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This chapter estimates a regime switching Taylor Rule for the European Central Bank (ECB) in order to investigate some potential nonlinearities in the forward-looking policy reaction function within a real-time framework. In order to compare observed and predicted policy behavior, the chapter estimates Actual and Perceived regime switching Taylor Rules for the ECB. The former is based on the refi rate set by the Governing Council while the latter relies on the professional point forecasts of the refi rate performed by a large investment bank before the upcoming policy rate decision. The empirical evidence shows that the Central Bank’s main policy rate has switched between two regimes: in the first one the Taylor Principle is satisfied and the ECB stabilizes the economic outlook, while in the second regime the Central Bank cuts rates more aggressively and puts a higher emphasis on stabilizing real output growth expectations. Second, the results point out that the professional forecasters have broadly well predicted the actual policy regimes. The estimation results are also robust to using consensus forecasts of inflation and real output growth. The empirical evidence from the augmented Taylor Rules shows that the Central Bank has most likely not responded to the growth rates of M3 and the nominal effective exchange rate and the estimated regimes are robust to including these additional variables in the regressions. Finally, after the bankruptcy of Lehman Brothers the policy rate has switched to a crisis regime as the ECB has focused on preventing a further decline in economic activity and on securing the stability of the financial system.

This chapter investigates the predictability of the European monetary policy through the eyes of the professional forecasters from a large investment bank. The analysis is based on forward-looking Actual and Perceived Taylor Rules for the European Central Bank which are estimated in real-time using a newly constructed database for the period April 2000–November 2009. The former policy rule is based on the actual refi rate set by the Governing Council, while the latter is estimated for the bank’s economists using their main point forecast for the upcoming refi rate decision as a dependent variable. The empirical evidence shows that the pattern of the refi rate is broadly well predicted by the professional forecasters even though the latter have foreseen more accurately the increases rather than the policy rate cuts. Second, the results point to an increasing responsiveness of the ECB to macroeconomic fundamentals along the forecast horizon. Third, the rolling window regressions suggest that the estimated coefficients have changed after the bankruptcy of Lehman Brothers in October 2008; the ECB has responded less strongly to macroeconomic fundamentals and the degree of policy inertia has decreased. A sensitivity analysis shows that the baseline results are robust to applying a recursive window methodology and some of the findings are qualitatively unaltered from using Consensus Economics forecasts in the regressions.

In this paper, a lifetime estimation model for the solder joint is proposed which is capable of considering both severe and running mechanical shocks which is the real case in electric converters in the automotive and aerospace applications. This paper aims to asses the reliability of the solder joint under mixed exposure of mechanical loads.

Mechanical failure process may put at risk the perfect performance of any kinds of electronic systems regardless of the applications they are prepared for. Observation of solder joint health in an electronic assembly under simultaneous exposure of severe and running shocks is an open problem. Three commonly used soldering compositions are considered while the electronic assembly is exposed to three well-known driving cycles.

The results show that the best performance is achieved using SAC405 soldering alloy in comparison with Sn63Pb37 and SAC387 solder alloy. Consideration of mixed exposure to the mechanical loads leads to much more accurate lifetime estimation of the solder joint in the electronic assemblies.

The originality of the paper is confirmed.

This paper aims to investigate possibility of statistical detection of market completeness for continuous time diffusion stock market models.

The paper uses theory of forecasting to find criteria of predictability of market parameters such as volatilities and the appreciation rates.

It is known that the market completeness is not a robust property: small random deviations of the coefficients convert a complete market model into an incomplete one. The paper shows that market incompleteness is also non-robust: for any incomplete market from a wide class of models, there exists a complete market model with arbitrarily close paths of the stock prices and the market parameters.

The paper results lead to a counterintuitive conclusion that the incomplete markets are indistinguishable in the terms of the market statistics.

Since its introduction by Chari, Kehoe, and McGrattan (2007), Business Cycle Accounting (BCA) exercises have become widespread. Much attention has been devoted to the results of such exercises and to methodological departures from the baseline methodology. Little attention has been paid to identification issues within these classes of models. In this chapter, the authors investigate whether such issues are of concern in the original methodology and in an extension proposed by Šustek (2011) called Monetary Business Cycle Accounting. The authors resort to two types of identification tests in population. One concerns strict identification as theorized by Komunjer and Ng (2011) while the other deals both with strict and weak identification as in Iskrev (2010). Most importantly, the authors explore the extent to which these weak identification problems affect the main economic takeaways and find that the identification deficiencies are not relevant for the standard BCA model. Finally, the authors compute some statistics of interest to practitioners of the BCA methodology.

The purpose of this paper is to consider a procedure of water-water energetic reactor (WWER) reactor pressure vessel (RPV) lifetime prediction at the stages of design and lifetime extension using the standard irradiation embrittlement parameters as defined in regulatory documents. A comparison is made of the brittle fracture resistance (BFR) values evaluated using two criteria: shift in the critical brittleness temperature ΔT_c or shift in the brittle-to-ductile transition temperature ΔT_p and without shifts (T_c and T_p).

The radiation resistance was determined using the following three approaches: calculation based on standard values ΔT_c and T_c0 or ΔT_p and T_p0 (a level of excessive conservatism); calculation based on standard value ΔT_c and actual value T_c0 or actual values ΔT_p and T_p0 (the level of realistic conservatism); or calculation based on actual values of T_c and T_c0 or T_p and T_p0 (the level of actual conservatism). The BFR was evaluated based on the results of testing the specimens subjected to irradiation in research reactors as well as surveillance specimens subjected to irradiation immediately under operating conditions.

The excessive conservatism in determining the actual lifetime of nuclear reactor vessel materials can be eliminated by using the immediate values of critical brittleness temperature and ductile-to-brittle transition temperature.

Obtained results can be applied to extend WWER vessel operating time at the stages of designing and operation due to substantiated decrease in conservatism. And it will allow carrying out a statistical substantiated assessment of the resistance to brittle fracture of the RPV steels.