Logistics and Exports

Drawing on a new and comprehensive measure of logistics quality, our gravity model suggests logistics in the exporting and partner-country can have an important impact on bilateral exports. A one standard deviation improvement in the exporter’s logistics quality, which for example would improve Gabon to the level of Guinea, would raise exports by almost 60%. Landlocked countries’ exports depend on their neighbours’ logistics, but their own logistics quality is not as important as for other countries. We also find that logistics act to reduce the trade effects of distance, but without eliminating them.Logistics, exports, gravity models

The Impact of Monetary Policy on the Exchange Rate: A Study Using Intraday Data

This paper uses intraday data to estimate the effect of changes in monetary policy on the exchange rate. We use an event study with carefully selected sample periods for four countries (Australia, Canada, New Zealand and the United Kingdom) to ensure that the change in monetary policy is exogenous to the exchange rate. Intraday data allow us to use a short event window, which improves the accuracy of estimates, and demonstrates that the change in policy is rapidly incorporated into the exchange rate. On average, an unanticipated tightening of 25 basis points is found to appreciate the exchange rate by around 0.35 per cent, with estimates for the individual countries ranging from ¼–½ of a per cent. The estimation indicates that monetary policy changes account for only a small part of the observed variability of exchange rates in these countries. We also find that changes in monetary policy have substantially different effects on the exchange rate depending on how they alter expectations regarding future policy. Surprises that cause expectations of future policy to be revised by the full amount of the surprise are found to have a larger impact on the exchange rate (around 0.4 per cent) than surprises that only bring forward an anticipated change in policy and do not change expectations of future policy (around 0.2 per cent).exchange rates; monetary policy; intraday data

Exports and international logistics

Do better international logistics reduce trade costs, raising a developing country's exports? Yes, but the magnitude of the effect depends on the country's size. The authors apply a gravity model that accounts for firm heterogeneity and multilateral resistance to a comprehensive new international logistics index. A one-standard deviation improvement in logistics is equivalent to a 14 percent reduction in distance. An average-sized developing country would raise exports by about 36 percent. Most countries are much smaller than average however, so the typical effect is 8 percent. This difference is chiefly due to multilateral resistance: it is bilateral trade costs relative to multilateral trade costs that matter for bilateral exports, and multilateral resistance is more important for small countries.Economic Theory&Research,Free Trade,Trade Policy,Common Carriers Industry,Trade Law

The Profitability of Speculators in Currency Futures Markets

Using weekly data on the positions of different types of participants in currency futures markets we present evidence that suggests speculators are profitable. Across six currencies, speculators’ gross profits are seemingly positive in 60 per cent of weeks. The profits are significant even after accounting for transactions costs. Our estimated speculator profits are consistent both with speculators being paid a risk premium and with speculators having superior forecasting ability.exchange rates; futures markets; speculators

Mental Health Through Movement

Children’s mental health: ‘has become an issue of real concern, in the media and to both politicians and NHS leaders, over the last five years in particular. It has prompted numerous inquiries, reports, recommendations and pledges by politicians and NHS leaders to improve the situation’: https://www.theguardian.com/society/2018/nov/22/what-is-happening-withchildrens-mental-health On July 1st 2019, the Local Government Association released statistics to show that: ‘There were 205,720 cases where a child was identified as having a mental health issue in 2017/18, compared with 133,600 in 2014/15- up 54%’: https://www.local.gov.uk/about/news/councils-seeing-more-560-child-mentalhealth-cases-every-day It is within this context that the All-Party Parliamentary Group on A Fit and Healthy Childhood presents its 14th Report: ‘Positive Mental Health Through Movement’. With 1 in 10 children now having a mental health diagnosis and 1 in 4 an undiagnosed mental health issue, this, our third Report on the issue of child mental health, addresses the link between positive mental health and physical activity and movement experiences at a time when, paradoxically, today’s children and young people are more inactive and play less than ever before. The growing recognition of a link between mental health and movement is fortuitous because from September 2019, health education in English schools will be statutory alongside the expectation that they will offer their pupils at least 30 ‘active minutes’ per day. The APPG on A Fit and Healthy Childhood welcomes the change whilst recognising that those responsible for implementing the new strategy (including practitioners and families) will need guidance as they help children to develop individual strategies to address future adverse events and foster the positive sense of self that will enable them to lead fulfilled, healthy lives. This Report is therefore presented as a practical contribution to an essential debate. It offers new strategies against the persistence of historical and traditional ways of thinking; examines and collates best practice in the devolved Home Countries as well as the wider world and discusses exactly what is required to ensure that future child mental health strategy is holistic. It is respectful of equalities and is aware that the successful outcome of policies is entirely dependent upon the expertise and confidence of those tasked with the responsibility of delivering them. As the 21st century advances, we consider the effects of the digital age and its impact on children and young people’s mental health and wellbeing and the crucial role of parents and carers who want the best for their children in a societal climate where, all too often, fears of ‘nanny state’ meddling serve to isolate families who suffer in silence – until a disaster that may have been all too predictable and preventable overtakes them, making a private grief a public concern. The trajectory of progress in mental health policy has been ‘stop start’ rather than linear, with legislative change in 1959 and 1983, an increase in spending from 1997- 2010 and radical changes to child and adolescent mental health services (CAMHS) in 2000. The Wessely Independent Review of the Mental Health Act is another such milestone: https://www.gov.uk/government/groups/independent-review-of-the-mentalhealth-act The APPG on A Fit and Healthy Childhood anticipates that the Government will fulfil its pledge to parents, children and practitioners by introducing much needed mental health legislation - and that our trio of Reports and the holistic theme of this one will help to inform a strategy that works for 21st century children

The Impact of Monetary Policy on the Exchange Rate: A Study Using Intraday Data

We investigate the impact of monetary policy on the exchange rate using an event study with intraday data for four countries. Carefully selecting the sample periods ensures that the policy change is exogenous to the exchange rate. An unanticipated tightening of 25 basis points leads to a rapid appreciation of around 0.35 percent. We also show that the impact depends on how the surprise affects expectations of future monetary policy. If expectations of future policy are revised by the full amount of the surprise, then the impact on the exchange rate is larger (0.4 percent) than if the surprise only brings forward an anticipated change in policy (0.2 percent).

Exports and Logistics.

Do better trade logistics reduce trade costs, raising a country’s exports? Yes, but the magnitude of the effect depends on country size. Applying a new gravity model to a comprehensive logistics index, we find that an average-sized country would raise exports by about 46% after a one-standard deviation improvement in logistics. Most countries are much smaller than average however, so the typical effect is only 6%. This difference is chiefly due to multilateral resistance, which stresses that bilateral trade costs relative to multilateral trade costs matter for bilateral exports. Our method also distinguishes between the effects of logistics on the intensive margin (exports per firm) and the extensive margin (the number of exporting firms) of trade