Internationalising the currency while leveraging massively: the case of China. Bruegel Working Paper 2015/12, October 2015

This paper reviews the steps that China has taken towards financial reform with a particular focus on capital account liberalisation and internationalisation of the use of the renminbi. • After a slowdown in reform momentum during the global financial crisis, there is a clear push towards reform, especially in terms of RMB internationalisation. • During the same period, though, China’s debt has doubled, reaching levels that are clearly above those of most emerging markets. This increases the risks embedded in financial reform and, in particular, capital account liberalisation. • At this juncture, however, China has no option but to press for reform since the current growth model is no longer working and China urgently needs to better allocate its savings.

Squaring the cycle: capital flows, financial cycles, and macro-prudential policy in the euro area. Bruegel Working Paper 2015/14, November 2015

• Before the financial and economic crisis, monetary policy unification and interest rate convergence resulted in the divergence of euroarea countries’ financial cycles. This divergence is deeply rooted in the financial integration spurred by currency union and strongly correlated with intra-euro area capital flows. Macro-prudential policy will need to deal with potentially divergent financial cycles, while catering for potential cross-border spillovers from domestic policies, which domestic authorities have little incentive to internalise. • The current framework is unfit to deal effectively with these challenges. The European Central Bank should be responsible for consistent and coherent application of macro-prudential policy, with appropriate divergences catering for national differences in financial conditions. The close link between domestic financial cycles and intra-euro area capital flows raises the question of whether macro-prudential policy in the euro area can be compatible with free flows of capital. Financial cycle divergence had its counterpart in the build-up of macroeconomic imbalances, so effective implementation of the Macroeconomic Imbalance Procedure would support and strengthen macro-prudential policy.

The Limited Influence of the European Union in Armenia and Azerbaijan: A Domestic Explanation. EU Diplomacy Paper 9/2015

This paper seeks to explain why the European Union (EU) has had limited influence in Armenia and Azerbaijan in the framework of the European Neighbourhood Policy (ENP). Combining approaches from external governance, norm diffusion and structural foreign policy, it offers an explanation based on domestic factors in the two countries: the political regime, state capacity, political structures, domestic incentives and the perceived legitimacy of EU rules. Although willingness to reform appears to exist in Armenia, such willingness remains constrained by the country’s vulnerable geopolitical location and high dependence on Russia. By contrast, none of the domestic preconditions for EU influence identified by the analytical framework were found in Azerbaijan. The author argues that the Eastern Partnership has not properly addressed the extent to which the clan structures feed into informal political practices and enforce the sustainability of an existing regime in both countries, and that, in addition, the EU has underestimated the multipolar environment which the two countries have to operate in, making it unlikely that the current policy can reach its objectives in Armenia and Azerbaijan.

Three-Dimensional Structure and Disposition of the Air Conducting and Gas Exchange Conduits of the Avian Lung: The Domestic Duck (Cairina moschata)

The anatomy of the domestic duck lung was studied macroscopically, by casting and by light, transmission, and scanning electron microscopy. The lung had four categories of secondary bronchi (SB), namely, the medioventral (MV, 4-5), laterodorsal (LD, 6-10), lateroventral (LV, 2-4), and posterior secondary bronchi (PO, 36-44). The neopulmonic parabronchi formed an intricate feltwork on the ventral third of the lung and inosculated those from the other SB. The lung parenchyma was organized into cylindrical parabronchi separated by thin septa containing blood vessels. Atria were shallow and well-fortified by epithelial ridges reinforced by smooth muscle bundles and gave rise to 2-6 elongate infundibulae. Air capillaries arose either directly from the atria or from infundibulae and were tubular or globular in shape with thin interconnecting branches. The newly described spatial disposition of the conducting air conduits closely resembles that of the chicken. This remarkable similarity between the categories, numbers, and 3D arrangement of the SB in the duck and chicken points to a convergence in function-oriented design. To illuminate airflow dynamics in the avian lung, precise directions of airflow in the various categories of SB and parabronchi need to be characterized.

Use of space by domestic chicks housed in complex aviaries.

To improve the understanding of the development of locomotor capacity in layer hens, we measured how female laying hen chicks (n=120) of four different strains (LSL-lite, Hyline Brown, Dekalb White, Lohmann Brown; 3 groups of 10 chicks per line) utilized the ground, the air, elevated horizontal (platforms and perches) and inclined surfaces (ramps and ladders) in an aviary until 9 weeks of age. We used infra-red video recordings to perform all-occurrences sampling of locomotive behavioural and perching events that occurred on the ground—where bedding material, food and water were provided, in the air, and on elevated horizontal and inclined surfaces within weekly 30-min sampling periods. Chicks preferred level ground during the first week of life compared to weeks 5–9 (P<0.0001) and performed 52% of all behavioural events in this section. Elevated surface use began at 2 weeks of age and increased over time (P=0.003), where most behaviour was performed in S2 (45% of all events). Chicks preferred horizontal to inclined surfaces, which were used from weeks 2–5 with maximum use occurring during weeks 2 and 3. Lohmann LSL chicks used the space above the ground most frequently (P=0.05) and performed more aerial ascent/descent behaviour than other lines (P<0.0001). Overall activity levels declined with age (P<0.0001). In summary layer chicks almost exclusively locomoted on the ground but utilized elevated horizontal surfaces (perch, first platform) as early as 2 weeks. These results provide information for improving space use in rearing aviaries by introducing lower perches, platforms and ramps/ladders to accommodate age-dependent locomotor abilities.

Saline Township (Mich.) residences and business, ca. 1874

Left to right: Res. of Orange Risdon, Sec. 1, Saline Tp. Mich.; Res. of Andrew Bush, Sec. 3, Saline Tp. Mich.; Res. of Dudley Miller, Sec. 24, Saline Tp. Mich.; Saline Exchange, A. Harmon Prop, Saline, Mich.; Res. of Abram Davenport, Sec. 36, Saline Tp. Mich.; Res. of Milton Reynolds, Sec. 22, Saline Tp. Mich.; Res. of George Neissle, Sec. 12, Saline Tp. Mich.; Res. of Robert Hammond, Sec. 25, Saline Tp. Mich.; Res. of M. Himerdinger, Sec. 8, Saline Tp. Mich. Publication information: Chicago, Ill. : Everts & Stewart, 1874.