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).

Xanthine oxidoreductase in essential hypertension and metabolic syndrome : Experimental studies on rodent models

Hypertension, obesity, dyslipidemia and dysglycemia constitute metabolic syndrome, a major public health concern, which is associated with cardiovascular mortality. High dietary salt (NaCl) is the most important dietary risk factor for elevated blood pressure. The kidney has a major role in salt-sensitive hypertension and is vulnerable to harmful effects of increased blood pressure. Elevated serum urate is a common finding in these disorders. While dysregulation of urate excretion is associated with cardiovascular diseases, present studies aimed to clarify the role of xanthine oxidoreductase (XOR), i.e. xanthine dehydrogenase (XDH) and its post-translational isoform xanthine oxidase (XO), in cardiovascular diseases. XOR yields urate from hypoxanthine and xanthine. Low oxygen levels upregulate XOR in addition to other factors. In present studies higher renal XOR activity was found in hypertension-prone rats than in the controls. Furthermore, NaCl intake increased renal XOR dose-dependently. To clarify whether XOR has any causal role in hypertension, rats were kept on NaCl diets for different periods of time, with or without a XOR inhibitor, allopurinol. While allopurinol did not alleviate hypertension, it prevented left ventricular and renal hypertrophy. Nitric oxide synthases (NOS) produce nitric oxide (NO), which mediates vasodilatation. A paucity of NO, produced by NOS inhibition, aggravated hypertension and induced renal XOR, whereas NO generating drug, alleviated salt-induced hypertension without changes in renal XOR. Zucker fa/fa rat is an animal model of metabolic syndrome. These rats developed substantial obesity and modest hypertension and showed increased hepatic and renal XOR activities. XOR was modified by diet and antihypertensive treatment. Cyclosporine (CsA) is a fungal peptide and one of the first-line immunosuppressive drugs used in the management of organ transplantation. Nephrotoxicity ensue high doses resulting in hypertension and limit CsA use. CsA increased renal XO substantially in salt-sensitive rats on a high NaCl diet, indicating a possible role for this reactive oxygen species generating isoform in CsA nephrotoxicity. Renal hypoxia, common to these rodent models of hypertension and obesity, is one of the plausible XOR inducing factors. Although XOR inhibition did not prevent hypertension, present experimental data indicate that XOR plays a role in the pathology of salt-induced cardiac and renal hypertrophy.

Econometric models of Finnish non-industrial private forest owners' timber supply and timber stock

This dissertation examines the short- and long-run impacts of timber prices and other factors affecting NIPF owners' timber harvesting and timber stocking decisions. The utility-based Faustmann model provides testable hypotheses of the exogenous variables retained in the timber supply analysis. The timber stock function, derived from a two-period biomass harvesting model, is estimated using a two-step GMM estimator based on balanced panel data from 1983 to 1991. Timber supply functions are estimated using a Tobit model adjusted for heteroscedasticity and nonnormality of errors based on panel data from 1994 to 1998. Results show that if specification analysis of the Tobit model is ignored, inconsistency and biasedness can have a marked effect on parameter estimates. The empirical results show that owner's age is the single most important factor determining timber stock; timber price is the single most important factor in harvesting decision. The results of the timber supply estimations can be interpreted using utility-based Faustmann model of a forest owner who values a growing timber in situ.

Death pathways activated in the neurotrophic factor-deprived neurons

Programed cell death (PCD) is a fundamental biological process that is as essential for the development and tissue homeostasis as cell proliferation, differentiation and adaptation. The main mode of PCD - apoptosis - occurs via specifi c pathways, such as mitochondrial or death receptor pathway. In the developing nervous system, programed death broadly occurs, mainly triggered by the defi ciency of different survival-promoting neurotrophic factors, but the respective death pathways are poorly studied. In one of the best-characterized models, sympathetic neurons deprived of nerve growth factor (NGF) die via the classical mitochondrial apoptotic pathway. The main aim of this study was to describe the death programs activated in these and other neuronal populations by using neuronal cultures deprived of other neurotrophic factors. First, this study showed that the cultured sympathetic neurons deprived of glial cell line-derived neurotrophic factor (GDNF) die via a novel non-classical death pathway, in which mitochondria and death receptors are not involved. Indeed, cytochrome c was not released into the cytosol, Bax, caspase-9, and caspase-3 were not involved, and Bcl-xL overexpression did not prevent the death. This pathway involved activation of mixed lineage kinases and c-jun, and crucially requires caspase-2 and -7. Second, it was shown that deprivation of neurotrophin-3 (NT-3) from cultured sensory neurons of the dorsal root ganglia kills them via a dependence receptor pathway, including cleavage of the NT- 3 receptor TrkC and liberation of a pro-apoptotic dependence domain. Indeed, death of NT-3-deprived neurons was blocked by a dominant-negative construct interfering with TrkC cleavage. Also, the uncleavable mutant of TrkC, replacing the siRNA-silenced endogeneous TrkC, was not able to trigger death upon NT-3 removal. Such a pathway was not activated in another subpopulation of sensory neurons deprived of NGF. Third, it was shown that cultured midbrain dopaminergic neurons deprived of GDNF or brainderived neurotrophic factor (BDNF) kills them by still a different pathway, in which death receptors and caspases, but not mitochondria, are activated. Indeed, cytochrome c was not released into the cytosol, Bax was not activated, and Bcl-xL did not block the death, but caspases were necessary for the death of these neurons. Blocking the components of the death receptor pathway - caspase-8, FADD, or Fas - blocked the death, whereas activation of Fas accelerated it. The activity of Fas in the dopaminergic neurons could be controlled by the apoptosis inhibitory molecule FAIML. For these studies we developed a novel assay to study apoptosis in the transfected dopaminergic neurons. Thus, a novel death pathway, characteristic for the dopaminergic neurons was described. The study suggests death receptors as possible targets for the treatment of Parkinson s disease, which is caused by the degeneration of dopaminergic neurons.

Transforming growth factor -beta signaling through Smad3 in allergy : Studies in the mechanisms of asthma, atopic dermatitis and allergic contact reactions

Transforming growth factor β signalling through Smad3 in allergy Allergic diseases, such as atopic dermatitis, asthma, and contact dermatitis are complex diseases influenced by both genetic and environmental factors. It is still unclear why allergy and subsequent allergic disease occur in some individuals but not in others. Transforming growth factor (TGF)-β is an important immunomodulatory and fibrogenic factor that regulates cellular processes in injured and inflamed skin. TGF-β has a significant role in the regulation of the allergen-induced immune response participating in the development of allergic and asthmatic inflammation. TGF-β is known to be an immunomodulatory factor in the progression of delayed type hypersensitivity reactions and allergic contact dermatitis. TGF-β is crucial in regulating the cellular responses involved in allergy, such as differentiation, proliferation and migration. TGF-β signals are delivered from the cytoplasm to the nucleus by TGF-β signal transducers called Smads. Smad3 is a major signal transducer in TGF-β -signalling that controls the expression of target genes in the nucleus in a cell-type specific manner. The role of TGF-β-Smad3 -signalling in the immunoregulation and pathophysiology of allergic disorders is still poorly understood. In this thesis, the role of TGF-β-Smad -signalling pathway using Smad3 -deficient knock out mice in the murine models of allergic diseases; atopic dermatitis, asthma and allergic contact reactions, was examined. Smad3-pathway regulates allergen induced skin inflammation and systemic IgE antibody production in a murine model atopic dermatitis. The defect in Smad3 -signalling decreased Th2 cytokine (IL-13 and IL-5) mRNA expression in the lung, modulated allergen induced specific IgG1 response, and affected mucus production in the lung in a murine model of asthma. TGF-β / Smad3 -signalling contributed to inflammatory hypersensitivity reactions and disease progression via modulation of chemokine and cytokine expression and inflammatory cell recruitment, cell proliferation and regulation of the specific antibody response in a murine model of contact hypersensitivity. TGF-β modulates inflammatory responses - at least partly through the Smad3 pathway - but also through other compensatory, non-Smad-dependent pathways. Understanding the effects of the TGF-β signalling pathway in the immune system and in disease models can help in elucidating the multilevel effects of TGF-β. Unravelling the mechanisms of Smad3 may open new possibilities for treating and preventing allergic responses, which may lead to severe illness and loss of work ability. In the future the Smad3 signalling pathway might be a potential target in the therapy of allergic diseases.

Part I: Enzyme replacement versus neurotrophic factor viral vector-mediated gene therapy of Parkinson’s disease, Part II: The effects of orally dosed tolcapone and entacapone on dopamine metabolism in the dorsal striatum and nucleus accumbens in rats

Part I: Parkinson’s disease is a slowly progressive neurodegenerative disorder in which particularly the dopaminergic neurons of the substantia nigra pars compacta degenerate and die. Current conventional treatment is based on restraining symptoms but it has no effect on the progression of the disease. Gene therapy research has focused on the possibility of restoring the lost brain function by at least two means: substitution of critical enzymes needed for the synthesis of dopamine and slowing down the progression of the disease by supporting the functions of the remaining nigral dopaminergic neurons by neurotrophic factors. The striatal levels of enzymes such as tyrosine hydroxylase, dopadecarboxylase and GTP-CH1 are decreased as the disease progresses. By replacing one or all of the enzymes, dopamine levels in the striatum may be restored to normal and behavioral impairments caused by the disease may be ameliorated especially in the later stages of the disease. The neurotrophic factors glial cell derived neurotrophic factor (GDNF) and neurturin have shown to protect and restore functions of dopaminergic cell somas and terminals as well as improve behavior in animal lesion models. This therapy may be best suited at the early stages of the disease when there are more dopaminergic neurons for neurotrophic factors to reach. Viral vector-mediated gene transfer provides a tool to deliver proteins with complex structures into specific brain locations and provides long-term protein over-expression. Part II: The aim of our study was to investigate the effects of two orally dosed COMT inhibitors entacapone (10 and 30 mg/kg) and tolcapone (10 and 30 mg/kg) with a subsequent administration of a peripheral dopadecarboxylase inhibitor carbidopa (30 mg/kg) and L- dopa (30 mg/kg) on dopamine and its metabolite levels in the dorsal striatum and nucleus accumbens of freely moving rats using dual-probe in vivo microdialysis. Earlier similarly designed studies have only been conducted in the dorsal striatum. We also confirmed the result of earlier ex vivo studies regarding the effects of intraperitoneally dosed tolcapone (30 mg/kg) and entacapone (30 mg/kg) on striatal and hepatic COMT activity. The results obtained from the dorsal striatum were generally in line with earlier studies, where tolcapone tended to increase dopamine and DOPAC levels and decrease HVA levels. Entacapone tended to keep striatal dopamine and HVA levels elevated longer than in controls and also tended to elevate the levels of DOPAC. Surprisingly in the nucleus accumbens, dopamine levels after either dose of entacapone or tolcapone were not elevated. Accumbal DOPAC levels, especially in the tolcapone 30 mg/kg group, were elevated nearly to the same extent as measured in the dorsal striatum. Entacapone 10 mg/kg elevated accumbal HVA levels more than the dose of 30 mg/kg and the effect was more pronounced in the nucleus accumbens than in the dorsal striatum. This suggests that entacapone 30 mg/kg has minor central effects. Also our ex vivo study results obtained from the dorsal striatum suggest that entacapone 30 mg/kg has minor and transient central effects, even though central HVA levels were not suppressed below those of the control group in either brain area in the microdialysis study. Both entacapone and tolcapone suppressed hepatic COMT activity more than striatal COMT activity. Tolcapone was more effective than entacapone in the dorsal striatum. The differences between dopamine and its metabolite levels in the dorsal striatum and nucleus accumbens may be due to different properties of the two brain areas.

Inference on Cointegration in Vector Autoregressive Models (summary section only)

In the thesis we consider inference for cointegration in vector autoregressive (VAR) models. The thesis consists of an introduction and four papers. The first paper proposes a new test for cointegration in VAR models that is directly based on the eigenvalues of the least squares (LS) estimate of the autoregressive matrix. In the second paper we compare a small sample correction for the likelihood ratio (LR) test of cointegrating rank and the bootstrap. The simulation experiments show that the bootstrap works very well in practice and dominates the correction factor. The tests are applied to international stock prices data, and the .nite sample performance of the tests are investigated by simulating the data. The third paper studies the demand for money in Sweden 1970—2000 using the I(2) model. In the fourth paper we re-examine the evidence of cointegration between international stock prices. The paper shows that some of the previous empirical results can be explained by the small-sample bias and size distortion of Johansen’s LR tests for cointegration. In all papers we work with two data sets. The first data set is a Swedish money demand data set with observations on the money stock, the consumer price index, gross domestic product (GDP), the short-term interest rate and the long-term interest rate. The data are quarterly and the sample period is 1970(1)—2000(1). The second data set consists of month-end stock market index observations for Finland, France, Germany, Sweden, the United Kingdom and the United States from 1980(1) to 1997(2). Both data sets are typical of the sample sizes encountered in economic data, and the applications illustrate the usefulness of the models and tests discussed in the thesis.

Mammalian Mat1 subunit of Transcription Factor IIH in gene-specific and general transcription

All protein-encoding genes in eukaryotes are transcribed into messenger RNA (mRNA) by RNA Polymerase II (RNAP II), whose activity therefore needs to be tightly controlled. An important and only partially understood level of regulation is the multiple phosphorylations of RNAP II large subunit C-terminal domain (CTD). Sequential phosphorylations regulate transcription initiation and elongation, and recruit factors involved in co-transcriptional processing of mRNA. Based largely on studies in yeast models and in vitro, the kinase activity responsible for the phosphorylation of the serine-5 (Ser5) residues of RNAP II CTD has been attributed to the Mat1/Cdk7/CycH trimer as part of Transcription Factor IIH. However, due to the lack of good mammalian genetic models, the roles of both RNAP II Ser5 phosphorylation as well as TFIIH kinase in transcription have provided ambiguous results and the in vivo kinase of Ser5 has remained elusive. The primary objective of this study was to elucidate the role of mammalian TFIIH, and specifically the Mat1 subunit in CTD phosphorylation and general RNAP II-mediated transcription. The approach utilized the Cre-LoxP system to conditionally delete murine Mat1 in cardiomyocytes and hepatocytes in vivo and and in cell culture models. The results identify the TFIIH kinase as the major mammalian Ser5 kinase and demonstrate its requirement for general transcription, noted by the use of nascent mRNA labeling. Also a role for Mat1 in regulating general mRNA turnover was identified, providing a possible rationale for earlier negative findings. A secondary objective was to identify potential gene- and tissue-specific roles of Mat1 and the TFIIH kinase through the use of tissue-specific Mat1 deletion. Mat1 was found to be required for the transcriptional function of PGC-1 in cardiomyocytes. Transriptional activation of lipogenic SREBP1 target genes following Mat1 deletion in hepatocytes revealed a repressive role for Mat1apparently mediated via co-repressor DMAP1 and the DNA methyltransferase Dnmt1. Finally, Mat1 and Cdk7 were also identified as a negative regulators of adipocyte differentiation through the inhibitory phosphorylation of Peroxisome proliferator-activated receptor (PPAR) γ. Together, these results demonstrate gene- and tissue-specific roles for the Mat1 subunit of TFIIH and open up new therapeutic possibilities in the treatment of diseases such as type II diabetes, hepatosteatosis and obesity.