How Optimal is US Monetary Policy?

Most of the literature estimating DSGE models for monetary policy analysis assume that policy follows a simple rule. In this paper we allow policy to be described by various forms of optimal policy - commitment, discretion and quasi-commitment. We find that, even after allowing for Markov switching in shock variances, the inflation target and/or rule parameters, the data preferred description of policy is that the US Fed operates under discretion with a marked increase in conservatism after the 1970s. Parameter estimates are similar to those obtained under simple rules, except that the degree of habits is significantly lower and the prevalence of cost-push shocks greater. Moreover, we find that the greatest welfare gains from the ‘Great Moderation’ arose from the reduction in the variances in shocks hitting the economy, rather than increased inflation aversion. However, much of the high inflation of the 1970s could have been avoided had policy makers been able to commit, even without adopting stronger anti-inflation objectives. More recently the Fed appears to have temporarily relaxed policy following the 1987 stock market crash, and has lost, without regaining, its post-Volcker conservatism following the bursting of the dot-com bubble in 2000.

Comparative Statics of Asset Prices: the effect of other assets' risk

Currently, financial economics is unable to predict changes in asset prices with respect to changes in the underlying risk factors, even when an asset's dividend is independent of a given factor. This paper takes steps towards addressing this issue by highlighting a crucial component of wealth effects on asset prices hitherto ignored by the literature. Changes in wealth do not only alter an agents risk aversion, but also her perceived 'riskiness' of a security. The latter enhances significantly the extent to which market- clearing leads to endogenously-generated correlation across asset prices, over and above that induced by correlation between payoffs, giving the appearance of 'contagion.'

Effects of stress on economic decision-making: Evidence from laboratory experiments

The ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions.

A Theory of Wage Setting Behavior

Concerns for fairness, workers' morale and reciprocity infuence firms' wage setting policy. In this paper we formalize a theory of wage setting behavior in a simple and tractable model that explicitly considers these behavioral aspects. A worker is assumed to have reference-dependent preferences and displays loss aversion when evaluating the fairness of a wage contract. The theory establishes a wage-effort relationship that captures the worker's reference-dependent reciprocity, which in turn in uences the firm's optimal wage policy. The paper makes two key contributions: it identifies loss aversion as an explanation for a worker's asymmetric reciprocity; and it provides realistic and generalized microfoundation for downward wage rigidity. We further illustrate the implications of our theory for both wage setting and hiring behavior. Downward wage rigidity generates several implications for the outcome of the initial employment contract. The worker's reference wage, his extent of negative reciprocity and the firms expectations are key drivers of the propositions derived.

Cognition, Resources, and Institutions in the Explanation of Attitudes to Free Trade

This article proposes a framework for the analysis of attitudes to foreign trade policies that challenges the traditional skill-endowment approach. The traditional approach assumes informed individuals who calculate the costs and benefits of alternative policies. We propose that individuals lack information and that their positions rest on economic vulnerability, as mediated through risk-aversion. We also stress the role of environmental signals and political endorsements in guiding individuals' views on trade policy. We test this alternative approach with a Spanish survey conducted in May 2009 and the ISSP survey conducted in 2003 in a large number of less developed and more developed countries. The Spanish data show that the population is largely uninformed and that their ideas about the consequences of free trade policy do not explain attitudes among different socio-demographic groups. Meanwhile, the ISSP data contradict important aspects of the traditional approach and are consistent with the alternative approach.

Les préférences alimentaires sont-elles influencées par l'index de masse corporelle, l'âge, le sexe ou le tabac [Are food preferences affected by body mass index, age, sex or tobacco?].

In recent decades the percentage of energy derived from dietary fat has increased. The aim of this study was to explore the relationship between food taste preferences, BMI, age, gender and smoking habits. A computerized questionnaire using a hedonic scale (range 0 to 8) to quantify the liking for sweet and savoury, lean and fat foods, was filled by 233 adults: 171 normal weight (131 women, 40 men) and 62 overweight subjects (BMI > 25 kg/m2 42 women, 20 men). The majority of the subjects had a general preference for savoury lean food irrespective of their BMI or gender. Similarly, preference for sweet lean food was not influenced by the magnitude of the BMI. In contrast, overweight subjects had a preference for sweet fat food (p = 0.05) as well as for savoury fat food (p < 0.05). At any age or BMI, men preferred sweet fat food (p < 0.01). This was not the case for women. Overweight men over forty preferred savoury fat food, in contrast to overweight women of the same age (p < 0.01). The same difference existed between normal weight smokers and non-smokers. This study demonstrates that fat food preference plays a potential role in the development of obesity.

Nash equilibrium strategies in discrete-time finite-horizon dynamic games with risk-and effort-averse players

The objective of this paper is to re-examine the risk-and effort attitude in the context of strategic dynamic interactions stated as a discrete-time finite-horizon Nash game. The analysis is based on the assumption that players are endogenously risk-and effort-averse. Each player is characterized by distinct risk-and effort-aversion types that are unknown to his opponent. The goal of the game is the optimal risk-and effort-sharing between the players. It generally depends on the individual strategies adopted and, implicitly, on the the players' types or characteristics.

Do Legal Immigrants and Natives Compete in the Labour Market? Evidence from Catalonia

The precondition for labour-market competition between immigrants and natives is that both are willing to accept jobs that do not differ in quality. To test this hypothesis, in this paper we compare the working conditions between immigrants and natives in Catalonia. Comparing immigrants’ working conditions in relation to their native counterparts is not only a useful analysis for studying the extent to which immigrants and low-skilled native workers are direct competitors in the labour market, but also allows us to contribute to the literature on this issue by moving away from the conventional approach used in previous studies. Our results indicate that: i) natives and immigrants display a different taste for job (dis)amenities; ii) Catalan-born workers might be in direct competition with EU15 immigrants, while non-Catalan Spanish workers might be competing with Latin American immigrants, and; iii) African-born immigrants are the group in the Catalan workforce that by far face the worst working conditions.

Activity in inferior parietal and medial prefrontal cortex signals the accumulation of evidence in a probability learning task.

In an uncertain environment, probabilities are key to predicting future events and making adaptive choices. However, little is known about how humans learn such probabilities and where and how they are encoded in the brain, especially when they concern more than two outcomes. During functional magnetic resonance imaging (fMRI), young adults learned the probabilities of uncertain stimuli through repetitive sampling. Stimuli represented payoffs and participants had to predict their occurrence to maximize their earnings. Choices indicated loss and risk aversion but unbiased estimation of probabilities. BOLD response in medial prefrontal cortex and angular gyri increased linearly with the probability of the currently observed stimulus, untainted by its value. Connectivity analyses during rest and task revealed that these regions belonged to the default mode network. The activation of past outcomes in memory is evoked as a possible mechanism to explain the engagement of the default mode network in probability learning. A BOLD response relating to value was detected only at decision time, mainly in striatum. It is concluded that activity in inferior parietal and medial prefrontal cortex reflects the amount of evidence accumulated in favor of competing and uncertain outcomes.

Essays in higher moment asset pricing and liquidity risk

This thesis focuses on theoretical asset pricing models and their empirical applications. I aim to investigate the following noteworthy problems: i) if the relationship between asset prices and investors' propensities to gamble and to fear disaster is time varying, ii) if the conflicting evidence for the firm and market level skewness can be explained by downside risk, Hi) if costly learning drives liquidity risk. Moreover, empirical tests support the above assumptions and provide novel findings in asset pricing, investment decisions, and firms' funding liquidity. The first chapter considers a partial equilibrium model where investors have heterogeneous propensities to gamble and fear disaster. Skewness preference represents the desire to gamble, while kurtosis aversion represents fear of extreme returns. Using US data from 1988 to 2012, my model demonstrates that in bad times, risk aversion is higher, more people fear disaster, and fewer people gamble, in contrast to good times. This leads to a new empirical finding: gambling preference has a greater impact on asset prices during market downturns than during booms. The second chapter consists of two essays. The first essay introduces a foramula based on conditional CAPM for decomposing the market skewness. We find that the major market upward and downward movements can be well preadicted by the asymmetric comovement of betas, which is characterized by an indicator called "Systematic Downside Risk" (SDR). We find that SDR can efafectively forecast future stock market movements and we obtain out-of-sample R-squares (compared with a strategy using historical mean) of more than 2.27% with monthly data. The second essay reconciles a well-known empirical fact: aggregating positively skewed firm returns leads to negatively skewed market return. We reconcile this fact through firms' greater response to negative maraket news than positive market news. We also propose several market return predictors, such as downside idiosyncratic skewness. The third chapter studies the funding liquidity risk based on a general equialibrium model which features two agents: one entrepreneur and one external investor. Only the investor needs to acquire information to estimate the unobservable fundamentals driving the economic outputs. The novelty is that information acquisition is more costly in bad times than in good times, i.e. counter-cyclical information cost, as supported by previous empirical evidence. Later we show that liquidity risks are principally driven by costly learning. Résumé Cette thèse présente des modèles théoriques dévaluation des actifs et leurs applications empiriques. Mon objectif est d'étudier les problèmes suivants: la relation entre l'évaluation des actifs et les tendances des investisseurs à parier et à crainadre le désastre varie selon le temps ; les indications contraires pour l'entreprise et l'asymétrie des niveaux de marché peuvent être expliquées par les risques de perte en cas de baisse; l'apprentissage coûteux augmente le risque de liquidité. En outre, des tests empiriques confirment les suppositions ci-dessus et fournissent de nouvelles découvertes en ce qui concerne l'évaluation des actifs, les décisions relatives aux investissements et la liquidité de financement des entreprises. Le premier chapitre examine un modèle d'équilibre où les investisseurs ont des tendances hétérogènes à parier et à craindre le désastre. La préférence asymétrique représente le désir de parier, alors que le kurtosis d'aversion représente la crainte du désastre. En utilisant les données des Etats-Unis de 1988 à 2012, mon modèle démontre que dans les mauvaises périodes, l'aversion du risque est plus grande, plus de gens craignent le désastre et moins de gens parient, conatrairement aux bonnes périodes. Ceci mène à une nouvelle découverte empirique: la préférence relative au pari a un plus grand impact sur les évaluations des actifs durant les ralentissements de marché que durant les booms économiques. Exploitant uniquement cette relation générera un revenu excédentaire annuel de 7,74% qui n'est pas expliqué par les modèles factoriels populaires. Le second chapitre comprend deux essais. Le premier essai introduit une foramule base sur le CAPM conditionnel pour décomposer l'asymétrie du marché. Nous avons découvert que les mouvements de hausses et de baisses majeures du marché peuvent être prédits par les mouvements communs des bêtas. Un inadicateur appelé Systematic Downside Risk, SDR (risque de ralentissement systématique) est créé pour caractériser cette asymétrie dans les mouvements communs des bêtas. Nous avons découvert que le risque de ralentissement systématique peut prévoir les prochains mouvements des marchés boursiers de manière efficace, et nous obtenons des carrés R hors échantillon (comparés avec une stratégie utilisant des moyens historiques) de plus de 2,272% avec des données mensuelles. Un investisseur qui évalue le marché en utilisant le risque de ralentissement systématique aurait obtenu une forte hausse du ratio de 0,206. Le second essai fait cadrer un fait empirique bien connu dans l'asymétrie des niveaux de march et d'entreprise, le total des revenus des entreprises positiveament asymétriques conduit à un revenu de marché négativement asymétrique. Nous décomposons l'asymétrie des revenus du marché au niveau de l'entreprise et faisons cadrer ce fait par une plus grande réaction des entreprises aux nouvelles négatives du marché qu'aux nouvelles positives du marché. Cette décomposition révélé plusieurs variables de revenus de marché efficaces tels que l'asymétrie caractéristique pondérée par la volatilité ainsi que l'asymétrie caractéristique de ralentissement. Le troisième chapitre fournit une nouvelle base théorique pour les problèmes de liquidité qui varient selon le temps au sein d'un environnement de marché incomplet. Nous proposons un modèle d'équilibre général avec deux agents: un entrepreneur et un investisseur externe. Seul l'investisseur a besoin de connaitre le véritable état de l'entreprise, par conséquent, les informations de paiement coutent de l'argent. La nouveauté est que l'acquisition de l'information coute plus cher durant les mauvaises périodes que durant les bonnes périodes, comme cela a été confirmé par de précédentes expériences. Lorsque la récession comamence, l'apprentissage coûteux fait augmenter les primes de liquidité causant un problème d'évaporation de liquidité, comme cela a été aussi confirmé par de précédentes expériences.

Generación de visitas virtuales a museos 3D para la inclusión en páginas web

Las páginas web junto a la animación 3D son dos grandes atractivos hoy en día en el mundo de Internet. Una interfaz web agradable e interactiva por la que navegar cómodamente; junto a una herramienta en dos dimensiones fácil de manejar, para diseñar y obtener un resultado en tres dimensiones. Esas han sido las bases de mi aplicación, la cual consiste en una página web dedicada al arte, donde cualquier persona podrá registrarse y dibujar mediante una paleta cómo sería un museo a su gusto. Visitando el museo virtual resultante, donde admirar las obras junto a su autor y título.

Health and wellbeing project

This project will promote and introduce a healthier lifestyle for people over 50 through healthy eating, exercise and self-help in the Atticall and surrounding area. The project will focus on local produce and give participants an opportunity to cook and taste samples of their own 'healthy food'. The Pharmacist will attend these sessions to give diet realted talks and anwer any queries people may have.

New interactive resource feeds children's curiosity

The Public Health Agency and safefood today (Wednesday 22 June) officially launched Eat, Taste and Grow, a new interactive curriculum based education resource to help increase awareness among primary school children of the origins of their food, local produce and the role this plays in healthy eating. As research in 2006 showed, 18% of children aged 2-15 years in Northern Ireland were reported to be obese; and provisional data in 2008-2009 showed that 22.5% of children entering Year 1 were already overweight (17%) or obese (5%).* The launch of Eat, Taste and Grow is an innovative collaboration between the PHA and safefood that will provide children with lifelong lessons about the food they eat, healthy eating options and the benefits of an active lifestyle.The free teacher-led CD-ROM resource will be sent to every primary school across Northern Ireland by September 2011 and will help increase awareness among primary school children of the origins of their food and local produce, and the role this plays in healthy eating.Speaking at the event, Health Minister Edwin Poots said: "Being obese as a child can store up problems for the future, leading to a reduction in life expectancy and potentially causing other health problems such as increased risk of coronary heart disease, cancer and Type 2 Diabetes."Currently around one in four girls and one in six boys in Primary One (Year 1) are overweight or obese."Many of our children are not as physically active as they should be, nor do they have a healthy, balanced diet."This new resource will help teachers in our primary schools educate children on how to choose what foods are healthier for them which hopefully they will carry with them into adulthood."Dr Eddie Rooney, Chief Executive, PHA said: "The Public Health Agency recognises the need to give every child a healthy start in life. Schools play a vital role in contributing to the development of knowledge and skills necessary to make healthier food choices and laying the foundation for good eating habits which can then be carried through into adulthood. Eat, Taste and Grow is an excellent resource that will help equip teachers to carry out this role and in turn enable children to make healthier choices."Mr Martin Higgins, CEO safefood said: "We know and understand the challenges faced by parents to encourage children to eat healthy foods. As obesity among children continues to rise, this interactive resource will educate children in a fun and engaging way while providing them with the information to make informed, responsible choices throughout their lives."The Eat, Taste and Grow resource is an interactive CD-ROM for use on a whiteboard or computer and is divided into: Foundation, Key Stage 1 and Key Stage 2. Topics include 'Where does our food come from?', 'Who produces our food?', 'How food grows' and 'How food is produced and preserved'. Each topic has accompanying teacher's notes and includes ideas for classroom discussions, role play, games and quiz suggestions.

Obesity - an acknowledged public health challenge

As we face a difficult economic climate, in which inequalities may worsen, the PHA faces many challenges in its efforts to improve the health of the population. One such challenge is the issue of obesity. Recently, in the Draft Programme for Government and, again today, in anticipation of the publication of the Consultation on the Review of Health and Social Care Services in Northern Ireland, the specific issue of obesity has been highlighted in the media.The PHA is committed to playing a lead role in tackling this major health issue and has been systematically examining the evidence of best practice and effectiveness to ensure that investment and working in partnership will bring clear benefits. A welcome consequence of any success would be a reduction in the impact of the physical, and emotional costs of obesity related ill-health to individuals - and the financial costs to an overstretched healthcare system.A multi-facetted approach to tackling obesity is required for Northern Ireland. This will mean working across government departments, looking at relevant legislation, taxation, food standards and labelling, as well as supporting a raft of programmes within education, workplace, and at the local community level."The prevalence of overweight and obesity has risen dramatically in recent years in Northern Ireland and is now the norm to be overweight, rather than the exception. The Northern Ireland Health and Social Wellbeing Survey (2010-11) indicated that 36% of adults are overweight and a further 23% are obese; this means that approximately 3 in 5 adults in Northern Ireland carry excess weight. A similar proportion of males and females were obese (23%) however males were more likely to be overweight (44%) than females (30%).Data from the Northern Ireland Health and Wellbeing Survey (2010-11) reported that 27% of children aged 2-15 years are obese or overweight. The findings presented here are based on the guidelines put forward by the International Obesity Task Force. Using this approach, 8% of children were assessed as obese, with similar results for boys (8%) and girls (9%). Obesity has serious implications for health and wellbeing and is associated with an increased risk of heart disease and stroke, type 2 diabetes, some cancers, respiratory problems and joint pain.Evidence indicates that being obese can reduce life expectancy by up to 9 years; and it can impact on emotional and psychological well-being and self-esteem, especially among young people.Obesity also impacts on wider society through economic costs, loss of productivity and increased demands on our health and social care system. It is estimated that obesity in Northern Ireland is resulting in 260,000 working days lost each year with a cost to the local economy of £500 million.The good news is that the intentional loss of significant weight (approx 10kg) in overweight and obese adults has been shown to confer significant health benefits, decreased morbidity and may also reduce obesity-related mortality.Key programmes and interventions are undertaken by the PHA in order to prevent and reduce overweight and obesity. The programmes/interventions are supported by significant ongoing work at local level. Examples include:the promotion of breastfeeding; local programmes to increase awareness of good nutrition and develop cooking skills, for example 'Cook It!'; promotion of more active lifestyles, for example, Walking for Health' and 'Teenage Kicks'; development of community allotment schemes; programmes for primary school children, for example Skip2bfit and Eat, Taste and Grow; and sports and other recreation, for example 'Active Belfast'. The PHA's multi media campaign 'It all adds up!' to encourage children to become more active and understand the importance of keeping fit, in a fun and exciting way, ran until October 2011. It encouraged parents and carers to go to the website www.getalifegetactive.com and download the PHA logbook It all adds up! to plan activities as a family. The logbook helped children and parents plan and keep track of their participation in physical activity at school, home and in the community. PHA is currently developing a public information campaign and other supportive work to increase public awareness of obesity as well as to provide advice and support for those who want to make real changes. The campaign development is well underway and is anticipated for launch in late Spring 2012. Like many common health problems, people living in disadvantaged circumstances suffer most and the PHA is committed to tackling this aspect of health inequality. The good news is that even a modest weight loss, of 1-1 Â_ stones, can help to reduce the risk of many of the health problems resulting from being overweight or obese. Information on losing weight through healthier eating and being more active can be found on the PHA websites - www.enjoyhealthyeating.info and www.getalifegetactive.com . These websites provide help and advice for anyone who wants to improve their eating habits and fitness levels, by making small, sustainable, healthy changes to their lifestyle. The PHA leaflet, Small changes, big benefits is also available to download from the PHA website, 'Publications' section.

Stop, Look and Cook: recipe book for schools in Northern Ireland

Nutrition is central to health and children's diets can be an important influence now and in the future. Stop, Look and Cook is a new recipe book for use by catering staff in all grant-aided nursery, primary and post-primary schools in Northern Ireland.�Recipes have been collected from school caterers across the region. These recipes have been checked to ensure that they are compliant with nutritional standards for school lunches and have been tested in schools for taste and suitability. In addition all the recipes have been analysed by the PHA using a nutritional software package, with a particular focus on fat, salt and sugar.�This recipe book provides approximately 280 recipes, giving schools more choice for menus. It also contains useful advice for dealing with food allergies and supplying alternative meals for pupils from other cultures.For more information on Stop, Look and Cook please contact the school meals catering manager at your local Education and Library Board.�