Political Stability and the Effectiveness of Currency Based Macro Prudential Measures

The use of multiple currency based macroprudential tools by Reserve Bank of India, India’s central bank, has helped create resilience in the economy, especially during financial turmoil. However, in a democratic set-up like India, the analysis of capital based macroprudential reforms needs to incorporate the political stability, as there is increasing evidence that macroprudential policy effectiveness is closely linked to political conditions. This study incorporates the role of political stability is understanding the effectiveness of currency based macroprudential policies, by using the years of election as a proxy for political uncertainty. I develop an index of capital based macroprudential policies (CMPP) using the notifications on capital flows and risk management guidelines on foreign exchange exposures from Reserve Bank of India. Using a GARCH model, the impact of CMPP on the net capital inflows is analyzed for the period from January, 1997 to March, 2018. I find that while the presence of CMPP leads to a fall in capital flow volatility, such policies in the years of election are ineffective in curbing capital flow volatility. The paper adds to the increasing evidence coming in recent years of the link between political cycles, interest groups and macroprudential policies.

     

Firm–Specific Assets and the Link between Exchange Rates and Japanese Foreign Direct Investment in the United States: A Re–examination

Blonigen has studied Japanese foreign direct investment (FDI) in the USA using panel count models and data for 1975–92. He reports that appreciation of Japanese yen had a positive impact on Japanese FDI in the USA. We re–examine the robustness of this conclusion using Blonigen’s data and a family of econometric models—finite mixture panel count models—that are more flexible and appear to provide an improved fit to his data. Although our results broadly support Blonigen’s conclusions regarding the link between the exchange rate and Japanese FDI in the USA, our approach highlights the considerable diversity in the response of FDI to exchange rate variations. JEL Classification Number: C25.     

A Note on Estimating Unemployment Duration

A focal point of a number of recent studies of unemployment duration has been the estimation of the unobserved average completed duration (ACD) of an unemployment spell using groped data on observed incomplete spells. Both parametric and non-parametric methods are available. This note compares the assumptions underlying the two approaches and argues for the use of a non-parametric estimator, specifically the Kaplan-Meier estimator, on grounds of its use of the weaker assumptions. In an actual application of the Kaplan-Meier estimator to some data from the Australian Labour Force Survey a Number of problems are experienced due to the fact that the estimator is intended for data in a life table format. The note briefly discusses the resolution of these problems and related statistical issues.     

The new financial framework for the Cuban non-state sector

A cornerstone of the current Cuban economic model reforms is its opening to the non-state small-scale sector. Using the results of a survey of non-state businesses, we look at the provision of financial services to the small- and medium-sized enterprises in the non-state sector from two perspectives: first, the nature of the new credit regulations and bank policies and how they accomplish the evaluation of credit to a hitherto non-existent sector; and second, how these small business clients view their relationship with their lender state banks. We look at Cuba from the perspective of a socialist economy in transition and compare it to microfinance in China and India.     

Globalization,paradox and the (un)making of identities: Immigrant Chartered Accountants of India in Canada

We study the labour market experiences of immigrant accountants in Canada, to reveal the tensions contradictions and paradoxes embedded in neoliberal globalization. Drawing on themes within pragmatic sociology (Boltanski & Thévenot, [1991] 2006), we argue that globalization has differentially impacted on the moral orders underpinning the identity projects of the Canadian state and the elite sector of the accountancy profession and this has in turn created three paradoxes: paradox of the state, paradox of the market and paradox of place.     

An analysis of publication lags in econometrics

This note describes the lengthening in publication lags for econometric papers in seven journals since 1986 and briefly considers ways of shortening them.     

Small samples and collateral information: An application of the hyperparameter model

When time-series and cross-section data are available for estimating a linear relationship, the data may be pooled using a number of frameworks of varying degrees of restrictiveness. One possible framework which appears not to have been exploited in previous applied econometric work, but which may have some merit especially when the number of observations in the time-series or cross-section dimension is not very large, is the hyperparameter model of Lindley-Smith (1972). Under appropriate conditions the use of this framework enables one to obtain ‘improved’ Bayesian point estimates which yield predictions with smaller mean-square-error than those from ordinary least squares. The paper uses the hyperparameter framework to estimate a Cobb-Douglas production function using U.K. cross-sectional data. A cross-validation exercise is carried out to see how much of the potential of the Bayesian method is realised in practice.     

Switching of biologic disease modifying anti-rheumatic drugs in patients with rheumatoid arthritis in a real world setting

Objectives:

This study examined total healthcare costs and rates of patients with rheumatoid arthritis (RA) who switch biologic disease-modifying anti-rheumatic drug (bDMARD) therapy in a real world setting.

Methods:

A retrospective longitudinal analysis was conducted in patients with RA using IMS PharMetrics Plus database from 1/1/2004 to 3/31/2010. The first-line cohort included patients newly initiated on abatacept or the tumor necrosis factor-alpha inhibitors (anti-TNFs) adalimumab, etanercept, or infliximab, with 12 months of continuous follow-up. The second-line cohort included patients initiating a bDMARD with evidence of a different bDMARD within the previous 2 years and with 12 months of continuous follow-up. Switching was defined as a different bDMARD claim within a 200% gap in days supply from the previous bDMARD claim. Non-switchers stayed on their bDMARD in the follow-up period. Monthly total healthcare costs for switchers and non-switchers and rates of bDMARD switching were examined. Switch rates for each bDMARD were also compared.

Results:

First-line switchers had significantly higher monthly total healthcare costs after the switch than non-switchers ($3759 vs $2343; p?p?Limitations:

There are no clinical data available in this database and, therefore, this study did not examine the clinical drivers of healthcare costs and switch rates.

Conclusions:

Monthly total healthcare costs were higher for bDMARD switchers following the switch compared to non-switchers. Patients on abatacept switched less frequently than patients on anti-TNFs. This study highlights the need to identify patients who are likely to switch in order to ensure they receive the appropriate therapy which may improve outcomes and decrease healthcare costs.