The cross-currency hedging performance of implied versus statistical forecasting models

This article examines the ability of several models to generate optimal hedge ratios. Statistical models employed include univariate and multivariate generalized autoregressive conditionally heteroscedastic (GARCH) models, and exponentially weighted and simple moving averages. The variances of the hedged portfolios derived using these hedge ratios are compared with those based on market expectations implied by the prices of traded options. One-month and three-month hedging horizons are considered for four currency pairs. Overall, it has been found that an exponentially weighted moving-average model leads to lower portfolio variances than any of the GARCH-based, implied or time-invariant approaches.

Agricultural commodity markets : reference point for the real value of a currency

Using monthly time-series data 1999-2013, the paper shows that markets for agricultural commodities provide a yardstick for real purchasing power, and thus a reference point for the real value of fiat currencies. The daily need for each adult to consume about 2800 food calories is universal; data from FAO food balance sheets confirm that the world basket of food consumed daily is non-volatile in comparison to the volatility of currency exchange rates, and so the replacement cost of food consumed provides a consistent indicator of economic value. Food commodities are storable for short periods, but ultimately perishable, and this exerts continual pressure for markets to clear in the short term; moreover, food calories can be obtained from a very large range of foodstuffs, and so most households are able to use arbitrage to select a near optimal weighting of quantities purchased. The paper proposes an original method to enable a standard of value to be established, definable in physical units on the basis of actual worldwide consumption of food goods, with an illustration of the method.

The Devil’s Daughters and a question of translation between Occitan and Anglo-Norman French: ‘De las .vii. filhas del diable’ (British Library Add. MS 17920).

The evidence for vernacular-to-vernacular translation is hard to demonstrate in medieval Romance languages. This article analyses a hypothesis published a century ago that there is an identifiable Anglo-Norman source for an Occitan prose text. Both texts spring from a Latin exemplum in which the seven capital vices are personified as the Devil's daughters, married off to seven social categories (the clergy, knights, peasants, etc.). Although the hypothesis is disproved, it remains that the dialogue between Anglo-Norman French and Occitan has been overlooked, and deserves further exploration.

Family language policy in the Chinese community in Singapore: a question of balance?

This paper focuses on the language shift phenomenon in Singapore as a consequence of the top-town policies. By looking at bilingual family language policies it examines the characteristics of Singapore’s multilingual nature and cultural diversity. Specifically, it looks at what languages are practiced and how family language policies are enacted in Singaporean English-Chinese bilingual families, and to what extend macro language policies – i.e. national and educational language policies influence and interact with family language policies. Involving 545 families and including parents and grandparents as participants, the study traces the trajectory of the policy history. Data sources include 2 parts: 1) a prescribed linguistic practices survey; and 2) participant observation of actual negotiation of FLP in face-to-face social interaction in bilingual English-Chinese families. The data provides valuable information on how family language policy is enacted and language practices are negotiated, and what linguistic practices have been changed and abandoned against the background of the Speaking Mandarin Campaign and the current bilingual policy implemented in the 1970s. Importantly, the detailed face-to-face interactions and linguistics practices are able to enhance our understanding of the subtleties and processes of language (dis)continuity in relation to policy interventions. The study also discusses the reality of language management measures in contrast to the government’s ‘separate bilingualism’ (Creese & Blackledge, 2011) expectations with regard to ‘striking a balance’ between Asian and Western culture (Curdt-Christiansen & Silver 2013; Shepherd, 2005) and between English and mother tongue languages (Curdt-Christiansen, 2014). Demonstrating how parents and children negotiate their family language policy through translanguaging or heteroglossia practices (Canagarajah, 2013; Garcia & Li Wei, 2014), this paper argues that ‘striking a balance’ as a political ideology places emphasis on discrete and separate notions of cultural and linguistic categorization and thus downplays the significant influences from historical, political and sociolinguistic contexts in which people find themselves. This simplistic view of culture and linguistic code will inevitably constrain individuals’ language expression as it regards code switching and translanguaging as delimited and incompetent language behaviour.

How much flower-rich habitat is enough for wild pollinators? Answering a key policy question with incomplete knowledge

In 2013, an opportunity arose in England to develop an agri-environment package for wild pollinators, as part of the new Countryside Stewardship scheme launched in 2015. It can be understood as a 'policy window', a rare and time-limited opportunity to change policy, supported by a narrative about pollinator decline and widely supported mitigating actions. An agri-environment package is a bundle of management options that together supply sufficient resources to support a target group of species. This paper documents information that was available at the time to develop such a package for wild pollinators. Four questions needed answering: (1) Which pollinator species should be targeted? (2) Which resources limit these species in farmland? (3) Which management options provide these resources? (4) What area of each option is needed to support populations of the target species? Focussing on wild bees, we provide tentative answers that were used to inform development of the package. There is strong evidence that floral resources can limit wild bee populations, and several sources of evidence identify a set of agri-environment options that provide flowers and other resources for pollinators. The final question could only be answered for floral resources, with a wide range of uncertainty. We show that the areas of some floral resource options in the basic Wild Pollinator and Farmland Wildlife Package (2% flower-rich habitat and 1 km flowering hedgerow), are sufficient to supply a set of six common pollinator species with enough pollen to feed their larvae at lowest estimates, using minimum values for estimated parameters where a range was available. We identify key sources of uncertainty, and stress the importance of keeping the Package flexible, so it can be revised as new evidence emerges about how to achieve the policy aim of supporting pollinators on farmland.

Estimation or simulation? That is the question

The issue of smoothing in kriging has been addressed either by estimation or simulation. The solution via estimation calls for postprocessing kriging estimates in order to correct the smoothing effect. Stochastic simulation provides equiprobable images presenting no smoothing and reproducing the covariance model. Consequently, these images reproduce both the sample histogram and the sample semivariogram. However, there is still a problem, which is the lack of local accuracy of simulated images. In this paper, a postprocessing algorithm for correcting the smoothing effect of ordinary kriging estimates is compared with sequential Gaussian simulation realizations. Based on samples drawn from exhaustive data sets, the postprocessing algorithm is shown to be superior to any individual simulation realization yet, at the expense of providing one deterministic estimate of the random function.

Simple Question, Complex Answer : Pathways Towards a 50% Decrease in Building Energy Use

Addressing building energy use is a pressing issue for building sector decision makers across Europe. In Sweden, some regions have adopted a target of reducing energy use in buildings by 50% until 2050. However, building codes currently do not support as ambitious objectives as these, and novel approaches to addressing energy use in buildings from a regional perspective are called for. The purpose of this licentiate thesis was to provide a deeper understanding of most relevant issues with regard to energy use in buildings from a broad perspective and to suggest pathways towards reaching the long-term savings objective. Current trends in building sector structure and energy use point to detached houses constructed before 1981 playing a key role in the energy transition, especially in the rural areas of Sweden. In the Swedish county of Dalarna, which was used as a study area in this thesis, these houses account for almost 70% of the residential heating demand. Building energy simulations of eight sample houses from county show that there is considerable techno-economic potential for energy savings in these houses, but not quite enough to reach the 50% savings objective. Two case studies from rural Sweden show that savings well beyond 50% are achievable, both when access to capital and use of high technology are granted and when they are not. However, on a broader scale both direct and indirect rebound effects will have to be expected, which calls for more refined approaches to energy savings. Furthermore, research has shown that the techno-economic potential is in fact never realised, not even in the most well-designed intervention programmes, due to the inherent complexity of human behaviour with respect to energy use. This is not taken account of in neither current nor previous Swedish energy use legislation. Therefore an approach that considers the technical prerequisites, economic aspects and the perspective of the many home owners, based on Community-Based Social Marketing methodology, is suggested as a way forward towards reaching the energy savings target.

Speculative attacks on debts and optimum currency area: a welfare analysis

Traditionally the issue of an optimum currency area is based on the theoretical underpinnings developed in the 1960s by McKinnon [13], Kenen [12] and mainly Mundell [14], who is concerned with the benefits of lowering transaction costs vis-à- vis adjustments to asymmetrical shocks. Recently, this theme has been reappraised with new aspects included in the analysis, such as: incomplete markets, credibility of monetary policy and seigniorage, among others. For instance, Neumeyer [15] develops a general equilibrium model with incomplete asset markets and shows that a monetary union is desirable when the welfare gains of eliminating the exchange rate volatility are greater than the cost of reducing the number of currencies to hedge against risks. In this paper, we also resort to a general equilibrium model to evaluate financial aspects of an optimum currency area. Our focus is to appraise the welfare of a country heavily dependent on foreign capital that may suffer a speculative attack on its public debt. The welfare analysis uses as reference the self-fulfilling debt crisis model of Cole and Kehoe ([6], [7] and [8]), which is employed here to represent dollarization. Under this regime, the national government has no control over its monetary policy, the total public debt is denominated in dollars and it is in the hands of international bankers. To describe a country that is a member of a currency union, we modify the original Cole-Kehoe model by including public debt denominated in common currency, only purchased by national consumers. According to this rule, the member countries regain some influence over the monetary policy decision, which is, however, dependent on majority voting. We show that for specific levels of dollar debt, to create inflation tax on common-currency debt in order to avoid an external default is more desirable than to suspend its payment, which is the only choice available for a dollarized economy when foreign creditors decide not to renew their loans.