Integrating Micro and Macro Policy Levers in Response to Financial Crises

The 2008–09 Global Financial Crisis originated from a poor incentive structure in the asset market derived from subprime mortgages. The ultimate bursting and unwinding of an asset bubble (here highly overvalued real estate prices woven into a complex multilayer network of securitization, so called collateralized debt obligations or CDOs) put enormous stress on the financial system, spreading through the global network economy and ultimately resulting in the worst economic crisis since the Great Depression. Economists today agree that the severe economic fallout can be largely attributed to the poor systemic performance of international financial markets. Global macroeconomic imbalances, as well as market failures such as excessive risk taking, misaligned incentives of rating agencies, inefficient liquidity provisions within banks and systemic risk or contagion, i.e., the international and inter-sectoral public goods nature of financial stability, were not sufficiently accounted for by regulation and international macroeconomic policy. This combined financial and economic crisis environment not only put the intrinsic connection between the financial and the real economy back into the spotlight, but also opened up a policy debate about how to ensure macroeconomic and financial stability without jeopardizing microeconomic foundations of the real economy such as competition. In sum, the resulting policy challenge is twofold: First, a new and sustainable balance between free markets, macro industrial policies, and governmental regulation needs to be found in the financial sector, and second, strategic interactions between macro and microeconomic policy goals need to be identified, understood, and balanced. This article will focus on the interaction between macroeconomic crisis management and prudential regulatory responses on the one hand, and competition policy and market structure on the other. We provide a simple economic framework for thinking about the relationship between macro and micro policies as a function of the immediate policy environment, i.e., “extraordinary” financial instability and imminent economic crisis versus “ordinary,” stable economic circumstances. Specifically, we claim that— during severe financial crises—the overall success of policy responses depends on the coordination of three related decisional vectors. First, policy makers must coordinate the responses of multiple regulatory and political actors. Second, they need to follow a systematic, rather than ad hoc, approach that diminishes moral hazard and leaves open a reasonable exit strategy. Finally, policy makers need to consider time consistency. In other words, they need to avoid the temptation to excessively discount post-crisis effects. Overall, this work shall add structure to the ongoing policy debate and provide conceptual guidance for lawyers and economists trying to address the challenges of micro and macro policy integration. In Part I, we provide an overview of the relationship between the financial and real economic sectors and between systemic financial stability and micro-competitive effects. In Part II, we advance our core theoretical proposition—the strategic complementarity of macro and micro policy levers during financial crises. In particular, we demonstrate that policy responses that fail to consider and balance the three key dimensions—coordination among decision-makers, a systematic approach, and time consistency—run the risk of harming both macro and micro-economic well-being in the long run. Finally, in Part III, we illustrate the quite different responses to the financial crisis of the European Union and the United States along the three key dimensions. Our goal is not to provide a comparative assessment of the two systems’ responses or a trans-Atlantic scorecard, but rather to illustrate the possibilities and challenges of coordinating macro and micro responses along the three key dimensions

Neurodevelopmental delay in the Cln3Δex7/8 mouse model for Batten disease

Juvenile neuronal ceroid lipofuscinosis (JNCL), also known as Batten disease, is a fatal inherited neurodegenerative disorder. The major clinical features of this disease are vision loss, seizures and progressive cognitive and motor decline starting in childhood. Mutations in CLN3 are known to cause the disease, allowing the generation of mouse models that are powerful tools for JNCL research. In this study, we applied behavioural phenotyping protocols to test for early behavioural alterations in Cln3(Deltaex7/8) knock-in mice, a genetic model that harbours the most common disease-causing CLN3 mutation. We found delayed acquisition of developmental milestones, including negative geotaxis, grasping, wire suspension time and postural reflex in both homozygous and heterozygous Cln3(Deltaex7/8) preweaning pups. To further investigate the consequences of this neurodevelopmental delay, we studied the behaviour of juvenile mice and found that homozygous and heterozygous Cln3(Deltaex7/8) knock-in mice also exhibit deficits in exploratory activity. Moreover, when analysing motor behaviour, we observed severe motor deficits in Cln3(Deltaex7/8) homozygous mice, but only a mild impairment in motor co-ordination and ambulatory gait in Cln3(Deltaex7/8) heterozygous animals. This study reveals previously overlooked behaviour deficits in neonate and young adult Cln3(Deltaex7/8) mice indicating neurodevelopmental delay as a putative novel component of JNCL.Fundação para a Ciência e Tecnologia (FCT) project PTDC/SAU-NEU/70161/2006, NIH R01NS044310 and the BeatBatten Foundation. N.S.O. was supported by the PhD grant15318 from F

Long-term experiences of living with stroke in a family context

Hvert år rammes cirka 15 000 nordmenn av hjerneslag og mange får sammensatte og vedvarende funksjonshemninger. Sykdommen har vidtrekkende konsekvenser på alle livets områder og rammer hele familien. Ektefellens livskvalitet blir påvirket og barn kan få atferdsproblemer relatert til foreldrenes reaksjoner. Hovedhensikten med Doktorgradsprosjektet var å belyse livserfaringene til mennesker som lever i en familie som rammes av langvarige følger etter hjerneslag. Avhandlingen inkluderer tre artikler som ser på hvordan de kroppslige endringene påvirker selvoppfattelsen til den slagrammede; hvordan det er å leve sammen som en slagrammet familie i et langtidsperspektiv og hvilke eksistensielle utfordringer som oppleves i parforhold etter hjerneslag. Datamaterialet baserer seg på trettini kvalitative intervju med slagrammede, ektefeller og voksne barn som ser tilbake på sin oppvekst sammen med en slagrammet forelder. Familiene ble kastet inn i langvarige og uforutsigbare endringsprosesser som ble fortolket som transisjoner. Endringene gjorde seg særlig gjeldende på tre områder i familielivet: kommunikasjon; relasjoner og identitet. Sykdommen viste seg å ha en negativ innvirkning på kommunikasjonsprosessene i familiene med afasi som det største hinder, etterfulgt av personlighets- og atferdsendringer. Distansen som oppstod mellom familiemedlemmer førte ofte til ensomhet. Likevel ble familien oppfattet som en livbøye fordi omsorgsfulle familierelasjoner ga nytt livsmot. Støtteforeninger bidro sterkt til nyorientering. De kroppslige endringene og følgene av disse påvirket både den slagrammedes identitet og selvoppfattelsen til andre familiemedlemmer. Par som hadde levd i langvarige og velfunderte forhold ble som regel knyttet tettere sammen og deres livsverdier endret seg, mens par i kortvarige forhold gikk fra hverandre. Familiene var lite forberedt på utfordringene og de friske ektefellene og barna følte at de ikke mottok nevneverdig oppfølging fra helsepersonell. Datamaterialet baserer seg på trettini kvalitative intervju med slagrammede, ektefeller og voksne barn som ser tilbake på sin oppvekst sammen med en slagrammet forelder. Familiene ble kastet inn i langvarige og uforutsigbare endringsprosesser som ble fortolket som transisjoner. Endringene gjorde seg særlig gjeldende på tre områder i familielivet: kommunikasjon, relasjoner og identitet. Sykdommen viste seg å ha en negativ innvirkning på kommunikasjonsprosessene i familiene. Afasi var det største hinder, etterfulgt av personlighets- og atferdsendringer. Distansen som oppstod mellom familiemedlemmer førte ofte til ensomhet. Likevel ble familien oppfattet som en livbøye fordi omsorgsfulle familierelasjoner ga nytt livsmot. Støtteforeninger bidro sterkt til nyorientering. De kroppslige endringene og følgene av disse påvirket både den slagrammedes identitet og selvoppfattelsen til andre familiemedlemmer. Par som hadde levd i langvarige og velfunderte forhold ble som regel knyttet tettere sammen og deres livsverdier endret seg, mens par i kortvarige forhold gikk fra hverandre. Familiene var lite forberedt på utfordringene og de friske ektefellene og barna følte at de ikke fikk nevneverdig oppfølging fra helsepersonell

Integrating Micro and Macro Policy Levers in Response to Financial Crises

The 2008–09 Global Financial Crisis originated from a poor incentive structure in the asset market derived from subprime mortgages. The ultimate bursting and unwinding of an asset bubble (here highly overvalued real estate prices woven into a complex multilayer network of securitization, so called collateralized debt obligations or CDOs) put enormous stress on the financial system, spreading through the global network economy and ultimately resulting in the worst economic crisis since the Great Depression. Economists today agree that the severe economic fallout can be largely attributed to the poor systemic performance of international financial markets. Global macroeconomic imbalances, as well as market failures such as excessive risk taking, misaligned incentives of rating agencies, inefficient liquidity provisions within banks and systemic risk or contagion, i.e., the international and inter-sectoral public goods nature of financial stability, were not sufficiently accounted for by regulation and international macroeconomic policy. This combined financial and economic crisis environment not only put the intrinsic connection between the financial and the real economy back into the spotlight, but also opened up a policy debate about how to ensure macroeconomic and financial stability without jeopardizing microeconomic foundations of the real economy such as competition. In sum, the resulting policy challenge is twofold: First, a new and sustainable balance between free markets, macro industrial policies, and governmental regulation needs to be found in the financial sector, and second, strategic interactions between macro and microeconomic policy goals need to be identified, understood, and balanced. This article will focus on the interaction between macroeconomic crisis management and prudential regulatory responses on the one hand, and competition policy and market structure on the other. We provide a simple economic framework for thinking about the relationship between macro and micro policies as a function of the immediate policy environment, i.e., “extraordinary” financial instability and imminent economic crisis versus “ordinary,” stable economic circumstances. Specifically, we claim that— during severe financial crises—the overall success of policy responses depends on the coordination of three related decisional vectors. First, policy makers must coordinate the responses of multiple regulatory and political actors. Second, they need to follow a systematic, rather than ad hoc, approach that diminishes moral hazard and leaves open a reasonable exit strategy. Finally, policy makers need to consider time consistency. In other words, they need to avoid the temptation to excessively discount post-crisis effects. Overall, this work shall add structure to the ongoing policy debate and provide conceptual guidance for lawyers and economists trying to address the challenges of micro and macro policy integration. In Part I, we provide an overview of the relationship between the financial and real economic sectors and between systemic financial stability and micro-competitive effects. In Part II, we advance our core theoretical proposition—the strategic complementarity of macro and micro policy levers during financial crises. In particular, we demonstrate that policy responses that fail to consider and balance the three key dimensions—coordination among decision-makers, a systematic approach, and time consistency—run the risk of harming both macro and micro-economic well-being in the long run. Finally, in Part III, we illustrate the quite different responses to the financial crisis of the European Union and the United States along the three key dimensions. Our goal is not to provide a comparative assessment of the two systems’ responses or a trans-Atlantic scorecard, but rather to illustrate the possibilities and challenges of coordinating macro and micro responses along the three key dimensions