The formation of inflation expectations under changing inflation regimes

The present paper offers a careful description of empirical identification of possible multiple changes in regime. We apply recently developed tools designed to select between regime-switching models among a broad class of linear and nonlinear regression models and provide a discussion of the impact on the formation of inflation expectations in the presence of multiple and recurrent changes in inflation regimes. Our empirical findings give a plausible explanation as to why the rationalexpectation hypothesis based on direct measures of inflation expectations from survey series is typically rejected due to large systematic differences between actual and expected inflation rates. In particular, our results indicate that in the case of changing and not perfectly observed inflation regimes, inference about rationality and unbiasedness based on a comparison of ex-ante forecasts from survey series and actual inflation rate based on ex-post realizations will be ambiguous because of the presence of an ex-post bias. The empirical findings are based on Danish inflation rates covering 1957 - 1998. We show that it is not possible to reject the hypothesis of multiple inflationary regimes and that the actual inflation rate can be represented by a two state Markov regime-switching model. It turns out that the real-time forecasts produced from this model exhibit a large degree of similarity when compared to the direct measures of inflation expectations. The result illustrates the important impact of switching regimes on the formation of actual and expected inflation and hence of ex-post bias as a main contributor to the difference between actual and expected inflation observed directly from survey series

Does Indigenous Knowledge Occur in and Influence Impact Assessment Reports? Exploring Consultation Remarks in Three Cases of Mining Projects in Greenland

Mineral extraction is pursued in Greenland to strengthen the national economy. In order that new industries promote sustainable development, environmental impact assessments and social impact assessments are legally required and undertaken by companies prior to license approval to inform decision-making. Knowledge systems in Arctic indigenous communities have evolved through adaptive processes over generations, and indigenous knowledge (IK) is considered a great source of information on local environments and related ecosystem services. In Greenland the Inuit are in the majority, and Greenlanders are still considered indigenous. The Inuit Circumpolar Council stresses that utilizing IK is highly relevant in the Greenland context. Impact assessment processes involve stakeholder engagement and public participation, and hence offer arenas for potential knowledge sharing and thereby the utilization of IK. Based on the assumption that IK is a valuable knowledge resource, which can supplement and improve impact assessments in Greenland thus supporting sustainable development, this paper presents an investigation of how IK is utilized in the last stages of an impact assessment process when the final report is subject to a hearing in three recent mining projects in Greenland