Capital Flows,Exchange Rates,and the New International Financial Architecture: Six Financial Crises in Search of a Generic Explanation

Exchange-rate history can be divided into two periods: the Bretton Woods period and the period of floating exchange rates since the early 1970s. In this second period, financial crises and the roles played by institutions, rules, and commitments in international finance have been of central importance. Many proposals for changing the international financial architecture have been presented to reduce the likelihood of crises, but the source of the problem is in variable capital flows and the floating exchange-rate system. Based on six major financial crises of the last 25 years, the wide range in movements in the exchange rate, which might also be inferred from differences in national inflation rates, reflects changes in the ex-ante cross-border capital flows. As long as currencies are floating, economic conditions among countries are likely to be more variable and diverse: the greater variability in economic conditions suggests greater variability in capital flows.     

Cost-effectiveness of lenalidomide plus dexamethasone vs bortezomib plus melphalan and prednisone in transplant-ineligible US patients with newly-diagnosed multiple myeloma

Objective:

To conduct a cost-effectiveness assessment of lenalidomide plus dexamethasone (Rd) vs bortezomib plus melphalan and prednisone (VMP) as initial treatment for transplant-ineligible patients with newly-diagnosed multiple myeloma (MM), from a US payer perspective.

Methods:

A partitioned survival model was developed to estimate expected life-years (LYs), quality-adjusted LYs (QALYs), direct costs and incremental costs per QALY and LY gained associated with use of Rd vs VMP over a patient’s lifetime. Information on the efficacy and safety of Rd and VMP was based on data from multinational phase III clinical trials and a network meta-analysis. Pre-progression direct costs included the costs of Rd and VMP, treatment of adverse events (including prophylaxis) and routine care and monitoring associated with MM. Post-progression direct costs included costs of subsequent treatment(s) and routine care and monitoring for progressive disease, all obtained from published literature and estimated from a US payer perspective. Utilities were obtained from the aforementioned trials. Costs and outcomes were discounted at 3% annually.

Results:

Relative to VMP, use of Rd was expected to result in an additional 2.22 LYs and 1.47 QALYs (discounted). Patients initiated with Rd were expected to incur an additional $78,977 in mean lifetime direct costs (discounted) vs those initiated with VMP. The incremental costs per QALY and per LY gained with Rd vs VMP were $53,826 and $35,552, respectively. In sensitivity analyses, results were found to be most sensitive to differences in survival associated with Rd vs VMP, the cost of lenalidomide and the discount rate applied to effectiveness outcomes.

Conclusions:

Rd was expected to result in greater LYs and QALYs compared with VMP, with similar overall costs per LY for each regimen. Results of this analysis indicated that Rd may be a cost-effective alternative to VMP as initial treatment for transplant-ineligible patients with MM, with an incremental cost-effectiveness ratio well within the levels for recent advancements in oncology.     

Personalised news filtering and recommendation system using Chi-square statistics-based K-nearest neighbour (χ2SB-KNN) model

Recommendation problem has been extensively studied by researchers in the field of data mining, database and information retrieval. This study presents the design and realisation of an automated, personalised news recommendations system based on Chi-square statistics-based K-nearest neighbour (χ²SB-KNN) model. The proposed χ²SB-KNN model has the potential to overcome computational complexity and information overloading problems, reduces runtime and speeds up execution process through the use of critical value of χ² distribution. The proposed recommendation engine can alleviate scalability challenges through combined online pattern discovery and pattern matching for real-time recommendations. This work also showcases the development of a novel method of feature selection referred to as Data Discretisation-Based feature selection method. This is used for selecting the best features for the proposed χ²SB-KNN algorithm at the preprocessing stage of the classification procedures. The implementation of the proposed χ²SB-KNN model is achieved through the use of a developed in-house Java program on an experimental website called OUC newsreaders’ website. Finally, we compared the performance of our system with two baseline methods which are traditional Euclidean distance K-nearest neighbour and Naive Bayesian techniques. The result shows a significant improvement of our method over the baseline methods studied.     

Auditors' Ability to Resist Client Pressure and Culture: Perceptions in China and the United Kingdom

Ongoing corporate scandal and audit failure raise serious concerns about the ability of auditors to resist client pressure. Based on a sample of 93 auditors from China and the United Kingdom (U.K.), we analyze the effect of specificity of accounting standard, level of auditor tenure, provision of management advisory services (MAS) and degree of audit market competition on perceptions of auditors' ability to withstand client pressure in audit conflict situations. We draw on cultural differences to explain differences in auditors' perceptions in the respective countries. Our findings are consistent with national cultural characteristics identified in the research literature. We find that U.K. auditors perceive specificity of accounting standards, auditor tenure, MAS and competition as less likely to affect decisions as to whether or not to accept clients' preferred accounting treatments than do their Chinese counterparts. Additionally while Chinese auditors perceive MAS and competition to be significant factors, they perceive accounting standard specificity and auditor tenure to be insignificant. For U.K. auditors, these results are reversed. The results may be relevant to international audit firms operating cross‐culturally and seeking to apply common audit procedures or codes of professional conduct in different national settings.     

The Financial Knowledge Scale: An Application of Item Response Theory to the Assessment of Financial Literacy

Despite increasing interest in and funding for financial literacy and financial education programs in the private and public sectors, the field of financial literacy still has a major obstacle to overcome: the lack of a widely disseminated measure of financial literacy, developed through rigorous psychometric analyses. In this article, we develop such a measure, focusing specifically on financial knowledge. Using item response theory (IRT), we analyze items from three national surveys, resulting in a psychometrically sound 20‐item financial knowledge scale. By using IRT, the current analysis uses individuals' answers to inform which questions to include in the scale in the first place, rather than simply confirming relationships between these answers and other financially relevant outcomes post hoc. Widespread use of this index and the continued use of modern psychometric techniques would allow for the comparison of financial knowledge, measured consistently and reliably, across studies, populations, and programs.     

A New Global Auto Industry？

This paper brings together a number of robust trade models to shed some light on the likely evolution of the global automotive industry. Vertical product differentiation, intra‐industry trade and fragmentation of production leading to international outsourcing are important features of the existing global automotive sector. The global automotive sector will most likely experience groundbreaking changes over the coming decades. The sector is confronted with a multidimensional technological revolution spurred by radical product innovation, shifts in customer demand and government incentives. A dominant driver will be growing public concern about climate change. China and India might well become leading players by 2050, if not earlier.     

Financial Development and Economic Growth: An Egg‐and‐Chicken Problem?

This study uses a Granger causality procedure to investigate the relationship between financial development and economic growth. The authors estimate a vector autoregression (VAR) model for nine OECD countries and China. They argue that a time-series approach is superior to a cross-sectional one and that the VAR framework avoids technical problems common in other time-series models. Evidence is presented of bidirectional causality between financial development and growth in half of the countries and reverse causality in three others. There is little support for the hypothesis that finance "leads" growth, and caution must be exercised in making general conclusions about this relationship.     

Cultural Values in Indian Television Advertising

The study investigates cultural values portrayed in commercials aired on television in India. The study included a comparison of the cultural values depicted in Indian and Western product brands as well as a comparison across four groups of products for both within and across Indian and Western brands. The study concludes that Indian and Western marketers are stressing the following cultural values: modern, symbolic, tradition, and utilitarian, and are blending Eastern and Western values. Results of the study indicate the importance of considering cultural values associated with different product types in the development of successful advertising campaigns.     

Preferences for change: Do individuals prefer voluntary actions, soft regulations, or hard regulations to decrease fossil fuel consumption?

Pittsburgh residents (n = 209) reported their preferences for voluntary actions, soft regulations, and hard regulations to (a) limit the number of SUVs and trucks and (b) increase green energy use for household energy consumption. These two goals were presented in one of two motivating frames, as addressing either environmental or national security issues. For the goal of limiting SUVs and trucks, results indicated that participants favored voluntary actions over hard regulations, and soft regulations over voluntary actions. For the goal of increasing green energy, results indicated that participants preferred both voluntary actions and soft regulations over hard regulations, but had no significant preference between voluntary actions and soft regulations. How the problems were framed did not significantly affect participants' willingness to accept voluntary actions or regulations. Participants' environmental attitudes (as assessed using the New Ecological Paradigm scale) had a strong positive relationship with support for regulatory strategies intended to change the behaviors in question. Women were more likely to support voluntary actions than men. The loss of personal freedom was frequently mentioned as a reason for saying no to hard regulations.