Optimal HP filtering for South Africa

Among the various methods used to identify the business cycle from aggregate data, the Hodrick-Prescott filter has become an industry standard – it ‘identifies’ the business cycle by removing low-frequency information, thereby smoothing the data. Since the filter’s inception in 1980, the value of the smoothing constant for quarterly data has been set at a ‘default’ of 1600, following the suggestion of Hodrick and Prescott (1980). This paper argues that this ‘default value’ is inappropriate due to its ad hoc nature and problematic underlying assumptions. Instead this paper uses the method of optimal filtering, developed by Pedersen (1998, 2001, and 2002), to determine the optimal value of the smoothing constant for South Africa. The optimal smoothing constant is that value which least distorts the frequency information of the time series. The result depends on both the censoring rule for the duration of the business cycles and the structure of the economy. The paper raises a number of important issues concerning the practical use of the HP filter, and provides an easily replicable method in the form of MATLAB code.Hodrick-Prescott filter, Spectral analysis, Ideal filtering, Optimal filtering, Distortionary filtering, Business cycles, MATLAB

Economic Crises, Stabilisation Policy and Output in Emerging Market Economies

The recent macroeconomic history of emerging market economies is coloured with economic crises of all kinds, ranging from debt-crises, through hyperinflationary periods to currency crises to name but a few. Much of the empirical literature notes that alongside fast-paced structural change this has resulted in volatile business cycles and a difficult environment for stabilisation policy. Both short- and long-run output dynamics are shaped by the multidimensional exposure of EMEs to economic shocks. The paper uses an SVAR analysis and finds that in spite of high degrees of output volatility, the conduct of stabilisation policy has sometimes been successful in dampening short-run output fluctuations. However, even when stabilisation has been successful, the effect on overall output volatility has been negligible when compared to supply-side shocks. The results show that economic crises are associated with large negative supply shocks which are only counteracted by stabilisation policy to a very small extent. These crisis-related supply shocks, in turn, have large negative effects on potential GDP growth, which are only reversible when positive supply shocks regain lost ground. Given the institutional origin of the economic crises, the paper suggests that for stabilisation policy to become more effective in lowering output volatility and maintaining long-term growth potential, it must be supported by appropriate supply-side measures which insulate EMEs against large negative supply shocks and help them to recover in the wake of economic crises.Economic crises, Stabilisation policy, Emerging Market Economies, Business Cycles, Potential output

The sources of comparative advantage in tourism

Tourism flows are usually explained through demand-side factors such as income growth in developed economies and changes in the preferences of visitors. While these models are adequate for short-term forecasts, little theoretical justification is provided to explain why certain countries perform better than others. This paper identifies which countries have a comparative advantage in the export of travel services (tourism). Consequently, the paper seeks to identify the sources of this comparative advantage. We include the standard explanatory variables (factors of production, including natural environment) for Ricardian comparative advantage, plus measures of infrastructure, health, safety and security, tourism prioritization, and various dummy variables. We also develop and test new variables, including a neighbourhood variable, which measures the benefits obtained from regional tourism clusters. Our results have important policy implications; it is clear that the natural environment has a large positive and significant impact on a country’s revealed comparative advantage, as do transport endowments (a measure of relative accessibility) and the neighbourhood variable. These findings correspond to the predictions of the neoclassical trade theories (namely Heckscher-Ohlin) and to some extent the new trade theories (Krugman).tourism, comparative advantage, trade in services

The effect of industry nuances on the relationship between corporate governance and financial performance: Evidence from South African listed companies

Background: Premised on agency, resource dependence and stewardship theories, the study investigates empirically the existence of industry nuances in the relationship between corporate governance and financial performance of companies listed in the Johannesburg Stock Exchange.   Aims: The main objective of the study is to understand the relationship between internal corporate governance and company performance from the perspective of three distinct economic periods, as well as industry nuances, cognisant of endogeneity issues.   Setting: South Africa, as an emerging African market, offers an interesting research context in which the corporate governance and financial performance nexus can be examined empirically.   Method: A sample of 90 companies from the five largest South African industries, covering a 13-year period from 2002 to 2014 (1170 firm-year observations) was examined with three estimation approaches.   Results: Two key trends emerged from this study. First, the relationship between corporate governance and company performance differed from industry to industry. Second, the association between corporate governance and company performance also changes during steady and non-steady periods, which is an indication that the nexus is driven by the state of the global economy and the type of the industry.   Conclusion: Evidence from the study suggests that companies should be allowed to optimise rather than maximise their corporate governance options. This finding questioned the approach of the recently published King IV Code of Good Corporate Governance, which requires Johannesburg Stock Exchange-listed companies to ‘apply and explain’ as opposed to ‘apply or explain’ as pronounced by King III Code of Good Corporate Governance

The mortality of colorectal cancer in relation to the initial symptom at presentation to primary care and to the duration of symptoms: a cohort study using medical records

The association between the staging of colorectal cancer and mortality is well known. Much less researched is the relationship between the duration of symptoms and outcome, and whether particular initial symptoms carry a different prognosis. We performed a cohort study of 349 patients with primary colorectal cancer in whom all their prediagnostic symptoms and investigation results were known. Survival data for 3–8 years after diagnosis were taken from the cancer registry. Six features were studied: rectal bleeding, abdominal pain, diarrhoea, constipation, weight loss, and anaemia. Two of these were significantly associated with different staging and mortality. Rectal bleeding as an initial symptom was associated with less advanced staging (odds ratio from one Duke's stage to the next 0.50, 95% confidence interval 0.31, 0.79; P=0.003) and with reduced mortality (Cox's proportional hazard ratio (HR) 0.56 (0.41, 0.79); P=0.001. Mild anaemia, with a haemoglobin of 10.0–12.9 g dl−1, was associated with more advanced staging (odds ratio 2.2 (1.2, 4.3); P=0.021) and worse mortality (HR 1.5 (0.98, 2.3): P=0.064). When corrected for emergency admission, sex, and the site of the tumour, the HR for mild anaemia was 1.7 (1.1, 2.6); P=0.015. No relationship was found between the duration of symptoms and staging or mortality

A meta-analysis of the efficacy of preoperative surgical safety checklists to improve perioperative outcomes

Background. Meta-analyses of the implementation of a surgical safety checklist (SSC) in observational studies have shown a significant decrease in mortality and surgical complications.Objective. To determine the efficacy of the SSC using data from randomised controlled trials (RCTs).Methods. This meta-analysis followed the Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines and was registered with PROSPERO (CRD42015017546). A comprehensive search of six databases was conducted using the OvidSP search engine.Results. Four hundred and sixty-four citations revealed three eligible trials conducted in tertiary hospitals and a community hospital, with a total of 6 060 patients. All trials had allocation concealment bias and a lack of blinding of participants and personnel. A single trial that contributed 5 295 of the 6 060 patients to the meta-analysis had no detection, attrition or reporting biases. The SSC was associated with significantly decreased mortality (risk ratio (RR) 0.59, 95% confidence interval (CI) 0.42 - 0.85; p=0.0004; I2=0%) and surgical complications (RR 0.64, 95% CI 0.57 - 0.71; p<0.00001; I2=0%). The efficacy of the SSC on specific surgical complications was as follows: respiratory complications RR 0.59, 95% CI 0.21 - 1.70; p=0.33, cardiac complications RR 0.74, 95% CI 0.28 - 1.95; p=0.54, infectious complications RR 0.61, 95% CI 0.29 - 1.27; p=0.18, and perioperative bleeding RR 0.36, 95% CI 0.23 - 0.56; p<0.00001.Conclusions. There is sufficient RCT evidence to suggest that SSCs decrease hospital mortality and surgical outcomes in tertiary and community hospitals. However, randomised evidence of the efficacy of the SSC at rural hospital level is absent

Antimicrobial resistance among migrants in Europe: a systematic review and meta-analysis

BACKGROUND: Rates of antimicrobial resistance (AMR) are rising globally and there is concern that increased migration is contributing to the burden of antibiotic resistance in Europe. However, the effect of migration on the burden of AMR in Europe has not yet been comprehensively examined. Therefore, we did a systematic review and meta-analysis to identify and synthesise data for AMR carriage or infection in migrants to Europe to examine differences in patterns of AMR across migrant groups and in different settings. METHODS: For this systematic review and meta-analysis, we searched MEDLINE, Embase, PubMed, and Scopus with no language restrictions from Jan 1, 2000, to Jan 18, 2017, for primary data from observational studies reporting antibacterial resistance in common bacterial pathogens among migrants to 21 European Union-15 and European Economic Area countries. To be eligible for inclusion, studies had to report data on carriage or infection with laboratory-confirmed antibiotic-resistant organisms in migrant populations. We extracted data from eligible studies and assessed quality using piloted, standardised forms. We did not examine drug resistance in tuberculosis and excluded articles solely reporting on this parameter. We also excluded articles in which migrant status was determined by ethnicity, country of birth of participants' parents, or was not defined, and articles in which data were not disaggregated by migrant status. Outcomes were carriage of or infection with antibiotic-resistant organisms. We used random-effects models to calculate the pooled prevalence of each outcome. The study protocol is registered with PROSPERO, number CRD42016043681. FINDINGS: We identified 2274 articles, of which 23 observational studies reporting on antibiotic resistance in 2319 migrants were included. The pooled prevalence of any AMR carriage or AMR infection in migrants was 25·4% (95% CI 19·1-31·8; I2 =98%), including meticillin-resistant Staphylococcus aureus (7·8%, 4·8-10·7; I2 =92%) and antibiotic-resistant Gram-negative bacteria (27·2%, 17·6-36·8; I2 =94%). The pooled prevalence of any AMR carriage or infection was higher in refugees and asylum seekers (33·0%, 18·3-47·6; I2 =98%) than in other migrant groups (6·6%, 1·8-11·3; I2 =92%). The pooled prevalence of antibiotic-resistant organisms was slightly higher in high-migrant community settings (33·1%, 11·1-55·1; I2 =96%) than in migrants in hospitals (24·3%, 16·1-32·6; I2 =98%). We did not find evidence of high rates of transmission of AMR from migrant to host populations. INTERPRETATION: Migrants are exposed to conditions favouring the emergence of drug resistance during transit and in host countries in Europe. Increased antibiotic resistance among refugees and asylum seekers and in high-migrant community settings (such as refugee camps and detention facilities) highlights the need for improved living conditions, access to health care, and initiatives to facilitate detection of and appropriate high-quality treatment for antibiotic-resistant infections during transit and in host countries. Protocols for the prevention and control of infection and for antibiotic surveillance need to be integrated in all aspects of health care, which should be accessible for all migrant groups, and should target determinants of AMR before, during, and after migration. FUNDING: UK National Institute for Health Research Imperial Biomedical Research Centre, Imperial College Healthcare Charity, the Wellcome Trust, and UK National Institute for Health Research Health Protection Research Unit in Healthcare-associated Infections and Antimictobial Resistance at Imperial College London