Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

Role of surgery in pediatric epilepsy.

Twenty five percent of patients with intractable epilepsy have surgically remediable epilepsy syndromes. This article reviews the treatment paradigm for pediatric epilepsy and also the indications, methods, and surgical options for the subgroup of patients with surgically remediable epileptic disorders based on our experience in the management of these children. The article also discusses the rationale for offering surgery and the timing of surgery in these patients. The study of surgically remediable epilepsy can best be divided into focal, sub hemispheric, hemispheric and multifocal epileptic syndromes. These syndromes have both acquired and congenital etiologies and can be treated by resective or disconnective surgery. The surgical management of these conditions (with the exception of multifocal epilepsy) provides Engel's Class 1 outcome(complete seizure freedom) in approximately 80% of children. The consequences of seizure freedom leads to a marked improvement in the quality of life of these children. The benefits to society, of allowing a child to grow to adulthood with normal cognition to earn a livelihood and contribute actively to society, cannot be understated.

Health education of diabetes as a chronic disease : transmission of information or active appropriation ?

Résumé du poster : Diabetes is both an important chronic disease and a real public health problem. It requires a great control over the body and a great mastery of the tools used in the daily struggle to reach a physiological balance. It is therefore a disease in which health education plays an important role, since patients are expected to reach a certain autonomy in the management of their disease. But how can the patients' autonomy be promoted? This is the question to which this study tried to answer from the perspective of socio-cultural psychology. The study was launched by the Cantonal Diabetes Program Vaud and aimed at evaluating a health education setting located in the east region of the Canton Vaud. It was based on both quantitative and qualitative methodological approaches. The results showed that there is a correlation between the number of hospitalizations and the quality of support provided by this particular health education setting. Moreover, the acquisition of expertise appears to be a distributed and collective process based upon the actors' active participation in various types of activities and involving and extended network. Further research is now required in order to examine how health education might be grasped through the lens of social-cultural psychology.

Pharmacovigilance update [Pharmacovigilance update]

Main pharmacovigilance signals and alerts issued in 2009 are reviewed. Efalizumab was withdrawn from the market due to increased risks, including progressive multifocal leukoencephalopathy (PML) and questionable efficacy. New cases of PML are still being reported with rituximab and natalizumab. Rare cases of pure red cell aplasia have been observed with mycophenate. Gastrointestinal perforation, severe skin rashes and various ocular disorders have been reported during erlotinib use. Severe skin rashes have been related to etravirine. Acute renal failure and pancreatitis can occur with exenatide. A link between sitagliptin and pancreatitis is suspected. Raised concerns of causality between insuline glargine and malignant tumors are not supported by strong evidence. Proton pump inhibitors seem to blunt clopidogrel benefit. Aliskiren can cause angioedema.

Impairment of JCV-specific T-cell response by corticotherapy: Effect on PML-IRIS management?

OBJECTIVE: To investigate the impact of corticosteroids (CS) on the viral-specific T-cell response, in particular the JC virus (JCV)-specific one, in an attempt to determine the optimal timing of CS in the management of progressive multifocal leukoencephalopathy-immune reconstitution inflammatory syndrome (PML-IRIS). METHODS: A blood draw was performed before and 7 days after the administration of IV CS to 24 patients with relapsing multiple sclerosis (MS). The phenotypic pattern of T cells was determined by CCR7 and CD45RA. To assess the impact of CS treatment on proliferative response of JCV-, influenza-, and Epstein-Barr virus (EBV)-specific T cells, a thymidine incorporation proliferation assay was performed. An intracellular cytokine staining assay was performed to determine the effect of CS treatment on the production of cytokine by virus-specific T cells. JCV T-cell assays were performed only in JCV-infected patients with MS as detected by serologies (Stratify) or detection of JCV DNA in the urine by PCR. RESULTS: CS led T cells, CD4+ and CD8+, toward a less differentiated phenotype. There was a significant decrease of EBV-, influenza-, and JCV-specific T-cell proliferative response upon CS treatment. There was a significant decrease in the frequency of interferon (IFN) γ- and tumor necrosis factor (TNF) α-producing JCV-specific CD8+ T cells, but not EBV- or influenza-specific CD4+ or CD8+ T cells. CONCLUSIONS: CS have a profound impact on the virus-specific T-cell response, especially on JCV, suggesting that when CS are considered, they should not be given before the onset of clinical or radiologic signs of IRIS. Studies addressing directly patients with MS with natalizumab-caused PML are warranted. CLASSIFICATION OF EVIDENCE: This study provides Class III evidence that methylprednisolone treatment decreases the frequency of JCV-specific CD8+ T cells producing IFN-γ and TNFα, impairing control of JCV, suggesting this should be used to treat but not to prevent PML-IRIS. No clinical outcomes were measured.

Neuropathies diabétiques: tableaux cliniques, détection précoce et appel au spécialiste [Diabetic neuropathies: clinical sub-types, early detection and asking help from the specialist].

In diabetes mellitus, it is expected to see a common, mainly sensitive, distal symmetrical polyneuropathy (DPN) involving a large proportion of diabetic patients according to known risk factors. Several other diabetic peripheral neuropathies are recognized, such as dysautonomia and multifocal neuropathies including lumbosacral radiculoplexus and oculomotor palsies. In this review, general aspects of diabetic neuropathies are examined, and it is discussed why and how the general practionner has to perform a yearly examination. At the present time, some consensuses emerge to ask help from the specialist when faced to other forms of peripheral neuropathies than distal symmetrical DPN.

Notes for a new guide to Keynes (I): Wages, aggregate demand, and employment

I revisit the General Theory's discussion of the role of wages inemployment determination through the lens of the New Keynesianmodel. The analysis points to the key role played by the monetarypolicy rule in shaping the link between wages and employment, andin determining the welfare impact of enhanced wage flexibility. I showthat the latter is not always welfare improving.

Natalizumab treatment alters the expression of T-cell trafficking marker LFA-1 α-chain (CD11a) in MS patients.

OBJECTIVE: To determine the long-term effect of natalizumab (NTZ) treatment on the expression of integrins and chemokine receptors involved in the migration of T cells towards the central nervous system (CNS). METHODS: We drew the blood of 23 patients just before starting NTZ therapy and every 12 months thereafter, for up to 48 months of treatment. We assessed the ex-vivo expression of phenotype markers (CCR7 and CD45RA), CNS-addressing integrins (CD11a, CD49d and CD29) and chemokine receptors (CXCR3 and CCR6) in CD4+ or CD8+ T-cell subsets by flow cytometry. RESULTS: As compared to the pre-NTZ values, there was a marked increase in central memory (CCR7+/CD45RA-) CD4+ T cells and in effector memory (CCR7-/CD45RA-) CD8+ T cells at 12 and 24 months. In addition to an expected downregulation of both VLA-4 subunits (CD49d/CD29), we also found decreased T-cell expression of CXCR3 at 12 months, and of CD11a (LFA-1 αL subunit) at 12 months, but mostly at 24 months of NTZ treatment. CONCLUSION: Our data show a nadir of CD11a expression at 2 years of NTZ treatment, at the peak of incidence of progressive multifocal leukoencephalopathy (PML), indirectly suggesting that a lack of these molecules may play a role in the onset of PML in NTZ-treated patients.

Late Onset Cystoid Macular Oedema Following Surgery for Radiation Induced Cataract in Patient With Retinoblastoma

Purpose: Cystoid macular oedema (CMO) is a very rare condition following cataract surgery in paediatric population. Nevertheless, we report a case series of patients with radiation induced cataract after retinoblastoma (Rb) treatment that underwent cataract surgery and developed subsequently late onset CMO. Methods: Between January 1984 and December 2009, 25 consecutive eyes (25 patients) with Rb presented with radiation induced cataract surgery at the Jules Gonin Eye Hospital. Sixteen eyes (16 patients) had prior radiation induced retinopathy and maculopathy (IRM). Out of these, 3 eyes (3 patients) developed CMO after cataract surgery. Results: One eye had Rb stage B, and 2 eyes had stage D International classification. All of them developed IRM following brachytherapy and/or external beam irradiation. Patients underwent phako-aspiration and in bag intraocular lens implantation after IRM had resolved. Mean age at cataract surgery was 10.7 ± 2.8 (SEM) (range 5-14) years old. Mean time between resolution of IRM and cataract surgery was 76.0 ± 27.2 (SEM) (range 24-116) months. Mean time of onset CMO after cataract surgery was 81.0 ± 34.4 (SEM) (range 13-124) months. There was no other underlying vascular or tractional factor for CMO development. All of them were treated with a combination of oral carbonic anhydrase inhibitor, topical steroid and topical non-steroid. Mean macular thickness pre-, during-, and post CMO were 134.0 ± 10.3, 298.0 ± 37.1, and 154.0 ± 4.0 (SEM) µm, respectively. Mean best corrected visual acuity pre-, during-, and post CMO were 0.31 ± 0.19, 0.46 ± 0.12, and 0.34 ± 0.18 (SEM) LogMAR, respectively. Mean time for CMO reabsorption was 17.0 ± 9.8 (SEM) months. Conclusions: To the best of our knowledge, CMO following paediatric cataract surgery is a very uncommon condition. Moreover, late onset CMO after phako-aspiration for radiation induced cataract in Rb patients has never been described. It is a rare complication but can be treated successfully.

Décollement de rétine rhegmatogène et hypertonie: penser au syndrome de Schwartz-Matsuo [Rhegmatogenous retinal detachment and hypertension: Schwartz-Matsuo syndrome]

PURPOSE: To assess the usefulness of electron microscopy of the aqueous cells when confronted with the clinical association of rhegmatogenous retinal detachment after trauma, high intraocular pressure (IOP) and aqueous cells. METHOD: We report a clinical history of a 50-years-old man who had ocular trauma with perforation in 1944, intraocular lens for traumatic cataract in 1988, Yag capsulotomy in 1993 and retinal detachment with oral dialysis, high IOP and aqueous cells in anterior chamber in 1995. During the surgical therapy we performed an anterior chamber puncture to analyse the aqueous cells. An electron microscopic study was performed on 0.2 ml of aqueous humor mixed in the same volume of 2.5% glutaraldehyde and fixed with 1% osmium acid. RESULTS: Electron microscopic ultrastructural study of the aqueous cells showed numerous photoreceptor outer segments, some of them appearing degenerated. CONCLUSION: The combination of rhegmatogenous retinal detachment with tears near the ora serrata, high IOP and aqueous cells in the anterior chamber should lead the physician to do an anterior chamber puncture and analyse the aqueous cells structure. The combination of those three clinical signs associated with the photoreceptor outer segments in the anterior chamber allowed to diagnose the Schwartz-Matsuo syndrome.

On heuristic and linear models of judgment: Mapping the demand for knowledge

Research on judgment and decision making presents a confusing picture of human abilities. For example, much research has emphasized the dysfunctional aspects of judgmental heuristics, and yet, other findings suggest that these can be highly effective. A further line of research has modeled judgment as resulting from as if linear models. This paper illuminates the distinctions in these approaches by providing a common analytical framework based on the central theoretical premise that understanding human performance requires specifying how characteristics of the decision rules people use interact with the demands of the tasks they face. Our work synthesizes the analytical tools of lens model research with novel methodology developed to specify the effectiveness of heuristics in different environments and allows direct comparisons between the different approaches. We illustrate with both theoretical analyses and simulations. We further link our results to the empirical literature by a meta-analysis of lens model studies and estimate both human andheuristic performance in the same tasks. Our results highlight the trade-off betweenlinear models and heuristics. Whereas the former are cognitively demanding, the latterare simple to use. However, they require knowledge and thus maps of when andwhich heuristic to employ.

Granulomatous uveitis and congenital cataract: a rare association.

INTRODUCTION: The association of a granulomatous uveitis and congenital cataract and is rarely observed in newborn children. We describe the history of two patients presenting simultaneously with these two features in the absence of a TORCH infection. PATIENTS AND METHODS: The first patient, a boy born in 1997, presented to our hospital two days after birth with multiples Koeppe's and Busacca's nodules and bilateral cataract. The second patient, a boy born in 2006, was referred two weeks after birth. He presented with a severe unilateral granulomatous uveitis, multiples iris nodules, a high intraocular pressure of 45 mmHg and a congenital cataract. THERAPY AND OUTCOME: Lens extraction produced a rapid resolution of uveitis in these two patients. TORCH infection was ruled out in both children by history, extensive serologies performed simultaneously in mother and child or PCR of ocular fluids. CONCLUSIONS: A congenital cataract associated with a granulomatous uveitis is an extremely rare association. The removal of the lens resulted in complete resolution of the inflammation: a phacogenic mechanism could be at the origin of ocular inflammation in both cases.

The zebrafish is an animal model in ophthalmic diseases : Fleck corneal dystrophy and Schorderet-Munier syndrome

RAPPORT DE SYNTHÈSE : Pip5k3 : Pip5k3 is a kinase responsible for fleck corneal dystrophy when mutated. It is a well conserved gene that has only been characterized in human and mouse. Characterization of pip5k3 in zebrafish was necessary before using it as a model. The protein is 70 % similar to the human homologue. The full coding sequence encompasses 6303 by and presented four isoforms. They were differentially expressed during development. All the analyzed organs of the adult zebrafish expressed pip5k3. The adult eye expressed pip5k3 in the cornea, lens, ganglion cell layer (GCL), inner nuclear layer (INL) and outer limiting membrane (OLM). During development, pip5k3 was first uniformly expressed before to be restricted to the head region and to the somites. The expression of pip5k3 in the cornea of the larval eye could make possible the study of fleck corneal dystrophy on this animal. NkxS-3 : NKXS-3 is a transcription factor responsible for a new oculo-auricular syndrome in human when mutated. This recessive disorder is characterized by defects in ear lobule and multiple defects in eye, including microphthalmia and cataract. During development, the zebrafish expressed nkx5-3 in the lens, in the anterior retina and in otic vesicles. Knockdown experiments partially phenocopied the human disease. Microphthalmia and cataract were reproduced, but zebrafish showed also defects in the cartilage of the jaw associated with a microcephaly and fins abnormalities. The retinal cell differentiation was delayed, possibly linked with the delayed expression of at`h5 and crx also observed in morphants. Shh, a regulator of ath5, was normally expressed in morphant. Overexpression of nkx5-3 lead to an anophthalmia, suggesting a role at the early organogenesis of the eye. All the phenotypes observed in morphants and embryos overexpressing nkx5-3 suggest a potential involvement of the FGF and hedgehog signaling pathways.

Maladies auto-immunes neuromusculaires: diagnostic et prise en charge [Dysimmune neuromuscular disorders: diagnostic challenges and new ways of management].

This review describes some dysimmune neuromuscular disorders and their recent management: syndrome of peripheral nerve hyperexcitability (treatment of cramps, immunosuppressors); Guillain-Barré syndrome (new mechanisms and consensus treatment); chronic inflammatory demyelinating polyradiculoneuropathy (new indication for the use of pulse dexamethasone, new scores of activity); importance of subcutaneous immunoglobulin in multifocal motor neuropathy and of infusions of rituximab in myasthenia gravis; new entities in myositis and their treatment.