Monetary policy strategies, financial institutions and financial markets in the Middle East and North Africa: an overview

Three polar types of monetary architecture are identified together with the institutional and market infrastructure required for each type and the kinds of monetary policy feasible in each case: a ‘basic’ architecture where there is little or no financial system as such but an elementary central bank which is able to fix the exchange rate, as a substitute for a proper monetary policy; a ‘modern’ monetary architecture with developed banks, financial markets and central bank where policy choices include types of inflation targeting; and an ‘intermediate’ monetary architecture where less market-based monetary policies involving less discretion are feasible. A range of data is used to locate the various MENA countries with respect to these polar types. Five countries (Iran, Libya, Sudan, Syria and Yemen) are identified as those with the least developed monetary architecture, while Bahrain and Jordan are identified as the group at the other end of the spectrum, reaching beyond the intermediate polar type in some dimensions but not others. The countries in between vary on different dimensions but all lie between basic and intermediate architectures. The key general findings are that the MENA countries are both less differentiated and less ‘developed’ than might have been expected. The paper ends by calling for research on the costs and benefits of different types of monetary architecture.

Policy initiatives and firms’ access to external finance: Evidence from a panel of emerging Asian economies

This paper analyses the impact of policy initiatives co-ordinated by Asian national governments on firms' access to external finance, using a unique firm-level database of eight Asian countries- Hong Kong SAR, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand over the period of 1996-2012. Using a difference-indifferences approach and controlling for firm-level and macroeconomic factors, the results show a significant impact of policy on firms' access to external finance. After splitting firms into constrained and unconstrained, using several criteria, the results document that unconstrained firms benefited significantly in obtaining external finance, compared to their constrained counterparts. Finally, we show that the increase in access to external finance after the policy initiative helped firms to raise their investment spending, especially for unconstrained firms.

Co-Movement, Spillovers and Excess Returns in Global Bond Markets

This paper investigates global term structure dynamics using a Bayesian hierarchical factor model augmented with macroeconomic fundamentals. More than half of the variation in bond yields of seven advanced economies is due to global co-movement, which is mainly attributed to shocks to non-fundamentals. Global fundamentals, especially global inflation, affect yields through a ‘policy channel’ and a ‘risk compensation channel’, but the effects through two channels are offset. This evidence explains the unsatisfactory performance of fundamentals-driven term structure models. Our approach delineates asymmetric spillovers in global bond markets connected to diverging monetary policies. The proposed model is robust as identified factors has significant explanatory power of excess returns. The finding that global inflation uncertainty is useful in explaining realized excess returns does not rule out regime changing as a source of non-fundamental fluctuations.

Fractional Integration of the Price-Dividend Ratio in a Present-Value Model of Stock Prices

We re-examine the dynamics of returns and dividend growth within the present-value framework of stock prices. We find that the finite sample order of integration of returns is approximately equal to the order of integration of the first-differenced price-dividend ratio. As such, the traditional return forecasting regressions based on the price-dividend ratio are invalid. Moreover, the nonstationary long memory behaviour of the price-dividend ratio induces antipersistence in returns. This suggests that expected returns should be modelled as an AFIRMA process and we show this improves the forecast ability of the present-value model in-sample and out-of-sample.

Multilayer perceptron with local constraint as an emerging method in spatial data analysis

The use of Geographic Information Systems has revolutionalized the handling and the visualization of geo-referenced data and has underlined the critic role of spatial analysis. The usual tools for such a purpose are geostatistics which are widely used in Earth science. Geostatistics are based upon several hypothesis which are not always verified in practice. On the other hand, Artificial Neural Network (ANN) a priori can be used without special assumptions and are known to be flexible. This paper proposes to discuss the application of ANN in the case of the interpolation of a geo-referenced variable.

Markets and linguistic diversity

The choice of language is a crucial decision for firms competing in cultural goods and media markets with a bilingual or multilingual consumer base. To the extent that multilingual consumers have preferences over the intrinsic characteristics (content) as well as over the language of the product, we can examine the efficiency of market outcomes regarding linguistic diversity. In this paper, I extend the spokes model and introduce language as an additional dimension of product differentiation. I show that: (i) if firms supply their product in a single language (the adoption model) then the degree of linguistic diversity is inefficiently low, and (ii) if some firms supply more than one linguistic version (the translation model) then in principle the market outcome may exhibit insufficient or excessive linguistic diversity. However, excessive diversity is associated to markets where the fraction of products in the minority language is disproportionately high with respect to the relative size of the linguistic minority.

The ‘Dragon’ and the ‘Elephant’ and Global Imbalances

Global financial imbalances receive a great deal of attention in relation to the emerging economies China and India. This chapter analyzes this relation, but argues first that they are actually re-balancing the existing structural inequality in the world economy, in which for so long only the Western economies and Japan dominated economic growth and international trade, moving towards a more multi-polar world economy. China in particular, with its rapid export-led growth, has indeed been part and parcel of the emerging financial imbalances, feeding the ‘over-consumption’ in the US and using its accumulating international reserves in buying US-treasury bonds. Finance therefore is moving to the economy that ‘least needs it’. This imbalance can only be redressed if the US (and some of the other OECD countries) start saving more and consuming less (and become more competitive), with China further stimulating domestic demand (which it already did in response to the crisis). China and to a lesser extend India, as emerging large economies and a more important roles in global markets, also contribute to new imbalances, such as the influence of the insatiable appetite for resources (carbon-hydrates, minerals and bio-mass) of these relatively energy-inefficient economies, while at the same time attracting an increasing share of FDI towards them. The chapter finally raises the issue that these three mentioned imbalances make it more difficult for developing countries (except for those who are resource-rich) to get access to the necessary development finance.

Emerging roles of non-coding RNAs in pancreatic β-cell function and dysfunction.

Pancreatic β-cells play a central role in glucose homeostasis by tightly regulating insulin release according to the organism's demand. Impairment of β-cell function due to hostile environment, such as hyperglycaemia and hyperlipidaemia, or due to autoimmune destruction of β-cells, results in diabetes onset. Both environmental factors and genetic predisposition are known to be involved in the development of the disease, but the exact mechanisms leading to β-cell dysfunction and death remain to be characterized. Non-coding RNA molecules, such as microRNAs (miRNAs), have been suggested to be necessary for proper β-cell development and function. The present review aims at summarizing the most recent findings about the role of non-coding RNAs in the control of β-cell functions and their involvement in diabetes. We will also provide a perspective view of the future research directions in the field of non-coding RNAs. In particular, we will discuss the implications for diabetes research of the discovery of a new communication mechanism based on cell-to-cell miRNA transfer. Moreover, we will highlight the emerging interconnections between miRNAs and epigenetics and the possible role of long non-coding RNAs in the control of β-cell activities.

Manipulability in matching markets: conflict and coincidence of interests

We study comparative statics of manipulations by women in the men-proposing deferred acceptance mechanism in the two-sided one-to-one marriage market. We prove that if a group of women employs truncation strategies or weakly successfully manipulates, then all other women weakly benefit and all men are weakly harmed. We show that our results do not appropriately generalize to the many-to-one college admissions model.

New and emerging treatment of Staphylococcus aureus infections in the hospital setting.

Methicillin-resistant Staphylococcus aureus (MRSA), both hospital-acquired and community-acquired, is a dangerous pathogen that is involved in an increasing number of serious infections with high risk for morbidity and mortality. Community-acquired MRSA strains have epidemic potential and can be particularly virulent. Vancomycin has been the standard hospital treatment for the past 40 years, but vancomycin-resistant isolates of S. aureus have emerged in the USA, and vancomycin-intermediate isolates are increasingly being reported worldwide. New antimicrobial agents with activity against multidrug-resistant S. aureus and other resistant pathogens are urgently needed. Despite great strides, further advances in our understanding of the molecular and biochemical mechanisms responsible for antimicrobial resistance are still required. Several agents have been recently approved for the treatment of serious Gram-positive infections, including linezolid, daptomycin, and tigecycline. The novel investigational cephalosporin, ceftobiprole, is one of the first penicillinase-resistant agents to target penicillin-binding protein 2a (or PBP2a), an acquired PBP with low beta-lactam-affinity that confers intrinsic beta-lactam resistance to S. aureus and other staphylococci. This mechanism of PBP binding, including inhibition of PBP2a, confers broad-spectrum activity against clinically important Gram-negative and Gram-positive pathogens, including MRSA. Phase III clinical trials comparing ceftobiprole with vancomycin alone and in combination with ceftazidime for the treatment of complicated skin and skin structure infections showed ceftobiprole to have efficacy similar to the efficacy of these comparators as evidenced by non-inferior clinical cure and microbiological eradication rates.