A comparison of linear forecasting models and neural networks:an application to Euro inflation and Euro Divisia

Linear models reach their limitations in applications with nonlinearities in the data. In this paper new empirical evidence is provided on the relative Euro inflation forecasting performance of linear and non-linear models. The well established and widely used univariate ARIMA and multivariate VAR models are used as linear forecasting models whereas neural networks (NN) are used as non-linear forecasting models. It is endeavoured to keep the level of subjectivity in the NN building process to a minimum in an attempt to exploit the full potentials of the NN. It is also investigated whether the historically poor performance of the theoretically superior measure of the monetary services flow, Divisia, relative to the traditional Simple Sum measure could be attributed to a certain extent to the evaluation of these indices within a linear framework. Results obtained suggest that non-linear models provide better within-sample and out-of-sample forecasts and linear models are simply a subset of them. The Divisia index also outperforms the Simple Sum index when evaluated in a non-linear framework. © 2005 Taylor & Francis Group Ltd.

Polish EU accession in comparative perspective:macroeconomics, finance and the government

This book is a collection of papers that focusses on the macroeconomic and financial aspects of EU accession of its largest new member, Poland, seen in comparative perspective. Two main themes are covered. One relates to empirical estimations, evaluating the effects of integration on fiscal balance, prices, seigniorage wealth and FDI flows. The second theme relates to institutional reform and policy recommendations. Discussion focuses on how transparency and fiscal rules, including those implied by EU accession, may help to reduce the deficit bias in fiscal policy; what is the institutional framework for low inflation and how to make the insurance sector regulation more efficient, including its implications for insurance offer for small and medium-size enterprises. Last but not least, the Irish model of development and the role of the foreign direct investment in it is discussed, including the applicability of the Irish policy in Poland and other new EU member states.

The development and investigation of a novel pulsatile heart assist device

Cardiovascular diseases (CVD) contributed to almost 30% of worldwide mortality; with heart failure being one class of CVD. One popular and widely available treatment for heart failure is the intra-aortic balloon pump (IABP). This heart assist device is used in counterpulsation to improve myocardial function by increasing coronary perfusion, and decreasing aortic end-diastolic pressure (i.e. the resistance to blood ejection from the heart). However, this device can only be used acutely, and patients are bedridden. The subject of this research is a novel heart assist treatment called the Chronic Intermittent Mechanical Support (CIMS) which was conceived to offer advantages of the IABP device chronically, whilst overcoming its disadvantages. The CIMS device comprises an implantable balloon pump, a percutaneous drive line, and a wearable driver console. The research here aims to determine the haemodynamic effect of balloon pump activation under in vitro conditions. A human mock circulatory loop (MCL) with systemic and coronary perfusion was constructed, capable of simulating various degrees of heart failure. Two prototypes of the CIMS balloon pump were made with varying stiffness. Several experimental factors (balloon inflation/deflation timing, Helium gas volume, arterial compliance, balloon pump stiffness and heart valve type) form the factorial design experiments. A simple modification to the MCL allowed flow visualisation experiments using video recording. Suitable statistical tests were used to analyse the data obtained from all experiments. Balloon inflation and deflation in the ascending aorta of the MCL yielded favourable results. The sudden balloon deflation caused the heart valve to open earlier, thus causing longer valve opening duration in a cardiac cycle. It was also found that pressure augmentation in diastole was significantly correlated with increased cardiac output and coronary flowrate. With an optimum combination (low arterial compliance and low balloon pump stiffness), systemic and coronary perfusions were increased by 18% and 21% respectively, while the aortic end-diastolic pressure (forward flow resistance) decreased by 17%. Consequently, the ratio of oxygen supply and demand to myocardium (endocardial viability ratio, EVR) increased between 33% and 75%. The increase was mostly attributed to diastolic augmentation rather than systolic unloading.

Accommodating energy price volatility in life cycle cost analysis of asphalt pavements

Energy price is related to more than half of the total life cycle cost of asphalt pavements. Furthermore, the fluctuation related to price of energy has been much higher than the general inflation and interest rate. This makes the energy price inflation an important variable that should be addressed when performing life cycle cost (LCC) studies re- garding asphalt pavements. The present value of future costs is highly sensitive to the selected discount rate. Therefore, the choice of the discount rate is the most critical element in LCC analysis during the life time of a project. The objective of the paper is to present a discount rate for asphalt pavement projects as a function of interest rate, general inflation and energy price inflation. The discount rate is defined based on the portion of the energy related costs during the life time of the pavement. Consequently, it can reflect the financial risks related to the energy price in asphalt pavement projects. It is suggested that a discount rate sensitivity analysis for asphalt pavements in Sweden should range between –20 and 30%.

Margetinggeschichte:Die Genese einer modernen Sozialtechnik, Hartmut Berghoff

Book revew: Marketinggeschichte: die Genese einer modernen Sozialtechnik [Marketing history: The genesis of a modern social technique], edited by Hartmut Berghoff, Frankfurt/Main, Campus Verlag, 2007, 409 pp., illus., [euro]30.00 (paperback), ISBN 978-3-593-38323-1. This edited volume is the result of a workshop at Göttingen University in 2006 and combines a number of different approaches to the research into the history of marketing in Germany's economy and society. The majority of contributions loosely focus around the occurrence of a ‘marketing revolution’ in the 1970s, which ties in with interpretations of the Americanisation of German business. This revolution replaced the indigenous German idea of Absatzwirtschaft (the economics of sales) with the American-influenced idea of Marketing, which was less functionally oriented and more strategic, and which aimed to connect processes within the firm in order to allow a greater focus on the consumer. The entire volume is framed by Hartmut Berghoff's substantial and informative introduction, which introduces a number of actors and trends beyond the content of the volume. Throughout the various contributions, authors provide explanations of the timing and nature of marketing revolutions. Alexander Engel identifies an earlier revolution in the marketing of dyes, which undergoes major change with the emergence of chemical dyes. While the natural dyestuff had been a commodity, with producers removed from consumers via a global network of traders, chemical dyes were products and were branded at an early stage. This was a fundamental change in the nature of production and sales. As Roman Rossfeld shows in his contribution on the Swiss chocolate industry (which focuses almost exclusively on Suchard), even companies that produced non-essential consumer goods which had always required some measure of labelling grappled for years with the need to develop fewer and higher impact brands, as well as an efficient sales operation. A good example for the classical ‘marketing revolution’ of the 1970s is the German automobile industry. Ingo Köhler convincingly argues that the crisis situation of German car manufacturers – the change from a seller's to a buyer's market, appreciation of the German mark which undermines exports, the oil crises coupled with higher inflation and greater frugality of consumers and the emergence of new competitors – lead companies to refocus from production to the demands of the consumer. While he highlights the role of Ford in responding most rapidly to these problems, he does not address whether the multinational was potentially transferring American knowledge to the German market. Similarly, Paul Erker illustrates that a marketing revolution in transport and logistics happened much later, because the market remained highly regulated until the 1980s. Both Paul Erker and Uwe Spiekermann in their contribution, present comparisons of two different sectors or companies (the tire manufacturer Continental and the logistics company Dachser, and agriculture and trade, respectively). In both cases, however, it remains unclear why these examples were chosen for comparison, as both seem to have little in common and are not always effectively used to demonstrate differences. The weakest section of the book is the development of marketing as an academic discipline. The attempt at sketching the phases in the evolution of marketing as an academic discipline by Ursula Hansen and Matthias Bode opens with an undergraduate-level explanation on the methodology of historical periodisation that seems extraneous. Considerably stronger is the section on the wider societal impact of marketing, and Anja Kruke shows how the new techniques of opinion research was accepted by politics and business – surprisingly more readily by politicians than their commercial counterparts. In terms of contemporary personalities, Hans Domizlaff emerges as one fascinating figure of German marketing history, which several contributors refer to and whose career as the German cigarette manufacturer Reemtsma is critically analysed by Tino Jacobs. Domizlaff was Germany's own ‘marketing guru’, whose successful campaigns led to the wide-ranging reception of his ideas about the nature of good branding and marketing. These are variously described as intuitive, elitist, and sachlich, a German concept of a sober, fact-based, and ‘no frills’ approach. Domizlaff did not believe in market research. Rather, he saw the genius of the individual advertiser as key to intuitively ascertaining the people's moods, wishes, and desires. This seems to have made him peculiarly suited to the tastes of the German middle class, according to Thomas Mergel's contribution on the nature of political marketing in the republic. Especially in politics, any form of hard sales tactics were severely frowned upon and considered to demean the citizen as incapable of making an informed choice, a mentality that he dates back to the traditions of nineteenth-century liberalism. Part of this disdain of ‘selling politics like toothpaste’ was also founded on the highly effective use of branding by the National Socialists, who identified their party through the use of an increasingly standardised image of Adolf Hitler and the swastika. Alexander Schug extends on previous research that criticised the simplistic notion of Hitler's charisma as the only explanation of the popular success and distances his approach from those who see it in terms of propaganda and demagogy. He argues that the NSDAP used the tools of advertising and branding precisely because they had to introduce their new ideology into a political marketplace dominated by more established parties. In this they were undoubtedly successful, more so than they intended: as bakers sold swastika cookies and butchers formed Führer heads out of lard, the NSDAP sought to regain control over the now effectively iconic images that constituted their brand, which was in danger of being trivialised and devalued. Key to understanding the history of marketing in Germany is on the one hand the exchange of ideas with the United States, and on the other the impact of national-socialist policies, and the question whether they were a force of modernisation or retardation. The general argument in the volume appears to favour the latter explanation. In the 1930s, some of the leading marketing experts emigrated to the USA, leaving German academia and business isolated. The aftermath of the Second World War left a country that needed to increase production to satisfy consumer demand, and there was little interest in advanced sales techniques. Although the Nazis were progressive in applying new marketing methods to their political campaign, this retarded the adoption of sales techniques in politics for a long time. Germany saw the development of idiosyncratic approaches by people like Domizlaff in the 1930s and 1940s, when it lost some leading thinkers, and only engaged with American marketing conceptions in the 1960s and 1970s, when consumers eventually became more important than producers.

Discretion in accounting for pensions under IAS 19:using the ‘magic telescope’?

We use a panel data set of UK-listed companies over the period 2005–2009 to analyse the actuarial assumptions used to value pension plan liabilities under IAS 19. The valuation process requires companies to make assumptions about financial and demographic variables, notably discount rate, price inflation, salary inflation and mortality/life expectancy of plan members/beneficiaries. We use regression analysis to analyse the relationships between these key assumptions (except mortality, where disclosures are limited) and company-specific factors such as the pension plan funding position and duration of pension liabilities. We find evidence of selective ‘management’ of the three assumptions investigated, although the nature of this appears to differ from the findings of US authors. We conclude that IAS 19 does not prevent the use of managerial discretion, particularly by companies whose pension plan funding positions are weak, thereby reducing the representational faithfulness of the reported pension figures. We also highlight that the degree of discretion used reflects the extent to which IAS 19 defines how the assumptions are to be determined. We therefore suggest that companies should be encouraged to justify more explicitly their choice of assumptions.

From recession to renewal:the impact of the financial crisis on public services and local government

Book review of From Recession to Renewal: The Impact of the Financial Crisis on Public Services and Local Government, Joanna Richardson (Ed). Bristol, Policy Press, 2010, ISBN 9781847426994

Evolution, recurrency and kernels in learning to model inflation

This paper provides the most fully comprehensive evidence to date on whether or not monetary aggregates are valuable for forecasting US inflation in the early to mid 2000s. We explore a wide range of different definitions of money, including different methods of aggregation and different collections of included monetary assets. We use non-linear, artificial intelligence techniques, namely, recurrent neural networks, evolution strategies and kernel methods in our forecasting experiment. In the experiment, these three methodologies compete to find the best fitting US inflation forecasting models and are then compared to forecasts from a naive random walk model. The best models were non-linear autoregressive models based on kernel methods. Our findings do not provide much support for the usefulness of monetary aggregates in forecasting inflation. There is evidence in the literature that evolutionary methods can be used to evolve kernels hence our future work should combine the evolutionary and kernel methods to get the benefits of both.

Inward investment and the drivers of post recession recovery in Germany

This paper examines changes in the drivers of productivity in Germany over the period 1997-2012. We start by comparing the performance of German firms and inward investors before and during the recovery from the recent global financial crisis of 2008 across a range of sectors, and subsequently examine the channels through which different firms are able to generate productivity. Our results show that foreign investors are more productive than German MNEs and purely domestic firms, with the gap narrowing in the manufacturing sector, but growing in the service sector during the recovery period. We also contrast those firms for whom productivity growth is related to greater use of intangible assets, compared with those for whom productivity is linked to cash flow. Productivity of inward investors is driven by cash flow rather than intangible assets, these being limited to high-technology investors from the EU and the USA.

Inflation forecasting, relative price variability and skewness

This article presents out-of-sample inflation forecasting results based on relative price variability and skewness. It is demonstrated that forecasts on long horizons of 1.5-2 years are significantly improved if the forecast equation is augmented with skewness. © 2010 Taylor & Francis.

A composite leading indicator of the inflation cycle for the Euro area

We evaluate the performance of composite leading indicators of turning points of inflation in the Euro area, constructed by combining the techniques of Fourier analysis and Kalman filters with the National Bureau of Economic Research methodology. In addition, the study compares the empirical performance of Euro Simple Sum and Divisia monetary aggregates and provides a tentative answer to the issue of whether or not the UK should join the Euro area. Our findings suggest that, first, the cyclical pattern of the different composite leading indicators very closely reflect that of the inflation cycle for the Euro area; second, the empirical performance of the Euro Divisia is better than its Simple Sum counterpart and third, the UK is better out of the Euro area. © 2005 Taylor & Francis Group Ltd.

Why critical pedagogy and popular education matter today

Few today doubt that English Higher Education (HE), like the wider world in which it is located, is in crisis. This is, in part, an economic crisis, as the government response to the current recession seems to be that of introducing the kind of neoliberal ‘shock doctrine’ (Klein 2007) or ‘shock therapy’ (Harvey 2005) that previously resulted in swingeing cuts in public services in Southern nations. Our aim in producing this volume is that these contributions help develop a collective response to the seeming limits of these conditions. We view the strength of these contributions in part as providing palpable evidence of how we and our colleagues are acting with critical hope under current conditions so that we might encourage others to work with us to build, together, more progressive formal and informal education systems that address and seek to redress multiple injustices of the world today.

Pole tip recession in linear tape systems

The tribology of linear tape storage system including Linear Tape Open (LTO) and Travan5 was investigated by combining X-ray Photoelectron Spectroscopy (XPS), Auger Electron Spectroscopy (AES), Optical Microscopy and Atomic Force Microscopy (AFM) technologies. The purpose of this study was to understand the tribology mechanism of linear tape systems then projected recording densities may be achieved in future systems. Water vapour pressure or Normalized Water Content (NWC) rather than the Relative Humidity (RH) values (as are used almost universally in this field) determined the extent of PTR and stain (if produced) in linear heads. Approximately linear dependencies were found for saturated PTR increasing with normalized water content increasing over the range studied using the same tape. Fe Stain (if produced) preferentially formed on the head surfaces at the lower water contents. The stain formation mechanism had been identified. Adhesive bond formation is a chemical process that is governed by temperature. Thus the higher the contact pressure, the higher the contact temperature in the interface of head and tape, was produced higher the probability of adhesive bond formation and the greater the amount of transferred material (stain). Water molecules at the interface saturate the surface bonds and makes adhesive junctions less likely. Tape polymeric binder formulation also has a significant role in stain formation, with the latest generation binders producing less transfer of material. This is almost certainly due to higher cohesive bonds within the body of the magnetic layer. TiC in the two-phase ceramic tape-bearing surface (AlTiC) was found to oxidise to form TiO2.The oxidation rate of TiC increased with water content increasing. The oxide was less dense than the underlying carbide; hence the interface between TiO2 oxide and TiC was stressed. Removals of the oxide phase results in the formation of three-body abrasive particles that were swept across the tape head, and gave rise to three-body abrasive wear, particularly in the pole regions. Hence, PTR and subsequent which signal loss and error growth. The lower contact pressure of the LTO system comparing with the Travan5 system ensures that fewer and smaller three-body abrasive particles were swept across the poles and insulator regions. Hence, lower contact pressure, as well as reducing stain in the same time significantly reduces PTR in the LTO system.

Employability management needs analysis and the ICT sector in Europe:the case of small and medium-sized enterprises

The purpose of this paper is to deal with the outcomes of a so-called “employability management needs analysis” that is meant to provide more insight into current employability management activities and its possible benefits for Information and Communication Technology (ICT) professionals working in Small- and Medium-sized enterprises (SMEs) throughout Europe. A considerable series of interviews (N=107) were conducted with managers in SMEs in seven European countries, including Germany, Greece, Italy, the Netherlands, Norway, Poland, and the UK. A semi-structured interview protocol was used during the interviews to cover three issues: employability (13 items), ageing (8 items), and future developments and requirements (13 items). Analysis of all final interview transcriptions was at a national level using an elaborate common coding scheme. Although an interest in employability emerged, actual policy and action lagged behind. The recession in the ICT sector at the time of the investigation and the developmental stage of the sector in each participating country appeared connected. Ageing was not seen as a major issue in the ICT sector because managers considered ICT to be a relatively young sector. There appeared to be a serious lack of investment in the development of expertise of ICT professionals. Generalization of the results to large organizations in the ICT sector should be made with caution. The interview protocol developed is of value for further research and complements survey research undertaken within the employability field of study. It can be concluded that proactive HRM (Human Resource Management) policies and strategies are essential, even in times of economic downturn. Employability management activities are especially important in the light of current career issues. The study advances knowledge regarding HRM practices adopted by SMEs in the ICT sector, especially as there is a gap in knowledge about career development issues in that particular sector.