Medium-term Target Research Articles

Testing for asymmetry in monetary policy rule for small-open developing economies: Multiscale Bayesian quantile evidence from Ghana

Ghana’s consumer inflation has remained persistently high above its medium-term target despite officially practicing inflation targeting regime for over a decade. This paper examines how the Central Bank of Ghana has reacted to deviations of inflation and output gap from their respective desired levels over the past one and half decades. Primarily, it ascertains whether monetary policy in Ghana can be more precisely described by either (i) the standard linear Taylor rule, or (ii) an augmented linear rule including exchange rate or (iii) a nonlinear augmented threshold rule. The paper applies versions of frequentist and Bayesian quantile regressions at both time- and multiscale domains along with the standard threshold regression framework. The basic result is that the augmented nonlinear (threshold) Taylor rule describes the dynamics of interest rate settings in Ghana better than the linear rule. There is high degree of monetary policy inertia and an overriding aversion for rising inflation (above target). The authority shows greater tendency to react strongly to above-target inflation in the medium-to-longer term than in the short-term. We find that the Bank of Ghana is more aggressive toward inflation than output growth and does not react to the real economy independently from its concerns about inflation. The exchange rate has important influence on interest rate in the low inflation regime. We find an accommodative policy response to positive deviation of inflation from target even at the long run. Such policy passivity possibly underpins the persistently high inflation in Ghana as other policy interventions have not succeeded in taming inflation over the years.

Finland

This 2019 Article IV Consultation highlights that Finland’s economy has performed well over the past three years, however, has slowed in 2019. There are some vulnerabilities in household finances, and productivity growth remains weak, with trend growth also constrained by adverse demographics. A new coalition government targets greater social support and inclusion, higher employment, carbon neutrality by 2035, and a balanced budget by 2023. A key challenge is to balance plans to increase spending with the need to maintain fiscal buffers. The fiscal expansion is expected to provide useful cyclical support in the short run, but offsetting measures will be required to ensure the structural balance reaches the government’s medium-term target. The government aims for a substantial increase in employment, but the effectiveness of the proposed wage subsidies is unclear. Alternatively, incentives from tax and benefit schedules could be improved, especially for younger women, older workers, and those out of the workforce. Risks in the banking system remain low overall, but some types of lending are increasing household vulnerabilities. The recent recommendation to limit the ratio of household debt to income is both sensible and in line with steps taken in many other countries.

Wpływ reguły wydatkowej na typ polityki fiskalnej w Polsce

<p><strong>Uzasadnienie teoretyczne:</strong> Przedstawienie polskich doświadczeń z wprowadzaniem reguły wydatkowej do krajowego prawa pod wpływem regulacji unijnych.</p><p><strong>Cel artykułu:</strong> Wykazanie, że modyfikacja reguły wydatkowej z 2015 r. skutkowała utratą jej stabilizującego charakteru, który miał stanowić jej główną właściwość.</p><p><strong>Metody badawcze:</strong> Identyfikacji zmian w nastawieniu w polityce fiskalnej w latach 2013–2018 dokonano na podstawie zmian w ujęciu rocznym salda pierwotnego dostosowanego cyklicznie względem luki produkcyjnej.</p><p><strong>Główne wnioski:</strong> Przeprowadzone w pracy analizy wykazały, że reguła wydatkowa funkcjonująca w pierwotnym kształcie sprzyjała łagodzeniu wahań koniunkturalnych. Wraz ze zmniejszeniem restrykcyjności reguły wydatkowej w 2015 r., polegającej na zastąpieniu w formule wskaźnika prognozowanej inflacji wskaźnikiem średniookresowego celu inflacyjnego, jej funkcja stabilizująca została zatracona. Stwierdzono, że dobrze skonstruowane numeryczne reguły fiskalne mogą być ważnym instrumentem zachowania kontroli nad stanem finansów publicznych, lecz doświadczenia z regułą wydatkową w Polsce dostarczają wielu argumentów przeciwnikom stosowania reguł numerycznych w polityce fiskalnej.</p>

UAE–Ukraine: Accomplishing the Ambitious Agenda

The article examines the bilateral relations between Ukraine and the UAE as well as prospects of their development. It comes as no surprise that nowadays these relations are flourishing and even have reached a strategic level. The introduction of the visa free regime for travels at the end of 2017 has had a significant impact on the state of bilateral relations. In the middle of August 2018, the third meeting of the Intergovernmental Ukrainian-UAE Commission on Trade and Economic Cooperation was held in Kyiv. The upshot was that the bilateral trade turnover in goods and services for 2018 reached almost $1 billion and counting in 2019. The number of flights between the states has also shown an upward trend. It is stated that the participation of Ukrainian enterprises in the UAE exhibitions is the most significant factor for penetrating into the UAE market and facilitating the development of bilateral cooperation to reach the medium-term target of $2 billion of trade turnover. It is mentioned that due to the efforts of both parties cultural cooperation between Ukraine and the UAE is now thriving. In April 2019, a delegation of 60 artists presented Ukrainian culture and traditions in the UAE in the course of Sharjah Heritage Days. The Embassy of the UAE in Ukraine has contributed to establishment of the Centre for Arabic Studies and Arabic Language at the Institute of International Relations of Taras Shevchenko National University of Kyiv, Semen Kuznets Kharkiv National University of Economics, and Hennadii Udovenko Diplomatic Academy of Ukraine of the Ministry of Foreign Affairs of Ukraine. Mention is also made of the fact that Mr Ambassador became the winner of the 23rd Nationwide Programme ‘Person of the year 2018.’ The article concludes that the UAE pays equal attention to economic, cultural, and humanitarian interaction, whilst also remaining committed to cultivating it. Key words: the UAE, bilateral relations, cultural cooperation, trade, the Embassy of the UAE to Ukraine.

Papua New Guinea: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Papua New Guinea

The Papua New Guinea (PNG) economy has grown sluggishly in recent years, reflecting a combination of domestic and external factors. External factors have included adverse terms of trade movements, a drought, and, in 2018, a large earthquake. Domestic factors have included a difficult fiscal consolidation and a shortage of foreign exchange, sustained by an overvalued exchange rate, leading to import compression and weak investment in the non-resource sector. The main macroeconomic challenges for the government are to finish putting in place policies that will help promote economic stability, and to strengthen its long-term development framework. In 2017-18, the new government made important progress in narrowing the fiscal deficit, and adopted a medium-term revenue strategy. But progress on fiscal consolidation has stalled, and the debt-to-GDP ratio is well above the medium-term target. Monetary authorities have begun to facilitate exchange rate adjustment and strengthening of the monetary framework. Stronger economic policies, involving more ambitious fiscal consolidation coupled with faster exchange rate adjustment would yield favorable results.

Monetary Policy, De-Anchoring of Inflation Expectations, and the 'New Normal'

Low inflation rates in the Euro Area raise the question of whether inflation is still credibly anchored to the Euro-system’s medium term target of below, but close to 2%. The purpose of this paper is twofold. On the one hand, we investigate why agents’ inflation expectations that inflation will remain in line with the target begin to falter. On the other hand, we want to study how the de-anchoring of expectations interacts with monetary policy determining whether the central bank is still able to achieve its target - and hence re-anchor inflation expectations - or whether the system drifts away towards the liquidity trap. Two are our main findings. The first is that large unfavourable shocks might lead agents to question their trust in resilience of the system, and to revise their expectations. If inflation expectations fall faster than the policy rate, and the zero lower bound is reached without correcting the interest-rate gap, the system converges to a new steady state - the “new normal” - with permanent negative gaps. The second is that a more aggressive monetary policy is ineffective both at the ZLB and above the ZLB, when the shock is large shocks and/or when the reactivity of inflation expectations is high enough. This last finding seems to support the necessity, in those conditions, to abandon conventional monetary policy and to switch to an aggressive reflationary policy that prevents the entrenchment of deflationary expectations.

International water targets and national realities in Sub-Saharan Africa: the case of Uganda

ABSTRACTThis article considers how to reconcile ambitious UN Sustainable Development Goals (SDGs) for universal piped water supplies with developing country realities in Sub-Saharan Africa (SSA). A concise process for effective reviews of medium-term national targets is proposed and is applied in an analysis of the current provision of piped water to households and shared community facilities in urban and rural settings in Uganda. Different disciplinary perspectives are adopted to review trends, the performance of key stakeholders and their scope for achieving new targets. Only about 5% of households have piped water supplies on their premises in rural areas in SSA. To achieve the SDG target of 100% coverage will, therefore, take a long time and requires continued support for the sustainability of community water facilities as a priority. The SDGs offer sensible long-term aims, but national medium-term target setting and reviewing remain critical and require realistic and systematic planning approaches, as well as careful global reporting of national performance against SDG targets. The authors argue that balanced incentives are needed to encourage stakeholders to strive for realistic targets in the medium term, without demotivating countries with limited capacities and resources.

TCTAP A-052 Medium Term Target Lesion Failure in Patient Treated with Bioresorbable Vascular Scaffold

TCTAP A-052 Medium Term Target Lesion Failure in Patient Treated with Bioresorbable Vascular Scaffold

Percutaneous coronary interventions and antiplatelet therapy in renal transplant recipients.

Cardiovascular disease is the leading cause of mortality and morbidity following renal transplantation (RT), accounting for 40-50% of all deaths. After renal transplantation, an adverse cardiovascular event occurs in nearly 40% of patients; given the dialysis vintage and the average wait time, the likelihood of receiving coronary revascularization is very high. There is a significant gap in the literature in terms of the outcomes of prophylactic coronary revascularization in renal transplantation candidates. Current guidelines on myocardial revascularization stipulate that renal transplant patients with significant coronary artery disease (CAD) should not be excluded from the potential benefit of revascularization. Compared with percutaneous coronary intervention (PCI), however, coronary artery bypass grafting is associated with higher early and 30-day mortality. About one-third of renal transplant patients with CAD have to be treated invasively and so PCI is currently the most popular mode of revascularization in these fragile and compromised patients. A newer generation drug-eluting stent (DES) should be preferred over a bare metal stent (BMS) because of its lower risk of restenosis and improved safety concerns (stent thrombosis) compared with first generation DES and BMS. Among DES, despite no significant differences being reported in terms of efficacy, the newer everolimus and zotarolimus eluting stents should be preferred given the possibility of discontinuing, if necessary, dual antiplatelet therapy before 12 months. Since there is a lack of randomized controlled trials, the current guidelines are inadequate to provide a specifically tailored antiplatelet therapeutic approach for renal transplant patients. At present, clopidogrel is the most used agent, confirming its central role in the therapeutic management of renal transplant patients undergoing PCI. While progress in malignancy-related mortality seems a more distant target, a slow but steady reduction in cardiovascular deaths, improving pharmacological and interventional therapy, is nowadays an achievable medium-term target in renal transplant patients.

The Consolidated Medium-Term Income and Expenditure Framework

The medium-term projections of Fund income and precautionary balances accumulation have been updated since the April 2012 projections. The overall income outlook remains positive with continued high lending income expected in the medium-term. The projections indicate a downward shift in the income path primarily due to lower non-lending income as a result of the low global interest rates and the agreement to phase in investments under the new gold-sales funded endowment. The updated expenditure path has not changed significantly. The projections also illustrate a broad balance between income and expenditures when lending returns to pre-crisis levels. The accumulation of precautionary balances remains strong in the medium-term. The indicative medium-term target of SDR 20 billion is now expected to be reached by FY18–FY19.

Inflation and Growth: Estimation of Threshold Inflation for Ghana

The Central Bank of Ghana often come under severe criticism from the academia, policy and research institutions, think tanks, politicians and the general public with regards to the appropriateness of the choice of inflation level to target. These critics have often questioned the pursuit of single digit inflation by the Central Bank, often arguing that output growth would be unduly sacrificed at such low levels of inflation (single digit). This study therefore, attempts to investigate whether there exists a threshold in the relationship between inflation rate and real GDP growth for Ghana using annual data for the period 1970–2010. The paper employs standard econometric technique and finds an estimated 9 per cent threshold inflation for Ghana within the range 6.5–10.5 percent end year inflation target, but above the medium term target (6.5%) set by the Bank of Ghana. The finding suggests that targeting an inflation rate exceeding 9 percent will be deterrent to economic growth.

Expenditure Ceilings and Fiscal Policy: Swedish Experiences

The paper by Hansson Brusewitz and Lindh describes the Swedish reform of the budget process undertaken in the late Nineties and discusses the experiences since then. Central features of the reformed budget process are a “top-down” budgetary process, which assigns a clear role to the Ministry of Finance in setting the budget, multi-year ceilings on nominal expenditure and a medium-term target for the government’s net lending. Such a target, set at 2 per cent of GDP per year on average over the business cycle, primarily aims at reducing public debt in view of the budgetary impact of an ageing population. Hansson Brusewits and Lindh point out that between 1997 and 2004 the expenditure ceiling has contributed to the fall in general government expenditure from 60 to 54 per cent of GDP and has thus helped to stabilize public finances. They conclude that, although such strict budget rules have to some extent provided the Government with incentives to circumvent them, nominal expenditure ceilings have generally functioned well.

What is the Real-World CO2 Reduction Benefit of the 95 g/km Passenger Car Average Emission Target to be Reached by 2020?

Road transport is responsible for roughly 20% of total Greenhouse gas (GHG) emissions in Europe with passenger cars being a significant fraction. To control this, emission limits for CO2 have been set, with the target is to reach 130g/km of CO2 as an average for all new passenger cars in 2015. The medium-term target is to reach 95g/km average in 2020. These average values refer to CO2 emission over the New European Driving Cycle (NEDC). This cycle has been recently considered to be misrepresenting actual driving conditions. Hence, a vehicle may emit significantly higher CO2 emissions in real-world than it does over the NEDC. This paper aims at quantifying the impact in real-world CO2 emissions by selecting different technology pathways to reach the 95g/km target. Along with a basecase scenario considering, three alternative scenarios were examined. The first scenario considers downsizing to smaller and more efficient diesel and gasoline cars. The second one assumes that hybrids will be the prime technology for emission reduction. The third scenario assumes that electrification will be the main technology pathway. The 95g/km target is reached in all scenarios. Results show that despite the statutory target is fixed, actual reductions over the basecase scenario differ. Electrification, downsizing, and hybridization scenarios achieve 3%, 4,1%, and 11% CO2 reductions over the basecase new registrations in 2020, respectively. The average CO2 emission factor in the same order is 117, 116 and 108g/km. These results show that actual CO2 reductions to be reached not only depend on the average CO2 value agreed but also on the technology pathway selected. Conclusions were obtained under certain boundary conditions and by studying a limited suite of scenarios and technology pathways. However, our intention has been to demonstrate that real-world performance differs than statutory targets by offering a few examples. Such an approach, when further developed and adjusted to national circumstances, may be used to inform policy regarding the expected benefits of vehicle GHG regulation in view of wider targets, such as the 20-20-20 initiative.

Sustainable development under ambitious medium term target of reducing greenhouse gases

Japanese government submitted the medium-term target to the secretarial office of Framework Convention on Climate Change that Japan would decrease 25% of greenhouse gases compared with 1990 emissions. This commitment was highly evaluated worldwide. However, some experts criticize that it is impossible to maintain sustainable development under such severe target. This article aims at investigating whether we could realize sustainable development under such ambitious target of reducing greenhouse gas emissions. For this purpose, we first evaluated possible technology options and system innovation along with economic options. Technology options include efficiency improvement, renewable energy technologies and nuclear power technologies. Economic options include carbon tax, emissions trading scheme and feed-in-tariff for renewable energies.Once the promising technologies and policy options were listed up, we integrated these options in a computable general equilibrium model for Japan, which we developed, so as to evaluate the impact to national economy. As results, we identified the condition, how we could realize sustainable development under the 25% target of reducing greenhouse gas emissions.

An Analysis of the Medium-term Target for CO2 Reduction by the JCER-CGE Model

An Analysis of the Medium-term Target for CO₂ Reduction by the JCER-CGE Model

Influences of Hedge Fund Activism on the Medium Term Target Firm Value

In this study, the 'new' phenomenon of hedge fund activism is examined by testing the effects of 188 hedge fund activism events from Europe and North America. For all events it was measured what the effects were after the initial investment and the first action by the hedge fund, with the goal to research if these effects resulted in a value increase on the target firm value. On a short term period surrounding the initial filing by an activist hedge fund, there were found significant abnormal returns in the range of 9,5% to 12,19%, in both Europe and North America. Also, on a 6-month window significant positive abnormal returns were found, indicating that the involvement of a hedge fund activist created value also on a longer term. Furthermore, in the 20 days surrounding the initial activism, results showed a statistically significant abnormal return of 5,59%. After 6 months, this effect decreased a little and was not significant anymore. This decrease was mainly due to the events in Europe, that were less successful and reported no significant effects on the medium term. In contrast, in North America, on the medium term there were found (though not significant) even larger positive abnormal returns. Overall, the investments of activist hedge funds lead to an increase in shareholder value for the targeted firms. Activist hedge funds can be described as value investors that try to increase shareholder value by certain actions. The presented evidence in this research indicates that they are often successful in this strategy and thus create an increase in firm value on both the short and medium term.

Fiscal discipline and flexibility in EMU: the implementation of the Stability and Growth Pact

Fiscal discipline to safeguard the credibility of the single monetary authority and fiscal flexibility to respond to country-specific shocks are two core principles governing budgetary policy in EMU. The Stability and Growth Pact aims at ensuring the first objective. To comply with the requirements of the pact, EU members need to achieve a 'close to balance or surplus' position and change their budgetary behaviour in periods of cyclical upturns by refraining from spending the 'growth dividend'. Past experience shows that fiscal laxity does not buy more effective stabilization. Once EMU countries have achieved their medium-term target, their automatic stabilizers will be able to operate fully, thus helping in smoothing out cyclical fluctuations. The main potential problems in the implementation of the pact may arise in the early years of EMU, during the transition to a balanced budget, in the event of a slow-down in economic activity.

Croissance et emploi : l'ambition d'une initiative européenne

Croissance et emploi : l'ambition d'une initiative européenne

Chronic nephritis due to ingestion of lead-contaminated flour.

<h3>Abstract</h3> Short-term target species for mitigation should be realistically and effectively selected for restoration within a few years. Current short-term target species selection is based on spatial distribution data of past and present biota in the neighborhood based on capture surveys. However, current methods have the following problems: If historical spatial distribution data are used, the risk of including large areas, where target species cannot be dispersed, exists, as well as the risk of including extinct species. If recent spatial distribution data are used, the survey area may be narrowed due to time constraints, thereby increasing the possibility of missing species that should be selected as the target species. We examined the possibility of using the environmental DNA (eDNA) metabarcoding method, which can obtain spatial distribution data quickly, sensitively, and extensively, as a new short-term target species selection method. The study site was a restoration mitigation area (Kaihotsu–Kasumi) in the Shigenobu River system, Ehime Prefecture, Japan, where freshwater fish target species were selected based on capture surveys and past literature information. Furthermore, eDNA surveys were conducted at 17 sites in the Kaihotsu–Kasumi and its inflow and outflow rivers in 2020, and metabarcoding analysis using MiFish primers was conducted to determine the current freshwater fish fauna at each site. The visualization of the fish community composition obtained from the eDNA survey using NMDS showed that the Kaihotsu–Kasumi and surrounding watersheds were significantly divided into three clusters: upper reaches, middle and lower reaches, and estuarine reaches. Kaihotsu–Kasumi was included in Cluster 2, comprising the middle and lower reaches of the inflow and outflow rivers. Twenty-six species (including five non-native species) were detected in Cluster 2. Twenty-one fish species, excluding non-native species, were considered suitable as short-term target species as taxa with high potential for dispersal into Kaihotsu–Kasumi. The selection of short-term target species using the eDNA metabarcoding method covered all short- and medium-term target species (14 species) selected based on the capture surveys, and seven additional species were also proposed. The study also showed that intraspecific lineages of <i>Misgurnus anguillicaudatus</i> (Clades A and B), which were missed by the capture surveys, can be identified. These results indicate that the eDNA metabarcoding method can provide more comprehensive and realistic short-term target species selection than capture surveys, providing higher resolution monitoring through intraspecific lineage detection.