Learning from Shocks and the Decision to Open

Two claims pervade the literature on the political economy of market reforms: that economic crises cause reforms; and that crises matter because they bring into question the validity of the economic model held to be responsible for them. Economic crises are said to spur a process of learning that is conducive to the abandonment of failing models and to the adoption of successful models. But although these claims have become the conventional wisdom, they have been hardly tested empirically due to the lack of agreement on what constitutes a crisis and to difficulties in measuring learning from them. I propose a model of rational learning from experience and apply it to the decision to open the economy. Using data from 1964 through 1990, I show that learning from the 1982 debt crisis was relevant to the first wave of adoption of an export promotion strategy, but learning was conditional on the high variability of economic outcomes in countries that opened up to trade. Learning was also symbolic in that the sheer number of other countries that liberalized was a more important driver of others��� decisions to follow suit.

Multi-Scale Integrated Analysis of Societal and Ecosystem Metabolism (MUSIASEM): an outline of rationale and theory

This paper presents an outline of rationale and theory of the MuSIASEM scheme (Multi-Scale Integrated Analysis of Societal and Ecosystem Metabolism). First, three points of the rationale behind our MuSIASEM scheme are discussed: (i) endosomatic and exosomatic metabolism in relation to Georgescu-Roegen���s flow-fund scheme; (2) the bioeconomic analogy of hypercycle and dissipative parts in ecosystems; (3) the dramatic reallocation of human time and land use patterns in various sectors of modern economy. Next, a flow-fund representation of the MUSIASEM scheme on three levels (the whole national level, the paid work sectors level, and the agricultural sector level) is illustrated to look at the structure of the human economy in relation to two primary factors: (i) human time - a fund; and (ii) exosomatic energy - a flow. The three levels representation uses extensive and intensive variables simultaneously. Key conceptual tools of the MuSIASEM scheme - mosaic effects and impredicative loop analysis - are explained using the three level flow-fund representation. Finally, we claim that the MuSIASEM scheme can be seen as a multi-purpose grammar useful to deal with sustainability issues.

Improving the risk concept: a revision of Arrow-Pratt theory in the context of controlled dynamic stochastic environments

In the literature on risk, one generally assume that uncertainty is uniformly distributed over the entire working horizon, when the absolute risk-aversion index is negative and constant. From this perspective, the risk is totally exogenous, and thus independent of endogenous risks. The classic procedure is "myopic" with regard to potential changes in the future behavior of the agent due to inherent random fluctuations of the system. The agent's attitude to risk is rigid. Although often criticized, the most widely used hypothesis for the analysis of economic behavior is risk-neutrality. This borderline case must be envisaged with prudence in a dynamic stochastic context. The traditional measures of risk-aversion are generally too weak for making comparisons between risky situations, given the dynamic ������complexity of the environment. This can be highlighted in concrete problems in finance and insurance, context for which the Arrow-Pratt measures (in the small) give ambiguous.

In Search of a theory of debt management

A growing literature integrates theories of debt management into models of optimal fiscal policy. One promising theory argues that the composition of government debt should be chosen so that fluctuations in the market value of debt offset changes in expected future deficits. This complete market approach to debt management is valid even when the government only issues non-contingent bonds. A number of authors conclude from this approach that governments should issue long term debt and invest in short term assets. We argue that the conclusions of this approach are too fragile to serve as a basis for policy recommendations. This is because bonds at different maturities have highly correlated returns, causing the determination of the optimal portfolio to be ill-conditioned. To make this point concrete we examine the implications of this approach to debt management in various models, both analytically and using numerical methods calibrated to the US economy. We find the complete market approach recommends asset positions which are huge multiples of GDP. Introducing persistent shocks or capital accumulation only worsens this problem. Increasing the volatility of interest rates through habits partly reduces the size of these simulations we find no presumption that governments should issue long term debt ? policy recommendations can be easily reversed through small perturbations in the specification of shocks or small variations in the maturity of bonds issued. We further extend the literature by removing the assumption that governments every period costlessly repurchase all outstanding debt. This exacerbates the size of the required positions, worsens their volatility and in some cases produces instability in debt holdings. We conclude that it is very difficult to insulate fiscal policy from shocks by using the complete markets approach to debt management. Given the limited variability of the yield curve using maturities is a poor way to substitute for state contingent debt. The result is the positions recommended by this approach conflict with a number of features that we believe are important in making bond markets incomplete e.g allowing for transaction costs, liquidity effects, etc.. Until these features are all fully incorporated we remain in search of a theory of debt management capable of providing robust policy insights.

Elements of algebraic geometry and the positive theory of partially commutative groups

The first main result of the paper is a criterion for a partially commutative group G to be a domain. It allows us to reduce the study of algebraic sets over G to the study of irreducible algebraic sets, and reduce the elementary theory of G (of a coordinate group over G) to the elementary theories of the direct factors of G (to the elementary theory of coordinate groups of irreducible algebraic sets). Then we establish normal forms for quantifier-free formulas over a non-abelian directly indecomposable partially commutative group H. Analogously to the case of free groups, we introduce the notion of a generalised equation and prove that the positive theory of H has quantifier elimination and that arbitrary first-order formulas lift from H to H * F, where F is a free group of finite rank. As a consequence, the positive theory of an arbitrary partially commutative group is decidable.

A general construction of internal sheaves in algebraic set theory

We present a solution to the problem of defining a counterpart in Algebraic Set Theory of the construction of internal sheaves in Topos Theory. Our approach is general in that we consider sheaves as determined by Lawvere-Tierney coverages, rather than by Grothen-dieck coverages, and assume only a weakening of the axioms for small maps originally introduced by Joyal and Moerdijk, thus subsuming the existing topos-theoretic results.

Which screening strategy using BMD measurements would be most cost effective for hip fracture prevention in elderly women? A decision analysis based on a Markov model.

INTRODUCTION: Hip fractures are responsible for excessive mortality, decreasing the 5-year survival rate by about 20%. From an economic perspective, they represent a major source of expense, with direct costs in hospitalization, rehabilitation, and institutionalization. The incidence rate sharply increases after the age of 70, but it can be reduced in women aged 70-80 years by therapeutic interventions. Recent analyses suggest that the most efficient strategy is to implement such interventions in women at the age of 70 years. As several guidelines recommend bone mineral density (BMD) screening of postmenopausal women with clinical risk factors, our objective was to assess the cost-effectiveness of two screening strategies applied to elderly women aged 70 years and older. METHODS: A cost-effectiveness analysis was performed using decision-tree analysis and a Markov model. Two alternative strategies, one measuring BMD of all women, and one measuring BMD only of those having at least one risk factor, were compared with the reference strategy "no screening". Cost-effectiveness ratios were measured as cost per year gained without hip fracture. Most probabilities were based on data observed in EPIDOS, SEMOF and OFELY cohorts. RESULTS: In this model, which is mostly based on observed data, the strategy "screen all" was more cost effective than "screen women at risk." For one woman screened at the age of 70 and followed for 10 years, the incremental (additional) cost-effectiveness ratio of these two strategies compared with the reference was 4,235 euros and 8,290 euros, respectively. CONCLUSION: The results of this model, under the assumptions described in the paper, suggest that in women aged 70-80 years, screening all women with dual-energy X-ray absorptiometry (DXA) would be more effective than no screening or screening only women with at least one risk factor. Cost-effectiveness studies based on decision-analysis trees maybe useful tools for helping decision makers, and further models based on different assumptions should be performed to improve the level of evidence on cost-effectiveness ratios of the usual screening strategies for osteoporosis.

Rational first integrals in the Darboux theory of integrability in Cn

"Vegeu el resum a l'inici del document del fitxer adjunt."

Weighted limits in simplicial homotopy theory

We extend the theory of Quillen adjunctions by combining ideas of homotopical algebra and of enriched category theory. Our results describe how the formulas for homotopy colimits of Bousfield and Kan arise from general formulas describing the derived functor of the weighted colimit functor.

L' Aprenentatge basat en problemes a trav��s de casos cl��nics simulats. Una proposta metodol��gica de disseny i avaluaci�� docent

RESUM Les exig��ncies actuals de la professi�� de d���infermeria requereixen que la doc��ncia vagi orientada a interrelacionar els diferents rols a desenvolupar enla pr��ctica di��ria, per adquirir experi��ncia en l���aprenentatge i aix�� augmentar la qualitat de les cures d���infermeria. Per assolir aquest objectiu ��s important l���aprenentatge basat enproblemes. Aquest pret��n en primer lloc que els estudiants aprenguin all�� que permet desenvolupar-se enla vida professional de la manera m��s natural possible a partir d���una idea clara i profunda de l���evid��ncia sobre la que s���ha d���actuar. Amb aquesta finalitat es vandissenyar casos cl��nics amb uns objectius que requerien la integraci�� de coneixements, actituds i valors, en diferents fases a desenvolupar en un per��ode de temps predeterminat. Tamb�� ens vam proposar una estrat��gia docent que permet��s a l���estudiant incorporar el coneixement cient��fic que d��na suport a la pr��ctica assistencial per aproximar teoria i pr��ctica. Es pret��n que els estudiants busquin una resposta basada en la millor evid��ncia cient��fica disponible, per prendre una decisi�� respecte a les cures del pacient. Els objectius de l���estudi s��n: Avaluar globalment l���aprenentatge basat en la simulaci�� de casos Avaluar com els estudiants valoren la integraci�� del model d���infermeria i del proc��s d���atenci�� en l���aprenentatge basat en la simulaci�� de casos. Valorar les sensacions percebudes per l���estudiant durant la simulaci�� del cas. Valorar l���actitud d el���estudiant en relaci�� a la incorporaci�� de l���evid��ncia cient��fica per una millora en la pr��ctica cl��nica. Avaluar el grau de dificultat manifestat per l���estudiant en relaci�� al proc��s de documentaci��. Avaluar la idonietat de l���argumentaci�� i la decisi�� de l���estudiant a la pregunta formulada en el cas cl��nic. Metodologia: L���assignatura d���Infermeria Medicoquir��rgica. Adult I del Departament d���Infermeria de la Universitat de Vic, va iniciar una experi��ncia d���aprenentatge basat en la resoluci�� de problemes, amb estudiants de 2on curs. Les professores responsables dels seminaris van realitzar una avaluaci�� de l���experi��ncia a trav��s d���una enquesta. Aquesta es responia al cap d���un mes de la simulaci�� al laboratori, quan es contrastaven els resultats obtinguts en aquesta entre professores i estudiants despr��s de visualitzar la gravaci�� feta durant el mateix. En el context del seminari de simulaci�� de casos, es va introduir una pregunta/problema, a partir de la que els estudiants, en grup, havien de documentar-se amb el suport d���una guia. Per valorar l���actitud davant aquesta pregunta/problema es va dissenyar un qustionari tipus Likert. L���avaluaci�� del grau de dificultat s���ha registrat a trav��s d���unes escales de puntuaci��. Per a l���avaluaci�� de la decisi�� presa, es van valorar les s��ntesis resum entregades en els treballs escrits pels diferents grups. Resultats: La realitzaci�� de la simulaci�� en el laboratori va ser avaluada per un alt percentatge d���estudiants (68,8%) amb puntuacions entre 6 i 8 mentre que un 26,6% la van situar en tre 9 i 10, nom��s un 4,7 % la van puntuar amb 5. La integraci�� del model d���infermeria va ser valorada pel 86% amb una puntuaci�� entre 7 i 10. La valoraci�� global de la simulaci�� va ser qualificada pels estudiants amb una puntuaci�� de 8 (34,4%) seguida d���un 28,1% amb una consideraci�� de 7. Un 7,2% van puntuar entre 9 i 10. El 93,3% van assegurar que con��ixer les fonts documentals els serviria per millorar l���assist��ncia, el 86,7% esperen obtenir arguments s��lids respecte les seves desicions si la documentaci�� consultada ��s de qualitat. Un 77,8% dels estudiants consideren estar m��s satisfets al saber incorporar la presa de decisions basada en evid��ncies. Respecte el grau de dificultat en el proc��s de documentaci�� la dificultat m��s gran la presenten en com buscar en les bases de dades de refer��ncies bibliogr��fiques. Conclusions: L���aprenentatge dels estudiants a trav��s de la simulaci�� de casos ��s una estrat��gia v��lida que l���estudiant valora positivament al mateix temps que permet desenvolupar habilitats per a la pr��ctica professional. L���estrat��gia docent dissenyada per integrar les evid��ncies en la presa de decisions es considera positiva, no obstant, despr��s d���analitzar els resultats, s���han de modificar alguns aspectes per a la seva millora; tutoritzar per a millorar el proc��s de documentaci�� i incidir m��s en la cr��tica i reflexi��, de manera que les troballes de la investigaci�� siguin canalitzades cap a la pr��ctica.

Political Risk, Economic Integration, and the Foreign Direct Investment Decision

In this paper we analyse the impact of policy uncertainty on foreign direct investment strategies. We also consider the impact of economic integration upon FDI decisions. The paper follows the real options approach, which allows investigating the value to a firm of waiting to invest and/or disinvest, when payoffs are stochastic due to political uncertainty and investments are partially reversible. Across the board we find that political uncertainty can be very detrimental to FDI decisions while economic integration leads to an increasing benefit of investing abroad.

Solovian and New Growth Theory from the Perspective of Allyn Young on Macroeconomic Increasing Returns

This paper evaluates, from an Allyn Youngian perspective, the neoclassical Solow model of growth and the associated empirical estimates of the sources of growth based on it. It attempts to clarify Young���s particular concept of generalised or macroeconomic ���increasing returns��� to show the limitations of a model of growth based on an assumption that the aggregate production function is characterised by constant returns to scale but ���augmented��� by exogenous technical progress. Young���s concept of endogenous, self-sustaining growth is also shown to differ in important respects (including in its policy implications) from modern endogenous growth theory.

A Soft Edge Target Zone Model: Theory And Application To Hong Kong

Hong Kong���s currency is pegged to the US dollar in a currency board arrangement. In autumn 2003, the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities revamped the one-sided currency board mechanism into a symmetric two-sided system with a narrow exchange rate band. This paper reviews the characteristics of the new currency board arrangement and embeds a theoretical soft edge target zone model typifying many intermediate regimes, to explain the notable achievement of speculative peace and credibility since May 2005.

Off-the-Record Target Zones: Theory with an Application to Hong Kongs Currency Board

This paper provides a modelling framework for evaluating the exchange rate dynamics of a target zone regime with undisclosed bands. We generalize the literature to allow for asymmetric one-sided regimes. Market participants' beliefs concerning an undisclosed band change as they learn more about central bank intervention policy. We apply the model to Hong Kong's one-sided currency board mechanism. In autumn 2003, the Hong Kong dollar appreciated from close to 7.80 per US dollar to 7.70, as investors feared that the currency board would be abandoned. In the wake of this appreciation, the monetary authorities finally revamped the regime as a symmetric two-sided system with a narrow exchange rate band.