China’s monetary policy and the exchange rate

The paper models monetary policy in China using a hybrid McCallum-Taylor empirical reaction function. The feedback rule allows for reactions to inflation and output gaps, and to developments in a trade-weighted exchange rate gap measure. The investigation finds that monetary policy in China has, on average, accommodated inflationary developments. But exchange rate shocks do not significantly affect monetary policy behavior, and there is no evidence of a structural break in the estimated reaction function at the end of the strict dollar peg in July 2005. The paper also runs an exercise incorporating survey-based inflation expectations into the policy reaction function and meets with some success.exchange rate; hybrid McCallum-Taylor monetary policy reaction function; SVAR; survey-based inflation expectations; China

Forecasting Inflation in China

This paper forecasts inflation in China over a 12-month horizon. The analysis runs 15 alternative models and finds that only those considering many predictors via a principal component display a better relative forecasting performance than the univariate benchmark.inflation forecasting; data-rich environment; principal components; China

Social security and the search behaviour of workers approaching retirement

This paper explores the links between unemployment, retirement and their associated public insurance programs. It is a contribution to a growing body of literature focused on a better understanding of the labor behavior of advanced—age workers, which has gained importance as the pension crisis looms. The analysis combines the development of a new theoretical model and a detailed exploration of the empirical regularities using the Spanish Muestra Continua de Vidas Laborales (MCVL) dataset. The model is a extension of the standard search model, designed to reproduce the non—stationary environment faced by workers approaching retirement and to explore the interaction of unemployment benefits and retirement pensions. Via calibrated simulations we show that the basic empirical reemployment and retirement patterns can be rationalized as the optimal responses to both the labor market conditions and the institutional incentives. Generous Unemployment Benefits (for durations of up to two years) together with very significant early retirement penalties, make optimal to stay unemployed without searching for large groups of unemployed workers. This moral hazard problem can he substantially alleviated through institutional reform. Setting the early retirement penalties according to the age when the individual withdraws from the labor force (rather than when he/she claims the pension for the first time) seems particularly beneficial. It increases the labor supply, reduces the financial cost for the social security system and generate enough extra resources to compensate for the welfare loss of those unemployed directly hit by the reform.Unemployment search, job benefit, retirement

Assessing the impact of different nominal anchors on the credibility of stabilisation programmes

The paper compares the impact of announcing exchange-rate-based versus money-based stabilisation programmes in a cross-section of countries. The analysis finds that the effect of announcing exchange-rate-based programmes is more credible, in terms of reducing inflation inertia, than the outcome associated with implementing money-based programmes. But the gap between the magnitudes of the impacts from implementing the different strategies has been falling since the 1970s.Inflation stabilisation; credibility; nominal anchors; IMF programmes

Multifloquet to single electronic channel transition in the transport properties of a resistive 1D driven disordered ring

We investigate the dc response of a 1D disordered ring coupled to a reservoir and driven by a magnetic flux with a linear dependence on time. We identify two regimes: (i) A localized or large length L regime, characterized by a dc conductance, g_{dc}, whose probability distribution P(g_{dc}) is identical to the one exhibited by a 1D wire of the same length L and disorder strength placed in a Landauer setup. (ii) A "multifloquet" regime for small L and weak coupling to the reservoir, which exhibits large currents and conductances that can be g_{dc} > 1, in spite of the fact that the ring contains a single electronic transmission channel. The crossover length between the multifloquet to the single channel transport regime, L_c, is controlled by the coupling to the reservoir.Comment: 5 pages, 4 figure

Creating local networks in the Cloud

The resources and services offered by cloud computing platforms have been opening new alternatives of expansion to several research areas. The cloud computing platform applications to the educative area have been creating interest in different educative organizations. This thesis proposes the use of the Amazon EC2 cloud computing platform to build networking laboratories for the computational and networking educative areas. Within this paper, several options are evaluated in order to fulfill this objective. The final proposed design introduces a practical scenario for networking laboratories. Future enhancements of the final design are proposed

Economic Development Strategies in the Dominican Republic

The paper documents the economic development strategies pursued by the Dominican Republic. The study argues that the country’s success results from the implementation of a three-pronged economic development strategy. The first prong relates to diversifying production and the second to developing special economic zones. These zones operate in parallel fashion to the rest of the economy but with protections from domestic impediments to growth and progress. The third item in the recipe involves maintaining ample economic and social engagement with the rest of the world. The paper also highlights challenges that the country faces going forward.economic development strategies, primary commodities, special economic zones, economic openness, Dominican Republic

The day-to-day interbank market, volatility, and central bank intervention in a developing economy

This paper investigates banking system instability vis-à-vis the day-to-day interbank market and monetary policy effectiveness in the Dominican Republic. The analysis reveals a negative relationship among excess banking system reserves and the interbank interest rate, and shows that in crisis ‘news’ affect the interbank rate’s volatility asymmetrically and non-linearly. The paper also finds that the 2002-2003 banking crisis and the subsequent central bank intervention as a lender of last resort weakened monetary policy’s transmission mechanism. These events undermined the ensuing stabilization effort, stressing the pervasive short-run trade-off between preserving macroeconomic stability and safeguarding financial stability, and the pitfalls of monetary policymaking in a highly volatility setting.interbank market; financial stability; monetary policy; IMF stabilisation programme; Dominican Republic.