The Log of Gravity at 15

Portuguese Economic Journal - We review the contribution of “The Log of Gravity” (Santos Silva and Tenreyro, Rev Econ Stat 88:641–658, 2006), summarize the main results in the...     

Some new characterization of rational expectation equilibria in economies with asymmetric information

We compare the family of rational expectation equilibria with the ex-post Aubin core allocations in the framework of an economy with uncertainty and asymmetric information. We do it in a very general setting: an arbitrary space of agents and an infinite dimensional commodity space. We also present a characterization of the ex–post Aubin core by allocations belonging to the core of the associated complete information economies, and we use a suitable definition of Edgeworth equilibria to characterize the family of rational expectation equilibria. Moreover, we study some generalizations of the ex-post Aubin core obtained by making some restriction on the families of blocking coalitions.     

Environmental degradation,self-protection choices and coordination failures in a North–South evolutionary model

Environmental degradation may lead agents to increase their work effort to replace the consumption of depleted free access environmental goods with that of private substitute goods. The rise in the activity level that follows may further deplete the environment, which in turn increases the production and consumption of substitute goods. Using a North–South evolutionary model, we show that the existence of a coordination failure among interacting heterogeneous agents may lead the economy towards Pareto-dominated attracting stationary states where individuals work and produce “too much” (i.e. more than socially optimal). Finally, we analyse possible welfare effects of transferring the environmental impact of Northern production to the South and show that such a policy may decrease welfare in both hemispheres.     

Institutional Change of Accounting Systems: The Adoption of a Regime of Adapted International Financial Reporting Standards

Richard Mattessich, New York: Garland Publishing (New Works in Accounting History), 2000, £43.00, xii +179pp. ISBN: 0-8153-3445-1     

A proposed method to evaluate the quality of services using Fuzzy sets theory

This paper seeks to provide the services sector with a focus on the assessment of quality and for this purpose, a technique that may able a quantitative approach to evaluating quality is proposed. The use of the fuzzy sets theory to process data was used, thus allowing a more flexible and suitable insight into the characteristics of the service sector. An extension of the technique for order performance by similarity to the ideal solution was used. This informs managers of the distance from the company $\prime $ s current level of quality, if compared to a company of perfect quality by means of an overall evaluation. The same technique was used to detect changes in the level of quality during the period surveyed by using a stratified assessment. Finally, a practical application of the approach proposed is presented.     

Fundamentals versus external shocks: Brazil's growing exposure to currency crises

While financial globalization does not lack theoretical economic merit, the more far-reaching practical consequences of this phenomenon are often not fully appreciated from the vantage point of North America or the European Union. In particular, globalization can make it more difficult for emerging economies to achieve macroeconomic stabilization. This is especially true if the countries in question have chosen the vehicle of pegged exchange rates as an important element of domestic anti-inflation policy. The chief macroeconomic difficulties for emerging economies in a world of volatile capital flows can include a loss of monetary control, a real appreciation of the domestic currency, and a worsening of economic fundamentals leading to damaging currency crises. This paper concentrates on the recent experience of Brazil as illustrative of the abject plight faced by many developing countries attempting to secure economic stabilization against the background of the present globalized international economy.This paper has benefitted from discussion with participants of the Forty-Sixth International Atlantic Economic Conference, Boston, MA, October 8–11, 1998.     

A systematic review of cost-effectiveness modeling of pharmaceutical therapies in neuropathic pain: variation in practice,key challenges,and recommendations for the future

Objectives: Complexities in the neuropathic-pain care pathway make the condition difficult to manage and difficult to capture in cost-effectiveness models. The aim of this study is to understand, through a systematic review of previous cost-effectiveness studies, some of the key strengths and limitations in data and modeling practices in neuropathic pain. Thus, the aim is to guide future research and practice to improve resource allocation decisions and encourage continued investment to find novel and effective treatments for patients with neuropathic pain.

Methods: The search strategy was designed to identify peer-reviewed cost-effectiveness evaluations of non-surgical, pharmaceutical therapies for neuropathic pain published since January 2000, accessing five key databases. All identified publications were reviewed and screened according to pre-defined eligibility criteria. Data extraction was designed to reflect key data challenges and approaches to modeling in neuropathic pain and based on published guidelines.

Results: The search strategy identified 20 cost-effectiveness analyses meeting the inclusion criteria, of which 14 had original model structures. Cost-effectiveness modeling in neuropathic pain is established and increasing across multiple jurisdictions; however, amongst these studies, there is substantial variation in modeling approach, and there are common limitations. Capturing the effect of treatments upon health outcomes, particularly health-related quality-of-life, is challenging, and the health effects of multiple lines of ineffective treatment, common for patients with neuropathic pain, have not been consistently or robustly modeled.

Conclusions: To improve future economic modeling in neuropathic pain, further research is suggested into the effect of multiple lines of treatment and treatment failure upon patient outcomes and subsequent treatment effectiveness; the impact of treatment-emergent adverse events upon patient outcomes; and consistent and appropriate pain measures to inform models. The authors further encourage transparent reporting of inputs used to inform cost-effectiveness models, with robust, comprehensive and clear uncertainty analysis and, where feasible, open-source modeling is encouraged.     

Cost-effectiveness of omalizumab add-on to standard-of-care therapy in patients with uncontrolled severe allergic asthma in a Brazilian healthcare setting

Objective: Omalizumab add-on to standard-of-care therapy has proven to be efficacious in severe asthma patients for whom exacerbations cannot be controlled otherwise. Moreover, evidence from different healthcare settings suggests reduced healthcare resource utilization with omalizumab. Based on these findings, this study aimed to assess the cost-effectiveness of the addition of omalizumab to standard-of-care therapy in patients with uncontrolled severe allergic asthma in a Brazilian healthcare setting.

Methods: A previously published Markov model was adapted using Brazil-specific unit costs to compare the costs and outcomes of the addition of omalizumab to standard-of-care therapy vs standard-of-care therapy alone. Model inputs were largely based on the eXpeRience study. Costs and health outcomes were calculated for lifetime-years and were annually discounted at 5%. Both one-way and probabilistic sensitivity analyses were performed.

Results: An additional cost of R$280,400 for 5.20 additional quality-adjusted life-years was estimated with the addition of omalizumab to standard-of-care therapy, resulting in an incremental cost-effectiveness ratio of R$53,890. One-way sensitivity analysis indicated that discount rates, standard-of-care therapy exacerbation rates, and exacerbation-related mortality rates had the largest impact on incremental cost-effectiveness ratios.

Limitations: Assumptions of lifetime treatment adherence and rate of future exacerbations, independent of previous events, might affect the findings. The lack of Brazilian patients in the eXpeRience study may affect the findings, although sample size and baseline characteristics suggest that the modeled population closely resembles Brazilian severe allergic asthma patients.

Conclusion: Results indicate that omalizumab as an add-on therapy is more cost-effective than standard-of-care therapy alone for Brazilian patients with uncontrolled severe allergic asthma, based on the World Health Organization’s cost-effectiveness threshold of up to 3-times the gross domestic product.     

When a Door Closes,a Window Opens? Long‐Term Labor Market Effects of Involuntary Separations

This study estimates the earning losses of workers experiencing an involuntary job separation. We employ, for the first time in the earning losses literature, a Poisson pseudo‐maximum‐likelihood estimator with fixed effects that has several advantages with respect to conventional fixed effects models. The Poisson estimator allows considering the full set of involuntary separations, including those with zero labor market earnings because of unemployment. By including individuals with zero earnings and by using our new method, the loss in the year of separation becomes larger than in previous studies. The loss starts with roughly 30% and, although it quickly shrinks, it remains at around 15% in the following years. In addition, we find that compared to other reasons for separation, the earning loss pattern is unique for involuntary separations, because no other type of separation implies such permanent scarring. This latter finding makes us confident that the self‐reported involuntariness of a separation is a reliable source of information.     

Flexibility at the Margin and Labor Market Volatility in OECD Countries*

We study the business‐cycle behavior of segmented labor markets with flexibility at the margin (e.g., just affecting fixed‐term contracts). We present a matching model with temporary and permanent jobs (i) where there is a gap in the firing costs associated with these types of jobs and (ii) where there are restrictions in the creation and duration of fixed‐term contracts. We show that a labor market with ``flexibility at the margin'' increases the unemployment volatility with respect to one that is fully regulated. This analysis yields new insights into the interpretation of the recent volatility changes witnessed in the OECD area.