Education and the local equity bias around the world

Using a panel of 38 economies, over the period 2001 to 2010, we analyse the link between different facets of education and diversification in international portfolios. We find that university education, mathematical numeracy, in addition to financial skill, play an important role in reducing home bias. After separating countries according to their level of financial development, we find that less developed economies with more university graduates, or with higher level of mathematical numeracy, have lower level of local equity bias compared to more developed countries. We also find that the beneficial effect of education is more pronounced during the most recent financial crisis, especially for economies with less developed financial markets.

Nutrition transition in a middle-income country: 22-year trends in the Seychelles.

BACKGROUND/OBJECTIVES: There is little objective information regarding nutrition transition in African countries. We assessed trends in nutrition patterns in the Seychelles between 1989 and 2011. SUBJECTS/METHODS: Population-based samples were obtained in 1989, 1994 and 2011 and participants aged 25-44 are considered in this study (n=493, 599 and 471, respectively). Similar, although not identical, food frequency questionnaires (FFQs) were used in each survey and the variables were collapsed into homogenous categories for the purpose of this study. RESULTS: Between 1989 and 2011, consumption frequency of fish (5+/week) decreased from 93 to 74%, whereas the following increased: meat (5+/week) 25 to 51%, fruits (1+/week) 48 to 94%, salty snacks (1+/week) 22 to 64% and sweet snacks (1+/week) 38 to 67% (P<0.001 for all). Consumption frequency decreased for home-brewed alcoholic drinks (1+/week) 16 to 1%, but increased for wine (1+/week) 5 to 33% (both P<0.001). Between 2004 and 2011, consumption frequency decreased for rice (2/day) 62 to 57% and tea (1+/day) 72 to 68%, increased for poultry (1+/week) 86 to 96% (all P<0.01), and did not change for vegetables (70.3 to 69.8%, P=0.65). CONCLUSIONS: Seychelles is experiencing nutrition transition characterized by a decreased consumption frequency of traditional staple foods (fish, polished rice), beverages (tea) and of inexpensive home brews, and increased consumption frequency of meat, poultry and snacks. Food patterns also became more varied along with a broader availability of products in the 22-year interval. The health impact of these changes should be further studied.

Suicidal expression among school-attending adolescents in a middle-income sub-Saharan country.

We investigated correlates for suicidal expression among adolescents in the Seychelles. Data on 1,432 students (52% females) were derived from the Global School-based Health Survey. Participants were divided into three groups: those with no suicidal behavior (N = 1,199); those with suicide ideation/SI (N = 89); and those reporting SI with a plan to carry out a suicide attempt/SISP (N = 139), each within a 12-month recall period. Using multinomial logistic regression, we examined the strength of associations with social, behavioral and economic indicators while adjusting for covariates. Sixteen percent of school-attending adolescents reported a suicidal expression (10% with a plan/6.2% without). Those reporting SI were younger (relative risk ratio RRR = 0.81; CI = 0.68-0.96), indicated signs of depression (RRR = 1.69; CI = 1.05-2.72) and loneliness (RRR=3.36; CI =1.93-5.84). Tobacco use (RRR = 2.34; CI = 1.32-4.12) and not having close friends (RRR = 3.32; CI = 1.54-7.15) were significantly associated with SI. Those with SISP were more likely to be female (RRR = 0.47; 0.30-0.74), anxious (RRR = 3.04; CI = 1.89-4.88) and lonely (RRR = 1.74; CI = 1.07-2.84). Having no close friends (RRR = 2.98; 1.56-5.69) and using tobacco (RRR = 2.41; 1.48-3.91) were also strongly associated. Having parents who were understanding was protective (RRR = 0.50; CI = 0.31-0.82). Our results suggest that school health promotion programs may benefit from targeting multiple factors associated with suicidal expression. More research, particularly multilevel designs are needed to identify peer and family influences which may modify associations with suicidality.

The quality of primary care in a country with universal health care coverage.

BACKGROUND: Standard indicators of quality of care have been developed in the United States. Limited information exists about quality of care in countries with universal health care coverage.OBJECTIVE: To assess the quality of preventive care and care for cardiovascular risk factors in a country with universal health care coverage.DESIGN AND PARTICIPANTS: Retrospective cohort of a random sample of 1,002 patients aged 50-80 years followed for 2 years from all Swiss university primary care settings.MAIN MEASURES: We used indicators derived from RAND's Quality Assessment Tools. Each indicator was scored by dividing the number of episodes when recommended care was delivered by the number of times patients were eligible for indicators. Aggregate scores were calculated by taking into account the number of eligible patients for each indicator.KEY RESULTS: Overall, patients (44% women) received 69% of recommended preventive care, but rates differed by indicators. Indicators assessing annual blood pressure and weight measurements (both 95%) were more likely to be met than indicators assessing smoking cessation counseling (72%), breast (40%) and colon cancer screening (35%; all p < 0.001 for comparisons with blood pressure and weight measurements). Eighty-three percent of patients received the recommended care for cardiovascular risk factors, including > 75% for hypertension, dyslipidemia and diabetes. However, foot examination was performed only in 50% of patients with diabetes. Prevention indicators were more likely to be met in men (72.2% vs 65.3% in women, p < 0.001) and patients < 65 years (70.1% vs 68.0% in those a parts per thousand yen65 years, p = 0.047).CONCLUSIONS: Using standardized tools, these adults received 69% of recommended preventive care and 83% of care for cardiovascular risk factors in Switzerland, a country with universal coverage. Prevention indicator rates were lower for women and the elderly, and for cancer screening. Our study helps pave the way for targeted quality improvement initiatives and broader assessment of health care in Continental Europe.

The Peace Processes in the Basque Country and Northern Ireland (1994-2006): a Comparative Approach

The peace process in Northern Ireland demonstrates that new sovereignty formulas need to be explored in order to meet the demands of the populations and territories in conflict. The profound transformation of the classic symbolic elements of the nation-state within the context of the European Union has greatly contributed to the prospects for a resolution of this old conflict. Today’s discussions are focused on the search for instruments of shared sovereignty that are adapted to a complex and plural social reality. This new approach for finding a solution to the Irish conflict is particularly relevant to the Basque debate about formulating creative and modern solutions to similar conflicts over identity and sovereignty. The notion of shared sovereignty implemented in Northern Ireland –a formula for complex interdependent relations– is of significant relevance to the broader international community and is likely to become an increasingly potent and transcendent model for conflict resolution and peace building.

Evolution of anaesthesia care and related events between 1996 and 2010 in a developed country

Background: Anaesthesia Databank Switzerland (ADS) is a voluntary data registry introduced in 1996. The goal was to promote quality in anaesthesiology. Methods: Analysis of routinely recorded adverse events. Internal and external benchmark comparisons between anaesthesia departments. Results: In 2010, the database included 2'158'735 anaesthetic procedures. Forty-four anaesthesia departments were participating to the data collection in 2010. Over time, the number of patients in older age groups increased, the largest group being patients aged 50 to 64 years. Over time, the percentage of patients with ASA physical status score 1 decreased while the number of ASA 2 or 3 patients increased. The most frequent co-morbidities were hypertension (21%), smoking (16%), allergy (15%), and obesity (12%). Between 1996 and 2010, 146'459 adverse events were recorded, of which 34% were cardiovascular, 7% respiratory, 39% specific to anaesthesia and 17% nonspecific. The overall proportion of adverse events decreased over time, whatever their severity. Conclusion: The ADS routine data collection contributes to monitoring the trends of anaesthesia care in Switzerland.

Tuberculosis in HIV-negative and HIV-infected patients in a low-incidence country: clinical characteristics and treatment outcomes.

BACKGROUND: In Switzerland and other developed countries, the number of tuberculosis (TB) cases has been decreasing for decades, but HIV-infected patients and migrants remain risk groups. The aim of this study was to compare characteristics of TB in HIV-negative and HIV-infected patients diagnosed in Switzerland, and between coinfected patients enrolled and not enrolled in the national Swiss HIV Cohort Study (SHCS). METHODS AND FINDINGS: All patients diagnosed with culture-confirmed TB in the SHCS and a random sample of culture-confirmed cases reported to the national TB registry 2000-2008 were included. Outcomes were assessed in HIV-infected patients and considered successful in case of cure or treatment completion. Ninety-three SHCS patients and 288 patients selected randomly from 4221 registered patients were analyzed. The registry sample included 10 (3.5%) coinfected patients not enrolled in the SHCS: the estimated number of HIV-infected patients not enrolled in the SHCS but reported to the registry 2000-2008 was 146 (95% CI 122-173). Coinfected patients were more likely to be from sub-Saharan Africa (51.5% versus 15.8%, P<0.0001) and to present disseminated disease (23.9% vs. 3.4%, P<0.0001) than HIV-negative patients. Coinfected patients not enrolled in the SHCS were asylum seekers or migrant workers, with lower CD4 cell counts at TB diagnosis (median CD4 count 79 cells/µL compared to 149 cells/µL among SHCS patients, P = 0.07). There were 6 patients (60.0%) with successful outcomes compared to 82 (88.2%) patients in the SHCS (P = 0.023). CONCLUSIONS: The clinical presentation of coinfected patients differed from HIV-negative TB patients. The number of HIV-infected patients diagnosed with TB outside the SHCS is similar to the number diagnosed within the cohort but outcomes are poorer in patients not followed up in the national cohort. Special efforts are required to address the needs of this vulnerable population.

Cross-country polarisation in CO2 emissions per capita in the European Union: changes and explanatory factors

In this study, we analyse the degree of polarisation-a concept fundamentally different from that of inequality-in the international distribution of CO2 emissions per capita in the European Union. It is analytically relevant to examine the degree of instability inherent to a distribution and, in the analysed case, the likelihood that the distribution and its evolution will increase or decrease the chances of reaching an agreement. Two approaches were used to measure polarisation: the endogenous approach, in which countries are grouped according to their similarity in terms of emissions, and the exogenous approach, in which countries are grouped geographically. Our findings indicate a clear decrease in polarisation since the mid-1990s, which can essentially be explained by the fact that the different groups of countries have converged (i.e. antagonism among the CO2 emitters has decreased) as the contribution of energy intensity to between-group differences has decreased. This lower degree of polarisation in CO2 distribution suggests a situation more conducive to the possibility of reaching EU-wide agreements on the mitigation of CO2 emissions.

Lutzomyia sand flies (Diptera: Psychodidae) from middle and lower Putumayo department, Colombia, with new records to the country

A total of 4,840 phlebotomine sand flies from 54 localities in Putumayo department (=state), in the Colombian Amazon region, were collected in Shannon traps, CDC light traps, resting places and from human baits. At least 42 Lutzomyia species were registered for the first time to the department. Psychodopygus and Nyssomyia were the subgenera with the greatest number of taxa, the most common species being L. (N.) yuilli and L. (N.) pajoti. They were sympatric in a wide zone of Putumayo, indicating that they should be treated as full species (new status). Among the anthropophilic sand flies, L. gomezi and L. yuilli were found in intradomiciliar, peridomestic, urban or forest habitats. L. richardwardi, L. claustrei, L. nocticola and L. micropyga are reported for the first time in the Colombian Amazon basin. L. pajoti, L. sipani and L. yucumensis are new records for Colombia.

Towards a Standardised Framework for Inter-Country Adoption - Report of the Implementation Group

The report contains Background to the commissioning of the Report â?~â?~Towards a Standardised Framework for Intercountry Adoption Assessment Proceduresâ?Tâ?T; the Government decision arising; and the principal findings and recommendations of the Report (Chapter 1); Detailed information on progress made in relation to the recommendations contained in the Report (Chapters 2-5); Statistical data in relation to intercountry adoption services at June, 2000 (Chapter 6); A summary of key findings of the Implementation Group (Chapter 7); and The Implementation Groupâ?Ts recommendations regarding the future of intercountry adoption services (Chapter 8). Download the Report here

Towards a Standardised Framework for Inter-Country Adoption - Assessment Procedures

In the first part the background on inter-country adoption and assessment of prospective adopters are considered in general terms in Chapters Two and Three respectively. The second chapter places the objectives of the research into context. Due to the declining numbers of children being put forward for domestic adoption, there is increasing recourse to inter-country adoption. An overview of the situation is outlined. The legislation section outlines both Irish legislation and the pivotal international agreement relevant to inter-country adoption, namely the Hague Convention. The implications for inter-country adoption processes are described Download the Report here

Speech by Mr. Micheál Martin TD – Meeting The Challenges Of Cultural Diversity In The Irish Healthcare Sector

It gives me great pleasure to accept the invitation to address this conference on “Meeting the Challenges of Cultural Diversity in the Irish Healthcare Sector” which is being organised by the Irish Health Services Management Institute in partnership with the National Consultative Committee on Racism and Interculturalism. The conference provides an important opportunity to develop our knowledge and understanding of the issues surrounding cultural diversity in the health sector from the twin perspectives of patients and staff. Cultural diversity has over recent years become an increasingly visible aspect of Irish society bringing with it both opportunities and challenges. It holds out great possibilities for the enrichment of all who live in Ireland but it also challenges us to adapt creatively to the changes required to realise this potential and to ensure that the experience is a positive one for all concerned but particularly for those in the minority ethnic groups. In the last number of years in particular, the focus has tended to be on people coming to this country either as refugees, asylum seekers or economic migrants. Government figures estimate that as many as 340,000 immigrants are expected in the next six years. However ethnic and cultural diversity are not new phenomena in Ireland. Travellers have a long history as an indigenous minority group in Ireland with a strong culture and identity of their own. The changing experience and dynamics of their relationship with the wider society and its institutions over time can, I think, provide some valuable lessons for us as we seek to address the more numerous and complex issues of cultural diversity which have arisen for us in the last decade. Turning more specifically to the health sector which is the focus of this conference, culture and identity have particular relevance to health service policy and provision in that The first requirement is that we in the health service acknowledge cultural diversity and the differences in behaviours and in the less obvious areas of values and beliefs that this often implies. Only by acknowledging these differences in a respectful way and informing ourselves of them can we address them. Our equality legislation – The Employment Equality Act, 1998 and the Equal Status Act, 2000 – prohibits discrimination on nine grounds including race and membership of the Traveller community. The Equal Status Act prohibits discrimination on an individual basis in relation to the nine grounds while for groups it provides for the promotion of equality of opportunity. The Act applies to the provision of services including health services. I will speak first about cultural diversity in relation to the patient. In this respect it is worth mentioning that the recognition of cultural diversity and appropriate responses to it were issues which were strongly emphasised in the public consultation process which we held earlier this year in the context of developing National Anti-Poverty targets for the health sector and also our new national health strategy. Awareness and sensitivity training for staff is a key requirement for adapting to a culturally diverse patient population. The focus of this training should be the development of the knowledge and skills to provide services sensitive to cultural diversity. Such training can often be most effectively delivered in partnership with members of the minority groups themselves. I am aware that the Traveller community, for example, is involved in in-service training for health care workers. I am also aware that the National Consultative Committee on Racism and Interculturalism has been involved in training with the Eastern Regional Health Authority. We need to have more such initiatives. A step beyond the sensitivity training for existing staff is the training of members of the minority communities themselves as workers in our health services. Again the Traveller community has set an example in this area with its Primary Health Care Project for Travellers. The Primary Health Care for Travellers Project was established in 1994 as a joint partnership initiative with the Eastern Health Board and Pavee Point, with ongoing technical assistance being provided from the Department of Community Health and General Practice, Trinity College, Dublin. This project was the first of its kind in the country and has facilitated The project included a training course which concentrated on skills development, capacity building and the empowerment of Travellers. This confidence and skill allowed the Community Health Workers to go out and conduct a baseline survey to identify and articulate Travellers’ health needs. This was the first time that Travellers were involved in this process; in the past their needs were assumed. The results of the survey were fed back to the community and they prioritised their needs and suggested changes to the health services which would facilitate their access and utilisation. Ongoing monitoring and data collection demonstrates a big improvement in levels of satisfaction and uptake and ulitisation of health services by Travellers in the pilot area. This Primary Health Care for Travellers initiative is being replicated in three other areas around the country and funding has been approved for a further 9 new projects. This pilot project was the recipient of a WHO 50th anniversary commemorative award in 1998. The project is developing as a model of good practice which could inspire further initiatives of this type for other minority groups. Access to information has been identified in numerous consultative processes as a key factor in enabling people to take a proactive approach to managing their own health and that of their families and in facilitating their access to health services. Honouring our commitment to equity in these areas requires that information is provided in culturally appropriate formats. The National Health Promotion Strategy 2000-2005, for example, recognises that there exists within our society many groups with different requirements which need to be identified and accommodated when planning and implementing health promotion interventions. These groups include Travellers, refugees and asylum seekers, people with intellectual, physical or sensory disability and the gay and lesbian community. The Strategy acknowledges the challenge involved in being sensitive to the potential differences in patterns of poor health among these different groups. The Strategic aim is to promote the physical, mental and social well-being of individuals from these groups. The objective of the Strategy on these issues are: While our long term aim may be to mainstream responses so that our health services is truly multicultural, we must recognise the need at this point in time for very specific focused responses particularly for groups with poor health status such as Travellers and also for refugees and asylum seekers. In the case of refugees and asylum seekers examples of targeted services are screening for communicable diseases – offered on a voluntary basis – and psychological support services for those who have suffered trauma before coming here. The two approaches of targeting and mainstreaming are not mutually exclusive. A combination of both is required at this point in time but the balance between them must be kept under constant review in the light of changing needs. A major requirement if we are to meet the challenge of cultural diversity is an appropriate data and research base. I think it is important that we build up our information and research data base in partnership with the minority groups themselves. We must establish what the health needs of diverse groups are; we must monitor uptake of services and how well we are responding to needs and we must monitor outcomes and health status. We must also examine the impact of the policies in other sectors on the health of minority groups. The National Health Information Strategy, currently being developed, and the recently published National Strategy for Health Research – Making Knowledge Work for Health provide important frameworks within which we can improve our data and research base. A culturally diverse health sector workforce – challenges and opportunities The Irish health service can benefit greatly from successful international recruitment. There has been a strong non-national representation amongst the medical profession for more than 30 years. More recently there have been significant increases in other categories of health service workers from overseas. The Department recognises the enormous value that overseas recruitment brings over a wide range of services and supports the development of effective and appropriate recruitment strategies in partnership with health service employers. These changes have made cultural diversity an important issue for all health service organisations. Diversity in the workplace is primarily about creating a culture that seeks, respects, values and harnesses difference. This includes all the differences that when added together make each person unique. So instead of the focus being on particular groups, diversity is about all of us. Change is not about helping “them” to join “us” but about critically looking at “us” and rooting out all aspects of our culture that inappropriately exclude people and prevent us from being inclusive in the way we relate to employees, potential employees and clients of the health service. International recruitment benefits consumers, Irish employees and the overseas personnel alike. Regardless of whether they are employed by the health service, members of minority groups will be clients of our service and consequently we need to be flexible in order to accommodate different cultural needs. For staff, we recognise that coming from other cultures can be a difficult transition. Consequently health service employers have made strong efforts to assist them during this period. Many organisations provide induction courses, religious facilities (such as prayer rooms) and help in finding suitable accommodation. The Health Service Employers Agency (HSEA) is developing an equal opportunities/diversity strategy and action plans as well as training programmes to support their implementation, to ensure that all health service employment policies and practices promote the equality/diversity agenda to continue the development of a culturally diverse health service. The management of this new environment is extremely important for the health service as it offers an opportunity to go beyond set legal requirements and to strive for an acceptance and nurturing of cultural differences. Workforce cultural diversity affords us the opportunity to learn from the working practices and perspectives of others by allowing personnel to present their ideas and experience through teamwork, partnership structures and other appropriate fora, leading to further improvement in the services we provide. It is important to ensure that both personnel units and line managers communicate directly with their staff and demonstrate by their actions that they intend to create an inclusive work place which doesn´t demand that minority staff fit. Contented, valued employees who feel that there is a place for them in the organisation will deliver a high quality health service. Your conference here today has two laudable aims – to heighten awareness and assist health care staff to work effectively with their colleagues from different cultural backgrounds and to gain a greater understanding of the diverse needs of patients from minority ethnic backgrounds. There is a synergy in these aims and in the tasks to which they give rise in the management of our health service. The creative adaptations required for one have the potential to feed into the other. I would like to commend both organisations which are hosting this conference for their initiative in making this event happen, particularly at this time – Racism in the Workplace Week. I look forward very much to hearing the outcome of your deliberations. Thank you.

Clinical presentation and survival of smear-positive pulmonary tuberculosis patients of a University General Hospital in a developing country

From January 1995 to August 1997 we evaluated prospectively the clinical presentation, laboratory findings and short-term survival of smear-positive pulmonary tuberculosis (TB) patients who sought care at our hospital. After providing informed, written consent, the patients were interviewed and laboratory tests were performed. Information about survivorship and death was collected through September 1998. Eighty-six smear-positive pulmonary TB patients were enrolled; 26.7% were HIV-seropositive. Seventeen HIV-seronegative pulmonary TB patients (19.8%) presented chronic diseases in addition to TB. In the multiple logistic regression analysis a CD4+ cell count <= 200 cell/mm³ was independently associated with HIV seropositivity. In the Cox regression model, fitted to all patients, HIV seropositivity and age > or = 50 years were independently associated with decreased survival. Among HIV-seronegative persons, the presence of an additional disease increased the risk of death of almost six-fold. Use of antiretroviral drugs was associated with a lower risk of death among HIV-seropositive smear-positive pulmonary TB patients (RH = 0.32, 95% CI 0.10-0.92). In our study smear-positive pulmonary TB patients had a low short-term survival rate that was strongly associated with HIV infection, age and co-morbidities. Therapy with antiretroviral drugs reduced the short-term risk of death among HIV-seropositive patients after TB diagnosis.

Kubrick i Losey : dues mirades crítiques sobre la Primera Guerra Mundial. Estudi comparatiu entre 'Paths of lory' i 'King and Country'

Estudi comparatiu entre 'Paths of Glory'(S.Kubrick) i 'King and Country' (J.Losey) : Dos films crítics sobre la Primera Guerra Mundial amb una temàtica molt similar però que aporten un punt de vista diferent.

Three essays in international finance

Executive Summary The first essay of this dissertation investigates whether greater exchange rate uncertainty (i.e., variation over time in the exchange rate) fosters or depresses the foreign investment of multinational firms. In addition to the direct capital financing it supplies, foreign investment can be a source of valuable technology and know-how, which can have substantial positive effects on a host country's economic growth. Thus, it is critically important for policy makers and central bankers, among others, to understand how multinationals base their investment decisions on the characteristics of foreign exchange markets. In this essay, I first develop a theoretical framework to improve our knowledge regarding how the aggregate level of foreign investment responds to exchange rate uncertainty when an economy consists of many firms, each of which is making decisions. The analysis predicts a U-shaped effect of exchange rate uncertainty on the total level of foreign investment of the economy. That is, the effect is negative for low levels of uncertainty and positive for higher levels of uncertainty. This pattern emerges because the relationship between exchange rate volatility and 'the probability of investment is negative for firms with low productivity at home (i.e., firms that find it profitable to invest abroad) and the relationship is positive for firms with high productivity at home (i.e., firms that prefer exporting their product). This finding stands in sharp contrast to predictions in the existing literature that consider a single firm's decision to invest in a unique project. The main contribution of this research is to show that the aggregation over many firms produces a U-shaped pattern between exchange rate uncertainty and the probability of investment. Using data from industrialized countries for the period of 1982-2002, this essay offers a comprehensive empirical analysis that provides evidence in support of the theoretical prediction. In the second essay, I aim to explain the time variation in sovereign credit risk, which captures the risk that a government may be unable to repay its debt. The importance of correctly evaluating such a risk is illustrated by the central role of sovereign debt in previous international lending crises. In addition, sovereign debt is the largest asset class in emerging markets. In this essay, I provide a pricing formula for the evaluation of sovereign credit risk in which the decision to default on sovereign debt is made by the government. The pricing formula explains the variation across time in daily credit spreads - a widely used measure of credit risk - to a degree not offered by existing theoretical and empirical models. I use information on a country's stock market to compute the prevailing sovereign credit spread in that country. The pricing formula explains a substantial fraction of the time variation in daily credit spread changes for Brazil, Mexico, Peru, and Russia for the 1998-2008 period, particularly during the recent subprime crisis. I also show that when a government incentive to default is allowed to depend on current economic conditions, one can best explain the level of credit spreads, especially during the recent period of financial distress. In the third essay, I show that the risk of sovereign default abroad can produce adverse consequences for the U.S. equity market through a decrease in returns and an increase in volatility. The risk of sovereign default, which is no longer limited to emerging economies, has recently become a major concern for financial markets. While sovereign debt plays an increasing role in today's financial environment, the effects of sovereign credit risk on the U.S. financial markets have been largely ignored in the literature. In this essay, I develop a theoretical framework that explores how the risk of sovereign default abroad helps explain the level and the volatility of U.S. equity returns. The intuition for this effect is that negative economic shocks deteriorate the fiscal situation of foreign governments, thereby increasing the risk of a sovereign default that would trigger a local contraction in economic growth. The increased risk of an economic slowdown abroad amplifies the direct effect of these shocks on the level and the volatility of equity returns in the U.S. through two channels. The first channel involves a decrease in the future earnings of U.S. exporters resulting from unfavorable adjustments to the exchange rate. The second channel involves investors' incentives to rebalance their portfolios toward safer assets, which depresses U.S. equity prices. An empirical estimation of the model with monthly data for the 1994-2008 period provides evidence that the risk of sovereign default abroad generates a strong leverage effect during economic downturns, which helps to substantially explain the level and the volatility of U.S. equity returns.