Monetary and fiscal policies interactions in a monetary union with country-size asymmetry

Within a country-size asymmetric monetary union, idiosyncratic shocks and national fiscal stabilization policies cause asymmetric cross-border effects. These effects are a source of strategic interactions between noncoordinated fiscal and monetary policies: on the one hand, due to larger externalities imposed on the union, large countries face less incentives to develop free-riding fiscal policies; on the other hand, a larger strategic position vis-à-vis the central bank incentives the use of fiscal policy to, deliberately, influence monetary policy. Additionally, the existence of non-distortionary government financing may also shape policy interactions. As a result, optimal policy regimes may diverge not only across the union members, but also between the latter and the monetary union. In a two-country micro-founded New-Keynesian model for a monetary union, we consider two fiscal policy scenarios: (i) lump-sum taxes are raised to fully finance the government budget and (ii) lump-sum taxes do not ensure balanced budgets in each period; therefore, fiscal and monetary policies are expected to impinge on debt sustainability. For several degrees of country-size asymmetry, we compute optimal discretionary and dynamic non-cooperative policy games and compare their stabilization performance using a union-wide welfare measure. We also assess whether these outcomes could be improved, for the monetary union, through institutional policy arrangements. We find that, in the presence of government indebtedness, monetary policy optimally deviates from macroeconomic to debt stabilization. We also find that policy cooperation is always welfare increasing for the monetary union as a whole; however, indebted large countries may strongly oppose to this arrangement in favour of fiscal leadership. In this case, delegation of monetary policy to a conservative central bank proves to be fruitful to improve the union’s welfare.

Stabilization constraints from different-average public debt levels in a Monetary Union with country-size asymmetry

In the sequence of the recent financial and economic crisis, the recent public debt accumulation is expected to hamper considerably business cycle stabilization, by enlarging the budgetary consequences of the shocks. This paper analyses how the average level of public debt in a monetary union shapes optimal discretionary fiscal and monetary stabilization policies and affects stabilization welfare. We use a two-country micro-founded New-Keynesian model, where a benevolent central bank and the fiscal authorities play discretionary policy games under different union-average debt-constrained scenarios. We find that high debt levels shift monetary policy assignment from inflation to debt stabilization, making cooperation welfare superior to noncooperation. Moreover, when average debt is too high, welfare moves directly (inversely) with debt-to-output ratios for the union and the large country (small country) under cooperation. However, under non-cooperation, higher average debt levels benefit only the large country.

Effects of early life permethrin exposure on spatial working memory and on monoamine levels in different brain areas of pre-senescent rats

Pesticide exposure during brain development could represent an important risk factor for the onset of neurodegenerative diseases. Previous studies investigated the effect of permethrin (PERM) administered at 34 mg/kg, a dose close to the no observable adverse effect level (NOAEL) from post natal day (PND) 6 to PND 21 in rats. Despite the PERM dose did not elicited overt signs of toxicity (i.e. normal body weight gain curve), it was able to induce striatal neurodegeneration (dopamine and Nurr1 reduction, and lipid peroxidation increase). The present study was designed to characterize the cognitive deficits in the current animal model. When during late adulthood PERM treated rats were tested for spatial working memory performances in a T-maze-rewarded alternation task they took longer to choose for the correct arm in comparison to age matched controls. No differences between groups were found in anxiety-like state, locomotor activity, feeding behavior and spatial orientation task. Our findings showing a selective effect of PERM treatment on the T-maze task point to an involvement of frontal cortico-striatal circuitry rather than to a role for the hippocampus. The predominant disturbances concern the dopamine (DA) depletion in the striatum and, the serotonin (5-HT) and noradrenaline (NE) unbalance together with a hypometabolic state in the medial prefrontal cortex area. In the hippocampus, an increase of NE and a decrease of DA were observed in PERM treated rats as compared to controls. The concentration of the most representative marker for pyrethroid exposure (3-phenoxybenzoic acid) measured in the urine of rodents 12 h after the last treatment was 41.50 µ/L and it was completely eliminated after 96 h.

Effects of emotional valence and three-dimensionality of visual stimuli on brain activation: an fMRI study

BACKGROUND: Examining changes in brain activation linked with emotion-inducing stimuli is essential to the study of emotions. Due to the ecological potential of techniques such as virtual reality (VR), inspection of whether brain activation in response to emotional stimuli can be modulated by the three-dimensional (3D) properties of the images is important. OBJECTIVE: The current study sought to test whether the activation of brain areas involved in the emotional processing of scenarios of different valences can be modulated by 3D. Therefore, the focus was made on the interaction effect between emotion-inducing stimuli of different emotional valences (pleasant, unpleasant and neutral valences) and visualization types (2D, 3D). However, main effects were also analyzed.METHODS: The effect of emotional valence and visualization types and their interaction were analyzed through a 3x2 repeated measures ANOVA. Post-hoc t-tests were performed under a ROI-analysis approach. RESULTS: The results show increased brain activation for the 3D affective-inducing stimuli in comparison with the same stimuli in 2D scenarios, mostly in cortical and subcortical regions that are related to emotional processing, in addition to visual processing regions. CONCLUSIONS: This study has the potential of clarify brain mechanisms involved in the processing of emotional stimuli (scenarios’ valence) and their interaction with three-dimensionality.

Aerobic Exercise Does Not Predict Brain Derived Neurotrophic Factor And Cortisol Alterations in Depressed Patients

The pathophysiology of depression is related to neurobiological changes that occur in the monoamine system, hypothalamic-pituitary-adrenal axis, neurogenesis system and the neuroimmune system. In recent years, there has been a growing interest in the research of the effects of exercise on brain function, with a special focus on its effects on brainderived neurotrophic factor (BDNF), cortisol and other biomarkers. Thus, the aim of this study is to present a review investigating the acute and chronic effects of aerobic exercise on BDNF and cortisol levels in individuals with depression. It was not possible to establish an interaction between aerobic exercise and concentration of BDNF and cortisol, which may actually be the result of the divergence of methods, such as type of exercises, duration of the sessions, and prescribed intensity and frequency of sessions.

Effects of Exercise on Physical and Mental Health, and Cognitive and Brain Functions in Schizophrenia: Clinical and Experimental Evidence

Exercise promotes several health benefits, such as cardiovascular, musculoskeletal and cardiorespiratory improvements. It is believed that the practice of exercise in individuals with psychiatric disorders, e.g. schizophrenia, can cause significant changes. Schizophrenic patients have problematic lifestyle habits compared with general population; this may cause a high mortality rate, mainly caused by cardiovascular and metabolic diseases. Thus, the aim of this study is to investigate changes in physical and mental health, cognitive and brain functioning due to the practice of exercise in patients with schizophrenia. Although still little is known about the benefits of exercise on mental health, cognitive and brain functioning of schizophrenic patients, exercise training has been shown to be a beneficial intervention in the control and reduction of disease severity. Type of training, form of execution, duration and intensity need to be better studied as the effects on physical and mental health, cognition and brain activity depend exclusively of interconnected factors, such as the combination of exercise and medication. However, one should understand that exercise is not only an effective nondrug alternative, but also acts as a supporting linking up interventions to promote improvements in process performance optimization. In general, the positive effects on mental health, cognition and brain activity as a result of an exercise program are quite evident. Few studies have been published correlating effects of exercise in patients with schizophrenia, but there is increasing evidence that positive and negative symptoms can be improved. Therefore, it is important that further studies be undertaken to expand the knowledge of physical exercise on mental health in people with schizophrenia, as well as its dose-response and the most effective type of exercise.

Accounting accruals and information asymmetry in Europe

We investigate whether the positive relation between accounting accruals and information asymmetry documented for U.S. stock markets also holds for European markets, considered as a whole and at the country level. This research is relevant because this relation is likely to be affected by differences in accounting standards used by companies for financial reporting, in the traditional use of the banking system or capital markets for firm financing, in legal systems and cultural environment. We find that in European stock markets discretionary accruals are positively related with the Corwin and Schultz high-low spread estimator used as a proxy for information asymmetry. Our results suggest that the earnings management component of accruals outweighs the informational component, but the significance of the relation varies across countries. Further, such association tends to be stronger for firms with the highest levels of positive discretionary accruals. Consistent with the evidence provided by the authors, our results also suggest that the high-low spread estimator is more efficient than the closing bid-ask spread when analysing the impact of information quality on information asymmetry.