Foreign Capital and Finland : Central government's first period of reliance on international financial markets, 1862-1938

The main objective of the study is to evaluate the Finnish central government s foreign borrowing between the years 1862 and 1938. Most of this period was characterised by deep capital market integration that bears resemblance to the liberal world financial order at the turn of the millennium. The main aim is to analyse the credit risk associated with the state and its determination by evaluating the world financial market centres perception of Finland. By doing this, the study is also expected to provide an additional dimension to Finland s political and economic history by incorporating into the research the assessments of international capital markets regarding Finland during a period that witnessed profound political and economic changes in Finnish society. The evaluation of the credit risk mainly relies on exchange-rate risk free time series of the state s foreign bonds. They have been collected from quotations in the stock exchanges in Helsinki, Hamburg, Paris and London. In addition, it investigates Finland s exposure to short-term debt and Moody s credit ratings assigned to Finland. The study emphasises the importance of the political risk. It suggests that the hey-day of the state s reliance on foreign capital markets took place during last few decades of the 19th century when Finland enjoyed a wide autonomy in the Russian Empire and prudently managed its economy, highlighted in Finland s adherence to the international gold standard. Political confrontations in Finland and, in particular, in Russia and the turbulence of the world financial system prevented the return of this beneficial position again. Through its issuance of foreign bonds the state was able to import substantial amounts of foreign capital, which was sorely needed to foster economic development in Finland. Moreover, the study argues that the state s presence in the western capital markets not only had economic benefits, but it also increased the international awareness of Finland s distinct and separate status in the Russian Empire and later underlined its position as an independent republic.

Studies on Wage Differentials and Labour Market Transitions

This thesis consists of four studies. The first study examines wage differentials between women and men in the Finnish manufacturing sector. A matched employer-employee data set is used to decompose the overall gender wage gap into the contributions of sex differences in human capital, labour market segregation, and residual within-job wage differentials. The topic of the second study is the relationship between the extended unemployment benefits and labour market transitions of older workers. The analysis exploits a quasi-experimental setting caused by a change in the law that raised the eligibility age of workers benefiting from extended benefits. Roughly half of the unemployed workers with extended benefits are estimated to be effectively withdrawn from labour market search. The risk of unemployment declined and the re-employment probability increased among the age groups directly affected by the reform. The third study provides an empirical analysis of a structural equilibrium search model. Estimation results from various model specifications are compared and discussed. The last study is a methodological study where the difficulties of interpreting the results of competing risks hazard models are discussed and a solution for a particular class of models is proposed. It is argued that a common practice of reporting the results of qualitative response models in terms of marginal effects is also useful in the context of competing risks duration models.

Essays on Labor Market Frictions, Technological Change and Macroeconomic Fluctuations

The dissertation consists of an introductory chapter and three essays that apply search-matching theory to study the interaction of labor market frictions, technological change and macroeconomic fluctuations. The first essay studies the impact of capital-embodied growth on equilibrium unemployment by extending a vintage capital/search model to incorporate vintage human capital. In addition to the capital obsolescence (or creative destruction) effect that tends to raise unemployment, vintage human capital introduces a skill obsolescence effect of faster growth that has the opposite sign. Faster skill obsolescence reduces the value of unemployment, hence wages and leads to more job creation and less job destruction, unambiguously reducing unemployment. The second essay studies the effect of skill biased technological change on skill mismatch and the allocation of workers and firms in the labor market. By allowing workers to invest in education, we extend a matching model with two-sided heterogeneity to incorporate an endogenous distribution of high and low skill workers. We consider various possibilities for the cost of acquiring skills and show that while unemployment increases in most scenarios, the effect on the distribution of vacancy and worker types varies according to the structure of skill costs. When the model is extended to incorporate endogenous labor market participation, we show that the unemployment rate becomes less informative of the state of the labor market as the participation margin absorbs employment effects. The third essay studies the effects of labor taxes on equilibrium labor market outcomes and macroeconomic dynamics in a New Keynesian model with matching frictions. Three policy instruments are considered: a marginal tax and a tax subsidy to produce tax progression schemes, and a replacement ratio to account for variability in outside options. In equilibrium, the marginal tax rate and replacement ratio dampen economic activity whereas tax subsidies boost the economy. The marginal tax rate and replacement ratio amplify shock responses whereas employment subsidies weaken them. The tax instruments affect the degree to which the wage absorbs shocks. We show that increasing tax progression when taxation is initially progressive is harmful for steady state employment and output, and amplifies the sensitivity of macroeconomic variables to shocks. When taxation is initially proportional, increasing progression is beneficial for output and employment and dampens shock responses.

Tibetan Market Participation in China

Since the Chinese government began implementing economic reforms in the late 1970s, China has experienced profound economic change and growth. Like other parts of China, Tibetan areas of China have also experienced wide-ranging economic change with growth even higher than the China-wide average in certain years. Though China s strategic policy of developing the West provided many opportunities for economic and business activities, Tibetans have proven poorly equipped to respond to and take advantage of these opportunities. This study is about people, about market participation and specifically about why Tibetans do not effectively participate in the market in the context of China s economic development process. Many political, social, cultural and environmental factors explain the difficulties met by Tibetan communities. However, this study focuses on three factors: the social and culture context, government policy and education. The Buddhistic nature of Tibetan communities, particularly the political and economic system in traditional Tibetan society, explains this, especially after implementation of new national economic policies. An inclusive economic development policy that promotes local people s participation in the market demands serious consideration of local conditions. Unfortunately, such considerations often ignore local Tibetan realities. The economic development policy in Tibetan areas in China is nearly always an attempt to replicate the inland model and open up markets, even though economic and sociopolitical conditions in Tibet are markedly unlike much of China. A consequence of these policies is increasing numbers of non-Tibetan migrants flowing into Tibetan areas with the ensuing marginalization of Tibetans in the marketplace. Poor quality education is another factor contributing to Tibetan inability to effectively participate in the market. Vocational and business education targeting Tibetans is of very low quality and reflective of government failing to consider local circumstances when implementing education policy. The relatively few Tibetans who do receive education are nearly always unable to compete with non-Tibetan migrants in commercial activity. Encouraging and promoting Tibetan participation in business development and access to quality education are crucial for a sustainable and prosperous society in the long term. Particularly, a localized development policy that considers local environmental conditions and production as well as local culture is crucial. Tibet s economic development should be based on local environmental and production conditions, while utilizing Tibetan culture for the benefit of creating a sustainable economy. Such a localized approach best promotes Tibetan market participation. Keywords: Tibet cultural policy education market participation

Market access and welfare: Is there a conflict?

Well known tariff reform rules that are guaranteed to increase welfare will not necessarily increase market access, while rules that are guaranteed to increase market access will not necessarily increase welfare. The present paper proposes a new set of tariff reforms that can achieve both objectives at the same time.

Tariff-tax reforms and market access

Reducing tariffs and increasing consumption taxes is a standard IMF advice to countries that want to open up their economy without hurting government finances. Indeed, theoretical analysis of such a tariff–tax reform shows an unambiguous increase in welfare and government revenues. The present paper examines whether the country that implements such a reform ends up opening up its markets to international trade, i.e. whether its market access improves. It is shown that this is not necessarily so. We also show that, comparing to the reform of only tariffs, the tariff–tax reform is a less efficient proposal to follow both as far as it concerns market access and welfare.

Asymptotic analysis of option pricing in a Markov modulated market

We address asymptotic analysis of option pricing in a regime switching market where the risk free interest rate, growth rate and the volatility of the stocks depend on a finite state Markov chain. We study two variations of the chain namely, when the chain is moving very fast compared to the underlying asset price and when it is moving very slow. Using quadratic hedging and asymptotic expansion, we derive corrections on the locally risk minimizing option price.

Marked increase in proton pump inhibitors use in Australia

Objectives: To examine the trends in the prescribing of subsidised proton pump inhibitors (PPIs) and histamine receptor antagonists (H2RAs), in the Australian population from 1995 to 2006 to encourage discussion regarding appropriate clinical use. PPIs and H2RAs are the second highest drug cost to the publicly subsidised Pharmaceutical Benefits Scheme (PBS). Design: Government data on numbers of subsidised scripts, quantity and doses for PPIs and H2RAs were analysed by gender and age, dose and indication. Main outcome measure: Drug utilisation as DDD [defined daily dose]/1000 population/day. Results: The use of combined PPIs increased by 1318%. Utilisation increased substantially after the relaxation of the subsidised indications for PPIs in 2001. Omeprazole had the largest market share but was substituted by its S-enantiomer esomeprazole after its introduction in 2002. There was considerable use in the elderly with the peak use being in those aged 80 years and over. The utilisation of H2RAs declined 72% over 12 years. Conclusions: PPI use has increased substantially, not only due to substitution of H2RAs but to expansion in the overall market. Utilisation does not appear to be commensurate with prevalence of gastro-oesophageal reflux disease (GORD) nor with prescribing guidelines for PPIs, with significant financial costs to patients and PBS. This study encourages clinical discussion regarding quality use of these medicines. © 2010 John Wiley & Sons, Ltd.

Reconstructing identity of older people in using day care services in Taiwan: A grounded theory study

Adult day care centers provide a means whereby frail or disabled older people can remain living at home particularly when their family care-givers engage in waged work. In Taiwan, adult day care services appear to meet the cultural needs of both older people and their families for whom filial care is vital. Little research attention has been paid to the use of day care services in Taiwan, the uptake rate of which is low. This grounded theory study explored the ways in which older people and family care-givers construct meanings around the use of day care services in Taiwan. The research methodology drew on the theoretical tenets of symbolic interactionism and methods were informed by the grounded theory. In-depth interviews with 30 participants were undertaken. Reconstructing identity in a shifting world is the core category of the study and reflects a process of reframing whereby older people came to new definitions of social responsibility and independence within the context of the day care center. The implications of the findings is that the older people, rather than seeking to be relieved of social responsibilities, worked very hard to frame and reframe a social role. Rather than letting the institutions undermine or disrupt their identity, the older people worked to actively negotiate and redefine the meaning of self. Thus, although reluctant to come to use the services at the outset, they found a way to manage their lives independently. Social roles and responsibilities as older parents were retained. This study explored the process of meaning construction of day care use and the ways in which this process entailed a reconstruction of the identities of the participants. The evidence from this study underlines the importance of recognizing and acknowledging subjectively conceived identities as work that older people undertake, when in care, to render their lives meaningful.

Day Surgery in Finland : randomized and cross-sectional studies on treatment, quality, and outcome

The aims of this study were to describe Finnish day surgery practice at present and to evaluate quality of care by assessing postdischarge minor morbidity and quality indicators. Potential treatment options were approached by investigating the role of oral dexamethasone as a part of multimodal analgesia and the feasibility of day surgery in patients aged 65 years and older. Over a 2-month period, all patient cases at 14 Finnish day surgery or short-stay units were analyzed (Study I). Quality indicators included rates and reasons for overnight admission, readmission, reoperation, cancellations, and patient satisfaction. Recovery during the first postoperative week was assessed at two units (Study II). Altogether 2732 patients graded daily the intensity of predefined symptoms. To define risk factors of postdischarge symptoms, multinomial regression analysis was used. Sixty patients scheduled to undergo day surgery for hallux valgus were randomized to receive twice perioperatively dexamethasone 9 mg or placebo (Study III). Paracetamol 1 g was administered 3 times daily. Rescue medication (oxycodone) consumption during 0-3 postoperative days (POD), maximal pain scores and adverse effects were documented. Medically stable patients aged 65 years or older, scheduled for open inguinal hernia repair, were randomized to receive treatment either as day cases or inpatients (Study IV). Complications, unplanned admissions, healthcare visits, and patients’ acceptance of the type of care provided were assessed during 2 weeks postoperatively. In Study I, unplanned overnight admissions were reported in 5.9%, return hospital visits during PODs 1-28 in 3.7%, and readmissions in 0.7% of patients. Patient satisfaction was high. In Study II, pain was the most common symptom in adult patients (57%). Postdischarge symptoms were more frequent in adults aged < 40 years, children aged ≥ 7 years, females, and following a longer duration of surgery. In Study III, the total median (range) oxycodone consumption during the study period was 45 (0–165) mg in the dexamethasone group, compared with 78 (15–175) mg in the placebo group (P < 0.049). On PODs 0-1, patients in the dexamethasone group reported significantly lower pain scores. Following inguinal hernia repair, no significant differences in outcome measures were seen between the study groups. Patient satisfaction was equally high in day cases and inpatients (Study IV). Finnish day surgery units provide good-quality services. Minor postdischarge symptoms are common, and they are influenced by several patient-, surgery-, and anesthesia-related factors. Oral dexamethasone combined with paracetamol improves pain relief and reduces the need for oxycodone rescue medication following correction of hallux valgus. Day surgery for open inguinal hernia repair is safe and well accepted by patients aged 65 years or older and can be recommended as the primary choice of care for medically stable patients.

Ischemic Stroke in Young Adults

Stroke is the second leading cause of death and the leading cause of disability worldwide. Of all strokes, up to 80% to 85% are ischemic, and of these, less than 10% occur in young individuals. Stroke in young adults—most often defined as stroke occurring under the age of 45 or 50—can be particularly devastating due to long expected life-span ahead and marked socio-economic consequences. Current basic knowledge on ischemic stroke in this age group originates mostly from rather small and imprecise patient series. Regarding emergency treatment, systematic data on use of intravenous thrombolysis are absent. For this Thesis project, we collected detailed clinical and radiological data on all consecutive patients aged 15 to 49 with first-ever ischemic stroke between 1994 and 2007 treated at the Helsinki University Central Hospital. The aims of the study were to define demographic characteristics, risk factors, imaging features, etiology, and long-term mortality and its predictors in this patient population. We additionally sought to investigate, whether intravenous thrombolysis is safe and beneficial for the treatment of acute ischemic stroke in the young. Of our 1008 patients, most were males (ratio 1.7:1), who clearly outnumbered females after the age of 44, but females were preponderant among those aged <30. Occurrence increased exponentially. The most frequent risk factors were dyslipidemia (60%), smoking (44%), and hypertension (39%). Risk factors accumulated in males and along aging. Cardioembolism (20%) and cervicocerebral artery dissection (15%) were the most frequent etiologic subgroups, followed by small-vessel disease (14%), and large-artery atherosclerosis (8%). A total of 33% had undetermined etiology. Left hemisphere strokes were more common in general. Posterior circulation infarcts were more common among those aged <45. Multiple brain infarcts were present in 23% of our patients, 13% had silent infarcts, and 5% had leukoaraiosis. Of those with silent brain infarcts, majority (54%) had only a single lesion, and most of the silent strokes were located in basal ganglia (39%) and subcortical regions (21%). In a logistic regression analysis, type 1 diabetes mellitus in particular predicted the presence of both silent brain infarcts (odds ratio 5.78, 95% confidence interval 2.37-14.10) and leukoaraiosis (9.75; 3.39-28.04). We identified 48 young patients with hemispheric ischemic stroke treated with intravenous tissue plasminogen activator, alteplase. For comparisons, we searched 96 untreated control patients matched by age, gender, and admission stroke severity, as well as 96 alteplase-treated older controls aged 50 to 79 matched by gender and stroke severity. Alteplase-treated young patients recovered more often completely (27% versus 10%, P=0.010) or had only mild residual symptoms (40% versus 22%, P=0.025) compared to age-matched controls. None of the alteplase-treated young patients had symptomatic intracerebral hemorrhage or died within 3-month follow-up. Overall long-term mortality was low in our patient population. Cumulative mortality risks were 2.7% (95% confidence interval 1.5-3.9%) at 1 month, 4.7% (3.1-6.3%) at 1 year, and 10.7% (9.9-11.5%) at 5 years. Among the 30-day survivors who died during the 5-year follow-up, more than half died due to vascular causes. Malignancy, heart failure, heavy drinking, preceding infection, type 1 diabetes, increasing age, and large-artery atherosclerosis causing the index stroke independently predicted 5-year mortality when adjusted for age, gender, relevant risk factors, stroke severity, and etiologic subtype. In sum, young adults with ischemic stroke have distinct demographic patterns and they frequently harbor traditional vascular risk factors. Etiology in the young is extremely diverse, but in as many as one-third the exact cause remains unknown. Silent brain infarcts and leukoaraiosis are not uncommon brain imaging findings in these patients and should not be overlooked due to their potential prognostic relevance. Outcomes in young adults with hemispheric ischemic stroke can safely be improved with intravenous thrombolysis. Furthermore, despite their overall low risk of death after ischemic stroke, several easily recognizable factors—of which most are modifiable—predict higher mortality in the long term in young adults.

The supermarket of the future: Directions for Australia

Supermarkets are scrambling to effect change across stores in order to meet the needs of a changing consumer and stay ahead of their competition. If the UK, US and European market is anything to go by, our Australian supermarkets of the future will offer less choice and engagement, but more private labels, greater convenience and solutions.