Least squares learning and the US Treasury bill rate

Understanding how agents formulate their expectations about Fed behavior is important for market participants because they can potentially use this information to make more accurate estimates of stock and bond prices. Although it is commonly assumed that agents learn over time, there is scant empirical evidence in support of this assumption. Thus, in this paper we test if the forecast of the three month T-bill rate in the Survey of Professional Forecasters (SPF) is consistent with least squares learning when there are discrete shifts in monetary policy. We first derive the mean, variance and autocovariances of the forecast errors from a recursive least squares learning algorithm when there are breaks in the structure of the model. We then apply the Bai and Perron (1998) test for structural change to a forecasting model for the three month T-bill rate in order to identify changes in monetary policy. Having identified the policy regimes, we then estimate the implied biases in the interest rate forecasts within each regime. We find that when the forecast errors from the SPF are corrected for the biases due to shifts in policy, the forecasts are consistent with least squares learning. © 2014 Elsevier B.V.

Corrigendum to “Least squares learning and the US treasury bill rate” [Econ. Syst. 38 (2014) 194–204]

Understanding how agents formulate their expectations about Fed behavior is important for market participants because they can potentially use this information to make more accurate estimates of stock and bond prices. Although it is commonly assumed that agents learn over time, there is scant empirical evidence in support of this assumption. Thus, in this paper we test if the forecast of the three month T-bill rate in the Survey of Professional Forecasters (SPF) is consistent with least squares learning when there are discrete shifts in monetary policy. We first derive the mean, variance and autocovariances of the forecast errors from a recursive least squares learning algorithm when there are breaks in the structure of the model. We then apply the Bai and Perron (1998) test for structural change to a forecasting model for the three month T-bill rate in order to identify changes in monetary policy. Having identified the policy regimes, we then estimate the implied biases in the interest rate forecasts within each regime. We find that when the forecast errors from the SPF are corrected for the biases due to shifts in policy, the forecasts are consistent with least squares learning.

Persistence, capital account openness, and financial sector health in exchange rate regime choice

This paper investigates empirically the persistence in exchange rate regimes as well as the role of capital account openness and financial sector health (measured by financial development and financial sector fragility) in exchange rate regime determination for a panel of 143 countries covering the post-Bretton Woods period. The results demonstrate that while low- and high-income countries exhibit highly persistent exchange rate regimes, middle-income countries display relatively lower persistence. For middle-income countries, capital account openness and the level of financial development play important roles in exchange rate regime choice. The fragility of the financial sector does not affect the exchange rate regime determination.

A demandeur-centric theory of regime design in transnational commercial law

Recent scholarship on international agreement design has almost exclusively focused on the public international law area. The literature on regime design in the area of international private law lacks a solid theoretical foundation. Academic writing on public international law's state-centric approach is only amenable to crude transplantation and poses several puzzles in the international private law context. Resolving these puzzles is important because of the proliferation of transnational commercial agreements in areas that were traditionally the province of domestic law. This paper attempts to provide a starting point to address the theoretical vacuum. Part I argues that functionalist, liberal, and realist theories cannot fully explain transnational commercial law agreement design. Part II puts forth a demandeur-centric approach with the aid of examples that span the spectrum from hard law to soft law. Part III concludes that agreement design in transnational commercial law is premised on demandeur preferences and relative power.

The effects of topographic variation and the fire regime on coarse woody debris: insights from a large wildfire

Coarse woody debris (CWD) is a common structural component of terrestrial ecosystems, and provides important habitat for biota. Fires modify the distribution of CWD, both spatially and temporally. Changes in fire regimes, such as those arising from prescribed burning and changing climatic conditions, make it critical to understand the response of this resource to fire. We created a conceptual model of the effects of fire on logs and dead trees in topographically diverse forests in which trees often survive severe fire. We then surveyed paired sites, in a damp gully and adjacent drier slope, ~3.5. years after a large wildfire in south-eastern Australia. Sites were stratified by fire severity (unburnt, understorey burnt and severely burnt), and fire history (burnt ≤3. years or ≥20. years prior to the wildfire). Both components of the fire regime influenced CWD availability in gullies. Severe wildfire and fire history ≤3. years reduced the volume of small logs (10-30. cm diameter) in gullies, while severe wildfire increased the number of large dead trees in gullies. CWD on slopes was not affected by fire severity or history at ~3.5. years post-fire. Log volumes on slopes may recover more quickly after wildfire through rapid collapse of branches and trees. Gullies generally supported more logs than slopes, but longer inter-fire intervals in gullies may allow fuel loads to accumulate and lead to comparatively larger fire impacts. Given that fire severity and fire interval are predicted to change in many fire-prone ecosystems in coming decades, this study highlights the importance of understanding the interacting effects of multiple components of the fire regime with landscape structure. In particular, variation in fire interval and fire severity in relation to topographic position will influence the pattern of accumulation of coarse woody debris across the landscape, and therefore the structure and quality of habitats for biota.

Associations between firefighters' physical activity across multiple shifts of wildfire suppression

The aim of this study was to examine the associations between firefighters' physical activity levels across consecutive shifts during a multi-day emergency wildfire and to determine whether sleep duration moderated these associations. Forty volunteer firefighters (31 males, 9 females) wore an activity monitor to concurrently measure physical activity and sleep duration. Sedentary time and time spent in light- (LPA), moderate- (MPA), and vigorous-intensity physical activity (VPA) during each shift were determined using monitor-specific cut points. During any given shift, every additional 60 min spent in LPA was associated with 7.2 min more LPA and 27.6 min MPA the following shift. There were no other significant positive or negative associations. No significant moderating effect of total sleep time was observed. Firefighters are able to maintain and/or increase their physical activity intensity between consecutive shifts. Further research is needed to understand firefighters pacing and energy conservation strategies during emergency wildfire deployments. Practitioner Summary To examine associations between firefighters' physical activity levels across consecutive shifts during a multi-day emergency wildfire and determine whether sleep duration moderated these associations. Firefighters are able to maintain and/or increase their physical activity intensity between consecutive shifts. No significant moderating effect of total sleep time was observed.

Effects of the fire regime on mammal occurrence after wildfire: site effects vs landscape context in fire-prone forests

Wildfires have major impacts on ecosystems globally. Fire regimes (including fire frequency, intensity, season and type of fire) influence the status of species by altering habitat suitability at the site scale, and by creating heterogeneity at the landscape scale. The relative effects of site and landscape-scale fire attributes on animal species are rarely examined together. Such knowledge is important, given that fire regimes are sensitive to changing land management practices; and that fires are predicted to become larger and more frequent in some regions as a result of climate change. Here, we tested the relative influence of elements of the fire regime (fire severity, fire history) at the site-scale, and the landscape context (extent of surrounding unburnt forest, fire heterogeneity) on the occurrence of native terrestrial mammals after severe wildfire in south-eastern Australia. We conducted surveys by using automatically triggered, infrared cameras at 80 sites in fire-prone eucalypt forests, 2-3. years post-wildfire. Thirteen native mammal species were recorded, eight of which were detected with sufficient frequency for analysis. Most species were widespread (35-90% of sites) and recorded in all fire severity classes. Fire effects at the site-level were more influential than landscape context effects arising from heterogeneity in the fire regime (e.g. extent of surrounding unburnt forest). Fire severity was the most influential of the fire-regime elements investigated, but it affected different species in different ways. This study highlights three main points relevant to conservation of terrestrial mammals after wildfire. First, spatial variation in fire severity associated with wildfire (ranging from unburned to severely burned stands) is an important contributor to the post-fire status of species. Second, post-fire environmental conditions are significant: here, rapid regeneration of vegetation following drought-breaking rains greatly influenced the suitability of post-fire habitats. Third, it is valuable to consider the effects of the fire regime at multiple scales, including both the site (forest stand) and its landscape context. Insights from short-term surveys, such as this, will be enhanced by complementary longitudinal studies, especially where they encompass environmental variation through the post-fire succession.

Sleep quantity and quality is not compromised during planned burn shifts of less than 12 h

Planned burning is a preventative strategy aimed at decreasing fuel loads to reduce the severity of future wildfire events. During planned burn operations, firefighters can work long shifts. Furthermore, remote burning locations may require firefighters to sleep away from home between shifts. The existing evidence surrounding firefighters' sleep during such operations is exclusively anecdotal. The aims of the study were to describe firefighters' sleep during planned burn operations and evaluate the impact of the key operational factors (shift start time, shift length and sleeping location) that may contribute to inadequate sleep. Thirty-three salaried firefighters were recruited from Australia's fire agencies and sleep was measured objectively using wrist actigraphy for four weeks. All variables were examined in two conditions: (1) burn days, and (2) non-burn days. Time in bed, total sleep time, sleep latency and sleep efficiency were evaluated objectively. Subjective reports of pre- and post-sleep fatigue, sleep location, sleep quality, sleep quantity, number of times woken and sleep timing were also recorded. Analyses revealed no differences in measures of sleep quantity and quality when comparing non-burn and burn days. Total sleep time was less when planned burn shifts were >12 h. However, on burn days, work shift start time as well as sleeping location did not impact firefighters' sleep quantity. Self-reported levels of pre- and post-sleep fatigue were greater on burn days compared to non-burn days. These findings indicate that sleep quantity and quality are not compromised during planned burn operations <12 h in duration.