An Exploratory Study on Nonlinear Causality Among the MILA Markets

According to conventional portfolio theory, an increase in the interconnectedness of international financial markets may reduce the potential for constructing diversified portfolios. This article explores the implications of the creation of the Latin American Integrated Market (MILA)¹ over the dependence structure of its members using correlation and cointegration analysis as well as linear and nonlinear Granger causality tests. The creation of MILA aimed to enhance the integration process that Latin American financial markets “naturally” present while still providing diversification opportunities to investors. The results of our empirical analysis suggest that such objective is being achieved. Evidence of a rise in cross-country linear correlations and their linear causal relationship supports the idea of an increasing financial integration process in the region, while the absence of cointegration and the weakening of the nonlinear causal relationship favors the creation of diversified regional portfolios. These findings provide valuable insights for investment portfolio designers, regulators, and supervisors.     

Stock markets fragmentation,volatility and final investors

The 2000s in equity markets are marked by two major regulatory shocks: RegNMS in the United States, and MiFID in the European Union. Simultaneously, there is a massive increase in the proportion of high-frequency trading, and market orders volume. However, trading volumes do not significantly increase. We propose a theoretical model describing the effects of stock markets fragmentation on two types of investors optimization problems: “intermediary” high-frequency and “final” investors. Volatility has a permanent and a transitory component, whose weights depend on market fragmentation via the share of non-marketable orders of intermediary investors. The trading volume of final investors depends on market fragmentation both directly via transaction costs, and indirectly via total volatility. Finally a shock in fragmentation may lead to a decrease in trading volume, enhanced in the case of an equity markets crisis by a rise in the components of volatility.     

Migrant Remittances Provide Resilience Against Disasters in Africa

How responsive are migrant remittances to various disasters, both natural and human-made? Would remittances be affected by systemic financial crises, such as the 2008–09 financial crisis, or more recent crises affecting the Eurozone? Using panel data on 23 sub-Saharan African (SSA) countries from 1980 to 2007, we find that remittances are slow to respond to natural disasters, unresponsive to outbreaks of conflict, and will slowly decline following a systemic financial crisis. This suggests that, given its stability, remittances are sources of resilience in SSA.     

Money,Prices and the Silver Industry during the Price Revolution

The discovery of American silver has been commonly viewed in the literature as the moving force behind the sustained rise of prices experienced by Western Europe from the early 16th to the mid-17th century. However, the mechanical connection between the money supply and the general price level implied by the Quantity Theory oversimplifies the analysis of a period characterized by different trends, some of which cannot be easily explained by the monetarist story: (i) Central Europe silver mining boomed between 1451 and 1540 following a phase of scarcity of money that was especially severe between the end of the 14th century and the beginning of the 15th century; (ii) European prices started to rise before American silver was significantly imported to the Continent; (iii) the rapid expansion of American mining coincided with the decline of the European silver industry (1540–1618); and finally (iv) Mexican and Peruvian bullion production evidenced a downward course during the period 1628–1697, but no alteration in the rising trend of European prices occurred in response. It is argued instead that the classical theory of value and distribution, emphasizing costs of production as determinants of the ‘natural’ value of commodities including precious metals, can accommodate the facts in a more consistent manner than the monetarist view.     

NOUVEL ESSOR DES FONDATIONS AU QUÉBEC ET AU CANADA: POUR UNE ANALYSE SOCIOPOLITIQUE FONDÉE SUR LE CONCEPT D'ÉCONOMIE PLURIELLE

Philanthropic foundations are the object of little research in Canada and Quebec. Our article recognizes the role of these organizations, as well as the presence of powerful new foundations, rich in assets and donations. This article consists of three parts. The first part presents a theoretical review of the American literature published from 2000 on. The second part examines data that we extracted from three main repertoires. Though informative, these repertoires tend to classify Canadian and Quebec foundations in categories that are mostly fiscal and legal and tend to break them down as public or private foundations. We therefore question the limits of studies based on such categories. In the third part of the article we propose a theoretical framework based on a sociopolitical point of view in an attempt to transcend the binary approach. Our approach borrows from the concepts of social and solidarity economy (SSE) and plural economy in order to better understand the new institutional arrangements in which foundations operate. This theoretical framework allows us to analyse foundations as actors of the SSE even though they might not reproduce automatically the principles and the values of the SSE in their behaviours. On the contrary, from the standpoint of a plural economy we may be in a better position to develop a sound sociopolitical analysis of diverse configurations and hybrid forms resulting from emulations or transactions between the principles of the social and solidarity economy (reciprocity), the private economy (competition) and the public economy (redistribution).     

Country Differences in Material Deprivation in Europe

This paper assesses to what extent differences in the characteristics of individuals (micro‐level perspective) and country‐specific factors (macro‐level perspective) can explain country differences with respect to material deprivation levels. Thus, our work aims to simultaneously consider the macro dimension and the predominantly individually‐oriented study field of material deprivation using multilevel techniques. We make use of the European Union Statistics on Income and Living Conditions. Our results show that country‐specific factors seem to be much more relevant than individual effects in explaining country differences in material deprivation. We estimate that the introduction of country‐specific factors reduces the proportion of total variance due to between‐country differences in deprivation by 72.7 percent, while individual‐level variables reduce this proportion by only 9.4 percent. We also show, through interaction variables, that the effect of sociodemographic characteristics can be shaped by institutional and structural factors, especially by the level of GDP.     

Economic modelling of costs associated with outcomes reported for type 2 diabetes mellitus (T2DM) patients in the CANVAS and EMPA-REG cardiovascular outcomes trials

Aims: To model direct medical costs associated with reductions in cardiovascular disease (CVD) events in T2DM patients reported in the CANVAS and EMPA-REG trials, which assessed the cardiovascular safety of canagliflozin and empagliflozin, respectively.

Materials and methods: Costs were modeled from a US managed care organization (MCO) perspective for the CVD outcomes included in both trials: three-point major adverse cardiovascular event (MACE) and its components (cardiovascular-related death, nonfatal myocardial infarction, nonfatal stroke), as well as heart failure requiring hospitalization. The rate of CVD events averted (difference between study drug and placebo) was projected to the portion of an MCO T2DM population matching the respective trial’s inclusion criteria. A targeted literature search for paid amounts directly associated with each CVD event provided the unit costs, which were applied to the projected number of events averted, to calculate costs avoided per member per year (PMPY). One-way sensitivity analyses were performed on events averted, unit costs, and percentages of trial-applicable patients.

Results: Based on three-point MACE events averted, costs avoided PMPY of $6.17 (range: $1.27–$10.94) for CANVAS and $2.75 ($0.19–$4.83) for EMPA-REG were estimated. Costs avoided for individual components of MACE ranged from $0.77 to $3.84 PMPY for CANVAS and from -$0.97 (additional costs) to $1.54 for EMPA-REG. PMPY costs avoided for heart failure were $2.72 for CANVAS and $1.32 for EMPA-REG.

Limitations and conclusions: Models assumed independent, non-recurrent outcomes and were restricted to medical costs directly associated with the trial-reported events. The reductions in CVD events in T2DM patients reported for both CANVAS and EMPA-REG project to a positive cost avoidance for these events in an MCO population. The analysis did not include an assessment of the impact on total cost, as the costs associated with adverse events, drug utilization or other clinical outcomes were not examined.