Essays on the term structure of interest rates

This PhD thesis contains three main chapters on macro finance, with a focus on the term structure of interest rates and the applications of state-of-the-art Bayesian econometrics. Except for Chapter 1 and Chapter 5, which set out the general introduction and conclusion, each of the chapters can be considered as a standalone piece of work. In Chapter 2, we model and predict the term structure of US interest rates in a data rich environment. We allow the model dimension and parameters to change over time, accounting for model uncertainty and sudden structural changes. The proposed timevarying parameter Nelson-Siegel Dynamic Model Averaging (DMA) predicts yields better than standard benchmarks. DMA performs better since it incorporates more macro-finance information during recessions. The proposed method allows us to estimate plausible realtime term premia, whose countercyclicality weakened during the financial crisis. Chapter 3 investigates global term structure dynamics using a Bayesian hierarchical factor model augmented with macroeconomic fundamentals. More than half of the variation in the bond yields of seven advanced economies is due to global co-movement. Our results suggest that global inflation is the most important factor among global macro fundamentals. Non-fundamental factors are essential in driving global co-movements, and are closely related to sentiment and economic uncertainty. Lastly, we analyze asymmetric spillovers in global bond markets connected to diverging monetary policies. Chapter 4 proposes a no-arbitrage framework of term structure modeling with learning and model uncertainty. The representative agent considers parameter instability, as well as the uncertainty in learning speed and model restrictions. The empirical evidence shows that apart from observational variance, parameter instability is the dominant source of predictive variance when compared with uncertainty in learning speed or model restrictions. When accounting for ambiguity aversion, the out-of-sample predictability of excess returns implied by the learning model can be translated into significant and consistent economic gains over the Expectations Hypothesis benchmark.

MicroRNA modulation of aldosterone production in the adrenal gland

Hypertension is the major risk factor for coronary disease worldwide. Primary hypertension is idiopathic in origin but is thought to arise from multiple risk factors including genetic, lifestyle and environmental influences. Secondary hypertension has a more definite aetiology; its major single cause is primary aldosteronism (PA), the greatest proportion of which is caused by aldosteroneproducing adenoma (APA), where aldosterone is synthesized at high levels by an adenoma of the adrenal gland. There is strong evidence to show that high aldosterone levels cause adverse effects on cardiovascular, cerebrovascular, renal and other systems. Extensive studies have been conducted to analyse the role that regulation of CYP11B2, the gene encoding the aldosterone synthase enzyme plays in determining aldosterone production and the development of hypertension. One significant regulatory factor that has only recently emerged is microRNA (miRNA). miRNAs are small non-coding RNAs, synthesized by a series of enzymatic processes, that negatively regulate gene expression at the posttranscriptional level. Detection and manipulation of miRNA is now known to be a viable method in the treatment, prevention and prognosis of certain diseases. The aim of the present study was to identify miRNAs likely to have a role in the regulation of corticosteroid biosynthesis. To achieve this, the miRNA profile of APA and normal human adrenal tissue was compared, as was the H295R adrenocortical cell line model of adrenocortical function, under both basal conditions and following stimulation of aldosterone production. Key differentially-expressed miRNAs were then identified and bioinformatic tools used to identify likely mRNA targets and pathways for these miRNAs, several of which were investigated and validated using in vitro methods. The background to this study is set out in Chapter 1 of this thesis, followed by a description of the major technical methods employed in Chapter 2. Chapter 3 presents the first of the study results, analysing differences in miRNA profile between APA and normal human adrenal tissue. Microarray was implemented to detect the expression of miRNAs in these two tissue types and several miRNAs were found to vary significantly and consistently between them. Furthermore, members of several miRNA clusters exhibited similar changes in expression pattern between the two tissues e.g. members of cluster miR-29b-1 (miR-29a-3p and miR-29b-3p) and of cluster miR-29b-2 (miR-29b-3p and miR-29c- 3p) are downregulated in APA, while members of cluster let-7a-1 (let-7a-5p and let-7d-5p), cluster let-7a-3 (let-7a-5p and let-7b-5p) and cluster miR-134 (miR- 134 and miR-382) are upregulated. Further bioinformatic analysis explored the possible biological function of these miRNAs using Ingenuity® Systems Pathway Analysis software. This led to the identification of validated mRNAs already known to be targeted by these miRNAs, as well as the prediction of other mRNAs that are likely targets and which are involved in processes relevant to APA pathology including cholesterol synthesis (HMGCR) and corticosteroidogenesis (CYP11B2). It was therefore hypothesised that increases in miR-125a-5p or miR- 335-5p would reduce HMGCR and CYP11B2 expression. Chapter 4 describes the characterisation of H295R cells of different strains and sources (H295R Strain 1, 2, 3 and HAC 15). Expression of CYP11B2 was assessed following application of 3 different stimulants: Angio II, dbcAMP and KCl. The most responsive strain to stimulation was Strain 1 at lower passage numbers. Furthermore, H295R proliferation increased following Angio II stimulation. In Chapter 5, the hypothesis that increases in miR-125a-5p or miR-335-5p reduces HMGCR and CYP11B2 expression was tested using realtime quantitative RT-PCR and transfection of miRNA mimics and inhibitors into the H295R cell line model of adrenocortical function. In this way, miR-125a-5p and miR-335-5p were shown to downregulate CYP11B2 and HMGCR expression, thereby validating certain of the bioinformatic predictions generated in Chapter 3. The study of miRNA profile in the H295R cell lines was conducted in Chapter 6, analysing how it changes under conditions that increase aldosterone secretion, including stimulation Angiotensin II, potassium chloride or dibutyryl cAMP (as a substitute for adrenocorticotropic hormone). miRNA profiling identified 7 miRNAs that are consistently downregulated by all three stimuli relative to basal cells: miR-106a-5p, miR-154-3p, miR-17-5p, miR-196b-5p, miR-19a-3p, miR-20b- 5p and miR-766-3p. These miRNAs include those derived from cluster miR-106a- 5p/miR-20b-5p and cluster miR-17-5p/miR-19a-3p, each producing a single polycistronic transcript. IPA bioinformatic analysis was again applied to identify experimentally validated and predicted mRNA targets of these miRNAs and the key biological pathways likely to be affected. This predicted several interactions between miRNAs derived from cluster miR-17-5p/miR-19a-3p and important mRNAs involved in cholesterol biosynthesis: LDLR and ABCA1. These predictions were investigated by in vitro experiment. miR-17-5p/miR-106a-p and miR-20b-5p were found to be consistently downregulated by stimulation of aldosterone biosynthesis. Moreover, miR-766-3p was upregulation throughout. Furthermore, I was able to validate the downregulation of LDLR by miR-17 transfection, as predicted by IPA. In summary, this study identified key miRNAs that are differentially-expressed in vivo in cases of APA or in vitro following stimulation of aldosterone biosynthesis. The many possible biological actions these miRNAs could have were filtered by bioinformatic analysis and selected interactions validated in vitro. While direct actions of these miRNAs on steroidogenic enzymes were identified, cholesterol handling also emerged as an important target and may represent a useful point of intervention in future therapies designed to modulate aldosterone biosynthesis and reduce its harmful effects.