Global Public‐Private Investment Partnerships: A Financing Innovation with Positive Social Impact

Global bond markets, along with banks and governments, are the main source of funding for investment in environmentally friendly infrastructure and the transition to clean energy. Although such bonds are a relatively recent innovation, the green bond market has grown rapidly from its start in 2008 to around $800 billion in outstanding issues. The problem, however, is that green bonds, which represent less than 1% of global bond markets, have been issued disproportionately by government‐sponsored entities, corporations, and municipalities in developed markets. In the emerging market countries where the infrastructure investments are most needed, they barely exist. The authors describe a new investment vehicle, called the AP EGO fund, whose mission and MO are to channel the vast global pools of institutional savings that are now invested in low or (even negative) yield fixed‐income assets—as much as $17 trillion in 2019—to higher‐return emerging markets green investments, in particular sustainable infrastructure, by creating a new asset class: emerging‐market green bonds issued by banks. The AP EGO fund is premised on and involves a reworking of the public‐private partnership (PPP) into a form they call the global public‐private investment partnership (or GPPIP). Unlike the PPP, which combines a public agency with a private operator, the GPPIP has four instead of just two partners. In addition to the standard public agency and the private concession operator, there is a development bank—in this case the International Finance Corporation (IFC), which is the financial markets affiliate of the World Bank—and private investors that include emerging‐market banks as well as global institutional investors. Along with the mediating role played by a public agency like the IFC, the AP EGO Fund is fundamentally different from other PPPs in that it takes the form of a special purpose securitization vehicle whose shares are backed by a pool of green bonds issued by emerging market banks in multiple emerging market countries. And besides its application to a new asset class, the fund also breaks new ground by applying a securitization technique with a fund structure designed with an embedded “first‐loss” protection to a global pool of green bonds originated in emerging market economies. By means of this structuring, the green‐bond‐backed fund shares issued by the AP EGO are now providing developed market institutional investors with somewhat higher‐yielding fixed income securities that nevertheless carry an investment‐grade rating.     

Evaluation of the long-term cost-effectiveness of liraglutide therapy for patients with type 2 diabetes in France

Objectives:

The present study aimed to compare the projected long-term clinical and cost implications associated with liraglutide, sitagliptin and glimepiride in patients with type 2 diabetes mellitus failing to achieve glycemic control on metformin monotherapy in France.

Methods:

Clinical input data for the modeling analysis were taken from two randomized, controlled trials (LIRA-DPP4 and LEAD-2). Long-term (patient lifetime) projections of clinical outcomes and direct costs (2013 Euros; €) were made using a validated computer simulation model of type 2 diabetes. Costs were taken from published France-specific sources. Future costs and clinical benefits were discounted at 3% annually. Sensitivity analyses were performed.

Results:

Liraglutide was associated with an increase in quality-adjusted life expectancy of 0.25 quality-adjusted life years (QALYs) and an increase in mean direct healthcare costs of €2558 per patient compared with sitagliptin. In the comparison with glimepiride, liraglutide was associated with an increase in quality-adjusted life expectancy of 0.23 QALYs and an increase in direct costs of €4695. Based on these estimates, liraglutide was associated with an incremental cost-effectiveness ratio (ICER) of €10,275 per QALY gained vs sitagliptin and €20,709 per QALY gained vs glimepiride in France.

Conclusion:

Calculated ICERs for both comparisons fell below the commonly quoted willingness-to-pay threshold of €30,000 per QALY gained. Therefore, liraglutide is likely to be cost-effective vs sitagliptin and glimepiride from a healthcare payer perspective in France.     

Tracing the Origins of Personalist Economics to Aristotle and Aquinas

Personalist Economics has identified a central problem in Neoclassical Economics that originates in its representation of the economic agent as homo economicus and its grounding in individualism. Both flaws are directly addressed by Personalist Economics that has a different perspective on human nature as set forth in Personalism. Our remarks are presented in three sections. In the first section we address why individualism is an unsatisfactory philosophical foundation for modern economic theory. In the second section we trace the origins of Personalist Economics to Aristotle and Aquinas. While others, such as Heinrich Pesch and Joseph Schumpeter, played important roles in the evolution of Personalist Economics, here our efforts are restricted to the contributions of Aristotle and Aquinas. In the third section we explore how, in terms of 18 tenets, Personalist Economics and a Personalist economy differ from Mainstream Economics and the individualistic market economy.     

Regional demands for pulp and paper products

The pulp and paper industry has experienced dramatic changes during the past several decades with large variations in world regional market shares of production capacity and consumption patterns. Based on panel data available (1961–2000) from the United Nations Food and Agricultural Organization, this paper estimates dynamic demand models for pulp and paper products in four major trading regions: Asia, Europe, the North American Free Trade Agreement Area, and South America. With or without price in the model, short-run demands are generally output inelastic. However, without price in the model, long-run output elasticities were more elastic, particularly in the Paper/Paperboard, Printing/Writing, and Household/Sanitary sectors with most elasticities greater than 1. With price included in the model, long-run demands were generally output inelastic, with primary exceptions being the Paper/Paperboard sector for all but the NAFTA region and Wrapping/Packaging for Asia and South America. Price was generally significant with long-run elasticities, in absolute value, in the (0.05, 0.11) range. And as a measure of urbanization, the percent of the population living in urban areas significantly affects consumption in total and in the Pulp and Printing/Writing sectors.     

Farm credit and credit demand elasticities in Shaanxi and Gansu

This paper empirically estimates individual household credit demand elasticities based on 897 farm households surveyed in Shaanxi and Gansu provinces in the People's Republic of China (PRC) in October 2009. We used survey-based experimental techniques to extract individual household credit demand functions from which we estimated point demand elasticities. From a theoretical point of view, we proposed that as interest rates fell the demand for credit increased in elasticity, and this appears to hold in our data. We find a range of elasticities with mean point estimates of about ? 0.6. We find that nearly 20% of farm households have nearly perfectly inelastic demands for credit but we also find that nearly 20% have elasticities above ? 0.75 including some 15% that have elasticities greater than ? 1.0. Previous studies that have argued against credit policies because of the low inelasticity of demand do not generally hold. There is much heterogeneity in credit demand and we would argue that a full spectrum of targeted credit policies can be used to address differences across farms.     

Banking and the Macroeconomy in China: A Banking Crisis Deferred?

The downturn in the world economy following the global banking crisis has left the Chinese economy relatively unscathed. This paper develops a model of the Chinese economy using a DSGE framework with a banking sector to shed light on this episode. It differs from other applications in the use of indirect inference procedure to test the fitted model. The model finds that the main shocks hitting China in the crisis were international and that domestic banking shocks were unimportant. However, directed bank lending and direct government spending was used to supplement monetary policy to aggressively offset shocks to demand. The model finds that government expenditure feedback reduces the frequency of a business cycle crisis but that any feedback effect on investment creates excess capacity and instability in output.     

How Does Perceived Effectiveness Affect Adults’ Ethical Acceptance of Anti-obesity Threat Appeals to Children? When the Going Gets Tough,the Audience Gets Going

Little is known on the appraisal of ethically questionable not- for-profit actions such as social marketing advertising campaigns. The present study evaluates the ethical acceptance by adults of anti-obesity threat appeals targeting children, depending on the claimed effectiveness of the campaign. An experiment conducted among 176 Belgian participants by means of an online survey shows that individuals’ acceptance of social marketing practices increases along with the claimed effectiveness of the campaign. As such it demonstrates that the audience adopts a pragmatic perspective, challenging the non-consequentialist stance of social marketers who refrain themselves from using these ‘questionable’ techniques although highly effective. The trade-off between ethical judgment and claimed effectiveness varies depending on whether the threats focus on the child’s physical integrity or social life. Individual characteristics such as parenthood and age also influence the relationship. All in all, it seems that people with stronger connections to the issue such as parents are more ready to compromise. These findings enrich our insights into consequentialism in social marketing campaigns, how people respond to controversial messages targeted at vulnerable group, and open new venues to social managers and public policy makers. Managerial implications and concrete advice on how to communicate with the various audiences are proposed, as well as suggestions for future studies.