News-Driven International Business Cycles: Effects of the US News Shock on the Canadian Economy

This paper studies the international transmission effects of the news about the Total Factor Productivity (TFP) of the US to the Canadian economy. First, using the Vector Error Correction Model (VECM), the impulse responses of Canadian macroeconomic variables to the US news shock are estimated. Next, I develop and estimate a two-country RBC model with the preference introduced by Jaimovich and Rebelo (2008) and investment adjustment cost to generate booms in Canadian variables in response to news about future US TFP. I find that international macroeconomic comovements between the US and Canada can be generated by the news about future TFP in the US. Unlike previous studies, I show that the response of Canadian TFP to the US news shock is important in order to generate the boom observed in empirical analysis. Estimated value of the preference parameter indicates that getting rid of the wealth effect on hours worked is important. I also show that low elasticity of substitution between domestically and foreign produced intermediate goods can also help explaining the domestic boom created by the news shock, which highlights the importance of analyzing an open economy.

The Chinese Yuan after the Chinese Exchange Rate System Reform

In this paper, we investigate the actual exchange rate policy conducted by the Chinese government after the Chinese exchange rate system reform on July 21 2005. Also, we investigate long-run effect (Balassa-Samuelson effect) on the Chinese yuan. We found that the Chinese government had a statistically significant but small change in exchange rate policy during our sample period to January 25, 2006. It is not identified that the Chinese monetary authority is adopting the currency basket system because the change is too small in the economic sense. On one hand, higher growth rate of productivity will appreciate the Chinese yuan in terms of the US dollar and the Japanese yen while higher growth rates of productivity in Chinese tradable good sector tend to give the Balassa-Samuleson effect, that is undervaluation bias, to the Chinese yuan.

Prevention of hypoglycemia by intermittent-scanning continuous glucose monitoring device combined with structured education in patients with type 1 diabetes mellitus : A randomized, crossover trial

Aims: We conducted a randomized, crossover trial to compare intermittent-scanning continuous glucose monitoring (isCGM) device with structured education (Intervention) to self-monitoring of blood glucose (SMBG) (Control) in the reduction of time below range. Methods: This crossover trial involved 104 adults with type 1 diabetes mellitus (T1DM) using multiple daily injections. Participants were randomly allocated to either sequence Intervention/Control or sequence Control/Intervention. During the Intervention period which lasted 84 days, participants used the first-generation FreeStyle Libre (Abbott Diabetes Care, Alameda, CA, USA) and received structured education on how to prevent hypoglycemia based on the trend arrow and by frequent sensor scanning (≥10 times a day). Confirmatory SMBG was conducted before dosing insulin. The Control period lasted 84 days. The primary endpoint was the decrease in the time below range (TBR; <70 mg/dL). Results: The time below range was significantly reduced in the Intervention arm compared to the Control arm (2.42 ± 1.68 h/day [10.1 %±7.0 %] vs 3.10 ± 2.28 h/day [12.9 %±9.5 %], P = 0.012). The ratio of high-risk participants with low blood glucose index >5 was significantly reduced (8.6 % vs 23.7 %, P < 0.001). Conclusions: The use of isCGM combined with structured education significantly reduced the time below range in patients with T1DM

Essays in International Business Cycles

<p>This dissertation consists of two chapters on international business cycles. In the first chapter, I revisit the problem of the anomaly of terms of trade dynamics. First, I empirically analyze the effect of a US aggregate labor productivity shock on the US terms of trade using a Vector Autoregression (VAR) and Maximum Forecast Error Variance identification. I find that the shock appreciates the terms of trade of the US. Next, using a non-homothetic preference, I explain the dynamics of the terms of trade in response to a positive aggregate productivity shock theoretically. Using a model with endogenous markup and heterogeneous firm-specific productivities, the appreciation of the terms of trade can be generated even under a complete asset market assumption. Unlike previous studies, I explain the dynamics of the terms of trade through a new channel, which is the channel of relative cutoff firm-specific productivity that determines the optimal export decisions of the firms. Depending on the asset market structure, two competing effects, i.e., the income effect and the markup effect, have different implication to terms of trade dynamics. Under the assumption of financial autarky, the income effect is bigger than the markup effect and the terms of trade depreciates in response to a positive aggregate productivity shock. However, if we allow for the trade of state-contingent or non-state contingent bonds, the markup effect also comes into play and the terms of trade appreciates, which is in line with the empirical findings. </p><p>In the second chapter, I study the international transmission effects of the news about the Total Factor Productivity (TFP hereafter) of the US to the Canadian and Japanese economy. First, using the Vector Error Correction Model (VECM), the impulse responses of Canadian and Japanese macroeconomic variables to the US news shock are estimated. Next, I develop and estimate a two-country real business cycle (RBC) model with investment adjustment cost and the preference which eliminates the wealth effect on hours worked to generate booms in Canadian and Japanese variables in response to news about future US TFP. I find that international macroeconomic comovements can be generated by the news about future TFP in the US. Unlike previous studies, I show that the response of Canadian or Japanese TFP to the US news shock is important in order to generate the boom observed in the empirical analysis. Estimated value of the preference parameter indicates that eliminating the wealth effect on hours worked is important. I also show that low elasticity of substitution between domestically and foreign produced intermediate goods can also help explain the domestic boom created by the news shock, which highlights the importance of analyzing an open economy.</p>Dissertatio