What Does Pakistan Have to Join Inflation Targeters Club, A Royal Flush or A Seven-Deuce Offsuit?

The economic and institutional structure required for successful adoption and implementation of Inflation Targeting (IT) framework is often lacking in Emerging economies. In this paper, we evaluate these structures for the economy of Pakistan both qualitatively and quantitatively. Although our comprehensive assessment identifies non-realization of many core requirements but as literature and real time experience pointed out that IT can be a framework for emerging economies even in the absence of these conditions, we go further by investigating that if State Bank of Pakistan (SBP) decides to adopt IT, does there exist a stable and significant relationship between policy rate (monetary tool) and inflation measure (objective)? This bivariate relationship is important to be analyzed given the important role of interest rate in mitigating the deviations between actual and target inflation while working within the IT framework. To illustrate this relationship, we use Granger Causality test and our estimates fail to find any significant link between interest rate and inflation. On the basis of overall findings, this study suggests that Pakistan, due to the absence of most fundamental requirements of IT, is perhaps not ready for Inflation Targeting yet.Inflation Targeting, Pakistan, Monetary policy

Asymmetric Behavior of Inflation Uncertainty and Friedman-Ball Hypothesis: Evidence from Pakistan

This paper is first attempt to measure and analyze inflation uncertainty in Pakistan and it provides several contributions. Using quarterly data from 1976:01 to 2008:02, at first stage we model inflation uncertainty as time varying process through GARCH framework. At second stage asymmetric behavior of inflation uncertainty is analyzed by using GJR-GARCH and EGARCH models, for further analysis of asymmetry and leverage effects, we developed news impact curves proposed by Pagan and Schwert (1990). Finally we investigate the causality and its direction between inflation and inflation uncertainty by using bivariate Granger-Causality test to know which inflation uncertainty hypothesis (Friedman-Ball or Cukierman- Meltzer) holds true for Pakistani data. We get two important results. First, GJR-GARCH and EGARCH models are more successful in capturing inflation uncertainty and its asymmetric behavior as compared to simple GARCH model. This can also be seen from news impact curves. Second, there is strong evidence that Friedman-Ball inflation uncertainty hypothesis holds true for Pakistan.Inflation, Uncertainty, GJR-GARCH, EGARCH

Inflation Targeting Framework: Is the story different for Asian Economies?

This paper aims to measure and compare the economic performance of four Asian economies who adopted Inflation Targeting (Indonesia, Philippines, South Korea and Thailand) against their six neighboring Asian non-targeting economies (China, Hong Kong, India, Malaysia, Singapore and Pakistan). Using the methodology of Ball and Sheridan, firstly, behavior of inflation, output growth and short term interest rate has been measured for both groups (Targeters vs. Non-Targeters) in pre and post IT adoption period in order to see whether performance has improved in targeting countries after the adoption of IT. Secondly, we try to find out whether Inflation Targeting has played any significant role in the changed behavior of these variables. Thirdly, we measure the effect of output gap and supply shock on inflation and see whether economic structure of these countries has changed between pre and post targeting period; and then we measure the role of IT in the structural change of these economies if there is any. The results force us to believe that economic performance has improved in all Asian economies in post targeting period. However, IT does not seem to play any significant role in this improvement of targeting countries. In addition to this, we find strong evidence that all variables showed strong reversion to mean suggesting that improved performance of variables today is in fact the outcome of poor economic performance in the past.Inflation Targeting, Asian countries, Output gap, Targeters vs Non Targeters, Economic Performance

Diagnostic tool for Glanzmann\u27s thrombasthenia clinicopathologic spectrum

OBJECTIVE: To platelet aggregometry and describe the clinical spectrum of Glanzmann\u27s thrombasthenia diagnosed by platelet aggregometry. STUDY DESIGN: A case-series. PLACE AND DURATION OF STUDY: This study was carried out at the clinical laboratories at the Aga Khan University Hospital, Karachi from January 2003 to January 2006. PATIENTS AND METHODS: All patients irrespective of age and gender presenting with bleeding symptoms and having normal platelet count were evaluated. Demographic details, relevant clinical history along with results of complete blood count, bleeding time and platelet aggregation studies were retrieved through computerized data base and evaluated for the diagnosis of Glanzmann\u27s thrombasthenia. RESULTS: During the study period, 50 out of 2317 patients (2.2%) were diagnosed as Glanzmann\u27s thrombasthenia by platelet aggregometry with male to female ratio of 0.85:1 and median age of 10.2 years (ranging from 3 months to 27 years). Common symptoms were epistaxis, oral and gingival bleed, bleeding from minor cuts and trauma that were observed in 46% of the patients; while 18%, 8% and 10% of them also complained of bruising, hematuria and bleeding per rectum respectively. Majority i.e. 86% had a bleeding time greater than 10 minutes. All patients had received blood or blood products for their bleeding episodes. CONCLUSION: Platelet aggregometry is a useful diagnostic modality for the assessment of Glanzmann\u27s thrombasthenia. The disorder presents with muco-cutaneous bleeding and was found to be a common cause of bleeding in our setup

What enables Islamic banks to contribute in global financial reintermediation?

Conventional banks which once were competing with non-banking financial institutions and capital markets today face the new challenge of being reintermediated by Islamic banks. Earlier academic research has been debating over disintermediation and reintermediation of conventional banks, but consistently failed to address reintermediation through Islamic banks as a possibility. This study, however, fills the void by addressing the novel possibility of reintermediation “within” the banking sector and is the first attempt to analyze and compare Islamic and conventional banks from the perspective of reintermediated financial markets. After identifying the reintermediation trends led by Islamic banks we investigate several bank specific financial and non-financial characteristics that might have enabled Islamic banks to emerge as an important player in reintermediated financial markets. By keeping our focus on slightly modified version of CAMELS framework where ‘S’ represents “Service Quality” we find that along with better capitalization (C) and improved liquidity (L), better service quality (S) is another distinguished feature of Islamic banks that might be linked with their high degree of intermediation

Do fear indices help predict stock returns?

This study investigates the forecasting power of implied volatility indices on forward looking returns. Prior studies document that negative innovations to returns are associated with increasing implied volatility of the underlying indices; thus, suggesting a possible relationship between extremely high levels of implied volatility and positive short term returns. We investigate this issue by examining the predictive power of three implied volatility indices, VIX, VXN and VDAX, on the underlying index returns. We extend previous research by also focusing on characterised selected stocks and examine the relationship between implied volatility indices and future returns across different sectors and classified portfolios. Our findings suggest that implied volatility indices are good predictors of 20-days and 60-days forward looking returns and illustrate insignificant predictive power for very short term (1-day and 5-days) returns. © 2014 © 2014 Taylor & Francis

Unleashing the Health Policy, A Computation Approach Step by Step

Health is considered a basic right of every living being on this planet earth. To monitor and sustain, countries of the world contributed to develop an organization called World Health Organization in 1946. Still children from many developing countries still suffer from hunger and disease by complications of malpractices. It is believed that in a child learning, school education is prior to any source. The main source of such uncountable incidents were insufficient policies to eradicate occurrences caused by disease and improve quality life. Considering Peoples Republic of China as the leader in the race of developing countries has emerged as most successful in making reforms in health sector and policy implementations in contrast with Pakistan. This research contributes in analyzing health policies of Islamic Republic of Pakistan by determining the lack of policies, roles of stakeholders and simulating the model for driving suggestions for health policy improvements from the role of health physicians in schools. In the end, conclusive suggestions based on policy simulation is presented to ascertain the health policy benchmarks by including the role of school physicians and propose achievable sustainable goals in next health policies to meet the challenges of the new era

Portfolio optimisation with higher moments of risk at the Pakistan Stock Exchange

Stock markets play an important role in spurring economic growth and development through diversification opportunities. However, diversification cannot be truly achieved if we continue to ignore additional dimensions of risk, namely skewness and kurtosis. This study incorporates higher moments of risk to form a mean-varianceskewness-kurtosis based framework for portfolio optimisation. Inclusion of higher moments in optimisation framework acknowledges the risk of asymmetric returns and fat-tail risk and can help investors in formulating optimal portfolios of stocks which can be significantly divergent from the ones they obtain through the Markowitz meanvariance optimisation. Our results confirm the presence of tradeoff between returns and additional dimensions of risk in Pakistan Stock Exchange (PSX) and strongly suggest including them in the optimisation framework to avoid sub-optimal decisions and to curtail exposure towards higher moments of risks

Inflation Volatility: An Asian Perspective

The primary purpose of this study is to model and analyze inflation volatility in ten selected Asian economies. We used quarterly data of inflation from 1987Q1 to 2008Q4 to model inflation volatility as time varying process through different symmetric and asymmetric GARCH specifications. We also proposed to model inflation volatility on the basis of cyclic component of inflation obtained from HP filter, instead of actual inflation when the latter does not fulfill the criterion of stationarity. Through news impact curves we tried to highlight the behavior of inflation volatility in response to lagged inflation shocks, under different GARCH specifications for selected economies. Bivariate granger causality test is also applied to analyze the direction of causality between inflation and different volatility estimates. We get few important results. At first, leverage parameter shows expected sign and is significant for almost all countries suggesting strong asymmetry in inflation volatility. The hyperbolic sign integral shape of news impact curves based on GJR-GARCH is not only consistent with the results of our previous study based on Pakistani data (Rizvi and Naqvi, 2008) but also highlight the importance of inflation stabilization programs particularly because of the subsequent evidences obtained in favor of bidirectional causality running between inflation and inflation volatility. We also found that cyclic component of inflation could be a suitable proxy of inflation for volatility estimation

Asymmetric Behavior of Inflation Uncertainty and Friedman-Ball Hypothesis: Evidence from Pakistan

This paper is first attempt to measure and analyze inflation uncertainty in Pakistan and it provides several contributions. Using quarterly data from 1976:01 to 2008:02, at first stage we model inflation uncertainty as time varying process through GARCH framework. At second stage asymmetric behavior of inflation uncertainty is analyzed by using GJR-GARCH and EGARCH models, for further analysis of asymmetry and leverage effects, we developed news impact curves proposed by Pagan and Schwert (1990). Finally we investigate the causality and its direction between inflation and inflation uncertainty by using bivariate Granger-Causality test to know which inflation uncertainty hypothesis (Friedman-Ball or Cukierman- Meltzer) holds true for Pakistani data. We get two important results. First, GJR-GARCH and EGARCH models are more successful in capturing inflation uncertainty and its asymmetric behavior as compared to simple GARCH model. This can also be seen from news impact curves. Second, there is strong evidence that Friedman-Ball inflation uncertainty hypothesis holds true for Pakistan