Forecasting economies in transition: The case of Romania

Structural change is endemic in the Eastern European economies and the newly emerging Commonwealth of Independent States yet conventional econometric modelling techniques proceed under the assumption that there is a structurally stable ‘true’ economy to be discovered. This paper extends the analysis of Hall (1993) by exploring the consequences of endemic structural change for forecasting and building structural econometric models. We propose a model formulation which makes the econometric model itself able to adjust its parameters in the light of economic change using the Kalman Filter. The paper then illustrates this approach by building a small model of Romania and investigating its forecasting properties.     

Measuring the correlation of shocks between the EU15 and the new member countries

This paper considers the question of the symmetry of inflation, exchange rate changes and GDP shocks between the EU15 and the new member countries. It applies a relatively new technique, the orthogonal GARCH model, which allows us to calculate a complete time varying correlation matrix for these countries. We can then examine the way the conditional correlation of shocks between the EU15 and the new member countries has been evolving over time. Our results suggest that the shocks which hit the EU are not symmetrical with those affecting the majority of new member countries. In addition, most of the new member countries seem to exhibit relatively low correlation with EU15.     

Examining the constitutionality of Internet filtering in public schools: a US perspective

The use of Internet filters in public classrooms in the USA has been intensely debated, both in terms of its effectiveness and legality. The debate pits concerns to protect students from indecent material against issues of unconstitutional censorship. This paper examines the legal issues addressed in various rulings by the US Supreme Court pertinent to issues raised in the debate over the constitutionality of filtering in the classroom. The rulings and opinions offer valuable insights into the legal issues raised in this debate.     

Making sense of referral fee statutes

State and federal prohibitions of referral fees have long plagued the health care sector because their broadly worded provisions threaten established and socially valuable business arrangements. Congress has recently instructed the Department of Health and Human Services to issue regulations that clarify the scope of the most threatening of these prohibitions, the Medicare and Medicaid felony referral fee statute. This article examines three possible analytical models for imposing a limiting construction on referral fee statutes by testing the models against three beneficial practices that the statute jeopardizes: physician recruitment, fee discounting, and efficiency bonuses. The article recommends primary reliance on an earned/unearned analysis that detects a prohibited referral fee by asking whether the fee is fully earned by legitimate, nonreferral services.