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).

Talouskäsitysten vaikutus hallituksen suosioon Puolassa 2006–2007

Tutkimuksessa tarkastellaan äänestäjien talouskäsitysten vaikutusta hallituksen suosioon Puolassa vuosina 2006 ja 2007. Tutkimusasetelma juontaa juurensa poliittisten suhdannevaihteluiden teoriaan, jonka mukaan poliitikot pyrkivät manipuloimaan taloutta vaalien alla tullakseen uudelleen valituiksi. Vastuullisuushypoteesin mukaan äänestäjät palkitsevat poliitikot hyvästä taloustilanteesta. Näin ollen mikäli äänestäjät ovat tyytyväisiä talouteen he äänestävät hallitusta. Mikäli eivät, he äänestävät oppositiota. Miten äänestäjät sitten tekevät arvionsa taloudesta? Tutkielmassa selvitetään vaikuttiko äänestäjien mielipiteisiin käsitys nykyisestä vai tulevaisuuden taloustilanteesta. Käsitys nykyisestä taloustilanteesta perustuu havaintoihin jo toteutuneesta talouspolitiikasta. Tätä käsitystä kutsutaan retrospektiiviseksi näkemykseksi. Prospektiiviset talousnäkemykset koostuvat näkemyksestä ja odotuksista talouden tulevasta tilasta ja uskosta hallituksen kykyyn tarjota paras vaihtoehto suotuisalle talouskehitykselle. Aikaulottuvuuden lisäksi tutkielmassa testataan, vaikuttaako äänestäjiin enemmän heidän oma taloustilanteensa vai näkemys yleisestä talouden tilanteesta. Mikäli hallituksen suosio perustuu näkemyksiin henkilökohtaisen talouden tilasta, ovat äänestäjät egotrooppisia. Mikäli kannatuspäätös perustuu näkemykseen kansantalouden tilasta, ovat äänestäjät puolestaan sosiotrooppisia. Aineistona tutkielmassa käytetään uusinta saatavilla olevaa Puolan mielipidetiedustelun (Centrum Badania Opinii Publicznej) keräämää kyselyaineistoa vuosilta 2006 ja 2007. Tutkielmassa on yhdistetty kyselyaineistot 22:n kuukauden ajalta. Aineistoa on analysoitu logistisen regressioanalyysin menetelmin. Tutkielman perusteella talousnäkemyksistä suurin vaikutus hallituksen suosioon on äänestäjien näkemyksillä kansantalouden tulevaisuuden tilasta. Henkilökohtaisen talouden osalta positiiviset tulevaisuudennäkymät vaikuttavat positiivisesti myös hallituksen kannatukseen. Retrospektiivinen arvio henkilökohtaisesta taloudesta toimii kuitenkin teorian vastaisesti; oman taloudellisen tilanteen hyväksi arvioineiden todennäköisyys kannatta hallitusta oli pienempää kuin niillä, jotka arvioivat oman taloustilanteensa huonoksi. Kontrollimuuttujiksi valittiin joukko aiemmassa tutkimuksessa äänestyskäyttäytymiseen Puolassa vaikuttaneita tekijöitä. Näitä olivat ikä, sukupuoli, koulutus, asuinpaikka, näkemys työllisyystilanteesta, ideologinen sijoittuminen oikeisto–vasemmisto-akselilla sekä uskonnollisuus. Kontrollimuuttujista merkitseviksi osoittautuivat uskonnollisuus, oikeisto–vasemmisto-ideologia, koulutus, asuinpaikka sekä ikä. Kun edellä mainitut taustamuuttujat on kontrolloitu, taloustekijät selittävät noin viidesosan hallituksen kannatuksen todennäköisyyden vaihtelusta.

Helsingin seudun ruuhkamaksut yritysnäkökulmasta

Congestion of traffic is one of the biggest challenges for urban cities in global perspective. Car traffic and traffic jams are causing major problems and the congestion is predicted to worsen in the future. The greenhouse effect has caused a severe threat to the environment globally. On the other hand from the point of view of companies and other economic parties time and money has been lost because of the congestion of traffic. This work studies some possible traffic payment systems for the Helsinki Metropolitan area introducing three optional models and concentrating on the point of view of the economic parties. Central part of this work is formed by a research questionnaire, which was conducted among companies located in the Helsinki area and where more than 1000 responses were gained. The study researches the approaches of the respondents to the area s current traffic system, its development and urban congestion pricing and the answers are analyzed according to the size, industry and location of the companies. The economic aspect is studied by economic theory of industrial location and by emphasizing the meaning of smoothly running traffic for the economic world. Chapter three presents detailed information about traffic congestion, how today s car-centered society has been formed, what concrete things congestion means for economic life and how traffic congestion can be limited. Theoretically it is examined how urban traffic payment systems are working using examples from London and Stockholm where successful traffic payment experiences exist. The literature review analyzes urban development, increasing car traffic and Helsinki Metropolitan area on a structural point of view. The fourth chapter introduces a case study, which concentrates on Helsinki Metropolitan area s different structures, the congestion situation in Helsinki and the introduction of the traffic payment system clarification. Currently the region is experiencing a phase where big changes are happening in the planning of traffic. The traffic systems are being unified to consider the whole region in the future. Also different advices for the increasing traffic congestion problems are needed. Chapter five concentrates on the questionnaire and theme interviews and introduces the research findings. The respondents overall opinion of the traffic payments is quite skeptical. There were some regional differences found and especially taxi, bus and cargo and transit enterprises shared the most negative opinion. Economic parties were worried especially because of the traffic congestion is causing harm for the business travel and the employees traveling to and from work. According to the respondents the best option from the traffic payment models was the ring model where the payment places would be situated inside the Ring Road III. Both the company representatives and other key decision makers see public transportation as a good and powerful tool to decrease traffic congestion. The only question, which remains, is where to find investors willing to invest in public transportation if economic representatives do not believe in pricing the traffic by for example traffic payment systems.

Methods and applications for improving parameter prediction models for stand structures in Finland

This thesis report attempts to improve the models for predicting forest stand structure for practical use, e.g. forest management planning (FMP) purposes in Finland. Comparisons were made between Weibull and Johnson s SB distribution and alternative regression estimation methods. Data used for preliminary studies was local but the final models were based on representative data. Models were validated mainly in terms of bias and RMSE in the main stand characteristics (e.g. volume) using independent data. The bivariate SBB distribution model was used to mimic realistic variations in tree dimensions by including within-diameter-class height variation. Using the traditional method, diameter distribution with the expected height resulted in reduced height variation, whereas the alternative bivariate method utilized the error-term of the height model. The lack of models for FMP was covered to some extent by the models for peatland and juvenile stands. The validation of these models showed that the more sophisticated regression estimation methods provided slightly improved accuracy. A flexible prediction and application for stand structure consisted of seemingly unrelated regression models for eight stand characteristics, the parameters of three optional distributions and Näslund s height curve. The cross-model covariance structure was used for linear prediction application, in which the expected values of the models were calibrated with the known stand characteristics. This provided a framework to validate the optional distributions and the optional set of stand characteristics. Height distribution is recommended for the earliest state of stands because of its continuous feature. From the mean height of about 4 m, Weibull dbh-frequency distribution is recommended in young stands if the input variables consist of arithmetic stand characteristics. In advanced stands, basal area-dbh distribution models are recommended. Näslund s height curve proved useful. Some efficient transformations of stand characteristics are introduced, e.g. the shape index, which combined the basal area, the stem number and the median diameter. Shape index enabled SB model for peatland stands to detect large variation in stand densities. This model also demonstrated reasonable behaviour for stands in mineral soils.

Toxicant distributions and impact models in environmental risk analysis of waste sites

Myrkyllisten aineiden jakaumat ja vaikutusmallit jätealueiden ympäristöriskien analyysissä.

Forest sector simulation models as methodological tools in forest policy analysis.

XVIII IUFRO World Congress, Ljubljana 1986.

Putative neuroprotective compounds in in vitro models of dopaminergic neurodegeneration

Parkinson´s disease (PD) is a debilitating age-related neurological disorder that affects various motor skills and can lead to a loss of cognitive functions. The motor symptoms are the result of the progressive degeneration of dopaminergic neurons within the substantia nigra. The factors that influence the pathogenesis and the progression of the neurodegeneration remain mostly unclear. This study investigated the role of various programmed cell death (PCD) pathways, oxidative stress, and glial cells both in dopaminergic neurodegeneration and in the protective action of various drugs. To this end, we exposed dopaminergic neuroblastoma cells (SH-SY5Y cells) to 6-OHDA, which produces oxidative stress and activates various PCD modalities that result in neuronal degeneration. Additionally, to explore the role of glia, we prepared rat midbrain primary mixed-cell cultures containing both neurons and glial cell types such as microglia and astroglia and then exposed the cultures to either MPP plus or lipopolysaccharide. Our results revealed that 6-OHDA activated several PCD pathways including apoptosis, autophagic stress, lysosomal membrane permeabilization, and perhaps paraptosis in SH-SY5Y cells. Furthermore, we found that minocycline protected SH-SY5Y cells from 6-OHDA by inhibiting both apoptotic and non-apoptotic PCD modalities. We also observed an inconsistent neuroprotective effect of various dietary anti-oxidant compounds against 6-OHDA toxicity in vitro in SH-SY5Y cells. Specifically, quercetin and curcumin exerted neuroprotection only within a narrow concentration range and a limited time frame, whereas resveratrol and epigallocatechin 3-gallate provided no protection whatsoever. Lastly, we found that molecules such as amantadine may delay or even halt the neurodegeneration in primary cell cultures by inhibiting the release of neurotoxic factors from overactivated microglia and by enhancing the pro-survival actions of astroglia. Together these data suggest that the strategy of dampening oxidative species with anti-oxidants is less effective than preventing the production of toxic factors such as oxidative and pro-inflammatory molecules by pathologically activated microglia. This would subsequently prevent the activation of various PCD modalities that cause neuronal degeneration.

Playing Games on Sets and Models

The most prominent objective of the thesis is the development of the generalized descriptive set theory, as we call it. There, we study the space of all functions from a fixed uncountable cardinal to itself, or to a finite set of size two. These correspond to generalized notions of the universal Baire space (functions from natural numbers to themselves with the product topology) and the Cantor space (functions from natural numbers to the {0,1}-set) respectively. We generalize the notion of Borel sets in three different ways and study the corresponding Borel structures with the aims of generalizing classical theorems of descriptive set theory or providing counter examples. In particular we are interested in equivalence relations on these spaces and their Borel reducibility to each other. The last chapter shows, using game-theoretic techniques, that the order of Borel equivalence relations under Borel reduciblity has very high complexity. The techniques in the above described set theoretical side of the thesis include forcing, general topological notions such as meager sets and combinatorial games of infinite length. By coding uncountable models to functions, we are able to apply the understanding of the generalized descriptive set theory to the model theory of uncountable models. The links between the theorems of model theory (including Shelah's classification theory) and the theorems in pure set theory are provided using game theoretic techniques from Ehrenfeucht-Fraïssé games in model theory to cub-games in set theory. The bottom line of the research declairs that the descriptive (set theoretic) complexity of an isomorphism relation of a first-order definable model class goes in synch with the stability theoretical complexity of the corresponding first-order theory. The first chapter of the thesis has slightly different focus and is purely concerned with a certain modification of the well known Ehrenfeucht-Fraïssé games. There we (me and my supervisor Tapani Hyttinen) answer some natural questions about that game mainly concerning determinacy and its relation to the standard EF-game

"Kyl mä varmaan kohta ymmärrän." : Asunnon suunnittelu -opetusohjelma oppilaiden ajattelun ja oppimisen haastajana peruskoulun kotitalousopetuksessa

"I will soon understand." The House Planning Program as an Enhancer of Pupils´ Thinking Skills and Learning in Home Economics at Comprehensive School The aim of the research was to build a study program for home economics education in order to enhance pupils´ thinking skills. The program was based on the intervention programs or strategies known as Cognitive Acceleration (CA), which are founded on the theories of Jean Piaget, Lev Vygotsky, and Reuven Feuerstein. In addition, Carl Bereiter s theory of knowledge building was integrated to the research. The viewpoint of home economics was based on the multidimensional foundation of home economics science, particularly household technology and house planning. I first analyzed the kind of body of knowledge home economics science and home economics education provides for enhancing thinking skills in home economics. For the study, a CATE (Cognitive Acceleration through Technology Education) program was adapted and modified and a House Planning program was created for home economics classes. The house planning program consisted of five lessons during which pupils learned how to make functional floor plans as well as choose furniture, household appliances and materials for the home. In order to obtain the required data, various classroom experiments were arranged in 2005 with grade 9 pupils at a comprehensive school in Helsinki. All the experiments were videotaped, and five hours of the videotaped material was edited and transcribed for closer examination. The material consisted of all the video-recorded activity of the selected study group. Interaction study and content analysis were used to analyze the data. Following the experiments, a small survey was conducted to solicit pupils´ and teacher´s opinions of the program. The analysis sheds light on the nature of pupils´ interaction and knowledge building in small group activity. Special attention was given to tracking pupils´ interaction during the socalled construction zone activity. The models and qualities of teacher´s aid and support during the lessons were examined as well. The results revealed the versatility of the pupils social interaction and common knowledge building that occurred during the small group activity. The pupils discussions, including their arguments, their sharing of ideas, and the multiple perspectives that emerged reflected home economics knowledge building. The construction zone activity appeared through expressions of cognitive conflict and metacognition. Cognitive conflict was evident in the pupils´ words and involved questioning, doubting and disputing. The metacognitive activity emerged by thinking aloud, choosing the strategies, and negotiating the results. The pupils also coordinated their activity, allocated the responsibility, and systematized their work. The teacher assisted by preparing new themes for the pupils and by participating in the small group work. The teacher´s help during the small group sessions strengthened the pupils activity in the construction zone. The results showed that one can utilize the wide multidisciplinary basis of home economics, which includes scientific knowledge but also the knowledge derived from practical activity and experience. In this study practical activity was undertaken as a planning project the result of which was a plan or a new vision for the house planning situation. The study showed that the House Planning program was able to enhance the pupils´ social interaction and collaboration. The learning environment challenged the pupils in a way that could be a gateway to further developing their thinking skills. The method of analysis created in the study could be a potential tool for examining social interaction, construction zone activity, and knowledge building in other learning environments as well. Key words: home economics, house planning, classroom experiment, thinking skills,cognitive conflict, metacognition, social interaction, knowledge building

Finite-State Spell-Checking with Weighted Language and Error Models

In this paper we present simple methods for construction and evaluation of finite-state spell-checking tools using an existing finite-state lexical automaton, freely available finite-state tools and Internet corpora acquired from projects such as Wikipedia. As an example, we use a freely available open-source implementation of Finnish morphology, made with traditional finite-state morphology tools, and demonstrate rapid building of Northern Sámi and English spell checkers from tools and resources available from the Internet.