WHAT WILL HAPPEN TO THE EURO?

The Stability Pact ‐ intended to make EMU governments run prudent budgets ‐ is losing its credibility. This article asks the question: what will happen if national debts start to rise again and some governments then have difficulty borrowing? It suggests that there will be calls for bailout, that the EU's political structures will not cope well with the resulting arguments over which countries will pay, and that the eventual and painful result will be a return to the principle that currencies and political areas coincide.     

Security,commercial and monetary policies

This article discusses the frustrations both sides of the Atlantic regarding security, commercial and monetary policies. It suggests, however, that with the European Community, Japan and the USA all in difficulties together they might now possess the political will to arrest through negotiations a threatening return to discriminatory policies.     

Modeling total cholesterol as predictor of mortality: the low-cholesterol paradox

Elevated total cholesterol is well-established as a risk factor for coronary artery disease and cardiovascular mortality. However, less attention is paid to the association between low cholesterol levels and mortality--the low cholesterol paradox. In this paper, restricted cubic splines (RCS) and complex survey methodology are used to show the low-cholesterol paradox is present in the laboratory, examination, and mortality follow-up data from the Third National Health and Nutrition Examination Survey (NHANES III). A series of Cox proportional hazard models, demonstrate that RCS are necessary to incorporate desired covariates while avoiding the use of categorical variables. Valid concerns regarding the accuracy of such predictive models are discussed. The one certain conclusion is that low cholesterol levels are markers for excess mortality, just as are high levels. Restricted cubic splines provide the necessary flexibility to demonstrate the U-shaped relationship between cholesterol and mortality without resorting to binning results. Cox PH models perform well at identifying associations between risk factors and outcomes of interest such as mortality. However, the predictions from such a model may not be as accurate as common statistics suggest and predictive models should be used with caution.     

On the commercialization of accountancy thesis: A review essay

Hanlon's thesis on the commercialisation of accountancy is examined in relation to contemporary changes in the organization of work and the concentration and Intelnationalization of the accounting industry. Attention is drawn to the tensions between Hanlon's empirical materials and his exegesis of theoretical debates. An appreciation of the value of his book for highlighting the wider significance of accounting to a shift from Fordist to more flexible forms of accumulation is balanced by a discussion of various limitations. These include the neglect of non-audit business undertaken by accounting firms, and the sketchy treatment of the links between these firms and other key players that have supported and legitimised the progressive commercialization of accountancy.     

Investigation of institutional changes in the UK housing market using structural break tests and time-varying parameter models

This paper investigates the effects of institutional changes within the UK housing market in recent decades using structural break tests and time-varying parameter models. This approach is motivated by models of institutional change drawn from the political science literature which focus on the existence of both fast-moving and slow-moving institutional changes and the interactions between them as drivers of the dynamics of asset prices. As a methodological contribution, we use several time-varying parameter models for the first time in investigations of institutional change. Our findings support the existence of both structural breaks and continuous variance in parameters. This contributes to our understanding of the housing market in two respects. Firstly, the dates of structural breaks appear to better match unexpected market shocks rather than remarkable political events, and this supports prior institutional theory. Secondly, assessment of the effect of slow-moving institutional changes shows that people’s biased expectations rather than the economic fundamentals have increasingly played an important role in driving housing prices in the short run although fundamentals continue to drive house prices to converge to their long-run equilibrium.     

How Monetary Policy can have Permanent Real Effects with Only Temporary Nominal Rigidity

A macroeconomic model is developed in which the psychological concept of loss aversion is incorporated into workers' preferences. The impact of monetary policy in the presence of loss aversion depends on the specification of the reference wage. The plausible specification that a worker's reference wage is the real wage she was paid in the previous period is considered in detail. Specifying the reference wage in this way, we show that an unanticipated change in monetary policy has a permanent, real effect when short term labour contracts are written in nominal wages.