Exchange Market Pressure and Monetary Policy: Evidence from Pakistan

The study employs Girton and Roper (1977) measure of exchange market pressure—sum of exchange rate depreciation and foreign reserves outflow, to examine the interaction between exchange market pressure and monetary variables, viz. domestic credit (Reserve Money) and interest rate. Evidence from impulse response functions suggests that domestic credit has remained the dominant tool of monetary policy for managing exchange market pressure. The increase in domestic credit upon increase in exchange market pressure (during 1991–98) is imprudent. The result suggests that fiscal needs/growth objective might have dominated the external account considerations during the span. Post 9/11 there is evidence of sterilised intervention in forex market. Interest rate has also weakly served as the tool of monetary policy during the hay days of foreign currency deposits (1991–98). The finding implies that for interest rate to work as tool of monetary policy vis-a-vis exchange market pressure a reasonable degree of capital mobility is called for.Monetary Policy, Foreign Exchange

Reforming Institutions: Where to Begin?

Institutions promote growth—this view now holds firm ground. The task then is to ‘engineer’ growth promoting institutions. Endogeneity characterises institutions, for example, groups enjoying political power influence economic institutions but political power itself is a function of wealth. The question then is: what to reform first? History stands witness that generally the societies with extreme inequality and a heterogeneous population tend to evolve institutions that restrict access to economic opportunities for the poor which in turn constrains economic development. On the other hand societies with greater equality and homogeneous population typically enjoy growth-promoting institutions. Institutional reforms should therefore begin with institutions that serve to create or perpetuate inequality and heterogeneity in the society. We argue that the four different kinds of educational systems in operation in Pakistan are a major source of creating and perpetuating inequality and heterogeneity in the population. Access to a single and common educational system will open-up similar opportunities of higher education and job attainment for all the citizens, thereby reducing inequality. Diverse educational systems promote different sets of beliefs while a uniform system forges beliefconvergence in the society that in turn facilitates agreement on a common set of institutional reforms. Therefore it is the educational system that should be the first to reform. We also argue that in Pakistan, unlike some European countries in the 17th century, neither commercial interest nor fiscal constraints can force the de jure power to reform institutions. Typically, large commercial interests in Pakistan have thrived on favours from the de jure power and therefore have no interest in changing the system. Foreign aid eases the fiscal constraints from time to time relieving government of the need to reform institutions. The thought of a revolution of some kind is still a far cry, the society having no such inclination. The alternative then is the gradual approach preferred by North, Acemoglu and Rodrik. This gradual approach suggests the area of educational reforms.Institutional Evolution, Institutional Change, Human Behaviour

Pass-through of Change in Policy Interest Rate to Market Rates

This paper examines the pass through of the change in policy interest rate of the central bank of Pakistan to market interest rates. The market rates examined include KIBOR, six month deposit rate and weighted average lending rate. More or less complete pass-through of the change in policy rate to KIBOR is observed within one month. However, the magnitude of change in policy rate to deposit and lending rate is not only low but is slow as well. The pass-through to the weighted average lending rate is 47 percent and occurs with a lag of one to one and half year. The pass-through to the deposit rate is only 16 percent and occurs with a lag of one year. The asymmetry between the magnitude of pass-through to lending and deposit rates has served to increase the interest margin of the banks. The slow pass-through to the lending and deposit rate put limits on the effectiveness of interest rate as a policy tool. The pass-through, and hence the effectiveness of monetary policy will increase if all the lending and deposit rates are floating in nature and are quoted as KIBOR-plus and KIBOR-minus respectively.

Reforming Institutions: Where to Begin?

No society is devoid of institutions but many live with poor institutions. Institutions promote growth. This is a view now held firmly and widely. The task then is to ‘engineer’ growth-promoting institutions. Endogeneity characterises institutions; for example, groups enjoying political power influence economic institutions, but political power itself is a function of wealth. Given endogeneity, if the task is to design institutional reforms, the question then arises, as to what to reform first. We use the theories of institutional evolution put forth by Douglas North, Darron Acemoglu and Dani Rodrik and the historical experiences of different countries in the context of development (or non-development) of institutions, to determine the starting-point of institutional reforms, if the objective is to design institutional reforms. We argue that in Pakistan, neither large commercial interest nor fiscal constraints can force the de jure power to reform institutions. Typically, large commercial interests in Pakistan have thrived on favours from de jure power, and therefore do not have teeth. Given strategic interests of foreign powers, foreign aid will alleviate the fiscal constraint and the ruler-citizens bargain—though reforming institution in exchange for tax revenue will remain a dream. The country does not seem ready for a revolution either; the thought process that typically precedes revolutions seems to have barely begun. The alternative, that remains, then is the gradualist approach preferred by North, Acemoglu, and Rodrik. Institutional reforms in Pakistan should begin with reform of the educational system—the introduction of a common educational system for all and sundry up to a certain level. Two reasons make us chose the educational system as the candidate to start the process of institutional reform. First, a common educational system will produce a shared value system which, in turn, will reduce the heterogeneity in the society. Lesser heterogeneity in society will then facilitate an agreement over the minimal set of institutional reforms. Second, politicians being myopic, the de jure power is more likely to concede to the demand for reform of the educational system as compared to the demand to, say, put an end to rent-seeking. The former will affect the de jure power a generation hence, while the latter will affect them today.Institutional Evolution, Institutional Change, Human Behaviour

Reforming Institutions : Where to Begin?

No society is devoid of institutions but many live with poor institutions. Institutions promote growth. This is a view now held firmly and widely. The task then is to engineer growth-promoting institutions. Endogeneity characterises institutions; for example, groups enjoying political power influence economic institutions, but political power itself is a function of wealth. Given endogeneity, if the task is to design institutional reforms, the question then arises, as to what to reform first. We use the theories of institutional evolution put forth by Douglas North, Darron Acemoglu and Dani Rodrik and the historical experiences of different countries in the context of development (or non-development) of institutions, to determine the starting-point of institutional reforms, if the objective is to design institutional reforms. We argue that in Pakistan, neither large commercial interest nor fiscal constraints can force the de jure power to reform institutions. Typically, large commercial interests in Pakistan have thrived on favours from de jure power, and therefore do not have teeth. Given strategic interests of foreign powers, foreign aid will alleviate the fiscal constraint and the ruler-citizens bargainthough reforming institution in exchange for tax revenue will remain a dream. The country does not seem ready for a revolution either; the thought process that typically precedes revolutions seems to have barely begun. The alternative, that remains, then is the gradualist approach preferred by North, Acemoglu, and Rodrik. Institutional reforms in Pakistan should begin with reform of the educational systemthe introduction of a common educational system for all and sundry up to a certain level. Two reasons make us chose the educational system as the candidate to start the process of institutional reform. First, a common educational system will produce a shared value system which, in turn, will reduce the heterogeneity in the society. Lesser heterogeneity in society will then facilitate an agreement over the minimal set of institutional reforms. Second, politicians being myopic, the de jure power is more likely to concede to the demand for reform of the educational system as compared to the demand to, say, put an end to rent-seeking. The former will affect the de jure power a generation hence, while the latter will affect them today.Institutional Evolution, Institutional Change, Human Behaviour

Determinants of Interest Spread in Pakistan

Interest spread of Pakistan s banking industry has been on the rise for the last two years. The increase in interest spread discourages savings and investments, on the one hand, and raises concerns about the effectiveness of the bank-lending channels of monetary policy, on the other. This study examines the determinants of interest spread in Pakistan using panel data of 29 banks. The results show that the share of interest-insensitive deposits in total bank deposits is a key determinant of interest spread, whereas industry concentration has no significant impact on interest spread. Furthermore, the ongoing merger wave in the banking industry will limit the options for the savers, with adverse implications for the interest spread. We argue that to maintain a reasonably competitive environment, merger proposals may be subjected to review by an anti-trust authority.Banks, Determination of Interest Rates, Mergers, Acquisitions

The Global Engineer : Incorporating global skills within UK higher education of engineers

Background. The Marburg virus (MARV) has a negative-sense single-stranded RNA genome, belongs to the family Filoviridae, and is responsible for several outbreaks of highly fatal hemorrhagic fever. Codon usage patterns of viruses reflect a series of evolutionary changes that enable viruses to shape their survival rates and fitness toward the external environment and, most importantly, their hosts. To understand the evolution of MARV at the codon level, we report a comprehensive analysis of synonymous codon usage patterns in MARV genomes. Multiple codon analysis approaches and statistical methods were performed to determine overall codon usage patterns, biases in codon usage, and influence of various factors, including mutation pressure, natural selection, and its two hosts, Homo sapiens and Rousettus aegyptiacus. Results. Nucleotide composition and relative synonymous codon usage (RSCU) analysis revealed that MARV shows mutation bias and prefers U- and A-ended codons to code amino acids. Effective number of codons analysis indicated that overall codon usage among MARV genomes is slightly biased. The Parity Rule 2 plot analysis showed that GC and AU nucleotides were not used proportionally which accounts for the presence of natural selection. Codon usage patterns of MARV were also found to be influenced by its hosts. This indicates that MARV have evolved codon usage patterns that are specific to both of its hosts. Moreover, selection pressure from R. aegyptiacus on the MARV RSCU patterns was found to be dominant compared with that from H. sapiens. Overall, mutation pressure was found to be the most important and dominant force that shapes codon usage patterns in MARV. Conclusions. To our knowledge, this is the first detailed codon usage analysis of MARV and extends our understanding of the mechanisms that contribute to codon usage and evolution of MARV

Treatment of Drinking Water in Economical Cost Perspective

It is observed that most economical way in treating the drinking water for humans with coagulation treatment cost is Rs.1.25 per litre calculated in case of open surface water but only Rs.0.15 cost for ground and water storage tanks samples, after treatment it is sure water is safe for drinking purpose. But boiling treatment of drinking water is not economical as compare to coagulation treatment because it covers the Rs. 2.5 to Rs. 1.0 it depends on nature of water quality to treat. This cost was applicable and useful for human\u27s drinking water treatment and save the medical treatment cost from suffering the painful water borne diseases such as cholera and diarrhoea. Aluminium sulphate is coagulated which economical but with low price available and we must use it for canal water treatment because 5 to 10 percent toxins are present. In case of ground water and storage water tanks, treatment we no need coagulant we just need boiling of drinking water then it is sure that toxins and other organic material vaporized and drinking water free of low toxicity and safe to health

PIndroid: A novel Android malware detection system using ensemble learning methods

The extensive use of smartphones has been a major driving force behind a drastic increase of malware attacks. Covert techniques used by the malware make them hard to detect with signature based methods. In this paper, we present PIndroid – a novel Permissions and Intents based framework for identifying Android malware apps. To the best of our knowledge, PIndroid is the first solution that uses a combination of permissions and intents supplemented with Ensemble methods for accurate malware detection. The proposed approach, when applied to 1,745 real world applications, provides 99.8% accuracy (which is best reported to date). Empirical results suggest that the proposed framework is effective in detection of malware apps