Exchange rate overvaluation and trade protection - lessons from experience

Despite a trend toward more flexible rates, more than half the world's countries maintain fixed or managed exchange rates. In the 1980s and 1990s, developing countries as a group progressively liberalized their trade regimes, but some governments defend their exchange rate in actions that run counter to long-run plans for liberalization. Without discussing the relative merits of fixed and flexible exchange rate systems, the authors note that exchange rate management in many countries has resulted in overvaluation of the real exchange rate. Roughly twenty five percent of the countries for which data are available have overvalued exchange rates, with black market premiums from 10 percent to more than 100 percent. After surveying the literature, the authors present lessons from experience about what has worked (or not) in response to crises involving external shocks and external trade deficits - and why. Trying to defend an overvalued exchange rate with protectionist trade policies is a classic pattern, but experience shows such protection does significantly retard the country's growth, and delay its integration into the world trading community. In fact, and overvalued exchange rate is often the root cause of protection, preventing the country from returning to more liberal trade policies that allow growth and integration into the world community without exchange rate adjustment. Most developing countries have downward price and wage rigidities and, with an external trade deficit, require some form of nominal exchange rate adjustment to restore external equilibrium. The authors present cross-country econometric and case study evidence - citing examples from Argentina, Chile, Ghana, The Republic of Korea, Malaysia, Turkey, Uruguay, and Sub-Saharan Africa (including the CFA zone) - that overvalued exchange rates reduce economic growth. Defending the exchange rate, they show, has nor no medium-term benefits, since falling reserves will eventually force devaluation. Better to have devaluation occur without further debilitating losses in reserves and lost productivity because of import controls. After devaluation the exchange rate will reach a new equilibrium, strongly influenced by government and central bank policies.ICT Policy and Strategies,Environmental Economics&Policies,Fiscal&Monetary Policy,Payment Systems&Infrastructure,Economic Theory&Research,Macroeconomic Management,Environmental Economics&Policies,Achieving Shared Growth,Economic Stabilization,Economic Theory&Research

Services liberalization in preferential trade arrangements : the case of Kenya

Given the growing importance of commitments to foreign investors in services in regional trade agreements, it is important to develop applied general equilibrium models to assess the impacts of liberalization of barriers to multinational service providers. This paper develops a 55 sector applied general equilibrium model of Kenya with foreign direct investment and Dixit-Stiglitz productivity effects from additional varieties of imperfectly competitive goods or services, and uses the model to assess its regional and multilateral trade options, focusing on commitments to foreign investors in services. To assess the sensitivity of the results to parameter values, the model is executed 30,000 times, and results are reported as confidence intervals of the sample distributions. The analysis reveals that a 50 percent preferential reduction in the ad valorem equivalents of barriers in all business services by Kenya with its African partners would be somewhat beneficial for Kenya. If a preferential agreement with African partners is combined with an agreement with the European Union, the gains would more than triple the gains of an Africa only agreement. Multilateral reduction of services barriers, however, would yield gains about 12 times the gains of an agreement with the Africa region alone. These results suggest that preferential liberalization in the region is a valuable first step, but wider liberalization, with larger partners and liberal rules of origin or multilaterally, will yield much larger gains due to providing access to a much wider set of services providers. The largest gains would come from domestic regulatory reform in services, as this would almost triple the gains of multilateral liberalization.Economic Theory&Research,Emerging Markets,Public Sector Corruption&Anticorruption Measures,Transport Economics Policy&Planning,Free Trade

Practising jazz performance: An investigation into the process that underpins optimal instrumental practice in the jazz idiom

Little formal research has been undertaken into the processes associated with jazz improvisation, particularly those associated with practising to become an elite jazz improviser. This study seeks to understand the role of instrumental practice, particularly physical practice strategies and the associated mental states, in the development of jazz improvisers. Interviews were conducted with six improvisers of various ages, instruments and backgrounds. The study identified a number of strategies specific to jazz practice that differed from traditional practice strategies described in Western art literature, particularly in relation to the importance of the ear-to-instrument connection. Accordingly, the study sets out a series of recommendations relating to practice for those aspiring to become master jazz performers

Modeling services liberalization : the case of Kenya

This paper employs a 55 sector small open economy computable general equilibrium model of the Kenyan economy to assess the impact of the liberalization of regulatory barriers against foreign and domestic business service providers in Kenya. The model incorporates productivity effects in both goods and services markets endogenously, through a Dixit-Stiglitz framework. It estimates the ad valorem equivalent of barriers to foreign direct investment based on detailed questionnaires completed by specialists in Kenya. The authors estimate that Kenya will gain about 11 percent of the value of Kenyan consumption in the medium run (or about 10 percent of gross domestic product) from a full reform package that also includes uniform tariffs. The estimated gains increase to 77 percent of consumption in the long-run steady-state model, where the impact on the accumulation of capital from an improvement in the productivity of capital is taken into account. Decomposition exercises reveal that the largest gains to Kenya will derive from liberalization of costly regulatory barriers that are non-discriminatory in their impacts between Kenyan and multinational service providers.Transport Economics Policy&Planning,Economic Theory&Research,Banks&Banking Reform,Emerging Markets,Debt Markets

The C-terminal portion of the cleaved HT motif is necessary and sufficient to mediate export of proteins from the malaria parasite into its host cell

The malaria parasite exports proteins across its plasma membrane and a surrounding parasitophorous vacuole membrane, into its host erythrocyte. Most exported proteins contain a Host Targeting motif (HT motif) that targets them for export. In the parasite secretory pathway, the HT motif is cleaved by the protease plasmepsin V, but the role of the newly generated N-terminal sequence in protein export is unclear. Using a model protein that is cleaved by an exogenous viral protease, we show that the new N-terminal sequence, normally generated by plasmepsin V cleavage, is sufficient to target a protein for export, and that cleavage by plasmepsin V is not coupled directly to the transfer of a protein to the next component in the export pathway. Mutation of the fourth and fifth positions of the HT motif, as well as amino acids further downstream, block or affect the efficiency of protein export indicating that this region is necessary for efficient export. We also show that the fifth position of the HT motif is important for plasmepsin V cleavage. Our results indicate that plasmepsin V cleavage is required to generate a new N-terminal sequence that is necessary and sufficient to mediate protein export by the malaria parasite

Portable lightweight cell provides controlled environment

Inflatable, lightweight cell provides a separate, secondary environment for a spacesuited man in case of spacesuit damage or malfunction. The cell has a pressure-sealing zipper and is equipped to maintain a livable atmosphere

Droplet digital PCR quantifies host inflammatory transcripts in feces reliably and reproducibly

AbstractThe gut is the most extensive, interactive, and complex interface between the human host and the environment and therefore a critical site of immunological activity. Non-invasive methods to assess the host response in this organ are currently lacking. Feces are the available analyte which have been in proximity to the gut tissue.We applied a method of concentrating host transcripts from fecal specimens using a existing bead-based affinity separation method for nucleic acids and quantified transcripts using droplet digital PCR (ddPCR) to determine the copy numbers of a variety of key transcripts in the gut immune system. ddPCR compartmentalizes the reaction in a small aqueous droplet suspended in oil, and counts droplets as either fluorescent or non-fluorescent. Glyceraldehyde-3-phosphate dehydrogenase (GAPDH) was used to normalize transcript concentration.This method was applied to 799 fecal samples from rural Malawian children, and over 20,000 transcript concentrations were quantified. Host mRNA was detected in >99% samples, a threshold for target detection was established at an average expression of 0.02 copies target/GAPDH, above which correlation coefficient between duplicate measurements is >0.95. Quantities of transcript detected using ddPCR were greater than standard qPCR. Fecal sample preservation at the time of collection did not require immediate freezing or the addition of buffers or enzymes. Measurements of transcripts encoding immunoactive proteins correlated with a measure of gut inflammation in the study children, thereby substantiating their relevance. This method allows investigators to interrogate gene expression in the gut

Enteric pathogen testing importance for children with acute gastroenteritis: A modified Delphi study

The application of clinical diagnostics for gastroenteritis in children has implications for a broad collection of stakeholders, impacting clinical care, communicable disease control, and laboratory utilization. To support diagnostic stewardship as gastroenteritis testing options continue to advance, it is critical to understand which enteropathogens constitute priorities for testing across stakeholder groups. Using a modified Delphi technique, we elicited opinions of subject matter experts to determine clinical and public health testing priorities. There was a high level of overall agreement (≥80%) among stakeholders (final roun