Unpredictable Shocks Research Articles

The Working Capital Credit Multiplier

ABSTRACTWe provide novel evidence that funding frictions can limit firms’ short‐term investments in receivables and inventories, reducing their production capacity. We propose a credit multiplier driven by these considerations and empirically isolate its importance by comparing how a similar firm responds to shocks differently when these shocks are initiated in their most profitable quarter (“main quarter”). We implement this test using recurring and unpredictable shocks (e.g., oil shocks) and provide extensive evidence supporting our identification strategy. Our results suggest that funding constraints and credit multiplier effects are significant for smaller firms that heavily rely on financing from suppliers.

Seasonal deprivation in the Sahel is large, widespread, and can be anticipated

ABSTRACT Shocks and seasonality may have profound effects on poor households’ wellbeing, especially in contexts such as the Sahel where livelihoods depend on rain-fed agriculture and pastoralism. Understanding how seasonal variation affects Sahelian households is therefore essential for guiding policies that jointly seek to address chronic poverty, seasonality, and unexpected shocks. This paper uses harmonized household survey data from Burkina Faso, Mali, Niger, Senegal, and Chad, collected in two distinct waves in 2018 and 2019, to examine the extent of seasonal deprivation in the Sahel. These data reveal significant seasonal variation in poverty and wellbeing. Mean real monetary consumption is around 10.5 percent lower in the lean season. Moreover, rather than representing a reduction in dietary diversity, this drop is concentrated in staple foods (especially cereals), implying seasonality brings about extreme forms of deprivation. Therefore, while initiatives currently focus on responding to unpredictable shocks, seasonal food insecurity could be better tackled by expanding social protection and providing regular transfers early in the lean season, when prices are lower and fewer households have succumbed to extreme deprivation. Seasonal variation happens every year and more can be done to support Sahelian households if the perennial threat it poses to their wellbeing is recognized.

Intermittent theta-burst stimulation to the right dorsolateral prefrontal cortex may increase potentiated startle in healthy individuals

Repetitive transcranial magnetic stimulation (rTMS) treatment protocols targeting the right dlPFC have been effective in reducing anxiety symptoms comorbid with depression. However, the mechanism behind these effects is unclear. Further, it is unclear whether these results generalize to non-depressed individuals. We conducted a series of studies aimed at understanding the link between anxiety potentiated startle and the right dlPFC, following a previous study suggesting that continuous theta burst stimulation (cTBS) to the right dlPFC can make people more anxious. Based on these results we hypothesized that intermittent TBS (iTBS), which is thought to have opposing effects on plasticity, may reduce anxiety when targeted at the same right dlPFC region. In this double-blinded, cross-over design, 28 healthy subjects underwent 12 study visits over a 4-week period. During each of their 2 stimulation weeks, they received four 600 pulse iTBS sessions (2/day), with a post-stimulation testing session occurring 24 h following the final iTBS session. One week they received active stimulation, one week they received sham. Stimulation weeks were separated by a 1-week washout period and the order of active/sham delivery was counterbalanced across subjects. During the testing session, we induced anxiety using the threat of unpredictable shock and measured anxiety potentiated startle. Contrary to our initial hypothesis, subjects showed increased startle reactivity following active compared to sham stimulation. These results replicate work from our two previous trials suggesting that TMS to the right dlPFC increases anxiety potentiated startle, independent of both the pattern of stimulation and the timing of the post stimulation measure. Although these results confirm a mechanistic link between right dlPFC excitability and startle, capitalizing upon this link for the benefit of patients will require future exploration.

373 The brain under stress: How a history of unpredictable shock affects neural processing of future stressors

OBJECTIVES/GOALS: Determine how a history of unpredictable foot shock in mice affects brain wide patterns of neural activation to future stressors. Additionally, we aimed to characterize how the paraventricular nucleus of the thalamus (PVT) is involved in the fear sensitization process. METHODS/STUDY POPULATION: We used a mouse model of stress enhanced fear learning, where stressed mice are first subjected to a series of unpredictable foot shocks in a novel context while control mice undergo exposure to the novel context without experiencing foot shock. Mice are then left undisturbed for 28 days, following which they are exposed to a single foot shock in a novel context. Mice are tested in the second context 24 hours after single shock, and the amount of time spent frozen in the context provides a measure of fear sensitization. Whole brain patterns of activation during the second context test will be assessed via whole brain optical clearing with antibody staining of immediate early genes. The role of the PVT in fear sensitization will be characterized using chemogenetic approaches. RESULTS/ANTICIPATED RESULTS: Our preliminary results demonstrate that mice display enhanced fear acquisition long after the initial experience of unpredictable shocks. We anticipate to identify regions previously implicated in fear learning and novel regions not previously described through our brain clearing approach. In addition, we anticipate chemogenetic inhibition of the PVT will reduce freezing to an auditory cue associated with the shock in the second context but not to the context itself. DISCUSSION/SIGNIFICANCE: Our findings will provide a comprehensive view of how a history of unpredictable stress affects whole brain processing of subsequent stressful experiences, and describe the role of the PVT in cued fear sensitization.

Remaining useful life prediction method for Degradation–Shock dependence: Case of a subsea hydraulic control system

Predicting the remaining useful life (RUL) is crucial for ensuring reliable equipment operation. This study addresses the challenges of RUL prediction in modeling the effects of external shocks and internal degradation, with emphasis on the dependency relationship between the two factors. A novel hybrid method for RUL prediction is proposed. The proposed method combines degradation models and field data to realize RUL assessment under the influence of system degradation and external shocks. A dependency factor is introduced to effectively incorporate the influence of degradation stage and shock intensity on system failure. A comprehensive uncertainty analysis is performed, in consideration of random degradation, unpredictable shock events, and the dynamic evolution of degradation stages and performance degradation processes. Numerical simulations are conducted on a hydraulic control system to demonstrate the effectiveness and accuracy of the proposed method. The robustness and reliability of the proposed approach in predicting the RUL of the hydraulic control system are demonstrated, with particular emphasis on the method's capability to handle the complexities of dependency modeling and uncertainty analysis. Results show that the proposed method can realize dependency modeling of the hydraulic control system, accurately predict its RUL, and analyze the vulnerability of its subsystems.

Unpredictable threat increases early event-related potential amplitudes and cardiac acceleration: A brain-heart coupling study.

In the face of unpredictable threat, rapid processing of external events and behavioral mobilization through early psychophysiological responses are crucial for survival. While unpredictable threat generally enhances early processing, it would seem adaptive to particularly increase sensitivity for unexpected events as they may signal danger. To examine this possibility, n = 77 participants performed an auditory oddball paradigm and received unpredictable shocks in threat but not in safe contexts while a stream of frequent (standard) and infrequent (deviant) tones was presented. We assessed event-related potentials (ERP), heart period (HP), and time-lagged within-subject correlations of single-trial EEG and HP (cardio-EEG covariance tracing, CECT) time-locked to the tones. N1 and P2 ERP amplitudes were generally enhanced under threat. The P3 amplitude was enhanced to deviants versus standards and this effect was reduced in the threat condition. Regarding HP, both threat versus safe and unexpected versus expected tones led to stronger cardiac acceleration, suggesting separate effects of threat and stimulus expectancy on HP. Finally, CECTs revealed two correlation clusters, indicating that single-trial EEG magnitudes in the N1/P2 and P3 time-windows predicted subsequent cardiac acceleration. The current results show that an unpredictable threat context enhances N1 and P2 amplitudes and cardiac acceleration to benign auditory stimuli. They further suggest separable cortical correlates of different effects on cardiac activity: an early N1/P2 correlate associated with threat-effects on HP and a later P3 correlate associated with expectedness-effects. Finally, the results indicate that unpredictable threat attenuates rather than enhances the processing of unexpected benign events during the P3 latency.

A neural oscillatory signature of sustained anxiety.

Anxiety is a sustained response to uncertain threats; yet few studies have explored sustained neurobiological activities underlying anxious states, particularly spontaneous neural oscillations. To address this gap, we reanalysed magnetoencephalographic (MEG) data recorded during induced anxiety to identify differences in sustained oscillatory activity between high- and low-anxiety states. We combined data from three previous MEG studies in which healthy adults (total N = 51) were exposed to alternating periods of threat of unpredictable shock and safety while performing a range of cognitive tasks (passive oddball, mixed-saccade or stop-signal tasks). Spontaneous, band-limited, oscillatory activity was extracted from middle and late intervals of the threat and safe periods, and regional power distributions were reconstructed with adaptive beamforming. Conjunction analyses were used to identify regions showing overlapping spectral power differences between threat and safe periods across the three task paradigms. MEG source analyses revealed a robust and widespread reduction in beta (14-30 Hz) power during threat periods in bilateral sensorimotor cortices extending into right prefrontal regions. Alpha (8-13 Hz) power reductions during threat were more circumscribed, with notable peaks in left intraparietal sulcus and thalamus. Threat-induced anxiety is underpinned by a sustained reduction in spontaneous beta- and alpha-band activity in sensorimotor and parietal cortical regions. This general oscillatory pattern likely reflects a state of heightened action readiness and vigilance to cope with uncertain threats. Our findings provide a critical reference for which to identify abnormalities in cortical oscillatory activities in clinically anxious patients as well as evaluating the efficacy of anxiolytic treatments.

Exploring the Intellectual Structure of Research in Organizational Resilience through a Bibliometric Approach

Organizations, businesses, and communities at large are exposed to unprecedented adversities, uncertainties, economic, social, and ecological shocks and disruptions caused by natural disasters, climate change, political turmoil, global recession, economic instability, fluctuations in energy-source prices, war and terrorism dilemmas, pandemics, and several other newly rising social turbulences. This situation has forced stakeholders to revisit and redefine their strategies to effectively and efficiently combat adversity and uncertainty within their business domain. One concern attracting attention is organizational resilience. Strategists and decision-makers are keener to secure, sustain, and progress against unpredicted shocks by making organizations highly resilient. The present research provides in-depth insight into the foundation, evolution, progression, and dissemination of organizational resilience as a promising research field, doing so by deploying advanced bibliometric techniques on the Elsevier Scopus-listed dataset of all 484 published journal articles up to 31 December 2022. Herein, it is inferred that the concept of organizational resilience is evolving and has great potential to become a key research domain due to ever-increasing adversities around the globe.

Food security and coping strategies for COVID-19 disruptions among farming households in Cameroon

The uncertainty of a secure next meal has continued to bedevil global economies and undermine households’ well-being. The COVID-19 pandemic has affected farming households’ livelihood through diverse pressures on global food systems. In this study, we assessed the association between the COVID-19 shocks and farming households’ food and nutrition security and the different coping strategies adopted in Cameroon. Focus group discussions were conducted to identify the COVID-19 shocks affecting farming households and the different response strategies implemented. A multi-stage random sampling method was employed to interview 249 households. Through the ordered probit model and other empirical strategies, we show that the COVID-19 pandemic significantly reduced farming households’ access to food, dietary diversity, and consumption frequency of essential food groups. Our results show that male-headed and rural households are significantly more food insecure than female-headed and semi-urban households. Moreover, our analysis shows that female-headed and semi-urban households reported a positive and statistically significant association with coping strategies, indicating that female-headed and urban households contributed more to sustaining household food security than male-headed and semi-urban households. The most implemented coping strategy is consuming less preferred and less expensive food. This study provides evidence for targeted interventions such as capacity build and training to strengthen farming households’ food and nutrition security resilience to emerging and unpredictable shocks. Strengthening and improving farming households’ coping strategies through capacity building and skills acquisition in off-farm income opportunities are crucial to improving their adaptive capacity and reducing their vulnerability to food and nutrition insecurity in Cameroon.

MANAGEMENT PROBLEMS OF INNOVATIVE TECHNOLOGIES

The article focused on the innovative technologies management problems investigation. The endogenous distribution of economic factors for research and development sectors have been evaluated in order to study the accumulation process of innovation and technologies. The research methodology is based on the system dynamics approach that gives the advantage to delve in dynamic problems for complex economic and social issues taking into account information and material delays as well as feedback and endogenous causality. The computer simulation model has been built to describe the dynamic of innovative technologies and to perform the sensitivity analysis in order to investigate how change in different parameter of system affect the economic growth and its dynamic properties. The simulation results confirm that management policy decisions can change dramatically if parameters are influenced by unpredictable shocks but the behavior of technological growth does not depend on initial conditions of system if an effective management policy has been provided.

Leveraging digital capabilities toward a circular economy: Reinforcing sustainable supply chain management with Industry 4.0 technologies

Facing the challenges of globalisation and unpredictable shocks, manufacturers seek novel methods to maintain the sustainability of their supply chains. Adopting Industry 4.0 (I4.0) technologies facilitates sustainable supply chain management (SSCM) with the precise decision-making of supply chain activities and the realisation of circular development. However, according to the bibliometric analysis and systematic literature review of articles related to “SSCM”, few frameworks with I4.0 technologies are found to empower SSCM under circular economy (CE) logic. Thus, this article proposes a conceptual framework of I4.0 technologies-embedded SSCM, which takes advantage of five kinds of emerging digital technologies, including cloud services, artificial intelligence (AI), big data analytics (BDA), blockchain technology (BT), and internet of things (IoT). The CAB2IN framework is based on the technologies mentioned above alongside the design, manufacturing, delivering, using, and end-of-life stages of products and services to meet the requirements of reducing material usage, remanufacturing, reusing, and recycling. This paper's contribution lies in indicating the trends of SSCM in the era of Industry 4.0 and proposing CAB2IN to creatively establish the virtual side of circular SSCM, which leverages the data generated in each stage to assist sustainable decision-making. CAB2IN illuminates several research directions for future studies of digitalised SSCM under the perspective of CE. The case of Company S illustrates the application of CAB2IN in the healthcare supply chain. This paper also summarises insightful directions of digitalised SSCM under the proposed circular framework.

AN ANALYSIS OF WAQF, ZAKĀT, QARḌ AND TAKĀFUL AS ISLAMIC SOCIAL FINANCE INSTRUMENTS: JURISTIC VIEWS

This paper discusses how waqf properties, zakāt and qarḍ which are Islamic social finance (ISF) instruments, can be used to assist different categories of low-income individuals and groups to achieve financial empowerment and widen their financial well-being. In addition, this paper explains how takāful products and services can prevent financial anxiety and strengthen the financial resilience of low-income individuals and groups against unpredictable shocks. Qualitative approach is used to review opinions of both classical and contemporary jurists from four major Sunni madhāhib namely, the Ḥanafiyyah school, the Mālikiyyah school, the Shāfiʽīyah school and Ḥanbaliyyah school on the useability and application of waqf, zakāt, qarḍ and takāful as social financing tools. In addition, the paper discusses ijtihād held by a number of Muslim jurists who are known for deep thought and their ability to scrutinise and compare opinions and views from different Shari’ah sources. As the result, the divergent views expressed by these jurists are to some extent reconciled to help the policymakers and other interested parties to have a clear understanding of the actual meaning of the concept of sufficiency of sustenance/need (ḥājah) and conditions that deem to appropriately align with the concept. This is expected to provide the basis for the policymakers to formulate policies and strategies for the intended beneficiaries who are the low-income individuals and groups who constitute the vulnerable groups in a society. 
 This research is supported by Ministry of Education (MOE) through Fundamental Research Grant Scheme (FRGS /1 /2021 /SS01 /UIAM /03 /3).

Towards an integrated system modeling of water scarcity with projected changes in climate and socioeconomic conditions

Water scarcity is one of the major challenges in semi-arid and arid areas. Drivers for water scarcity include climate change, population growth, economic, and agricultural development. This paper presents a framework for assessing water scarcity under the impact of climate, industry, and socio-economic changes in the Qazvin Plain, Iran. A system dynamics model is developed and calibrated using historical data to evaluate the effects of the projected drivers on water scarcity in 2025–2054. A Bayesian averaging model was used to manage the uncertainty in the GFDL, INM, IPSL, MPI-ESM1-2, and MRI.MRI-ESM2-0 climate projections under the two future SSP126 and SSP585 (shared socioeconomic pathways) scenarios. The results demonstrate that the water scarcity index (with a minimum of 0 and a maximum of 1) is about 0.4 and 0.7 in SSP126 and SSP585, respectively, which may severely affect agricultural development. On the other hand, the industry, domestic, and service sectors are more resilient to these variations with no probable major effects on water scarcity. However, the stress on the agricultural sector may cause migration of the workforce to industry. Policymakers must focus on implementing appropriate adaptation strategies for the agricultural sector to prepare for unpredictable shocks to the system.

Aversive response to uncertainty as a mediator for the effect of a mindfulness intervention on symptoms of anxiety

Theoretical backgroundIntolerance of uncertainty plays a central role in anxiety and research suggests that it's an important treatment target. Investigating response to uncertainty using other dimensions than self-report, such as physiological responses, can further the effort to understand the role of uncertainty in anxiety more fully. Mindfulness interventions have become increasingly interesting in their application to anxiety, as they foster acceptance of unpleasant aspects of experience. The aims of the study were to examine whether a mindfulness intervention reduced response to uncertainty and anxiety symptoms, and to examine the associations between intolerance of uncertainty, physiological response to uncertainty, mindfulness and anxiety. MethodsParticipants were 117 students who completed a two-week mindfulness or audiobook control intervention. At pre- and post-intervention assessments, measures of anxiety, mindfulness, and intolerance of uncertainty were completed and a threat-of-shock task assessing startle responding to unpredictable shock was administered. ResultsFindings showed a significant effect of the intervention for social anxiety symptoms. Furthermore, intolerance of uncertainty mediated the effect of the intervention on symptoms for social anxiety and worry. No such effects were found for physiological response to uncertainty. ConclusionThe study adds to the understanding of the role of response to uncertainty in anxiety as well as to its mechanistic role in the context of mindfulness practice. Implications and possible explanations for the non-significant main effects of the intervention on anxiety symptoms and physiological response to uncertainty are discussed.

Continuous Theta-Burst Stimulation to the Right Dorsolateral Prefrontal Cortex May Increase Potentiated Startle in Healthy Individuals

BackgroundConvergent neuroimaging and neuromodulation studies implicate the right dorsolateral prefrontal cortex (dlPFC) as a key region involved in anxiety-cognition interactions. However, neuroimaging data are correlational, and neuromodulation studies often lack appropriate methodological controls. Accordingly, this work was designed to explore the role of right prefrontal cognitive control mechanisms in the expression/regulation of anxiety using continuous theta-burst transcranial magnetic stimulation (cTBS) and threat of unpredictable shock. Based on prior neuromodulation studies, we hypothesized that the right dlPFC contributed to anxiety expression, and that cTBS should downregulate this expression. MethodsWe measured potentiated startle and performance on the Sternberg working memory paradigm in 28 healthy participants before and after 4 sessions (600 pulses/session) of active or sham cTBS. Stimulation was individualized to the right dlPFC site of maximal working memory–related activity and optimized using electric-field modeling. ResultsCompared with sham cTBS, active cTBS, which is thought to induce long-term depression–like synaptic changes, increased startle during threat of shock, but the effect was similar for predictable and unpredictable threat. As a measure of target (dis)engagement, we also showed that active but not sham cTBS decreased accuracy on the Sternberg task. ConclusionsCounter to our initial hypothesis, cTBS to the right dlPFC made individuals more anxious, rather than less anxious. Although preliminary, these results are unlikely to be due to transient effects of the stimulation, because anxiety was measured 24 hours after cTBS. In addition, these results are unlikely to be due to off-target effects, because target disengagement was evident from the Sternberg performance data.

Lending relationships and a corporate liquidity shortage: Evidence from the COVID-19 shock in Japan.

We investigate the effects of lending relationships between banks and borrowers on loan supply during the economic shock caused by the coronavirus (COVID‐19) pandemic. Using bank–firm matched data for Japan to control for several firm‐ and bank‐specific unobserved effects, we show that banks with close relationships with borrowing firms offer more bank loans to these firms during the COVID‐19 shock. This effect is larger if the borrowing firms' cash flows decrease substantially during the shock. These results imply that banks acted as liquidity providers for borrowers during sudden and unpredictable shocks if their relationships with firms were close.

On the resilience of health systems: A methodological exploration across countries in the WHO African Region.

The need for resilient health systems is recognized as important for the attainment of health outcomes, given the current shocks to health services. Resilience has been defined as the capacity to “prepare and effectively respond to crises; maintain core functions; and, informed by lessons learnt, reorganize if conditions require it”. There is however a recognized dichotomy between its conceptualization in literature, and its application in practice. We propose two mutually reinforcing categories of resilience, representing resilience targeted at potentially known shocks, and the inherent health system resilience, needed to respond to unpredictable shock events. We determined capacities for each of these categories, and explored this methodological proposition by computing country-specific scores against each capacity, for the 47 Member States of the WHO African Region. We assessed face validity of the computed index, to ensure derived values were representative of the different elements of resilience, and were predictive of health outcomes, and computed bias-corrected non-parametric confidence intervals of the emergency preparedness and response (EPR) and inherent system resilience (ISR) sub-indices, as well as the overall resilience index, using 1000 bootstrap replicates. We also explored the internal consistency and scale reliability of the index, by calculating Cronbach alphas for the various proposed capacities and their corresponding attributes. We computed overall resilience to be 48.4 out of a possible 100 in the 47 assessed countries, with generally lower levels of ISR. For ISR, the capacities were weakest for transformation capacity, followed by mobilization of resources, awareness of own capacities, self-regulation and finally diversity of services respectively. This paper aims to contribute to the growing body of empirical evidence on health systems and service resilience, which is of great importance to the functionality and performance of health systems, particularly in the context of COVID-19. It provides a methodological reflection for monitoring health system resilience, revealing areas of improvement in the provision of essential health services during shock events, and builds a case for the need for mechanisms, at country level, that address both specific and non-specific shocks to the health system, ultimately for the attainment of improved health outcomes.

Evaluation of the spatial aspect of building resilience in classrooms equipped with displacement ventilation

Throughout their lifetime, buildings might face unpredictable shocks leading to fast deterioration of comfort levels. The ability of buildings and systems to absorb the shock and bring back the indoor conditions to their designed state is termed as “resilience”. Ventilation and thermal resilience have been studied under homogeneous conditions. However, the established airflow indoors and hence resilience is non-homogeneous. In this work, the spatial aspect of ventilation and thermal resilience will be assessed in a classroom equipped with displacement ventilation using 3D CFD modeling. Two sources of pollution were considered in the space: CO2and VOCs. To study resilience, the numerical model was simulated until steady state. Subsequently, a power outage shock of 60 min was induced. The temporal and spatial mappings of temperature, and pollutants’ concentration were recorded in the occupied zone at the breathing height of 1.2 m and compared to that at the exhaust. Building resilience was assessed throughppm.hoursanddegree.hoursand compared at both locations. Results showed that resilience is rather a non-homogeneous field that depends on the location of heat sources and pollution sources in the space. However, results showed that any over or under estimations (~20 − 28%) in assessing the thermal or ventilation resilience are negligible when evaluated at either the breathing plane or the exhaust.

On the antifragility-based economic sustainability – a crucial lesson from Covid-19 pandemic

The COVID-19 pandemic is a non-economic, external, and unpredictable shock that directly affects the real economy, having the potential to degenerate into an economic and financial crisis. The paper's aim is to find an institutional and structural way by which the economies could manage such shocks without covering unspecified risks or handling unknown uncertainties. In fact, the paper proposes a sui generis immune system of the economy which consists in endowing that economy with an anti-fragile potential to oppose against perturbations (either external or internal), no matter either of their kind, or their intensity, and even to gain from those perturbations. The proposal is analogous, from a structural and functional point of view, with the biological immune mechanism, but it is designed on an institutional basis (both discretionary and automatic). The anti-fragility property is more relevant and productive than other similar properties as robustness, resilience, homeostasis, and so on.

N-Fold compound option pricing with technical risk under fractional jump-diffusion model

The problem of generalizing the compound option pricing model to incorporate more empirical features becomes an urgent and necessary event. In this study, a new N-fold compound option pricing method is designed for the economic uncertainty and technical uncertainty. The economic uncertainty is modelled by a fractional jump-diffusion model, which incorporates the long-term dependence of financial markets, the kurtosis of returns and the unpredictable shocks of real world. The technical uncertainty is modelled as a simplified version Poisson-type jump process, which describes the catastrophic impact of the technical risk in multi-stage projects. The main contribution of this paper is that we firstly develop the N-fold compound option pricing model with the fractional Brownian motion and the technical risk variable. Further, the analytic solutions of pricing compound options are achieved and verified by the recursive formula of option price. Numerical examples are provided to support the theoretical results of this model. Moreover, from the sensitivity analysis, some results are presented to illustrate that the N-fold compound option price without considering the phase-specific characteristics of technical risk is improperly estimated. Thereby, it is essential for investors to take into account the technical risk when making decisions.