Small businesses are an important part of the economy of virtually every nation. In the U.S., for example, small businesses account for about half of all private-sector employment and non-farm gross domestic product according to the Small Business Administration. Nonetheless, small firms have historically faced significant difficulties in accessing funding for creditworthy (i.e., positive net present value) projects due to a lack of credible information about them by potential providers of funds.
Small businesses are typically much more informationally opaque than large corporations because they often do not have certified audited financial statements to yield credible financial information on a regular basis. As well, these firms usually do not have publicly traded equity or debt, yielding no market prices or public ratings that might suggest their quality. To address this opacity problem and provide funding to small firms, financial institutions use a number of different lending technologies.
As a result of the obesity epidemic in the United States numerous dietary strategies have been advocated as effective methods for reducing body weight. One such dietary strategy is a carbohydrate restricted diet, one of which is the Atkins diet. This study examined the effects of the Atkins diet on body mass, body composition, and blood cholesterol concentrations in persons engaging in the Atkins diet and a brisk walking exercise program. Nineteen healthy adults who desired to lose weight were randomly assigned to either the Atkins diet (LowCho; n=9) or a diet which followed the current USDA guidelines (Con; n=10), and walking for 30 minutes, 3 times per week for 7 weeks. Body mass (96 ± 8 vs. 90 ± 9 kg), fat mass (30 ± 4 vs. 26 ± 4 kg), and blood [triglyceride] decreased significantly (P< 0.05) from baseline to week 7 in LowCho. The subjects in Con experienced a significant (P<0.05) decrease in blood [HDL] from baseline to week 7 (54 ± 5 vs. 48 ± 5 mg/dl). No other changes were noted.
The aim of this paper is to study how financial structures and monetary policy regimes (including exchange rate regimes) affect the pattern of business cycle correlation across countries. More specifically, I propose a unitary framework in which international business cycle co-movements are explained jointly by the differences between the financial systems and by the monetary policy regime adopted by the countries concerned.
The European Union is a prime example where my analysis is likely to be relevant. The 12 countries of the euro area have adopted a single currency but are still characterized by different financial structures, as a result of history, legal frameworks, collective preferences and politics. Financial regulations, legislation and bank supervisory policies of these countries have not been unified but remain largely under national control — though pressures towards harmonization and the adoption of common standards, partly as a result of the single currency, are mounting. Of the remaining EU members, many (including several new entrants from Central and Eastern Europe) will adopt the euro before or around the end of this decade, and also in preparation for that are introducing financial market reforms. This process of currency unification and financial reform taking place at continental level provides an ideal testing ground for my theory. Examining the implications of this for business cycles is clearly important for many reasons, e.g. to determine the optimal monetary policy and to study the welfare properties of the currency area.
