International capital flows and credit market imperfections: A tale of two frictions

The financial crisis of 2007-08 has underscored the importance of adverse selection in financialmarkets. This friction has been mostly neglected by macroeconomic models of financialimperfections, however, which have focused almost exclusively on the effects of limited pledgeability.In this paper, we fill this gap by developing a standard growth model with adverseselection. Our main results are that, by fostering unproductive investment, adverse selection:(i) leads to an increase in the economy s equilibrium interest rate, and; (ii) it generates a negativewedge between the marginal return to investment and the equilibrium interest rate. Underfinancial integration, we show how this translates into excessive capital inflows and endogenouscycles. We also extend our model to the more general case in which adverse selection and limitedpledgeability coexist. We conclude that both frictions complement one another and show thatlimited pledgeability exacerbates the effects of adverse selection.

Bank liquidity, interbank markets and monetary policy

A major lesson of the recent financial crisis is that the interbank lending marketis crucial for banks facing large uncertainty regarding their liquidity needs. Thispaper studies the efficiency of the interbank lending market in allocating funds. Weconsider two different types of liquidity shocks leading to different implications foroptimal policy by the central bank. We show that, when confronted with a distributional liquidity-shock crisis that causes a large disparity in the liquidity held amongbanks, the central bank should lower the interbank rate. This view implies that thetraditional tenet prescribing the separation between prudential regulation and monetary policy should be abandoned. In addition, we show that, during an aggregateliquidity crisis, central banks should manage the aggregate volume of liquidity. Twodifferent instruments, interest rates and liquidity injection, are therefore required tocope with the two different types of liquidity shocks. Finally, we show that failureto cut interest rates during a crisis erodes financial stability by increasing the riskof bank runs.

Jackson County Sanitary Disposal Agency independent auditor's reports, basic financial statements and required supplementary information, schedule of findings, June 30, 2008

Audit report on the Jackson County Sanitary Disposal Agency for the year ended June 30, 2008

Asset prices and the measurement of wealth and saving

The paper defines concepts of real wealth and saving which take into account the intertemporal index number problem that results from changing interest rates. Unlike conventional measures of real wealth, which are based on the market value of assets and ignore the index number problem, the new measure correctly reflects the changes in the welfare of households over time. An empirically operational approximation to the theoretical measure is provided and applied to US data. A major empirical finding is that US real financial wealth increased strongly in the 1980s, much more than is revealed by the market value of assets.

Wireless E911 Emergency Communications Fund Iowa Homeland Security and Emergency Management Division of the Iowa Department of Public Defense independent auditor's reports, basic financial statements and supplementary information, June 30, 2008.

Audit report on the Wireless E911 Emergency Communication Fund of the Iowa Homeland Security and Emergency Management Division of the Iowa Department of Public Defense for the year ended June 30, 2008

Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

Pupillographic investigation of the relative afferent pupillary defect associated with a midbrain lesion.

OBJECTIVE: To identify clinical and pupillographic features of patients with a relative afferent pupillary defect (RAPD) without visual acuity or visual field loss caused by a lesion in the dorsal midbrain. DESIGN: Experimental study. PARTICIPANTS AND CONTROLS: Four patients with a dorsal midbrain lesion who had normal visual fields and a clinically detectable RAPD. METHODS: The pupil response from full-field and hemifield light stimulation over a range of light intensities was measured by computerized binocular pupillography. MAIN OUTCOME MEASURES: The mean of the direct and consensual pupil response to full-field and hemifield light stimulation was plotted as a function of stimulus light intensity. RESULTS: All 4 subjects showed decreased pupillographic responses at all intensities to full-field light stimulation in the eye with the clinical RAPD. The pupillographic responses to hemifield stimulation showed a homonymous pattern of deficit on the side ipsilateral to the RAPD, similar to that observed in a previously reported patient with an optic tract lesion. CONCLUSIONS: The basis of a midbrain RAPD is the nasal-temporal asymmetry of pupillomotor input that becomes manifest when a unilateral postchiasmal lesion interrupts homonymously paired fibers traveling in the contralateral optic tract or midbrain pathway to the pupillomotor center, respectively. The pupillographic characteristics of an RAPD resulting from a dorsal midbrain lesion thus resemble those of an RAPD resulting from a unilateral optic tract lesion, but without the homonymous visual field defect. FINANCIAL DISCLOSURE(S): The author(s) have no proprietary or commercial interest in any materials discussed in this article.

Is bank debt special for the transmission of monetary policy? Evidence from the stock market

We combine existing balance sheet and stock market data with two new datasets to studywhether, how much, and why bank lending to firms matters for the transmission of monetarypolicy. The first new dataset enables us to quantify the bank dependence of firms precisely,as the ratio of bank debt to total assets. We show that a two standard deviation increase inthe bank dependence of a firm makes its stock price about 25% more responsive to monetarypolicy shocks. We explore the channels through which this effect occurs, and find that thestock prices of bank-dependent firms that borrow from financially weaker banks display astronger sensitivity to monetary policy shocks. This finding is consistent with the banklending channel, a theory according to which the strength of bank balance sheets mattersfor monetary policy transmission. We construct a new database of hedging activities andshow that the stock prices of bank-dependent firms that hedge against interest rate riskdisplay a lower sensitivity to monetary policy shocks. This finding is consistent with aninterest rate pass-through channel that operates via the direct transmission of policy ratesto lending rates associated with the widespread use of floating-rates in bank loans and creditline agreements.

Deep sclerectomy combined with trabeculectomy in pediatric glaucoma.

PURPOSE: To evaluate the outcomes of combined deep sclerectomy and trabeculectomy (penetrating deep sclerectomy) in pediatric glaucoma. DESIGN: Retrospective, nonconsecutive, noncomparative, interventional case series. PARTICIPANTS: Children suffering from pediatric glaucoma who underwent surgery between March 1997 and October 2006 were included in this study. METHODS: A primary combined deep sclerectomy and trabeculectomy was performed in 35 eyes of 28 patients. Complete examinations were performed before surgery, postoperatively at 1 and 7 days, at 1, 2, 3, 4, 6, 9, and 12 months, and then every 6 months after surgery. MAIN OUTCOME MEASURES: Surgical outcome was assessed in terms of intraocular pressure (IOP) change, additional glaucoma medication, complication rate, need for surgical revision, as well as refractive errors, best-corrected visual acuity (BCVA), and corneal clarity and diameters. RESULTS: The mean age before surgery was 3.6+/-4.5 years, and the mean follow-up was 3.5+/-2.9 years. The mean preoperative IOP was 31.9+/-11.5 mmHg. At the end of follow-up, the mean IOP decreased by 58.3% (P<0.005), and from 14 patients with available BCVA 8 patients (57.1%) achieved 0.5 (20/40) or better, 3 (21.4%) 0.2 (20/100), and 2 (14.3%) 0.1 (20/200) in their better eye. The mean refractive error (spherical equivalent [SE]) at final follow-up visits was +0.83+/-5.4. Six patients (43%) were affected by myopia. The complete and qualified success rates, based on a cumulative survival curve, after 9 years were 52.3% and 70.6%, respectively (P<0.05). Sight-threatening complications were more common (8.6%) in refractory glaucomas. CONCLUSIONS: Combined deep sclerectomy and trabeculectomy is an operative technique developed to control IOP in congenital, secondary, and juvenile glaucomas. The intermediate results are satisfactory and promising. Previous classic glaucoma surgeries performed before this new technique had less favorable results. The number of sight-threatening complications is related to the severity of glaucoma and number of previous surgeries. FINANCIAL DISCLOSURE(S): The authors have no proprietary or commercial interest in any materials discussed in this article.

Identification of geometrically consistent interest points for 3D scene reconstruction

We propose an algorithm that extracts image features that are consistent with the 3D structure of the scene. The features can be robustly tracked over multiple views and serve as vertices of planar patches that suitably represent scene surfaces, while reducing the redundancy in the description of 3D shapes. In other words, the extracted features will off er good tracking properties while providing the basis for 3D reconstruction with minimum model complexity

Comprehensive Annual Financial Report (CAFR) of the Iowa Public Employees' Retirement System (IPERS) for the fiscal year ended June 30, 2009.

Comprehensive Annual Financial Report (CAFR) of the Iowa Public Employees Retirement System (IPERS) for the fiscal year ended June 30, 2009. NOTE: this is a large file and may take a moment to download.

Jackson County Sanitary Disposal Agency independent auditor's reports, basic financial statements and required supplementary information, schedule of findings, June 30, 2009

Audit report on the Jackson County Sanitary Disposal Agency for the year ended June 30, 2009

Wireless E911 Emergency Communications Fund Iowa Homeland Security and Emergency Management Division of the Iowa Department of Public Defense independent auditor's reports, basic financial statements and supplementary information, June 30, 2009.

Audit report on the Wireless E911 Emergency Communication Fund of the Iowa Homeland Security and Emergency Management Division of the Iowa Department of Public Defense for the year ended June 30, 2009

The Rebuild Iowa Office is a part of the State of Iowa and, as such, has been included in our audits of the State’s Comprehensive Annual Financial Report (CAFR) and the State’s Single Audit Report for the year ended June 30, 2009

The Rebuild Iowa Office is a part of the State of Iowa and, as such, has been included in our audits of the State’s Comprehensive Annual Financial Report (CAFR) and the State’s Single Audit Report for the year ended June 30, 2009