Do Candidate Countries Fit the Optimum-Currency-Area Criteria?

This paper attempts to assess the degree to which CEE candidate countries fulfill Optimal Currency Area criteria set out in the literature. The literature review provided focuses on the seminal contributions of Mundell (1961) and McKinnon (1963) and later evolution of the theory as well as papers related to CEE candidate countries. The empirical analysis indicates that candidate countries are already very open to trade with the EU, in many cases much more open than the members of the EU themselves. Nonetheless, results of the static real activity comovements, with the exception of Hungary and Slovenia, point to weak or even negative correlations of shocks in the Euro-zone and respective acceding economies. Another approach pursued in the paper involves examining the nominal and real exchange rate variability to determine whether the exchange rate flexibility constitutes an important instrument of absorbing asymmetric shocks. From the comparison of the exchange rate stability in CEE with that of ClubMed countries in the years preceding the formation of the EMU it follows that the candidate countries as a group resemble the ClubMed countries in the early, rather than, mid 1990s.OCA, candidate countries, EMU accession, Euro zone, asymmetric shocks, business cycle co-movements, exchange rate fluctuations

BIOGEOCHEMICAL PROCESSES IN HYDROSOIL OF PILOT-SCALE CONSTRUCTED WETLAND TREATMENT SYSTEMS DESIGNED FOR TREATMENT OF SELENIUM

Two pilot-scale wetland treatment system cells (nutrient amended and unamended) were designed and constructed to reduce aqueous Se concentrations in simulated energy-derived water. Specific objectives of this study were: (i) measure and correlate hydrosoil conditions with Se concentrations vertically through the hydrosoil; (ii) investigate Se-accumulating biogeochemical processes (dissimilatory Se reduction and sorption) operating in the hydrosoil; and (iii) evaluate the effect of a nutrient amendment on hydrosoil conditions, Se accumulation, and Se-sequestering biogeochemical processes in the hydrosoil. Se accumulation (i.e. total Se concentration) and hydrosoil conditions were measured with depth in the hydrosoil. Se-sequestering biogeochemical processes were investigated by counting Se-reducing microbial colony forming units (CFUs) and identifying Se geochemical fractions at various depths in the hydrosoil. The detritus (0-21 cm in nutrient amended cell and 0-14 cm in unamended cell) contained greater Se concentrations (308-830 µg/g and 138-569 µg/g) and greater CFUs (2,700-22,000 CFUs/mL pore water and 9,300-15,000 CFUs/mL pore water) than the underlying sandy sediment. Correlation of organic matter content with Se concentration (r = 0.95; p\u3c0.00001 in nutrient amended and r = 0.87; p\u3c0.00002 in unamended) suggests organic matter influences Se-accumulating biogeochemical processes. In detritus, mean hydrosoil conditions (redox: -2 to -173 mV, pH: 6.20-6.46, and organic matter: 52-86%) were more favorable for sorption than for dissimilatory Se reduction; however, the majority of Se measured in the detritus was elemental (52.1%-58.0% in the nutrient amended cell and 21.1%-62.6% in the unamended cell) suggesting that dissimilatory Se reduction is the dominant biogeochemical process sequestering Se in the detritus. T-tests indicate significant difference in pH (t = 2.87, p = 0.0132) of the hydrosoil between the nutrient amended cell and unamended cell, but no significant differences (p\u3c0.005) in redox potential, organic matter content, and Se concentration. Greater Se concentrations and percent of elemental Se in the nutrient amended cell than the unamended cell suggests that the nutrient amendment enhanced dissimilatory Se reduction and therefore Se accumulation in the hydrosoil

Will They Own Up to the Habit of Phone Hacking?

Justin Schlosberg of Birkbeck, University of London draws a thick line between freedom of the press and freedom of media owners, and warns that protecting the latter can have dire consequences for free speech rights in the UK

Writing the City: The Cosmopolitan Realism of Offenbach's La Vie parisienne

When Offenbach’s La Vie parisienne premiered in Paris in 1866, it entered a longstanding debate on what it meant to be “Parisian.” This article uses La Vie parisienne to explore a key facet of Second Empire modernity: the notion that the Paris was a theater and that its dwellers were actors in a play. The operetta’s title alludes to a popular magazine likewise titled La Vie parisienne, which compared the rituals of Parisians to the scripted behaviors of theatrical characters. The librettists Meilhac and Halévy worked for the magazine in the early 1860s, and subsequently dedicated their operetta to the magazine’s founder, Marcelin. Three co-written vaudevilles reflect Marcelin’s attitudes about urban life and contain the prototypes of La Vie parisienne’s protagonists. As an example of what I call “cosmopolitan realism” in Second-Empire culture, the operetta assumed the function of an operatic anthology—analyzing, taxonomizing, and mythologizing Paris’s spaces, citizens and visitors. Long at the fringes of opera scholarship, operetta and vaudeville provide a rich corpus of literature that aestheticized the industrializing city, contributing to what Offenbach’s contemporaries, such as Charles Baudelaire and Gustave Claudin, diagnosed as la vie moderne

The Importance of Brain-Adipose Communication for Metabolic Homeostasis

Although the brain is the master regulator of all bodily functions, peripheral nerves provide a means by which the brain communicates to all tissues, regulates organ function, and maintains systemic homeostasis. Metabolic homeostasis relies on the maintenance of energy balance which is governed in large part by the brain and adipose tissue. Disruption of communication between these two organs can lead to a metabolic state of energy excess or insufficiency, i.e. energy imbalance. Energy balance is maintained when energy intake, governed by appetite, food intake and nutrient absorption, equates energy expenditure, which is influenced by physical activity, basal metabolic rate, and thermogenesis. Over the last few decades, surgical and chemical denervation studies have demonstrated how maintenance of brain-­adipose communication through both sympathetic efferent and sensory afferent nerves helps regulate adipocyte size, cell number, lipolysis, and ‘browning’ of white adipose tissue (the process by which energy iv storing adipose tissue becomes thermogenically active and expends energy). However, the factors that regulate peripheral nerve health and remodeling, defined to include neuropathy (nerve death) and plasticity (neurite outgrowth), within the adipose organ have not been well explored. Peripheral neuropathy is a condition of nerve die-­back that begins in the skin and travels inwards. Here we have shown that underlying subcutaneous adipose tissues also display peripheral neuropathy with conditions that range from obesity and diabetes to aging and certain diets. Under all aforementioned conditions the tissue also exhibited a loss of locally produced neurotrophic factors, which we have now implicated in the mechanism of adipose neuropathy. Exercise is able to at least partially reverse adipose neuropathy, and is associated with an increase in local neurotrophic factor expression. Furthermore, AAV-­mediated gene delivery of this neurotrophic factor was shown to increase innervation in subcutaneous adipose tissue in a murine model of diabetic peripheral neuropathy. Interestingly, exercise and cold stimulation are both able to increase gene and protein expression of pan-­neuronal and synaptic markers in adipose tissue, suggesting increased innervation of the tissue. We have also demonstrated that in adipose tissue, a neurotrophic factor is produced by immune cells in the stromovascular fraction, under stimulation from noradrenergic signaling. Deletion of this neurotrophic factor from myeloid lineage immune cells leads to a striking and specific ‘genetic denervation’ of white adipose tissue only, sparing the spinal nerves, neuromuscular junction, brain, and brown adipose tissue. Therefore, we believe we have uncovered a novel mechanism for how adipose tissue metabolic health is regulated through remodeling of the tissue’s peripheral nerve network

Harrod-Balassa-Samuelson Effect in Selected Countries of Central and Eastern Europe

This study investigates the HBS effect in a panel of nine CEECs during 1993:Q1-2003:Q4 (unbalanced panel). Prior to estimating the model, we analyze several key assumptions of the model (e.g. wage equalisation, PPP and sectoral division) and elaborate on possible consequences of their failure to hold. In the empirical part of the paper, we check the level of integration of the variables in our panel using the Pedroni panel-stationarity tests. We then investigate the internal and external version of the HBS effect with the Pedroni panel-cointegration tests as well as by means of group-mean FMOLS and PMGE estimations to conclude that there is a strong evidence in support of the internal HBS and ambiguous evidence regarding the external HBS. Our estimates of the size of inflation and real appreciation consistent with the HBS effect turned out generally within the range of previous estimates in the literature (0-3 % per annum). However, we warn against drawing automatic policy conclusions based on these figures due to very strong assumptions on which they rest (which may not be met in near future). Finally, following the hypotheses put forward in the literature, we elaborate and attempt to evaluate empirically the potential impact of exchange rate regimes on the magnitude of the HBS effect.Harrod-Balassa-Samuelson effect, Real Exchange Rate, Central and Eastern Europe, EMU

What Factors led to the Asian Financial Crisis: Were or were not Asian Economics Sound?

This paper attempts to confront various theoretical and empirical approaches to the East Asian currency crisis in 1997, but also with emphasis on two recently dominated literature about East Asian financial crisis. One, strongly supported by Corsetti, et. al (1998) stresses fundamental weaknesses, particularly in the financial sector. The other explains the crisis as the problem of illiquidity and multiple equilibria or 'herd behaviour' [Radelet and Sachs, 1998]. These two controversial articles facilitate the main exchange of ideas about the evolution and causes of the collapse of these economies which were viewed initially as very successful on their way to development and integration with the global economy. An econometric probit analysis was done in order to establish the most important determinants of the currency crisis in East Asia. The results were mixed (the probit modelling turned out to be very sensitive to changes in sample size, introduction of new variables and brought up an important issue of causality, the solution of which, or at least limitation of the problem, requires an inclusion of lagged variables in the model), but at least it showed that this type of exercise without further sensitivity analysis could not support Radelet and Sachs' (1998) panic scenario of the Asian meltdown. If anything, it rather pointed to fundamental problems existing in these economies.Asian economics, financial crisis

Some benefits of reducing inflation in transition economies

We analyse welfare effects of the interactions between the tax system and inflation in Poland and in Ukraine, using the framework developed by Feldstein (1997, 1999). This approach stresses the fact that inflation increases distortions created by the tax system, in particular distortions to intertemporal saving decisions. We find that the effects are much smaller in the two transition countries than in developed marketeconomies. The reason is that taxation of investment returns is much more limited. Our results suggest that taxes on investment returns should be avoided in any future redesign of the tax system.Poland, Ukraine, inflation, tax system

Explaining Exchange Rate Movements in New Member States of the European Union: Nominal and Real Convergence

This paper uses the univariate and bivariate structural VAR variance framework to quantify real and nominal exchange rate volatility in the selective New Member States of the European Union, and identify factors responsible for movements of those rates. The scale and the nature of nominal and real exchange rate volatility are tightly linked to fulfilment of Maastricht criteria, real convergence, and the effectiveness of the nominal exchange rate in absorbing asymmetric real shocks. Given that there is no consensus on the appropriate definition of real convergence, and since the degree of real exchange rate volatility reflects the scale of idiosyncratic shocks, as well as overall flexibility of the economy to adjust to these shocks, this paper measures the degree of real convergence by the degree of real exchange rate variability. The results indicate that (i) real asymmetric shocks are not insignificant when compared with the poorer Old Member States of the European Union (ii) the nominal exchange rates, in general, do play a stabilising role, and that (iii) nominal shocks, on average, do not move real exchange rates. Therefore, based on the analysis conducted in this paper, it appears that among the New Member States, only Estonia and Slovenia are ready to give up monetary and exchange rate independenceExchange Rate Volatility, Convergence, European Monetary Integration, Structural Vector Autoregression, Heteroskedasticity, Small-sample Confidence Intervals

Some benefits of reducing inflation in transition economies

We analyse welfare effects of the interactions between the tax system and inflation in Poland and in Ukraine, using the framework developed by Feldstein (1997, 1999). This approach stresses the fact that inflation increases distortions created by the tax system, in particular distortions to intertemporal saving decisions. We find that the effects are much smaller in the two transition countries than in developed marketeconomies. The reason is that taxation of investment returns is much more limited. Our results suggest that taxes on investment returns should be avoided in any future redesign of the tax system.