From Bretton Woods to inflation targeting: financial change and monetary policy evolution in Europe

Different ‘monetary architectures’ are distinguished, as a background to a discussion of the change in developed country monetary policy frameworks from fixed exchange rates under the Bretton Woods international monetary system to, ultimately, formal or informal inflation targeting. The introduction and experience of monetary targets in the 1970s is considered, followed by an analysis of the changes in countries’ monetary architectures, with particular reference to money and bond markets and to France and Italy, in the 1980s. Exchange rate targeting in Europe in the 1980s and 1990s is examined, followed by the changes in central bank independence in the 1990s. This leads to a discussion of the introduction of inflation targeting, and the issues raised for inflation targeting by the financial crisis of the late 2000s.

Modelling world investment markets using threshold conditional correlation models

In this paper we propose a parsimonious regime-switching approach to model the correlations between assets, the threshold conditional correlation (TCC) model. This method allows the dynamics of the correlations to change from one state (or regime) to another as a function of observable transition variables. Our model is similar in spirit to Silvennoinen and Teräsvirta (2009) and Pelletier (2006) but with the appealing feature that it does not suffer from the course of dimensionality. In particular, estimation of the parameters of the TCC involves a simple grid search procedure. In addition, it is easy to guarantee a positive definite correlation matrix because the TCC estimator is given by the sample correlation matrix, which is positive definite by construction. The methodology is illustrated by evaluating the behaviour of international equities, govenrment bonds and major exchange rates, first separately and then jointly. We also test and allow for different parts in the correlation matrix to be governed by different transition variables. For this, we estimate a multi-threshold TCC specification. Further, we evaluate the economic performance of the TCC model against a constant conditional correlation (CCC) estimator using a Diebold-Mariano type test. We conclude that threshold correlation modelling gives rise to a significant reduction in portfolio´s variance.

Relative price riddles in international business cycle theory: Are transport costs the explanation?

We study relative price behavior in an international business cyclemodel with specialization in production, in which a goods marketfriction is introduced through transport costs. The transporttechnology allows for flexible transport costs. We analyze whetherthis extension can account for the striking differences betweentheory and data as far as the moments of terms of trade and realexchange rates are concerned. We find that transport costs increaseboth the volatility of the terms of trade and the volatility of thereal exchange rate. However, unless the transport technology isspecified by a Leontief technology, transport costs do not resolvethe quantitative discrepancies between theory and data. Asurprising result is that transport costs may actually lower thepersistence of the real exchange rate, a finding that is in contrastto much of the emphasis of the empirical literature.

Globalization and the provision of incentives inside the firm: The effect of foreign competition

This paper studies the effect of changes in foreign competition on the structureof compensation and incentives of U.S. executives. We measure foreign competitionas import penetration and use tariffs and exchange rates as instrumental variables toestimate its causal effect on pay. We find that higher foreign competition leads tomore incentive provision in a variety of ways. First, it increases the sensitivity of payto performance. Second, it increases whithin-firm pay differentials between executivelevels, with CEOs typically experiencing the largest wage increases, partly becausethey receive the steepest incentive contracts. Finally, higher foreign competition is alsoassociated with a higher demand for talent. These results indicate that increased foreigncompetition can explain some of the recent trends in compensation structures.

With a bang, not a whimper: Pricking Germany's "stock market bubble" in 1927 and the slide into depression

In May 1927, the German central bank intervenedindirectly to reduce lending to equity investors.The crash that followed ended the only stockmarket boom during Germany s relative stabilization 1924-28. This paper examines thefactors that lead to the intervention as well asits consequences. We argue that genuine concernabout the exuberant level of the stock market,in addition to worries about an inflow offoreign funds, tipped the scales in favour ofintervention. The evidence strongly suggeststhat the German central bank under HjalmarSchacht was wrong to be concerned aboutstockprices-there was no bubble. Also, theReichsbank was mistaken in its belief thata fall in the market would reduce theimportance of short-term foreign borrowing,and help to ease conditions in the money market.The misguided intervention had important realeffects. Investment suffered, helping to tipGermany into depression.

Stock returns, term structure, inflation and real activity: An international perspective

This paper analyses the empirical interdependences among assetreturns, real activity and inflation from a multicountry and internationalpoint of view. We find that nominal stock returns are significantly relatedto inflation only in the US, that the US term structure of interest ratespredicts both domestic and foreign inflation rates while foreign termstructures do not have this predictive power and that innovations in inflationand exchange rates induce insignificant responses of real and financialvariables. An interpretation of the dynamics and some policy implicationsof the results are provided.

International debt deleveraging

I provide a framework for understanding debt deleveraging in a group of financiallyintegrated countries. During an episode of international deleveraging world consumptiondemand is depressed and the world interest rate is low, reflecting a high propensity to save.If exchange rates are allowed to float, deleveraging countries can depreciate their nominalexchange rate to increase production and mitigate the fall in consumption associatedwith debt reduction. The key insight of the paper is that in a monetary union thischannel of adjustment is shut off, and therefore the falls in consumption demand and inthe world interest rate are amplified. Hence, monetary unions are especially prone tohit the zero lower bound on the nominal interest rate and enter a liquidity trap duringdeleveraging. In a liquidity trap deleveraging gives rise to a union-wide recession, which isparticularly severe in high-debt countries. The model suggests several policy interventionsthat mitigate the negative impact of deleveraging on output in monetary unions.

The changing relationship between commodity prices and equity prices in commodity exporting

We explore the linkage between equity and commodity markets, focusing in particular on its evolution over time. We document that a country's equity market valuehas significant out-of-sample predictive ability for the future global commodity priceindex for several primary commodity-exporting countries. The out-of-sample predictive ability of the equity market appears around 2000s. The results are robust to usingseveral control variables as well as firm-level equity data. Finally, our results indicatethat exchange rates are a better predictor of commodity prices than equity markets,especially at very short horizons.

Valuuttakurssiriskin hallinta Yhdysvaltoihin listautuneessa sähkövoima- ja automaatioteknologia yrityksessä

Tutkimuksen päätavoite on tutkia ja kehittää Case -yrityksen valuuttakurssiriskin hallintaa. Tavoitteiden saavuttamiseksi tutkitaan kirjoitetunteorian ja tutkimusten pohjalta valuuttamarkkinoita ja -kursseja sekä valuuttakurssiriskin tunnistamista, suojaamista ja kirjaamis-ta. Eri suojausinstrumentteja ja US GAAP:in mukaista suojauslaskentaa tarkastellaan. Teoriat tarjoavat viitekehyksen Case -yrityksen valuuttahallinnan lähempään tarkasteluun. Pääpaino on empiirisessä, historiallisessa valuuttapositiotutkimuksessa, jonka tarkoituksena on selvittää yrityksessä vallinneiden valuuttasuojausten taso. Empiirinen tutkimus osoittaa joidenkin yksiköiden valuuttapolitiikan mukaisissa suojauskäytännöissä olevan parantamisen varaa. Suuriakin valuuttakurssimuutoksille alttiita avoimia positioita muodostuu johtuen liian vähäisestä tai liiallisesta suojaustoiminnasta (finanssitransaktioista). Joidenkin valuuttojen suojaaminen osoittautuu olevan vaikeampaa kuin toisten. Kirjoitetun teorian ja empiirisen tutkimuksen pohjalta tehdään valuuttariski-analyysi, pohditaan termiinien soveltuvuutta riskinhallinnan välineenä ja annetaan kehitys-ehdotuksia yrityksen nykyiselle valuuttahallinnolle ja johdon päätöksenteon tueksi. Case -yrityksen tulevia haasteita on kattavan valuuttapositio -seurantajärjestelmän kehittäminen.

HARVEST LABOR QUALITY AND PRODUCTIVITY:CASE STUDY OF CHERRY GROWING IN CHILE

In Chile, the cherry tree has been one of the fastest growing and most profitable crops in the last ten years. However, increasing production costs, the scarcity of hired labor, and unfavorable exchange rates have reduced the productivity and competitiveness of the Chilean fruit sector. The aim of this article is to evaluate the harvest labor quality in cherry growing in Chile through the use of productivity indicators. A harvest labor evaluation system (HLES) was designed and four indicators were measured: Average Weight of Harvested Box, Average Daily Production per Worker, Percent of Export Fruit, and Percent of Fruit Discarded. Significant differences werefound between the 2010/11 season (with the HLES implementation) and the previous seasons without HLES. The average worker yield, average weight of a filled box, and fruit quality improved, while the amount of discarded fruit decreased. Hired labor management in agriculture is crucial for improving the productivity of the fresh fruit export producers. The use of HLES and the adoption of new technologies could help to solve the competitiveness problem in the Chilean fruit sector.

Ohutlevyosien valmistuskustannukset ja kansainvälinen hankintastrategia

Työn tarkoituksena on kehittää hankinnan päätöksentekoa tukeva ohutlevyosien valmistuskustannusten laskentamenetelmä toimintolaskentaan pohjautuen. Laskentamenetelmä koostuu valmistukseen kuluvan ajan laskennassa käytettävistä funktioista sekä konetuntihinnoista. Hankintatoimen päätöksistä käsitellään toimittajanvalintaa, jossa yhtenä vaihtoehtona on hankkiminen Kiinasta. Toimittajanvalinnan kriteereitä ovat tällöin hankintahinnan lisäksi kuljetuskustannukset, laatu sekä toimitusvarmuus. Myös kansainvälisen hankinnan Kiinasta erityispiirteitä käsitellään. Hankkiminen Kiinasta koetaan vielä melko ongelmallisena etenkin laadun ja toimitusvarmuuden osalta. Erityisen huomioitavaa on, että hankintahintojen alhaisuus on osakohtaista. Suurin riski hankinnan kannattavuudelle aiheutuu valuuttakursseista. Osto-organisaation yhteistyötä alihankkijoiden sekä muiden osastojen kanssa parantamalla voidaan välttää hankittavien ohutlevyosien laatuongelmia. Suomalaisten alihankkijoiden kanssa kustannuslaskentamallia avoimeen hinnoitteluun soveltamalla hankintakustannuksia voidaan alentaa.

Sugarcane yellow leaf virus infection leads to alterations in photosynthetic efficiency and carbohydrate accumulation in sugarcane leaves

Infection by Sugarcane yellow leaf virus (ScYLV) causes severe leaf symptoms in sugarcane (Saccharum spp.) hybrids, which indicate alterations in its photosynthetic apparatus. To gain an overview of the physiological status of infected plants, we evaluated chlorophyll a fluorescence and gas exchange assays, correlating the results with leaf metabolic surveys, i.e., photosynthetic pigments and carbohydrate contents. When compared to healthy plants, infected plants showed a reduction in potential quantum efficiency for photochemistry of photosystem (PSII) and alterations in the filling up of the plastoquinone (PQ) pool. They also showed reduction in the CO2 net exchange rates, probably as a consequence of impaired quantum yield. In addition, reductions were found in the contents of photosynthetic leaf pigments and in the ratio chlorophyll a/chlorophyll b (chla/chlb). Carbohydrate content in the leaves was increased as a secondary effect of the ScYLV infection. This article discusses the relation of virus replication and host defense responses with general alterations in the photosynthetic apparatus and in the metabolism of infected plants.

Rahatalous

Suomen Pankin kirjaston rahatalouden kokoelma on maan kattavin ja monipuolisin rahatalouteen ja rahoitusmarkkinoihin painottunut kokoelma. Kokoelmaan kuuluu merkittävä määrä nimekkeitä, joita ei ole hankittu muihin suomalaisiin kirjastoihin. Rahatalouden kokoelma koostuu monografioista, painetuista kausijulkaisuista ja elektronisista lehtitietokannoista. Kokoelma on painottunut tieteelliseen kirjallisuuteen, joka tukee pankissa tehtävää tutkimusta. Lisäksi aineistossa on huomattava määrä yleistajuista kirjallisuutta rahatalouden eri aihealueilta. Rahatalouden kokoelmaan kuuluu monografioita n. 9000 nimekettä (joulukuu 2010). Kokoelma käsittää nimekkeitä useilta eri aihealueilta, kuten rahapolitiikka ja rahateoria (n. 900), valuutat, valuuttajärjestelmät ja valuuttakurssit (n. 1100), pankkitoiminta ja keskuspankit (n. 1300), rahoitusmarkkinat (n. 1700), yleinen talousteoria ja oppihistoria (n. 1300), talouspolitiikka ja -historia (n. 450), hyöty- ja hintateoriat (n. 300), taloudellinen kasvu ja kansantulo (n. 700), suhdanteet (n. 250), julkinen talous ja verotus (n. 400) ja ekonometria (n. 600). Lehtiä kokoelmaan kuuluu n. 300 nimekettä, joista edelleen tilataan 200 nimekettä. Osa lehdistä löytyy painettuna ja osa on käytettävissä kirjastoon hankittujen elektronisten lehtitietokantojen kautta. Kokoelma karttuu pääosin ostojen kautta ja uutta aineistoa hankitaan jatkuvasti. Kokoelmaa on kartutettu systemaattisesti 1950-luvulta lähtien, minkä vuoksi siihen kuuluu merkittävästi vanhempaa aineistoa. Kokoelmaan kuuluvista kirjoista n. 26 % on julkaistu 2000-luvulla ja n. 21 % 1990-luvulla. Varsin suuri osa kirjoista, n. 29 %, on julkaistu 1970- ja 1980-luvulla. Ennen vuotta 1950 julkaistua aineistoa on n. 10 % kokoelmasta. Aineisto on valtaosin englanninkielistä, mutta kokoelmaan kuuluu myös suomen-, ruotsin- ja saksankielisiä nimekkeitä. Monografiat on luokiteltu Suomen Pankin kirjaston oman luokitusjärjestelmän mukaan. Kokoelmaa säilytetään Suomen Pankin kirjaston tiloissa jaettuna avokokoelmaan ja varastokokoelmaan. Aineiston ensisijaisia käyttäjiä ovat pankin oma henkilökunta, mutta kirjasto on avoinna myös kaikille ulkoisille asiakkaille. Kokoelma on lainattavissa muutamia poikkeuksia lukuun ottamatta.

Suomen Pankin julkaisut

Kokoelmaan kuuluu Suomen Pankin julkaisemaa aineistoa 1870-luvulta lähtien. Kokoelma sisältää vuosikertomuksia, vuosikirjoja, tieteellisiä julkaisuja kuten keskustelualoitteita, työpapereita ja muita tutkimusjulkaisuja, Suomen Pankin ennusteita, selvityksiä, raportteja ja lehtiä. Kokoelmaan kuuluu lisäksi taloudellista kehitystä kuvaavia pitkiä tilastosarjoja, joista osa on erillisiä julkaisuja ja osa on ilmestynyt Suomen Pankin muissa julkaisuissa, kuten vuosikirjoissa tai lehdissä. Tilastoihin kuuluvat mm. maksutase-, valuuttakurssi-, rahoitusmarkkina-, arvopaperi- ja korkotilastot sekä hintatasoa kuvaavat ja rahan määrän kehitystä seuraavat tilastot. Kokoelmaan kuuluu myös Suomen Pankista tehdyt historiikit, joista vanhin on vuodelta 1914. Suomen Pankin julkaisuja löytyy sekä painettuna että elektronisena. Lähes kaikki 1990-luvun puolivälin jälkeen ilmestyneet julkaisut on saatavilla elektronisena Suomen Pankin verkkosivujen kautta. Vanhemmat julkaisut on osittain digitoitu, ja tällä hetkellä elektronisena on saatavilla uudempien julkaisujen lisäksi mm. Suomen Pankin keskustelualoitteet, Bank of Finland (Montly) Bulletin ja Suomen Pankin vuosikirjat. Kokoelmassa on yhteensä n. 4000 nimekettä, ja kokoelma karttuu jatkuvasti. Kokoelman muodostavista julkaisuista n. 13 % on ilmestynyt ennen 1950 lukua ja n. 36 % vuosina 1950–1989. Yli 50 % julkaisuista on 1990- ja 2000-luvuilta. Aineisto on valtaosin suomen- ja englanninkielistä, mutta kokoelmaan kuuluu myös ruotsinkielisiä julkaisuja. Kokoelman painettua osaa säilytetään Suomen Pankin kirjaston tiloissa avokokoelmassa. Kirjasto on avoinna ulkoisille asiakkaille, ja Suomen Pankin julkaisut ovat lainattavissa joitakin poikkeuksia, kuten käsikirjoja, lukuun ottamatta. Julkaisuista voi ottaa kopioita maksutta.

Recovery and refining of manganese as by-product from hydrometallurgical processes

The consumption of manganese is increasing, but huge amounts of manganese still end up in waste in hydrometallurgical processes. The recovery of manganese from multi-metal solutions at low concentrations may not be economical. In addition, poor iron control typically prevents the production of high purity manganese. Separation of iron from manganese can be done with chemical precipitation or solvent extraction methods. Combined carbonate precipitation with air oxidation is a feasible method to separate iron and manganese due to the fast kinetics, good controllability and economical reagents. In addition the leaching of manganese carbonate is easier and less acid consuming than that of hydroxide or sulfide precipitates. Selective iron removal with great efficiency from MnSO4 solution is achieved by combined oxygen or air oxidation and CaCO3 precipitation at pH > 5.8 and at a redox potential of > 200 mV. In order to avoid gypsum formation, soda ash should be used instead of limestone. In such case, however, extra attention needs to be paid on the reagents mole ratios in order to avoid manganese coprecipitation. After iron removal, pure MnSO4 solution was obtained by solvent extraction using organophosphorus reagents, di-(2-ethylhexyl)phosphoric acid (D2EHPA) and bis(2,4,4- trimethylpentyl)phosphinic acid (CYANEX 272). The Mn/Ca and Mn/Mg selectivities can be increased by decreasing the temperature from the commonly used temperatures (40 –60oC) to 5oC. The extraction order of D2EHPA (Ca before Mn) at low temperature remains unchanged but the lowering of temperature causes an increase in viscosity and slower phase separation. Of these regents, CYANEX 272 is selective for Mn over Ca and, therefore, it would be the better choice if there is Ca present in solution. A three-stage Mn extraction followed by a two-stage scrubbing and two-stage sulfuric acid stripping is an effective method of producing a very pure MnSO4 intermediate solution for further processing. From the intermediate MnSO4 some special Mn- products for ion exchange applications were synthesized and studied. Three types of octahedrally coordinated manganese oxide materials as an alternative final product for manganese were chosen for synthesis: layer structured Nabirnessite, tunnel structured Mg-todorokite and K-kryptomelane. As an alternative source of pure MnSO4 intermediate, kryptomelane was synthesized by using a synthetic hydrometallurgical tailings. The results show that the studied OMS materials adsorb selectively Cu, Ni, Cd and K in the presence of Ca and Mg. It was also found that the exchange rates were reasonably high due to the small particle dimensions. Materials are stable in the studied conditions and their maximum Cu uptake capacity was 1.3 mmol/g. Competitive uptake of metals and acid was studied using equilibrium, batch kinetic and fixed-bed measurements. The experimental data was correlated with a dynamic model, which also accounts for the dissolution of the framework manganese. Manganese oxide micro-crystals were also bound onto silica to prepare a composite material having a particle size large enough to be used in column separation experiments. The MnOx/SiO2 ratio was found to affect significantly the properties of the composite. The higher the ratio, the lower is the specific surface area, the pore volume and the pore size. On the other hand, higher amount of silica binder gives composites better mechanical properties. Birnesite and todorokite can be aggregated successfully with colloidal silica at pH 4 and with MnO2/SiO2 weight ratio of 0.7. The best gelation and drying temperature was 110oC and sufficiently strong composites were obtained by additional heat-treatment at 250oC for 2 h. The results show that silica–supported MnO2 materials can be utilized to separate copper from nickel and cadmium. The behavior of the composites can be explained reasonably well with the presented model and the parameters estimated from the data of the unsupported oxides. The metal uptake capacities of the prepared materials were quite small. For example, the final copper loading was 0.14 mmol/gMnO2. According to the results the special MnO2 materials are potential for a specific environmental application to uptake harmful metal ions.