Exploring BIS credit-to-GDP gap critiques: the Swiss case

A growing body of literature has highlighted two important caveats to the credit-to-GDP gap as advocated by the Bank for International Settlements (BIS). The first relates to the approach used to normalise credit (i.e. dividing nominal credit by GDP). In this regard, critics have argued that GDP movements, that may or may not be relevant, run the risk of affecting a normalised measure of credit. The second relates to the use of the Hodrick-Prescott (HP) filter to estimate the gap’s trend component. In this regard, critics have emphasised several measurement problems associated with using the HP filter. In this paper, we assess the relevance of these critiques for Switzerland. Our findings show that despite its drawbacks, the BIS gap is a reliable measure of excess credit in Switzerland. Alternatives do not provide clear advantages, rather they are considerably more complex to estimate and come with their own set of pitfalls. For policymaking purposes, the BIS gap’s signal should be complemented with narratives based on a broader set of credit metrics to ensure that an all-encompassing risk assessment is made.

High-Temperature Stable Specific Enzyme for Guar Polymer Based Fracturing Fluid Degradation

Hydraulic fracturing, commonly referred to as fracking, is a widely used technology to enhance the productivity of low-perm reservoirs and the aqueous-based fracturing fluids use guar as the rheology builder. Residual polymer layer over the fractured surface results in a reduced matrix to fracture permeability, causing reduced well productivity. This research aims to develop a specialized mannanase enzyme and evaluate its efficiency in degrading linear and cross-linked guar polymer gel as a function of time, temperature, and breaker concentration, to enhance the effectiveness of the fracturing process and yielding higher production. The study begins with developing high-temperature stable mannanase using "protein engineering" tools to minimize denaturation at high temperatures and the underlying formation chemistry, followed by optimization of polymer, crosslinker, and breaker concentration through the measurement of rheological properties at moderate to high temperature. Initial studies were conducted using HT-HP filter press and filter papers as porous media for visual inspection of polymer cake dissolution efficiency. Final conclusions were drawn from the simulated coreflooding studies, wherein the injection and production return permeabilities were investigated on post-fracture and enzyme-treated cores, where the breaker was mixed with the frac fluid applied once the frac fluid is in place. The thermal stability of the enzyme breaker vis-à-vis viscosity reduction and degradation pattern of linear and cross-linked gel observed from the break test showed that the enzyme is stable up to 250 °F and can reduce viscosity by more than 1800 cp (99% breaking ability).

Macroeconomic Short-Term High-Precision Combined Forecasting Algorithm Based on Grey Model

Using the characteristics of grey forecasting, which requires a small amount of sample data and a simple modeling process, to predict the main macroeconomic indicators in the early stage, combined with the filtering decomposition method and the production function method, establishes a short-term high-precision combination forecasting algorithm for macroeconomics based on the grey model. The algorithm uses the improved HP filter method in the HP filter method to study whether the potential economic growth rate can be more accurately measured, and the production function method is used to calculate the potential economic growth rate. First, the two methods are used to calculate the potential economic growth rate. The accuracy of this method finally established a combined model based on the two models for short-term forecasting. Under the premise of considering economic factors, the input data is preprocessed, and the high-precision combined forecast is used to finally obtain the macroeconomic forecast results. The calculation examples in the paper show that the method is feasible and effective.

TREND EXTRACTION FROM ECONOMIC TIME SERIES WITH MISSING OBSERVATIONS BY GENERALIZED HODRICK–PRESCOTT FILTERS

The Hodrick–Prescott (HP) filter has been a popular method of trend extraction from economic time series. However, it is impractical without modification if some observations are not available. This paper improves the HP filter so that it can be applied in such situations. More precisely, this paper introduces two alternative generalized HP filters that are applicable for this purpose. We provide their properties and a way of specifying those smoothing parameters that are required for their application. In addition, we numerically examine their performance. Finally, based on our analysis, we recommend one of them for applied studies.

Investigating the Effect of Oil Revenue Shocks on Business Cycles and the Synchronism of Cycles with Selected OECD Countries

The effect of temporary and permanent shocks of oil revenues on the concurrence of trade cycles between Iran and selected OECD countries has been investigated using the data series of the period 1985–2019. For this purpose, first, business cycles and temporary and permanent shocks of oil revenues are extracted using Hodrick-Prescott (HP) filter and Blanchard-Quah technique, respectively. Then, the relationship between business cycles and model-independent variables is evaluated by the ARDL method. The results show that the main cause of business cycle fluctuations is temporary shocks to oil revenues, also, government expenditure variables and permanent and temporary shocks to oil revenues in the short and long term have a negative and significant effect on business cycles, and the exchange rate variable has a positive and significant effect on business cycles. Estimation of business cycle synchronization index shows that Belgium, Germany, Greece, Japan, Spain, and Turkey have had business cycles synchronization with Iran. And Germany with a correlation coefficient of 0.42 has the most synchronization of business cycles with Iran.