Political instability, public investment and macroeconomic performance

This paper attempts to provide a framework to explain both the lower share of current spending in large fiscal adjustments and the potential expansionary effects of fiscal contractions. We distinguish between current spending and productivity enhancing public investments and analyze the potential determinants of the policy maker's choice for the composition of overall public spending. Using this framework, we also link the overall macroeconomic performance to the public spending decisions. Our results suggest that raising current spending at the expense of public investment is associated with less favourable performance in terms of not only inflation and output but also, interestingly, future ‘current'' spending.composition of public spending

The Banking Sector, Government Bonds and Financial Intermediation: The Case of Emerging Market Countries

This paper develops an analytical framework to explore how financial sector characteristics shape domestic debt dynamics in emerging market economies. Our analysis suggests that the more competitive the banking sector and the more liquid and deeper the deposit market, the better would be the conditions in the public securities market. Our results also reveal that the lower the financial depth, the greater the scale of private sector credits that are crowded-out by public borrowing. To the extent that credit availability is associated with improved productivity and better output performance, the lack of financial depth in emerging market countries implies that extensive domestic borrowing in these countries may have consequences far beyond the concern with fiscal sustainability. As such, our results higlight the importance of developing domestic debt markets for financial and macroeconomic stability.Financial sector; public debt; cost of borrowing.

The second moments matter: The response of bank lending behavior to macroeconomic uncertainty

In this paper we investigate whether macroeconomic uncertainty could distort banks’ allocation of loanable funds. To provide a road- map for our empirical investigation, we present a simple framework which demonstrates that lower uncertainty about the return from lending should lead to a more unequal distribution of lending across banks as managers take advantage of more precise knowledge of different lending opportunities. When bank-specific differences in lending opportunities are harder to predict, we should observe less cross-sectional variation in loan-to-asset ratios. Using a comprehensive U.S. commercial bank data set, we receive support for our hypothesis.Bank lending, financial intermediation, credit, macroeconomic, uncertainty, panel data, ARCH.

The second moments matter: The response of bank lending behaviour to macroeconomic uncertainty

This paper investigates whether variations in macroeconomic uncertainty distort banks' allocation of loanable funds by affecting the predictability of banks' returns from lending. Low levels of macroeconomic uncertainty will allow bankers to base their lending decisions on more accurate evaluations of different lending opportunities, leading to a more unequal distribution of lending across banks. Contrarily, increased macroeconomic uncertainty will hinder bankers ability to identify and channel funds towards the best opportunities, including more similar lending behaviour across banks. Our empirical analysis provides support for the hypothesis that macroeconomic uncertainty adversely affects the efficient allocation of loanable banks.

The Impact of Macroeconomic Uncertainty on Bank Lending Behavior

bank lending, macroeconomic uncertainty, panel data, ARCH

Comorbid personality disorders in subjects with panic disorder: which personality disorders increase clinical severity?

Personality disorders are common in subjects with panic disorder. Personality disorders have shown to affect the course of panic disorder. The purpose of this study was to examine which personality disorders effect clinical severity in subjects with panic disorder. This study included 122 adults (71 female, 41 male), who met DSM-IV criteria for panic disorder (with or without agoraphobia). Clinical assessment was conducted by using the Structured Clinical Interview for DSM-IV Axis I Disorders (SCID-I), the Structured Clinical Interview for DSM-IV Axis II Personality Disorders (SCID-II) and the Panic and Agoraphobia Scale (PAS), Global Assessment Functioning Scale (GAF), Beck Depression Inventory (BDI), and State-Trait Anxiety Inventory (STAI). Patients who had a history of sexual abuse were assessed with Sexual Abuse Severity Scale. Logistic regressions were used to identify predictors of suicide attempts, suicidal ideation, agoraphobia, different panic attack symptoms, sexual abuse, and early onset of disorders. The rates of comorbid Axis I and Axis II psychiatric disorders were 80.3% and 33.9%, consecutively, in patients with panic disorder. Panic disorder patients with comorbid personality disorders had more severe anxiety, depression and agoraphobia symptoms, and had earlier ages of onset, and lower levels of functioning. The rates of suicidal ideation and suicide attempts were 34.8% and 9.8%, consecutively, in subjects with panic disorder. The rate of patients with panic disorder had a history of childhood sexual abuse was 12.5%. The predictor of sexual abuse was more than one comorbid Axis II diagnosis. The predictors of suicide attempt were comorbid paranoid and borderline personality disorders, and the predictor of suicidal ideation was major depressive disorder in subjects with panic disorder. In conclusion, this study documents that comorbid personality disorders increase the clinical severity of panic disorder. Patients with more than one comorbid Axis II diagnosis had more severe clinical symptoms. Borderline, Cluster B and -with a lower effect- Cluster C personality disorders seem to increase the clinical severity of panic disorder

The Impact of Macroeconomic Uncertainty on Cash Holdings for Non-Financial Firms

This paper investigates the effects of macroeconomic volatility on nonfinancial firms cash holding behavior. Using an augmented cash bufferstock model, we demonstrate that an increase in macroeconomic volatility will cause the crosssectional distribution of firms cashtoasset ratios to narrow. We test this prediction on a panel of nonfinancial firms drawn from the annual COMPUSTAT database covering the period 19572000, and find that as macroeconomic uncertainty increases, firms behave more homogeneously. Our results are shown to be robust to the inclusion of the levels of several macroeconomic factors. --Cash holdings,macroeconomic uncertainty,time series,ARCH,nonfinancial Firms.

The Impact of Macroeconomic Uncertainty onNon-Financial Firms’ Demandf or Liquidity

This paper empirically investigates whether changes in macroeconomic volatility affect the effcient allocation of non-financial firms' liquid assets. We argue that higher uncertainty will hamper managers' ability to accurately predict firm-specific information and induce them to implement similar cash management policies. Contrarily, when the macroeconomic environment becomes more tranquil, each manger will have the latitude to behave more idiosyncratically as she can adjust liquid assets based on the specific requirements of the firm, bringing about a more efficient allocation of liquid assets. Our empirical analysis provides support for these predictions.

The Impact of Macroeconomic Uncertainty on Cash Holdings for Non–Financial Firms

This paper investigates the effects of macroeconomic volatility on non–financial firms’ cash holding behavior. Using an augmented cash buffer–stock model, we demonstrate that an increase in macroeconomic volatility will cause the cross–sectional distribution of firms’ cash–to–asset ratios to narrow. We test this prediction on a panel of non–financial firms drawn from the annual COMPUSTAT database covering the period 1970–2000, and find that as macroeconomic uncertainty increases, firms behave more homogeneously. Our results are shown to be robust to the inclusion of the levels of several macroeconomic factors.Cash holdings; macroeconomic uncertainty; panel data; time series; ARCH; non-financial firms