Policy evaluation and uncertainty about the effects of oil prices on economic activity

This paper addresses the issue of policy evaluation in a context in which policymakers are uncertain about the effects of oil prices on economic performance. I consider models of the economy inspired by Solow (1980), Blanchard and Gali (2007), Kim and Loungani (1992) and Hamilton (1983, 2005), which incorporate different assumptions on the channels through which oil prices have an impact on economic activity. I first study the characteristics of the model space and I analyze the likelihood of the different specifications. I show that the existence of plausible alternative representations of the economy forces the policymaker to face the problem of model uncertainty. Then, I use the Bayesian approach proposed by Brock, Durlauf and West (2003, 2007) and the minimax approach developed by Hansen and Sargent (2008) to integrate this form of uncertainty into policy evaluation. I find that, in the environment under analysis, the standard Taylor rule is outperformed under a number of criteria by alternative simple rules in which policymakers introduce persistence in the policy instrument and respond to changes in the real price of oil.

Computer-aided discovery of biological activity spectra for anti-aging and anti-cancer olive oil oleuropeins

Aging is associated with common conditions, including cancer, diabetes, cardiovascular disease, and Alzheimer"s disease. The type of multi‐targeted pharmacological approach necessary to address a complex multifaceted disease such as aging might take advantage of pleiotropic natural polyphenols affecting a wide variety of biological processes. We have recently postulated that the secoiridoids oleuropein aglycone (OA) and decarboxymethyl oleuropein aglycone (DOA), two complex polyphenols present in health‐promoting extra virgin olive oil (EVOO), might constitute a new family of plant‐produced gerosuppressant agents. This paper describes an analysis of the biological activity spectra (BAS) of OA and DOA using PASS (Prediction of Activity Spectra for Substances) software. PASS can predict thousands of biological activities, as the BAS of a compound is an intrinsic property that is largely dependent on the compound"s structure and reflects pharmacological effects, physiological and biochemical mechanisms of action, and specific toxicities. Using Pharmaexpert, a tool that analyzes the PASS‐predicted BAS of substances based on thousands of"mechanism‐ effect" and"effect‐mechanism" relationships, we illuminate hypothesis‐generating pharmacological effects, mechanisms of action, and targets that might underlie the anti‐aging/anti‐cancer activities of the gerosuppressant EVOO oleuropeins.

The macroeconomic effects of oil price shocks: Why are the 2000s so different from the 1970s?

We characterize the macroeconomic performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labor markets, and (d) improvements in monetary policy. Weconclude that all four have played an important role.

Effect of olive oil on early and late events of colon carcinogenesis in rats: modulation of arachidonic acid metabolism and local prostaglandin E2 synthesis.

BACKGROUND Animal model studies have shown that the colon tumour promoting effect of dietary fat depends not only on the amount but on its fatty acid composition. With respect to this, the effect of n9 fatty acids, present in olive oil, on colon carcinogenesis has been scarcely investigated. AIMS To assess the effect of an n9 fat diet on precancer events, carcinoma development, and changes in mucosal fatty acid composition and prostaglandin (PG)E2 formation in male Sprague-Dawley rats with azoxymethane induced colon cancer. METHODS Rats were divided into three groups to receive isocaloric diets (5% of the energy as fat) rich in n9, n3, or n6 fat, and were administered azoxymethane subcutaneously once a week for 11 weeks at a dose rate of 7.4 mg/kg body weight. Vehicle treated groups received an equal volume of normal saline. Groups of animals were colectomised at weeks 12 and 19 after the first dose of azoxymethane or saline. Mucosal fatty acids were assessed at 12 and 19 weeks. Aberrant crypt foci and the in vivo intracolonic release of PGE2 were assessed at week 12, and tumour formation at week 19. RESULTS Rats on the n6 diet were found to have colonic aberrant crypt foci and adenocarcinomas more often than those consuming either the n9 or n3 diet. There were no differences between the rats on the n9 and n3 diets. On the other hand, administration of both n9 and n3 diets was associated with a decrease in mucosal arachidonate concentrations as compared with the n6 diet. Carcinogen treatment induced an appreciable increase in PGE2 formation in rats fed the n6 diet, but not in those fed the n3 and n9 diets. CONCLUSIONS Dietary olive oil prevented the development of aberrant crypt foci and colon carcinomas in rats, suggesting that olive oil may have chemopreventive activity against colon carcinogenesis. These effects may be partly due to modulation of arachidonic acid metabolism and local PGE2synthesis.

Fiscal sustainability and fiscal shocks in a dollarized and oil-exporting country: Ecuador

This paper investigates the fiscal sustainability of an emerging, dollarized, oil-exporting country: Ecuador. A cointegrated VAR approach is adopted in testing, first, if the intertemporal budget constraint is satisfied in Ecuador and, second, in identifying the permanent and transitory shocks that affect a fiscal policy characterized by inertia and a heavy dependence on oil revenues. Following confirmation that the debt-GDP ratio does not place the Ecuadorian budget under any pressure, we reformulate the model and identify two forces that push the fiscal system out of equilibrium, namely, economic activity and oil revenues implemented in the government budget. We argue that Ecuador needs to recover control of its monetary policy and to promote the diversification of its economy in order that non-oil tax revenues can replace oil revenues as a pushing force. Finally, we calculate quarterly elasticities of tax revenues with respect to Ecuador’s GDP and that of eight Eurozone countries. We illustrate graphically how the Eurozone countries with low positive or high negative elasticities’ levels suffer debt problems after the crisis. This finding emphasizes the pressing need for Ecuador to strengthen the connection between its tax revenues and output, and also suggests that the convergence of these elasticities in the Eurozone might contribute to the success of an eventually future fiscal union.