Health expenditures in the OECD: A political economy analysis using structural breaks

A Masters Thesis, presented as part of the requirements for the award of a Research Masters Degree in Economics from NOVA – School of Business and Economics

Return Migration, Self-Selection and Entrepreneurship in Mozambique

Does return migration affect entrepreneurship? This question has important implications for the debate on the economic development effects of migration for origin countries. The existing literature has, however, not addressed how the estimation of the impact of return migration on entrepreneurship is affected by double unobservable migrant self-selection, both at the initial outward migration and at the final inward return migration stages. This paper uses a representative household survey conducted in Mozambique in order to address this research question. We exploit variation provided by displacement caused by civil war in Mozambique, as well as social unrest and other shocks in migrant destination countries. The results lend support to negative unobservable self-selection at both and each of the initial and return stages of migration, which results in an under-estimation of the effects of return migration on entrepreneurial outcomes when using a ‘naïve’ estimator not controlling for self-selection. Indeed, ‘naïve’ estimates point to a 13 pp increase in the probability of owning a business when there is a return migrant in the household relative to non-migrants only, whereas excluding the double effect of unobservable self-selection, this effect becomes significantly larger - between 24 pp and 29 pp, depending on the method of estimation and source of variation used.

Mechanical characterization of aortas using 2D ultrasound elastography

Rupture of aortic aneurysms (AA) is a major cause of death in the Western world. Currently, clinical decision upon surgical intervention is based on the diameter of the aneurysm. However, this method is not fully adequate. Noninvasive assessment of the elastic properties of the arterial wall can be a better predictor for AA growth and rupture risk. The purpose of this study is to estimate mechanical properties of the aortic wall using in vitro inflation testing and 2D ultrasound (US) elastography, and investigate the performance of the proposed methodology for physiological conditions. Two different inflation experiments were performed on twelve porcine aortas: 1) a static experiment for a large pressure range (0 – 140 mmHg); 2) a dynamic experiment closely mimicking the in vivo hemodynamics at physiological pressures (70 – 130 mmHg). 2D raw radiofrequency (RF) US datasets were acquired for one longitudinal and two cross-sectional imaging planes, for both experiments. The RF-data were manually segmented and a 2D vessel wall displacement tracking algorithm was applied to obtain the aortic diameter–time behavior. The shear modulus G was estimated assuming a Neo-Hookean material model. In addition, an incremental study based on the static data was performed to: 1) investigate the changes in G for increasing mean arterial pressure (MAP), for a certain pressure difference (30, 40, 50 and 60 mmHg); 2) compare the results with those from the dynamic experiment, for the same pressure range. The resulting shear modulus G was 94 ± 16 kPa for the static experiment, which is in agreement with literature. A linear dependency on MAP was found for G, yet the effect of the pressure difference was negligible. The dynamic data revealed a G of 250 ± 20 kPa. For the same pressure range, the incremental shear modulus (Ginc) was 240 ± 39 kPa, which is in agreement with the former. In general, for all experiments, no significant differences in the values of G were found between different image planes. This study shows that 2D US elastography of aortas during inflation testing is feasible under controlled and physiological circumstances. In future studies, the in vivo, dynamic experiment should be repeated for a range of MAPs and pathological vessels should be examined. Furthermore, the use of more complex material models needs to be considered to describe the non-linear behavior of the vascular tissue.

Firms and aggregate dynamics

We investigate the role of permanent and transitory shocks for firms and aggregate dynamics. We find that permanent shocks to productivity and permanent shifts in the composition of output explain at least four-fifths of firms’ dynamics. However, these permanent shocks are almost uncorrelated across firms and are therefore less relevant for aggregate dynamics. Transitory shocks, on the other hand, are not very important at the firm level,but they account for most of the volatility of aggregate hours and output, because they are significantly correlated across firms. Finally, we try to make some progress on the interpretation of the shocks.

Mental health and the crisis: Evidence from share

Mental health constitutes a significant share of the global burden of disease. It is shaped to a great extent by socioeconomic factors and is vulnerable to external shocks. The recent financial crisis brought about stressors prone to trigger and aggravate mental illnesses. This project presents a micro analysis of the effect of the economic crisis on mental health in eleven European countries, through the estimation of individual health production functions accounting for socioeconomic controls and macroeconomic indicators. We find that mental health has deteriorated since 2007, even though the development of depression episodes is unchanged. Additionally, his variation can be partially attributed to economic recession and budgetary cuts in health spending.

Market risk charge of the trading book: a comparison of the Basel II and Basel III

This paper aims to investigate if the market capital charge of the trading book increased in Basel III compared to Basel II. I showed that the capital charge rises by 232% and 182% under the standardized and internal model, respectively. The varying liquidity horizons, the calibration to a stress period, the introduction of credit spread risk, the restrictions on correlations across risk categories and the incremental default charge boost Basel III requirements. Nevertheless, the impact of Expected shortfall at 97.5% is low and long term shocks decrease the charge. The standardized approach presents advantages and disadvantages relative to internal models.

To what extent do aspects of sustainability impact established firms' resilience

An organizations´ level of sustainability has so far been primarily been analyzed within the context of economic performance. This study changes that dependent variable to “resilience”, namely a company’s ability to recover from potential lethal shocks or disruptive events. The research questions aims to investigate whether sustainability and resilience are related. This study utilizes the financial crisis from 2007/08 as disruptive event, as it encompassed market phase-out but also survival by established firms. Two Swiss luxury watchmaking companies have been chosen as industry sample and the study’s investigation is based on a comparative case study approach. The latter applies both quantitative data, in the form of the respective annual company reports, and qualitative data, in the form of semi-structured interviews with three stakeholder groups. Findings indicate that the investigated measures of sustainability are related the investigated companies’ level of resilience. These findings contribute to the building of new theory towards resilience as this study outlines specifically which measures have been proven to be of relevance for companies’ resilience. Moreover, the results are of high relevance for companies that are operating in constant evolving markets and struggling adapting to any disruptive environment as it is outlined why and how comparative companies have to be sustainable in order to become more resilient towards future shocks.

The effect of social and environmental sustainability on firm resilience

Double degree

Basel III new capital requirements, impacts and bank behavior

For some years, researchers could not find a clear effect of capital adequacy on the risk profile of banks, as shareholders could increase the riskiness of the assets (qualitative effect), crowding-out the effect of reduced leverage (volume effect). Some shareholders might have the will to increase the riskiness of the assets, but they may lack the power to do so. Considering only ”powerful” shareholders, definitive conclusions were drawn but with constant ownership profile. In this paper I investigate whether there is a significant change in the type of shareholders in response to regulatory capital shocks and, if so, will the banking system be in the hands of more “desired” shareholders. I find that ownership profile responds to a regulatory shock, changing the risk appetite of the ruling power at the bank. I find more banks and the government in the ownership of undercapitalised banks and much less institutional shareholders and free float. I claim that these new shareholders may not the desired ones, given the objective of the regulatory change, as they are associated with a preference for more leverage. One possible explanation for this crowding-out effect is that regulators are trying to contain idiosyncratic risk (more linked to the riskiness of the assets) with a rule that contains systematic risk (capital adequacy). This has a distorting effect on ownership. Another insight can be drawn from the tests: supervisors should be aware of significant ownership movements that cause the crowding-out.

Fiscal adjustments and sovereign default in different government systems

This paper extends the model of Spolaore (2004) about adjustments in di erent government systems for the context of scal adjustments and sovereign default. We introduce asymmetry between groups in income and preferences towards scal reforms. Default a ects di erently each group and becomes a possibility if reforms are not enacted after public nance solvency shocks, in uencing the political game according to its likelihood. With the extensions, new situations which were not possible with the previous framework arise. After the exposition of the model, the Argentine default in 2001 provides an example of the political con icts addressed by the model.

Drilling deeper: Understanding trade in Angola

The present study analyzes Angola’s trading partners from 2005 to 2015 in order to understand the main drivers of Exports and Imports growth. Departing from a gravity model, foreign GDP growth and real exchange rate fluctuations were interpreted as demand and supply disturbances on Exports. While nominal and real exports both increase with demand expansions, they react differently to supply shocks. Imports are growing at the same rate as Angola’s economy while exchange rate fluctuations capture the wealth effect of Oil price in the economy.

Measuring the effects of price movements on private consumption

This paper studies how shocks in the prices of Food, Energy and Financial Assets affect private consumption using a VAR Model. Then, the total effects are broken into direct and indirect effects, using the coefficients taken from the previous model. We use quarterly data for the Portuguese economy from the last 20 years. We found that energy prices and financial assets have a strong connection with consumption, suggesting that the economy may be too exposed to shocks in these markets.

Deflation and monetary policy: A look into Japan and the Euro Area

With more than two decades of weak economic performance since the bubble burst in the ‘90s, the Japanese deflationary scenario has become the economic fate every developed economy fears to become. As the euro area continues to experience sustained low inflation, studying the Japanese monetary policy may shed light on how to prevent persistent deflation. Using an SVAR methodology to understand the monetary transmission mechanism, we find some evidence that the euro area may possess characteristics that would eventually lead to a deflationary scenario. The extent of whether it would suffer the same Japanese fate would depend on how macroeconomic policies are timely coordinated as a response to its liquidity problem and increasing public debt across member states.

Different doses of exogenous surfactant for treatment of meconium aspiration syndrome in newborn rabbits

OBJECTIVE: To evaluate the effects of 2 different doses of exogenous surfactant on pulmonary mechanics and on the regularity of pulmonary parenchyma inflation in newborn rabbits. METHOD: Newborn rabbits were submitted to tracheostomy and randomized into 4 study groups: the Control group did not receive any material inside the trachea; the MEC group was instilled with meconium, without surfactant treatment; the S100 and S200 groups were instilled with meconium and were treated with 100 and 200 mg/kg of exogenous surfactant (produced by Instituto Butantan) respectively. Animals from the 4 groups were mechanically ventilated during a 25-minute period. Dynamic compliance, ventilatory pressure, tidal volume, and maximum lung volume (P-V curve) were evaluated. Histological analysis was conducted using the mean linear intercept (Lm), and the lung tissue distortion index (SDI) was derived from the standard deviation of the means of the Lm. One-way analysis of variance was used with a = 0.05. RESULTS: After 25 minutes of ventilation, dynamic compliance (mL/cm H2O · kg) was 0.87 ± 0.07 (Control); 0.49 ± 0.04 (MEC*); 0.67 ± 0.06 (S100); and 0.67 ± 0.08 (S200), and ventilatory pressure (cm H2O) was 9.0 ± 0.9 (Control); 16.5 ± 1.7 (MEC*); 12.4 ± 1.1 (S100); and 12.1 ± 1.5 (S200). Both treated groups had lower Lm values and more homogeneity in the lung parenchyma compared to the MEC group: SDI = 7.5 ± 1.9 (Control); 11.3 ± 2.5 (MEC*), 5.8 ± 1.9 (S100); and 6.7 ± 1.7 (S200) (*P < 0.05 versus all the other groups). CONCLUSIONS: Animals treated with surfactant showed significant improvement in pulmonary mechanics and more regularity of the lung parenchyma in comparison to untreated animals. There was no difference in results after treatment with either of the doses used.

Comparative analysis of Spanish Banks’ Standalone credit profile

The paper studies the relationship between four differently rated bank’s financial profile and their standalone credit rating issued by Moody’s. The comparative analysis shows an example that despite their pricing power and geographical coverage, larger banks do not necessarily have better credit ratings. Instead, business model and risk appetite seem to be the defining factors of banks’ vulnerability to shocks, such as the Spanish real estate crisis. The risk-return relationship is also identified in the banks’ fundamentals meaning that while expansionary strategy in riskier asset classes enhances margins, it also potentially distorts the credit risk profile.