In the 37th Bank of Valletta Review, Brian Micallef analyses the rationale behind a separate monetary pillar in the European Central Bank's policy in light of the poor performance of monetary aggregates since the start of the Economic and Monetary Union (EMU). He observes that it is unlikely that a single indicator is able to incorporate all the relevant information to forecast future inflation.
Joseph Darmanin applies the Housing Affordability Index (HAI) to the Maltese real estate market. He explains that the index assesses affordability for various income groups and household categories. The computation considers factors like house prices, income levels, mortgage rates and other lending standards by banks. The paper indicates that escalation in house prices, coupled with sluggish income growth suggests that affordability is becoming a problem in Malta.
In his paper, entitled 'Measuring Export Concentration: The Implications for Small States', Chris Meilak offers pragmatic evidence of the phenomenon of export concentration of export goods and services.
Export concentration, as measured by eight indices, exhibits a negative link with country size variables, indicating higher export concentration in smaller countries.
The results of this study also point towards higher export concentration in less developed countries, indicating that both size and stage of economic development are relevant factors in determining export concentration.
Silvio John Camilleri applies different statistical tests to investigate whether monthly volatility patterns prevailing in a cross-section of stock markets are present on the Malta Stock Exchange. A January effect is detected, together with a variant of the turn-of-the-month effect, in that volatility tends to increase towards the end of the month. While these effects may be attributed to sources identified in previous literature, it also shows that this seasonality is related to announcement patterns of listed companies.
The BOV Review also provides an index of articles featured in past issues. Articles from Issue 23 are available online at www.bov.com. For more information or to obtain a copy of the review, contact Victoria Azzopardi on 2275 5779 or e-mail victoria.azzopardi@bov.com.