Monetary policy in a systemic crisis

This paper examines the monetary policy followed during the current financial crisisfrom the perspective of the theory of the lender of last resort. It is argued that standardmonetary policy measures would have failed because the channels through whichmonetary policy is implemented depend upon the well functioning of the interbankmarket. As the crisis developed, liquidity vanished and the interbank market collapsed,central banks had to inject much more liquidity at low interest rates than predicted bystandard monetary policy models. At the same time, as the interbank market did notallow for the redistribution of liquidity among banks, central banks had to design newchannels for liquidity injection.

Monetary policy shocks and transmission in Italy: A VAR analysis

This paper provides updated empirical evidence about the real and nominal effects of monetary policy in Italy, by using structural VAR analysis. We discuss different empirical approaches that have been used in order to identify monetary policy exogenous shocks. We argue that the data support the view that the Bank of Italy, at least in the recent past, has been targeting the rate on overnight interbank loans. Therefore, we interpret shocks to the overnight rate as purely exogenous monetary policy shocks and study how different macroeconomic variables react to such shocks.

Economic booms, trade deficits and economic policy

Many economic booms have been accompanied by realexchange rate appreciations, large trade defcits -whichhave sometimes persisted after the return to the initialexchange rate parity- and a deteriorating traded sector.Those circumstances have typically raised the questionof the de-sirability of some stabilization policy. We show that the dynamics induced by an expectedproductivity shock in an economy where the capital stockis non-mobile across sectors, match those circumstances.Furthermore, we obtain that credit market imperfectionstend to exacerbate trade deficits, and to cause aninefficient capacity reduction in the traded sector.Some stabilization policies are explored.

Should banking supervision and monetary policy tasks be given to different agencies?

This paper adds some new arguments to the thesis that the responsibility forbanking supervision should be assigned to an agency formally separated bythe Central bank. We also provide some additional evidence on the macroand microeconomic performance of OECD countries whose banking systems areclassified according to the regulatory regime in place. We find that theinflation rate is considerably higher and more volatile in countries wherethe Central bank acts as a monopolist in banking supervision. Besides,although banks seem to be more profitable when Central banks supervise them,they incur into higher costs and rely more on deposits with respect to moresophisticated liabilities as a funding source.The data are not definitively in favor of functional separation. However, we argue that the evolution of financial intermediaries, moral hazard problems and especially cost accountability seem to suggest that separation would be a better solution for industrialized countries.We also critically discuss the current arrangement of financial regulationand supervision in the EMU: our proposal is to establish an independentEuropean System of Financial Supervisors (ESFS) structured similarly to theESCB.

A zero-delay sequential scheme for lossy coding of individual sequences

We consider adaptive sequential lossy coding of bounded individual sequences when the performance is measured by the sequentially accumulated mean squared distortion. Theencoder and the decoder are connected via a noiseless channel of capacity $R$ and both are assumed to have zero delay. No probabilistic assumptions are made on how the sequence to be encoded is generated. For any bounded sequence of length $n$, the distortion redundancy is defined as the normalized cumulative distortion of the sequential scheme minus the normalized cumulative distortion of the best scalarquantizer of rate $R$ which is matched to this particular sequence. We demonstrate the existence of a zero-delay sequential scheme which uses common randomization in the encoder and the decoder such that the normalized maximum distortion redundancy converges to zero at a rate $n^{-1/5}\log n$ as the length of the encoded sequence $n$ increases without bound.

Increasing lactate turnover rate during exercise by means of altitude training and fructose ingestion : effects on substrate metabolism and endurance performance

Summary : With regard to exercise metabolism, lactate was long considered as a dead-end waste product responsible for muscle fatigue and a limiting factor for motor performance. However, a large body of evidence clearly indicates that lactate is an energy efficient metabolite able to link the glycolytic pathway with aerobic metabolism and has endocrine-like actions, rather than to be a dead-end waste product. Lactate metabolism is also known to be quickly upregulated by regular endurance training and is thought to be related to exercise performance. However, to what extent its modulation can increase exercise performance in already endurance-trained subjects is unknown. The general hypothesis of this work was therefore that increasing either lactate metabolic clearance rate or lactate availability could, in turn, increase endurance performance. The first study (Study I) aimed at increasing the lactate clearance rate by means of assumed interaction effects of endurance training and hypoxia on lactate metabolism and endurance performance. Although this study did not demonstrate any interaction of training and hypoxia on both lactate metabolism and endurance performance, a significant deleterious effect of endurance training in hypoxia was shown on glucose homeostasis. The methods used to determine lactate kinetics during exercise exhibited some limitations, and the second study did delineate some of the issues raised (Study 2). The third study (Study 3) investigated the metabolic and performance effects of increasing plasma lactate production and availability during prolonged exercise in the fed state. A nutritional intervention was used for this purpose: part of glucose feedings ingested during the control condition was substituted by fructose. The results of this study showed a significant increase of lactate turnover rate, quantified the metabolic fate of fructose; and demonstrated a significant decrease of lipid oxidation and glycogen breakdown. In contrast, endurance performance appeared to be unmodified by this dietary intervention, being at odds with recent reports. Altogether the results of this thesis suggest that in endurance athletes the relationship between endurance performance and lactate turnover rate remains unclear. Nonetheless, the result of the present study raises questions and opens perspectives on the rationale of using hypoxia as a therapeutic aid for the treatment of insulin resistance. Moreover, the results of the second study open perspectives on the role of lactate as an intermediate metabolite and its modulatory effects on substrate metabolism during exercise. Additionally it is suggested that the simple nutritional intervention used in the third study can be of interest in the investigation on the aforementioned roles of lactate. Résumé : Lorsque le lactate est évoqué en rapport avec l'exercice, il est souvent considéré comme un déchet métabolique responsable de l'acidose métabolique, de la fatigue musculaire ou encore comme un facteur limitant de la performance. Or la littérature montre clairement que le lactate se révèle être plutôt un métabolite utilisé efficacement par de nombreux tissus par les voies oxydatives et, ainsi, il peut être considéré comme un lien entre le métabolisme glycolytique et le métabolisme oxydatif. De plus on lui prête des propriétés endocrines. Il est connu que l'entraînement d'endurance accroît rapidement le métabolisme du lactate, et il est suggéré que la performance d'endurance est liée à son métabolisme. Toutefois la relation entre le taux de renouvellement du lactate et la performance d'endurance est peu claire, et, de même, de quelle manière la modulation de son métabolisme peut influencer cette dernière. Le but de cette thèse était en conséquence d'investiguer de quelle manière et à quel degré l'augmentation du métabolisme du lactate, par l'augmentation de sa clearance et de son turnover, pouvait à son tour améliorer la performance d'endurance de sujets entraînés. L'objectif de la première étude a été d'augmenter la clearance du lactate par le biais d'un entraînement en conditions hypoxiques chez des cyclistes d'endurance. Basé sur la littérature scientifique existante, on a fait l'hypothèse que l'entraînement d'endurance et l'hypoxie exerceraient un effet synergétique sur le métabolisme du lactate et sur la performance, ce qui permettrait de montrer des relations entre performance et métabolisme du lactate. Les résultats de cette étude n'ont montré aucun effet synergique sur la performance ou le métabolisme du lactate. Toutefois, un effet délétère sur le métabolisme du glucose a été démontré. Quelques limitations de la méthode employée pour la mesure du métabolisme du lactate ont été soulevées, et partiellement résolues dans la seconde étude de ce travail, qui avait pour but d'évaluer la sensibilité du modèle pharmacodynamique utilisé pour le calcul du turnover du lactate. La troisième étude a investigué l'effet d'une augmentation de la lactatémie sur le métabolisme des substrats et sur la performance par une intervention nutritionnelle substituant une partie de glucose ingéré pendant l'exercice par du fructose. Les résultats montrent que les composants dynamiques du métabolisme du lactate sont significativement augmentés en présence de fructose, et que les oxydations de graisse et de glycogène sont significativement diminuées. Toutefois aucun effet sur la performance n'a été démontré. Les résultats de ces études montrent que la relation entre le métabolisme du lactate et la performance reste peu claire. Les résultats délétères de la première étude laissent envisager des pistes de travail, étant donné que l'entraînement en hypoxie est considéré comme outil thérapeutique dans le traitement de pathologies liées à la résistance à l'insuline. De plus les résultats de la troisième étude ouvrent des perspectives de travail quant au rôle du lactate comme intermédiaire métabolique durant l'exercice ainsi que sur ses effets directs sur le métabolisme. Ils suggèrent de plus que la manipulation nutritionnelle simple qui a été utilisée se révèle être un outil prometteur dans l'étude des rôles et effets métaboliques que peut revêtir le lactate durant l'exercice.

Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth

Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth

Deciding the sale of a life policy in the viatical market: Implications on individual welfare

[cat] En aquest article, es presenta un model econòmic que permet determinar la venda o no d'una pòlissa de vida (total o en part) per part d'un assegurat malalt terminal en el mercat dels viatical settlements. Aquest mercat va aparèixer a finals de la dècada dels 80 a conseqüència de l'epidèmia de la SIDA. Actualment, representa una part del mercat dels life settlements. Les pòlisses que es comercialitzen en el mercat dels viaticals són aquelles on l'assegurat és malalt terminal amb una esperança de vida de dos anys o menys. El model és discret i considera només dos períodes (anys), ja que aquesta és la vida residual màxima que contempla el mercat. L'agent posseix una riquesa inicial que ha de repartir entre consum i herència. S'introdueix en primer lloc la funció d'utilitat esperada del decisor i, utilitzant programació dinàmica, es dedueix l'estratègia que reporta una utilitat més gran (no vendre/vendre (en part) la pòlissa en el moment zero/vendre (en part) la pòlissa en el moment ú). L'òptim depèn del preu de la pòlissa venuda i de paràmetres personals de l'individu. Es troba una expressió analítica per l'estratègia òptima i es realitza un anàlisi de sensibilitat.

Optimal fiscal policy in overlapping generations models

[eng] This paper provides, from a theoretical and quantitative point of view, an explanation of why taxes on capital returns are high (around 35%) by analyzing the optimal fiscal policy in an economy with intergenerational redistribution. For this purpose, the government is modeled explicitly and can choose (and commit to) an optimal tax policy in order to maximize society's welfare. In an infinitely lived economy with heterogeneous agents, the long run optimal capital tax is zero. If heterogeneity is due to the existence of overlapping generations, this result in general is no longer true. I provide sufficient conditions for zero capital and labor taxes, and show that a general class of preferences, commonly used on the macro and public finance literature, violate these conditions. For a version of the model, calibrated to the US economy, the main results are: first, if the government is restricted to a set of instruments, the observed fiscal policy cannot be disregarded as sub optimal and capital taxes are positive and quantitatively relevant. Second, if the government can use age specific taxes for each generation, then the age profile capital tax pattern implies subsidizing asset returns of the younger generations and taxing at higher rates the asset returns of the older ones.

An eclectic third generation model of financial and exchange rate crises

[cat] En aquest treball es presenta un model eclèctic que sistematitza la dinàmica de les crisis que s’autoconfimen, usant els principals aspectes de les tres tipologies dels models de crisis canviàries de tercera generació, amb la finalitat de descriure els fets que precipiten la renúncia al manteniment d’una paritat fixada. Les contribucions més notables són les implicacions per a la política econòmica, així com la pèrdua del paper del tipus de canvi com instrument d’ajust macroeconòmic, quan els efectes de balanç són una possibilitat real.

Prices of medicines: a case-study on the impact of the rate-of-return regulation in the United Kingdom

This work carries out an empirical evaluation of the impact of the main mechanism for regulating the prices of medicines in the UK on a variety ofpharmaceutical price indices. The empirical evidence shows that the overall impact of the rate of return cap appears to have been slight or even null, and in any case that the impact would differ across therapeutic areas. These empiricalfindings suggest that the price regulation has managed to encourage UK-based firms¿ diversification in many therapeutic areas

Policy Environment and Public Service Motivation

This article analyzes whether and to what extent the policy environment of civil servants has an impact on their level of Public Service Motivation (PSM). It hypothesizes that public employees working in different policy domains and stages of the policy cycle are diversely motivated by four PSM orientations (Compassion, Commitment to the public interest, Self-sacrifice and Attraction to politics). The empirical results are based on a survey of 6885 Swiss civil servants. They show that those in charge of Welfare State policies are inclined to have higher levels of 'Compassion', whereas those performing core state functions report lower levels. Furthermore, employees whose main tasks are related to policy formulation display high levels of the 'Attraction to politics' dimension of PSM. This study questions the generalization of previous findings on PSM that are based on heterogeneous survey populations.

Deciding the sale of a life policy in the viatical market: Implications on individual welfare

[cat] En aquest article, es presenta un model econòmic que permet determinar la venda o no d'una pòlissa de vida (total o en part) per part d'un assegurat malalt terminal en el mercat dels viatical settlements. Aquest mercat va aparèixer a finals de la dècada dels 80 a conseqüència de l'epidèmia de la SIDA. Actualment, representa una part del mercat dels life settlements. Les pòlisses que es comercialitzen en el mercat dels viaticals són aquelles on l'assegurat és malalt terminal amb una esperança de vida de dos anys o menys. El model és discret i considera només dos períodes (anys), ja que aquesta és la vida residual màxima que contempla el mercat. L'agent posseix una riquesa inicial que ha de repartir entre consum i herència. S'introdueix en primer lloc la funció d'utilitat esperada del decisor i, utilitzant programació dinàmica, es dedueix l'estratègia que reporta una utilitat més gran (no vendre/vendre (en part) la pòlissa en el moment zero/vendre (en part) la pòlissa en el moment ú). L'òptim depèn del preu de la pòlissa venuda i de paràmetres personals de l'individu. Es troba una expressió analítica per l'estratègia òptima i es realitza un anàlisi de sensibilitat.

An eclectic third generation model of financial and exchange rate crises

[cat] En aquest treball es presenta un model eclèctic que sistematitza la dinàmica de les crisis que s’autoconfimen, usant els principals aspectes de les tres tipologies dels models de crisis canviàries de tercera generació, amb la finalitat de descriure els fets que precipiten la renúncia al manteniment d’una paritat fixada. Les contribucions més notables són les implicacions per a la política econòmica, així com la pèrdua del paper del tipus de canvi com instrument d’ajust macroeconòmic, quan els efectes de balanç són una possibilitat real.