Studies on the international effects of real shocks

This doctoral thesis addresses the macroeconomic effects of real shocks in open economies in flexible exchange rate regimes. The first study of this thesis analyses the welfare effects of fiscal policy in a small open economy, where private and government consumption are substitutes in terms of private utility. The main findings are as follows: fiscal policy raises output, bringing it closer to its efficient level, but is not welfare-improving even though government spending directly affects private utility. The main reason for this is that the introduction of useful government spending implies a larger crowding-out effect on private consumption, when compared with the `pure waste' case. Utility decreases since one unit of government consumption yields less utility than one unit of private consumption. The second study of this thesis analyses the question of how the macroeconomic effects of fiscal policy in a small open economy depend on optimal intertemporal behaviour. The key result is that the effects of fiscal policy depend on the size of the elasticity of substitution between traded and nontraded goods. In particular, the sign of the current account response to fiscal policy depends on the interplay between the intertemporal elasticity of aggregate consumption and the elasticity of substitution between traded and nontraded goods. The third study analyses the consequences of productive government spending on the international transmission of fiscal policy. A standard result in the New Open Economy Macroeconomics literature is that a fiscal shock depreciates the exchange rate. I demonstrate that the response of the exchange rate depends on the productivity of government spending. If productivity is sufficiently high, a fiscal shock appreciates the exchange rate. It is also shown that the introduction of productive government spending increases both domestic and foreign welfare, when compared with the case where government spending is wasted. The fourth study analyses the question of how the international transmission of technology shocks depends on the specification of nominal rigidities. A growing body of empirical evidence suggests that a positive technology shock leads to a temporary decline in employment. In this study, I demonstrate that the open economy dimension can enhance the ability of sticky price models to account for the evidence. The reasoning is as follows. An improvement in technology appreciates the nominal exchange rate. Under producer-currency pricing, the exchange rate appreciation shifts global demand toward foreign goods away from domestic goods. This causes a temporary decline in domestic employment.

Essays on Economic Integration and Labour Demand

This dissertation consists of an introductory section and three essays investigating the effects of economic integration on labour demand by using theoretical models and by empirical analysis. The essays adopt an intra-industry trade approach to specify a theoretical framework of estimation for determining the effects of economic integration on employment. In all the essays the empirical aim is to explore the labour demand consequences of European integration. The first essay analyzes how labour-demand elasticities with own price have changed during the process of economic integration. As a theoretical result, intensified trade competition increases labour-demand elasticity, whereas better advantage of economies of scale decreases labour-demand elasticity by decreasing the elasticity of substitution between differentiated products. Furthermore, if integration gives rise to an increase in input-substitutability and/or outsourcing activities, labour demand will become more elastic. Using data from the manufacturing sector from 1975 to 2002, the empirical results provide support for the hypothesis that European integration has contributed to increased elasticities of total labour demand in Finland. The second essay analyzes how economic integration affects the impact of welfare poli-cies on employment. The essay considers the viability of financing the public sector, i.e. public consumption and social security expenses, by general labour taxation in an economy which has become more integrated into international product markets. The theoretical results of the second essay indicate that, as increased trade competition crowds out better economies of scale, it becomes more costly to maintain welfare systems financed by labour taxation. Using data from European countries for the years 1975 to 2004, the empirical results provide inconsistent evidence for the hypothesis that economic integration has contributed to the distortion effects of welfare policies on employment. The third essay analyzes the impact of profit sharing on employment as a way to introduce wage flexibility into the process of economic integration. The results of the essay suggest that, in theory, the effects of economic integration on the impact of profit sharing on employment clearly depend on a trade-off between intensified competition and better advantage of economies of scale. If product market competition increases, the ability of profit sharing to improve employment through economic integration increases with moderated wages. While, the economic integration associating with market power in turn decrease the possibilities of profit sharing with higher wages to improve employment. Using data from the manufacturing sector for the years 1996 to 2004, the empirical results show that profit-sharing has a positive impact on employment during the process of European integration, but can have ambiguous effects on the stability of employment in Finland.

Rhizoctonia -Scots pine interactions: detection, impact on seedling performance and host defence gene response

Rhizoctonia spp. are ubiquitous soil inhabiting fungi that enter into pathogenic or symbiotic associations with plants. In general Rhizoctonia spp. are regarded as plant pathogenic fungi and many cause root rot and other plant diseases which results in considerable economic losses both in agriculture and forestry. Many Rhizoctonia strains enter into symbiotic mycorrhizal associations with orchids and some hypovirulent strains are promising biocontrol candidates in preventing host plant infection by pathogenic Rhizoctonia strains. This work focuses on uni- and binucleate Rhizoctonia (respectively UNR and BNR) strains belonging to the teleomorphic genus Ceratobasidium, but multinucleate Rhizoctonia (MNR) belonging to teleomorphic genus Thanatephorus and ectomycorrhizal fungal species, such as Suillus bovinus, were also included in DNA probe development work. Strain specific probes were developed to target rDNA ITS (internal transcribed spacer) sequences (ITS1, 5.8S and ITS2) and applied in Southern dot blot and liquid hybridization assays. Liquid hybridization was more sensitive and the size of the hybridized PCR products could be detected simultaneously, but the advantage in Southern hybridization was that sample DNA could be used without additional PCR amplification. The impacts of four Finnish BNR Ceratorhiza sp. strains 251, 266, 268 and 269 were investigated on Scot pine (Pinus sylvestris) seedling growth, and the infection biology and infection levels were microscopically examined following tryphan blue staining of infected roots. All BNR strains enhanced early seedling growth and affected the root architecture, while the infection levels remained low. The fungal infection was restricted to the outer cortical regions of long roots and typical monilioid cells detected with strain 268. The interactions of pathogenic UNR Ceratobasidium bicorne strain 1983-111/1N, and endophytic BNR Ceratorhiza sp. strain 268 were studied in single or dual inoculated Scots pine roots. The fungal infection levels and host defence-gene activity of nine transcripts [phenylalanine ammonia lyase (pal1), silbene synthase (STS), chalcone synthase (CHS), short-root specific peroxidase (Psyp1), antimicrobial peptide gene (Sp-AMP), rapidly elicited defence-related gene (PsACRE), germin-like protein (PsGER1), CuZn- superoxide dismutase (SOD), and dehydrin-like protein (dhy-like)] were measured from differentially treated and un-treated control roots by quantitative real time PCR (qRT-PCR). The infection level of pathogenic UNR was restricted in BNR- pre-inoculated Scots pine roots, while UNR was more competitive in simultaneous dual infection. The STS transcript was highly up-regulated in all treated roots, while CHS, pal1, and Psyp1 transcripts were more moderately activated. No significant activity of Sp-AMP, PsACRE, PsGER1, SOD, or dhy-like transcripts were detected compared to control roots. The integrated experiments presented, provide tools to assist in the future detection of these fungi in the environment and to understand the host infection biology and defence, and relationships between these interacting fungi in roots and soils. This study further confirms the complexity of the Rhizoctonia group both phylogenetically and in their infection biology and plant host specificity. The knowledge obtained could be applied in integrated forestry nursery management programmes.

Immune response to insulin and changes in the gut immune system in children with or at risk for type 1 diabetes

Type 1 diabetes (T1D) is considered to be an autoimmune disease. The cause of T1D is the destruction of insulin-producing β-cells in the pancreatic islets. The autoimmune nature of T1D is characterized by the presence of autoreactive T-cells and autoantibodies against β-cell molecules. Insulin is the only β-cell-specific autoantigen associated with T1D but the insulin autoantibodies (IAAs) are difficult to measure with proper sensitivity. T-cell assays for detection of autoreactive T-cells, such as insulin-specific T-cells, have also proven to be difficult to perform. The genetic risk of T1D is associated with the HLA gene region but the environmental factors also play an important role. The most studied environmental risk factors of T1D are enteroviruses and cow's milk which both affect the immune system through the gut. One hypothesis is that the insulin-specific immune response develops against bovine insulin in cow's milk during early infancy and later spreads to include human insulin. The aims of this study were to determine whether the separation of immunoglobulin (Ig)G from plasma would improve the sensitivity of the IAA assay and how insulin treatment affects the cellular immune response to insulin in newly diagnosed patients. Furthermore, the effect of insulin concentration in mother's breast milk on the development of antibodies to dietary insulin in the child was examined. Small intestinal biopsies were also obtained from children with T1D to characterize any immunological changes associated with T1D in the gut. The isolation of the IgG fraction from the plasma of T1D patients negative for plasma IAA led to detectable IAA levels that exceeded those in the control children. Thus the isolation of IgG may improve the sensitivity of the IAA assay. The effect of insulin treatment on insulin-specific T-cells was studied by culturing peripheral blood mononuclear cells with insulin. The insulin stimulation induced increased expression of regulatory T-cell markers, such as Foxp3, in those patients treated with insulin than in patients examined before initiating insulin treatment. This finding suggests that insulin treatment in patients with T1D stimulates regulatory T-cells in vivo and this may partly explain the difficulties in measuring autoantigen-specific T-cell responses in recently diagnosed patients. The stimulation of regulatory T-cells by insulin treatment may also explain the remission period often seen after initiating insulin treatment. In the third study we showed that insulin concentration in mother's breast milk correlates inversely with the levels of bovine insulin-specific antibodies in those infants who were exposed to cow's milk proteins in their diet, suggesting that human insulin in breast milk induces tolerance to dietary bovine insulin. However, in infants who later developed T1D-associated autoantibodies, the insulin concentration in their mother's breast milk was increased. This finding may indicate that in those children prone to β-cell autoimmunity, breast milk insulin does not promote tolerance to insulin. In the small intestinal biopsies the presence of several immunological markers were quantified with the RT-PCR. From these markers the expression of the interleukin (IL)-18 cytokine was significantly increased in the gut in patients with T1D compared with children with celiac disease or control children. The increased IL-18 expression lends further support for the hypothesis that the gut immune system is involved in the pathogenesis of T1D.

Thyroid Hormone Control of Cardiac Substrate Metabolism

Thyroid hormone (TH) plays an important role in maintaining a homeostasis in all the cells of our body. It also has significant cardiovascular effects, and abnormalities of its concentration can cause cardiovascular disease and even morbidity. Especially development of heart failure has been connected to low levels of thyroid hormone. A decrease in TH levels or TH-receptor binding adversely effects cardiac function. Although, this occurs in part through alterations in excitation-contraction and transport proteins, recent data from our laboratory indicate that TH also mediates changes in myocardial energy metabolism. Thyroid dysfunction may limit the heart s ability to shift substrate pathways and provide adequate energy supply during stress responses. Our goals of these studies were to determine substrate oxidation pattern in systemic and cardiac specific hypothyroidism at rest and at higher rates of oxygen demand. Additionally we investigated the TH mediated mechanisms in myocardial substrate selection and established the metabolic phenotype caused by a thyroid receptor dysfunction. We measured cardiac metabolism in an isolated heart model using 13Carbon isotopomer analyses with MR spectroscopy to determine function, oxygen consumption, fluxes and fractional contribution of acetyl-CoA to the citric acid cycle (CAC). Molecular pathways for changes in cardiac function and substrate shifts occurring during stress through thyroid receptor abnormalities were determined by protein analyses. Our results show that TH modifies substrate selection through nuclear-mediated and rapid posttranscriptional mechanisms. It modifies substrate selection differentially at rest and at higher rates of oxygen demand. Chronic TH deficiency depresses total CAC flux and selectively fatty acid flux, whereas acute TH supplementation decreases lactate oxidation. Insertion of a dominant negative thyroid receptor (Δ337T) alters metabolic phenotype and contractive efficiency in heart. The capability of the Δ337T heart to increase carbohydrate oxidation in response to stress seems to be limited. These studies provided a clearer understanding of the TH role in heart disease and shed light to identification of the molecular mechanisms that will facilitate in finding targets for heart failure prevention and treatment.

Microbe-induced activation of inflammatory cytokine response in human cells

Human body is in continuous contact with microbes. Although many microbes are harmless or beneficial for humans, pathogenic microbes possess a threat to wellbeing. Antimicrobial protection is provided by the immune system, which can be functionally divided into two parts, namely innate and adaptive immunity. The key players of the innate immunity are phagocytic white blood cells such as neutrophils, monocytes, macrophages and dendritic cells (DCs), which constantly monitor the blood and peripheral tissues. These cells are armed for rapid activation upon microbial contact since they express a variety of microbe-recognizing receptors. Macrophages and DCs also act as antigen presenting cells (APCs) and play an important role in the development of adaptive immunity. The development of adaptive immunity requires intimate cooperation between APCs and T lymphocytes and results in microbe-specific immune responses. Moreover, adaptive immunity generates immunological memory, which rapidly and efficiently protects the host from reinfection. Properly functioning immune system requires efficient communication between cells. Cytokines are proteins, which mediate intercellular communication together with direct cell-cell contacts. Immune cells produce inflammatory cytokines rapidly following microbial contact. Inflammatory cytokines modulate the development of local immune response by binding to cell surface receptors, which results in the activation of intracellular signalling and modulates target cell gene expression. One class of inflammatory cytokines chemokines has a major role in regulating cellular traffic. Locally produced inflammatory chemokines guide the recruitment of effector cells to the site of inflammation during microbial infection. In this study two key questions were addressed. First, the ability of pathogenic and non-pathogenic Gram-positive bacteria to activate inflammatory cytokine and chemokine production in different human APCs was compared. In these studies macrophages and DCs were stimulated with pathogenic Steptococcus pyogenes or non-pathogenic Lactobacillus rhamnosus. The second aim of this thesis work was to analyze the role of pro-inflammatory cytokines in the regulation of microbe-induced chemokine production. In these studies bacteria-stimulated macrophages and influenza A virus-infected lung epithelial cells were used as model systems. The results of this study show that although macrophages and DCs share several common antimicrobial functions, these cells have significantly distinct responses against pathogenic and non-pathogenic Gram-positive bacteria. Macrophages were activated in a nearly similar fashion by pathogenic S. pyogenes and non-pathogenic L. rhamnosus. Both bacteria induced the production of similar core set of inflammatory chemokines consisting of several CC-class chemokines and CXCL8. These chemokines attract monocytes, neutrophils, dendritic cells and T cells. Thus, the results suggest that bacteria-activated macrophages efficiently recruit other effector cells to the site of inflammation. Moreover, macrophages seem to be activated by all bacteria irrespective of their pathogenicity. DCs, in contrast, were efficiently activated only by pathogenic S. pyogenes, which induced DC maturation and production of several inflammatory cytokines and chemokines. In contrast, L. rhamnosus-stimulated DCs matured only partially and, most importantly, these cells did not produce inflammatory cytokines or chemokines. L. rhamnosus-stimulated DCs had a phenotype of "semi-mature" DCs and this type of DCs have been suggested to enhance tolerogenic adaptive immune responses. Since DCs have an essential role in the development of adaptive immune response the results suggest that, in contrast to macrophages, DCs may be able to discriminate between pathogenic and non-pathogenic bacteria and thus mount appropriate inflammatory or tolerogenic adaptive immune response depending on the microbe in question. The results of this study also show that pro-inflammatory cytokines can contribute to microbe-induced chemokine production at multiple levels. S. pyogenes-induced type I interferon (IFN) was found to enhance the production of certain inflammatory chemokines in macrophages during bacterial stimulation. Thus, bacteria-induced chemokine production is regulated by direct (microbe-induced) and indirect (pro-inflammatory cytokine-induced) mechanisms during inflammation. In epithelial cells IFN- and tumor necrosis factor- (TNF-) were found to enhance the expression of PRRs and components of cellular signal transduction machinery. Pre-treatment of epithelial cells with these cytokines prior to virus infection resulted in markedly enhanced chemokine response compared to untreated cells. In conclusion, the results obtained from this study show that pro-inflammatory cytokines can enhance microbe-induced chemokine production during microbial infection by providing a positive feedback loop. In addition, pro-inflammatory cytokines can render normally low-responding cells to high chemokine producers via enhancement of microbial detection and signal transduction.

Juvenile neuronal ceroid lipofuscinosis; psychiatric symptoms, GAD-autoantibodies, and response to medication

Juvenile neuronal ceroid lipofuscinosis (JNCL) is one of the most common neurodegenerative diseases in childhood. Its clinical onset, with visual failure as the first sign, is between the ages of 4 to 8 years. During the disease progress, epilepsy, motor symptoms, cognitive decline, and psychiatric symptoms become apparent. It leads to premature death between ages 15 and 30. Treatment consists of symptomatic drug administration and various forms of rehabilitation, but to date, no curative treatment exists. To gain a more comprehensive picture of psychiatric problems, symptoms were evaluated by the Child Behavior Checklist, the Teacher Report Form, and the Children s Depression Inventory. The JNCL patients had a great number of severe psychiatric symptoms, with wide inter-individual variability. The most common symptoms were social, thought, attention, and sleep problems, somatic complaints, and aggressive behaviour. Patients with psychotropic treatment had more problems than did those without psychotropic treatment, and female patients had more problems than did males. Between 10 and 20% of the patients reported depressive symptoms. In a 5-year follow-up, [123I]β-CIT SPECT and MRI revealed a tendency of decreasing serotonin transporter (SERT) availability and progressive brain atrophy. The correlation between changes in midbrain SERT and total brain volume was positive; no correlation appeared between SERT or brain atrophy and depressive symptoms. Thus, it seems likely that the low SERT availability is associated with progressive brain atrophy; it may also predispose towards depression, however. An open survey of psychotropic drugs and their efficacy was performed on JNCL patients in Finland. The most commonly used psychotropic drugs were the antidepressant citalopram and the antipsychotic risperidone. Their efficacy was good or satisfactory in the majority of cases and they seemed well tolerated. Quetiapine had a marked effect on one patient with a history of severe psychotic symptoms. Glutamate decarboxylase 65 autoantibodies (GAD65ab), found in JNCL patients, indicate that an immunomediated reaction against GAD or GABAergic neurons may play a part in the underlying pathogenetic mechanism. GAD65ab s also appeared in the serum of all eight JNCL patients included and intermittent corticosteroid therapy was initiated in all cases. After one year, the GAD65ab s had disappeared in the two oldest patients, who experienced an improvement in motor symptoms and alertness associated with their prednisolone therapy. Two younger patients experienced a significant IQ increase, but no change in GADab s. A randomized study with longer follow-up time is needed, however, to clarify the effect of prednisolone on disease progression.

Cyclosporine A in the treatment of Interstitial Cystitis

Painful bladder syndrome/interstitial cystitis (PBS/IC) is a chronic urinary bladder disorder of unknown etiology characterized by symptoms of bladder pain and urinary frequency. PBS/IC is a chronic disease in which drug therapy has not led to significant success over the course of time. If the symptoms of PBS/IC are refractory to standard treatments, a possible cure might demand surgical intervention involving cystectomy. The eventual autoimmune etiology in mind, immunosuppressive drug therapy with cyclosporine A (CyA) was started to patients with refractory PBS/IC. CyA is a potent anti-inflammatory drug, a calcineurin inhibitor which inhibits T lymphocyte IL-2 produc-tion. T cells are present in abundance in inflammation of the bladder in PBS/IC. On the basis of a pilot, short-term study with CyA on PBS/IC, use of CyA was continued empirically over the long term. We conducted a prospective, randomized, six-month study in 64 patients comparing the effect of CyA with the FDA approved treatment, pentosan polysulfate sodium (PPS). We measured the drug effect on patient s symptoms, the potassium sensitivity test, and on urinary biomarkers. We further tested the impact of CyA, PPS, DMSO and BCG therapy on a health-related quality of life questionnaire and evaluated the response rate to treatment with these therapies. Long-term use of CyA was safe and effective in PBS/IC patients. The good clinical effect matured individually during the years in which CyA was continued. Cessation of medication led to the reappearance of symptoms, and restarting CyA to renewed alleviation, so that CyA was administered as continuous medication. The response rate to CyA increased during the study period, comprising 75% of CyA patients at six months. 19% of patients responded to PPS therapy. Adverse effects were more common in the CyA group, underlining the importance of monitoring the drug safety and appropriate titration of the dose. The potassium sensitivity test is positive in the majority of PBS/IC patients. Successful therapy of PBS/IC can alter nerve sensitivity to external potassium. This effect was seen more often after CyA therapy. Successful treatment of PBS/IC with CyA resulted to decreasing urinary levels of EGF. IL-6 levels in urine were higher among older patient with a longer history of PBS/IC. In these patients, reduced levels of urinary IL-6 were measured after CyA therapy. Patients who experience the best treatment response have improved quality of life according to the post-treatment health-related quality of life (HRQOL) questionnaire. CyA had more impact on the ma-jority of the aspects of QoL than PPS. Despite DMSO therapy being more successful than BCG in the count of responders, DMSO and BCG had equal effects on the HRQOL questionnaire.