Dynamic Factor Models and Forecasting Finnish Macroeconomic Variables

In recent years, thanks to developments in information technology, large-dimensional datasets have been increasingly available. Researchers now have access to thousands of economic series and the information contained in them can be used to create accurate forecasts and to test economic theories. To exploit this large amount of information, researchers and policymakers need an appropriate econometric model.Usual time series models, vector autoregression for example, cannot incorporate more than a few variables. There are two ways to solve this problem: use variable selection procedures or gather the information contained in the series to create an index model. This thesis focuses on one of the most widespread index model, the dynamic factor model (the theory behind this model, based on previous literature, is the core of the first part of this study), and its use in forecasting Finnish macroeconomic indicators (which is the focus of the second part of the thesis). In particular, I forecast economic activity indicators (e.g. GDP) and price indicators (e.g. consumer price index), from 3 large Finnish datasets. The first dataset contains a large series of aggregated data obtained from the Statistics Finland database. The second dataset is composed by economic indicators from Bank of Finland. The last dataset is formed by disaggregated data from Statistic Finland, which I call micro dataset. The forecasts are computed following a two steps procedure: in the first step I estimate a set of common factors from the original dataset. The second step consists in formulating forecasting equations including the factors extracted previously. The predictions are evaluated using relative mean squared forecast error, where the benchmark model is a univariate autoregressive model. The results are dataset-dependent. The forecasts based on factor models are very accurate for the first dataset (the Statistics Finland one), while they are considerably worse for the Bank of Finland dataset. The forecasts derived from the micro dataset are still good, but less accurate than the ones obtained in the first case. This work leads to multiple research developments. The results here obtained can be replicated for longer datasets. The non-aggregated data can be represented in an even more disaggregated form (firm level). Finally, the use of the micro data, one of the major contributions of this thesis, can be useful in the imputation of missing values and the creation of flash estimates of macroeconomic indicator (nowcasting).

Learning Challenges in Biogas Production for Sustainability : An activity theoretical study of a network from a swine industry chain

This study is about the challenges of learning in the creation and implementation of new sustainable technologies. The system of biogas production in the Programme of Sustainable Swine Production (3S Programme) conducted by the Sadia food processing company in Santa Catarina State, Brazil, is used as a case example for exploring the challenges, possibilities and obstacles of learning in the use of biogas production as a way to increase the environmental sustainability of swine production. The aim is to contribute to the discussion about the possibilities of developing systems of biogas production for sustainability (BPfS). In the study I develop hypotheses concerning the central challenges and possibilities for developing systems of BPfS in three phases. First, I construct a model of the network of activities involved in the BP for sustainability in the case study. Next, I construct a) an idealised model of the historically evolved concepts of BPfS through an analysis of the development of forms of BP and b) a hypothesis of the current central contradictions within and between the activity systems involved in BP for sustainability in the case study. This hypothesis is further developed through two actual empirical analyses: an analysis of the actors senses in taking part in the system, and an analysis of the disturbance processes in the implementation and operation of the BP system in the 3S Programme. The historical analysis shows that BP for sustainability in the 3S Programme emerged as a feasible solution for the contradiction between environmental protection and concentration, intensification and specialisation in swine production. This contradiction created a threat to the supply of swine to the food processing company. In the food production activity, the contradiction was expressed as a contradiction between the desire of the company to become a sustainable company and the situation in the outsourced farms. For the swine producers the contradiction was expressed between the contradictory rules in which the market exerted pressure which pushed for continual increases in scale, specialisation and concentration to keep the production economically viable, while the environmental rules imposed a limit to this expansion. Although the observed disturbances in the biogas system seemed to be merely technical and localised within the farms, the analysis proposed that these disturbances were formed in and between the activity systems involved in the network of BPfS during the implementation. The disturbances observed could be explained by four contradictions: a) contradictions between the new, more expanded activity of sustainable swine production and the old activity, b) a contradiction between the concept of BP for carbon credits and BP for local use in the BPfS that was implemented, c) contradictions between the new UNFCCC1 methodology for applying for carbon credits and the small size of the farms, and d) between the technologies of biogas use and burning available in the market and the small size of the farms. The main finding of this study relates to the zone of proximal development (ZPD) of the BPfS in Sadia food production chain. The model is first developed as a general model of concepts of BPfS and further developed here to the specific case of the BPfS in the 3S Programme. The model is composed of two developmental dimensions: societal and functional integration. The dimension of societal integration refers to the level of integration with other activities outside the farm. At one extreme, biogas production is self-sufficient and highly independent and the products of BP are consumed within the farm, while at the other extreme BP is highly integrated in markets and networks of collaboration, and BP products are exchanged within the markets. The dimension of functional integration refers to the level of integration between products and production processes so that economies of scope can be achieved by combining several functions using the same utility. At one extreme, BP is specialised in only one product, which allows achieving economies of scale, while at the other extreme there is an integrated production in which several biogas products are produced in order to maximise the outcomes from the BP system. The analysis suggests that BP is moving towards a societal integration, towards the market and towards a functional integration in which several biogas products are combined. The model is a hypothesis to be further tested through interventions by collectively constructing the new proposed concept of BPfS. Another important contribution of this study refers to the concept of the learning challenge. Three central learning challenges for developing a sustainable system of BP in the 3S Programme were identified: 1) the development of cheaper and more practical technologies of burning and measuring the gas, as well as the reduction of costs of the process of certification, 2) the development of new ways of using biogas within farms, and 3) the creation of new local markets and networks for selling BP products. One general learning challenge is to find more varied and synergic ways of using BP products than solely for the production of carbon credits. Both the model of the ZPD of BPfS and the identified learning challenges could be used as learning tools to facilitate the development of biogas production systems. The proposed model of the ZPD could be used to analyse different types of agricultural activities that face a similar contradiction. The findings could be used in interventions to help actors to find their own expansive actions and developmental projects for change. Rather than proposing a standardised best concept of BPfS, the idea of these learning tools is to facilitate the analysis of local situations and to help actors to make their activities more sustainable.

Genetic polymorphisms and laboratory variables as predictors of blood pressure response to antihypertensive drugs

Hypertension is one of the major risk factors for cardiovascular morbidity. The advantages of antihypertensive therapy have been clearly demonstrated, but only about 30% of hypertensive patients have their blood pressure (BP) controlled by such treatment. One of the reasons for this poor BP control may lie in the difficulty in predicting BP response to antihypertensive treatment. The average BP reduction achieved is similar for each drug in the main classes of antihypertensive agents, but there is a marked individual variation in BP responses to any given drug. The purpose of the present study was to examine BP response to four different antihypertensive monotherapies with regard to demographic characteristics, laboratory test results and common genetic polymorphisms. The subjects of the present study are participants in the pharmacogenetic GENRES Study. A total of 208 subjects completed the whole study protocol including four drug treatment periods of four weeks, separated by four-week placebo periods. The study drugs were amlodipine, bisoprolol, hydrochlorothiazide and losartan. Both office (OBP) and 24-hour ambulatory blood pressure (ABP) measurements were carried out. BP response to study drugs were related to basic clinical characteristics, pretreatment laboratory test results and common polymorphisms in genes coding for components of the renin-angiotensin system, alpha-adducin (ADD1), beta1-adrenergic receptor (ADRB1) and beta2-adrenergic receptor (ADRB2). Age was positively correlated with BP responses to amlodipine and with OBP and systolic ABP responses to hydrochlorothiazide, while body mass index was negatively correlated with ABP responses to amlodipine. Of the laboratory test results, plasma renin activity (PRA) correlated positively with BP responses to losartan, with ABP responses to bisoprolol, and negatively with ABP responses to hydrochlorothiazide. Uniquely to this study, it was found that serum total calcium level was negatively correlated with BP responses to amlodipine, whilst serum total cholesterol level was negatively correlated with ABP responses to amlodipine. There were no significant associations of angiotensin II type I receptor 1166A/C, angiotensin converting enzyme I/D, angiotensinogen Met235Thr, ADD1 Gly460Trp, ADRB1 Ser49Gly and Gly389Arg and ADRB2 Arg16Gly and Gln27Glu polymorphisms with BP responses to the study drugs. In conclusion, this study confirmed the relationship between pretreatment PRA levels and response to three classes of antihypertensive drugs. This study is the first to note a significant inverse relation between serum calcium level and responsiveness to a calcium channel blocker. However, this study could not replicate the observations that common polymorphisms in angiotensin II type I receptor, angiotensin converting enzyme, angiotensinogen, ADD1, ADRB1, or ADRB2 genes can predict BP response to antihypertensive drugs.

The Transcriptional Regulation of Retrotransposon BARE

The purpose of this research project was to understand the steps of the retrotransposon BARE (BArley REtrotransposon) life cycle, from regulation of transcription to Virus-Like Particle (VLP) formation and ultimate integration back into the genome. Our study concentrates mainly on BARE1 transcriptional regulation because transcription is the crucial first step in the retrotransposon life cycle. The BARE element is a Class I LTR (Long Terminal Repeat) retrotransposon belonging to the Copia superfamily and was originally isolated in our research group. The LTR retrotransposons are transcribed from promoters in the LTRs and encode proteins for packaging of their transcripts, the reverse transcription of the transcripts into cDNA, and integration of the cDNA back into the genome. BARE1 is translated as a single polyprotein and cleaved into the capsid protein (GAG), integrase (IN), and reverse transcriptase-RNaseH (RT-RH) by the integral aspartic proteinase (AP). The BARE retrotransposon family comprises more than 104 copies in the barley (Hordeum vulgare) genome. The element is bound by long terminal repeats (LTRs, 1829 bp) containing promoters required for replication, signals for RNA processing, and motifs necessary for the integration of the cDNA. Members of the BARE1 subfamily are transcribed, translated, and form virus-like particles. Several basic questions concerning transcription are explored in the thesis: BARE1 transcription control, promoter choice in different barley tissues, start and termination sites for BARE transcripts, and BARE1 transcript polyadenylation (I). Polyadenylation is an important step during mRNA maturation, and determines its stability and translatability among other characteristics. Our work has found a novel way used by BARE1 to make extra GAG protein, which is critical for VLP formation. The discovery that BARE1 uses one RNA population for protein synthesis and another RNA population for making cDNA has established the most important step of the BARE1 life cycle (III). The relationship between BARE1 and BARE2 has been investigated. Besides BARE, we have examined the retrotransposon Cassandra (II), which uses a very different transcriptional mechanism and a fully parasitic life cycle. In general, this work is focused on BARE1 promoter activity, transcriptional regulation including differential promoter usage and RNA pools, extra GAG protein production and VLP formation. The results of this study give new insights into transcription regulation of LTR retrotransposons.