Financial crisis and quantitative easing: can broad money tell us anything?

When Bank of England (and the Federal Reserve Board) introduced their quantitative easing (QE) operations they emphasised the effects on money and credit, but much of their empirical research on the effects of QE focuses on long-term interest rates. We use a flow of funds matrix with an independent central bank to show the implications of QE and other monetary developments, and argue that the financial crisis, the fiscal expansion and QE are likely to have constituted major exogenous shocks to money and credit in the UK which could not be digested immediately by the usual adjustment mechanisms. We present regressions of a reduced form model which considers the growth of nominal spending as determined by the growth of nominal money and other variables. These results suggest that money was not important during the Great Moderation but has had a much larger role in the period of the crisis and QE. We then use these estimates to illustrate the effects of the financial crisis and QE. We conclude that it would be useful to incorporate money and/or credit in wider macroeconometric models of the UK economy.

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.

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.

Monetary policy strategies, financial institutions and financial markets in the Middle East and North Africa: an overview

Three polar types of monetary architecture are identified together with the institutional and market infrastructure required for each type and the kinds of monetary policy feasible in each case: a ‘basic’ architecture where there is little or no financial system as such but an elementary central bank which is able to fix the exchange rate, as a substitute for a proper monetary policy; a ‘modern’ monetary architecture with developed banks, financial markets and central bank where policy choices include types of inflation targeting; and an ‘intermediate’ monetary architecture where less market-based monetary policies involving less discretion are feasible. A range of data is used to locate the various MENA countries with respect to these polar types. Five countries (Iran, Libya, Sudan, Syria and Yemen) are identified as those with the least developed monetary architecture, while Bahrain and Jordan are identified as the group at the other end of the spectrum, reaching beyond the intermediate polar type in some dimensions but not others. The countries in between vary on different dimensions but all lie between basic and intermediate architectures. The key general findings are that the MENA countries are both less differentiated and less ‘developed’ than might have been expected. The paper ends by calling for research on the costs and benefits of different types of monetary architecture.

Complex landslide behaviour and structural controlled by the structures: A 3D conceptual model example of Åknes rockslide, Norway

Åknes is an active complex large rockslide of approximately 30?40 Mm3 located within the Proterozoic gneisses of western Norway. The observed surface displacements indicate that this rockslide is divided into several blocks moving in different directions at velocities of between 3 and 10 cm year?1. Because of regional safety issues and economic interests this rockslide has been extensively monitored since 2004. The understanding of the deformation mechanism is crucial for the implementation of a viable monitoring system. Detailed field investigations and the analysis of a digital elevation model (DEM) indicate that the movements and the block geometry are controlled by the main schistosity (S1) in gneisses, folds, joints and regional faults. Such complex slope deformations use pre-existing structures, but also result in new failure surfaces and deformation zones, like preferential rupture in fold-hinge zones. Our interpretation provides a consistent conceptual three-dimensional (3D) model for the movements measured by various methods that is crucial for numerical stability modelling. In addition, this reinterpretation of the morphology confirms that in the past several rockslides occurred from the Åknes slope. They may be related to scars propagating along the vertical foliation in folds hinges. Finally, a model of the evolution of the Åknes slope is presented.

Complex contact manifolds and S1 actions

We prove rigidity and vanishing theorems for several holomorphic Euler characteristics on complex contact manifolds admitting holomorphic circle actions preserving the contact structure. Such vanishings are reminiscent of those of LeBrun and Salamon on Fano contact manifolds but under a symmetry assumption instead of a curvature condition.

Misallocation of capital in a model of endogenous financial intermediation and insurance

In this paper we analyze productivity and welfare losses from capital misallocation in a general equilibrium model of occupational choice and endogenous financial intermediation. We study the effects of borrowing and lending, insurance, and risk sharing on the optimal allocation of resources. We find that financial markets together with general equilibrium effects have large impact on entrepreneurs' entry and firm-size decisions. Efficiency gains are increasing in the quality of financial markets, particularly in their ability to alleviate a financing constraint by providing insurance against idiosyncratic risk.

Financial constraints and the failure of innovation projects

Theoretical and empirical approaches have stressed the existence of financial constraints in innovative activities of firms. This paper analyses the role of financial obstacles on the likelihood of abandoning an innovation project. Although a large number of innovation projects are abandoned before their completion, the empirical evidence has focused on the determinants of innovation while failed projects have received little attention. Our analysis differentiates between internal and external barriers on the probability of abandoning a project and we examine whether the effects are different depending on the stage of the innovation process. In the empirical analysis carried out for a panel data of potential innovative Spanish firms for the period 2004-2010, we use a bivariate probit model to take into account the simultaneity of financial constraints and the decision to abandon an innovation project. Our results show that financial constraints most affect the probability of abandoning an innovation project during the concept stage and that low-technological manufacturing and non-KIS service sectors are more sensitive to financial constraints.

Fremont County, Independent Auditor's Reports, Basic Financial Statements and Supplementary Information, Schedule of Findings, June 30, 2005

County Audit Report

City of Center Point, Independent Auditor's Reports, Basic Financial Statements and Supplementary Information, Schedule of Findings, June 30, 2004

City Audit Report

Aalenian to Cenomanian Radiolaria of the Bermeja Complex (Puerto Rico) and Pacific origin of radiolarites on the Caribbean Plate

The study of the radiolarian ribbon chert is a key in determining the origins of associated Mesozoic oceanic terranes and may help to achieve a general agreement regarding the basic principles on the evolution of the Caribbean Plate. The Bermeja Complex of Puerto Rico, which contains serpentinized peridotite, altered basalt, amphibolite, and chert (Mariquita Chert Formation), is one of these crucial oceanic terranes. The radiolarian biochronology presented in this work is mainly based by correlation on the biozonations of Baumgartner et al. (1995) and O'Dogherty (1994) and indicates an early Middle Jurassic to early Late Cretaceous (late Bajocian-early Callovian to late early Albian-early middle Cenomanian) age. The illustrated assemblages contain about 120 species, of which one is new (Pantanellium karinae), and belonging to about 50 genera. A review of the previous radiolarian published works on the Mariquita Chert Formation and the results of this study suggest that this formation ranges in age from Middle Jurassic to early Late Cretaceous (late Aalenian to early-middle Cenomanian) and also reveal a possible feature of the Bermeja Complex, which is the younging of radiolarian cherts from north to south, evoking a polarity of accretion. On the basis of a currently exhaustive inventory of the radiolarite facies s.s. on the Caribbean Plate, a re-examination of the regional distribution of Middle Jurassic sediments associated with oceanic crust, and a paleoceanographic argumentation on the water currents, we come to the conclusion that the radiolarite and associated Mesozoic oceanic terranes of the Caribbean Plate are of Pacific origin. Eventually, a discussion on the origin of the cherts of the Mariquita Formation illustrated by Middle Jurassic to middle Cretaceous geodynamic models of the Pacific and Caribbean realms bring up the possibility that the rocks of the Bermeja Complex are remnants of two different oceans.

Iowa Federal Family Education Loan Program Division, Iowa College Student Aid Commission - Independent Auditor's Reports Basic Financial Statements and Supplementary Information, June 30, 2003

State Agency Audit Report