A comparison of linear forecasting models and neural networks:an application to Euro inflation and Euro Divisia

Linear models reach their limitations in applications with nonlinearities in the data. In this paper new empirical evidence is provided on the relative Euro inflation forecasting performance of linear and non-linear models. The well established and widely used univariate ARIMA and multivariate VAR models are used as linear forecasting models whereas neural networks (NN) are used as non-linear forecasting models. It is endeavoured to keep the level of subjectivity in the NN building process to a minimum in an attempt to exploit the full potentials of the NN. It is also investigated whether the historically poor performance of the theoretically superior measure of the monetary services flow, Divisia, relative to the traditional Simple Sum measure could be attributed to a certain extent to the evaluation of these indices within a linear framework. Results obtained suggest that non-linear models provide better within-sample and out-of-sample forecasts and linear models are simply a subset of them. The Divisia index also outperforms the Simple Sum index when evaluated in a non-linear framework. © 2005 Taylor & Francis Group Ltd.

A composite leading indicator of the inflation cycle for the Euro area

We evaluate the performance of composite leading indicators of turning points of inflation in the Euro area, constructed by combining the techniques of Fourier analysis and Kalman filters with the National Bureau of Economic Research methodology. In addition, the study compares the empirical performance of Euro Simple Sum and Divisia monetary aggregates and provides a tentative answer to the issue of whether or not the UK should join the Euro area. Our findings suggest that, first, the cyclical pattern of the different composite leading indicators very closely reflect that of the inflation cycle for the Euro area; second, the empirical performance of the Euro Divisia is better than its Simple Sum counterpart and third, the UK is better out of the Euro area. © 2005 Taylor & Francis Group Ltd.

Cascaded Bayesian processes: an account of bias in orientation perception

Following adaptation to an oriented (1-d) signal in central vision, the orientation of subsequently viewed test signals may appear repelled away from or attracted towards the adapting orientation. Small angular differences between the adaptor and test yield 'repulsive' shifts, while large angular differences yield 'attractive' shifts. In peripheral vision, however, both small and large angular differences yield repulsive shifts. To account for these tilt after-effects (TAEs), a cascaded model of orientation estimation that is optimized using hierarchical Bayesian methods is proposed. The model accounts for orientation bias through adaptation-induced losses in information that arise because of signal uncertainties and neural constraints placed upon the propagation of visual information. Repulsive (direct) TAEs arise at early stages of visual processing from adaptation of orientation-selective units with peak sensitivity at the orientation of the adaptor (theta). Attractive (indirect) TAEs result from adaptation of second-stage units with peak sensitivity at theta and theta+90 degrees , which arise from an efficient stage of linear compression that pools across the responses of the first-stage orientation-selective units. A spatial orientation vector is estimated from the transformed oriented unit responses. The change from attractive to repulsive TAEs in peripheral vision can be explained by the differing harmonic biases resulting from constraints on signal power (in central vision) versus signal uncertainties in orientation (in peripheral vision). The proposed model is consistent with recent work by computational neuroscientists in supposing that visual bias reflects the adjustment of a rational system in the light of uncertain signals and system constraints.

A new randomization assay reveals Unexpected elements of sequence bias in model 'randomized' gene libraries:Implications for biopanning

Although techniques such as biopanning rely heavily upon the screening of randomized gene libraries, there is surprisingly little information available on the construction of those libraries. In general, it is based on the cloning of 'randomized' synthetic oligonucleotides, in which given position(s) contain an equal mixture of all four bases. Yet, many supposedly 'randomized' libraries contain significant elements of bias and/or omission. Here, we report the development and validation of a new, PCR-based assay that enables rapid examination of library composition both prior to and after cloning. By using our assay to analyse model libraries, we demonstrate that the cloning of a given distribution of sequences does not necessarily result in a similarly composed library of clones. Thus, while bias in randomized synthetic oligonucleotide mixtures can be virtually eliminated by using unequal ratios of the four phosphoramidites, the use of such mixtures does not ensure retrieval of a truly randomized library. We propose that in the absence of a technique to control cloning frequencies, the ability to analyse the composition of libraries after cloning will enhance significantly the quality of information derived from those libraries. (C) 2000 Published by Elsevier Science B.V. All rights reserved.

Optic flow in human vision: MEG reveals a foveo-fugal bias in V1, specialization for spiral space in hMSTs, and global motion sensitivity in the IPS

Abstract We recorded MEG responses from 17 participants viewing random-dot patterns simulating global optic flow components (expansion, contraction, rotation, deformation, and translation) and a random motion control condition. Theta-band (3–7 Hz), MEG signal power was greater for expansion than the other optic flow components in a region concentrated along the calcarine sulcus, indicating an ecologically valid, foveo-fugal bias for unidirectional motion sensors in V1. When the responses to the optic flow components were combined, a decrease in MEG beta-band (17–23 Hz) power was found in regions extending beyond the calcarine sulcus to the posterior parietal lobe (inferior to IPS), indicating the importance of structured motion in this region. However, only one cortical area, within or near the V5/hMT+ complex, responded to all three spiral-space components (expansion, contraction, and rotation) and showed no selectivity for global translation or deformation: we term this area hMSTs. This is the first demonstration of an exclusive region for spiral space in the human brain and suggests a functional role better suited to preliminary analysis of ego-motion than surface pose, which would involve deformation. We also observed that the rotation condition activated the cerebellum, suggesting its involvement in visually mediated control of postural adjustment.

Morphology in autism spectrum disorders:local processing bias and language

We conducted a detailed study of a case of linguistic talent in the context of autism spectrum disorder, specifically Asperger syndrome. I.A. displays language strengths at the level of morphology and syntax. Yet, despite this grammar advantage, processing of figurative language and inferencing based on context presents a problem for him. The morphology advantage for I.A. is consistent with the weak central coherence (WCC) account of autism. From this account, the presence of a local processing bias is evident in the ways in which autistic individuals solve common problems, such as assessing similarities between objects and finding common patterns, and may therefore provide an advantage in some cognitive tasks compared to typical individuals. We extend the WCC account to language and provide evidence for a connection between the local processing bias and the acquisition of morphology and grammar.

A demonstration of attentional bias, using a novel dual task paradigm, towards clinically salient material in recovering alcohol abuse patients?

Background. This study examined whether alcohol abuse patients are characterized either by enhanced schematic processing of alcohol related cues or by an attentional bias towards the processing of alcohol cues. Method. Abstinent alcohol abusers (N = 25) and non-clinical control participants (N = 24) performed a dual task paradigm in which they had to make an odd/even decision to a centrally presented number while performing a peripherally presented lexical decision task. Stimuli on the lexical decision task comprised alcohol words, neutral words and non-words. In addition, participants completed an incidental recall task for the words presented in the lexical decision task. Results. It was found that, in the presence of alcohol related words, the performance of patients on the odd/even decision task was poorer than in the presence of other stimului. In addition, patients displayed slower lexical decision times for alcohol related words. Both groups displayed better recall for alcohol words than for other stimuli. Conclusions. These results are interpreted as supporting neither model of drug cravings. Rather, it is proposed that, in the presence of alcohol stimuli, alcohol abuse patients display a breakdown in the ability to focus attention.

Techniques for determining bias and stability in satellite altimeters

The case for monitoring large-scale sea level variability is established in the context of the estimation of the extent of anthropogenic climate change. Satellite altimeters are identified as having the potential to monitor this change with high resolution and accuracy. Possible sources of systematic errors and instabilities in these instruments which would be hurdles to the most accurate monitoring of such ocean signals are examined. Techniques for employing tide gauges to combat such inaccuracies are proposed and developed. The tide gauge at Newhaven in Sussex is used in conjunction with the nearby satellite laser ranger and high-resolution ocean models to estimate the absolute bias of the TOPEX, Poseidon, ERS 1 and ERS 2 altimeters. The theory which underlies the augmentation of altimeter measurements with tide gauge data is developed. In order to apply this, the tide gauges of the World Ocean Circulation Experiment are assessed and their suitability for altimeter calibration is determined. A reliable subset of these gauges is derived. A method of intra-altimeter calibration is developed using these tide gauges to remove the effect of variability over long time scales. In this way the long-term instability in the TOPEX range measurement is inferred and the drift arising from the on-board ultra stable oscillator is thus detected. An extension to this work develops a method for inter-altimeter calibration, allowing the systematic differences between unconnected altimeters to be measured. This is applied to the TOPEX and ERS 1 altimeters.

Does money matter in inflation forecasting

This paper provides the most fully comprehensive evidence to date on whether or not monetary aggregates are valuable for forecasting US inflation in the early to mid 2000s. We explore a wide range of different definitions of money, including different methods of aggregation and different collections of included monetary assets. In our forecasting experiment we use two non-linear techniques, namely, recurrent neural networks and kernel recursive least squares regression - techniques that are new to macroeconomics. Recurrent neural networks operate with potentially unbounded input memory, while the kernel regression technique is a finite memory predictor. The two methodologies compete to find the best fitting US inflation forecasting models and are then compared to forecasts from a naive random walk model. The best models were non-linear autoregressive models based on kernel methods. Our findings do not provide much support for the usefulness of monetary aggregates in forecasting inflation.

Polish EU accession in comparative perspective:macroeconomics, finance and the government

This book is a collection of papers that focusses on the macroeconomic and financial aspects of EU accession of its largest new member, Poland, seen in comparative perspective. Two main themes are covered. One relates to empirical estimations, evaluating the effects of integration on fiscal balance, prices, seigniorage wealth and FDI flows. The second theme relates to institutional reform and policy recommendations. Discussion focuses on how transparency and fiscal rules, including those implied by EU accession, may help to reduce the deficit bias in fiscal policy; what is the institutional framework for low inflation and how to make the insurance sector regulation more efficient, including its implications for insurance offer for small and medium-size enterprises. Last but not least, the Irish model of development and the role of the foreign direct investment in it is discussed, including the applicability of the Irish policy in Poland and other new EU member states.

Memory bias for emotional facial expressions in major depression

Sixteen clinically depressed patients and sixteen healthy controls were presented with a set of emotional facial expressions and were asked to identify the emotion portrayed by each face. They, were subsequently given a recognition memory test for these faces. There was no difference between the groups in terms of their ability to identify emotion between from faces. All participants identified emotional expressions more accurately than neutral expressions, with happy expressions being identified most accurately. During the recognition memory phase the depressed patients demonstrated superior memory for sad expressions, and inferior memory for happy expressions, relative to neutral expressions. Conversely, the controls demonstrated superior memory for happy expressions, and inferior memory for sad expressions, relative to neutral expressions. These results are discussed in terms of the cognitive model of depression proposed by Williams, Watts, MacLeod, and Mathews (1997).

A working memory bias for alcohol-related stimuli depends on drinking score

We tested 44 participants with respect to their working memory (WM) performance on alcohol-related versus neutral visual stimuli. Previously an alcohol attentional bias (AAB) had been reported using these stimuli, where the attention of frequent drinkers was automatically drawn toward alcohol-related items (e.g., beer bottle). The present study set out to provide evidence for an alcohol memory bias (AMB) that would persist over longer time-scales than the AAB. The WM task we used required memorizing 4 stimuli in their correct locations and a visual interference task was administered during a 4-sec delay interval. A subsequent probe required participants to indicate whether a stimulus was shown in the correct or incorrect location. For each participant we calculated a drinking score based on 3 items derived from the Alcohol Use Questionnaire, and we observed that higher scorers better remembered alcohol-related images compared with lower scorers, particularly when these were presented in their correct locations upon recall. This provides first evidence for an AMB. It is important to highlight that this effect persisted over a 4-sec delay period including a visual interference task that erased iconic memories and diverted attention away from the encoded items, thus the AMB cannot be reduced to the previously reported AAB. Our finding calls for further investigation of alcohol-related cognitive biases in WM, and we propose a preliminary model that may guide future research. © 2012 American Psychological Association.

Genetic modulation of the response bias towards facial displays of anger and happiness

Background: Investigating genetic modulation of emotion processing may contribute to the understanding of heritable mechanisms of emotional disorders. The aim of the present study was to test the effects of catechol- O-methyltransferase (COMT) val158met and serotonin-transporter-linked promoter region (5-HTTLPR) polymorphisms on facial emotion processing in healthy individuals. Methods: Two hundred and seventy five (167 female) participants were asked to complete a computerized facial affect recognition task, which involved four experimental conditions, each containing one type of emotional face (fearful, angry, sad or happy) intermixed with neutral faces. Participants were asked to indicate whether the face displayed an emotion or was neutral. The COMT-val158met and 5-HTTLPR polymorphisms were genotyped. Results: Met homozygotes (COMT) showed a stronger bias to perceive neutral faces as expressions of anger, compared with val homozygotes. However, the S-homozygotes (5-HTTLPR) showed a reduced bias to perceive neutral faces as expressions of happiness, compared to L-homozygotes. No interaction between 5-HTTLPR and COMT was found. Conclusions: These results add to the knowledge of individual differences in social cognition that are modulated via serotonergic and dopaminergic systems. This potentially could contribute to the understanding of the mechanisms of susceptibility to emotional disorders. © 2013 Elsevier Masson SAS.