External Effects of Currency Unions

Argument: The paper argues that the introduction of the Euro has considerably reduced de facto monetary policy autonomy in non-ECU members. We start from a simple Mundellian model, in which currency unions raise economic efficiency but reduce monetary policy autonomy. Our main argument holds that governments in countries that did not join the currency union lose monetary policy autonomy if the establishment of a currency union increases the size of the key currency area. The increase in the size of the key currency area has two external effects on countries remaining outside the currency union: Firstly, it renders stable exchange-rates to the currency union slightly more important, because the value of goods imported from countries within the currency union increases and because the countries inside the union have more synchronized business cycles. Secondly and more importantly, we claim that any given change in the real interest-rate differential leads to an exchange-rate effect, which is larger the smaller the domestic currency area is relative to the key currency area. Consequently, governments in non-member countries have to pay a higher price if they seek to stimulate the domestic economy. Hypotheses: a) Exchange-rate effects on changes in the real interest rate differential are larger, if currency areas are less equal in size. b) Outsider countries more closely follow the interest-rate policy of the currency union than they had previously followed the monetary policy of the anchor currency. Empirics: We employ a panel-GARCH model to estimate the impact of changes in the key currency real interest rate on the real interest rate of other countries. Specifically, we analyze the influence of Germany’s and the Eurozone’s monetary policy on the monetary policy of Great Britain, Denmark, Norway, Sweden, and Switzerland. Results: Our results support the assumptions underlying our model as well as our main argument. De facto monetary autonomy of countries remaining outside a currency union declines with the establishment of the union. ZUSAMMENFASSUNG - (Externe Auswirkungen von Währungsunionen) Der Artikel argumentiert, dass die Einführung des Euro die faktische geldpolitische Autonomie auch in Staaten reduziert hat, die der Europäischen Währungsunion nicht beigetreten sind. Das Argument basiert auf einem einfachen Mudellianischen Modell, in dem Währungsunionen die wirtschaftliche Effizienz steigern aber zugleich die geldpolitische Autonomie reduzieren. Wir zeigen über das Standardmodell hinaus, dass Länder, die der Währungsunion nicht beitreten, geldpolitische Autonomie einbüßen, wenn sich durch die Währungsunion die Größe des Leitwährungsraumes erhöht. Diese Vergrößerung des Leitwährungsraumes hat zwei Auswirkungen auf Länder außerhalb der Union: Erstens steigt die Bedeutung stabiler Wechselkurse leicht an, weil der Wert importierter Güter aus dem Währungsgebiet zunimmt und weil die Länder der Union stärker synchronisierte Konjunkturzyklen aufweisen als vor der Gründung der Währungsunion. Zweitens steigt durch die Vergrößerung der Leitwährung aber der Einfluss von Veränderungen der Zinsdifferenz auf die Wechselkurse zwischen Währungen außerhalb der Währungsunion und der Unionswährung an. Folglich müssen Länder eine stärkere Abwertung ihrer Währung hinnehmen, wenn sie die Zinsen senken, um die Konjunktur anzukurbeln. Wir testen dieses Argument anhand der zwei Kernhypothesen: a) Wechselkurse reagieren umso stärker auf Veränderungen der Zinsdifferenz, je größer der Leitwährungsraum ist. b) Länder außerhalb der Währungsunion folgen der Geldpolitik der Union stärker, als sie der Geldpolitik der Leitwährung vor Gründung der Union folgten. Wir greifen auf Panel-GARCH Modelle zurück, um den Einfluss der Geldpolitik der EZB relativ zum Einfluss der Bundesbank auf die Geldpolitik in Großbritannien, der Schweiz, Norwegen, Dänemark und Schweden zu testen. Die empirische Analyse bestätigt die aus dem formalen Modell abgeleiteten Hypothesen. Die faktische geldpolitische Autonomie der Länder außerhalb der Währungsunion sinkt mit deren Etablierung.Interest Rates, Monetary Policy Autonomy, Currency Unions, Bundesbank, European Central Bank

Monetary Policy Autonomy in European Non-Euro Countries: 1980–2005

We argue that the European currency union (ECU) reduced the de facto monetary policy autonomy of EU countries abstaining from introducing the euro. The large share of imports from euro zone countries renders a close alignment of monetary policy to the interest rate set by the European Central Bank (ECB) necessary if the monetary authorities of countries outside the ECU want to impede the import of inflation from the euro zone or a declining competitiveness of the domestic industry. In turn, the increasing role of the euro as an international reserve medium equal to the US dollar reduced the monetary policy autonomy of countries importing more goods and services from the euro zone than from the dollar zone. An empirical analysis of monetary policy in the United Kingdom, Denmark and Sweden lends support to our theoretical argument. Analysing the shortterm adjustments of central bank interest rates in these three EU countries, which did not introduce the euro, we show that these countries' monetary policies more closely follow the ECB's policy than they followed the Bundesbank's policy before 1994. In addition, we demonstrate the diminishing influence of the dollar on monetary policy in the UK, Denmark and Sweden since the countries of the Economic and Monetary Union harmonized monetary policies

Tip cap for a rotor blade

A replaceable tip cap for attachment to the end of a rotor blade is described. The tip cap includes a plurality of walls defining a compartment which, if desired, can be divided into a plurality of subcompartments. The tip cap can include inlet and outlet holes in walls thereof to permit fluid communication of a cooling fluid there through. Abrasive material can be attached with the radially outer wall of the tip cap

Case selection and causal inferences in qualitative comparative research

Traditionally, social scientists perceived causality as regularity. As a consequence, qualitative comparative case study research was regarded as unsuitable for drawing causal inferences since a few cases cannot establish regularity. The dominant perception of causality has changed, however. Nowadays, social scientists define and identify causality through the counterfactual effect of a treatment. This brings causal inference in qualitative comparative research back on the agenda since comparative case studies can identify counterfactual treatment effects. We argue that the validity of causal inferences from the comparative study of cases depends on the employed case-selection algorithm. We employ Monte Carlo techniques to demonstrate that different case-selection rules strongly differ in their ex ante reliability for making valid causal inferences and identify the most and the least reliable case selection rules

Case selection and causal inferences in qualitative comparative research

Traditionally, social scientists perceived causality as regularity. As a consequence, qualitative comparative case study research was regarded as unsuitable for drawing causal inferences since a few cases cannot establish regularity. The dominant perception of causality has changed, however. Nowadays, social scientists define and identify causality through the counterfactual effect of a treatment. This brings causal inference in qualitative comparative research back on the agenda since comparative case studies can identify counterfactual treatment effects. We argue that the validity of causal inferences from the comparative study of cases depends on the employed case-selection algorithm. We employ Monte Carlo techniques to demonstrate that different case-selection rules strongly differ in their ex ante reliability for making valid causal inferences and identify the most and the least reliable case selection rules

Quantifying risks and interventions that have affected the burden of lower respiratory infections among children younger than 5 years: an analysis for the Global Burden of Disease Study 2017

Background Despite large reductions in under-5 lower respiratory infection (LRI) mortality in many locations, the pace of progress for LRIs has generally lagged behind that of other childhood infectious diseases. To better inform programmes and policies focused on preventing and treating LRIs, we assessed the contributions and patterns of risk factor attribution, intervention coverage, and sociodemographic development in 195 countries and territories by drawing from the Global Burden of Diseases, Injuries, and Risk Factors Study 2017 (GBD 2017) LRI estimates. Methods We used four strategies to model LRI burden: the mortality due to LRIs was modelled using vital registration data, demographic surveillance data, and verbal autopsy data in a predictive ensemble modelling tool; the incidence of LRIs was modelled using population representative surveys, health-care utilisation data, and scientific literature in a compartmental meta-regression tool; the attribution of risk factors for LRI mortality was modelled in a counterfactual framework; and trends in LRI mortality were analysed applying changes in exposure to risk factors over time. In GBD, infectious disease mortality, including that due to LRI, is among HIV-negative individuals. We categorised locations based on their burden in 1990 to make comparisons in the changing burden between 1990 and 2017 and evaluate the relative percent change in mortality rate, incidence, and risk factor exposure to explain differences in the health loss associated with LRIs among children younger than 5 years. Findings In 2017, LRIs caused 808 920 deaths (95% uncertainty interval 747 286–873 591) in children younger than 5 years. Since 1990, there has been a substantial decrease in the number of deaths (from 2 337 538 to 808 920 deaths; 65·4% decrease, 61·5–68·5) and in mortality rate (from 362·7 deaths [330·1–392·0] per 100 000 children to 118·9 deaths [109·8–128·3] per 100 000 children; 67·2% decrease, 63·5–70·1). LRI incidence declined globally (32·4% decrease, 27·2–37·5). The percent change in under-5 mortality rate and incidence has varied across locations. Among the risk factors assessed in this study, those responsible for the greatest decrease in under-5 LRI mortality between 1990 and 2017 were increased coverage of vaccination against Haemophilus influenza type b (11·4% decrease, 0·0–24·5), increased pneumococcal vaccine coverage (6·3% decrease, 6·1–6·3), and reductions in household air pollution (8·4%, 6·8–9·2). Interpretation Our findings show that there have been substantial but uneven declines in LRI mortality among countries between 1990 and 2017. Although improvements in indicators of sociodemographic development could explain some of these trends, changes in exposure to modifiable risk factors are related to the rates of decline in LRI mortality. No single intervention would universally accelerate reductions in health loss associated with LRIs in all settings, but emphasising the most dominant risk factors, particularly in countries with high case fatality, can contribute to the reduction of preventable deaths

Mortality, morbidity, and hospitalisations due to influenza lower respiratory tract infections, 2017: an analysis for the Global Burden of Disease Study 2017

Background Although the burden of influenza is often discussed in the context of historical pandemics and the threat of future pandemics, every year a substantial burden of lower respiratory tract infections (LRTIs) and other respiratory conditions (like chronic obstructive pulmonary disease) are attributable to seasonal influenza. The Global Burden of Disease Study (GBD) 2017 is a systematic scientific effort to quantify the health loss associated with a comprehensive set of diseases and disabilities. In this Article, we focus on LRTIs that can be attributed to influenza. Methods We modelled the LRTI incidence, hospitalisations, and mortality attributable to influenza for every country and selected subnational locations by age and year from 1990 to 2017 as part of GBD 2017. We used a counterfactual approach that first estimated the LRTI incidence, hospitalisations, and mortality and then attributed a fraction of those outcomes to influenza. Findings Influenza LRTI was responsible for an estimated 145 000 (95% uncertainty interval [UI] 99 000–200 000) deaths among all ages in 2017. The influenza LRTI mortality rate was highest among adults older than 70 years (16·4 deaths per 100 000 [95% UI 11·6–21·9]), and the highest rate among all ages was in eastern Europe (5·2 per 100 000 population [95% UI 3·5–7·2]). We estimated that influenza LRTIs accounted for 9 459000 (95% UI 3 709000–22 935000) hospitalisations due to LRTIs and 81 536 000 hospital days (24 330 000–259851 000). We estimated that 11·5% (95% UI 10·0–12·9) of LRTI episodes were attributable to influenza, corresponding to 54481 000 (38465000–73864000) episodes and 8172000 severe episodes (5 000 000–13 296000). Interpretation This comprehensive assessment of the burden of influenza LRTIs shows the substantial annual effect of influenza on global health. Although preparedness planning will be important for potential pandemics, health loss due to seasonal influenza LRTIs should not be overlooked, and vaccine use should be considered. Efforts to improve influenza prevention measures are needed