An Empirical Assessment of Optimal Monetary Policy Delegation in the Euro Area

We estimate a New Keynesian DSGE model for the Euro area under alternative descriptions of monetary policy (discretion, commitment or a simple rule) after allowing for Markov switching in policy maker preferences and shock volatilities. This reveals that there have been several changes in Euro area policy making, with a strengthening of the anti-inflation stance in the early years of the ERM, which was then lost around the time of German reunification and only recovered following the turnoil in the ERM in 1992. The ECB does not appear to have been as conservative as aggregate Euro-area policy was under Bundesbank leadership, and its response to the financial crisis has been muted. The estimates also suggest that the most appropriate description of policy is that of discretion, with no evidence of commitment in the Euro-area. As a result although both ‘good luck’ and ‘good policy’ played a role in the moderation of inflation and output volatility in the Euro-area, the welfare gains would have been substantially higher had policy makers been able to commit. We consider a range of delegation schemes as devices to improve upon the discretionary outcome, and conclude that price level targeting would have achieved welfare levels close to those attained under commitment, even after accounting for the existence of the Zero Lower Bound on nominal interest rates.

Factors Affecting Audit Quality in the 2007 UK Regulatory Environment: Perceptions of Chief Financial Officers, Audit Committee Chairs and Audit Engagement Partners

In line with global changes, the UK regulatory regime for audit and corporate governance has changed significantly since the Enron scandal, with an increased role for audit committees and independent inspection of audit firms. UK listed company chief financial officers (CFOs), audit committee chairs (ACCs) and audit partners (APs) were surveyed in 2007 to obtain views on the impact of 36 economic and regulatory factors on audit quality. 498 usable responses were received, representing a response rate of 36%. All groups rated various audit committee interactions with auditors among the factors most enhancing audit quality. Exploratory factor analysis reduces the 36 factors to nine uncorrelated dimensions. In order of extraction, these are: economic risk; audit committee activities; risk of regulatory action; audit firm ethics; economic independence of auditor; audit partner rotation; risk of client loss; audit firm size; and, lastly, International Standards on Auditing (ISAs) and audit inspection. In addition to the activities of the audit committee, risk factors for the auditor (both economic and certain regulatory risks) are believed to most enhance audit quality. However, ISAs and the audit inspection regime, aspects of the ‘standards-surveillance compliance’ regulatory system, are viewed as less effective. Respondents commented that aspects of the changed regime are largely process and compliance driven, with high costs for limited benefits, supporting psychological bias regulation theory that claims there is overconfidence that a useful regulatory intervention exists.

The response of the external finance premium in Asian corporate bond markets to financial characteristics, financial constraints and two financial crises

Empirical investigation of the external finance premium has been conducted on the margin between internal finance and bank borrowing or equities but little attention has been given to corporate bonds, especially for the emerging Asian market. In this paper, we hypothesize that balance sheet indicators of creditworthiness could affect the external finance premium for bonds as they do for premia in other markets. Using bond-specific and firm-specific data for China, Hong Kong, Indonesia, Korea, Philippines, Singapore and Thailand during 1995-2009 we find that firms with better financial health face lower external finance premia in all countries. When we introduce firm-level heterogeneity, we show that financial variables appear to be both statistically and quantitatively more important for financially constrained firms. Finally, when we examine the effects of the 1997-98 Asian crisis and the 2007-09 global financial crisis, we find that the sensitivity of the premium is greater for constrained firms during the Asian crisis compared to other times.

Policy initiatives and firms’ access to external finance: Evidence from a panel of emerging Asian economies

This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on firms' access to external finance, using a unique firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012. Using a difference-indifferences approach and controlling for firm-level and macroeconomic factors, the results show a significant impact of policy on firms' access to external finance. After splitting firms into constrained and unconstrained, using several criteria, the results document that unconstrained firms benefited significantly in obtaining external finance, compared to their constrained counterparts. Finally, we show that the increase in access to external finance after the policy initiative helped firms to raise their investment spending, especially for unconstrained firms.

The Optimal Degree of Monetary-Discretion in a New Keynesian Model with Private Information

This paper considers the optimal degree of discretion in monetary policy when the central bank conducts policy based on its private information about the state of the economy and is unable to commit. Society seeks to maximize social welfare by imposing restrictions on the central bank's actions over time, and the central bank takes these restrictions and the New Keynesian Phillips curve as constraints. By solving a dynamic mechanism design problem we find that it is optimal to grant "constrained discretion" to the central bank by imposing both upper and lower bounds on permissible inflation, and that these bounds must be set in a history-dependent way. The optimal degree of discretion varies over time with the severity of the time-inconsistency problem, and, although no discretion is optimal when the time-inconsistency problem is very severe, our numerical experiment suggests that no-discretion is a transient phenomenon, and that some discretion is granted eventually.

Quantile forecasts of inflation under model uncertainty

Bayesian model averaging (BMA) methods are regularly used to deal with model uncertainty in regression models. This paper shows how to introduce Bayesian model averaging methods in quantile regressions, and allow for different predictors to affect different quantiles of the dependent variable. I show that quantile regression BMA methods can help reduce uncertainty regarding outcomes of future inflation by providing superior predictive densities compared to mean regression models with and without BMA.

Recerca versus docència en una experiència d'internalització dels estudis de Geografia a la Universitat de Girona: The faces of landscape, Catalonia and North Karelia = Research versus teaching in one experience of internationalization of the Geography degree studies in the University of Girona: The faces of landscape, Catalonia and North Karelia

Un dels reptes cabdals de la Universitat és enllaçar l’experiència de recerca amb la docència, així com promoure la internacionalització dels estudis, especialment a escala europea, tenint present que ambdues poden actuar com a catalitzadores de la millora de la qualitat docent. Una de les fórmules d’internacionalització és la realització d’assignatures compartides entre universitats de diferents països, fet que suposa l’oportunitat d’implementar noves metodologies docents. En aquesta comunicació es presenta una experiència en aquesta línia desenvolupada entre la Universitat de Girona i la Universitat de Joensuu (Finlàndia) en el marc dels estudis de Geografia amb la realització de l’assignatura 'The faces of landscape: Catalonia and North Karelia'. Aquesta es desenvolupa al llarg de dues setmanes intensives, una en cadascuna de les Universitats. L’objectiu és presentar i analitzar diferents significats del concepte paisatge aportant també metodologies d’estudi tant dels aspectes físics i ecològics com culturals que s’hi poden vincular i que són les que empren els grups de recerca dels professors responsables de l’assignatura. Aquesta part teòrica es completa amb una presentació de les característiques i dinàmiques pròpies dels paisatges finlandesos i catalans i una sortida de camp. Per a la part pràctica es constitueixen grups d’estudi multinacionals que treballen a escala local algun dels aspectes en els dos països, es comparen i es realitza una presentació i defensa davant del conjunt d’estudiants i professorat. La llengua vehicular de l’assignatura és l’anglès.

Knowledge of Glasgow coma scale by air-rescue physicians.

OBJECTIVE: To assess the theoretical and practical knowledge of the Glasgow Coma Scale (GCS) by trained Air-rescue physicians in Switzerland. METHODS: Prospective anonymous observational study with a specially designed questionnaire. General knowledge of the GCS and its use in a clinical case were assessed. RESULTS: From 130 questionnaires send out, 103 were returned (response rate of 79.2%) and analyzed. Theoretical knowledge of the GCS was consistent for registrars, fellows, consultants and private practitioners active in physician-staffed helicopters. The clinical case was wrongly scored by 38 participants (36.9%). Wrong evaluation of the motor component occurred in 28 questionnaires (27.2%), and 19 errors were made for the verbal score (18.5%). Errors were made most frequently by registrars (47.5%, p = 0.09), followed by fellows (31.6%, p = 0.67) and private practitioners (18.4%, p = 1.00). Consultants made significantly less errors than the rest of the participating physicians (0%, p < 0.05). No statistically significant differences were shown between anesthetists, general practitioners, internal medicine trainees or others. CONCLUSION: Although the theoretical knowledge of the GCS by out-of-hospital physicians is correct, significant errors were made in scoring a clinical case. Less experienced physicians had a higher rate of errors. Further emphasis on teaching the GCS is mandatory.

Knowledge of Glasgow coma scale by air-rescue physicians

Rapport de synthèse Introduction : Le Glasgow coma score (GCS) est un outil reconnu permettant l'évaluation des patients après avoir subi un traumatisme crânien. Il est réputé pour sa simplicité et sa reproductibilité permettant ainsi aux soignants une évaluation appropriée et continue du status neurologique des patients. Le GCS est composé de trois catégories évaluant la réponse oculaire, verbale et motrice. En Suisse, les soins préhospitaliers aux patients victimes d'un trauma crânien sévère sont effectués par des médecins, essdntiellement à bord des hélicoptères médicalisés. Avant une anesthésie générale nécessaire à ces patients, une évaluation du GCS est essentielle indiquant au personnel hospitalier la gravité des lésions cérébrales. Afin d'évaluer la connaissance du GCS par les médecins à bord des hélicoptères médicalisés en Suisse, nous avons élaboré un questionnaire, contenant dans une première partie des questions sur les connaissances générales du GCS suivi d'un cas clinique. Objectif : Evaluation des connaissances pratiques et théoriques du GCS par les médecins travaillant à bord des hélicoptères médicalisés en Suisse. Méthode : Etude observationnelle prospective et anonymisée à l'aide d'un questionnaire. Evaluation des connaissances générales du GCS et de son utilisation clinique lors de la présentation d'un cas. Résultats : 16 des 18 bases d'hélicoptères médicalisés suisses ont participé à notre étude. 130 questionnaires ont été envoyés et le taux de réponse a été de 79.2%. Les connaissances théoriques du GCS étaient comparables pour tous les médecins indépendamment de leur niveau de formation. Des erreurs dans l'appréciation du cas clinique étaient présentes chez 36.9% des participants. 27.2% ont commis des erreurs dans le score moteur et 18.5% dans le score verbal. Les erreurs ont été répertoriées le plus fréquemment chez les médecins assistants (47.5%, p=0.09), suivi par les chefs de clinique (31.6%, p=0.67) et les médecins installés en cabinet (18.4%, p=1.00). Les médecins cadres ont fait significativement moins d'erreurs que les autres participants (0%, p<0.05). Aucune différence significative n'à été observée entre les différentes spécialités (anesthésie, médecine interne, médecine général et «autres »). Conclusion Même si les connaissances théoriques du GCS sont adéquates parmi les médecins travaillant à bord des hélicoptères médicalisés, des erreurs dans son application clinique sont présentes dans plus d'un tiers des cas. Les médecins avec le moins d'expériences professionnelle font le plus d'erreurs. Au vu de l'importance de l'évaluation correcte du score de Glasgow initial, une amélioration des connaissances est indispensable.

Sustaining OER at the University of Cape Town : free, but not cheap

Open educational resource (OER) initiatives have made the shift from being a fringe activity to one that is increasingly considered as a key component in both teaching and learning in higher education and in the fulfilment of universities' mission and goals. Although the reduction in the cost of materials is often cited as a potential benefit of OER, this potential benefit has not yet been realised in practice necessitating thoughtful consideration of various strategies for new OER initiatives such as the OpenContent directory at the University of Cape Town (UCT) in South Africa.This paper reviews the range of sustainability strategies mentioned in the literature, plots the results of a small-scale OER sustainability survey against these strategies and explains how these findings and other papers on OER initiatives were used to inform an in-house workshop at UCT to deliberate the future strategy for the sustainability of OER at UCT.