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We develop a novel, risk-based theory of the effects of exchange rate stabilization. In our model, the choice of exchange rate regime allows policymakers to make their currency, and by extension, the firms in their country, a safer investment for international investors. Policies that induce a country’s currency to appreciate when the marginal utility of international investors is high lower the required rate of return on the country’s currency and increase the world-market value of domestic firms. Applying this logic to exchange rate stabilizations, we find a small economy stabilizing its bilateral exchange rate relative to a larger economy can increase domestic capital accumulation, domestic wages, and even its share in world wealth. In the absence of policy coordination, small countries optimally choose to stabilize their exchange rates relative to the currency of the largest economy in the world, which endogenously emerges as the world’s “anchor currency”, Larger economies instead optimally choose to float their exchange rates. The model therefore predicts an equilibrium pattern of exchange rate arrangements that is remarkably similar to the one in the data.

Background While phosphodiesterase type-5 inhibitors (PDE5Is) are highly effective for the treatment of erectile dysfunction (ED) and well tolerated, updated data on prescription patterns have been limited in real-world settings. Aim To describe men in the United States who are prescribed PDE5Is for ED treatment and to evaluate patterns of initiation, switching, and treatment overlap. Methods This retrospective claims study used MarketScan Commercial and Medicare Supplement Databases from January 1, 2010, to December 31, 2015, to identify initial PDE5I claims (index date) for sildenafil, tadalafil, and/or vardenafil. Adults aged ≥18 years with ED were identified between July 1, 2010, and December 31, 2014, allowing for a 6-month preindex and 12-month follow-up period from the index date. Outcomes Outcomes included patient demographics and treatment-related patterns after treatment initiation. Results A total of 106,206 identified patients met all inclusion criteria. Of these, 51,694, 40,193, and 14,319 had initial claims for sildenafil, tadalafil, and vardenafil, respectively. Mean age was 50.35 years, and comorbidities included dyslipidemia (44.17%), hypertension (43.09%), diabetes (15.32%), and depression (10.61%). More patients (48.67%) initiated on sildenafil than tadalafil (37.85%) or vardenafil (13.48%). Rate of switching was lower in the 60 days after the end of day supply of the initial prescription in the sildenafil cohort (2.71%) compared with the tadalafil (2.81%) and vardenafil (3.88%) cohorts (P Clinical Implications These findings provide insight into updated patterns of PDE5I prescriptions in the United States and may aid in clinical decision-making. Strengths & Limitations Strengths include the large sample size, long data coverage period, and the real-world nature of the study. Limitations include the retrospective study design, use of data collected with a primary focus of claims, and lack of further details regarding reasons that drive switching. Actual rates of ED and impact on prescription patterns may be underestimated because the claims database only captured patients electing to visit a health-care provider. Conclusion Among men with ED in the United States, rates of switching and treatment overlap were low for all PDE5Is but were found to be the lowest for sildenafil compared with tadalafil and vardenafil.

Separate literatures study violations of uncovered interest parity (UIP) using regression-based and portfolio-based methods. We propose a decomposition of these violations into a cross-currency, a between-time-and-currency, and a cross-time component that allows us to analytically relate regression-based and portfolio-based facts and to estimate the joint restrictions they put on models of currency returns. Subject to standard assumptions on investors’ information sets, we find that the forward premium puzzle (FPP) and the “dollar trade” anomaly are intimately linked: both are driven almost exclusively by the cross-time component. By contrast, the “carry trade” anomaly is driven largely by cross-sectional violations of UIP. The simplest model that the data do not reject features a cross-sectional asymmetry that makes some currencies pay permanently higher expected returns than others, and larger time series variation in expected returns on the U.S. dollar than on other currencies. Importantly, conventional estimates of the FPP are not directly informative about expected returns because they do not correct for uncertainty about future mean interest rates. Once we correct for this uncertainty, we never reject the null that investors expect high-interest-rate currencies to depreciate, not appreciate.

Unprecedented street protests brought down Mubarak’s government and ushered in an era of competition between three rival political groups in Egypt. Using daily variation in the number of protesters, we document that more intense protests are associated with lower stock market valuations for firms connected to the group currently in power relative to non-connected firms, but have no impact on the relative valuations of firms connected to rival groups. These results suggest that street protests serve as a partial check on political rent-seeking. General discontent expressed on Twitter predicts protests but has no direct effect on valuations.

We adapt simple tools from computational linguistics to construct a new measure of political risk faced by individual U.S. firms: the share of their quarterly earnings conference calls that they devote to political risks. We validate our measure by showing that it correctly identifies calls containing extensive conversations on risks that are political in nature, that it varies intuitively over time and across sectors, and that it correlates with the firm’s actions and stock market volatility in a manner that is highly indicative of political risk. Firms exposed to political risk retrench hiring and investment and actively lobby and donate to politicians. These results continue to hold after controlling for news about the mean (as opposed to the variance) of political shocks. Interestingly, the vast majority of the variation in our measure is at the firm level rather than at the aggregate or sector level, in the sense that it is captured neither by the interaction of sector and time fixed effects nor by heterogeneous exposure of individual firms to aggregate political risk. The dispersion of this firm-level political risk increases significantly at times with high aggregate political risk. Decomposing our measure of political risk by topic, we find that firms that devote more time to discussing risks associated with a given political topic tend to increase lobbying on that topic, but not on other topics, in the following quarter.

The microquasar Cygnus X-1 displays the two typical soft and hard X-ray states of a black hole transient. During the latter, Cygnus X-1 shows a one-sided relativistic radio-jet. Recent detection of the system in the high energy (HE; E greater than or similar to 60 MeV) gamma-ray range with FermiLAT associates this emission with the outflow. Former MAGIC observations revealed a hint of flaring activity in the very high-energy (VHE; E greater than or similar to 100 GeV) regime during this X-ray state. We analyse ~ to 97 h of Cygnus X-1 data taken with the MAGIC telescopes between July 2007 and October 2014. To shed light on the correlation between hard X-ray and VHE gamma rays as previously suggested, we study each main X-ray state separately. We perform an orbital phase-folded analysis to look for variability in the VHE band. Additionally, to place this variability behaviour in a multiwavelength context, we compare our results with Fermi-LAT, AGILE, Swift-BAT, MAXI, RXTE-ASM, AMI and RATAN-600 data. We do not detect Cygnus X-1 in the VHE regime. We establish upper limits for each X-ray state, assuming a power-law distribution with photon index Γ = 3.2. For steady emission in the hard and soft X-ray states, we set integral upper limits at 95 %per cent confidence level for energies above 200 GeV at 2.6 x 10⁻¹² photons cm⁻² s⁻¹ and 1.0 x 10⁻¹¹ photons cm⁻² s ⁻¹, respectively. We rule out steady VHE gamma-ray emission above this energy range, at the level of theMAGIC sensitivity, originating in the interaction between the relativistic jet and the surrounding medium, while the emission above this flux level produced inside the binary still remains a valid possibility.

We document a statistical association between the severity of the persecution, displacement and mass murder of Jews by the Nazis during World War II and long-run economic and political outcomes within Russia. Cities that experienced the Holocaust most intensely have grown less, and both cities and administrative districts (oblasts) where the Holocaust had the largest impact have worse economic and political outcomes since the collapse of the Soviet Union. We provide evidence that the lasting impact of the Holocaust may be attributable to a permanent change it induced in the social structure across different regions of Russia., William A. Ackman Fund for Holocaust Studies, Warburg Foundation