 6.5% of the daily change, which supports the argument that intervention, if performed by the Central Bank, it is not directed to push the currency towards the limits. Moreover, the credibility of the Colombian Central Bank, Banco de la República’s ability to defend the band seems low.

Eddy-driven exchange between the open ocean and a sub-ice shelf cavity

The exchange between the open ocean and sub-ice shelf cavities is important to both water mass transformations and ice shelf melting. Here we use a high-resolution (500 m) numerical model to investigate to which degree eddies produced by frontal instability at the edge of a polynya are capable of transporting dense High Salinity Shelf Water (HSSW) underneath an ice shelf. The applied surface buoyancy flux and ice shelf geometry is based on Ronne Ice Shelf in the southern Weddell Sea, an area of intense wintertime sea ice production where a flow of HSSW into the cavity has been observed. Results show that eddies are able to enter the cavity at the southwestern corner of the polynya where an anticyclonic rim current intersects the ice shelf front. The size and time scale of simulated eddies are in agreement with observations close to the Ronne Ice Front. The properties and strength of the inflow are sensitive to the prescribed total ice production, flushing the ice shelf cavity at a rate of 0.2–0.4 × 106 m3 s−1 depending on polynya size and magnitude of surface buoyancy flux. Eddy-driven HSSW transport into the cavity is reduced by about 50% if the model grid resolution is decreased to 2-5 km and eddies are not properly resolved.