Barking Up the Wrong Tree: A Reply to Haynes & Husan

The Albanian economy in the 1990s experienced a rapid recovery from its near-collapse in 1992. The rapid economic growth between 1993 and 1996 was exceptional by East European standards, and represented the highest rate of sustained economic growth of all transition economies. This investigation indicates that the standard explanations for recovery and growth in transition economies, such as the pace of economic reform or the levels of domestic and foreign investment, do not adequately explain the rapid growth of the Albanian economy. Factors specific to Albania also need to be considered. The main conclusion drawn here is that the success of the Albanian economy in the mid-1990s rested largely upon the inflow of remittances from Albanians working abroad. These remittances are shown to have been much greater in value than was previously assumed by the IMF: in the region of $700 million per annum rather than $400 million. Remittances are also found to have played a much greater role in Albania's economic recovery than was previously recognised. It is demonstrated that the rise of pyramid investment schemes in 1996 was closely linked to the inflow of remittances. Such schemes are also found to have played a part in fuelling the rapid economic growth in the Albanian economy, before their collapse in 1997.     

Analysis of a network structure of the foreign currency exchange market

We analyse structure of the world foreign currency exchange (FX) market viewed as a network of interacting currencies. We analyse daily time series of FX data for a set of 63 currencies, including gold, silver and platinum. We group together all the exchange rates with a common base currency and study each group separately. By applying the methods of filtered correlation matrix we identify clusters of closely related currencies. The clusters are formed typically according to the economical and geographical factors. We also study topology of weighted minimal spanning trees for different network representations (i.e., for different base currencies) and find that in a majority of representations the network has a hierarchical scale-free structure. In addition, we analyse the temporal evolution of the network and detect that its structure is not stable over time. A medium-term trend can be identified which affects the USD node by decreasing its centrality. Our analysis shows also an increasing role of euro in the world’s currency market.     

Initial conditions and privatisation as causes of post-communist corruption

This article investigates the economic determinants of corruption in post-communist countries. We conduct an empirical verification of two research hypotheses using EBRD and World Bank data on 27 post-communist economies over the 1996–2014 period. The first hypothesis suggests that corruption is rooted in the communist past, when these countries embraced communist institutions, social norms, as well as low-development structural factors broadly defined as initial conditions. The second hypothesis is that the flawed transition process led corruption to increase because politics and business were never separated. The elites pushed measures that preserved their status while obstructing reform policies that might endanger their interests. Our empirical results demonstrate that both hypotheses are valid to a limited extent, while revealing a more complex view of the reforms and initial conditions. Corruption seems to be related to the natural resource curse, to the lack of small-scale privatisation and to a long history of underdevelopment that could have preceded communism.     

Firm Productivity and Foreign Direct Investment into Non‐core Activities*

As foreign direct investment (FDI) often originates from multinational enterprises (MNEs) with non‐core activities and not single‐product firms, as MNE theory typically suggests, we hypothesize that such firms are more productive than MNEs without non‐core activities as well as non‐MNE firms. We test this hypothesis using Kolmogorov–Smirnov stochastic dominance Tests and Japanese firm‐level productivity and FDI data for the period 1985–2001. We find that both manufacturing and service multinational firms with non‐core foreign investments stochastically dominate firms without non‐core activities. We also find cost‐complementarities between certain core and non‐core FDI activities that span both manufacturing and service affiliates.     

The Extent of Nontariff Barriers to Industrial Countries' Imports

This article examines the extent of nontariff barriers (NTBS)to the visible imports of sixteen industrial countries. It userthree alternative measures to show that governmental commodity-specificborder measures affect more than 27 percent of all imports andmore than 34 percent of imports from developing countries. Italso shows that during the period from 1981 to 1983, NTBS becamesignificantly more extensive. Detailed statistics reveal considerablevariations in NTB coverage by commodity, type of barrier, importer,and exporter. The data on which these conclusions are basedwere compiled from official information at the highest levelof disaggregation and are described in the article.     

Cost-effectiveness of adding carfilzomib to lenalidomide and dexamethasone in relapsed multiple myeloma from a US perspective

Objective: To assess the economic value of carfilzomib (Kyprolis), this study developed the Kyprolis Global Economic Model (K-GEM), which examined from a United States (US) payer perspective the cost-effectiveness of carfilzomib-lenalidomide-dexamethasone (KRd) versus lenalidomide-dexamethasone (Rd) in relapsed multiple myeloma (RMM; 1–3 prior therapies) based on results from the phase III ASPIRE trial that directly compared these regimens.

Methods: A partitioned survival model that included three health states of progression-free (on or off treatment), post-progression, and death was developed. Using ASPIRE data, the effect of treatment regimens as administered in the trial was assessed for progression-free survival and overall survival (OS). Treatment effects were estimated with parametric regression models adjusting for baseline patient characteristics and applied over a lifetime horizon. US Surveillance, Epidemiology and End Results (1984–2014) registry data were matched to ASPIRE patients to extrapolate OS beyond the trial. Estimated survival was adjusted to account for utilities across health states. The K-GEM considered the total direct costs (pharmacy/medical) of care for patients treated with KRd and Rd.

Results: KRd was estimated to be more effective compared to Rd, providing 1.99 life year and 1.67 quality-adjusted life year (QALY) gains over the modeled horizon. KRd-treated patients incurred $179,393 in total additional costs. The incremental cost-effectiveness ratio (ICER) was $107,520 per QALY.

Limitations: Extrapolated survival functions present the greatest uncertainty in the modeled results. Utilities were derived from a combination of sources and assumed to reflect how US patients value their health state.

Conclusions: The K-GEM showed KRd is cost-effective, with an ICER of $107,520 per QALY gained against Rd for the treatment of patients with RMM (1–3 prior therapies) at a willingness-to-pay threshold of $150,000. Reimbursement of KRd for patients with RMM may represent an efficient allocation of the healthcare budget.     

A comment on The relationship between policies and growth in transition countries

The goal of this article is to point out the likely reasons for the differences between the results obtained by Roxana Radulescu and David Barlow ¹ 1 Radulescu, R. and Barlow, D. (2002). Economics of Transition, 10(3), pp. 719–45. and those presented in most other research papers on the growth determinants in the post‐communist countries. The authors also present the consequences of the impact of the specific composition of the EBRD index on the results of analysis obtained on the basis of econometric models, in which the index is used as a variable.     

The volatility of prices in the English and Welsh electricity pool

The volatility of spot prices has been a notable feature of the English and Welsh Electricity Pool since its formation in 1990. This study investigates the possibility that the volatility of spot prices is strongly affected by the functioning of the contract market for electricity. This paper suggest that generators with market power may have an incentive to create volatility in the spot market in order to benefit from higher risk premia in the contract market. A simple theoretical model is used to illustrate this argument. Nonparametric techniques are used to test for changes in volatility after the expiry of the coal contracts in 1993 and during the price cap of 1994–1996. Strongly significant increases in volatility are found in the latter period.