Issues in central bank finance and independence

Conventional economic policy models focus only on selected elements of the central bank balance sheet, in particular monetary liabilities and sometimes foreign reserves. The canonical model of an "independent" central bank assumes that it chooses money (or an interest rate) unconstrained by a need to generate seignorage for itself or the government. Whereas a long line of literature has emphasized the dangers of fiscal dominance influencing the conduct of monetary policy, this paper considers the relatively novel idea that an independent central bank could be constrained in achieving its policy objectives by its own balance sheet situation. If one accepts this potential constraint as a valid concern, the financial strength of the central bank as a stand-alone entity becomes highly relevant for ascertaining monetary policy credibility. We consider several strands of evidence that clearly indicate fiscal backing for central banks cannot be assumed, and hence financial independence is relevant to operational independence. First, we examine 135 central bank laws to illustrate the variety of legal approaches adopted with respect to central bank financial independence. Second, we examine the same data set with regard to central bank recapitalization provisions to show that even in cases where the treasury is nominally responsible for keeping the central bank financially strong, it may do so in purely a cosmetic fashion. Third, we show that, in actual practice, treasuries have frequently not provided central banks with genuine financial support on a timely basis, leaving them excessively reliant on seignorage to finance their operations or forcing them to abandon policy objectives.Banks and banking, Central ; Monetary policy

Light Propagation in Arbitrary Spacetimes and the Gravitational Lens Approximation

We reformulate the transport equation which determines the size, shape and orientation of infinitesimal light beams in arbitrary spacetimes. The behaviour of such light beams near vertices and conjugate points is investigated, with special attention to the singular behaviour of the optical scalars. We then specialize the general transport equation to the case of an approximate metric of an inhomogeneous universe, which is a Friedmann metric `on average' with superposed isolated weak matter inhomogeneities. In a series of well-defined approximations, the equations of gravitational lens theory are derived. Finally, we derive a relative optical focusing equation which describes the focusing of light beams relative to the case that the beam is unaffected by matter inhomogeneities in the universe, from which it follows immediately that no beam can be focused less than one which is unaffected by matter clumps, before it propagates through its first conjugate point.Comment: 31 pages, uuencoded compressed postscript; preprint MPA 78

Changing Sources of Magma Generation Beneath Intra-Oceanic Islands Arcs: An Insight From the Juvenile Kohistan Island Arc, Pakistan Himalaya

The Kohistan arc, situated in the Pakistan Himalaya, is a Cretaceous intraoceanic island arc which was initiated during the northward movement of the Indian Plate. The arc was sutured to Asia at ca. 100 Ma. It was subsequently tilted northward when underplated by Indian continental crust during the early stages of India–Asia collision. Deep erosion of this tilted section provides a spectacular section through the whole arc sequence and offers a profound insight into the mechanisms of early stages of arc formation. Geochemical analysis and rare earth element modelling of basaltic sequences which date from the intraoceanic stages of arc development allow identification of three main magma source types in the mantle beneath the juvenile arc. The ‘E-type’ Kamila Amphibolites, with a MORB-type chemistry, form the intraoceanic basement to the arc. The ‘D-type’ Kamila Amphibolites are the earliest of the arc volcanic rocks. These were extracted from a primitive spinel-bearing mantle source, above a north-dipping subduction zone. The stratigraphically younger basalts of the Jaglot Group and Ghizar Formation of the Chalt Volcanic Group were derived from partial melting of a garnet-bearing source at greater depth. The Hunza Formation of the Chalt Volcanic Group contains the youngest mafic volcanic rocks of the intraoceanic arc. Although coeval with the Ghizar Formation of the Chalt Volcanic Group, they were generated by melting of a depleted, spinel-bearing mantle source rock and were erupted into a spatially and temporally restricted back-arc basin developed behind the volcanic front. The Chalt Volcanic Group was therefore formed from two different, adjacent, mantle source regions active at the same time. Results of REE modelling are consistent with models for intraoceanic arc formation in which the earliest volcanic rocks are derived from shallow level spinel-bearing peridotite, and later ones from a deeper garnet-bearing source. This is consistent with the melt region becoming deeper with time as subduction continues. A two-stage model is proposed for the back-arc basalts of the Hunza Formation in which a mantle source, depleted from a previous melting event, is underplated beneath the arc and later remelted during decompression as a consequence of extension and rifting of the arc

Optimization of femtosecond laser processing in liquids

In this paper we analyze femtosecond laser processing of metals in liquids searching for optimal conditions for predictable ablation. Incident laser pulses are stretched or compressed, self-focused and scattered on bubbles and on surface waves in the liquid environment. Influence of these effects on the laser intensity distribution on the target surface is discussed and optimal processing parameters are suggested

Dying in the arts: creativity as metaphor

The idea that organizations need to adopt structures and practices that facilitate \u27creativity\u27 has become a central theme in theories of managing organisational innovation and success. This idea has been deployed in organisational theory, HRM, marketing and other domains of organization studies. We argue, however, that in the process of being appropriated from the arts, the concept of creativity has been \u27hollowed out\u27 and refashioned to suit the structures of organization as institution, and its needs as a business organization (to make money and establish \u27competitive advantage\u27). This devalued idea of creativity has, in turn, been imposed on arts organisatons, which are impelled to see themselves as \u27creative businesses\u27. Creativity, has been defined as a set of imaginative practices intended to express original ideas, and is in need of defence.<br /