The investment response to imperfectly credible trade liberalisation with endogenous probability of reversal

Many trade liberalisations and other economic reforms in developing countries, particularly in Africa, have been reversed. In addition to the loss of benefits from reform as such this tendency has led to concern that the response to reform, particularly from investment, may be weakened by the perception that it may be reversed and in turn that weak investment may itself lessen the chances of successful reform. These themes have been discussed extensively in the literature, the current paper's contribution being to develop a much more complete model of the investment response than previously available and to use it to partially endogenise the probability of reform reversal so the two are simultaneously determined. With respect to the reversal probability the argument presented is that a strong investment response in the favoured sector will of itself tend to discourage reversal of the reform (through a lobbying mechanism or simply by the existence of a larger constituency opposed to reversal) while the gradual depreciation of capital in the nonfavoured sector will weaken opposition to reform continuation.

The investment response to temporary commodity price shocks

The paper is concerned with the investment response to temporary trade shocks when capital in the commodity and import-competing sectors is irreversible once installed. Previous literature has argued in general terms that investment is likely to rise in response to sharp relative price movements because the return to capital in one of the sectors will increase. A rigorous model of investment under uncertainty in the two-sector commodity price shocks context is developed and used to investigate this issue. It is shown that investment booms in response to commodity price shocks are likely but not certain to occur and a boom at the end of the shock may also be expected. The predictions of the theory are shown to be consistent with the evidence from a small sample of countries during the late 1970s coffee/cocoa boom.

Print Media vs. Digital Manifest Destiny

Every communications medium reflects and reinforces intellectual habits and content patterns unique to the medium. A digital/internet hegemony is a paradoxical foreclosure on breadth of mind since digital formats do not reflect or reinforce the intellectual habits and content patterns unique to other media, especially books. A credible educational process w ill take appropriate advantage of digital media without allowing its influence to repress breadth of mind

Simple Pricing Rules, the Phillips Curve and the Microfoundations of Inflation Persistence

We analyze the microfoundations of the Phillips curve, a key relationship in general macroeconomics and models of monetary policy in particular. The form in current widespread use includes both forward looking expected inflation and lagged inflation. The presence of lagged inflation is necessary to generate predicted inflation persistence to match actual persistence in real world data but it has proved very difficult to microfound. Recent contributions from Christiano, Eichenbaum and Evans (JPE, 2005) and Gali and Gertler (JME, 1999) have attempted to provide such microfoundations through the assumption of indexing or rule of thumb behaviour. We question the nature of the indexing rules or rules of thumb assumed and re-derive these models for the case where firms choose constrained optimal simple pricing rules. We find that the models no longer convincingly predict inflation persistenceMonetary policy, Phillips curve, Inflation persistence, Microfoundations

Optimising Microfoundations for Inflation Persistence

We connect two major strands of the recent monetary policy literature, i) the search for well microfounded optimising models consistent with macroeconomic data, especially persistence in inflation, and ii) the wealth of newly available microeconomic data on price changing behaviour from the ECB’s Inflation Persistence Network, alongside earlier firm surveys for the US, UK and Sweden. We develop a fully optimising Phillips curve following Goodfriend and King (NBER Macro Annual,1997) that may be calibrated to virtually any time dependent pricing rule but extended to include cost push shocks and the aggregation of sectors with different pricing rules. Analytical results include a tendency for aggregate dynamics to be driven by “stickier†sectors. When calibrated to micro data the model predicts inflation persistence comparable to that in macro data with fully forward looking underlying pricing behaviourMonetary policy, Phillips curve, Inflation Persistence, Microfoundations

Supply flexibility and insurance under commodity market instability

The paper integrates the analysis of price volatility and supply instability for a commodity exporting country, adding consideration of the role of the non-tradables sector to the literature. The non-tradables sector plays a potentially significant role in changing the economy's response to instability and increases the returns from access to risk markets.

Excited Delirium and Sudden Death: A Syndromal Disorder at the Extreme End of the Neuropsychiatric Continuum

Over the past decade, the excited delirium syndrome (ExDS) has raised continuous controversy regarding the cause and manner of death of some highly agitated persons who die in police custody, during physical restraint or incapacitation by electrical devices. At autopsy, medical examiners have difficulty in identifying any anatomic cause of death, but frequently cite psychostimulant intoxication as a contributing factor. The characteristic symptoms of ExDS include bizarre and aggressive behavior, shouting, paranoia, panic, violence toward others, unexpected physical strength, and hyperthermia. Throughout the United States and Canada, these cases are most frequently associated with cocaine, methamphetamine and designer cathinone abuse. Acute exhaustive mania and sudden death presents with behavioral symptoms that are identical to what is described for ExDs in psychostimulant abusers. Bell’s mania or acute exhaustive mania was first described in the 1850’s by American psychiatrist Luther Bell in institutionalized psychiatric patients. This rare disorder of violent mania, elevated body temperature and autonomic collapse continued to be described by others in the psychiatric literature, but with different names until the first cases of ExDS were recognized at the beginning of the cocaine epidemic by medical examiners. The first neurochemical pathology examinations of brain tissues from these cases after death revealed a loss of dopamine transporter regulation together with increases in heat shock protein 70 (hsp70) expression as a biomarker of hyperthermia. The similarity in the behavioral symptoms between extremely agitated psychostimulant abusers and unmedicated psychiatric patients suggests that a genetic disorder that leads to dysregulated central dopamine transporter function could be a precipitating cause of the acute delirium and sudden death. While the precise cause and mechanism of lethality remains controversial, the likely whys and wherefores of sudden death of ExDS victims are seen to be biological, since excessive dopamine in the brain triggers the manic excitement and delirium, which unabated, culminates in a loss of autonomic function that progresses to cardiorespiratory collapse

The effects of a language barrier in a South African district hospital

The original publication is available at http://www.samj.org.zaCITATION: Schlemmer, A., Mash, B. 2006. The effects of a language barrier in a South African district hospital. South African Medical Journal, 96(10):1080-1087.Background. Communication between health workers and patients at Hottentots Holland Hospital (HHH) is hindered by staff and patients not speaking the same language. HHH is a district hospital in the Cape Town Metropolitan District of the Western Cape where staff mainly speak Afrikaans or English and a large number of patients mainly Xhosa. Objectives. The study aimed to explore the effects of this language barrier on health workers and patients at HHH. Design. Three focus group interviews were held with 21 members of staff and 5 in-depth patient interviews were conducted. Results. The language barrier was found to interfere with working efficiently, create uncertainty about the accuracy of interpretation, be enhanced by a lack of education or training, cause significant ethical dilemmas, negatively influence the attitudes of patients and staff towards each other, decrease the quality of and satisfaction with care, and cause cross-cultural misunderstandings. Conclusion. The effects of the language barrier were considerable and persistent despite an official language policy in the province. The training and employment of professional interpreters as well as teaching of basic Xhosa to staff are recommended.Publisher’s versio