Budgetary policies during recessions. Retrospective application of the "stability and growth pact" to the post-war period. Economic Papers No. 121, May 1997

Over recent years, the budgetary policies carried out by Western countries during the Post-War period have been analysed extensively in the literature. Several studies have pointed to the interaction of economic and political factors and underlined the important role of institutions and procedures in shaping policies and outcomes1. Considerable attention has been devoted to budgetary consolidation processes, with some studies emphasising the role of the composition of budgetary measures in determining the success of these policies2. The purpose of this paper is to analyse budgetary policies carried out during and after severe recessions, an issue which the above-mentioned literature has not yet focused upon

Current medical treatment of estrogen receptor-positive breast cancer

Approximately 80% of breast cancers (BC) are estrogen receptor (ER)-positive and thus endocrine therapy (ET) should be considered complementary to surgery in the majority of patients. The advantages of oophorectomy, adrenalectomy and hypophysectomy in women with advanced BC have been demonstrated many years ago, and currently ET consist of (i) ovarian function suppression (OFS), usually obtained using gonadotropin-releasing hormone agonists (GnRHa), (ii) selective estrogen receptor modulators or down-regulators (SERMs or SERDs), (iii) aromatase inhibitors (AIs), or a combination of two or more drugs. For patients aged less than 50 years and ER+ BC, there is no conclusive evidence that the combination of OFS and SERMs (i.e. tamoxifen) or chemotherapy is superior to OFS alone. Tamoxifen users exhibit a reduced risk of BC, both invasive and in situ, especially during the first 5 years of therapy, and extending the treatment to 10 years further reduced the risk of recurrences. SERDs (i.e. fulvestrant) are especially useful in the neoadjuvant treatment of advanced BC, alone or in combination with either cytotoxic agents or AIs. There are two types of AIs: type I are permanent steroidal inhibitors of aromatase, while type II are reversible nonsteroidal inhibitors. Several studies demonstrated the superiority of the third-generation AIs (i.e. anastrozole and letrozole) compared with tamoxifen, and adjuvant therapy with AIs reduces the recurrence risk especially in patients with advanced BC. Unfortunately, some cancers are or became ET-resistant, and thus other drugs have been suggested in combination with SERMs or AIs, including cyclin-dependent kinase 4/6 inhibitors (palbociclib) and mammalian target of rapamycin (mTOR) inhibitors, such as everolimus. Further studies are required to confirm their real usefulness

Budgetary Policies during Recessions - Retrospective Application of the "Stability and Growth Pact" to the Post-War Period

Cover pagesText AnnexesThe purpose of this paper is to analyse budgetary policies carried out during and after severe recessions. Since the agreement on the "Stability and Growth Pact" by the European Council in Dublin in December 1996, interest in this issue has increased significantly. The Stability and Growth Pact, which sets the rules for budgetary behaviour in stage three of EMU, singles out severe recessions as specifically problematical periods during which a certain budgetary flexibility could be allowed. The rules laid out in the Stability and Growth Pact are used in this paper as a benchmark to evaluate past budgetary behaviour during recessions in the fifteen European Union Member States. More specifically, the paper provides elements to examine the following issues: what type of budgetary policies have been adopted during severe recessions in the past? Were the automatic stabilisers allowed to operate fully and did governments adopt an expansionary budgetary policy stance? Which factors influenced the policies undertaken and what was the composition of the measures adopted? Can the accumulation of debt, which took place in the past two decades in Europe, be explained by "tax smoothing" during periods of economic hardship?II/195/97-ENConcluding remarks The application of the provisions of the Excessive Deficit Procedure and the Stability and Growth Pact to the past is obviously a highly speculative exercise. Its results do not address the following questions: to what extent is past budgetary behaviour a reliable guide to assess the likely behaviour of national budgetary policies in EMU during recessions? More specifically, would Member States need larger or smaller changes in their budgetary positions to provide the degree of stabilisation which occurred in the past?A number of factors will play an important role:New policy regime under EMUDuring the third phase of EMU, the conduct of monetary policy will be centralised at the European level and will therefore no longer be available as a policy tool at the national level. Budgetary policy will thus be the main macroeconomic policy instrument still available for individual Member States to combat recessions, especially when shocks are asymmetric. The impossibility of lowering interest rates and resorting to currency devaluations might require larger deficit changes.On the other hand, according to the Mundell-Fleming framework, budgetary policy will in principle become more effective in dampening the amplitude of cyclical fluctuations in the new policy environment of EMU with centralised monetary policy and irrevocably fixed exchange rates between Member States.If, however, EMU enhances the process of economic integration, trade leakages of budgetary policies will gradually increase, thereby reducing the "domestic" effectiveness of budgetary policies. Unless national policies are co-ordinated, this factor raises the changes in the budget deficit required in order to attain the same degree of stabilisation achieved in the past."Pre-recession" deficit levelActual deficit changes observed during past recessions were applied in our retrospective exercise to "pre-recession" deficit levels chosen specifically for the exercise (0% and 2% of GDP). However, the actual deficit changes which took place during past severe recessions usually started from markedly higher pre-recession deficit levels. The impact on the economy of budgetary policy changes during recessions also varies depending on the deficit and debt levels. For instance, the markets' perception of an increase in the deficit from 0% to 2% of GDP during a severe recession will be different from that of a rise in the deficit from, say, 8% to 10% of GDP, the latter more likely being interpreted as shifting the deficit to an unsustainable path. This may lead to an increase in the risk premium on interest rates which reduces the effectiveness of the fiscal expansion.High budgetary imbalances may inhibit policy makers from using the budgetary instrument for stabilisation purposes. Indeed, the higher risk premiums which would raise the interest burden may represent a powerful disincentive to expanding fiscal policy in spite of the recession. As was pointed out in Section 4, budgetary reactions to economic downturns differ depending on the initial public finance conditions before the recession: countries with high deficit and debt levels tend to conduct tighter fiscal policies during recessions than those with lower deficit and debt levels. In the future, when medium-term targets have been achieved, Member States would have more room for manoeuvre to undertake accommodating policies.These factors point in different directions. As a consequence, the net effect on the requirement for budgetary stabilisation is ambiguous. If it proved necessary to reinforce the working of the automatic stabilisers during recessions in EMU, larger swings in budget deficits compared to the past would have to be allowed for. Under the provisions of the Stability and Growth Pact, this would imply, however, that during the third phase of EMU, Member States, and especially those with large automatic stabilisers, would have to run budgetary surpluses when in medium-term equilibrium.The present paper far from exhausts the issue of what can be learnt from the past budgetary behaviour for the implementation of the Stability and Growth Pact and, more generally, how budgetary authorities actually behaved in different economic circumstances.The following areas were not or were only partially covered, and therefore, provide scope for further research:Budgetary policies over the full cycle: this paper has focused essentially on recession episodes. The exercise could therefore be extended to other cyclical phases besides the recession. Indeed, as already indicated in this paper, the problem in the past has not been so much that Member States let budget deficits get out of hand too much during recessions but that they did not seize the opportunity presented by post-recession economic recovery to immediately correct their budgetary position.Composition of budgetary policies: the paper addressed the issue of the composition of budgetary policy reactions to recessions via a preliminary analysis of the overall revenue and expenditure components. Two extensions can be envisaged: first, an analysis of the composition of retrenchment policies over the years following the recession to assess, for instance, whether the length of the adjustment depends on the composition of budgetary consolidation; second, a further disaggregation of the overall components into more detailed government revenue and expenditure categories is necessary. This detailed analysis would allow conclusions to be drawn on the mechanisms causing budgetary policies to become unsustainable, as well as on the possible effectiveness and durability of budgetary consolidation efforts.recessions, modelling, fiscal policy, public finances

The Stability pact Pains: A Forward-Looking Assessment of the Reform Debate

The Stability and Growth Pact has been under fire ever since it was born.But is the Pact a flawed fiscal rule?Against established criteria for an ideal fiscal rule, its design and compliance mechanisms show strengths and weaknesses. The latter tend to reflect tradeoffs typical of supra-national arrangements.In the end, only a higher degree of fiscal integration would remove the inflexibility inherent in the recourse to predefined budgetary rules.No alternative solution put forward in the literature appears clearly superior.This does not mean that the original Pact of 1997 could not be improved.The debate on the SGP has shown that any reform should aim at overcoming the excessive uniformity of the rules, improving their transparency, correcting pro-cyclicality and strengthening enforcement.The reform of the Pact agreed in 2005 moves in this direction but leaves open a number of issues.EMS;fiscal policy;fiscal rules;Economic and Monetary Union;Stability and Growth Pact

Nested entangled states for distributed quantum channels

We find a coupling-strength configuration for a linear chain of N spins which gives rise to simultaneous multiple Bell states. We suggest a way such an interesting entanglement pattern can be used in order to distribute maximally entangled channels to remote locations and generate multipartite entanglement with a minimum-control approach. Our proposal thus provides a way to achieve the core resources in distributed information processing. The schemes we describe can be efficiently tested in chains of coupled cavities interacting with three-level atoms.Comment: 4 pages, 2 figures, RevTeX

X-band noise temperature effects of rain on DSN antenna feedhorns

Simulated rain tests were carried out to determine the noise temperature contribution of liquid water adhering to the aperture cover material on both a standard DSN X-band feedhorn and on an S/X-band common aperture feedhorn. It was found that for the particular common aperture feedhorn tested, system noise temperature increases were much greater when the plastic horn cover material was old and weathered than when it was new. The age and condition of the aperture cover material is believed to be a major factor in the amount of degradation experienced by a telecommunications system during rain events

Quantum state transfer via temporal kicking of information

We propose a strategy for perfect state transfer in spin chains based on the use of an unmodulated coupling Hamiltonian whose coefficients are explicitly time dependent. We show that, if specific and non-demanding conditions are satisfied by the temporal behavior of the coupling strengths, our model allows perfect state transfer. The paradigma put forward by our proposal holds the promises to set an alternative standard to the use of clever encoding and coupling-strength engineering for perfect state transfer.Comment: 7 pages, 7 figures, RevTeX