Balance of payment crises and capital flows : the role of liquidity

A model of externaI CrISIS is deveIoped focusing on the interaction between Iiquidity creation by financiaI intermediaries and foreign exchange collapses. The intermediaries' role of transforming maturities is shown to result in larger movements of capital and a higher probability of crisis. This resembles the observed cycle in capital fiows: large infiows, crisis and abrupt outfiows. The mo deI highlights how adverse productivity and international interest rate shocks can be magnified by the behavior of individual foreign investors linked together through their deposits in the intermediaries. An eventual collapse of the exchange rate can link investors' behavior even further. The basic model is then extended, quite naturally, to study the effects of capital fiow contagion between countries.

América Latina y el déficit del petróleo: el proceso de ajuste a largo plazo de la balanza de pagos = Latin america and the oil deficit: the long-term balance of payment adjustment process

Incluye Bibliografía

Report of the Advisory Committee on the Presentation of Balance of Payment Statistics.

Mode of access: Internet.

Crises financeira nos anos 1990 e poupança externa

Ao contrário do que afirma a análise econômica convencional, a causa das crises financeiras dos anos 1990 no México, Ásia, Brasil e Argentina não foi principalmente fiscal, mas sim a decisão dos governos de crescerem com poupança externa, isto é, com déficits em conta corrente. Essas foram crises de balanço de pagamento geradas pela sobreapreciação da moeda local e pelo alto nível de dívida externa e/ou rápido crescimento de déficit de conta corrente. Assim, repentinamente os credores externos se convenceram de que o país não enfrenta apenas um problema de liquidez, mas de solvência, e para de rolar a dívida. Um teste econométrico demonstra essas afirmações

The known unknowns and the unknown unknowns of the EMU. Bruegel Policy Contribution 2012/18, October 2012

Extensive prior research on the economics of European monetary union highlighted some potential risks (the known unknowns) but overlooked others (the unknown unknowns). Asymmetries among participating countries, the potentially destabilising character of a one-size-fits all monetary policy, the weakness of adjustment mechanisms, the lack of incentives for fiscal discipline, the possibility of sovereign solvency crises and their adverse consequences were all known and understood. But policymakers often relied on a complacent reading of the evidence. • The potential for financial disruption was vastly underestimated. Economists generally did not consider, or underestimated, the possibility of balance of payment crises such as those experienced by southern European countries, or the risk of a feedback loop between banks and sovereigns. • Remedying EMU’s systemic deficiencies is on the policy agenda. Banking union would go a long way towards addressing the fault lines. The urgent question for economists is if it is going to be enough and, if not, what else should complement the ‘bare-bones’ EMU of Maastricht.

Ukraine: Can meaningful reform come out of conflict? Bruegel Policy Contribution 2014/08, August 2014

Apart from threats to its national security and territorial integrity, Ukraine faces serious economic challenges. These result from the slow pace of economic and institutional reform in the previous two decades, the populist policies of the Yanukovych era and the consequences of the conflict with Russia. The new Ukrainian authorities have made pro-reform declarations, but these do not seem to be supported sufficiently by concrete policy measures, especially in the critical areas of fiscal, balance-of-payment and structural adjustment. Also, the international financial aid package granted to Ukraine has not been accompanied by sufficiently strong policy conditionality. Ukraine urgently needs a complex programme of far-reaching economic and institutional reform, which will include both short-term fiscal and macroeconomic adjustment measures and medium- to long-term structural and institutional changes. Energy subsidies and the low retirement age are the two critical policy areas that require adjustment to avoid sovereign default and a balance-of-payments crisis.

Banks and the political economy of the sovereign debt crisis in Italy and Spain. CES Papers - Open Forum #18, 2013-2014

This paper sets out to explain why Spain experienced a full-fledged sovereign debt crisis and had to resort to euroarea financial assistance for its banks, whereas Italy did not. It undertakes a structured comparison, dissecting the sovereign debt crisis into a banking crisis and a balance of payments crisis. It argues that the distinctive features of bank business models and of national banking systems in Italy and Spain have considerable analytical leverage in explaining the different scenarios of the crises in each country. This ‘bank-based’ analysis contributes to the flourishing literature that examines changes in banking with a view to account for the differentiated impact of the global banking crisis first and the sovereign debt crisis in the euroarea later.

Strategies for agricultural change and the UK balance of payments

The world food crisis, Britain's reliance on imported food and feedstuffs and balance of payments difficulties were some of the factors which lent weight to the call for increased self-sufficiency in Britain's agriculture in the 1970s. This project considers two main areas: an investigation of the impact of radical agricultural change, designed to increase self-sufficiency, on the balance of payments; and, an appraisal of the potential role of the food industry within a radically different food system. The study proceeded by: an examination of the principles of agricultural policy and its development in Britain; an overview of the mechanism and meaning of the balance of payments; a consideration of the debate on agricultural import saving; the construction of radical agricultural strategies; the estimation of effects of the strategies, particularly to the balance of. payments; the role of the food industry and possible innovations within the strategies; a case study of textured vegetable proteins; and, the wider implications of implementation of radical agricultural alternatives. Two strategies were considered: a vegan system, involving no livestock; and, an intermediate system, including some livestock and dairy cattle. The study concludes that although agricultural change could in principle make a contribution to the balance of payments, implementation of agricultural change cannot be justified for this purpose alone. First, balance of payments problems can be solved by more appropriate methods. Second, the UK' s balance of payments problem has disappeared for the time being owing to North Sea oil and economic recession. Third, the political and social consequences of the changes investigated would be unacceptable. Progress in UK food policy is likely to be in the form of an integrated food and health policy.

Fluoride Concentrations In The Water Of Maringá, Brazil, Considering The Benefit/risk Balance Of Caries And Fluorosis.

Current Brazilian law regarding water fluoridation classification is dichotomous with respect to the risks of and benefits for oral diseases, and fluoride (F) concentrations less than 0.6 or above 0.8 mg F/L are considered outside the normal limits. Thus, the law does not consider that both caries and fluorosis are dependent on the dosage and duration of fluoride exposure because they are both chronic diseases. Therefore, this study evaluated the quality of water fluoridation in Maringá, PR, Brazil, considering a new classification for the concentration of F in water the supply, based on the anticaries benefit and risk of fluorosis (CECOL/USP, 2011). Water samples (n = 325) were collected monthly over one year from 28 distribution water networks: 20 from treatment plants and 8 from artesian wells. F concentrations were determined using a specific ion electrode. The average F concentration was 0.77 mg F/L (ppm F), ranging from 0.44 to 1.22 mg F/L. Considering all of the water samples analyzed, 83.7% of them presented from 0.55 to 0.84 mg F/L, and according to the new classification used, they would provide maximum anticaries benefit with a low risk of fluorosis. This percentage was lower (75.4%) in the water samples supplied from artesian wells than from those distributed by the treatment plant (86%). In conclusion, based on the new classification of water F concentrations, the quality of water fluoridation in Maringá is adequate and is within the range of the best balance between risk and benefit.

Angiotensin receptor blockade improves the net balance of cardiac Ca(2+) handling-related proteins in sympathetic hyperactivity-induced heart failure

Aims: The clinical benefits of angiotensin II type 1 (AT1) receptor blockers (ARB) in heart failure (HF) include cardiac anti-remodeling and improved ventricular function. However, the cellular mechanisms underlying the benefits of ARB on ventricular function need to be better clarified. In the present manuscript, we evaluated the effects of AT1 receptor blockade on the net balance of Ca(2+) handling proteins in hearts of mice lacking alpha(2A) and alpha(2C) adrenoceptors (alpha(2A)/alpha(2C)ARKO), which develop sympathetic hyperactivity (SH) induced-HF. Main methods: A cohort of male wild-type (WT) and congenic alpha(2A)/alpha(2C)ARKO mice in a C57BL6/J genetic background (5-7 mo of age) was randomly assigned to receive either placebo or ARB (Losartan, 10 mg/kg for 8wks). Ventricular function (VF) was assessed by echocardiography, and cardiac myocyte width and ventricular fibrosis by a computer-assisted morphometric system. Sarcoplasmic reticulum Ca(2+) ATPase (SERCA2), phospholamban (PLN), phospho-Ser(16)-PLN, phospho-Thr(17)-PLN, phosphatase 1 (PP1), Na(+)-Ca(2+) exchanger (NCX), Ca(2+)/calmodulin-dependent protein kinase 11 (CaMKII) and phospho-Thr(286)-CaMKII were analyzed by Western blot. Key findings: alpha(2A)/alpha(2C)ARKO mice displayed ventricular dysfunction, cardiomyocyte hypertrophy and cardiac fibrosis paralleled by decreased SERCA2 and increased phospho-Thr(17)-PLN, CaMKII, phospho-Thr(286)-CaMKII and NCX levels. ARB induced anti-cardiac remodeling effect and improved VF in alpha(2A)/alpha(2C)ARKO associated with increased SERCA2 and phospho-Ser(16)-PLN levels, and SERCA2:NCX ratio. Additionally, ARB decreased phospho-Thr(17)-PLN levels as well as reestablished NCX, CaMKII and phospho-Thr(286)-CaMKII toward WT levels. Significance: Altogether, these data provide new insights on intracellular Ca(2+) regulatory mechanisms underlying improved ventricular function by ARB therapy in HF. (c) 2011 Elsevier Inc. All rights reserved.

Greenhouse gas emissions and energy balance of palm oil biofuel

The search for alternatives to fossil fuels is boosting interest in biodiesel production. Among the crops used to produce biodiesel, palm trees stand out due to their high productivity and positive energy balance. This work assesses life cycle emissions and the energy balance of biodiesel production from palm oil in Brazil. The results are compared through a meta-analysis to previous published studies: Wood and Corley (1991) [Wood BJ, Corley RH. The energy balance of oil palm cultivation. In: PORIM intl. palm oil conference agriculture; 1991.], Malaysia; Yusoff and Hansen (2005) [Yusoff S. Hansen SB. Feasibility study of performing an life cycle assessment on crude palm oil production in Malaysia. International Journal of Life Cycle Assessment 2007;12:50-8], Malaysia; Angarita et al. (2009) [Angarita EE, Lora EE, Costa RE, Torres EA. The energy balance in the palm oil-derived methyl ester (PME) life cycle for the cases in Brazil and Colombia. Renewable Energy 2009;34:2905-13], Colombia; Pleanjai and Gheewala (2009) [Pleanjai S. Gheewala SH. Full chain energy analysis of biodiesel production from palm oil in Thailand. Applied Energy 2009;86:S209-14], Thailand; and Yee et al. (2009) [Yee KF, Tan KT, Abdullah AZ, Lee la. Life cycle assessment of palm biodiesel: revealing facts and benefits for sustainability. Applied Energy 2009;86:S189-96], Malaysia. In our study, data for the agricultural phase, transport, and energy content of the products and co-products were obtained from previous assessments done in Brazil. The energy intensities and greenhouse gas emission factors were obtained from the Simapro 7.1.8. software and other authors. These factors were applied to the inputs and outputs listed in the selected studies to render them comparable. The energy balance for our study was 1:5.37. In comparison the range for the other studies is between 1:3.40 and 1:7.78. Life cycle emissions determined in our assessment resulted in 1437 kg CO(2)e/ha, while our analysis based on the information provided by other authors resulted in 2406 kg CO(2)e/ha, on average. The Angarita et al. (2009) [Angarita EE, Lora EE, Costa RE, Torres EA. The energy balance in the palm oil-derived methyl ester (PME) life cycle for the cases in Brazil and Colombia. Renewable Energy 2009:34:2905-13] study does not report emissions. When compared to diesel on a energy basis, avoided emissions due to the use of biodiesel account for 80 g CO(2)e/MJ. Thus, avoided life Cycle emissions associated with the use of biodiesel yield a net reduction of greenhouse gas emissions. We also assessed the carbon balance between a palm tree plantation, including displaced emissions from diesel, and a natural ecosystem. Considering the carbon balance outcome plus life cycle emissions the payback time for a tropical forest is 39 years. The result published by Gibbs et al. (2008) [Gibbs HK, Johnston M, Foley JA, Holloway T, Monfreda C, Ramankutty N, et al., Carbon payback times for crop-based biofuel expansion in the tropics: the effects of changing yield and technology. Environmental Research Letters 2008;3:10], which ignores life cycle emissions, determined a payback range for biodiesel production between 30 and 120 years. Crown Copyright (C) 2010 Published by Elsevier Ltd. All rights reserved.

Real exchange rate and elasticity of labour supply in a balance-of-payments-constrained macrodynamics

A macrodynamic model is proposed in which the real exchange rate and the elasticity of labour supply interact defining different trajectories of growth and income distribution in a developing economy. Growth depends on imports of capital goods which are paid with exports (there are no capital flows) and hence is constrained by equilibrium in current account. The role of the elasticity of labour supply is to prevent the real exchange rate from appreciating as the economy grows, thereby sustaining international competitiveness. The model allows for endogenous technological change and considers the impact of migration from the subsistence to the modern sector on the cumulative (Kaldor-Verdoorn) process of learning.

Structural change, balance-of-payments constraint, and economic growth: evidence from the multisectoral Thirlwall`s law

This paper contributes to the literature on balance-of-payments constrained growth by investigating how structural change identified with changes in the sectoral composition of exports and imports affects the external constraint We test both the original and a multisectoral version of Thirlwall`s law for a sample of Latin American and Asian countries The original Thirlwall s law is found to hold for all sample countries except South Korea, whereas the multisectoral analogue holds for all of them As the sectoral composition of exports and imports is found to matter for growth we analyze the evolution of each country`s weighted trade income elasticities