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1 – 10 of 498Bing Xu and Xiaowen Hu
– The purpose of this paper is to find alternative strategies to change negative output gaps in China.
Abstract
Purpose
The purpose of this paper is to find alternative strategies to change negative output gaps in China.
Design/methodology/approach
A path Philips curves approach is proposed to investigate output gaps, which develops hybrid Philips curves with the control variables of money, house prices and interest rates.
Findings
An alternative strategy to stop the decline in output gaps rate is to perform interest rate, house price, and money growth rate about 3, 1 and 15 percent, respectively. The results also indicate that only one of monetary increase, changes in interest rates, and house price adjustments are difficult to change the negative output gap.
Practical implications
Alternative strategies cannot only change the negative output gap, but also succeed in pushing the inflation rate down to 3 percent.
Originality/value
This study provides a new path Philips curves to simulate how the macroscopic control variables influence output and inflation. It provides a useful insight for stopping the decline in output gaps.
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Javed Ahmad Bhat and Sajad Ahmad Bhat
This paper attempts to examine the transmission of exchange rate changes into the domestic prices together with other important determinants of later, in case of a developing…
Abstract
Purpose
This paper attempts to examine the transmission of exchange rate changes into the domestic prices together with other important determinants of later, in case of a developing country, namely, India.
Design/methodology/approach
In an open economy Philips curve framework, a symmetric model developed by Pesaran et al. (2001) together with a complete asymmetric model developed by Shin et al. (2014) has been applied to assess the transmission of exchange rate changes into the domestic prices (inflation) of India. In addition, non-linear cumulative dynamic multipliers are used to portray the route between disequilibrium position of short run and new long-run equilibrium of the system. The multipliers highlight the asymmetric adjustment paths and/or duration of disequilibrium and therefore add valuable information to the long and short-run asymmetry.
Findings
In symmetric framework, exchange rate pass-through is reported to be incomplete and short-run pass through is found to be lower than the long-run pass through. A contractionary monetary policy stance is observed to decrease inflation in the long-run only and in the short-run, a case for price puzzle is observed, although the coefficient is statistically insignificant. Similarly, the impact of output growth is positive in both the short and long-run and both the coefficients are statically significant. Finally, the oil price inflation is also found to escalate the domestic inflationary pressures in both the short and long run, although the pass-through transmission is lower in the short-run than in the long-run. In case of an asymmetric setting, evidence in favour of directional asymmetry is reported whereby long-run impact of currency appreciation is found to be higher than depreciation. Similarly, a contractionary monetary policy action lowers the inflation, the easy one increases it; however, the impact of both the positive and negative changes in interest rate is found to be symmetric. An increase in GR is found to increase the inflation by a relatively appreciable magnitude than is observed when the fall in GR is reported. The possible reason for this asymmetric response of inflation may be explained in terms of asymmetric behaviour of demand conditions during economic upturns and downturns and downward inflexibility of prices. Finally, the transmission of oil price inflation to domestic inflation is also found to be asymmetric. An increase in oil price inflation leads to an increase in domestic inflation by a higher magnitude. whereas a decrease in it lowers inflation only marginally.
Practical implications
From a policy perspective, it is certainly important for the central banks to monitor the exchange rate changes so as to design the appropriate policy actions to resist any inflationary pressures resulting from the external sector. More importantly, a gauge on the factors that lead to destabilizing exchange rate movements or large currency price fluctuations is highly warranted. The results also highlight the relevance of proper domestic demand management and lowering dependence on oil imports to avoid the unnecessary inflation pressures in the economy.
Originality/value
While some studies have explored the possibilities of asymmetric interactions in the case of India, however, these studies have considered only the partial asymmetric model specifications and have not included a well-established theoretical base to include the other potential determinants of inflation as well. In this regard, the authors applied a complete asymmetric model specification developed by Shin et al. (2014) in an open economy Philips curve framework to assess the transmission of exchange rate changes into the domestic prices (inflation) of India. This paper will enrich the existing literature from a viewpoint of a comprehensive analysis of exchange rate pass-through by taking note of potential asymmetries coupled with other important determinants of inflation.
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Philip Tong and Hans-Christian Wilhelm
Sloping topographies in urban areas are often under-utilised due to complex designs and difficult access, resulting in low construction productivity and high cost. Automated…
Abstract
Purpose
Sloping topographies in urban areas are often under-utilised due to complex designs and difficult access, resulting in low construction productivity and high cost. Automated construction techniques are usually limited to flat sites or lab spaces. This research combines concepts for automated and prefabricated construction with hillside dwelling design. It proposes a strategy to integrate both aspects and to equally inform design process and design output. The aims are to turn hillside access and construction automation into design generators, improve productivity and use more affordable hillside sites.
Design/methodology/approach
Analysis of typologies for hillside housing and automated construction techniques is used to derive principles and parameters to inform a strategy and generative script for setting out, volumetric disposition and access and using the topography as a design-generator. The output from the generative script and tool can then form the basis of a high-density, low-rise dwelling development suited for serial, automation-assisted construction. The strategy is tested on a case study site.
Findings
The typological analysis helps devising strategies for integrating construction robotics and design criteria for hillside housing. The generative script illustrates how a strategy is implemented and used in a design tool able to absorb varying input data, including topographies. This generates innovative, site-specific design outcomes, suited for a process that adapts contemporary construction automation techniques and allows for more efficient use of hillside sites.
Originality/value
This research builds on construction automation methods and proposes novel combinations and adaptations for use on hillside sites. It demonstrates how robotics and generative tools can inform early design stages.
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Rosaria Rita Canale and Rajmund Mirdala
The role of money and monetary policy of the central bank in pursuing macroeconomic stability has significantly changed over the period since the end of World War II…
Abstract
The role of money and monetary policy of the central bank in pursuing macroeconomic stability has significantly changed over the period since the end of World War II. Globalization, liberalization, integration, and transition processes generally shaped the crucial milestones of the macroeconomic development and substantial features of economic policy and its framework in Europe. Policy-driven changes together with variety of exogenous shocks significantly affected the key features of macroeconomic environment on the European continent that fashioned the framework and design of monetary policies.
This chapter examines the key basis of the central bank’s monetary policy on its way to pursue and preserve the internal and external stability of the purchasing power of money. Substantial elements of the monetary policy like objectives and strategies are not only generally introduced but also critically discussed according to their accuracy, suitability, and reliability in the changing macroeconomic conditions. Brief overview of the Eurozone common monetary policy milestones and the past Eastern bloc countries’ experience with a variety of exchange rate regimes provides interesting empirical evidence on origins and implications of vital changes in the monetary policy conduction in Europe and the Eurozone.
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Holbrook Working (1949) discovered that the percentage change in futures prices seemed to be largelyrandom. This led Paul Samuelson (1965) to develop the Efficient Market…
Abstract
Holbrook Working (1949) discovered that the percentage change in futures prices seemed to be largelyrandom. This led Paul Samuelson (1965) to develop the Efficient Market Hypothesis (EMH) which claims that the current spot and futures1 prices fully reflect all relevant information. Furthermore, because the future flow of information cannot be anticipated, price changes will not be serially correlated. These papers linked the notion of randomness of price changes to informational efficiency. From that point on, a major part of the empirical studies of asset markets has been the application of time series analysis to asset prices, in order to evaluate whether the price changes are random and whether futures prices reflect all available information. As the statistical tests became more sophisticated, the number of empirical studies increased and the results became more contradictory and difficult to interpret. An economic theorist can only be bemused by contemplating the empirical/econometric studies in the finance literature.