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.

The Macroeconomic Effects of Fiscal Policy in a Small Open Economy under a Flexible Exchange Rate Regime

This licentiate's thesis analyzes the macroeconomic effects of fiscal policy in a small open economy under a flexible exchange rate regime, assuming that the government spends exclusively on domestically produced goods. The motivation for this research comes from the observation that the literature on the new open economy macroeconomics (NOEM) has focused almost exclusively on two-country global models and the analyses of the effects of fiscal policy on small economies are almost completely ignored. This thesis aims at filling in the gap in the NOEM literature and illustrates how the macroeconomic effects of fiscal policy in a small open economy depend on the specification of preferences. The research method is to present two theoretical model that are extensions to the model contained in the Appendix to Obstfeld and Rogoff (1995). The first model analyzes the macroeconomic effects of fiscal policy, making use of a model that exploits the idea of modelling private and government consumption as substitutes in private utility. The model offers intuitive predictions on how the effects of fiscal policy depend on the marginal rate of substitution between private and government consumption. The findings illustrate that the higher the substitutability between private and government consumption, (i) the bigger is the crowding out effect on private consumption (ii) and the smaller is the positive effect on output. The welfare analysis shows that the less fiscal policy decreases welfare the higher is the marginal rate of substitution between private and government consumption. The second model of this thesis studies how the macroeconomic effects of fiscal policy depend on the elasticity of substitution between traded and nontraded goods. This model reveals that this elasticity a key variable to explain the exchange rate, current account and output response to a permanent rise in government spending. Finally, the model demonstrates that temporary changes in government spending are an effective stabilization tool when used wisely and timely in response to undesired fluctuations in output. Undesired fluctuations in output can be perfectly offset by an opposite change in government spending without causing any side-effects.

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.

A Cointegration Approach to Topics in Empirical Macroeconomics (summary section only)

Mikael Juselius’ doctoral dissertation covers a range of significant issues in modern macroeconomics by empirically testing a number of important theoretical hypotheses. The first essay presents indirect evidence within the framework of the cointegrated VAR model on the elasticity of substitution between capital and labor by using Finnish manufacturing data. Instead of estimating the elasticity of substitution by using the first order conditions, he develops a new approach that utilizes a CES production function in a model with a 3-stage decision process: investment in the long run, wage bargaining in the medium run and price and employment decisions in the short run. He estimates the elasticity of substitution to be below one. The second essay tests the restrictions implied by the core equations of the New Keynesian Model (NKM) in a vector autoregressive model (VAR) by using both Euro area and U.S. data. Both the new Keynesian Phillips curve and the aggregate demand curve are estimated and tested. The restrictions implied by the core equations of the NKM are rejected on both U.S. and Euro area data. These results are important for further research. The third essay is methodologically similar to essay 2, but it concentrates on Finnish macro data by adopting a theoretical framework of an open economy. Juselius’ results suggests that the open economy NKM framework is too stylized to provide an adequate explanation for Finnish inflation. The final essay provides a macroeconometric model of Finnish inflation and associated explanatory variables and it estimates the relative importance of different inflation theories. His main finding is that Finnish inflation is primarily determined by excess demand in the product market and by changes in the long-term interest rate. This study is part of the research agenda carried out by the Research Unit of Economic Structure and Growth (RUESG). The aim of RUESG it to conduct theoretical and empirical research with respect to important issues in industrial economics, real option theory, game theory, organization theory, theory of financial systems as well as to study problems in labor markets, macroeconomics, natural resources, taxation and time series econometrics. RUESG was established at the beginning of 1995 and is one of the National Centers of Excellence in research selected by the Academy of Finland. It is financed jointly by the Academy of Finland, the University of Helsinki, the Yrjö Jahnsson Foundation, Bank of Finland and the Nokia Group. This support is gratefully acknowledged.

Preparation, structural analysis and prebiotic potential of arabinoxylo-oligosaccharides

Arabinoxylo-oligosaccharides (AXOS) can be prepared enzymatically from arabinoxylans (AX) and AXOS are known to possess prebiotic potential. Here the structural features of 10 cereal AX were examined. AX were hydrolysed by Shearzyme® to prepare AXOS, and their structures were fully analysed. The prebiotic potential of the purified AXOS was studied in the fermentation experiments with bifidobacteria and faecal microbiota. In AX extracted from flours and bran, high amounts of a-L-Araf units are attached to the b-D-Xylp main chain, whereas moderate or low degree of substitution was found from husks, cob and straw. Nuclear magnetic resonance (NMR) spectroscopy showed that flour and bran AX contain high amounts of a-L-Araf units bound to the O-3 of b-D-Xylp residues and doubly substituted b-D-Xylp units with a-L-Araf substituents at O-2 and O-3. Barley husk and corn cob AX contain high amounts of b-D-Xylp(1→2)-a-L-Araf(1→3) side chains, which can also be found in AX from oat spelts and rice husks, and in lesser amounts in wheat straw AX. Rye and wheat flour AX and oat spelt AX were hydrolysed by Shearzyme® (with Aspergillus aculeatus GH10 endo-1,4-b-D-xylanase as the main enzyme) for the production of AXOS on a milligram scale. The AXOS were purified and their structures fully analysed, using mass spectrometry (MS) and 1D and 2D NMR spectroscopy. Monosubstituted xylobiose and xylotriose with a-L-Araf attached to the O-3 or O-2 of the nonreducing end b-D-Xylp unit and disubstituted AXOS with two a-L-Araf units at the nonreducing end b-D-Xylp unit of xylobiose or xylotriose were produced. Xylobiose with b-D-Xylp(1→2)-a-L-Araf(1→3) side chain was also purified. These AXOS were used as standards in further identification and quantification of corresponding AXOS from the hydrolysates in high-performance anion-exchange chromatography with pulsed amperometric detection (HPAEC-PAD) analysis. The prebiotic potential of AXOS was tested in in vitro fermentation experiments. Bifidobacterium adolescentis ATCC 15703 and B. longum ATCC 15707 utilized AXOS from the AX hydrolysates. Both species released L-arabinose from AXOS, but B. adolescentis consumed the XOS formed, whereas B. longum fermented the L-arabinose released. The third species tested, B. breve ATCC 15700, grew poorly on these substrates. When cultivated on pure AXOS, the bifidobacterial mixture utilized pure singly substituted AXOS almost completely, but no growth was detected with pure doubly substituted AXOS as substrates. However, doubly substituted AXOS were utilized from the mixture of xylose, XOS and AXOS. Faecal microbiota utilized both pure singly and doubly substituted AXOS. Thus, a mixture of singly and doubly substituted AXOS could function as a suitable, slowly fermenting prebiotic substance. This thesis contributes to the structural information on cereal AX and preparation of mono and doubly substituted AXOS from AX. Understanding the utilization strategies is fundamental in evaluating the prebiotic potential of AXOS. Further research is still required before AXOS can be used in applications for human consumption.

The Impact of Emissions Trading on the Price of Electricity in Nord Pool : Market Power and Price Determination in the Nordic Electricity Market

The objective of this thesis is to find out how dominant firms in a liberalised electricity market will react when they face an increase in the level of costs due to emissions trading, and how this will effect the price of electricity. The Nordic electricity market is chosen as the setting in which to examine the question, since recent studies on the subject suggest that interaction between electricity markets and emissions trading is very much dependent on conditions specific to each market area. There is reason to believe that imperfect competition prevails in the Nordic market, thus the issue is approached through the theory of oligopolistic competition. The generation capacity available at the market, marginal cost of electricity production and seasonal levels of demand form the data based on which the dominant firms are modelled using the Cournot model of competition. The calculations are made for two levels of demand, high and low, and with several values of demand elasticity. The producers are first modelled under no carbon costs and then by adding the cost of carbon dioxide at 20€/t to those technologies subject to carbon regulation. In all cases the situation under perfect competition is determined as a comparison point for the results of the Cournot game. The results imply that the potential for market power does exist on the Nordic market, but the possibility for exercising market power depends on the demand level. In season of high demand the dominant firms may raise the price significantly above competitive levels, and the situation is aggravated when the cost of carbon dioixide is accounted for. Under low demand leves there is no difference between perfect and imperfect competition. The results are highly dependent on the price elasticity of demand.

Studies on the Cell Wall Structure and on the Mechanical Properties of Norway Spruce

The structure and the mechanical properties of wood of Norway spruce (Picea abies [L.] Karst.) were studied using small samples from Finland and Sweden. X-ray diffraction (XRD) was used to determine the orientation of cellulose microfibrils (microfibril angle, MFA), the dimensions of cellulose crystallites and the average shape of the cell cross-section. X-ray attenuation and x-ray fluorescence measurements were used to study the chemical composition and the trace element content. Tensile testing with in situ XRD was used to characterise the mechanical properties of wood and the deformation of crystalline cellulose within the wood cell walls. Cellulose crystallites were found to be 192 284 Å long and 28.9 33.4 Å wide in chemically untreated wood and they were longer and wider in mature wood than in juvenile wood. The MFA distribution of individual Norway spruce tracheids and larger samples was asymmetric. In individual cell walls, the mean MFA was 19 30 degrees, while the mode of the MFA distribution was 7 21 degrees. Both the mean MFA and the mode of the MFA distribution decreased as a function of the annual ring. Tangential cell walls exhibited smaller mean MFA and mode of the MFA distribution than radial cell walls. Maceration of wood material caused narrowing of the MFA distribution and removed contributions observed at around 90 degrees. In wood of both untreated and fertilised trees, the average shape of the cell cross-section changed from circular via ambiguous to rectangular as the cambial age increased. The average shape of the cell cross-section and the MFA distribution did not change as a result of fertilisation. The mass absorption coefficient for x-rays was higher in wood of fertilised trees than in that of untreated trees and wood of fertilised trees contained more of the elements S, Cl, and K, but a smaller amount of Mn. Cellulose crystallites were longer in wood of fertilised trees than in that of untreated trees. Kraft cooking caused widening and shortening of the cellulose crystallites. Tensile tests parallel to the cells showed that if the mean MFA is initially around 10 degrees or smaller, no systematic changes occur in the MFA distribution due to strain. The role of mean MFA in defining the tensile strength or the modulus of elasticity of wood was not as dominant as that reported earlier. Crystalline cellulose elongated much less than the entire samples. The Poisson ratio νca of crystalline cellulose in Norway spruce wood was shown to be largely dependent on the surroundings of crystalline cellulose in the cell wall, varying between -1.2 and 0.8. The Poisson ratio was negative in kraft cooked wood and positive in chemically untreated wood. In chemically untreated wood, νca was larger in mature wood and in latewood compared to juvenile wood and earlywood.

Income inequality in the process of economic development : An empirical approach

This thesis studies the effect of income inequality on economic growth. This is done by analyzing panel data from several countries with both short and long time dimensions of the data. Two of the chapters study the direct effect of inequality on growth, and one chapter also looks at the possible indirect effect of inequality on growth by assessing the effect of inequality on savings. In Chapter two, the effect of inequality on growth is studied by using a panel of 70 countries and a new EHII2008 inequality measure. Chapter contributes on two problems that panel econometric studies on the economic effect of inequality have recently encountered: the comparability problem associated with the commonly used Deininger and Squire s Gini index, and the problem relating to the estimation of group-related elasticities in panel data. In this study, a simple way to 'bypass' vagueness related to the use of parametric methods to estimate group-related parameters is presented. The idea is to estimate the group-related elasticities implicitly using a set of group-related instrumental variables. The estimation results with new data and method indicate that the relationship between income inequality and growth is likely to be non-linear. Chapter three incorporates the EHII2.1 inequality measure and a panel with annual time series observations from 38 countries to test the existence of long-run equilibrium relation(s) between inequality and the level of GDP. Panel unit root tests indicate that both the logarithmic EHII2.1 inequality measure and the logarithmic GDP per capita series are I(1) nonstationary processes. They are also found to be cointegrated of order one, which implies that there is a long-run equilibrium relation between them. The long-run growth elasticity of inequality is found to be negative in the middle-income and rich economies, but the results for poor economies are inconclusive. In the fourth Chapter, macroeconomic data on nine developed economies spanning across four decades starting from the year 1960 is used to study the effect of the changes in the top income share to national and private savings. The income share of the top 1 % of population is used as proxy for the distribution of income. The effect of inequality on private savings is found to be positive in the Nordic and Central-European countries, but for the Anglo-Saxon countries the direction of the effect (positive vs. negative) remains somewhat ambiguous. Inequality is found to have an effect national savings only in the Nordic countries, where it is positive.

Aikakauslehtipapereiden pitkän aikavälin kulutus Yhdysvalloissa

The United States is the world s single biggest market area, where the demand for graphic papers has increased by 80 % during the last three decades. However, during the last two decades there have been very big unpredictable changes in the graphic paper markets. For example, the consumption of newsprint started to decline from the late 1980 s, which was surprising compared to the historical consumption and projections. The consumption has declined since. The aim of this study was to see how magazine paper consumption will develop in the United States until 2030. The long-term consumption projection was made using mainly two methods. The first method was to use trend analysis to see how and if the consumption has changed since 1980. The second method was to use qualitative estimate. These estimates are then compared to the so-called classical model projections, which are usually mentioned and used in forestry literature. The purpose of the qualitative analysis is to study magazine paper end-use purposes and to analyze how and with what intensity the changes in society will effect to magazine paper consumption in the long-term. The framework of this study covers theories such as technology adaptation, electronic substitution, electronic publishing and Porter s threat of substitution. Because this study deals with markets, which have showed signs of structural change, a very substantial part of this study covers recent development and newest possible studies and statistics. The following were among the key findings of this study. Different end-uses have very different kinds of future. Electronic substitution is very likely in some end-use purposes, but not in all. Young people i.e. future consumers have very different manners, habits and technological opportunities than our parents did. These will have substantial effects in magazine paper consumption in the long-term. This study concludes to the fact that the change in magazine paper consumption is more likely to be gradual (evolutionary) than sudden collapse (revolutionary). It is also probable that the years of fast growing consumption of magazine papers are behind. Besides the decelerated growth, the consumption of magazine papers will decline slowly in the long-term. The decline will be faster depending on how far in the future we ll extend the study to.

Mannans as film formers and emulsion stabilizers

Mannans are abundant plant polysaccharides found in the endosperm of certain leguminous seeds (guar gum galactomannan, GG; locust bean gum galactomannan, LBG), in the tuber of the konjac plant (konjac glucomannan, KGM), and in softwoods (galactoglucomannan, GGM). This study focused on the effects of the chemical structure of mannans on their film-forming and emulsion-stabilizing properties. Special focus was on spruce GGM, which is an interesting new product from forest biorefineries. A plasticizer was needed for the formation of films from mannans other than KGM and the optimal proportion was 40% (w/w of polymers) glycerol or sorbitol. Galactomannans with lower galactose content (LBG, modified GG) produced films with higher elongation at break and tensile strength. The mechanical properties of GG-based films were improved by decreasing the degree of polymerization of the polysaccharide with moderate mannanase treatments. The improvement of mechanical properties of GGM-based films was sought by blending GGM with each of poly(vinyl alcohol) (PVOH), corn arabinoxylan (cAX), and KGM. Adding other polymers increased the elongation at break of GGM blend films. The tensile strength of films increased with increasing amounts of PVOH and KGM, but the effect of cAX was the opposite. Dynamic mechanical analysis showed two separate loss modulus peaks for blends of GGM and PVOH, but a single peak for all other films. Optical and scanning electron microscopy confirmed good miscibility of GGM with cAX and KGM. In contrast, films blended from GGM and PVOH showed phase separation. GGM and KGM were mixed with cellulose nanowhiskers (CNW) to form composite films. Addition of CNW to KGM-based films induced the formation of fiberlike structures with lengths of several millimeters. In GGM-based films, rodlike structures with lengths of tens of micrometers were formed. Interestingly, the notable differences in the film structure did not appear to be related to the mechanical and thermal properties of the films. Permeability properties of GGM-based films were compared to those of films from commercial mannans KGM, GG, and LBG. GGM-based films had the lowest water vapor permeability when compared to films from other mannans. The oxygen permeability of GGM films was of the same magnitude as that of commercial polyethylene / ethylene vinyl alcohol / polyethylene laminate film. The aroma permeability of GGM films was low. All films were transparent in the visible region, but GGM films blocked the light transmission in the ultraviolet region of the spectra. The stabilizing effect of GGM on a model beverage emulsion system was studied and compared to that of GG, LBG, KGM, and cAX. In addition, GG was enzymatically modified in order to examine the effect of the degree of polymerization and the degree of substitution of galactomannans on emulsion stability. Use of GGM increased the turbidity of emulsions both immediately after preparation and after storage of up to 14 days at room temperature. GGM emulsions had higher turbidity than the emulsions containing other mannans. Increasing the storage temperature to +45 ºC led to rapid emulsion breakdown, but a decrease in storage temperature increased emulsion stability after 14 days. A low degree of polymerization and a high degree of substitution of the modified galactomannans were associated with a decrease in emulsion turbidity.

Cellulose Derivatives : Synthesis, Properties and Applications

Even though cellulose is the most abundant polymer on Earth, its utilisation has some limitations regarding its efficient use in the production of bio-based materials. It is quite clear from statistics that only a relatively small fraction of cellulose is used for the production of commodity materials and chemicals. This fact was the driving force in our research into understanding, designing, synthesising and finding new alternative applications for this well-known but underused biomaterial. This thesis focuses on the developing advanced materials and products from cellulose by using novel approaches. The aim of this study was to investigate and explore the versatility of cellulose as a starting material for the synthesis of cellulose-based materials, to introduce new synthetic methods for cellulose modification, and to widen the already existing synthetic approaches. Due to the insolubility of cellulose in organic solvents and in water, ionic liquids were applied extensively as the reaction media in the modification reactions. Cellulose derivatives were designed and fine-tuned to obtain desired properties. This was done by altering the inherent hydrogen bond network by introducing different substituents. These substituents either prevented spontaneous formation of hydrogen bonding completely or created new interactions between the cellulose chains. This enabled spontaneous self-assembly leading to supramolecular structures. It was also demonstrated that the material properties of cellulose can be modified even those molecules with a low degree of substitution when highly hydrophobic films and aerogels were prepared from fatty acid derivatives of nanocellulose. Development towards advanced cellulose-based materials was demostrated by synthesising chlorophyllcellulose derivatives that showed potential in photocurrent generation systems. In addition, liquid crystalline cellulose derivatives prepared in this study, showed to function as UV-absorbers in paper.

Aspiration-based utility functions in a planning model for timber flow management.

The study presents a theory of utility models based on aspiration levels, as well as the application of this theory to the planning of timber flow economics. The first part of the study comprises a derivation of the utility-theoretic basis for the application of aspiration levels. Two basic models are dealt with: the additive and the multiplicative. Applied here solely for partial utility functions, aspiration and reservation levels are interpreted as defining piecewisely linear functions. The standpoint of the choices of the decision-maker is emphasized by the use of indifference curves. The second part of the study introduces a model for the management of timber flows. The model is based on the assumption that the decision-maker is willing to specify a shape of income flow which is different from that of the capital-theoretic optimum. The utility model comprises four aspiration-based compound utility functions. The theory and the flow model are tested numerically by computations covering three forest holdings. The results show that the additive model is sensitive even to slight changes in relative importances and aspiration levels. This applies particularly to nearly linear production possibility boundaries of monetary variables. The multiplicative model, on the other hand, is stable because it generates strictly convex indifference curves. Due to a higher marginal rate of substitution, the multiplicative model implies a stronger dependence on forest management than the additive function. For income trajectory optimization, a method utilizing an income trajectory index is more efficient than one based on the use of aspiration levels per management period. Smooth trajectories can be attained by squaring the deviations of the feasible trajectories from the desired one.

Chronic and acute stress in atherosclerosis : the role of endothelial function and arterial elasticity

Atherosclerosis is the main underlying pathology of coronary heart disease. Coronary heart disease is a serious health problem in Finland, and it is the leading cause of morbidity and mortality in industrialized countries. Psychological stress correlates with coronary heart disease events – myocardial infarction and sudden death, which are the most common clinical syndromes of atherosclerotic narrowing of arteries. The present series of studies examines the interaction between stress and endothelial function in relation to atherosclerosis. The study also aims to give new information on the mechanisms through which stress has its effect on atherosclerosis progression, focusing on possible relations between psychological stress and the functioning of the endothelium. Our project is based on data from one of the largest national epidemiological studies, the Cardiovascular Risk in Young Finns study, which has monitored the development of risk factors for coronary heart disease in 3596 young adults since 1980. The present study combines experimental stress research with epidemiology and uses an advanced method for examining atherosclerosis development in healthy subjects (intima-media thickness ultrasound measurement). The physiological parameters used were heart rate, respiratory sinus arrhythmia and pre-ejection period. Chronic stress was assessed by vital exhaustion. The ultrasound measurements that served as the indexes of preclinical atherosclerosis were carotid intima-media thickness, brachial flow-mediated dilatation and carotid artery compliance. The effects of cardiovascular risk factors found to be important were taken into account: serum cholesterols level, triglyceride level, serum insulin level and systolic and diastolic blood pressure. There were 69, 1596, 81 and 1721 participants in studies I-IV, respectively. The results showed that both chronic and acute stress may exert an effect on atherosclerosis in subjects with impaired endothelial responses. The findings are consistent with the idea that risk factors are more harmful if the endothelium is not working properly. Chronic stress was found to be a risk if it has resulted in ineffective cardiac stress reactivity or delayed recovery. Men were shown to be at increased risk for atherosclerotic progression in early life, which suggests men’s decreased stress coping ability in relation to stressful psychosocial coronary risk factors. Autonomic imbalance may be the common mechanism of the stress influence on atherosclerosis development. The results of the present study contain background information for the identification the first stages of atherosclerosis, and they may be useful for preventive medicine programs for young adults and could help to improve cardiovascular health in Finland as well as in other countries.