Modelling the discrete and infrequent official interest rate change in the UK

This paper is an empirical analysis of the manner in which official interest rates are determined by the Bank of England. We use a nonlinear framework that allow for the separate study of factors affecting the magnitude of positive and negative interest rate changes as well as their probabilities. Using this approach, new kinds of monetary shocks are defined and used to evaluate their impact on the UK economy. Among them, unanticipated negative interest rate changes are especially important. The model generalizes previous approaches in the literature and provides a rich methodology to understand central banks' decisions and their consequences

Explaining inflation and output volatility in Chile : an empirical analysis of forty years

We present a data oriented analysis of the effect of different kind of economic shocks on Chilean output growth and inflation over the last 40 years. Two important results are: (1) foreign shocks only explain 17% of the variability of the output growth in the period 1984-2006 whereas it used to account for the 47,2% of output variability in 1966-1983; (2) The participation of foreign shocks to explain the Chilean inflation reaction becomes more importan in the last twienty years because of the price liberalization and Chile's openness to international trade. Results highlight specific features of the Chilean economy not present in other countries.

Market Concentration, Macroeconomic Uncertainty and Monetary Policy.

This paper studies the effect of market structure and macroeconomic uncertainty on the transmission of monetary policy. We motivate our analysis with a simple model which predicts that: 1) investment and production in more concentrated sectors are more affected by demand changes and 2) high uncertainty makes investment and production more sensitive to demand changes. The empirical analysis estimates the effect of monetary shocks on sectoral output for different sectors in the US using different structural vector autoregressive VAR approaches. The results are largely consistent with the proposed theory.Market concentration, macroeconomic uncertainty, monetary policy transmission, vector autoregressive models.

MODELLING THE DISCRETE AND INFREQUENT OFFICIAL INTEREST RATE CHANGE IN THE UK

This paper is an empirical analysis of the manner in which official interest rates are determined by the Bank of England. We use a nonlinear framework that allow for the separate study of factors affecting the magnitude of positive and negative interest rate changes as well as their probabilities. Using this approach, new kinds of monetary shocks are defined and used to evaluate their impact on the UK economy. Among them, unanticipated negative interest rate changes are especially important. The model generalizes previous approaches in the literature and provides a rich methodology to understand central banks’ decisions and their consequences.

Modelling monetary transmission in UK manufacturing industry

This paper studies the transmission of monetary policy to industrial output in the UK. In order to capture asymmetries, a system of threshold equations is considered. However, unlike previous research, endogenous threshold parameters are allowed to be different for each equation. This approach is consistent with economic intuition and is shown to be of tangible importance after suitable econometric evaluation. Results show evidence of cross-sectional differences across industries and asymmetries in some sectors. These findings contribute to the debate about the importance of alternative economic theories to explain these asymmetries and support the use of a sectorally disaggregated approach to the analysis of monetary transmission

A multimarket approach to estimate a New Keynesian Phillips Curve

We propose a new approach to estimate and "hybrid" New Keynesian Phillips Curve (NKPC) that includes demand pressures coming from disequilibrium relations in three different markets: (1) the monetary and financial, (2) the international, and (3) the labor market. In the application, our results show that all three markets contribute to the evolution of inflation. However, the effect of shocks on equilibrium in the labour market and short run movements in cyclical output are relatively more important than other shocks. Based on econometric tests, this specification is proved to be superior to the traditional NKPC that includes a single variable to account for demand pressures.

Empowerment in the Public Sector: Testing the Influence of Goal Orientation

Empowerment has emerged as an important new issue in the public sector organization setting in the wake of mainstream new public management (NPM). Nevertheless, few studies in this frame have combined structural (managerial) and psychological (individual) approaches in an integrative study of empowerment. There is also a need to examine the moderating variables involved in this relationship, as well as to extend research on work motivation in public management. This study explores the effect of structural empowerment on psychological empowerment, and it also draws on goal orientation (GO) theory to examine the moderating role of employees’ GO in this link. The model is tested on a sample of 521 Spanish local authority employees. The results do not confirm the direct link between structural and psychological empowerment, but show that learning GO has considerable moderating power in this relationship, and its interaction with structural empowerment affects employees’ psychological empowerment levels

Forecasting Spanish inflation using information from different sectors and geographical areas

This paper evaluates different strategies to forecast Spanish inflation using information of price series for 57 products and 18 regions in Spain. We consider vector equilibrium correction (VeqC) models that include cointegration relationships between Spanish prices and prices in the regions of Valencia, Andalusia, Madrid, Catalonia and the Basque Country. This approach is consistent with economic intuition and is shown to be of tangible importance after suitable econometric evaluation. It is found that inflation forecasts can always be improved by aggregating projections from differente sectors and geographical areas. Moreover, cointegration relationships between regional and national prices must be considered in order to obtain a significantly better inflation forecast.Vector equilibrium correction models, Relative prices, Cointegration, Disaggregation

A proposal to obtain a long quarterly chilean gdp series

An important limitation in order to specify and estimate a macroeconomic model that describes the Chilean economy resides in using variables with sufficient number of observations that allow for a reliable econometric estimation. Among these variables, the GDP constitutes a fundamental magnitude. Nevertheless, for this variable there is not quarterly information before 1980. This paper computes quarterly GDP series for the period 1966-1979 using the approach by Casals et al (2000). As result, the new series incorporates the cyclical dynamic in the quarterly series later to 1979 respecting, in addition, all the annual existing information before the above mentioned period