How the full opening of the capital account to highly liquid financial markets led Latin America to two and a half cycles of ‘mania, panic and crash’

Latin America has recently experienced three cycles of capital inflows, the first two ending in major financial crises. The first took place between 1973 and the 1982 ‘debt-crisis’. The second took place between the 1989 ‘Brady bonds’ agreement (and the beginning of the economic reforms and financial liberalisation that followed) and the Argentinian 2001/2002 crisis, and ended up with four major crises (as well as the 1997 one in East Asia) — Mexico (1994), Brazil (1999), and two in Argentina (1995 and 2001/2). Finally, the third inflow-cycle began in 2003 as soon as international financial markets felt reassured by the surprisingly neo-liberal orientation of President Lula’s government; this cycle intensified in 2004 with the beginning of a (purely speculative) commodity price-boom, and actually strengthened after a brief interlude following the 2008 global financial crash — and at the time of writing (mid-2011) this cycle is still unfolding, although already showing considerable signs of distress. The main aim of this paper is to analyse the financial crises resulting from this second cycle (both in LA and in East Asia) from the perspective of Keynesian/ Minskyian/ Kindlebergian financial economics. I will attempt to show that no matter how diversely these newly financially liberalised Developing Countries tried to deal with the absorption problem created by the subsequent surges of inflow (and they did follow different routes), they invariably ended up in a major crisis. As a result (and despite the insistence of mainstream analysis), these financial crises took place mostly due to factors that were intrinsic (or inherent) to the workings of over-liquid and under-regulated financial markets — and as such, they were both fully deserved and fairly predictable. Furthermore, these crises point not just to major market failures, but to a systemic market failure: evidence suggests that these crises were the spontaneous outcome of actions by utility-maximising agents, freely operating in friendly (‘light-touch’) regulated, over-liquid financial markets. That is, these crises are clear examples that financial markets can be driven by buyers who take little notice of underlying values — i.e., by investors who have incentives to interpret information in a biased fashion in a systematic way. Thus, ‘fat tails’ also occurred because under these circumstances there is a high likelihood of self-made disastrous events. In other words, markets are not always right — indeed, in the case of financial markets they can be seriously wrong as a whole. Also, as the recent collapse of ‘MF Global’ indicates, the capacity of ‘utility-maximising’ agents operating in (excessively) ‘friendly-regulated’ and over-liquid financial market to learn from previous mistakes seems rather limited.

How the full opening of the capital account to highly liquid financial markets led Latin America to two and a half cycles of ‘mania, panic and crash’

Latin America has recently experienced three cycles of capital inflows, the first two ending in major financial crises. The first took place between 1973 and the 1982 ‘debt-crisis’. The second took place between the 1989 ‘Brady bonds’ agreement (and the beginning of the economic reforms and financial liberalisation that followed) and the Argentinian 2001/2002 crisis, and ended up with four major crises (as well as the 1997 one in East Asia) — Mexico (1994), Brazil (1999), and two in Argentina (1995 and 2001/2). Finally, the third inflow-cycle began in 2003 as soon as international financial markets felt reassured by the surprisingly neo-liberal orientation of President Lula’s government; this cycle intensified in 2004 with the beginning of a (purely speculative) commodity price-boom, and actually strengthened after a brief interlude following the 2008 global financial crash — and at the time of writing (mid-2011) this cycle is still unfolding, although already showing considerable signs of distress. The main aim of this paper is to analyse the financial crises resulting from this second cycle (both in LA and in East Asia) from the perspective of Keynesian/ Minskyian/ Kindlebergian financial economics. I will attempt to show that no matter how diversely these newly financially liberalised Developing Countries tried to deal with the absorption problem created by the subsequent surges of inflow (and they did follow different routes), they invariably ended up in a major crisis. As a result (and despite the insistence of mainstream analysis), these financial crises took place mostly due to factors that were intrinsic (or inherent) to the workings of over-liquid and under-regulated financial markets — and as such, they were both fully deserved and fairly predictable. Furthermore, these crises point not just to major market failures, but to a systemic market failure: evidence suggests that these crises were the spontaneous outcome of actions by utility-maximising agents, freely operating in friendly (light-touched) regulated, over-liquid financial markets. That is, these crises are clear examples that financial markets can be driven by buyers who take little notice of underlying values — investors have incentives to interpret information in a biased fashion in a systematic way. ‘Fat tails’ also occurred because under these circumstances there is a high likelihood of self-made disastrous events. In other words, markets are not always right — indeed, in the case of financial markets they can be seriously wrong as a whole. Also, as the recent collapse of ‘MF Global’ indicates, the capacity of ‘utility-maximising’ agents operating in unregulated and over-liquid financial market to learn from previous mistakes seems rather limited.

Foot-and-mouth disease in tropical wildlife

This review of foot-and-mouth disease in cloven-hoofed, free-living animals, describes the disease, the wide range of the hosts, the carrier state, and the interrelationship between disease in domestic livestock and wildlife. This information becomes even more crucial to the development of control strategies when linked to the process of pathogenesis and the epidemiology of the disease.

Prices, property and markets in water allocation

Includes bibliography

Financial regulation and supervision in emerging markets: the experience of Latin America since the Tequila crisis

Includes bibliography

Risk of Disease from Wildlife Reservoirs: Badgers, Cattle, and Bovine Tuberculosis

Livestock face complex foraging options associated with optimizing nutrient intake while being able to avoid areas posing risk of parasites or disease. Areas of tall nutrient-rich swards around fecal deposits may be attractive for grazing, but might incur fitness costs from parasites. We use the example of dairy cattle and the risks of tuberculosis transmission posed to them by pastures contaminated with badger excreta to examine this trade-off. A risk may be posed either by aerosolized inhalation through investigation or by ingestion via grazing contaminated swards. We quantified the levels of investigation and grazing of 150 dairy cows at badger latrines (accumulations of feces and urine) and crossing points (urination-only sites). Grazing behavior was compared between strip-grazed and rotation-grazed fields. Strip grazing had fields subdivided for grazing periods of <24 h, whereas rotational grazing involved access to whole fields for 1 to 7 d each. A higher proportion of the herd investigated badger latrines than crossing points or controls. Cattle initially avoided swards around badger latrines but not around crossing points. Avoidance periods were shorter in strip- compared with rotation-grazing systems. In rotation-grazing management, latrines were avoided for longer times, but there were more investigative contacts than with strip-grazing management. If investigation is a major route of tuberculosis transmission, the risk to cattle is greatest in extensive rotation-grazing systems. However, if ingestion of fresh urine is the primary method of transmission, strip-grazing management may pose a greater threat. Farming systems affect the level and type of contact between livestock and wildlife excreta and thus the risks of disease.

Bioremediation of PAHs - Limitations and soultions

Introduction 1.1 Occurrence of polycyclic aromatic hydrocarbons (PAH) in the environment Worldwide industrial and agricultural developments have released a large number of natural and synthetic hazardous compounds into the environment due to careless waste disposal, illegal waste dumping and accidental spills. As a result, there are numerous sites in the world that require cleanup of soils and groundwater. Polycyclic aromatic hydrocarbons (PAHs) are one of the major groups of these contaminants (Da Silva et al., 2003). PAHs constitute a diverse class of organic compounds consisting of two or more aromatic rings with various structural configurations (Prabhu and Phale, 2003). Being a derivative of benzene, PAHs are thermodynamically stable. In addition, these chemicals tend to adhere to particle surfaces, such as soils, because of their low water solubility and strong hydrophobicity, and this results in greater persistence under natural conditions. This persistence coupled with their potential carcinogenicity makes PAHs problematic environmental contaminants (Cerniglia, 1992; Sutherland, 1992). PAHs are widely found in high concentrations at many industrial sites, particularly those associated with petroleum, gas production and wood preserving industries (Wilson and Jones, 1993). 1.2 Remediation technologies Conventional techniques used for the remediation of soil polluted with organic contaminants include excavation of the contaminated soil and disposal to a landfill or capping - containment - of the contaminated areas of a site. These methods have some drawbacks. The first method simply moves the contamination elsewhere and may create significant risks in the excavation, handling and transport of hazardous material. Additionally, it is very difficult and increasingly expensive to find new landfill sites for the final disposal of the material. The cap and containment method is only an interim solution since the contamination remains on site, requiring monitoring and maintenance of the isolation barriers long into the future, with all the associated costs and potential liability. A better approach than these traditional methods is to completely destroy the pollutants, if possible, or transform them into harmless substances. Some technologies that have been used are high-temperature incineration and various types of chemical decomposition (for example, base-catalyzed dechlorination, UV oxidation). However, these methods have significant disadvantages, principally their technological complexity, high cost , and the lack of public acceptance. Bioremediation, on the contrast, is a promising option for the complete removal and destruction of contaminants. 1.3 Bioremediation of PAH contaminated soil & groundwater Bioremediation is the use of living organisms, primarily microorganisms, to degrade or detoxify hazardous wastes into harmless substances such as carbon dioxide, water and cell biomass Most PAHs are biodegradable unter natural conditions (Da Silva et al., 2003; Meysami and Baheri, 2003) and bioremediation for cleanup of PAH wastes has been extensively studied at both laboratory and commercial levels- It has been implemented at a number of contaminated sites, including the cleanup of the Exxon Valdez oil spill in Prince William Sound, Alaska in 1989, the Mega Borg spill off the Texas coast in 1990 and the Burgan Oil Field, Kuwait in 1994 (Purwaningsih, 2002). Different strategies for PAH bioremediation, such as in situ , ex situ or on site bioremediation were developed in recent years. In situ bioremediation is a technique that is applied to soil and groundwater at the site without removing the contaminated soil or groundwater, based on the provision of optimum conditions for microbiological contaminant breakdown.. Ex situ bioremediation of PAHs, on the other hand, is a technique applied to soil and groundwater which has been removed from the site via excavation (soil) or pumping (water). Hazardous contaminants are converted in controlled bioreactors into harmless compounds in an efficient manner. 1.4 Bioavailability of PAH in the subsurface Frequently, PAH contamination in the environment is occurs as contaminants that are sorbed onto soilparticles rather than in phase (NAPL, non aqueous phase liquids). It is known that the biodegradation rate of most PAHs sorbed onto soil is far lower than rates measured in solution cultures of microorganisms with pure solid pollutants (Alexander and Scow, 1989; Hamaker, 1972). It is generally believed that only that fraction of PAHs dissolved in the solution can be metabolized by microorganisms in soil. The amount of contaminant that can be readily taken up and degraded by microorganisms is defined as bioavailability (Bosma et al., 1997; Maier, 2000). Two phenomena have been suggested to cause the low bioavailability of PAHs in soil (Danielsson, 2000). The first one is strong adsorption of the contaminants to the soil constituents which then leads to very slow release rates of contaminants to the aqueous phase. Sorption is often well correlated with soil organic matter content (Means, 1980) and significantly reduces biodegradation (Manilal and Alexander, 1991). The second phenomenon is slow mass transfer of pollutants, such as pore diffusion in the soil aggregates or diffusion in the organic matter in the soil. The complex set of these physical, chemical and biological processes is schematically illustrated in Figure 1. As shown in Figure 1, biodegradation processes are taking place in the soil solution while diffusion processes occur in the narrow pores in and between soil aggregates (Danielsson, 2000). Seemingly contradictory studies can be found in the literature that indicate the rate and final extent of metabolism may be either lower or higher for sorbed PAHs by soil than those for pure PAHs (Van Loosdrecht et al., 1990). These contrasting results demonstrate that the bioavailability of organic contaminants sorbed onto soil is far from being well understood. Besides bioavailability, there are several other factors influencing the rate and extent of biodegradation of PAHs in soil including microbial population characteristics, physical and chemical properties of PAHs and environmental factors (temperature, moisture, pH, degree of contamination). Figure 1: Schematic diagram showing possible rate-limiting processes during bioremediation of hydrophobic organic contaminants in a contaminated soil-water system (not to scale) (Danielsson, 2000). 1.5 Increasing the bioavailability of PAH in soil Attempts to improve the biodegradation of PAHs in soil by increasing their bioavailability include the use of surfactants , solvents or solubility enhancers.. However, introduction of synthetic surfactant may result in the addition of one more pollutant. (Wang and Brusseau, 1993).A study conducted by Mulder et al. showed that the introduction of hydropropyl-ß-cyclodextrin (HPCD), a well-known PAH solubility enhancer, significantly increased the solubilization of PAHs although it did not improve the biodegradation rate of PAHs (Mulder et al., 1998), indicating that further research is required in order to develop a feasible and efficient remediation method. Enhancing the extent of PAHs mass transfer from the soil phase to the liquid might prove an efficient and environmentally low-risk alternative way of addressing the problem of slow PAH biodegradation in soil.

Surveillance of bovine tuberculosis and risk estimation of a future reservoir formation in wildlife in Switzerland and Liechtenstein.

Bovine tuberculosis (bTB) caused by Mycobacterium bovis or M. caprae has recently (re-) emerged in livestock and wildlife in all countries bordering Switzerland (CH) and the Principality of Liechtenstein (FL). Comprehensive data for Swiss and Liechtenstein wildlife are not available so far, although two native species, wild boar (Sus scrofa) and red deer (Cervus elaphus elaphus), act as bTB reservoirs elsewhere in continental Europe. Our aims were (1) to assess the occurrence of bTB in these wild ungulates in CH/FL and to reinforce scanning surveillance in all wild mammals; (2) to evaluate the risk of a future bTB reservoir formation in wild boar and red deer in CH/FL. Tissue samples collected from 2009 to 2011 from 434 hunted red deer and wild boar and from eight diseased ungulates with tuberculosis-like lesions were tested by direct real-time PCR and culture to detect mycobacteria of the Mycobacterium tuberculosis complex (MTBC). Identification of suspicious colonies was attempted by real-time PCR, genotyping and spoligotyping. Information on risk factors for bTB maintenance within wildlife populations was retrieved from the literature and the situation regarding identified factors was assessed for our study areas. Mycobacteria of the MTBC were detected in six out of 165 wild boar (3.6%; 95% CI: 1.4-7.8) but none of the 269 red deer (0%; 0-1.4). M. microti was identified in two MTBC-positive wild boar, while species identification remained unsuccessful in four cases. Main risk factors for bTB maintenance worldwide, including different causes of aggregation often resulting from intensive wildlife management, are largely absent in CH and FL. In conclusion, M. bovis and M. caprae were not detected but we report for the first time MTBC mycobacteria in Swiss wild boar. Present conditions seem unfavorable for a reservoir emergence, nevertheless increasing population numbers of wild ungulates and offal consumption may represent a risk.

National competence center for wildlife diseases in Switzerland: Mandate, development and current strategies.

The need for wildlife health surveillance has become increasingly recognized. However, comprehensive programs which cover a wide spectrum of species, pathogens and geographic areas are still lacking in most European countries and practical examples of systems in place remain scarce. This article provides an overview of the organization of wildlife health surveillance in Switzerland, with a focus on the development, current strategies and the activities of the national program carried out by the Centre for Fish and Wildlife Health (FIWI), University of Bern. This documentation may stimulate on-going discussions on the design and development of national wildlife health surveillance programs in other countries. Investigations into wildlife health in Switzerland date back to the 1950s. The FIWI acts as a national competence center for wildlife diseases on mandate of the Swiss federal authorities. The mandate includes four main activities: disease diagnostics, research, consulting and teaching. In line with this, the FIWI has made continuous efforts to strengthen a national network of field partners and implemented strategies to facilitate long-term and metastudies.

Strategic Behavior in Day-Ahead and Real-Time Markets for Electricity: Offer Cost or Payment Cost Minimization?

This study compares the procurement cost-minimizing and productive efficiency performance of the auction mechanism used by independent system operators (ISOs) in wholesale electricity auction markets in the U.S. with that of a proposed alternative. The current practice allocates energy contracts as if the auction featured a discriminatory final payment method when, in fact, the markets are uniform price auctions. The proposed alternative explicitly accounts for the market clearing price during the allocation phase. We find that the proposed alternative largely outperforms the current practice on the basis of procurement costs in the context of simple auction markets featuring both day-ahead and real-time auctions and that the procurement cost advantage of the alternative is complete when we simulate the effects of increased competition. We also find that a trade-off between the objectives of procurement cost minimization and productive efficiency emerges in our simple auction markets and persists in the face of increased competition.

Equity Markets, the Money Market, and Long-Run Monetary Neutrality

This paper outlines a process for teaching long-run neutrality of money, drawing an analogy between equity markets and the money market. The key points in the discussion include the following: (1) What is the price of money? (2) Why does the long-run demand for money trace out a rectangular hyperbola? (3) Why does the slow adjustment of goods and service prices to changes in the stock of money lead to a different short-run demand for money? and (4) Why does a successful currency reform generate similar short-run movements in the price of money as movements in equity share prices after a change in the supply of shares? I have used this approach successfully for over 30 years at all levels, wherever I need to discuss the money market in a macroeconomic model.

Price formation in commodities markets. Financialisation and beyond. Report of an ECMI/CEPS Task Force

This report attempts to demystify the sphere of commodities markets worldwide by providing an in-depth examination of the major commodity groups, focusing on product characteristics, supply chains, pricing, liquidity, financial intermediation, industry players and the interplay between derivatives markets and the underlying physical goods. In so doing, the report contributes to the international debate with important information about the diverse market structures across commodities, including supply and demand elasticities, concentration of ownership, infrastructure organisation and layers of financial participation. While describing the endogenous factors, it also examines the increasing role of exogenous factors now impacting commodities. Finally, it assesses the drivers of the growth of derivatives markets and their impact on price formation. This report is a draft of the final version presented at a meeting at CEPS on 9 July 2013. A final version will be uploaded at the end of the summer when the book will be available in print.

Land Markets in the EU Candidate Countries of Croatia, Former Yugoslav Republic of Macedonia and Turkey. Factor Markets Working Paper No. 1, September 2011

The paper provides an overview and a comparison of land markets covering the three candidate countries for European Union membership: Croatia, the Former Yugoslav Republic (FYR) of Macedonia and Turkey. It analyses and compares agricultural land structures and factors driving land markets, based on the available cross-section and time-series evidence on agricultural land structures and land productivity (yields). The land productivity measured by production per hectare of agricultural land varies between the three countries. Agricultural land structures are the result of historical evolution in land markets and land-leasing developments with additional different institutional environments and agrarian and land reforms.

Sales Market Regulations for Agricultural Land in EU Member States and Candidate Countries. Factor Markets Working Paper No. 14, February 2012

All agricultural markets are subjected to institutional regulations that – in one way or another –affect the functioning of these markets, and this is no different for the agricultural land market in the EU. In this paper, we describe the existing regulations in the sales markets for agricultural land in selected EU member states and candidate countries. The analysis focuses on three types of sales market regulations and institutions: quantity regulations, price regulations and transaction costs. The differences in the regulatory framework between land acquisition and ownership by domestic and foreign investors are analysed, as well as the taxes associated with land sales and ownership, zoning regulations and market imperfections.

Supply and Demand Side Limitations Affecting the Structure of Agriculture and the Rural Economy. Factor Markets Working Paper No. 21, February 2012

The paper criticises the neo-classical assumptions of perfect factor markets and of complete information, which constitute central elements in labour market theory. Based on literature review and on economic reports from transition economies, as well as developing countries and more advanced economies, this deliverable focuses on the structural impediments and imperfections which often characterise rural labour markets and which may prevent an efficient allocation of labour. According to empirical studies, transactions costs and rigidities hinder the well-functioning of labour markets and constrain labour adjustments. The paper attempts to classify the various limitations of rural labour markets from both supply and demand side, although the distinction is not always clear-cut as some problems occur on both sides. The identification of these issues is extremely important as it allows us to highlight the inefficiencies and the failures in labour markets and to understand their impact on labour allocation. In this context, market intervention is desirable and the paper provides particular support for rural development policies such as investments in human capital. Lastly, labour institutions can play a key role in promoting the well functioning of labour markets, thus it is fundamental that they are well in place.