The Drivers of Sovereign CDS Spread Changes: Local Versus Global Factors

We use daily data for a panel of 34 countries to investigate regional differences in sovereign credit default swaps (CDS) spread determinants and the significance of local versus global market factors. Similar to prior studies, we find a high level of commonality among CDS spreads, but our results show that this effect is stronger in Latin American CDS. The results of our quantile panel regression model show that although global forces drive spreads across the conditional distribution, changes in credit ratings are significant in explaining CDS spreads only in the upper quantiles. We also confirm the existence of regional differences in spread determinants.     

Within the triangle of healthcare legacies: comparing the performance of South-Eastern European health systems

Objective: Inter-regional comparison of health-reform outcomes in south-eastern Europe (SEE).

Methods: Macro-indicators were obtained from the WHO Health for All Database. Inter-regional comparison among post-Semashko, former Yugoslavia, and prior-1989-free-market SEE economies was conducted.

Results: United Nations Development Program Human Development Index growth was strongest among prior-free-market SEE, followed by former Yugoslavia and post-Semashko. Policy cuts to hospital beds and nursing-staff capacities were highest in post-Semashko. Physician density increased the most in prior-free-market SEE. Length of hospital stay was reduced in most countries; frequency of outpatient visits and inpatient discharges doubled in prior-free-market SEE. Fertility rates fell for one third in Post-Semashko and prior-free-market SEE. Crude death rates slightly decreased in prior-free-market-SEE and post-Semashko, while growing in the former Yugoslavia region. Life expectancy increased by 4 years on average in all regions; prior-free-market SEE achieving the highest longevity. Childhood and maternal mortality rates decreased throughout SEE, while post-Semashko countries recorded the most progress.

Conclusions: Significant differences in healthcare resources and outcomes were observed among three historical health-policy legacies in south-eastern Europe. These different routes towards common goals created a golden opportunity for these economies to learn from each other.     

An asset-pricing view of external adjustment

Recent literature has argued that conventional measures of external sustainability - the trade balance and current account - are misleading because they omit capital gains on net foreign asset positions. We adjust the definition of the current account to include the capital gains and discuss how this may affect our thinking about external adjustment and sustainability. We do so in the context of a two-country macro-finance model of Pavlova and Rigobon (2008a) that allows exploration of the interconnections between equilibrium portfolios and external accounts' dynamics. We calibrate the model and find that it generates several testable implications, some of which have already been validated empirically. First, we establish dynamic properties of the capital-gains adjusted current account and show that they are fundamentally different from those of the conventional current account. Second, we find that capital gains have a stabilizing effect on the trade balance and the current account. Finally, we demonstrate that in response to a shock, the conventional and the capital-gains adjusted current accounts may move in opposite directions.     

Post-euro EU and US interest rates and foreign exchange rates: Are they in harmony or in disarray?

This paper focuses on: (1) how a select set of financial and economic factors could set the path for interest rates and foreign exchange rates, and (2) whether the resultant realized interest and exchange rates would be in harmony or in disarray. Using post-euro data for the EU and the US, an array of monetary rules is examined. In particular, the paper investigates whether the original and the extended Taylor rules provide an explanation of the dynamics of the EU monetary system since the inception of the euro. Our findings indicate that the EU and the US monetary responses are not the same and that exchange rates play a significant role.     

Willingness and ability of Bulgarian consumers to pay for improved public health care services

An application of the contingent valuation method to the willingness and ability of Bulgarian consumers to pay for public health care services is presented. The study uses data from a household survey conducted in May–June 2000. The willingness and ability to pay for outpatient, inpatient and dental services is investigated. A combination of interval checklist and open-ended questions are used to elicit the willingness-to-pay amounts. The impact of the sociodemographic characteristics on the responses is examined by a generalized Tobit regression. Based on the regression equation, the welfare effects of various fee levels are simulated.     

A Strategic Analysis of Eutrophication Abatement in the Baltic Sea

Cooperation between the littoral countries of the Baltic Sea to mitigate eutrophication has proven difficult in the past. In this study, we explore the countries’ incentives to free-ride on agreements, find stable coalitions where free-riding is deterred, and propose alternative ways of designing stable agreements that would reduce eutrophication in the sea. We conclude that strong free-riding incentives for some countries preclude the socially optimal solution in the absence of an enforcing authority. A stable agreement can, however, be formed with some loss in efficiency. The research shows that a treaty with modest abatement targets between all the littoral countries would be more efficient than a coalition between fewer countries but with more ambitious targets. We compare the two international institutions involved in the protection of the Baltic Sea—the intergovernmental Helsinki Commission and the partly supranational European Union—and show that the European Union would not benefit from enforcing an agreement among its member states on the Baltic without Russia being involved in the conservation efforts. Our results suggest that efficient abatement and full participation could be achieved by using the power the European Union has to enforce such an agreement among its members and, simultaneously, negotiating with Russia within the Helsinki Commission.     

Optimal Asset Allocation and Risk Shifting in Money Management

This article investigates a fund manager's risk-taking incentivesinduced by an increasing and convex relationship of fund flowsto relative performance. In a dynamic portfolio choice framework,we show that the ensuing convexities in the manager's objectivegive rise to a finite risk-shifting range over which she gamblesto finish ahead of her benchmark. Such gambling entails eitheran increase or a decrease in the volatility of the manager'sportfolio, depending on her risk tolerance. In the latter case,the manager reduces her holdings of the risky asset despiteits positive risk premium. Our empirical analysis lends supportto the novel predictions of the model.     

Social Change: How Should Technology Education Respond?

Rapid social change creates a powerful challenge to individuals and educational institutions. Technology education is not an exception. To be a useful and authentic learning area, technology education should constantly re-examine its rationale in order to formulate responses to changing contexts to improve the quality of learning for students. The more perspectives used for this process, the better the results should be. This article explores several facets of social change that can influence an understanding of the aims and nature of technology education and that might contribute to its development. Social change is a very complex and dynamic phenomenon that can be considered from a variety of perspectives and is reflected in a number of processes. These processes are different in different types of societies. In relation to the topic, the following processes that are relevant to Western societies (it is acknowledged that for different type of societies, e.g. Islamic, Chinese, social context will be different) will be analyzed: (1) The shift of emphasis from engaging society members primarily as producers to engaging society members primarily as consumers; (2) The colonisation of the cognitive and moral spheres of human life by the aesthetic sphere; (3) The integration of people into the technological world and (4) The shift from the Welfare state to the Competition state. These processes have been identified on the basis of their potential influences on the development of technology education and, as a consequence, the students who study it. These processes are in tension which creates even greater challenges to technology education. Several implications of the above analysis in terms of conceptualizing technology education are discussed. It is suggested that social change can be addressed through technology education if the educational goals of it are ‘to broaden minds and develop all pupils in the creation of a better society’. For technology education classrooms, these specifically mean the involvement of students in democratic debates on the future outlines of technological development; development of their social and ecological sensitivities; avoiding orienting their solutions exclusively to the standard of business efficiency and profitability criteria; helping them to distinguish real needs from desires; discussing the role of designed objects in the life of contemporary society; putting more emphasis on other than the aesthetic aspects of life that can provide existential meaning for people; challenging the way people are manipulated through advertising and cultivation of their desires; developing an active/creative attitude towards problems (not re-active); teaching students to formulate problems (not only being involved in problem solving); challenging consumer-oriented design; looking at design as one source of inspiration, not as a source of economic utility; and developing social responsibility     

An Application of Rating Conjoint Analysis to Study the Importance of Quality-, Access- and Price-attributes to Health Care Consumers

Outside the health care sector, consumer preferences have been effectively studied using rating and ranking conjoint techniques. In the health care sector this technique has received less attention than its choice-based variant. Applications of rating and ranking method to health care issues are few. This paper presents an application of rating conjoint analysis to study the importance of quality, access and price to the health care consumers in Bulgaria. The paper first describes the rating conjoint method and its distinctive features compared to the choice-based and the ranking approach. The method is illustrated by the rating conjoint design applied in the study. Next, the impact of different quality-, access- and price-levels on the rating of physician profiles is analysed and the differences between the socio-demographic groups are examined. The results suggest that similar to other countries, the quality of care is a highly valued characteristic in Bulgaria, whereas access is perceived as less important. The considerable importance of patient payments further implies that Bulgarians are responsive to prices in the health care sector, especially the elderly, the village dwellers and the lowest income groups. The relevance of the results with regards to health policy and planning, as well as with regards to the methodology of rating conjoint analysis is discussed at the end of the paper.