Is the Gold Standard Still the Gold Standard among Monetary Systems?

Critics have raised a number of theoretical and historical objections to the gold standard. Some have called the gold standard a "crazy" idea. The gold standard is not a flawless monetary system. Neither is the fiat money alternative. In light of historical evidence about the comparative magnitude of these flaws, however, the gold standard is a policy option that deserves serious consideration. In a study covering many decades in a large sample of countries, Federal Reserve Bank economists found that "money growth and inflation are higher" under fiat standards than under gold and silver standards. Nor is the gold standard a source of harmful deflation. Alan Greenspan has testified before Congress that "a central bank properly functioning will endeavor to, in many cases, replicate what a gold standard would itself generate." This study addresses the leading criticisms of the gold standard, relating to the costs of gold, the costs of transition, the dangers of speculation, and the need for a lender of last resort. One criticism is found to have some merit. The United States would not enjoy the benefits of being on an international gold standard if it were the first and only country whose currency was linked to gold.A gold standard does not guarantee perfect steadiness in the growth of the money supply, but historical comparison shows that it has provided more moderate and steadier money growth in practice than the present-day alternative, politically empowering a central banking committee to determine growth in the stock of fiat money. From the perspective of limiting money growth appropriately, the gold standard is far from a crazy idea

How Did We Get into This Financial Mess?

As policymakers confront the ongoing U.S. financial crisis, it is important to take a step back and understand its origins. Those who fault "deregulation," "unfettered capitalism," or "greed" would do well to look instead at flawed institutions and misguided policies. The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring lenders to extend mortgages to borrowers who previously would not have qualified. Meanwhile, Freddie Mac and Fannie Mae grew to own or guarantee about half of the United States' $12 trillion mortgage market. Congressional leaders pointedly refused to moderate the moral hazard problem of implicit guarantees or otherwise rein in their hyperexpansion, instead pushing them to promote "affordable housing" through expanded purchases of nonprime loans to low income applicants. The credit that fueled these risky mortgages was provided by the cheap money policy of the Federal Reserve. Following the 2001 recession, Fed chairman Alan Greenspan slashed the federal funds rate from 6.25 to 1.75 percent. It was reduced further in 2002 and 2003, reaching a record low of 1 percent in mid-2003 - where it stayed for a year. This set off what economist Steve Hanke called "the mother of all liquidity cycles and yet another massive demand bubble." The actual causes of our financial troubles were unusual monetary policy moves and novel federal regulatory interventions. These poorly chosen policies distorted interest rates and asset prices, diverted loanable funds into the wrong investments, and twisted normally robust financial institutions into unsustainable positions

Dolarización y libertad monetaria

This article exposes three objections to dollarization: (1) seignior age loss, (2) sovereignty loss, and (3) lack of smoothing of the economic cycles through a Central Bank, and discusses their validity. Dollarization benefits are explained taking Ecuador as an example. A proposal for further liberalization of the payment system, related to the idea of currency production competition, is made. Finally, the risks associated with electronic money are analyzed.En este artículo se exponen tres objeciones a la dolarización: (1) pérdida de señoreaje, (2) pérdida de soberanía, y (3) ausencia de moderación de los ciclos económicos a través de un Banco Central, y se discute la validez de cada una de ellas. Además, se exponen los beneficios que esta puede tener, tomando a Ecuador como ejemplo. Se realiza una propuesta de mayor liberalización del sistema de pagos, relacionada con la idea de competencia en la producción de la moneda. Finalmente, se analizan los peligros que la moneda electrónica supone para el país

Arp 302: Non-starburst Luminous Infrared Galaxies

Arp 302, a luminous infrared source (L_{IR} = 4.2x10^{11} Lsun), consisting of two spiral galaxies (VV340A and VV340B) with nuclear separation of 40'', has the highest CO luminosity known. Observations with the BIMA array at 5'' X 7'' resolution reveal that the CO emission is extended over 23.0 kpc in the edge-on spiral galaxy, VV340A, corresponding to 6.7x10^{10} Msun of H_2. In the companion face-on galaxy, VV340B, the CO emission is extended over ~10.0 kpc, with 1.1x10^{10} Msun of H_2. The large CO extent is in strong contrast to starburst systems, such as Arp 220, in which the CO extent is typically $\le$ 1 kpc. Furthermore, $L_{IR}/M$(H_2) is found to be $\le$ 6.0 Lsun/Msun throughout both galaxies. Thus the high IR luminosity of Arp 302 is apparently not due to starbursts in the nuclear regions, but is due to its unusually large amount of molecular gas forming stars at a rate similar to giant molecular clouds in the Milky Way disk. Arp 302 consists of a pair of very gas-rich spiral galaxies that may be interacting and in a phase before a likely onset of starbursts.Comment: AAS Latex plus two postscript figures. ApJ Letters (accepted

Multinationals Do It Better: Evidence on the Efficiency of Corporations’ Capital Budgeting

This paper examines the effectiveness of multinational enterprises’ capital budgeting decisions as compared to the decisions of purely domestic enterprises. This is an important question because of multinationals’ role in allocating capital globally. Answering this question may also shed light on whether multinationals are indeed better managed than are purely domestic firms. We examine this question empirically using the deviation of a firm’s estimated marginal Tobin’s q from an appropriate benchmark as an indicator of effective resource allocation. We find that multinationals make more efficient capital budgeting decisions than do purely domestic firms. The result stems from multinational enterprises’ exercising greater restraint on over-investment, but is not due to looser liquidity constraints. In obtaining the result, we account for the impact of institutional ownership, managerial ownership, and managerial entrenchment. We also test whether multinationals’ greater capital budgeting efficiency might be due to their investment locations, since they might thereby be monitored by more agents and also may be more successful in resisting pressures from special interest groups and governments to adopt practices that are not consistent with firm value maximization. We do not find support for the monitoring and bargaining hypotheses. Our observations therefore suggest that multinationals may be intrinsically better managed firms than are purely domestic firms

Historical Criminology and the Explanatory Power of the Past

To what extent can the past ‘explain’ the present? This deceptively simple question lies at the heart of historical criminology (research which incorporates historical primary sources while addressing present-day debates and practices in the criminal justice field). This article seeks first to categorise the ways in which criminologists have used historical data thus far, arguing that it is most commonly deployed to ‘problematize’ the contemporary rather than to ‘explain’ it. The article then interrogates the reticence of criminologists to attribute explicative power in relation to the present to historical data. Finally, it proposes the adoption of long time-frame historical research methods, outlining three advantages which would accrue from this: the identification and analysis of historical continuities; a more nuanced, shared understanding of micro/macro change over time in relation to criminal justice; and a method for identifying and analysing instances of historical recurrence, particularly in perceptions and discourses around crime and justice

CD4+ lymphocyte adenosine triphosphate determination in sepsis: a cohort study

INTRODUCTION: Patients suffering from sepsis are currently classified on a clinical basis (i.e., sepsis, severe sepsis, septic shock); however, this clinical classification may not accurately reflect the overall immune status of an individual patient. Our objective was to describe a cohort of patients with sepsis in terms of their measured immune status. METHODS: Fifty-two patients with sepsis (n = 13), severe sepsis (n = 21), or septic shock (n = 18) were studied. The immune status was determined by measuring the CD4+ lymphocyte adenosine triphosphate (ATP) content after mitogen stimulation in whole blood. RESULTS: The measured CD4+ lymphocyte ATP content at the time of ICU admission did not differ among the various groups defined by the sepsis classification system (sepsis = 454 ± 79 ng/ml; severe sepsis = 359 ± 54 ng/ml; septic shock = 371 ± 53 ng/ml; P = 0.44). Furthermore, survivors of sepsis had a significantly higher CD4+ lymphocyte ATP content at the time of ICU admission than did nonsurvivors of sepsis (431 ± 41 ng/mL vs. 266 ± 53 ng/mL, respectively; P = 0.04). CONCLUSIONS: The sepsis classification system that is currently used is not representative of the individual immune status as determined by measuring the CD4+ lymphocyte ATP content. Moreover, a lower CD4+ ATP content at the time of ICU admission is associated with a worse clinical outcome in those suffering from sepsis

A Chandra Observation of Abell 13: Investigating the Origin of the Radio Relic

We present results from the Chandra X-ray observation of Abell 13, a galaxy cluster that contains an unusual noncentral radio source, also known as a radio relic. This is the first pointed X-ray observation of Abell 13, providing a more sensitive study of the properties of the X-ray gas. The X-ray emission from Abell 13 is extended to the northwest of the X-ray peak and shows substructure indicative of a recent merger event. The cluster X-ray emission is centered on the bright galaxy H of Slee et al. 2001. We find no evidence for a cooling flow in the cluster. A knot of excess X-ray emission is coincident with the other bright elliptical galaxy F. This knot of emission has properties similar to the enhanced emission associated with the large galaxies in the Coma cluster. With these Chandra data we are able to compare the properties of the hot X-ray gas with those of the radio relic from VLA data, to study the interaction of the X-ray gas with the radio emitting electrons. Our results suggest that the radio relic is associated with cooler gas in the cluster. We suggest two explanations for the coincidence of the cooler gas and radio source. First, the gas may have been uplifted by the radio relic from the cluster core. Alternatively, the relic and cool gas may have been displaced from the central galaxy during the cluster merger event.Comment: 11 pages, 9 figures, Accepted for Publication in the Astrophysical Journal, higher-resolution figures can be found at http://www.astro.virginia.edu/~amj3r/Abell13