Do we need a European lender of last resort?

During a financial crisis, pressure on Central banks to act as a lender of last resort (LLR) and to offer emergency liquidity assistance to troubled banks increases. The European Central Bank, however, has announced that it does not regard it as its principal task to provide emergency liquidity to troubled banks and that it does not wish to disclose the conditions and practicalities of emergency liquidity assistance arrangements. In this paper, we investigate the benefi ts and the costs of centralising the LLR function in a monetary union and ask whether establishing an LLR in Europe could be useful.     

Bridging the communications gap with the ordinary citizen

This research note discusses findings from an exploratory study of people's perceptions of the economic situation in October 1981. The survey, as did earlier ones, reveals that there is a wide communications gap between governments, politicians, economists, journalists vis-à-vis members of the general public.     

Bank of Japan versus Eurosystem

On 9 March 2006, the Bank of Japan announced a change in its monetary policy framework. It decided to terminate quantitative easing policy and intends to attach more importance to price stability. Because the new strategy shares similarities with the one used by the Eurosystem, the paper will use this point of comparison to examine the respective monetary policymaking institutions of Japan and the euro area. *This paper was written while Uwe Vollmer was staying at Kobe University as a visiting scholar. He wishes to thank Kobe University for the fi nancial support and generous hospitality he received during this visit. The authors would also like to thank Monika Bucher and Achim Hauck for their helpful remarks and James Lewelyn for his careful grammatical corrections of this paper.     

Heart rate variability testing: could it change spending for rheumatoid arthritis patients in the United States? An exploratory economic analysis

Background: Autonomic nervous system (ANS) testing with heart rate variability (HRV) has been shown in early research to predict 52-week outcomes in rheumatoid arthritis (RA). HRV testing could be combined with putative ANS biologic pathways to improve treatment response for RA patients. This study explored potential costs and health outcomes of introducing HRV testing into RA treatment, without and with ANS optimization.

Methods: A decision tree exploratory economic model compared HRV testing to standard care in moderate-to-severe biologic-eligible patients over a 10-year time horizon. HRV data was derived from an observational study of RA patients (n?=?33). Patients were stratified into treatment groups based on HRV test scores indicating “low probability of response” and “moderate to high probability of response”. This study explored adding ANS optimization based on HRV score followed by clinically-appropriate treatment. Costs and quality-adjusted life-years (QALYs) for the US population were estimated.

Results: HRV testing in biologic-eligible patients decreased non-effective biologic use, reducing US healthcare costs by $34.6 billion over 10 years with QALYs unchanged. When combined with ANS optimization in biologic-eligible patients, HRV testing could increase costs by $3.6 billion over 10 years but save over 350,000 QALYs. Among all RA patients, HRV testing with ANS optimization could save over $8 billion and over 100,000 QALYs over 10 years, depending on the positive predictive value (PPV) of the HRV test.

Conclusions: The potential economic impact of introducing HRV testing and ANS optimization into RA treatment appears substantial and cost-effective based on the exploratory analysis. Additional rigorous studies are warranted in larger patient samples to better inform decision-making.     

Developing critical thinking: An examination of contemporary practices in accounting

Employers and professional bodies call for higher education accounting courses to emphasise the importance of critical thinking skills. This study provides an in-depth assessment of how critical thinking is currently taught and assessed across an entire accounting degree. Our study contributes to our understanding of how teaching and assessment can support students in developing their critical thinking. Using a case study approach, we identify resource restraints and disruptions to traditional forms of engagement as key challenges to developing critical thinking skills in accounting education. We conclude with suggestions for teaching practice, such as formative scaffolds and teacher-led discussions.     

Healthy financial habits in young adults: An exploratory study of the relationship between subjective financial literacy,engagement with finances,and financial decision-making

This paper provides insights into young adults' financial habits and decision-making considerations as they enter the workforce. We use 28 semi-structured interviews with Australian university graduates to explore how their motivation to engage with personal finances and their subjective financial literacy, i.e., self-reported, support healthy financial habits. Our findings show that a young adult's social context and exposure to financial hardship rather than their financial confidence determine the health of their financial habits. We observed research participants in a romantic partnership as more focused on their future. This future focus motivates them to engage more with their finances and manifests as explicit goal setting, formal budgeting, or adherence to strict bucket systems. These insights might be useful for policymakers and educators: social context matters when designing financial health interventions, while financial education programs predominately should aim at demystifying complex long-term financial decision-making such as investments and retirement.     

External validity of economic experiments on Agri-environmental scheme design

The use of laboratory experiments to study issues in agricultural policy has grown in prominence within the fields of agricultural and environmental economics. Such experiments are often conducted with university students and framed in an abstract manner. This raises questions about whether the findings of these experiments provide reliable insights on the behaviour of actual agents in real settings. We contribute to this methodological debate by analysing the impacts of sample population and framing on behaviour in the experiment and on two policy effects: the direction and the magnitude of the policy impact. We also examine the channels through which differences in results may occur. For this, we test if behaviour is correlated with a set of covariates collected from our samples, including socio-demographics, social and risk preferences. Our main finding is that the type of subject significantly affects the magnitude of the policy impact. The two populations differ substantially in the representation of key characteristics and preferences, which in consequence affects behaviour in the experiment. We find no significant impact of framing on behaviour.