The Federal Government’s Use of Interest Rate Swaps and Currency Swaps

Interest rate swaps and currency swaps are contracts in which counterparties agree to exchange cash flows according to a pre-arranged formula over a period of time. Since 1985, the federal government has been us-ing such swaps to manage its liabilities in a cost-effective and flexible manner. The authors outline the characteristics of swap agreements and the ways in which the government uses them. They show that the swap program has been cost-effective, estimating that past and projected savings exceed $500 million. The authors also discuss the methods that the government uses to monitor the counterparty credit risk associated with these transactions.

Are private capital flows to developing countries sustainable?

The remarkable surge in private capital flow to developing countries since 1990 has greatly facilitated their rapid growth, at a time when OECD countries have been in, or passed through, recession. The importance of these flows to the current account of severallarge developing countries has caused concern about their sustainability, especially if international interest rates continue rising. The form of these flows, and their source - investors rather than commercial banks - causes concern about their short-term volatility. To address the issue of sustainability, the authors draw on analyses of international financial flows and economic prospects carried out by the Bank's International Economics Department. They conclude that private capital flows to developing countries are likely to be sustained at, or near, current total levels for the following reasons: (a) Much of the private flow comes from direct investment. Foreign direct investment has increased as international businesses pursue globalization strategies. Firms are taking advantage of liberalization drives and rising incomes in developing countries, as well as dramatic changes in transport and telecommunications - factors that are structural rather than cyclical, and that are likely to be reinforced by implementation of Uruguay Round agreements. (b) Sources of finance are more diversified. There is greater risk-sharing between creditor and debtor. Funds are predominantly going to the private sector (not sovereign governments). Also, developing countries still account for less than 1 percent of the investment portfolios of OECD investors. In the 1970s, commercial loans accounted for proportionately more flows. Now, increasingly large roles are played by bondholders, equity investors, and money market funds. (c) A prolonged major increase in international interest rates would jeopardize continuation of the flows at current levels, but the likelihood of such an increase in the next three to five years is slim. Any rise in interest rates in industrial countries will largely reflect rising demand for credit because of increased economic activity, which will benefit developing country exports. Commodity prices have surged in the past six months, but measures of core inflation, including unit labor cost, are at a historic low. This scenario is very different from the combination of high interest rates and economic recession the developing would faced in the early 1980s, as high and rising inflation induced sudden tightening of monetary policies. Still, significant areas of risk deserve attention from developing country governments, international financial institutions, and industrial country investors. Some major recipients of private capital flow are vulnerable to sudden changes in both domestic or external environments. And portfolio equity flows are likely to be more volatile than other forms of private capital flows. The policy response to large capital inflows should depend on whether the current account deficit is sustainable and the degree to which it is over - or underfinanced. While the external environment is favorable, vulnerable countries have a window of opportunity to undertake adjustment.Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,Financial Intermediation,Macroeconomic Management

Robust Control of PEP Formation Rate in the Carbon Fixation Pathway of C4 Plants by a Bi-functional Enzyme

<p>Abstract</p> <p>Background</p> <p>C₄plants such as corn and sugarcane assimilate atmospheric CO₂ into biomass by means of the C₄carbon fixation pathway. We asked how PEP formation rate, a key step in the carbon fixation pathway, might work at a precise rate, regulated by light, despite fluctuations in substrate and enzyme levels constituting and regulating this process.</p> <p>Results</p> <p>We present a putative mechanism for robustness in C₄carbon fixation, involving a key enzyme in the pathway, pyruvate orthophosphate dikinase (PPDK), which is regulated by a bifunctional enzyme, Regulatory Protein (RP). The robust mechanism is based on avidity of the bifunctional enzyme RP to its multimeric substrate PPDK, and on a product-inhibition feedback loop that couples the system output to the activity of the bifunctional regulator. The model provides an explanation for several unusual biochemical characteristics of the system and predicts that the system's output, phosphoenolpyruvate (PEP) formation rate, is insensitive to fluctuations in enzyme levels (PPDK and RP), substrate levels (ATP and pyruvate) and the catalytic rate of PPDK, while remaining sensitive to the system's input (light levels).</p> <p>Conclusions</p> <p>The presented PPDK mechanism is a new way to achieve robustness using product inhibition as a feedback loop on a bifunctional regulatory enzyme. This mechanism exhibits robustness to protein and metabolite levels as well as to catalytic rate changes. At the same time, the output of the system remains tuned to input levels.</p

BioNumbers—the database of key numbers in molecular and cell biology

BioNumbers (http://www.bionumbers.hms.harvard.edu) is a database of key numbers in molecular and cell biology—the quantitative properties of biological systems of interest to computational, systems and molecular cell biologists. Contents of the database range from cell sizes to metabolite concentrations, from reaction rates to generation times, from genome sizes to the number of mitochondria in a cell. While always of importance to biologists, having numbers in hand is becoming increasingly critical for experimenting, modeling, and analyzing biological systems. BioNumbers was motivated by an appreciation of how long it can take to find even the simplest number in the vast biological literature. All numbers are taken directly from a literature source and that reference is provided with the number. BioNumbers is designed to be highly searchable and queries can be performed by keywords or browsed by menus. BioNumbers is a collaborative community platform where registered users can add content and make comments on existing data. All new entries and commentary are curated to maintain high quality. Here we describe the database characteristics and implementation, demonstrate its use, and discuss future directions for its development

Pedagogy for Conceptual Thinking in the Digital Age: Enhancing Learning Outcomes with Meaning Equivalence Reusable Learning Objects (MERLO) Formative Assessments

[EN] The research presented in this paper is the fruit of an ongoing international collaboration with the goal of enhancing students learning outcomes by implementing and sharing a novel pedagogy for conceptual thinking, and use of an innovative didactical and methodological tool: Meaning Equivalence Reusable Learning Objects (MERLO) that provide student-centered, weekly formative assessments for exploring and discussing conceptual situations in small groups. It was developed, tested, and implemented in Canada at University of Toronto and Ryerson University, as well as in Israel, Italy, Russia, and Australia, in different knowledge domains, including: physics; biology; mathematics; mathematics teacher education; teacher training; developmental psychology; English as a second language; architecture; management; business; project management. Statistical analysis of MERLO data collected since 2002, shows that conceptual thinking enhance learning outcomes and deepens students’ comprehension of the conceptual content of learned material. Conceptual thinking is learnable, and provide metrics to document continuous increase in higher-order thinking skills such as critical conceptual thinking, transfer of knowledge, and problem solving. Pedagogy for conceptual thinking is currently implemented with Brightspace (http://www.brightspace.com/), Integrated Learning Platform (ILP) offered by D2L (http://www.d2l.com/) that supports customizable online pedagogy.Etkind, M.; Shafrir, U.; Kenett, R.; Roytman, L. (2016). Pedagogy for Conceptual Thinking in the Digital Age: Enhancing Learning Outcomes with Meaning Equivalence Reusable Learning Objects (MERLO) Formative Assessments. En 2nd. International conference on higher education advances (HEAD'16). Editorial Universitat Politècnica de València. 105-113. https://doi.org/10.4995/HEAD16.2015.2581OCS10511