Growth Rebound Research Articles

China’s macroeconomic trends in downward pressures: the ‘micro stimulus’ effects and steady growth

This study reports China’s macroeconomic trends in downward pressures and discusses the effects of the ‘micro stimulus’ on the growth performance of Chinese economy. It appears that economic growth rebounds significantly in the short term every time ‘micro stimulus’ is applied, but the economy slows down again once the stimulus dwindles. China’s economic growth thus exhibits a pattern of significant ‘stimulus-dependence’. When facing economic downturn, China has only resorted to stimulus policy to sustain growth. Not surprisingly, our findings indicate that ‘micro stimulus’ cannot realize the strategic intent of growth stabilization and structural adjustment, and may even lead to more structural chaos. One problem that can be attributed to the near-sighted strategy is the worsening productivity performance since the financial crisis of 2008. Therefore both improvement in social security systems and social programs designed for maintaining long run growth are needed in order to improve productivity performance on the one hand and to facilitate structural adjustments on the other.

Iraq: Staff Report for the 2015 Article IV Consultation and Request for Purchase Under the Rapid Financing Instrument

This 2015 Article IV Consultation highlights that Iraq is facing a double shock emerging from the ISIS insurgency and the plunge in global oil prices. In 2014, real GDP contracted by 2.1 percent mainly owing to the impact of the conflict, while oil production and exports increased slightly compared with 2013. In 2015, overall economic activity is expected to see a modest recovery of 0.5 percent thanks to oil sector expansion, while non-oil activity is expected to contract further. Medium-term growth prospects remain positive, though less favorable than before the crisis. Growth will be driven by the projected ramp-up in oil production and the rebound in non-oil growth supported by the expected improvement in security and implementation of structural reform.

World Economic Prospects

Overview: The ECB acts…but growth forecasts edge down At the start of June the ECB announced a package of measures aimed at easing monetary conditions in the Eurozone – including negative interest rates on banks' excess reserves, a cut in the repo rate and new long‐term refinancing facilities. These moves were overdue in our view, with inflation hovering at just 0.5% and key countries such as France and Italy seeing zero or negative GDP growth in Q1. The overall pattern of ‘surprises’ in Eurozone economic data has become heavily skewed to the negative over recent weeks and we have modestly revised down our forecast for Eurozone GDP growth in 2014, from 1.2% to 1.1%. We have also cut growth forecasts for this year in the US and Japan. The reduction in US growth from 2.4% to 2.1% is mainly the result of GDP contracting in Q1, a development we continue to view as largely erratic. We expect a strong rebound in quarterly growth in the rest of 2014, helped by household consumption; this is supported by the latest payroll figures which again showed over 200,000 new jobs added in May. In Japan by contrast we think downside risks to consumer spending have risen; the first evidence of activity after the rise in the consumption tax on 1 April has started to come through and looks disappointing. The Bank of Japan is likely to delay any further monetary easing until late summer at the earliest, so we now see GDP growth at just 1.1% in 2014 and 2015 versus 1.3% in both years last time. Among the emergers, forecasts are relatively stable this month, barring a further cut in India after weak Q1 performance. But world GDP growth is now forecast at 2.7% for 2014 and 3.1% next, with these forecasts having edged lower since the start of the year. Sluggish world trade growth is a factor constraining the global recovery, with our forecast for world trade growth this year having fallen from 4.7% in February to 4% now. There have, however, been some positive signs in the latest indicators – including in Asia – supporting our view that trade growth will strengthen in the next 18 months.

World Economic Prospects

Overview: What do falling bond yields tell us? US bond yields have fallen considerably since the start of the year – by about 40bp for 10‐year bonds – a development apparently at odds with expectations of stronger US growth this year and next and with the process of Fed ‘tapering’. There are several possible explanations, some of which tie in with our global forecast story. Recent US growth data have been largely disappointing, with GDP barely expanding in Q1. This month sees our forecast for growth in 2014 cut to 2.4% from 2.9%. But we expect a solid rebound in growth from Q2, in line with most observers. This suggests other factors are at work – including factors outside the US. First, the US bond market seems to have taken a ‘sell on the rumour, buy on the fact’ attitude to tapering. This may reflect a view that tapering will lead to falls in prices of risky assets, and also perhaps indicates Fed success in managing its forward guidance. Notably, one‐year interest rates have drifted lower since Q3 2013: the market has pushed away expectations of early Fed rate hikes. Second, long‐term inflation expectations are stable or declining in most advanced economies. US expectations have hovered around 2% in recent months (down from 2.5% a year ago) while inflation expectations in the Eurozone have declined notably: 10‐year breakeven inflation in France is just 1.1%. Our growth forecast in the Eurozone has edged up in recent months but remains low, implying the negative output gap will remain wide and disinflationary pressures continue. And emerging markets are set to add to the global negative output gap. PMI surveys show continued weak growth and this month sees some further GDP forecast downgrades in the BRICs. Taken together, these factors suggest that bond markets are pricing modest economic growth and low inflation, broadly in line with our forecast. But there are significant nodes of downside risk in the Eurozone and the Chinese financial sector. The ECB seems likely to act next month but how decisive it will be is unclear. Whether the authorities in China can contain financial sector risks also remains an open question.

Why Paul Krugman Lost His Temper with the Swedish Riksbank?

Paul Krugman recently attacked the Swedish Riksbank for its monetary policy that it has caused a deflationary process because it raised its key interest rate in 2010 and 2011 and by this triggered unnecessarily a deflationary process afterwards. He used the term sadomonetarist for this kind of policy. This response on his accusation of the author of this paper is that Krugman has overdone his challenge of the monetary policy of the Riksbank. He has not looked sufficiently at the empirical facts of the past development in Sweden. In particular at the real GDP growth and the inflation performance it was from the standard approach reasonable to increase interest rates in Sweden after a very strong rebound of Swedish growth in 2010 with 6,6% and further strong economic growth afterwards. Inflation predictions have never been a simple problem due to the multitude of channels through which monetary policy influences economic development. Therefore it is always easy afterwards to claim that policy makers should have done better. However, this is only true ex post by ignoring the uncertainty about the future. Furthermore Sweden has experienced a significant deceleration of its inflation rate, i.e. disinflation, but not deflation for a couple of years. This might, however, be caused by external factors like a global slowdown in economic growth and a recession in the Euro area in particular. If unforeseen by the Swedish Riksbank probably due to overoptimistic forecasts of the EU-Commission, this is caused by a forecasting error, but it is not caused by a monetary policy error. A deflationary spiral is even now not in sight in Sweden. The risk of a global deflation has its origins elsewhere in the global economy.

Bortezomib and IL-12 produce synergetic anti-multiple myeloma effects with reduced toxicity to natural killer cells

The aim of this study was to examine the hypothesis that a combination of proteasome inhibition by bortezomib and immune therapy with interleukin-12 (IL-12) can produce enhanced antitumor efficacy relative to the effects of either of these agents alone. A mouse xenograft model of myeloma was developed. The mice were randomly divided into saline control (NS), IL-12 (0.4 µg/animal; intraperitoneal), bortezomib (0.75 mg/kg; intravenous), and bortezomib+IL-12 groups. Effects of treatments on tumor growth were assessed by before and after treatment comparisons and group comparisons. The effects of various treatments on the number of peripheral blood lymphocytes and natural killer (NK) cells were assessed by complete blood count and flow cytometry analysis. The cell-killing function of NK cells in splenocytes was evaluated using the lactate dehydrogenase release assay. IL-12 treatment alone produced a mild decrease in tumor volume compared with control (P>0.05). Bortezomib alone resulted in substantial inhibition of tumor growth at varying time points, reaching ~65 and ~60% reduction in tumor volume after 15 and 21 days of therapy, respectively. At the same time points, the combination therapy produced ~75 and ~84% decreases in tumor growth, respectively, which were significantly greater than the reduction produced by bortezomib monotherapy. Tumors resumed growth upon termination of bortezomib treatment at 2 weeks, although the tumor volume was still significantly smaller than that in the time-matched NS and IL-12 animals. This rebound of tumor growth was completely prevented with the combination therapy, and tumor volume continued to decrease throughout the time course. The percentage and total number of NK cells were significantly decreased after bortezomib monotherapy and combination therapy; however, they remained unaltered after IL-12 treatment compared with no treatment. Further, combination therapy significantly restored the bortezomib-induced functional impairment of the cell-killing capability of NK cells, relative to bortezomib alone. We conclude that the bortezomib-IL-12 combination therapy offers superior antitumor efficacy over monotherapy with either bortezomib or IL-12 in a mouse model of myeloma. Restoration of bortezomib-induced functional impairment of NK cells by IL-12 may be a mechanism for the synergetic effects of the two agents. Therefore, a combination of the two agents may represent a more rational therapeutic approach for myeloma.

Post-HIPC Growth Dynamics in Sub-Saharan Africa: An Application to Ethiopia

Abstract Over the past few years, Completion Point countries under the Highly Indebted Poor Country (HIPC) Initiative across Sub-Saharan Africa have enjoyed significantly higher investments and growth rates, primarily fueled by the expanding fiscal space of the post-HIPC era. Despite these post-HIPC growth rebounds, the region is not likely to meet the Millennium Development Goals (MDGs). Long-term growth projections from a simple macroeconomic model, which is applied to Ethiopia, suggest that prospects for reversing the widening income gaps with other regions of the developing world are limited and these gloomy prospects are likely to be even undermined by the risk of another sovereign debt crisis. A rapid expansion of capital accumulation financed by sustained foreign aid is required to increase income considerably.

Russian Industry in March 2013

The business opinion surveys carried out by the Gaidar Institute in March 2013 pointed to a worsening situation for Russian industrial enterprises. As a result, industrial enterprises began to lose confidence in the correctness of their production and marketing policies, and so were trying to push their output to match demand more closely. Their sales forecasts and output plans gave no reasons to expect that Russian industry might experience a rebound in growth – even if enterprises refrained from rising prices for their products.

Rebalancing: Evidence from Current Account Adjustment in Europe

After the 2003-2007 economic boom, European countries with large pre-crisis current account imbalances are undergoing adjustments. Countries are adjusting at different paces and ways reflecting the source and magnitude of imbalances, availability of financing, competitiveness of the tradable sector and external environment. While emerging European countries with large pre-crisis imbalances and a fixed exchange rate regime have seen sharp current account adjustments and a rebound in growth, adjustment in the euro zone periphery countries, which are also carrying a legacy of pre-crisis CA imbalances, has been gradual with difficulties bringing back growth. This paper is an empirical investigation of current account adjustment in Europe with a focus on these two groups, looking at contributions from cyclical and other factors, and seeking to draw policy conclusions.

Rebalancing: Evidence from Current Account Adjustment in Europe

After the 2003-2007 economic boom, European countries with large pre-crisis current account imbalances are undergoing adjustments. Countries are adjusting at different paces and ways reflecting the source and magnitude of imbalances, availability of financing, competitiveness of the tradable sector and external environment. While emerging European countries with large pre-crisis imbalances and a fixed exchange rate regime have seen sharp current account adjustments and a rebound in growth, adjustment in the euro zone periphery countries, which are also carrying a legacy of pre-crisis CA imbalances, has been gradual with difficulties bringing back growth. This paper is an empirical investigation of current account adjustment in Europe with a focus on these two groups, looking at contributions from cyclical and other factors, and seeking to draw policy conclusions.

Abstract 1601: Hsp90 inhibition results in a significant delay in tumor progression in a model of emerging EGFR TKI resistance in non-small cell lung cancer

Abstract Heat shock protein 90 (Hsp90) plays a role in regulating the stability of key cancer-causing proteins through its role as a protein chaperone. Proteins chaperoned by Hsp90, known as client proteins, include cancer-causing forms of ALK, BCR-ABL, EGFR, FLT3 and HER2. Infinity is developing two drug candidates in its Hsp90 chaperone inhibitor program: IPI-504 (retaspimycin hydrochloride), an intravenously-administered small molecule, and IPI-493, which is administered orally. EGFR tyrosine kinase inhibitors (TKIs) are an effective treatment for lung cancer patients with activating mutations in EGFR. After a dramatic initial response, however, most patients become resistant to drug treatment and progress. In about half of these cases, resistance is due to a second point mutation in EGFR (T790M). It is believed that in at least some of these cases, the TKI resistance mutations are pre-existing and that treatment with TKIs selects for the resistant cells. In an effort to model the emergence of resistance to TKIs from pre-existing mutations, we developed a novel in vivo model, where gefitinib treatment initially leads to tumor regression followed by rebound of tumor growth and outgrowth of drug resistant clones containing the T790M mutation. We show that in this model, treatment with IPI-493 alone and IPI-493 following gefitinib resulted in tumor growth inhibition of 61 and 77%, respectively, when compared with gefitinib treatment alone. Treatment with IPI-493 alone also resulted in a significant delay in time to tumor progression with ∼40% of animals still on study 45 days following tumor implant; all animals treated with either vehicle or gefitinib had been removed due to tumor progression. Interestingly, treatment with IPI-493 following gefitinib resulted in an even more impressive delay in time to progression, with >50% of animals still on study on day 65 post-implant. These results suggest that further studies with Hsp90 inhibitors in EGFR mutant NSCLC patients who have been pre-treated with a TKI may be warranted. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 102nd Annual Meeting of the American Association for Cancer Research; 2011 Apr 2-6; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2011;71(8 Suppl):Abstract nr 1601. doi:10.1158/1538-7445.AM2011-1601

Activism

The US recovery from the 2008 financial and economic crisis has been disappointingly tepid. What is most notable in sifting through the variables that might conceivably account for the lacklustre rebound in GDP growth and the persistence of high unemployment is the unusually low level of corporate illiquid long-term fixed asset investment. As a share of corporate liquid cash flow, it is at its lowest level since 1940. This contrasts starkly with the robust recovery in the markets for liquid corporate securities. What, then, accounts for this exceptionally elevated level of illiquidity aversion? I break down the broad potential sources, and analyse them with standard regression techniques. I infer that a minimum of half and possibly as much as three-fourths of the effect can be explained by the shock of vastly greater uncertainties embedded in the competitive, regulatory and financial environments faced by businesses since the collapse of Lehman Brothers, deriving from the surge in government activism. This explanation is buttressed by comparison with similar conundrums experienced during the 1930s. I conclude that the current government activism is hampering what should be a broad-based robust economic recovery, driven in significant part by the positive wealth effect of a buoyant U.S. and global stock market.

Potential role of soil calcium in recovery of paper birch following ice storm injury in Vermont, USA

In recent years, an increased number of mature paper birch ( Betula papyrifera Marsh.) and heart-leafed paper birch ( B. papyrifera var. cordifolia (Regel) Fern.) in northeastern United States forests have exhibited decline symptoms including foliar loss, reduced fine branching, and tree mortality. We assessed crown health, radial growth, and available soil cations in 2006 as a preliminary assessment of factors that may be influencing paper birch decline. Tree rings began to decrease in width in 1998—the year of a severe region-wide ice storm. All trees (regardless of their current decline status) experienced reduced growth starting in 1998 and tree growth continued to decrease for two years following the ice storm. After this generalized growth decrease, trees that now have vigorous crowns showed a marked increase in growth, whereas trees that now have low crown vigor did not rebound in growth, but instead exhibited a significantly higher incidence of locally absent annual rings. Extractable soil-aluminum (Al), a phytotoxic element mobilized by acid deposition, was significantly higher in soils associated with declining trees compared to those adjacent to vigorous trees. Higher soil calcium (Ca) availability was associated with both vigorous crowns and increased radial growth following the 1998 ice storm. Furthermore, increased soil Ca availability was negatively correlated to the percentage of declining trees, and positively related to increased radial growth, whereas elevation was not significantly associated with either parameter. Although previously overlooked as a factor influencing paper birch recovery from injury, we found that available soil Ca was linked to crown vigor and rebounds in growth following an inciting event.

Global Prospects and Sources of Economic Growth

Global output declined by 1 per cent in 2009, but the pace of recovery has been relatively rapid, especially in economies outside the OECD. We estimate that the level of global GDP regained its pre-crisis peak in the first quarter of 2010 (see figure A3 in the Appendix). The volume of world trade in goods and services remained some 6 per cent below its pre-crisis peak in the first quarter, but has rebounded by nearly 10 per cent since the trough reached in the second quarter of 2009 (see figure A2 in the Appendix). China remains a vital source of global demand. GDP increased by 11.9 per cent year-on-year in the first quarter of 2010, while imports of goods in US$ terms rose by more than 60 per cent over the same period. India also bears little scarring from the global crisis and the economy expanded rapidly throughout 2009. Other Asian economies, such as Taiwan, Hong Kong and Korea, have also recovered rapidly from the global recession, expanding by 6.3, 3.3 and 4.5 per cent, respectively, in the second half of 2009. Outside of Asia, Brazil and Mexico have seen a strong rebound in growth, although the level of output in Mexico remains well below its pre-crisis peak.

Plasmid-associated bacteriocin production byLactobacillusLMG21688 suppressesListeria monocytogenesgrowth rebound in a food system

Bacteriocin produced by Lactobacillus curvatus CWBI-B28wt is not completely effective against Listeria monocytogenes in food models. There is evidence suggesting that bacteriocin-degrading proteolytic enzymes produced by the CWBI-B28wt strain and/or present in the food matrix contribute to this rebound of Listeria growth. To limit this problem, we have partially characterized an approximately 10-kb plasmid responsible for bacteriocin production in L. curvatus CWBI-B28wt. This plasmid was transferred by high-voltage electroporation into a less proteolytic, but technologically competent Lactobacillus strain. When the transformed strain was used as a starter culture in a model food system, a high bacteriocin level was maintained for a longer time than with CWBI-B28wt, and Listeria growth rebound was delayed by 2 weeks (occurring after 3 weeks of apparently total inhibition, instead of one).

Post-Crisis Fiscal Policy Priorities for the ASEAN-5

This paper focuses on post-crisis fiscal priorities in the ASEAN-5 economies - Indonesia, Malaysia, Philippines, Singapore and Thailand. Sound economic fundamentals and timely and forceful policy responses to the crisis, including fiscal stimulus, contributed to rapid economic recovery in the ASEAN-5. As growth rebounds, these economies are beginning to identify, communicate and implement their strategies for unwinding the fiscal stimulus while addressing long-term growth challenges. In this context, the paper highlights the need for fiscal policies to address infrastructure gaps, stimulate private consumption and expand social safety nets. Creating fiscal space to address these challenges will require raising revenues and reorienting public spending rather than increasing borrowing. Supporting structural reforms, aiming to stimulate private infrastructure investment, could help address long-term growth challenges, while easing the burden on fiscal policy.

Taking Monetary Aggregates Seriously

In response to the recent financial crisis, central banks around the world, including the Bank of Canada, have provided markets with extraordinary levels of liquidity. As the economic recovery takes hold, the question arises of what the increased liquidity, through higher money growth, portends for the near future. The supply of and demand for money carries information on the outlook for inflation and economic growth. Current evidence suggests a rebound in economic growth and inflationary pressure unless the Bank begins to rein in money growth. The Bank of Canada should provide some guidance on its thinking on the behaviour of monetary and credit aggregates and what it entails for inflation and economic growth.

Maternal androgen levels during pregnancy are associated with early-life growth in Geoffroy’s marmosets, Callithrix geoffroyi

Fetal development is a critical period of physical development, and factors in the intrauterine environment can cause lasting effects on the growth and development of offspring. There is little research evaluating organizational effects of early androgen exposure of endogenous maternal origins on the prenatal and postnatal growth of offspring. We evaluated the association between maternal androgen levels during gestation and pre- and postnatal growth of offspring. Maternal androgen levels in marmoset females were measured using enzyme immunoassays of urine samples acquired during 18 pregnancies. Somatic measurements of the resulting 25 viable offspring were taken on postnatal days (PND) 2, 30, 60, 120, 180, 240, and 300. Maternal androgen levels during the first trimester were negatively associated with weight, body length, and several girth measurements (i.e., torso, head, chest, and arm circumference) of offspring on PND 2. First trimester maternal androgen was also negatively associated with physical growth during early and late infancy but seemed to be positively associated with a rebound in juvenile growth. Exposure to maternal androgen during early gestation led to both a reduction in birth weight and postnatal catch-up for both males and females, equally. Fetal growth retardation and the reprogramming of metabolic tissues by exposure to prenatal androgen could be mediating factors of suppressed postnatal growth.

Enhancing the antilisterial effect of Lactobacillus curvatus CWBI-B28 in pork meat and cocultures by limiting bacteriocin degradation

This work focused on Listeria monocytogenes growth inhibition and growth rebound in raw and cooked pork meat inoculated with Lactobacillus curvatus strains. During storage of raw meat homogenates in the presence of the bacteriocin-producing strain Lactobacillus curvatus CWBI-B28wt, the Listeria monocytogenes cfu count was initially reduced to an undetectable level, but a growth rebound occurred after two weeks, coinciding with loss of 70% of the bacteriocin activity present at the end of week 2. The Listeria growth rebound was suppressed when proteolysis of bacteriocin was countered by the absence of proteases (bacteriocin addition to cooked meat) or the presence of 1% soy flour (added to provide competing substrates). Further experiments confirmed that bacteriocin is sensitive to the action of proteolytic enzymes isolated from both Lactobacillus curvatus CWBI-B28wt and the meat matrix. Bacteriocin proteolysis thus emerges as a cause of Listeria growth rebound.

Effects of Stimulant Medication on Growth Rates Across 3 Years in the MTA Follow-up

To evaluate the hypothesis of stimulant medication effect on physical growth in the follow-up phase of the Multimodal Treatment Study of Children With ADHD. Naturalistic subgroups were established based on patterns of treatment with stimulant medication at baseline, 14-, 24-, and 36-month assessments: not medicated (n = 65), newly medicated (n = 88), consistently medicated (n = 70), and inconsistently medicated (n = 147). Analysis of variance was used to evaluate effects of subgroup and assessment time on measures of relative size (z scores) obtained from growth norms. The subgroup x assessment time interaction was significant for z height (p <.005) and z weight (p <.0001), due primarily to divergence of the newly medicated and the not medicated subgroups. These initially stimulant-naïve subgroups had z scores significantly >0 at baseline. The newly medicated subgroup showed decreases in relative size that reached asymptotes by the 36-month assessment, when this group showed average growth of 2.0 cm and 2.7 kg less than the not medicated subgroup, which showed slight increases in relative size. Stimulant-naïve school-age children with Combined type attention-deficit/hyperactivity disorder were, as a group, larger than expected from norms before treatment but show stimulant-related decreases in growth rates after initiation of treatment, which appeared to reach asymptotes within 3 years without evidence of growth rebound.