International Capital Flows and Monetary Policy Spillovers

This dissertation examines the drivers and implications of international capital flows. The overarching motivation is the observation that countries not at the centre of global financial markets are subject to considerable spillovers from centre countries, notably from their monetary policy. I present new empirical evidence on the determinants of the observed patterns of international capital flows and monetary policy spillovers, and study their effect on both financial markets and the real economy. In Chapter 2 I provide evidence on the determinants of a puzzling negative correlation observed between productivity growth and net capital inflows to developing and emerging market economies (EMEs) since 1980. By disaggregating net capital inflows into their gross components, I show that this negative correlation is explained by capital outflows related to purchases of very liquid assets from the fastest growing countries. My results suggest a desire for international portfolio diversification in liquid assets by fast growing countries is driving much of the original puzzle. In the reminder of my dissertation I pivot to study the foreign characteristics that drive international capital flows and monetary policy spillovers, with a particular focus on the role of unconventional monetary policy in the United States (U.S.). In Chapter 3 I show that a significant portion of the heterogeneity in EMEs' asset price adjustment following the quantitative easing operations by the Federal Reserve (the Fed) during 2008-2014 can be explained by the degree of bilateral capital market frictions between these countries and the U.S. This is true even after accounting for capital controls, exchange rate regimes, and domestic monetary policies. Chapter 4, co-authored with Michal Ksawery Popiel, studies unconventional monetary policy in a small open economy, looking specifically at the case of Canada since the global financial crisis. We quantify the effect Canadian unconventional monetary policy shocks had on the real economy, while carefully controlling for and quantifying spillovers from U.S. unconventional monetary policy. Our results indicate that the Bank of Canada's unconventional monetary policy increased Canadian output significantly from 2009-2010, but that spillovers from the Fed's policy were even more important for increasing Canadian output after 2008.

The role of vitamin D signalling in the interaction between mesenchymal mammary tumour cells and macrophages

The transition of epithelial-like tumour cells to those exhibiting mesenchymal characteristics (Epithelial-to-mesenchymal Transition; EMT) is an integral process in breast cancer metastasis. EMT can be promoted by Transforming growth factor-beta (TGF-β) which can be found at high levels in the tumour stroma. Tumour-associated macrophages (TAMs) can also induce EMT in breast cancer cells, which is one way that they promote breast cancer metastasis. Vitamin D signalling has been implicated in EMT suppression and plays a role in modulating macrophage differentiation and stimulating their anti-inflammatory functions. This project had two major aims. First, we aimed to create and verify a unique fluorescent reporter gene construct designed to evaluate the dynamics of EMT in real-time and at the single-cell level. While some components of this reporter system were successfully validated, work to complete the final reporter construct is ongoing. The second and main aspect of this project focused on exploring the ability of 1,25-dihydroxyvitamin D3 (1,25D3) to modulate the interaction between mesenchymal mammary tumour cells and TAMs. Unexpectedly, in short-term treatment (48 hours) studies of 4T1 murine mammary tumour cells, we observed that 1,25D3 and TGF-β signalling work together to increase expression of the mesenchymal markers, Snai1, Fn1, and Col1a1. 1,25D3 and TGF-β also synergistically activate transcription of the gene encoding the 1,25D3-catabolizing enzyme, Cyp24a1. The ability of 1,25D3 and TGF-β to enhance expression of these genes was diminished in a long-term treatment (14 days) of 4T1 cells, and this effect was accompanied by a decrease in cell proliferation. 1,25D3 may also cooperate with cytokines produced by normal macrophages and macrophages considered to be TAM-like. Conditioned media experiments revealed that in the presence of factors from normal macrophages, 1,25D3 enhanced expression of Fn1, and in the presence of factors from TAM-like macrophages, 1,25D3 enhanced expression of Fn1 and Cyp24a1. Rather than mitigating the interaction as hypothesized, 1,25D3 may exacerbate the tumour-promoting effects of the EMT-TAM relationship. Also, signalling pathways involved in the EMT-TAM relationship may synergize with 1,25D3 to upregulate Cyp24a1 expression. These findings are important for understanding the potential of vitamin D compounds to be used in the treatment of breast cancer.