Market Efficiency after the Financial Crisis: It's Still a Matter of Information Costs

Compared to the worldwide financial carnage that followed the Subprime Crisis of 2007-2008, it may seem of small consequence that it is also said to have demonstrated the bankruptcy of an academic financial institution: the Efficient Capital Market Hypothesis (“ECMH”). Two things make this encounter between theory and seemingly inconvenient facts of consequence. First, the ECMH had moved beyond academia, fueling decades of a deregulatory agenda. Second, when economic theory moves from academics to policy, it also enters the realm of politics, and is inevitably refashioned to serve the goals of political argument. This happened starkly with the ECMH. It was subject to its own bubble – as a result of politics, it expanded from a narrow but important academic theory about the informational underpinnings of market prices to a broad ideological preference for market outcomes over even measured regulation. In this Article we examine the Subprime Crisis as a vehicle to return the ECMH to its information cost roots that support a more modest but sensible regulatory policy. In particular, we argue that the ECMH addresses informational efficiency, which is a relative, not an absolute measure. This focus on informational efficiency leads to a more focused understanding of what went wrong in 2007-2008. Yet informational efficiency is related to fundamental efficiency – if all information relevant to determining a security’s fundamental value is publicly available and the mechanisms by which that information comes to be reflected in the securities market price operate without friction, fundamental and informational efficiency coincide. But where all value relevant information is not publicly available and/or the mechanisms of market efficiency operate with frictions, the coincidence is an empirical question both as to the information efficiency of prices and their relation to fundamental value. Properly framing market efficiency focuses our attention on the frictions that drive a wedge between relative efficiency and efficiency under perfect market conditions. So framed, relative efficiency is a diagnostic tool that identifies the information costs and structural barriers that reduce price efficiency which, in turn, provides part of a realistic regulatory strategy. While it will not prevent future crises, improving the mechanisms of market efficiency will make prices more efficient, frictions more transparent, and the influence of politics on public agencies more observable, which may allow us to catch the next problem earlier. Recall that on September 8, 2008, the Congressional Budget Office publicly stated its uncertainty about whether there would be a recession and predicted 1.5 percent growth in 2009. Eight days later, Lehman Brothers had failed, and AIG was being nationalized

The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems

In economic systems, the mix of products that countries make or export has been shown to be a strong leading indicator of economic growth. Hence, methods to characterize and predict the structure of the network connecting countries to the products that they export are relevant for understanding the dynamics of economic development. Here we study the presence and absence of industries at the global and national levels and show that these networks are significantly nested. This means that the less filled rows and columns of these networks' adjacency matrices tend to be subsets of the fuller rows and columns. Moreover, we show that nestedness remains relatively stable as the matrices become more filled over time and that this occurs because of a bias for industries that deviate from the networks' nestedness to disappear, and a bias for the missing industries that reduce nestedness to appear. This makes the appearance and disappearance of individual industries in each location predictable. We interpret the high level of nestedness observed in these networks in the context of the neutral model of development introduced by Hidalgo and Hausmann (2009). We show that, for the observed fills, the model can reproduce the high level of nestedness observed in these networks only when we assume a high level of heterogeneity in the distribution of capabilities available in countries and required by products. In the context of the neutral model, this implies that the high level of nestedness observed in these economic networks emerges as a combination of both, the complementarity of inputs and heterogeneity in the number of capabilities available in countries and required by products. The stability of nestedness in industrial ecosystems, and the predictability implied by it, demonstrates the importance of the study of network properties in the evolution of economic networks.Comment: 26 page

Profiles of physical, emotional and psychosocial wellbeing in the Lothian birth cohort 1936

<p>Abstract</p> <p>Background</p> <p>Physical, emotional, and psychosocial wellbeing are important domains of function. The aims of this study were to explore the existence of separable groups among 70-year olds with scores representing physical function, perceived quality of life, and emotional wellbeing, and to characterise any resulting groups using demographic, personality, cognition, health and lifestyle variables.</p> <p>Methods</p> <p>We used latent class analysis (LCA) to identify possible groups.</p> <p>Results</p> <p>Results suggested there were 5 groups. These included High (n = 515, 47.2% of the sample), Average (n = 417, 38.3%), and Poor Wellbeing (n = 37, 3.4%) groups. The two other groups had contrasting patterns of wellbeing: one group scored relatively well on physical function, but low on emotional wellbeing (Good Fitness/ Low Spirits,n = 60, 5.5%), whereas the other group showed low physical function but relatively well emotional wellbeing (Low Fitness/Good Spirits, n = 62, 5.7%). Salient characteristics that distinguished all the groups included smoking and drinking behaviours, personality, and illness.</p> <p>Conclusions</p> <p>Despite there being some evidence of these groups, the results also support a largely one-dimensional construct of wellbeing in old age—for the domains assessed here—though with some evidence that some individuals have uneven profiles.</p

Webinar Training: an acceptable, feasible and effective approach for multi-site medical record abstraction: the BOWII experience

<p>Abstract</p> <p>Background</p> <p>Abstractor training is a key element in creating valid and reliable data collection procedures. The choice between in-person vs. remote or simultaneous vs. sequential abstractor training has considerable consequences for time and resource utilization. We conducted a web-based (webinar) abstractor training session to standardize training across six individual Cancer Research Network (CRN) sites for a study of breast cancer treatment effects in older women (BOWII). The goals of this manuscript are to describe the training session, its participants and participants' evaluation of webinar technology for abstraction training.</p> <p>Findings</p> <p>A webinar was held for all six sites with the primary purpose of simultaneously training staff and ensuring consistent abstraction across sites. The training session involved sequential review of over 600 data elements outlined in the coding manual in conjunction with the display of data entry fields in the study's electronic data collection system. Post-training evaluation was conducted via Survey Monkey^©. Inter-rater reliability measures for abstractors within each site were conducted three months after the commencement of data collection.</p> <p>Ten of the 16 people who participated in the training completed the online survey. Almost all (90%) of the 10 trainees had previous medical record abstraction experience and nearly two-thirds reported over 10 years of experience. Half of the respondents had previously participated in a webinar, among which three had participated in a webinar for training purposes. All rated the knowledge and information delivered through the webinar as useful and reported it adequately prepared them for data collection. Moreover, all participants would recommend this platform for multi-site abstraction training. Consistent with participant-reported training effectiveness, results of data collection inter-rater agreement within sites ranged from 89 to 98%, with a weighted average of 95% agreement across sites.</p> <p>Conclusions</p> <p>Conducting training via web-based technology was an acceptable and effective approach to standardizing medical record review across multiple sites for this group of experienced abstractors. Given the substantial time and cost savings achieved with the webinar, coupled with participants' positive evaluation of the training session, researchers should consider this instructional method as part of training efforts to ensure high quality data collection in multi-site studies.</p

Carbon stable isotope analysis of cereal remains as a way to reconstruct water availability: preliminary results

Reconstructing past water availability, both as rainfall and irrigation, is important to answer questions about the way society reacts to climate and its changes and the role of irrigation in the development of social complexity. Carbon stable isotope analysis of archaeobotanical remains is a potentially valuable method for reconstructing water availability. To further define the relationship between water availability and plant carbon isotope composition and to set up baseline values for the Southern Levant, grains of experimentally grown barley and sorghum were studied. The cereal crops were grown at three stations under five different irrigation regimes in Jordan. Results indicate that a positive but weak relationship exists between irrigation regime and total water input of barley grains, but no relationship was found for sorghum. The relationship for barley is site-specific and inter-annual variation was present at Deir ‘Alla, but not at Ramtha and Khirbet as-Samra

High Level of Pyrethroid Resistance in an Anopheles funestus Population of the Chokwe District in Mozambique

Background Although Anopheles funestus is difficult to rear, it is crucial to analyse field populations of this malaria vector in order to successfully characterise mechanisms of insecticide resistance observed in this species in Africa. In this study we carried out a large-scale field collection and rearing of An. funestus from Mozambique in order to analyse its susceptibility status to insecticides and to broadly characterise the main resistance mechanisms involved in natural populations. Methodology/Principal Findings 3,000 F1 adults were obtained through larval rearing. WHO susceptibility assays indicated a very high resistance to pyrethroids with no mortality recorded after 1h30min exposure and less than 50% mortality at 3h30min. Resistance to the carbamate, bendiocarb was also noted, with 70% mortality after 1h exposure. In contrast, no DDT resistance was observed, indicating that no kdr-type resistance was involved. The sequencing of the acetylcholinesterase gene indicated the absence of the G119S and F455W mutations associated with carbamate and organophosphate resistance. This could explain the absence of malathion resistance in this population. Both biochemical assays and quantitative PCR implicated up-regulated P450 genes in pyrethroid resistance, with GSTs playing a secondary role. The carbamate resistance observed in this population is probably conferred by the observed altered AChE with esterases also involved. Conclusion/Significance The high level of pyrethroid resistance in this population despite the cessation of pyrethroid use for IRS in 1999 is a serious concern for resistance management strategies such as rotational use of insecticides. As DDT has now been re-introduced for IRS, susceptibility to DDT needs to be closely monitored to prevent the appearance and spread of resistance to this insecticide

Pre-agricultural plant management in the uplands of the central Zagros: the archaeobotanical evidence from Sheikh-e Abad

Prior to the emergence of agriculture in southwest Asia, sedentarising human communities were experimenting with a diverse range of wild plant species over a prolonged period. In some cases, this involved the cultivation of species that would go on to be domesticated and form the foundation of future agricultural economies. However, many forms of plant use did not follow this trajectory, and in multiple places farming was only taken up later as an established ‘package’. In this paper, we present new archaeobotanical evidence from the Early Neolithic site of Sheikh-e Abad in the central Zagros of western Iran. Sheikh-e Abad is unique in being the only settlement known to date within southwest Asia that lies at an altitude above 1000m and which has occupation spanning the agricultural transition. Thus, it provides a rare opportunity to examine pre-agricultural plant management strategies in an upland zone. Our analyses of the plant remains from Sheikh-e Abad suggest that from its earliest occupation inhabitants were unconsciously ‘auditioning’ a suite of locally available wild grasses which ultimately were never domesticated. We discuss the possible reasons for this from a socio-ecological perspective, considering both the biology and ecology of the plant species in question, as well as the ways in which they were potentially managed

Real-time imaging of hepatitis C virus infection using a fluorescent cell-based reporter system

Author Manuscript 2010 August 1Hepatitis C virus (HCV), which infects 2–3% of the world population, is a causative agent of chronic hepatitis and the leading indication for liver transplantation1. The ability to propagate HCV in cell culture (HCVcc) is a relatively recent breakthrough and a key tool in the quest for specific antiviral therapeutics. Monitoring HCV infection in culture generally involves bulk population assays, use of genetically modified viruses and/or terminal processing of potentially precious samples. Here we develop a cell-based fluorescent reporter system that allows sensitive distinction of individual HCV-infected cells in live or fixed samples. We demonstrate use of this technology for several previously intractable applications, including live-cell imaging of viral propagation and host response, as well as visualizing infection of primary hepatocyte cultures. Integration of this reporter with modern image-based analysis methods could open new doors for HCV research.New York (State). Dept. of Health (Empire State Stem Cell Fund Contract C023046)United States. Public Health Service (Grant R01 DK56966)National Institutes of Health (U.S.) (Roadmap for Medical Research Grant 1 R01 DK085713-01)Howard Hughes Medical Institute (Investigator