Capital flight, external debt, and domestic policies

The international debt crisis of 1982 revealed that unrecorded private capital outflows from developing countries occurred simultaneously with borrowing from international commercial banks. Current interest in capital flight has been generated by the possibility that the resurgence of private capital inflows to these countries may be limited to the return of flight capital. A simple public finance model shows that simultaneous capital outflows and inflows can be explained as the result of private international arbitrage of domestic policies. The paper discusses the welfare consequences of gross two-way capital flows that take advantage of opportunities to avoid taxation or generate subsidy income.Capital movements ; Developing countries ; Finance, Public

Capital Flight, External Debt and Domestic Policies

It is now well documented that capital flight has been a dominant feature of capital movements between developing and industrial countries. Since 1988 reductions in the stock of flight capital more than account for private capital flows to emerging markets. This suggests that what appears to be a diversification of portfolios of residents of developed countries may be a restoration of 'home bias' in the portfolios of residents of developing countries. We show that changes in the stock of capital flight can increase or decrease welfare depending on the structure of distortionary taxes and subsidies on capital income and the effects of capital flight on the tax base.

Recent Private Capital Inflows to Developing Countries: Is the Debt Crisis History?

This empirical study finds that while debt reduction and policy reforms in debtor countries have been important determinants of renewed access to international capital markets, changes in international interest rates have been the dominant factor. We calculate the effects of changes in international interest rates for a 'typical' debtor country. We conclude that increases in interest rates associated with business cycle upturn in industrial countries could depress the secondary market prices of existing debt to levels inconsistent with continued capital inflows.

Interest Rates, Exchange Rates and International Adjustment

In this paper we examine the behavior of interest rates and exchange rates following a variety of shocks to the international monetary system. Our analysis suggests that real interest rates in the US and Europe will remain low relative to historical experience for an extended period but converge slowly toward normal levels. During this adjustment interval, the US absorbs a disproportionate share of world savings. After a substantial initial appreciation of floating currencies relative to the dollar, the dollar and other floating currencies remain constant relative to each other. An improvement in the investment climate in Europe during the adjustment period would generate an immediate depreciation of the euro relative to the dollar. In real terms, the dollar and the floating currencies will eventually have to depreciate relative to the managed currencies. But most of the adjustment in the US trade account will come as US absorption responds to increases in real interest rates.

A new real-time pattern selection algorithm for very low bit-rate video coding focusing on moving regions

Very low bit-rate video coding, using regular shaped patterns to focus on moving regions in macroblocks, has gained significant attention recently. This paper presents a new real-time pattern selection (RTPS) algorithm using a large codebook of thirty two patterns. The algorithm uses a relevance measurement for all the patterns and a moving region, to eliminate a large number of irrelevant patterns prior to the actual best likelihood pattern selection procedure. Both theoretically and empirically it is proven that not only is the computational complexity of the new algorithm comparable to the contemporary algorithm that use a pattern codebook size of only eight patterns but also the new algorithm reduces the bit-rate significantly, while maintaining comparable subjective quality

A new efficient similarity metric and generic computation strategy for pattern-based very low bit-rate video coding

In the context of very low bit-rate video coding, pattern representations of a moving region (MR) in block-based motion estimation and compensation has become increasingly attractive. Generally, all existing pattern-matching algorithms apply a similarity metric, involving elementary operations, to compute the mismatch between an MR and a particular fixed pattern in order to select the best-matching pattern from a fixed-size codebook of predefined patterns. An efficient similarity metric, together with a new generic computation strategy, is presented by considering only the mismatch areas of MRs. It is theoretically proven that for a specific MR in a macroblock, the new similarity metric selects exactly the same pattern as existing metrics, while the resulting computational coding efficiency is improved by between 21% and 58% compared with the H.263 low bit-rate coding standard

A real-time pattern selection algorithm for very low bit-rate video coding using relevance and similarity metrics

Very low bit-rate video coding using regularly shaped patterns to represent moving regions in macroblocks has good potential for improved coding efficiency. This paper presents a real-time pattern selection (RTPS) algorithm, which uses a pattern relevance and similarity metric to achieve faster pattern selection from a large codebook. For each applicable macroblock, the relevance metric is applied to create a customized pattern codebook (CPC) from which the best pattern is selected using the similarity metric. The CPC size is adapted to facilitate real-time selection. Results prove the quantitative and perceptual performance of RTPS is superior to both the Fixed-8 algorithm and H.263

Challenges in the clinical assessment of novel tuberculosis drugs

To effectively tackle the global TB epidemic, novel treatment strategies are critically needed to shorten the duration of TB therapy and treat drug-resistant TB. Drug development for TB, stymied for decades, has enjoyed a renaissance over the past several years. However, development of new TB regimens is hindered by the limitations in our understanding and use of preclinical models; the paucity of accurate, early surrogate markers of cure, and challenges in untangling the individual contributions of drugs to multidrug regimens in a complex, multi-compartment disease. Lack of profit motive, advocacy, and imagination has contributed mightily to the dearth of drugs we have on the shelf to treat this ancient disease. Areas that will speed the development of new regimens for TB include novel murine and in vitro pharmacodynamics models, clinical endpoints that are not culture-based, innovative clinical trial designs, and an infusion of much-needed funding

Transmission of the U.S. Subprime Crisis to Emerging Markets: Evidence on the Decoupling-Recoupling Hypothesis

We find that emerging markets appeared to be somewhat insulated from developments in U.S. financial markets from early 2007 to summer 2008. From that point on, however, emerging markets responded very strongly to the deteriorating situation in the U.S. financial system and real economy. Policy measures taken in emerging markets to insulate themselves from global financial developments proved inadequate in the face of the credit crunch and decline in international trade that followed the Lehman bankruptcy in September 2008.