Capital Account Openness,Exchange Rate Volatility and Economic Growth:International Experiences and Implications

Based on the Barro classical growth model, this paper introduces capital account openness and exchange rate volatility to conduct an empirical analysis using the panel data of 182 countries(regions) during 1970-2013 to examine the combined effects of capital account openness and exchange rate risks on economic growth. Our findings are as follows:(1) Without considering exchange rate volatility, capital account openness is subject to a threshold effect, i.e. capital account openness significantly promotes the economic growth of middle-and high-income countries but exerts the opposite effect on low-income countries; and(2) after exchange rate volatility is taken into account, the growth effect of capital account openness is reduced and the greater the exchange rate volatility is, the smaller the marginal effect of capital account openness will be; sample-specific results also proved the existence of the threshold effect. This paper offers the following implications:(1) The effect of capital account openness can be better examined based on risk factors;(2) moderately controlling exchange rate volatility is conducive to acquiring greater benefits from capital account openness; and(3) the threshold effect of capital account openness cannot be overlooked.

Volatility Structures of ForwardRates and the Dynamics of the TermStructure:a Multifactor Case

For general volatility structures for forward rates, the evolution of interest rates may not be Markovian and the entire path may be necessary to capture the dynamics of the term structure. This article identifies conditions on the volatility structure of forward rates that permit the dynamics of the term structure to be represented by a finite-dimensional state variable Markov process. In the deterministic volatility case, we interpret then-factor model as a sum ofn unidimensional models.

The Strategies for Market Risk Management in International Shipping

International shipping market is a risky market associated with a variety of risks which shipping companies have to cope with. International shipping has been seriously hit by the financial crisis in 2008. Since then, this industry has experienced market downturn for a long period which was considered to be the longest period of depression in the history. This paper mainly focuses on the key market risks in international shipping including cyclical fluctuation risk, cost risk, freight rate volatility risk, and competition risk. It analyses the source of these market risks, and identifies some strategies to cope with these market risks. In the meantime, Maersk and China Ocean Shipping Group （COSCO）, the world leading international shipping companies, are taken as two cases. Their strategies in market risk management are analyzed, which enable the reader to learn from their success and failure. Based on the international experience in market risk management in shipping industry as well as the real practice of Maersk and COSCO, this paper provides useful guidance for shipping companies to reduce market risks, overcome market downturn, and improve competitiveness.

The Influence of Exchange Rate on the Volume of Japanese Manufacturing Export

This paper investigates the influence of exchange rate volatility on the volume of Japanese manufacturing export. The volatility in yen is shown by conditional variance from EGARCH （Exponential Generalized Autoregressive Conditional Heteroscedasticity） model, allowing for asymmetric effects that a shock of an appreciation of the yen is different from that of a depreciation of the yen. The export action model including exchange rate volatility is constructed based on VAR （Vector Auto Regressive） model to examine the relationship between exchange rate uncertainty and the volume of export. Tests are performed for typical eight kinds of industry in Japan. Few empirical studies focus on each Japanese industry export. Results indicate significant negative effects of exchange rate volatility on most manufacturing exports. In addition, this paper analyzes the each industry, featurc of the influence of exchange rate on the volume of Japanese export. The authors find that equipment industries occupying 60% or more of total Japanese exports especially tend to receive negative influence of exchange.

Modelling the Term Structure of Hong Kong Inter-Bank Offered Rates （HIBOR）

Different single-factor models are used to estimate the term structure of Hong Kong Inter-Bank Offered Rates （HIBOR）. These models use stochastic differential equations which effectively reflect market characteristics of short- and long-term interest rates, such as capability of mean reversion and interest rate level fluctuation. For the period from 2005 to early 2007, the economy of Hong Kong had been relatively stable with pretty low volatilities in interest rate. However, starting from 2008 to beginning of 2012, the Hong Kong and the world economies had been steering from relatively stable to fluctuations, the 2008 financial tsunami initiated by the U,S. had been causing financial instability globally. With the U.S： government taking quantitative easing monetary policy, U.S. interest rates fluctuated and submerged rapidly. Volatility of HIBOR was extremely sensitive to fluctuation of U.S. interest rates, since Hong Kong dollar exchange rate has been pegged with U.S. dollar. In short, during the period of early 2008 to early 2012, volatility of short-term interest rate was extremely sensitive. Obviously, the term structure of interest rate for these two periods had made major shift, combining the two periods would lead to unfavorable econometric results.

Reducing Ammonia Volatilization from Maize Fields with Separation of Nitrogen Fertilizer and Water in an Alternating Furrow Irrigation System

The objective of this 2-yr field trial, with a central composite rotatable design, was to assess and quantify the effects of separation of nitrogen fertilizer and water with alternating furrow irrigation （SNWAFI） practices on soil ammonia （NH3） emission during the summer maize （Zea mays L.） growing season. Ammonia volatilization after N sidedress and irrigation ranged from 4.8 to 17.0 kg N ha-1 and 6.2 to 20.6 kg N hal, respectively, in 2008 and 2009. The lower N input contributed to lower NH3 loss but lower yield, whereas the higher N input induced higher yield as well as higher NH3 loss. Ammonia intensity （NH3 volatilization per crop yield） after N sidedress and irrigation was 1.2-3.0 kg NH3-N t-1 yield in 2008 and 1.1-3.2 kg NH3-N t1 yield in 2009. The predicted minimum NH3 intensity in 2008 was 1.6 kg NH3-N fl yield and was obtained with the combined application of 127 kg N ha^-1 and 108 mm irrigation water. In 2009, the predicted minimum NH3 intensity was 1.3 kg NH3-N t-j yield and was obtained with the combined application of 101 kg N ha-1 and 83 mm irrigation water. We conclude that SNWAFI practices with optimum rates of water and fertilizer can significantly reduce soil NH3 intensity and maintain yield. It was more beneficial for sustainable farming strategies to minimize the NH3 intensity rather than reduce absolute NH3 emissions alone.

Senarmontite volatilization kinetics in nitrogen atmosphere at roasting/melting temperatures

The volatilization kinetics of senarmontite（Sb_2O_3） was analyzed in a neutral atmosphere in two temperature ranges： 550-615 °C（roasting temperature） and 660-1100 °C（melting temperature） by using a thermogravimetric analysis method under various gas flow rates and using a 1.3 m L ceramic crucible（11 mm in internal diameter and 14 mm in height）. The effect of particle size was also analyzed. The experimental results of mass loss data, X-ray diffraction（XRD） analysis of partially reacted samples and thermodynamic studies indicate that the senarmontite becomes volatile in the form of Sb_4O_6（g） without the formation of any intermediary compound in the entire temperature range. At roasting temperatures, the volatilization kinetics of Sb_2O_3 was analyzed using the model X=kappt. The volatilization reaction was controlled by the surface chemical reaction and an activation energy value of 193.0 k J/mol was obtained in this temperature range. Based on the volatilization kinetics at the melting temperatures, for linear behaviour in nitrogen gas, kinetic constants were determined, and an activation energy of 73.9 k J/mol was calculated for the volatilization reaction with a surface area of 8.171×10^（-5）m^2.

Performance of Islamic and conventional stock indices:empirical evidence from an emerging economy

Background:This study aims to investigate the extent to which the conditional volatilities of both Shari’ah compliant stock and conventional stock are related to those of interest rate and exchange rate in the emerging economy of Pakistan.Methods:We used KMI 30 and KSE 100 indices for Islamic and conventional stock for the period of July 2008 to November 2013.We employed Generalized Autoregressive Conditional Heteroskedastic in the mean(GARCH-M)model.This framework relaxes constancy assumption of classical linear regression(CLRM)model and allows exchange rate and interest rate volatility to evolve over time.The GARCHM framework also reveals results about risk-return trade-off in the context of both Islamic and conventional stock indices.Results:The findings show positive and statistically significant effect of interest rate volatility on KSE-100,whereas KMI-30 remains unaffected by the same.Exchange rate volatility is found to be significant for both conventional and Islamic indices.The relationship of risk coefficient(γ)and stocks returns,as expected,is positive and statistically significant for both KMI-30 and KSE-100.This result is consistent with the theory of risk-return trade-off.The results of parametric t-test show significant difference between returns of both indices.This implies that Shari’ah compliant stock index(KMI-30)of Pakistan underperforms its conventional counterpart.Conclusion:By using different performance measures(Sharp ratio,Jensen alpha,Treynor ratio),this study also investigates the hypothesis that Islamic stock index has inferior performance compared with unscreened conventional counterparts due to availability of a smaller investment universe,increased monitoring costs,and limited diversification.

Why Does the World Need a Reserve Asset with a Hard Anchor？,

From the 1970s, the global currency system has two features： the use of one or a few sovereign currencies as the global reserve asset and the floating exchange rate regime between major currencies. This paper points out that the costs of the dollar＇s use as an international reserve currency exceed the benefits for both the US and the rest of the world. These costs include the exporting of American manufacturing as a byproduct of its current account deficit needed to supply its currency to the rest of the world. In addition to the detriment to trade from unpredictable exchange rate fluctuations, the termination of the U.S. obligation to redeem its currency for gold also removed an important restraint on deficit financing for the US and many other countries in the short-run, thus promoting excessive leverage that was a major contributor to the 2008 financial crisis. The paper suggests replacing several main countries＇ currencies in international reserves with a real Special Drawing Right （SDR） issued according to currency board rules.

Catalytic removal of phenol from gas streams by perovskite-type catalysts

Three perovskite-type catalysts prepared by citric acid method are applied to remove phenol from gas streams with the total flow rate of 300 mL/min, corresponding to a GHSV of 10,000/hr. LaMnO3 catalyst is first prepared and further partially substituted with Sr and Cu to prepare Lao.sSro.2MnO3 and Lao.sSro.2Mno.sCuo.203, and catalytic activities and fundamen- tal characteristics of these three catalysts are compared. The results show that phenol removal efficiency achieved with Lao.sSro.2Mno.sCuo.203 reaches 100% with the operating temperature of 200℃ and the rate of mineralization at 300℃ is up to 100%, while the phenol removal efficiencies achieved with Lao.sSro.2MnO3 and LaMnO3 are up to 100% with the operating temperature of 300℃ and 400℃, respectively. X-ray photoelectron spectroscopy （XPS） analysis shows that the addition of Sr and Cu increases the lattice oxygen of Lao.sSro.2Mno.sCuo.203, and further increases mobility or availability of lattice oxygen. The results indicate that Lao.sSro.2Mno.sCuo.203 has the best activity for phenol removal among three catalysts prepared and the catalytic activity of phenol oxidation is enhanced by the introduction of Sr and Cu into LaMnO3. Apparent activation energy of 48 kJ/mol is calculated by Mars-Van Krevelen Model for phenol oxidation with Lao.sSro.2Mno.sCuo.203 as catalyst.