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This paper provides new evidence supporting the hypothesis that patriotism and nationalism influence personal trade policy preferences in addition to the typical economic determinants. It also examines the interaction of the 9/11 terrorist attacks along with patriotism and nationalism on policy preferences. Using the Heckscher-Ohlin model as a theoretical framework, ordered probit estimations were applied to survey responses from an International Social Survey Program survey question about preferences towards limiting imports. Extensions of the model were sequentially estimated to investigate the impact of national identity on policy preferences. The model was augmented to test how feelings of nationalism and patriotism influenced personal trade policy preferences. Data from the International Social Survey Program surveys administered in 1995/1996 and 2003/2004 also allowed us to reflect on the impact of the 9/11 terrorist attacks on trade preferences in the U.S. We found that prior to the 9/11 attacks, nationalism was associated with increased inclinations towards limiting imports while patriotism had no statistically significant impact on trade preferences. The 9/11 attacks made U.S. survey respondents less open to imports. Further, the 9/11 attacks served to reduce the impact of nationalism on the tendency to limit imports while it enhanced the desire to do so through patriotism.

This study examines the role of official development assistance (ODA) in affecting adolescent fertility rates in low- and middle-income countries. Approximately 95% of adolescent births occur in middle- and low-income countries, and the average adolescent fertility rate in low-income countries is five times higher than in high-income countries. Aid donors typically pursue multiple objectives when providing development aid, many of which can go beyond changes in per capita GDP and include human capital factors such as adolescent fertility and infant mortality. Using data over the period from 1995 to 2015, our results suggest that total ODA has a beneficial impact by lowering the adolescent fertility rate either directly or through the channel of income growth. Our results also show that this beneficial effect on the adolescent fertility rate is stronger in low-income countries than in middle-income countries. Findings based on sectoral aid suggest that health aid has a stronger effect than aid in other sectors.

This paper uses GARCH models and daily data to investigate the effect of the Canada – U.S. Free Trade Agreement (CUSFTA) and NAFTA on the volatility of, and the relationship between stock market returns and changes in bilateral exchange rates of the member countries. Empirical results indicate that the CUSFTA had a stabilizing effect on the Canadian and U.S. equity markets while increasing the volatility of the CAD/USD exchange rate. NAFTA further reduced the two stock markets’ volatility, however unlike CUSFTA, NAFTA also reduced the volatility of the CAD/USD exchange rate. Additional results indicate that during NAFTA, the Mexican stock market is more volatile than the other stock and bilateral exchange markets. Moreover, the exchange rate of the Mexican peso against both the U.S. and Canadian dollars has been more volatile than the Canadian dollar/US dollar exchange rate. Evidence also suggests that all three stock markets are positively correlated with each other with the U.S. market being much less correlated with the Canadian and Mexican stock markets than the latter two markets are correlated with each other. Evidence found in this paper suggests a negative relationship between the stock and bilateral currency markets that is statistically significant except for the U.S. equity market when paired with an exchange rate that involves the Mexican peso.

Part 1 Explaining G8 effectiveness: continuity and leadership in an age of globalization, Sir Nicholas Bayne explaining G8 effectiveness, John J. Kirton the G8 and the new political economy, Michael R. Hodges G8 summits and compliance, Ella Kokotsis and Joseph P. Daniels. Part 2 Finacial challenges: Japan's summit contributions and economic challenges, Koji Watanabe supervising the international financial system, Joseph P. Daniels promoting growth in the world economy, Bronwen Curtis managing the global economy, Charles Goodhart. Part 3 The broader challenges: negotiating multilateral rules to promote investment, Alan Rugman designing effective policies for employment creation, Richard Layard combating transnational financial crime, George Staple, QC.

We study the importance of individual characteristics and national factors influencing individual attitudes towards the impact of multinational corporations on local businesses. Our sample includes more than 40 000 respondents in 29 countries from the 2003 National Identity Survey conducted by the International Social Survey Programme. We find that individual demographic factors and socioeconomic status, such as gender, age, income and education, are strong predictors of their attitudes. For example, income and education are positively associated with favourable attitudes towards the impact of multinational corporations (MNCs) on local businesses while age is negatively associated with individual attitudes towards MNCs. In addition, hierarchical ordered logit model results show that approximately 8% of total variations in individual attitudes around our sample mean are not explained by differences in personal traits. Instead, they are due to country-level heterogeneity such as, but not limited to,...

During the past two decades, a growing body of research has explored the implications of increased trade and financial openness for the relationship between output and inflation. This paper reviews proposed theoretical channels through which the degree of openness might ultimately affect the output-inflation trade-off and surveys the empirical studies that have sought to determine the net effect of greater openness on this trade-off. In addition, the paper utilizes a single cross-country data set to evaluate, taking into account recent developments in the literature, the likely sign and significance of this net effect. In particular, we find current data imply that there is a negative and significant relationship between openness and the sacrifice ratio, regardless of the transmission channel that is proposed.

In empirical models of foreign direct investment (FDI), distance is most often used to proxy for transportation costs and other pure-trade costs. Given that distance is time invariant but transportation costs are not, this approach is less than satisfactory when actual transportation costs rise and fall over time.The contribution of this work is to explicitly control for transportation costs and thereby better understand their impact on FDI. We explore the impact of shipping costs on total US FDI stocks abroad, manufacturing stocks and service stocks using measures of sea-shipping and air-shipping costs in a Hausman–Taylor model that controls for endogeneity and allows for time-invariant variables such as distance. We find that transportation costs have a positive and statistically significant relationship with US total and manufacturing FDI, suggesting a substitute relationship between FDI and trade flows consistent with horizontal MNE activity. As one would expect, these costs are insignificant for service stocks.

SummaryIn response to stress and extracellular signals, the heart undergoes a process called cardiac hypertrophy during which cardiomyocytes increase in size. If untreated, cardiac hypertrophy can progress to overt heart failure that causes significant morbidity and mortality. The identification of molecular signals that cause or modify cardiomyopathies is necessary to understand how the normal heart progresses to cardiac hypertrophy and heart failure. Receptor tyrosine kinase (RTK) signaling is essential for normal human cardiac function, and the inhibition of RTKs can cause dilated cardiomyopathies. However, neither investigations of activated RTK signaling pathways nor the characterization of hypertrophic cardiomyopathy in the adult fly heart has been previously described. Therefore, we developed strategies using Drosophila as a model to circumvent some of the complexities associated with mammalian models of cardiovascular disease. Transgenes encoding activated EGFRA887T, Ras85DV12 and Ras85DV12S35, which preferentially signal to Raf, or constitutively active human or fly Raf caused hypertrophic cardiomyopathy as determined by decreased end diastolic lumen dimensions, abnormal cardiomyocyte fiber morphology and increased heart wall thicknesses. There were no changes in cardiomyocyte cell numbers. Additionally, activated Raf also induced an increase in cardiomyocyte ploidy compared with control hearts. However, preventing increases in cardiomyocyte ploidy using fizzy-related (Fzr) RNAi did not rescue Raf-mediated cardiac hypertrophy, suggesting that Raf-mediated polyploidization is not required for cardiac hypertrophy. Similar to mammals, the cardiac-specific expression of RNAi directed against MEK or ERK rescued Raf-mediated cardiac hypertrophy. However, the cardiac-specific expression of activated ERKD334N, which promotes hyperplasia in non-cardiac tissues, did not cause myocyte hypertrophy. These results suggest that ERK is necessary, but not sufficient, for Raf-mediated cardiac hypertrophy.

PurposeMegachurches are thriving in religious markets at a time when Americans are asserting their ability as consumers of religious products to engage in religious switching. The apparent success of megachurches, which often provide a low cost and low commitment path by which religious refugees may join the church, seems to challenge Iannocconne's theory that high commitment churches will thrive while low commitment churches will atrophy. This paper aims to investigate this issue.Design/methodology/approachThis paper employs a signaling model to illustrate the strategy and organizational forms megachurches employ to indicate a match between what the church produces and the religious refugee wishes to consume in an effort to increase their membership. The model illustrates that megachurches expect little in regard to financial or time commitment of new attendees. However, once the attendees perceive a good fit with the church, the megachurch increases its expectation of commitment. Data from the FACT2000 survey provide evidence in support of the model's predictions.FindingsData from the FACT2000 survey provide evidence in support of the model's predictions.Originality/valueThe paper serves to illustrate the dynamic process by which megachurches attract new attendees and transform those that find a good fit between their needs and what the church offers into full members of the church.

Drosophila is a useful model organism in which the genetics of human diseases, including recent advances in identification of the genetics of heart development and disease in the fly, can be studied. To identify novel genes that cause cardiomyopathy, we performed a deficiency screen in adult Drosophila. Using optical coherence tomography to phenotype cardiac function in awake adult Drosophila, we identified Df(1)Exel6240 as having cardiomyopathy. Using a number of strategies including customized smaller deletions, screening of mutant alleles, and transgenic rescue, we identified CG3226 as the causative gene for this deficiency. CG3226 is an uncharacterized gene in Drosophila possessing homology to the mammalian Siah-interacting protein (SIP) gene. Mammalian SIP functions as an adaptor protein involved in one of the β-catenin degradation complexes. To investigate the effects of altering β-catenin/Armadillo signaling in the adult fly, we measured heart function in flies expressing either constitutively active Armadillo or transgenic constructs that block Armadillo signaling, specifically in the heart. While, increasing Armadillo signaling in the heart did not have an effect on adult heart function, decreasing Armadillo signaling in the fly heart caused the significant reduction in heart chamber size. In summary, we show that deletion of CG3226, which has homology to mammalian SIP, causes cardiomyopathy in adult Drosophila. Alterations in Armadillo signaling during development lead to important changes in the size and function of the adult heart.

Though the recent literature offers intuitively appealing bases for, and evidence of, a linkage among religious beliefs, religious participation and economic outcomes, evidence on a relationship between religion and trust is mixed. By allowing for an attendance effect, disaggregating Protestant denominations, and using a more extensive data set, probit models of the General Social Survey (GSS), 1975 through 2000, show that black Protestants, Pentecostals, fundamentalist Protestants, and Catholics, trust others less than individuals who do not claim a preference for a particular denomination. For conservative denominations the effect of religion is through affiliation, not attendance. In contrast, liberal Protestants trust others more and this effect is reinforced by attendance. The impact of religion on moderate Protestants is only through attendance, as frequency of attendance increases trust of others while the denomination effect is insignificant.

Organ hypertrophy can result from enlargement of individual cells or from cell proliferation or both. Activating mutations in the serine-threonine kinase Raf cause cardiac hypertrophy and contribute to Noonan syndrome in humans. Cardiac-specific expression of activated Raf also causes hypertrophy in Drosophila melanogaster. We found that Yorkie (Yki), a transcriptional coactivator in the Hippo pathway that regulates organ size, is required for Raf-induced cardiac hypertrophy in flies. Although aberrant activation of Yki orthologs stimulates cardiac hyperplasia in mice, cardiac-specific expression of an activated mutant form of Yki in fruit flies caused cardiac hypertrophy without hyperplasia. Knockdown of Yki caused cardiac dilation without loss of cardiomyocytes and prevented Raf-induced cardiac hypertrophy. In flies, Yki-induced cardiac hypertrophy required the TEA domain-containing transcription factor Scalloped, and, in mammalian cells, expression of mouse Raf(L613V), an activated form of Raf with a Noonan syndrome mutation, increased Yki-induced Scalloped activity. Furthermore, overexpression of Tgi (a Tondu domain-containing Scalloped-binding corepressor) in the fly heart abrogated Yki- or Raf-induced cardiac hypertrophy. Thus, crosstalk between Raf and Yki occurs in the heart and can influence Raf-mediated cardiac hypertrophy.

The standard time-inconsistency-based explanation for the negative correlation between openness and inflation requires an inverse relationship between the sacrifice ratio and openness, but Daniels et al. (2005, Openness, central bank independence, and the sacrifice ratio. Journal of Money, Credit, and Banking 37 (2), 371–379.) have provided evidence that controlling for central bank independence reveals a positive relationship. This paper embeds the time-inconsistency approach within a model of a multisector, imperfectly competitive, open economy. In this setting, greater openness raises the sacrifice ratio but reduces the inflation bias. Thus, failure to observe an inverse relationship between openness and the sacrifice ratio does not necessarily imply that the time-inconsistency approach is irrelevant to understanding the openness–inflation relationship.

This paper develops a model of an open economy containing both sectors in which wages are market-determined and sectors with wage-setting arrangements. A portion of the latter group of sectors coordinate their wages, taking into account that their collective actions influence the equilibrium inflation outcome in an environment in which the central bank engages in discretionary monetary policymaking. Key predictions forthcoming from this model are (1) increased centralization of wage setting initially causes inflation to increase at low degrees of wage centralization but then, as wage centralization increases, results in an inflation drop-off; (2) a greater degree of centralized wage setting reduces the inflation-restraining effect of greater central bank independence; and (3) increased openness is more likely to reduce inflation in nations with less centralized wage bargaining. Analysis of data for seventeen nations for the period 1970–1999 provides generally robust empirical support for all three of these predictions.

Empirical examination of individual-level survey data on national identity, in general, reveals a significant relationship between religious affiliation and an individual's international-policy preferences and that this relationship varies across Protestant denominations. Specifically, we test attitudes toward import and immigration policies, the role of international institutions, and unilateral policy actions. The empirical results indicate that individuals affiliated with conservative Protestant denominations are more likely to support positions on international issues that can be regarded as consistent with the anti-globalist right. We also find evidence of a reinforcing regional effect among conservatives in the south, and differences in the preferences of Baptist and non-Baptist African Americans.

Using the results of a national identity survey, we test the impact of religious affiliation on trade and immigration-policy preferences of U.S. residents while controlling for individual level of skill, political ideology, and other important demographic characteristics. Our results show that religion is an important determinant of international-policy preferences as individuals who are pre-Vatican II Catholic or members of a fundamentalist Protestant denomination are more likely to prefer policies that restrict imports and immigration. Religiosity, in contrast, has a separate effect of moderating attitudes toward immigration. In addition, we find evidence of denominational effects among African Americans in that members of fundamentalist denominations tend to favor policies that restrict imports while others do not, implying that statistical results commonly attributed to racial effects may actually be a religion effect. Valuable comments and insights were provided by Jim McGibany, participants of the Third Annual Conference on Religion, Economics, and Culture, and two anonymous referees.

Traditional explanations of the negative correlation between openness and inflation presume that an inverse relationship between the degree of openness and the sacrifice ratio reduces the inflation bias of descretionary monetary policy. Temple (2002) concludes, however, that such a relationship fails to emerge in cross-country data. Our analysis of the same cross-country data considered by Temple indicates that once the degree of central bank independence and its interaction with greater openness and the sacrifice ratio. In addition, increased openness lessens the positive effect of central bank independence on the sacrifice ratio.

This paper employs survey data to examine the determinants of immigration-policy preferences among ten advanced economies. Ordered probit specifications suggest that skill level is a robust determinant of immigration-policy preferences and that less-skilled workers are more likely to express a preference for policies that restrict immigration. The results also suggest that older individuals, members of trade unions, and those who classify their political ideology as conservative are more likely to favor limiting immigration while non-citizens are less likely to favor such policies. Individual country-level regression results vary, in particular with regard to the influence of trade union member-ship, which is a robust determinant of immigration-policy preferences for both measures of skill in only a subset of nations.

This paper applies a two-country framework that allows for currency substitution in an environment in which policymakers optimally vary interest rates in light of utility-based objectives, one country pegs the value of its currency to the other nation’s currency, and government revenue is generated via explicit taxes and seigniorage. The analysis illustrates the roles that currency substitution, currency preferences, and efficiency of tax systems play in contributing to the likelihood of a “run” on one nation’s currency. We explore how these factors interact to influence the probability of a currency crisis in the country that fixes its exchange rate.

The exchange rate arrangement represents an important policy choice for emerging and transitional economies as they strive to become stable and market-driven. A wide variety of arrangements have emerged, ranging from currency boards, basket-currency pegs and single-currency pegs to floating rates. Recently the IMF has recommended that, if the exchange value of a currency is to be pegged, it is better to peg to a basket of currencies rather than a single currency. Nonetheless, there has been little theoretical research on the management and optimal design of basket-peg arrangements. In this paper we extend the small-country macroeconomics model of Turnovsky to show that an optimally designed basket-peg arrangement can minimize the variance in domestic consumer prices as well as the variance of foreign reserves. The model highlights the importance of the money and bond markets and, therefore, the importance of various interest rate channels. Additionally we show that a trade-weighted currency basket is not only suboptimal, it is at odds with increasing capital market integration. Further our solutions illustrate that the optimal weights will evolve as the domestic economy integrates with the global market for goods and services, and financial instruments.

This paper surveys the literature that uses two-country models to analyze monetary and fiscal policy issues faced in interdependent economies. We discuss sources of structural interdependence that researchers typically include in these models. We describe many of the types of policy interactions that researchers have considered and summarize the key results that they have obtained. Finally, we briefly explain the limitations of two-country models and outline directions that this literature might usefully be extended.

In this paper, a two-country leader-follower model with imperfect asset substitution is used to derive the optimal sterilization coefficients for two-country flexible and fixed exchange rate regimes. It is found that, in general, incomplete sterilization is optimal. However, both the origin and the type of macroeconomic shocks the economies experience are important in determining the appropriate degree of sterilization. We also find that sterilization policies have spill-over effects (strategic complements) in both cases. Thus, in a competitive policy-making environment, greater sterilization by one country leads to greater sterilization by the other country. Further, the impact of increasing capital market integration is examined in particular. We show that greater integration compounds this problem, leading to full sterilization as the optimal outcome under perfect capital mobility.

The authors address questions in current business and policy literature regarding the structural linkages evolving in the globalization process. The authors conclude that the US administration and American firms have to be more responsive to the interests of the international community that are being vitally affected by the integrating effects of transnational production and world trade.

This article considers a transition toward European monetary union that combines increased substitution of currencies and greater monetary, financial, and fiscal policy coordination. It explores how such a transition would affect national inflation and interest rates and required reserve ratios when governments depend in part on seigniorage funding for public expenditures. We find that greater coordination of policies would lead to lower inflation and interest rates but higher reserve-requirement ratios. Because higher reserve-requirement ratios could place European banks at a competititve disadvantage, we conclude that the interaction between reserve requirements and seigniorage concerns makes it less likely that the gradualist approach of the Maastricht treaty is a sustainable means of transition to European union.

The recent advances in the econometrics of integrated time series by Johansen are applied to the much examined Fisher effect. While the existing literature is concerned with whether there is a stable long-run equilibrium relation between the nominal rate of interest and inflation, the existence of a one-to-one relation along this path is also tested. Moreover, it is found that in the long run there is a unidirectional causality from the inflation rate to the rate of interest. However, in the short-run there is a feedback (bi-directional causality) between the two variables.

Most nations have experienced ‘base drift’ of their money stocks and associated price-level non-trend-stationarities. Recent explanations for this fact have emphasized tensions among various possible objectives of central banks in closed-economy or small-open-economy frameworks. In contrast, this paper explores structural and policy interdependence among economies as an explanation for price-level non-trend-stationarities. It demonstrates that such interdependence can induce central banks to follow non-trend-stationary policies even if they desire only to smooth prices in their home economies.