Is the observed persistence spurious? A test for fractional integration versus short memory and structural breaks

Although it is commonly accepted that most macroeconomic variables are nonstationary, it is often difficult to identify the source of the non-stationarity. In particular, it is well-known that integrated and short memory models containing trending components that may display sudden changes in their parameters share some statistical properties that make their identification a hard task. The goal of this paper is to extend the classical testing framework for I(1) versus I(0)+ breaks by considering a a more general class of models under the null hypothesis: non-stationary fractionally integrated (FI) processes. A similar identification problem holds in this broader setting which is shown to be a relevant issue from both a statistical and an economic perspective. The proposed test is developed in the time domain and is very simple to compute. The asymptotic properties of the new technique are derived and it is shown by simulation that it is very well-behaved in finite samples. To illustrate the usefulness of the proposed technique, an application using inflation data is also provided.

Betting on Hitler: The value of political connections in Nazi Germany

This paper examines the value of connections between German industry andthe Nazi movement in early 1933. Drawing on previously unused contemporarysources about management and supervisory board composition and stock returns,we find that one out of seven firms, and a large proportion of the biggest companies,had substantive links with the National Socialist German Workers Party. Firmssupporting the Nazi movement experienced unusually high returns, outperformingunconnected ones by 5% to 8% between January and March 1933. These resultsare not driven by sectoral composition and are robust to alternative estimatorsand definitions of affiliation.

Expression of apoptosis and survival genes in human memory T cell populations

RESUME Introduction: Les cellules T mémoires humaines sont classées en trois sous-populations sur la base de l'expression d'un marqueur de surface cellulaire, CD45RA, et du récepteur aux chimiokines, CCR7. Ces sous-populations, nommées cellules mémoires centrales (TcM), mémoires effectrices (TEM) et mémoires effectrices terminales (ITEM), ont des rôles fonctionnels distincts, ainsi que des capacités de prolifération et de régénération différentes. Cependant, la génération de ces différences reste encore mal comprise et on ignore les mécanismes moléculaires impliqués. Matériaux et Méthodes: Des cellules mononucléaires humaines du sang périphérique ont été séparées par cytométrie de flux selon leur expression de CD4, CD8, CD45RA et CCR7 en sous-populations de cellules CD4+ ou CD8+ naïves, TcM, TEM ou ITEM. Dans chacune de ces sous-populations, 14 gènes impliqués dans l'apoptose, la survie ou la capacité proliférative des cellules T ont été quantifiés par RT-PCR en temps réel, relativement à l'expression d'un gène de référence endogène. L'ARN provenant de 450 cellules T a été utilisé par gène et par sous-population. Les gènes analysés (cibles) comprenaient des gènes de survie (BAFF, APRIL, BAFF-R, BCMA, TACI, IL-15Rα, IL-7Rα), des gènes anti-apoptotiques (Bcl-2, BclxL, FLIP), des gènes pro-apoptotiques (Bad, Bax, Fast) et le gène anti-prolifératif, Tob. A l'aide de la méthode comparative delta-delta-CT, le taux d'expression des gènes cibles de chaque sous-population des cellules T mémoires CD4+ et CD8+, à été comparée à leur taux d'expression dans les cellules T naïves CD4+ et CD8+. Résultats: Dans les cellules CD8+, les gènes pro-apoptotiques Bax et Fast étaient surexprimés dans toutes les sous-populations mémoires, tandis que l'expression des facteurs anti-apoptotiques et de survie comme Bcl-2, APRIL et BAFF-R, étaient diminués. Ces deux tendances étaient particulièrement accentuées dans les sous-groupes des cellules mémoires TEM et TTEM. A noter que malgré le fait que leur expression était également diminuée dans les autres cellules mémoires, le facteur de survie IL-7Ra, était sélectivement surexprimé dans la sous-population de cellules TcM et l'expression d'IL-15Ra était sélectivement augmentée dans les TEM. Dans les cellules CD4+, le taux d'expression des gènes analysés était plus variable entre les sujets étudiés que dans les cellules CD8+, ne permettant pas de définir un profil d'expression spécifique. L'expression du gène de survie BAFF par contre, a été significativement augmentée dans toutes les sous-populations mémoire CD4+. Il en va de même pour l'expression d' APRIL et de BAFF-R, bien que dans moindre degré. A remarquer que l'expression du facteur anti-apoptotique Fast a été observée uniquement dans la souspopulation des TTEM. Discussion et Conclusions: Cette étude montre une nette différence entre les cellules CD8+ et CD4+, en ce qui concerne les profils d'expression des gènes impliqués dans la survie et l'apoptose des cellules T mémoires. Ceci pourrait impliquer une régulation cellulaire homéostatique distincte dans ces deux compartiments de cellules T mémoires. Dans les cellules CD8+ l'expression d'un nombre de gènes impliqués dans la survie et la protection de l'apoptose semblerait être diminuée dans les populations TEM et TTEM en comparaison à celle des sous-populations naïves et TEM, tandis que l'expression des gènes pro-apoptotiques semblerait être augmentée. Comme ceci paraît être plus accentué dans les TTEM, cela pourrait indiquer une plus grande disposition à l'apopotose dans les populations CCR7- (effectrices) et une perte de survie parallèlement à l'acquisition de capacités effectrices. Ceci parlerait en faveur d'un modèle de différentiation linéaire dans les cellules CD8+. De plus, l'augmentation sélective de l'expression d'IL-7Ra observée dans le sous-groupe de cellules mémoires TEM, et d'IL-15Ra dans celui des TEM, pourrait indiquer un moyen de sélection pour des réponses immunitaires mémoires à long terme par une réponse distincte à ces cytokines. Dans les cellules CD4+ par contre, aucun profil d'expression n'a pu être déterminé; les résultats suggèrent même une résistance relative à l'apoptose de la part des cellules mémoires. Ceci pourrait favoriser l'existence d'un modèle de différentiation plus flexible avec des possibilités d'interaction multiples. Ainsi, la surexpression sélective de BAFF, APRIL et BAFF-R dans les sous-populations individuelles des cellules mémoires pourrait être un indice de l'interaction de ces sous-groupes avec des cellules B. ABSTRACT Introduction: Based on their surface expression of the CD45 isoform and of the CCR7 chemokine receptor, memory T cells have been divided into the following three subsets: central memory (TAM), effector memory (TEM) and terminal effector memory (ITEM). Distinct functional roles and different proliferative and regenerative capacities have been attributed to each one of these subpopulations. The molecular mechanisms underlying these differences; however, remain poorly understood. Materials and Methods: According to their expression of CD4, CD8, CD45RA and CCR7, human peripheral blood mononuclear cells were sorted by flow-cytometry into CD4+ or CD8+ naïve, TAM, TEM and ITEM subsets. Using real-time PCR, the expression of 14 genes known to be involved in apoptotis, survival or proliferation of T cells was quantified separately in each individual subset, relative to an endogenous reference gene. The RNA equivalent of 450 T cells was used for each gene and subset. The target gene panel included the survival genes BAFF, APRIL, BAFF-R, BCMA, TACI, IL-15Rα and IL-7Rα, the anti-apoptotic genes Bcl2, Bcl-xL and FLIP, the pro-apoptotic genes Bad, Bax and Fast, as well as the antiproliferative gene Tob. Using the comparative CT-method, the expression of the target genes in the three memory T cell subsets of both CD4+ and CD8+ T cell populations was compared to their expression in the naïve T cells. Results: In CD8+ cells, the pro-apoptotic factors Bax and Fast were found to be upregulated in all memory T cell subsets, whereas the survival and anti-apoptotic factors Bcl-2, APRIL and BAFF-R were downregulated. These tendencies were most accentuated in TEM and TTEM subsets. Even though the survival factor IL-7Rα was also downregulated in these subsets, interestingly, it was selectively upregulated in the CD8+ TAM subset. Similarly, IL-15Rαexpression was shown to be selectively upregulated in the CD8+ TEM subset. In CD4+ cells, the expression levels of the analyzed genes showed a greater inter-individual variability than in CD8+ cells, thus suggesting the absence of any particular expression pattern for CD4+ memory T cells. However, the survival factor BAFF was found to be significantly upregulated in all CD4+ memory T cell subsets, as was also the expression of APRIL and BAFF-R, although to a lesser extent. Furthermore, it was noted that the pro-apoptotic gene Fast was only expressed in the TTEM CD4+ subset. Discussion and Conclusions: Genes involved in apoptosis and survival in human memory T cells have been shown to be expressed differently in CD8+ cells as compared to CD4+ cells, suggesting a distinct regulation of cell homeostasis in these two memory T cell compartments. The present study suggests that, in CD8+ T cells, the expression of various survival and antiapoptotic genes is downregulated in TEM and TTEM subsets, while the expression of proapoptotic genes is upregulated in comparison to the naïve and the TAM populations. These characteristics, potentially translating to a greater susceptibility to apoptosis in the CCR7- (effector) memory populations, are accentuated in the TTEM population, suggesting a loss of survival in parallel to the acquisition of effector capacities. This speaks in favour of a linear differentiation model in CD8+ T memory cells. Moreover, the observed selectively increased expression of IL-7Rα in CD8+ TAM cells - as that of IL-15Rα in CD8+ TEM cells -suggest that differential responsiveness to cytokines could confer a selection bias for distinct long-term memory cell responses. Relative to the results for CD8+ T cells, those for CD4+ T cells seem to indicate a certain resistance of the memory subsets to apoptosis, suggesting the possibility of a more flexible differentiation model with multiple checkpoints and potential interaction of CD4+ memory cells with other cells. Thus, the selective upregulation of BAFF, APRIL and BAFF-R in individual memory subsets could imply an interaction of these subsets with B cells.

The political economy of employment protection

This paper develops a model of job creation and job destruction in agrowing economy with embodied technical progress, that we use toanalyze the political support for employment protection legislationssuch as the ones that are observed in most European countries.We analyze the possibility of Condorcet cycles due to the fact thatworkers about to become unemployed prefer both an increase and areduction in firing costs over the status quo. Despite this problem, we show the existence of local, and sometimes global majority winners.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer job duration. We show that the gains from, and consequently the politicalsupport for employment protection (as defined by maximunjob tenure) are larger, the lower the rate of creative destruction and the largerthe worker's bargaining power. Numerical simulations suggest a hump-shaped response of firing costs to these variables, as well as negative impact of exogeneous turnover on employment protection.

Increasing political returns and rural-urban migrations

This paper analyzes the different equilibria in rural-urban migrationsand political redistribution that result from the interaction betweenincreasing political returns, the distribution of land, and creditmarket imperfections. Governments that put a special weight on thewelfare of urban workers when setting agricultural prices generate apolitical externality in the urban sector, giving peasants anincentive to migrate in anticipation of policy determination. Ifcredit markets are imperfect, land ownership confers higherproductivity to peasants, who require large price changes to migrate.In this context, land inequality would lead to large migrations and tolarge policy change, while an egalitarian land distribution would leadto no migration and to a small policy change. This interaction shedslight on the contrasting experience of Latin America and East Asia atthe outset of World War II.

Going Public in the European Union: Action Repertoires of Western European Collective Political Actors

As a result of the Europeanization of politics and the increasing role of the public sphere, political actors in Western Europe are currently facing a double strategic challenge. Based on data from seven West European countries and the European Union, the authors analyze how state actors, political parties, interest groups, and social movement organizations cope with this double challenge at both the national and the supranational level. Results indicate that the classic repertoire of inside strategies at the national level is still the most typical for all actors, but media-related strategies are also prominent at the national level. The Europeanization of repertoires is mainly determined by institutional factors and by the actors' power, whereas the public arena plays an equally important role for all types of actors, in all countries and at both the national and the EU level.

Social security in theory and practice (I): Facts and political theories

166 countries have some kind of public old age pension. What economic forcescreate and sustain old age Social Security as a public program? We document some of the internationally and historically common features of Social Security programs including explicit and implicit taxes on labor supply, pay-as-you-go features, intergenerational redistribution, benefits which areincreasing functions of lifetime earnings and not means-tested. We partition theories of Social Security into three groups: "political", "efficiency" and "narrative" theories. We explore three political theories in this paper: the majority rational voting model (with its two versions: "the elderly as the leaders of a winning coalition with the poor" and the "once and for all election" model), the "time-intensive model of political competition" and the "taxpayer protection model". Each of the explanations is compared with the international and historical facts. A companion paper explores the "efficiency" and "narrative" theories, and derives implicationsof all the theories for replacing the typical pay-as-you-go system with a forced savings plan.

The political consequences of unemployment

We analyze the channels by which an ill-functioning labor market changes the preferences of the people for public policy and therefore the decisions that are made. We not only discuss labour market reform but other important aspects of policy making such as the size and structure of government spending. Theclass of mechanisms that we highlight can be summarized as the very existence of unemployment generating political support for "sclerosis". This may help to explain the timid pace of reform, in particular the fact that any recovery sends them at the backfront of the political agenda, and the sometimes violent opposition generated by some measures, as we have seen mostly in France.

c-Myc acts downstream of IL-15 in the regulation of memory CD8 T-cell homeostasis.

A subset of CD8 T cells in normal mice, expressing high levels of activation markers such as CD44, shares many properties with antigen-specific memory CD8 T cells. Homeostasis of CD44(high) CD8 T cells depends upon cytokines such as interleukin-15 (IL-15); however, the downstream signaling pathways regulating IL-15-dependent homeostatic proliferation are poorly defined. Surprisingly, we show here that haploinsufficiency of the protooncogene c-myc leads to a highly selective decrease in CD44(high) CD8 T cells in mice. Although steady-state proliferation and survival of CD44(high) CD8 T cells appeared not to be dependent on c-Myc, homeostatic proliferation of c-myc(+/-) CD44(high) CD8 T cells in lymphopenic hosts was strongly reduced, and the residual homeostatic proliferation of these cells appeared to occur independently of IL-15. Moreover, c-myc(+/-) CD44(high) CD8 T cells responded very poorly to purified IL-15 in vitro. Backcrossing of c-myc(+/-) mice to IL-15(-/-) mice revealed that the number of CD44(high) CD8 T cells decreased in an additive fashion in mice heterozygous for c-myc and IL-15. Finally homeostatic proliferation of antigen-specific memory CD44(high) CD8 T cells was also impaired in c-myc(+/-) mice. Collectively, our data identify c-Myc as a novel downstream component of the IL-15-dependent pathway controlling homeostatic proliferation of memory CD44(high) CD8 T cells.

What is what?: A simple time-domain test of long-memory vs. structural breaks

This paper proposes a new time-domain test of a process being I(d), 0 < d = 1, under the null, against the alternative of being I(0) with deterministic components subject to structural breaks at known or unknown dates, with the goal of disentangling the existing identification issue between long-memory and structural breaks. Denoting by AB(t) the different types of structural breaks in the deterministic components of a time series considered by Perron (1989), the test statistic proposed here is based on the t-ratio (or the infimum of a sequence of t-ratios) of the estimated coefficient on yt-1 in an OLS regression of ?dyt on a simple transformation of the above-mentioned deterministic components and yt-1, possibly augmented by a suitable number of lags of ?dyt to account for serial correlation in the error terms. The case where d = 1 coincides with the Perron (1989) or the Zivot and Andrews (1992) approaches if the break date is known or unknown, respectively. The statistic is labelled as the SB-FDF (Structural Break-Fractional Dickey- Fuller) test, since it is based on the same principles as the well-known Dickey-Fuller unit root test. Both its asymptotic behavior and finite sample properties are analyzed, and two empirical applications are provided.

Electoral competition under the threat of political unrest

We study elections in which one party (the strong party) controls a source of political unrest; e.g., this party could instigate riots if it lost the election. We show that the strong party is more likely to win the election when there is less information about its ability to cause unrest. This is because when theweak party is better informed, it can more reliably prevent political unrest by implementing a ``centrist'' policy. When there is uncertainty over the credibility of the threat, ``posturing'' by the strong party leads to platform divergence.