Asset Price Instability and Policy Responses: The Legacy of Liberalisation

The debate about the dynamics and potential policy responses to asset inflation has intensified in recent years. Some analysts, notably Borio and Lowe, have called for 'subtle' changes to existing monetary targeting frameworks to try to deal with the problems of asset inflation and have attempted to developed indicators of financial vulnerability to aid this process. In contrast, this paper argues that the uncertainties involved in understanding financial market developments and their potential impact on the real economy are likely to remain too high to embolden policy makers. The political and institutional risks associated with policy errors are also significant. The fundamental premise that a liberalised financial system is based on 'efficient' market allocation cannot be overlooked. The corollary is that any serious attempt to stabilize financial market outcomes must involve at least a partial reversal of deregulation.

Size-based predation by kookaburras (Dacelo novaeguineae) on lizards (Eulamprus tympanum : Scincidae): what determines prey vulnerability?

Lizards and birds are both popular model organisms in behavioural ecology, but the interactions between them have attracted little study. Given the putative importance of birds as predators of diurnal Lizards, it is of considerable interest to know which traits (of lizards as well as birds) influence the outcome of a predatory attempt. We studied predation by giant terrestrial kingfishers (kookaburras, Dacelo novaeguineae: Alcedinidae) on heliothermic diurnal lizards (highland water skinks, Eulamprus tympanum: Scincidae), with particular reference to the role of prey (lizard) size. Our approach was twofold: to gather direct evidence (sizes of lizards consumed in the field, compared to those available) and indirect evidence rite-related shifts in lizard behaviour). We quantified the size structure of a natural population of skinks (determined by an extensive mark-recapture program), and compared it to the sizes of wild lizards taken by kookaburras (determined by analysis of prey remains left at the birds' nests,. Kookaburras showed size-based predation: they preyed mainly on small and medium-sized rather than large lizards in the field. However, the mechanism producing this bias remains elusive. It is not due to any distinctive behavioural attributes (locomotor ability, activity level, habitat usage) of the lizards of the size class disproportionately taken by the kookaburras. The greater vulnerability of subadult lizards may reflect subtle ontogenetic shifts in ecological and behavioural traits, but our data suggest that great caution is needed in inferring patterns of vulnerability to predation from indirect measures based on either the prey or the predator alone. Instead, we need direct observations on the interaction between the two.

The role of cognitive vulnerability and stress in the prediction of postpartum depressive symptomatology

Objectives. The present study was designed to test the diathesis-stress components of Beck's cognitive theory of depression and the reformulated learned helplessness model of depression in the prediction of postpartum depressive symptomatology. Design and methods. The research used a two-wave longitudinal design-data were collected from 65 primiparous women during their third trimester of pregnancy and then 6 weeks after the birth. Cognitive vulnerability and initial depressive symptomatology were assessed at Time 1, whereas stress and postpartum depressive symptomatology were assessed at Time 2. Results. There was some support for the diathesis-stress component of Beck's cognitive theory, to the extent that the negative relationship between both general and maternal-specific dysfunctional attitudes associated with performance evaluation and Time 2 depressive symptomatology was strongest for women who reported high levels of parental stress. In a similar vein, the effects of dysfunctional attitudes (general and maternal-specific) associated with performance evaluation and need for approval (general measure only) on partner ratings of emotional distress were evident only among those women whose infants were rated as being temperamentally difficult. Conclusion. There was no support for the diathesis-stress component of the reformulated learned helplessness model of depression; however, there was some support for the diathesis-stress component of Beck's cognitive theory.

Psychosocial sequelae of the 1989 Newcastle earthquake .3. Role of vulnerability factors in postdisaster morbidity

Background. This paper examines the contributions of dispositional and non-dispositional factors to post-disaster psychological morbidity. Data reported are from the 845 participants in the longitudinal component of the Quake Impact Study. Methods. The phase 1 survey was used to construct dimensional indices of threat and disruption exposure. Subsequently, a range of dispositional characteristics were measured, including neuroticism, personal hopefulness and defence style. The main morbidity measures were the General Health Questionnaire (GHQ-12) and Impact of Event Scale (IES). Results. Dispositional characteristics were the best predictors of psychological morbidity throughout the 2 years post-disaster, contributing substantially more to the variance in morbidity (12-39%) than did initial exposure (5-12%), but the extent of their contribution was greater for general (GHQ-12) than for post-traumatic (IES) morbidity. Among the non-dispositional factors, avoidance coping contributed equally to general and post-traumatic morbidity (pr = 0.24). Life events since the earthquake (pr = 0.18), poor social relationships (pr = -0.25) and ongoing earthquake-related disruptions (pr = 0.22) also contributed to general morbidity, while only the latter contributed significantly to post-traumatic morbidity (pr = 0.15). Conclusions. Medium-term post-earthquake morbidity appears to be a function of multiple factors whose contributions vary depending on the type of morbidity experienced and include trait vulnerability, the nature and degree of initial exposure, avoidance coping and the nature and severity of subsequent events.

Introduction to Discounted Cash Flow Analysis and Financial Functions in Excel

The financial and economic analysis of investment projects is typically carried out using the technique of discounted cash flow (DCF) analysis. This module introduces concepts of discounting and DCF analysis for the derivation of project performance criteria such as net present value (NPV), internal rate of return (IRR) and benefit to cost (B/C) ratios. These concepts and criteria are introduced with respect to a simple example, for which calculations using MicroSoft Excel are demonstrated.