The Balance Sheet Channel of Monetary Policy Transmission: Evidence from the UK

This paper examines the sensitivity of investment to cash flow using a panel of UK firms in manufacturing with a view to shedding some light on the existence of a balance sheet channel or financial accelerator. In addition to examining the impact of cash flow in different subsamples based on company size or financial policy (dividend payouts, share issues and debt accumulation), we also investigate the extent to which investment becomes more sensitive to cash flow in periods of monetary tightness. To this end, we employ a monetary tightness indicator constructed for the UK using the narrative approach pioneered by Romer and Romer. The results provide some support for the view that UK firms show greater investment sensitivity to cash flow during periods of tight monetary policy.Financial Constraints; Balance Sheet Channel, Investment.

The Contribution of Sectoral Productivity Differentials to Inflation in Greee

This paper estimates the magnitude of the Balassa-Samuelson effect for Greece. We calculate the effect directly, using sectoral national accounts data, which permits estimation of total factor productivity (TFP) growth in the tradeables and nontradeables sectors. Our results suggest that it is difficult to produce one estimate of the BS effect. Any particular estimate is contingent on the definition of the tradeables sector and the assumptions made about labour shares. Moreover, there is also evidence that the effect has been declining through time as Greek standards of living have caught up on those in the rest of the world and as the non-tradeables sector within Greece catches up with the tradeables.Balassa-Samuelson effect, inflation, productivity

Capital Flows and Speculative Attacks in Prospective EU Member States

This paper examines the capital flow experience of transition economies who are also prospective EU members with a view to shedding light on the likely problems they might encounter with exchange rate policy in the run up to euro area membership. We show that they have been experiencing fairly sizeable capital flows since the early 1990s. We explain these flows using two separate models. The first explains the level of capital flows using panel data from the prospective EU members. The second concentrates specifically on estimating the probability of a country experiencing downward speculative pressure. In both cases, the contribution of domestic factors and contagion is explored. The results suggest that while domestic factors have some role to play, it is rather limited. Moreover there is clear evidence of contagion effects, suggesting that macroeconomic policy in the prospective EU members will be complicated by capital flows in the run up to euro area membership.capital flows, transition economies, accession countries and EU membership

Capital Flows, Capital Account Liberalisation and the Mediterranean Countries

This paper examines questions related to possible capital account liberalisation in the Mediterranean countries. First, we provide an overview of the extent to which these countries have capital controls along with their exchange rate regimes and some basic macroeconomic aggregates. Second, we examine the case for capital account liberalisation, along with the prerequisites for successful liberalisation. Here we consider issues such as sequencing and possible benefits of synchronisation. Finally, we examine the experience with capital flows – both FDI and other capital flows. We explain these flows and use the past experience of these countries to draw some conclusions for the successful opening up of the capital account.capital account liberalisation, Mediterranean countries, capital flows

The Greek financial crisis: growing imbalances and sovereign spreads

We discuss the origins of the Greek financial crisis as manifested in the growing fiscal and current-account deficits since euro-area entry in 2001. We then provide an investigation of spreads on Greek relative to German long-term government debt. Using monthly data over the period 2000 to 2010, we estimate a cointegrating relationship between spreads and their long-term fundamental determinants, and compare the spreads predicted by this estimated relationship with actual spreads. We find periods of both undershooting and overshooting of spreads compared to what is predicted by the economic fundamentals.Greek financial crisis; sovereign spreads

A suggestion for a dynamic multi factor model (DMFM)

We provide a new way of deriving a number of dynamic unobserved factors from a set of variables. We show how standard principal components may be expressed in state space form and estimated using the Kalman filter. To illustrate our procedure, we perform two exercises. First, we use it to estimate a measure of the current account imbalances among northern and southern euro area countries that developed during the period leading up to the outbreak of the euro area crisis, before looking at adjustment in the post-crisis period. Second, we show how these dynamic factors can improve forecasting of the euro exchange rate.https://www.cambridge.org/core/journals/macroeconomic-dynamicshj2023Economic

The Very Low Albedo of WASP-12b From Spectral Eclipse Observations with Hubble\textit{Hubble}

We present an optical eclipse observation of the hot Jupiter WASP-12b using the Space Telescope Imaging Spectrograph on board the Hubble Space Telescope. These spectra allow us to place an upper limit of $A_g < 0.064$ (97.5% confidence level) on the planet's white light geometric albedo across 290--570 nm. Using six wavelength bins across the same wavelength range also produces stringent limits on the geometric albedo for all bins. However, our uncertainties in eclipse depth are $\sim$40% greater than the Poisson limit and may be limited by the intrinsic variability of the Sun-like host star --- the solar luminosity is known to vary at the $10^{-4}$ level on a timescale of minutes. We use our eclipse depth limits to test two previously suggested atmospheric models for this planet: Mie scattering from an aluminum-oxide haze or cloud-free Rayleigh scattering. Our stringent nondetection rules out both models and is consistent with thermal emission plus weak Rayleigh scattering from atomic hydrogen and helium. Our results are in stark contrast with those for the much cooler HD 189733b, the only other hot Jupiter with spectrally resolved reflected light observations; those data showed an increase in albedo with decreasing wavelength. The fact that the first two exoplanets with optical albedo spectra exhibit significant differences demonstrates the importance of spectrally resolved reflected light observations and highlights the great diversity among hot Jupiters.Comment: 8 pages, 4 figures, 1 table, published in ApJL, in pres

Neurotrophins Regulate Bone Marrow Stromal Cell IL-6 Expression through the MAPK Pathway

The host's response to infection is characterized by altered levels of neurotrophins and an influx of inflammatory cells to sites of injured tissue. Progenitor cells that give rise to the differentiated cellular mediators of inflammation are derived from bone marrow progenitor cells where their development is regulated, in part, by cues from bone marrow stromal cells (BMSC). As such, alteration of BMSC function in response to elevated systemic mediators has the potential to alter their function in biologically relevant ways, including downstream alteration of cytokine production that influences hematopoietic development.In the current study we investigated BMSC neurotrophin receptor expression by flow cytometric analysis to determine differences in expression as well as potential to respond to NGF or BDNF. Intracellular signaling subsequent to neurotrophin stimulation of BMSC was analyzed by western blot, microarray analysis, confocal microscopy and real-time PCR. Analysis of BMSC Interleukin-6 (IL-6) expression was completed using ELISA and real-time PCR.BMSC established from different individuals had distinct expression profiles of the neurotrophin receptors, TrkA, TrkB, TrkC, and p75(NTR). These receptors were functional, demonstrated by an increase in Akt-phosphorylation following BMSC exposure to recombinant NGF or BDNF. Neurotrophin stimulation of BMSC resulted in increased IL-6 gene and protein expression which required activation of ERK and p38 MAPK signaling, but was not mediated by the NFkappaB pathway. BMSC response to neurotrophins, including the up-regulation of IL-6, may alter their support of hematopoiesis and regulate the availability of inflammatory cells for migration to sites of injury or infection. As such, these studies are relevant to the growing appreciation of the interplay between neurotropic mediators and the regulation of hematopoiesis

The effect of emergency liquidity assistance (ELA) on bank lending during the euro area crisis

We examine the impact of emergency liquidity assistance (ELA) on bank lending in eleven euro area countries during the financial crisis. With the intensification of the crisis, ELA took on a pivotal role in some countries. However, assessments of the quantitative impact of ELA in the literature are non-existent. We estimate a structural panel model for the determination of bank lending, which includes the amount of ELA received by each bank, allowing us to investigate the direct effect of ELA on lending. Our model corrects a mis-specification found in the prototype model used in the literature. We then undertake a VAR analysis, which allows us to address the effect of ELA on GDP. Finally, we examine spillover effects among banks, indicating that ELA generated positive spillovers to other banks.http://www.elsevier.com/locate/jimf2021-02-12hj2020Economic