Flexible rules cum constrained discretion: a new consensus in monetary policy

This paper demonstrates that recent influential contributions to monetary policy imply an emerging consensus whereby neither rigid rules nor complete discretion are found optimal. Instead, middle-ground monetary regimes based on rules (operative under 'normal' circumstances) to anchor inflation expectations over the long run, but designed with enough flexibility to mitigate the short-run effect of shocks (with communicated discretion in 'exceptional' circumstances temporarily overriding these rules), are gaining support in theoretical models and policy formulation and implementation. The opposition of 'rules versus discretion' has, thus, reappeared as the synthesis of 'rules cum discretion', in essence as inflation-forecast targeting. But such synthesis is not without major theoretical problems, as we argue in this contribution. Furthermore, the very recent real-world events have made it obvious that the inflation targeting strategy of monetary policy, which rests upon the new consensus paradigm in modern macroeconomics is at best a 'fair weather' model. In the turbulent economic climate of highly unstable inflation, deep financial crisis and world-wide, abrupt economic slowdown nowadays this approach needs serious rethinking to say the least, if not abandoning it altogether

Testing for a unit root in a process exhibiting a structural break in the presence of GARCH errors

This paper considers the effect of GARCH errors on the tests proposed byPerron (1997) for a unit root in the presence of a structural break. We assessthe impact of degeneracy and integratedness of the conditional varianceindividually and find that, apart from in the limit, the testing procedure isinsensitive to the degree of degeneracy but does exhibit an increasingover-sizing as the process becomes more integrated. When we consider the GARCHspecifications that we are likely to encounter in empirical research, we findthat the Perron tests are reasonably robust to the presence of GARCH and donot suffer from severe over-or under-rejection of a correct null hypothesis.

Testing for non-stationarity and cointegration allowing for the possibility of a structural break: an application to EuroSterling interest rates

In this paper we examine the order of integration of EuroSterling interest rates by employing techniques that can allow for a structural break under the null and/or alternative hypothesis of the unit-root tests. In light of these results, we investigate the cointegrating relationship implied by the single, linear expectations hypothesis of the term structure of interest rates employing two techniques, one of which allows for the possibility of a break in the mean of the cointegrating relationship. The aim of the paper is to investigate whether or not the interest rate series can be viewed as I(1) processes and furthermore, to consider whether there has been a structural break in the series. We also determine whether, if we allow for a break in the cointegration analysis, the results are consistent with those obtained when a break is not allowed for. The main results reported in this paper support the conjecture that the ‘short’ Euro-currency rates are characterised as I(1) series that exhibit a structural break on or near Black Wednesday, 16 September 1992, whereas the ‘long’ rates are I(1) series that do not support the presence of a structural break. The evidence from the cointegration analysis suggests that tests of the expectations hypothesis based on data sets that include the ERM crisis period, or a period that includes a structural break, might be problematic if the structural break is not explicitly taken into account in the testing framework.

The housing market channel of monetary policy transmission in the Euro area

Purpose – The purpose of this paper is to explore the role of the housing market in the monetary policy transmission to consumption among euro area member states. It has been argued that the housing market in one country is then important when its mortgage market is well developed. The countries in the euro area follow unitary monetary policy, however, their housing and mortgage markets show some heterogeneity, which may lead to different policy effects on aggregate consumption through the housing market. Design/methodology/approach – The housing market can act as a channel of monetary policy shocks to household consumption through changes in house prices and residential investment – the housing market channel. We estimate vector autoregressive models for each country and conduct a counterfactual analysis in order to disentangle the housing market channel and assess its importance across the euro area member states. Findings – We find little evidence for heterogeneity of the monetary policy transmission through house prices across the euro area countries. Housing market variations in the euro area seem to be better captured by changes in residential investment rather than by changes in house prices. As a result we do not find significantly large house price channels. For some of the countries however, we observe a monetary policy channel through residential investment. The existence of a housing channel may depend on institutional features of both the labour market or with institutional factors capturing the degree of household debt as is the LTV ratio. Originality/value – The study contributes to the existing literature by assessing whether a unitary monetary policy has a different impact on consumption across the euro area countries through their housing and mortgage markets. We disentangle monetary-policy-induced effects on consumption associated with variations on the housing markets due to either house price variations or residential investment changes. We show that the housing market can play a role in the monetary transmission mechanism even in countries with less developed mortgage markets through variations in residential investment.

Bayesian model averaging and identification of structural breaks in time series

Bayesian Model Averaging (BMA) is used for testing for multiple break points in univariate series using conjugate normal-gamma priors. This approach can test for the number of structural breaks and produce posterior probabilities for a break at each point in time. Results are averaged over specifications including: stationary; stationary around trend and unit root models, each containing different types and number of breaks and different lag lengths. The procedures are used to test for structural breaks on 14 annual macroeconomic series and 11 natural resource price series. The results indicate that there are structural breaks in all of the natural resource series and most of the macroeconomic series. Many of the series had multiple breaks. Our findings regarding the existence of unit roots, having allowed for structural breaks in the data, are largely consistent with previous work.

Methylene spacer-regulated structural variation in cobalt(II/III) complexes with bridging acetate and Salen- or Salpn-type Schiff-base ligands

Two linear, trinuclear mixed-valence complexes, [Co-II{(mu-L-1)(mu-OAc)Co-III (OAc)}(2)] (1) and [Co-II(mu-L-2) (mu-OAc)Co-III(OAc)}(2)] (2) and two mononuclear Con' complexes [Co-III{L-3)(OAc)] (3), and [Co-III {L-4}(OAc)] (4) were prepared and the molecular structures of 1, 2 and 4 elucidated on the basis of X-ray crystallography [OAc = Acetate ion, H2L1 = H(2)Salen 1,6-bis(2-hydroxyphenyl)-2,5-diazahexa-1,5-diene, H2L2 H2Me2-Salen = 2,7-bis(2-hydroxyphenyl)-2,6-diazaocta-2,6-diene, H2L3 = H(2)Salpn = 1,7-bis(2-hydroxyphenyl)-2,6-diazahepta1,6-diene, H2L4 = H(2)Me(2)Salpn = 2,8-bis(2-hydroxyphenyl)3,7-diazanona-2,7-dienel. In complexes I and 2, the acetate groups show both monodentate and bridging bidentate coordination modes, whereas chelating bidentate acetate is present in 4. The terminal (CoN2O4)-N-III centres in 1 and 2 exhibit uniform facial arrangements of both non-bridged N2O and bridging O-3 donor sets and the Co-II centre is coordinated to six (four phenoxo and two acetato) oxygen atoms of the bridging ligands. The effective magnetic moment at room temperature corresponds to the presence of high-spin Coll in both 1 and 2. The complexes 1 and 2 are thus Co-III(S = 0)Co-II(S = 3/2)-Co-II(S = 0) trimers. Complexes 3 and 4 are monomeric and diamagnetic containing low-spin Co-III(S = 0) with chelating tetradentate Schiff base and bidentate acetate. Calculations based on DFT rationalise the formation of trinuclear or monomiclear complexes. (C) Wiley-VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2008).

Structural diversity in supramolecular architectures of Mn(II) through non-covalent interactions

Two mononuclear complexes of manganese(II), [Mn(OCN)(2)(phen)(2)] 1 and [Mn(NCO)(2)(bpy)(2)] 2 [1,10-phenanthroline (phen); 2,2'-bipyridine (bpy)], have been synthesized and characterized by single crystal X-ray analysis, infra-red spectroscopy and magnetic studies. The coordination structure of complex 2 is already reported. The cyanate anions are pendent in both the complexes. In 1, cyanate anion links manganese(II) through O-atom, whereas in 2 it coordinates through N-atom. The mononuclear fragments of 1 are built up to a supramolecular lamellar 3D architecture by pi-pi interactions only. On the other hand, mononuclear fragments of 2 are assembled to a 2D supramolecular brick-wall architecture by C-H-... pi interactions.

Structural variations in Ni(II) complexes of salen type di-Schiff base ligands

Three di-Schiff-base ligands, N,N'-bis(salicylidene)-1,3-propanediamine (H(2)Salpn), N,N'-bis(salicylidene)-1,3-pentanedianiine (H(2)Salpen) and N,N'-bis(salicylidine)-ethylenediamine (H(2)Salen) react with Ni(SCN)(2). 4H(2)O in 2:3 molar ratios to form the complexes; mononuclear [Ni(HSalpn)(NCS)(H2O)]center dot H2O (1a), trinuclear [{Ni(Salpen)}(2)Ni(NCS)(2)] (2b) and trinuclear [{Ni(Salen)}(2)Ni(NCS)(2)] (3) respectively. All the complexes have been characterized by elemental analyses, IR and UV-VIS spectra, and room temperature magnetic susceptibility measurements. The structures of la and 2b have been confirmed by X-ray single crystal analysis. In complex la, the Ni(II) atom is coordinated equatorially by the tetradentate, mononegative Schiff-base, HSalpn. Axial coordination of isothiocyanate group and a water molecule completes its octahedral geometry. The hydrogen atom attached to one of the oxygen atoms of the Schiff base is involved in a very strong hydrogen bond with a neighboring unit to form a centrosymmetric dimer. In 2b, two square planar [Ni(Salpen)] units act as bide mate oxygen donor ligands to a central Ni(II) which is also coordinated by two mutually cis N-bonded thiocyanate ligands to complete its distorted octahedral geometry. Complex 3 possesses a similar structure to that of 2b. A dehydrated form of la and a hydrated form of 2b have been obtained and characterized. The importance of electronic and steric factors in the variation of the structures is discussed. (c) 2007 Elsevier Ltd. All rights reserved.

English-only language-in-education policy in multilingual classrooms in Ghana

This paper, based on the findings of a qualitative study, discusses the influence of Ghana's recently introduced English-only language-in-education policy on pupils' classroom communicative practices and learning generally. It highlights how the use of English- an unfamiliar language- creates anxiety among students and stalls effective classroom participation. The paper first considers the key issues that impinge on the literacy development in multilingual classrooms in postcolonial Africa including the uninformed attitudes towards mother tongue/bilingual education. It then draws on the empirical data from Africa and elsewhere to refute the negative perceptions about mother-tongue education, and examines the prospects for bilingual/mother-tongue education in multilingual classrooms in Ghana.

A catemer-to-dimer structural transformation in cyheptamide

A catemeric crystal structure of cyheptamide undergoes a transformation in the solid-state upon heating to produce a dimer-based form whose structure has been determined from laboratory X-ray powder diffraction ( XRPD) data, thereby providing the first conclusive evidence of a carbamazepine analogue crystallising in both hydrogen bonded motifs.