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An exploration of the cross-sectional relationship between inflation and an array of indicators of financial market conditions, using time-averaged data covering several decades and a large number of countries.

This paper assesses the impact of the geographic diversification of bank holding company (BHC) assets across the United States on their market valuations. Using two novel identification strategies based on the dynamic process of interstate bank deregulation, we find that exogenous increases in geographic diversity reduce BHC valuations. These findings are consistent with the view that geographic diversity makes it more difficult for shareholders and creditors to monitor firm executives, allowing corporate insiders to extract larger private benefits from firms.

This paper describes a simple model of technology adoption which combines the two engines of growth emphasized in the recent growth literature: human capital accumulation and technological progress. Our model economy does not create new technologies, it simply adopts those that have been created elsewhere. The accumulation of human capital is closely tied to this adoption process: accumulating human capital simply means learning how to incorporate a new intermediate good into the production process. Since the adoption costs are proportional to the labor force, the model does not display the counterfactual scale effects that are standard in models with endogenous technical progress. We show that our model is compatible with various standard results on the effects of economic policy on the rate of growth.

JAK2 is critical to cytokine signaling and has a specific role in mediating alloreactivity. We have demonstrated that specific JAK2 inhibition with TG101348 suppresses alloimmunity stimulated by human dendritic cells in vitro, while maintaining immunity against viral antigens. JAK2 inhibition also extends survival in a mouse graft-versus-host disease (GvHD) model. Methods: Major MHC-mismatch models were used in human and mouse experiments. Human moDC and moDC:T cell cultures were treated with either TG101348 (1uM) or vehicle. Mice underwent 850 cGy irradiation followed by T cell-depleted marrow and splenic T cells. TG101348 (60mg/kg) or vehicle was administered per oral gavage daily. Results: JAK2 inhibition reduced the expression of CD83 and CCR7 in 2-day cytokine-matured moDCs (p

Creating Resilient Financial Regimes in Asia: Challenges and Policy Options. Edited by Priya Basu. Oxford and New York: Oxford University Press, 1998. Pp. xvi, 162. $32.00. ISBN 0–19–590440–0.

Mutations that result in constitutive tyrosine kinase activation occur in a wide spectrum of human malignancies, including acute myeloid leukemia (AML). Although activating mutations in the tyrosine kinases FLT3 and c-KIT occur in a significant proportion of patients with AML, the genomic events responsible for oncogenic signaling in most patients with AML have not been identified. To determine whether other aberrantly activated tyrosine kinases contribute to the pathogenesis of AML, we employed high throughput (HT) DNA sequence analysis to screen the exons encoding domains implicated in kinase activation (activation loop), and autoinhibition (juxtamembrane domains) in 85 tyrosine kinase genes in 192 AML patients without FLT3 or c-KIT mutations. The screen identified 34 non-synonymous sequence variations in 25 different kinases that had not been reported in single-nucleotide polymorphism (SNP) databases. These included a novel activating allele in FLT3, and a previously described activating mutation in MET (METT1010I). The majority of the novel sequence variants were cloned into their respective tyrosine kinase cDNA, and stably expressed in the factor-dependent Ba/F3 hematopoietic cell line. Apart from one FLT3 allele, none of the other novel variants showed evidence of constitutive phosphorylation by immunoblot analysis, and none transformed Ba/F3 cell lines to factor independent growth. These findings indicate that the majority of these alleles are not potent activators of tyrosine kinase activity in this cellular context, and that a significant proportion of non-synonymous sequence variants identified in HT DNA sequencing screens may not have functional significance. Although several explanations are possible for this observation, these data are consistent with recent reports that a significant fraction of such sequence variants are “passenger” rather than “driver” alleles, in cancer, and underscore the importance of functional assessment of candidate disease alleles.

This paper uses new data and new econometric techniques to investigate the impact of international financial integration on economic growth and also to assess whether this relationship depends on the level of economic development, financial development, legal system development, government corruption, and macroeconomic policies. Using a wide array of measures of international financial integration for 57 countries and an assortment of statistical methodologies, we are unable to reject the null hypothesis that international financial integration does not accelerate economic growth even when controlling for particular economic, financial, institutional, and policy characteristics.

Two arguments advanced in favor of Mexico abandoning the peso and adopting the U.S. dollar are to lower exchange rate volatility and inflation. We are not able to identify an independent link between economic growth and either the exogenous component of exchange rate volatility or the exogenous component of inflation. Exchange rate volatility generally reflects other factors, rather than representing an independent growth determinant. The findings are consistent with theoretical predictions that inflation influences growth by affecting financial development. However, we present suggestive evidence that legal reforms offer greater financial development dividends for Mexico than adopting the dollar. Two OF THE MAIN ARGUMENTS advanced in favor of Mexico abandoning the peso and adopting the U.S. dollar are (1) to lower inflation (and inflation uncertainty) and (2) to reduce exchange rate volatility. From 1960 tol995, Mexico's annual inflation rate averaged about 24.5 percent, while inflation in the United States averaged 5.5 percent. In addition, Mexico has experienced severe exchange rate fluctuations against the dollar, especially in the last fifteen years. Supporters of complete "dollarization" believe that reducing the rate of inflation (which moves very closely with the volatility of inflation) toward U.S. levels and eliminating exchange rate variability vis-a-vis the U.S. dollar will enhance the business climate and thereby promote economic performance. If lower inflation rates and less exchange rate variability boost growth, then this strengthens the case for dollarization. If, however, inflation and exchange rate variability do not exert large impacts on economic activity, then the arguments in favor of dollarization must be sought elsewhere. Besides inflation and exchange rate volatility, policymakers must contemplate an array of factors in deciding on dollarization. Dollarization would eliminate discretionary monetary policy and limit lender of last resort facilities during financial sec

This paper examines the relationship between the legal system and banlding development and traces this connection through to long-run rates of per capita GDP growth, capital stock growth, and productivity growth. The data indicate that countries where the legal system (1) emphasizes creditor rights and (2) rigorously enforces contracts have better-developed banks than countries where laws do not give a high priority to creditors and where enforcement is lax. Furtherrnore, the exogenous component of banking development-the component defined by the legal environment-is positively and robustly associated with per capita growth, physical capital accumulation, and productivity growth. THIS PAPER ADDRESSES TWO QUESTIONS. First, do crosscountry differences in the legal rights of creditors, the efficiency of contract enforcement, and the origin of the legal system explain cross-country differences in the level of banking development? Second, do better-developed banks cause faster economic development; that is, is the component of banking development defined by the legal environment positively associated with long-run rates of economic growth, capital accumulation, and productivity growth? Examining the relationship between the legal system and banking development is valuable irrespective of issues associated with long-run growth. First, banks may influence the level of income per capita and the magnitude of cyclical fluctuations (Bernanke and Gertler 1989, 1990). Second, many economists stress that understanding the evolution of legal and financial systems is essential for understanding economic development (North 1981; Engerman and Sokoloff 1996). Consequently, quantitative information on the relationship between the legal environment and banks will improve our understanding of business cycles and the process of economic development. Furthermore, examining the causal links between banks and economic growth has both conceptual and policy implications. On the conceptual front, a long literature debates the importance of banks in economic development. Starting as early as Bagehot (1873), economists have argued that better banks banks that are better at identifying creditworthy firms, mobilizing savings, pooling risks, and facilitating transactions

AN INTERNATION AL ARBITRAGE PRICING MODEL WITH PPP DEVIATIONS I. INTRODUCTION There is a growing literature examining the implications of purchasing power parity (PPP) deviations in international asset pricing models. This literature typically assumes that residents of a country deflate nominal returns by their national price index in order to determine real returns. In this setting, stochastic PPP deviations imply that the real return on an asset differs internationally. This international difference in real returns has forced authors to make important simplifying assumptions in order to derive international asset pricing models. Solnik [1974] develops an international capital asset pricing model (ICAPM) assuming no inflation and no correlation between PPP deviations and local real returns. His model is extended by Sercu [1980] to permit correlation between exchange rates and local real returns, and by Kouri and de Macedo [1978] to allow for nonstochastic inflation. This paper abandons the ICAPM approach in order to price assets in a setting of stochastic inflation rates, stochastic PPP deviations, and correlation between PPP deviations and real asset returns without imposing concomitant restrictions on agents' utility functions. (1) The paper extends Ross's [1976] arbitrage pricing theory to an international environment with PPP deviations. It improves upon Solnik's [1983] and Ross and Walsh's [1983] international arbitrage pricing models (IAPM) by (i) allowing both stochastic inflation and stochastic PPP deviations, (ii) demonstrating how returns may be translated into any nominal or real numeraire, and (iii) emphasizing the dynamic nature of international asset pricing. In addition, the model specifies risk, the price of risk, and the translation of these variables between all nominal and real numeraires as functions of the model's fundamental state variables. This yields testable restrictions not found in domestic arbitrage pricing models (APM). (2) After deriving an IAPM with PPP deviations, this paper uses the model to examine the forward exchange market's riks premium. The model's state variables determine the stochastic structure of PPP deviations and national price levels, which in turn define the dynamics of risk and the price of risk. The analysis demonstrates the potentially central role of PPP deviations in determining the evolution of forward exchange risk premia. Since the source of the bias between forward and future spot exchange rates has not bee convincingly identified and since PPP deviations have not been highlighted in studies of this bias, future empirical investigations concerning the systematic discrepancies between forward and future spot exchange rates should incorporate PPP deviations. (3) The model's equations are discussed in section II. Section III derives an intertemporal IAPM with PPP deviations, demonstrates how to translate risk and the price of risk into any nominal or real numeraire using the model's state variables, and identifies testable restrictions not found in the domestic APM. Section IV derives and examines the forward exchange market's risk premium, and section V presents a brief summary. II. THE MODEL The world economy consists of n + 1 countries each with its own currency. Currency 0 is arbitrarily chosen as the nominal numeraire. Every investor is able to issue and purchase assets in any country through freely floating international exchange markets. It is assumed that country i has [N.sub.i] assets, and the total number of assets [Mathematical Expression Omitted] is much larger than the number of countries (n + 1). For convenience, the first n + 1 assets are nominally riskless in local currency terms so that asset O is country O's nominally riskless asset. Although all goods are available in each country, residents of country i can consume only goods purchased in country i. …

This paper attempts to provide some structure to the analysis and measurement of "net resource transfers." We go about achieving this objective in two steps. First, we use standard measures of portfolio changes and balance of payments statistics to evaluate the real resource transfers associated with financial transactions. Second, we sketch ways in which this analytical framework can be used to address the economic concerns associated with the term "net resource transfers," e.g., questions regarding the "burdens" of international debt obligations and the effects of these obligations on domestic capital formation and debt servicing.

Patterns of vitrinite reflectance anisotropy in coal are represented by a three-dimensional graphical form resembling an ellipsoid, termed the vitrinite reflectance indicating surface (VRI). Naturally occurring VRIs from the Northern Appalachian basin, Pennsylvania, range in shape from biaxial negative to biaxial positive depending on their coalification history and tectonic setting. VRI shapes are measured by estimating the magnitudes of the three principal reflectances, Rmax, Rint, and Rmin, either on oriented blocks or non-oriented grain mounts. Spatial orientations of the principal axes are determined by reflectance measurements on oriented polished cores. The various VRI shapes are portrayed on axial ratio diagrams, i.e. plots of R max R int on the vertical axis and R int R min on the horizontal axis. Axial ratio diagrams are also used to depict the progressive change in VRI shape with coalification. Standard deviations of the principal reflectance axes, as measured on oriented cores, average around 0.09% in magnitude and 5° in orientation. Measurements are highly reproducible between pairs of oriented cores. Estimates of the principal reflectance magnitudes, as measured on oriented vs. non-oriented samples, agree on average to within 0.04% for Rmax, 0.08% for Rint, and 0.20% for Rint. Coal-bearing strata in the North-Central coal fields (medium-volatile bituminous coal to semianthracite), in northern Pennsylvania were diagenetically altered in a predominantly burial-strain environment and exhibit structural evidence of only mild tectonic deformation. VRIs from this suite of coals are biaxial negative with Rmin axes roughly perpendicular to bedding. With increasing rank toward the southeast, these VRIs plot along a straight line pathway on the axial ratio diagram, emanating from near the origin and extending through the biaxial negative deformation field. VRIs of coals from the Western Middle anthracite field exhibit a wide range of shapes and orientations, which is indicative of a more complex tectonic history. In their present-day orientation, Rmin axes are scattered about a great circle distribution, the pole to which is precisely coincident with regional fold axes. When beds are unfolded to a flat-lying orientation they become significantly less scattered, indicating that most coalification here preceded the final phase of Alleghanian folding. Rmax axes of sporinite grains are alwayas aligned parallel to bedding, which suggests that the strata were still flat-lying, and not subject to tectonic forces, when the coals passed through the 1st and 2nd “coalification jumps”.

Vitrinite in coal is optically anisotropic in reflected light, owing to a preferred orientation of its component molecular structure. Such reflectance fabrics can, under some circumstances, provide a record of stress and strain events occurring during coal metamorphism. Based upon observed differences in the orientation and shape of vitrinite reflectance indicatrices (VRIs), differing tectonic histories are suggested for three regions within the bituminous and anthracite coal fields of the northern Appalachian (coal) basin, Pennsylvania. VRIs of coals from the North-Central fields on the Allegheny Plateau have oblate geometries similar to those of most coals worldwide, indicative of only mild tectonic deformation. Maximum reflectance orientations for North-Central field coals are polymodal and aligned with polymodal Alleghanian fold axes. Low-volatile bituminous coals from the Broad Top field, south-central Pennsylvania, exhibit much stronger tectonic reflectance fabrics and bear evidence that low-volatile bituminous rank was attained only after folding was completed in this part of the fold-and-thrust belt. VRIs of coals from the Western Middle anthracite field reflect a more complex tectonic history and indicate that most coalification here preceded the final phase of Alleghanian folding. VRls of coals from an underground mine in the Western Middle anthracite field provide additional details on strain directions and timing of coalification. Coal rank increases very slightly down section, but R min decreases down section, opposite to the expected trend. These coals probably attained anthracite rank prior to the principal phase of Alleghanian folding, but at least some coalification continued after folding, as suggested by reconstructed coalification pathways on the axial ratio diagram. During this final coalification phase, the stratigraphically upper beds "caught up" in rank with the stratigraphically lower beds through elongation of R max parallel to the fold axes and elongation of R min in a subvertical direction. VRIs of the stratigraphically upper beds were transformed to a prolate geometry, whereas those of the lower beds retained their original oblate form.

This paper isolates the common themes and policy recommendations found in the capital flight literature, and evaluates their statistical, conceptual, and empirical foundations. We find that there is no basis for presuming a stable link between any measure of capital flight and a nation's growth potential or ability to meet external obligations. Thus, although popular measures of capital flight are occasionally indicative of underlying economic and political problems, "capital flight" is not generally useful as a policy target or reliable as a signal of when to intensify or mitigate efforts for policy reforms. Moreover, policies proposed to reduce capital flight and repatriate flight capital may even stymie investment, slow growth, shrink the tax-base, and the lower the country's debt financing capacity.

✓ A patient with bitemporal hemianopsia was found to have an enlarged optic chiasm. Biopsy of the intrachiasmatic tissue revealed craniopharyngioma.

This paper attempts to provide some structure to the analysis and measurement of "net resource transfers." We go about achieving this objective in two steps. First, we use standard measures of portfolio changes and balance of payments statistics to evaluate the real resource transfers associated with financial transactions. Second, we sketch ways in which this analytical framework can be used to address the economic concerns associated with the term "net resource transfers," e.g., questions regarding the "burdens" of international debt obligations and the effects of these obligations on domestic capital formation and debt servicing.

This paper examines the question of how the path of real GDP in four important Latin American countries, Argentina, Brazil, Chile and Mexico, might have differed if the sharp run-up in borrowing during the late 1970s and early 1980s had not occurred. Specifically, we ask whether these countries are better off or worse off for having borrowed heavily prior to the debt crisis, and we attempt to gauge the extent to which they would have received greater benefits if policies that improve economic efficiency had been followed. A simple macroeconomic mode is developed, and the simulation results are compared to the historical outcomes.

This paper addresses the question: do risk premia account for the observed time-varying discrepancies between forward and corresponding future spot exchange rates? A simple theoretical framework is used to derive testable restrictions on the parameters of a multivariate regression model. Using various econometric procedures and different estimation periods, the data reject the restrictions. In contrast to past investigations, the empirical results are inconsistent with a world in which time-varying risk premia are the sole determinants of observed deviations from the unbiased expectations hypothesis. Anticipated real exchange rate movements may explain the rejection.

This paper isolates the common themes and policy recommendations found in the capital flight literature, and evaluates their statistical, conceptual, and empirical foundations. We find that there is no basis for presuming a stable link between any measure of capital flight and a nation's growth potential or ability to meet external obligations. Thus, although popular measures of capital flight are occasionally indicative of underlying economic and political problems, "capital flight" is not generally useful as a policy target or reliable as a signal of when to intensify or mitigate efforts for policy reforms. Moreover, policies proposed to reduce capital flight and repatriate flight capital may even stymie investment, slow growth, shrink the tax-base, and the lower the country's debt financing capacity.

Although the literature has devoted prodigious resources to investigating the risk premium explanation of the systematic time-varying discrepancies between forward and corresponding future spot exchange rates, empirical verification of the risk premium hypothesis has proven elusive. This paper tests an alternative explanation of the forward bias: the anticipated real exchange rate hypothesis. This hypothesis states that except for a constant risk premium, the predictable, time ­varying wedge between forward and expected future spot exchange rates is fully explained by the anticipated rate of change in the real exchange rate. The data do not reject this hypothesis. This suggests that the literature's almost singular concern with the risk premium explanation of the forward bias should be amended to include the effects of anticipated real exchange rate movements.

Elgar Advanced Introductions are stimulating and thoughtful introductions to major fields in the social sciences and law, expertly written by the world’s leading scholars. Designed to be accessible yet rigorous, they offer concise and lucid surveys of the substantive and policy issues associated with discrete subject areas.

The following sections are included:IntroductionFinance and Growth, Inequality, and PovertyBanks, growth, inequality, and the poorCross-country evidenceU.S. evidence on finance, growth, inequality, and the poorBanks, markets, and growthFinancial Innovation and GrowthConclusionsReferences

Recent studies of vitrinite reflectance, sedimentary compaction, and fluid inclusions indicate that coal-bearing strata of the Pennsylvania Anthacite region were once buried at depths ranging from 6 to as much as 9 km. Vitrinite reflectance anisotropy suggests that anthracite rank was attained by normal geothermal heating largely prior to and during Alleghanian folding. Paleomagnetic ages for the folding and paleobotanical ages of the youngest extant sediments delimit the maximum burial and deformation to a relatively short interval (285 to 270 Ma). In comparison with typical molasse sequences, the implied thicknesses and rates of deposition are excessive, suggesting that much of the former overburden was emplaced tectonically or by extremely rapid sedimentation. The total implied thickness (about 20 km) of Paleozoic strata in the region is abnormally large for an epicontinental basin. An inferred body of mafic rock embedded in the Precambrian basement, evidenced by the Scranton gravity high (SGH), may have influenced crustal subsidence, especially during the Allegheny orogeny, and produced a large downwarp accounting for the high coal rank. The fact that isorank contours, Paleozoic sediment isopach contours, and a large structural sag all lie roughly parallel to the boundaries of the SGH, oblique to the principal Alleghanian fold trend, lends support to this idea.

The anisotropic “reflectance fabric” of coal is used as a finite strain marker in the structural analysis of deformed strata in the Broad Top Coal Field of central Pennsylvania. Oriented blocks of coal were collected at various field locations. The reflectances of three orthogonal surfaces were used to estimate the magnitudes and orientations of the three principal reflectance axes. Broad Top coals are shown to have three principal reflectance values, in contrast with most bituminous coals, which have only two. Reflectance values can be represented by a biaxial indicatrix that may be either prolate or oblate. The oblate indicatrices, showing flattening in the bedding plane, are associated with gently deformed strata. The prolate indicatrices, elongated parallel to the fold axes (N32°E), are associated with more intensely folded strata and show the influence of strong lateral compression superimposed upon gravitational loading. The reflectance indicatrices maintain a constant spatial orientation, regardless of the inclination of the enveloping bedding. The minimum principal reflectance axis plunges steeply toward the west, indicating that during deformation the direction of maximum compression was plunging toward the northwest. These results suggest that in the Broad Top field maximum coalification and, therefore, maximum burial were penecontemporaneous with the later stages of deformation, postdating most of the folding.

Chapitre n°2; International audience; Financial intermediaries and markets can alleviate market frictions through producing information and risk sharing in different ways. In practice, the structure of financial systems can be bank-based or market-based, varying across countries. The influence of financial structure on economic growth is dependent on the overall development of the real economy and institutions. The association is also different during crisis periods and non-crisis periods. Market-based systems tend to have an advantage for financially dependent industries in good times but are a disadvantage in bad times. The recent rapid growth of shadow banking benefits economic growth but also poses additional risks to the financial system and real economy.