The Real Exchange Rate in Small Open Developed Economies: Evidence from Cointegration Analysis

We examine the effects of the terms of trade and the expected real interest rate differential on the real exchange rate in a sample of small open developed economies. We employ cointegration analysis to search for possible long-term linkages. We find that while both the terms of trade and the expected real interest rate differentials affect the real exchange rate in the long run, the role of the terms of trade generally proves more consistent across countries. The speed of adjustment for the expected real interest rate differential in the error-correction model, however, is quantitatively larger than it is for the terms of trade.

Monetary Policy in a Portfolio Balance Model with Endogenous Physical Capital

We develop a portfolio balance model with real capital accumulation. The introduction of real capital as an asset as well as a good produced and demanded by firms enriches extant portfolio balance models of exchange rate determination. We show that expansionary monetary policy causes exchange rate overshooting, not once, but twice; the secondary repercussion comes through the reaction of firms to changed asset prices and the firms' decisions to invest in real capital. The model sheds further light on the volatility of real and nominal exchange rates, and it suggests that changes in corporate sector profitability may affect exchange rates through portfolio diversification in corporate securities.

Increasing Derivatives Market Activity in Emerging Markets and Exchange Rate Exposure

Understanding the effects of off-balance sheet transactions on interest and exchange rate exposures has become more important for emerging market countries that are experiencing remarkable growth in derivatives markets. Using firm level data, we report a significant fall in exposure over the past 10 years and relate this to higher derivatives market participation. Our methodology is composed of a three stage approach: First, we measure foreign exchange exposures using the Adler-Dumas (1984) model. Next, we follow an indirect approach to infer derivatives market participation at the firm level. Finally, we study the relationship between exchange rate exposure and derivatives market participation. Our results show that foreign exchange exposure is negatively related to derivatives market participation, and support the hedging explanation of the exchange rate exposure puzzle. This decline is especially salient in the financial sector, for bigger firms, and over longer time periods. Results are robust to using different exchange rates, a GARCH-SVAR approach to measure exchange rate exposure, and different return horizons.

Perchlorate remediation technologies: A systematic review of solely biodegradation versus a combination of ion-exchange and biodegradation technologies

A systematic review was performed in order to evaluate perchlorate remediation technologies. The two included technologies were ion-exchange concerted with biodegradation and solely biodegradation. A meta-analysis was completed and subsequently, a regression model was formed to conduct a degradation rate analysis and to depict the association between rate and various dependent variables (salinity/sali, nitrate concentration/nitc and carbon source concentration/csou). The outcome of the model analysis suggested that salt concentration did have an effect on the degradation rate in the ion-exchange process and that with a salt concentration greater than or equal to 18.6 g/L, the biodegradation process will produce a greater reduction of perchlorate than ion-exchange concerted with biodegradation. However, when a t-test examined the difference in perchlorate degradation rate between the two cleanup methods, there was no significant difference seen (p=0.7351, α = 0.05).^

Health information exchange: Using metrics to address quality of care and return on investment

Health Information Exchange (HIE) will play a key part in our nation’s effort to improve healthcare. The evidence of HIEs transformational role in healthcare delivery systems is quite limited. The lack of such evidence led us to explore what exists in the healthcare industry that may provide evidence of effectiveness and efficiency of HIEs. The objective of the study was to find out how many fully functional HIEs are using any measurements or metrics to gauge impact of HIE on quality improvement (QI) and on return on investment (ROI).^ A web-based survey was used to determine the number of operational HIEs using metrics for QI and ROI. Our study highlights the fact that only 50 percent of the HIEs who responded use or plan to use metrics. However, 95 percent of the respondents believed HIEs improve quality of care while only 56 percent believed HIE showed positive ROI. Although operational HIEs present numerous opportunities to demonstrate the business model for improving health care quality, evidence to document the impact of HIEs is lacking. ^

Policy analysis of Texas Senate Bill 532 and the regulation of nurse practitioners in the convenience care model

Background. Retail clinics, also called convenience care clinics, have become a rapidly growing trend since their initial development in 2000. These clinics are coupled within a larger retail operation and are generally located in "big-box" discount stores such as Wal-mart or Target, grocery stores such as Publix or H-E-B, or in retail pharmacies such as CVS or Walgreen's (Deloitte Center for Health Solutions, 2008). Care is typically provided by nurse practitioners. Research indicates that this new health care delivery system reduces cost, raises quality, and provides a means of access to the uninsured population (e.g., Deloitte Center for Health Solutions, 2008; Convenient Care Association, 2008a, 2008b, 2008c; Hansen-Turton, Miller, Nash, Ryan, Counts, 2007; Salinsky, 2009; Scott, 2006; Ahmed & Fincham, 2010). Some healthcare analysts even suggest that retail clinics offer a feasible solution to the shortage of primary care physicians facing the nation (AHRQ Health Care Innovations Exchange, 2010). ^ The development and performance of retail clinics is heavily dependent upon individual state policies regulating NPs. Texas currently has one of the most highly regulated practice environments for NPs (Stout & Elton, 2007; Hammonds, 2008). In September 2009, Texas passed Senate Bill 532 addressing the scope of practice of nurse practitioners in the convenience care model. In comparison to other states, this law still heavily regulates nurse practitioners. However, little research has been conducted to evaluate the impact of state laws regulating nurse practitioners on the development and performance of retail clinics. ^ Objectives. (1). To describe the potential impact that SB 532 has on retail clinic performance. (2). To discuss the effectiveness, efficiency, and equity of the convenience care model. (3). To describe possible alternatives to Texas' nurse practitioner scope of practice guidelines as delineated in Texas Senate Bill 532. (4). To describe the type of nurse practitioner state regulation (i.e. independent, light, moderate, or heavy) that best promotes the convenience care model. ^ Methods. State regulations governing nurse practitioners can be characterized as independent, light, moderate, and heavy. Four state NP regulatory types and retail clinic performance were compared and contrasted to that of Texas regulations using Dunn and Aday's theoretical models for conducting policy analysis and evaluating healthcare systems. Criteria for measurement included effectiveness, efficiency, and equity. Comparison states were Arizona (Independent), Minnesota (Light), Massachusetts (Moderate), and Florida (Heavy). ^ Results. A comparative states analysis of Texas SB 532 and alternative NP scope of practice guidelines among the four states: Arizona, Florida, Massachusetts, and Minnesota, indicated that SB 532 has minimal potential to affect the shortage of primary care providers in the state. Although SB 532 may increase the number of NPs a physician may supervise, NPs are still heavily restricted in their scope of practice and limited in their ability to act as primary care providers. Arizona's example of independent NP practice provided the best alternative to affect the shortage of PCPs in Texas as evidenced by a lower uninsured rate and less ED visits per 1,000 population. A survey of comparison states suggests that retail clinics thrive in states that more heavily restrict NP scope of practice as opposed to those that are more permissive, with the exception of Arizona. An analysis of effectiveness, efficiency, and equity of the convenience care model indicates that retail clinics perform well in the areas of effectiveness and efficiency; but, fall short in the area of equity. ^ Conclusion. Texas Senate 532 represents an incremental step towards addressing the problem of a shortage of PCPs in the state. A comparative policy analysis of the other four states with varying degrees of NP scope of practice indicate that a more aggressive policy allowing for independent NP practice will be needed to achieve positive changes in health outcomes. Retail clinics pose a temporary solution to the shortage of PCPs and will need to expand their locations to poorer regions and incorporate some chronic care to obtain measurable health outcomes. ^

Model results of the impact of climate change on agriculture in China

This paper assesses the impact of climate change on China's agricultural production at a cross-provincial level using the Ricardian approach, incorporating a multilevel model with farm-level group data. The farm-level group data includes 13379 farm households, across 316 villages, distributed in 31 provinces. The empirical results show that, firstly, the marginal effects and elasticities of net crop revenue per hectare with respect to climate factors indicated that the annual impact of temperature on net crop revenue per hectare was positive, and the effect of increased precipitation was negative when looking at the national totals; secondly, the total impact of simulated climate change scenarios on net crop revenues per hectare at a Chinese national total level, was an increase of between 79 USD per hectare and 207 USD per hectare for the 2050s, and an increase from 140 USD per hectare to 355 USD per hectare for the 2080s. As a result, climate change may create a potential advantage for the development of Chinese agriculture, rather than a risk, especially for agriculture in the provinces of the Northeast, Northwest and North regions. However, the increased precipitation can lead to a loss of net crop revenue per hectare, especially for the provinces of the Southwest, Northwest, North and Northeast regions.

Gotland Deep (Baltic Sea) independent age model based on Palaeomagnetic Secular Variation (PSV) and lead (Pb) deposition profiles

Dating of sediment cores from the Baltic Sea has proven to be difficult due to uncertainties surrounding the 14C reservoir age and a scarcity of macrofossils suitable for dating. Here we present the results of multiple dating methods carried out on cores in the Gotland Deep area of the Baltic Sea. Particular emphasis is placed on the Littorina stage (8 ka ago to the present) of the Baltic Sea and possible changes in the 14C reservoir age of our dated samples. Three geochronological methods are used. Firstly, palaeomagnetic secular variations (PSV) are reconstructed, whereby ages are transferred to PSV features through comparison with varved lake sediment based PSV records. Secondly, lead (Pb) content and stable isotope analysis are used to identify past peaks in anthropogenic atmospheric Pb pollution. Lastly, 14C determinations were carried out on benthic foraminifera (Elphidium spec.) samples from the brackish Littorina stage of the Baltic Sea. Determinations carried out on smaller samples (as low as 4 µg C) employed an experimental, state-of-the-art method involving the direct measurement of CO2 from samples by a gas ion source without the need for a graphitisation step - the first time this method has been performed on foraminifera in an applied study. The PSV chronology, based on the uppermost Littorina stage sediments, produced ten age constraints between 6.29 and 1.29 cal ka BP, and the Pb depositional analysis produced two age constraints associated with the Medieval pollution peak. Analysis of PSV data shows that adequate directional data can be derived from both the present Littorina saline phase muds and Baltic Ice Lake stage varved glacial sediments. Ferrimagnetic iron sulphides, most likely authigenic greigite (Fe3S4), present in the intermediate Ancylus Lake freshwater stage sediments acquire a gyroremanent magnetisation during static alternating field (AF) demagnetisation, preventing the identification of a primary natural remanent magnetisation for these sediments. An inferred marine reservoir age offset (deltaR) is calculated by comparing the foraminifera 14C determinations to a PSV & Pb age model. This deltaR is found to trend towards younger values upwards in the core, possibly due to a gradual change in hydrographic conditions brought about by a reduction in marine water exchange from the open sea due to continued isostatic rebound.

Southern Ocean CO2 uptake and buffer factor from model run 2012-2100, with links to model results

The Southern Ocean is a key region for global carbon uptake and is characterised by a strong seasonality with the annual CO2 uptake being mediated by biological carbon draw-down in summer. Here, we show that the contribution of biology to CO2 uptake will become even more important until 2100. This is the case even if biological production remains unaltered and can be explained by the decreasing buffer capacity of the ocean as its carbon content increases. The same amount of biological carbon draw-down leads to a more than twice as large reduction in CO2 (aq) concentration and hence to a larger CO2 gradient between ocean and atmosphere that drives the gas-exchange. While the winter uptake south of 44°S changes little, the summer uptake increases largely and is responsible for the annual mean response. The combination of decreasing buffer capacity and strong seasonality of biological carbon draw-down introduces a strong and increasing seasonality in the anthropogenic carbon uptake.

Cation exchange capacity and water content of ODP sites from Nankai

Pore fluid chlorinity lower than seawater is often observed in accretionary wedges and one of the possible causes of pore water freshening is the smectite to illite reaction. This reaction occurs during diagenesis in the 80-150°C temperature range. Low chlorinity anomalies observed at the toe of accretionary wedges have thus been interpreted as evidence for lateral fluid migration from inner parts of the wedge and the seismogenic zone. However, temperature conditions in Nankai Trough are locally high enough for the smectite to illite transition to occur in situ. Cation exchange capacity is here used as a proxy for smectite content in the sediment and the amount of interlayer water released during the smectite to illite reaction represents in average 12 water molecules per cation charge. Water and chloride budget calculations show that there is enough smectite to explain the chlorinity anomalies by in situ reactions. The shape of the pore fluid chlorinity profiles can be explained if compaction is also taken into account in the model. Lateral flow is not needed. This argument, based solely on chloride concentration, does not imply that lateral flow is absent. However, previous estimations of lateral fluid fluxes, and of the duration of transient flow events along the de.collement, should be reconsidered.

Simulated Bromoform emission and concentration using the ocean biogeochemistry model MPIOM/HAMOCC forced by 6-hourly NCEP data

Bromoform (CHBr3) is one important precursor of atmospheric reactive bromine species that are involved in ozone depletion in the troposphere and stratosphere. In the open ocean bromoform production is linked to phytoplankton that contains the enzyme bromoperoxidase. Coastal sources of bromoform are higher than open ocean sources. However, open ocean emissions are important because the transfer of tracers into higher altitude in the air, i.e. into the ozone layer, strongly depends on the location of emissions. For example, emissions in the tropics are more rapidly transported into the upper atmosphere than emissions from higher latitudes. Global spatio-temporal features of bromoform emissions are poorly constrained. Here, a global three-dimensional ocean biogeochemistry model (MPIOM-HAMOCC) is used to simulate bromoform cycling in the ocean and emissions into the atmosphere using recently published data of global atmospheric concentrations (Ziska et al., 2013) as upper boundary conditions. Our simulated surface concentrations of CHBr3 match the observations well. Simulated global annual emissions based on monthly mean model output are lower than previous estimates, including the estimate by Ziska et al. (2013), because the gas exchange reverses when less bromoform is produced in non-blooming seasons. This is the case for higher latitudes, i.e. the polar regions and northern North Atlantic. Further model experiments show that future model studies may need to distinguish different bromoform-producing phytoplankton species and reveal that the transport of CHBr3 from the coast considerably alters open ocean bromoform concentrations, in particular in the northern sub-polar and polar regions.

Regional ocean model for the Mediterranean, links to model files

A regional ocean general circulation model of the Mediterranean is used to study the climate of the Last Glacial Maximum. The atmospheric forcing for these simulations has been derived from simulations with an atmospheric general circulation model, which in turn was forced with surface conditions from a coarse resolution earth system model. The model is successful in reproducing the general patterns of reconstructed sea surface temperature anomalies with the strongest cooling in summer in the northwestern Mediterranean and weak cooling in the Levantine, although the model underestimates the extent of the summer cooling in the western Mediterranean. However, there is a strong vertical gradient associated with this pattern of summer cooling, which makes the comparison with reconstructions complicated. The exchange with the Atlantic is decreased to roughly one half of its present value, which can be explained by the shallower Strait of Gibraltar as a consequence of lower global sea level. This reduced exchange causes a strong increase of salinity in the Mediterranean in spite of reduced net evaporation.

Late glacial and deglacial age model and biomarker analyses of sediment core MSM05/5_712-2 from the western continental slope of Svalbard

The transition from last glacial to deglacial and subsequently to modern interglacial climate conditions was accompanied by abrupt shifts in the palaeoceanographic setting in the subpolar North Atlantic. Knowledge about the role that sea ice coverage played during these rapid climate reversals is limited since most marine sediment cores from the higher latitudes provide only a coarse temporal resolution and often poorly preserved microfossils. Here we present a highly resolved reconstruction of sea ice conditions that characterised the eastern Fram Strait - a key area for water mass exchange between the Arctic Ocean and the North Atlantic - for the past 30 ka BP. This reconstruction is based on the distribution of the sea ice biomarker IP25 and phytoplankton derived biomarkers in a sediment core from the continental slope of western Svalbard. During the late glacial (30 ka to 19 ka BP), recurrent advances and retreats of sea ice characterised the study area and point to a hitherto less considered oceanic (and/or atmospheric) variability. A long-lasting perennial sea ice coverage in eastern Fram Strait persisted only at the very end of the Last Glacial Maximum (i.e. from 19.2 to 17.6 ka BP) and was abruptly reduced at the onset of Heinrich Event 1 - coincident with or possibly even inducing the collapse of the Atlantic Meridional Overturning Circulation (AMOC). Further maximum sea ice conditions prevailed during the Younger Dryas cooling event and support the assumption of an AMOC reduction due to increased formation and export of Arctic sea ice through Fram Strait. A significant retreat of sea ice and sea surface warming are observed for the Early Holocene.

What Explains Real and Nominal Exchange Rate Fluctuations? Evidence from SVAR Analysis for India

This study empirically analyzes the sources of the exchange rate fluctuations in India by employing the structural VAR model. The VAR system consists of three variables, i.e., the nominal exchange rate, the real exchange rate, and the relative output of India and a foreign country. Consistent with most previous studies, the empirical evidence demonstrates that real shocks are the main drives of the fluctuations in real and nominal exchange rates, indicating that the central bank cannot maintain the real exchange rate at its desired level over time.

Sources of fluctuations in parallel exchange rates and policy reform in Myanmar

Myanmar maintained a multiple exchange rate system, and the parallel market exchange rate was left untamed. In the last two decades, the Myanmar kyat exchange rate of the parallel market has exhibited the sharpest fluctuations among Southeast Asian currencies in real terms. Since the move to a managed float regime in April 2012, the question arises of whether exchange rate policies will be effective in stabilizing the real exchange rate. This paper investigates the sources of fluctuations in the real effective exchange rate using Blanchard and Quah’s (1989) structural vector autoregression model. As nominal shocks can be created by exchange rate policies, a persistent impact of a nominal shock implies more room for exchange rate policies. Decomposition of the fluctuations into nominal and real shocks indicates that the impact of nominal shocks is small and quickly diminishes, implying that complementary sterilization is necessary for effective foreign exchange market interventions.