Vidya Mahambare

The present paper examines the effects of ownership structures on capital structure and firm valuation. It argues that the effects of separation of control from cash flow rights on capital structure and firm value also depend on the separation of control from management as well as on legal rules and enforcement defining investors’ protection. We obtain firm-level panel data (three stage least squares, 3SLS) estimates from four of the East Asian countries worst affected by the last crisis. There is evidence that the general wisdom that higher control than cash flow rights may lower firm value may be reversed among owner-managed family firms in the sample countries.

This paper compares the inflation targeting framework adopted by the European Central Bank (ECB) vis-à-vis the Bank of England (BOE) and argues that the ECB's strategy does not constitute the best international practice. The definition of price stability adopted by the ECB is ambiguous and therefore less effective as an anchor for inflation expectations. Furthermore, greater transparency would make the ECB more accountable, while also improving stabilisation properties of monetary policy. Thus, the success of inflation targeting depends on operational details, such as how the central bank's objectives are defined and communicated to the public.

This paper examines how the Bank of England conducts monetary policy in practice and assesses its policy preferences. Our empirical results using monthly ex post inflation forecast suggest that pursued policy can be characterized by a nonlinear policy reaction function with a deflation bias. We also find evidence of a target range as opposed to a point target for the 1992–5 period. These results are however, not robust to the use of the Bank's own forecast which suggests that pursued policy is consistent with a symmetric point target for inflation. In practice however, inflation has been consistently below the Bank's inflation target in recent years. We argue that a plausible explanation for this is that the MPC had systematically over predicted inflation, which in turn may have resulted in overly restrictive policy.