Asset Price Instability and Policy Responses: The Legacy of Liberalisation

The debate about the dynamics and potential policy responses to asset inflation has intensified in recent years. Some analysts, notably Borio and Lowe, have called for 'subtle' changes to existing monetary targeting frameworks to try to deal with the problems of asset inflation and have attempted to developed indicators of financial vulnerability to aid this process. In contrast, this paper argues that the uncertainties involved in understanding financial market developments and their potential impact on the real economy are likely to remain too high to embolden policy makers. The political and institutional risks associated with policy errors are also significant. The fundamental premise that a liberalised financial system is based on 'efficient' market allocation cannot be overlooked. The corollary is that any serious attempt to stabilize financial market outcomes must involve at least a partial reversal of deregulation.

Asymmetry and duration dependence in Australian GDP and unemployment

The per iodic structure of business cycles suggests that significant asymmetries are present over different phases of the cycle. This paper uses markov regime-switching models with fixed and duration dependent transition probabilities to directly model expansions, contractions and durations in Australian GDP growth and unemployment growth. Evidence is found of significant asymmetry in growth rates across expansions and contractions for both series. GDP contractions exhibit duration dependence implying that as output recessions age the likelihood of switching into an expansion phase increases. Unemployment growth does not exhibit duration dependence in either phase. Evidence is also presented that non-linearities in unemployment growth are well explained by the asymmetries in the GDP growth cycle. The analysis suggests that recessions are periods of rapid and intense job destruction, that Australian unemployment tends to ratchet up in recessionary periods and, in contrast to US and UK studies, that shocks to Australian unemployment growth are more persistent in recessions than expansions. [E37 C5 C41].

Price dispersion and price indexes

The traditional theory of price index numbers is based on the law of one price. But in the real world, we frequently observe the existence of an equilibrium price dispersion instead of one price of equilibrium. This article discusses the effects of price dispersion on two price indexes: the cost of living index and the consumer price index. With price dispersion and consumer searching for the lowest price, these indexes cannot be interpreted as deterministic indicators, but as stochastic indicators, and they can be biased if price dispersion is not taken into account. A measure for the bias of the consumer price index is proposed and the article ends with an estimation of the bias based on data obtained from the consumer price index calculated for the city of Sao Paulo, Brazil, from January 1988 through December 2004. The period analysed is very interesting, because it exhibits different inflationary environments: high levels and high volatility of the rates of inflation with great price dispersion until July 1994 and low and relatively stable rates of inflation with prices less dispersed after August 1994.

Optimal reserve management and sovereign debt

Most models currently used to determine optimal foreign reserve holdings take the level of international debt as given. However, given the sovereign`s willingness-to-pay incentive problems, reserve accumulation may reduce sustainable debt levels. In addition, assuming constant debt levels does not allow addressing one of the puzzles behind using reserves as a means to avoid the negative effects of crisis: why do not sovereign countries reduce their sovereign debt instead? To study the joint decision of holding sovereign debt and reserves, we construct a stochastic dynamic equilibrium model calibrated to a sample of emerging markets. We obtain that the reserve accumulation does not play a quantitatively important role in this model. In fact, we find the optimal policy is not to hold reserves at all. This finding is robust to considering interest rate shocks, sudden stops, contingent reserves and reserve dependent output costs. (c) 2008 Elsevier B.V. All rights reserved.

The food business environment and the role of China and Brazil building a ""food bridge""

Purpose - The purpose of this paper is to discuss the economic crisis of 2008/2009 and the major impacts on developing nations and food-producing countries Within this macro-environment of food chains, there is concern that food inflation might come back sooner than expected The role of China as one of the major food consumers in the future, and Brazil, as the major food producer, is described as the food bridge, and an agenda of common development of these countries suggested. Design/methodology/approach - This paper reviews literature on muses of food inflation, production shortages, and investigation of programs to solve the problem in the future, it is also based on author`s personal insights and experience of working on this field in the last 15 years, and recent discussions in forums and interviews Findings - The major factors that jointly caused food prices increase in 2007/2008 were population growth, Income distribution, urbanization, dollar devaluations, commodity funds, social programs, production shortages, and bionic`s A list of ten policies is suggested. horizontal expansion of food production, vertical expansion, reduction in transaction costs, in protectionism and other taxes, investment in logistics, technology and better coordination, contracts, new generation of fertilizers and to use the best sources of biofuels. Originality/value - Two major outputs from this paper are the ""food demand model"" that inserts in one model the trends and muses of food inflation and the solutions, and the ""food bridge concept"" that also aligns in one box the imminent major food chain cooperation between China and Brazil

An analysis of US greenhouse gas cap-and-trade proposals using a forward-looking economic model

We develop a forward-looking version of the recursive dynamic MIT Emissions Prediction and Policy Analysis (EPPA) model, and apply it to examine the economic implications of proposals in the US Congress to limit greenhouse gas (GHG) emissions. We find that shocks in the consumption path are smoothed out in the forward-looking model and that the lifetime welfare cost of GHG policy is lower than in the recursive model, since the forward-looking model can fully optimize over time. The forward-looking model allows us to explore issues for which it is uniquely well suited, including revenue-recycling and early action crediting. We find capital tax recycling to be more welfare-cost reducing than labor tax recycling because of its long-term effect on economic growth. Also, there are substantial incentives for early action credits; however, when spread over the full horizon of the policy they do not have a substantial effect on lifetime welfare costs.

GABAergic REGULATION OF AUDITORY SENSORY GATING IN LOW- AND HIGH-ANXIETY RATS SUBMITTED TO A FEAR CONDITIONING PROCEDURE

The inferior colliculus (IC) is primarily involved in the processing of acoustic stimuli, being in a position to send auditory information to motor centers that participate in behaviors such as prey catching and predators` avoidance The role of the central nucleus of the IC (CIC) on fear and anxiety has been suggested on the basis that rats are able to engage in tasks to decrease the aversiveness of CIC stimulation, increased Fos immunolabeling during diverse aversive states and increased CIC auditory evoked potentials (AEP) induced by conditioned fear stimuli Additionally it was shown that brainstem AEP, represented by wave V, for which the main generator is the IC, is increased during experimentally induced anxiety Rats segregated according to their low or high emotional reactivity have been used as an important tool in the study of fear and anxiety The IC contains a high density of GABA receptors Since the efficacy of an anxiolytic compound is a function of the animal`s anxiety level, it is possible that GABA-benzodiazepine (Bzp) agents affect LA and HA animals differently In this study we investigated the GABA-Bzp influence on the modulation of AEP in rats with low (LA) or high-anxiety (HA) levels, as assessed by the elevated plus maze test (EPM) GABA-Bzp modulation on the unconditioned AEP response was analyzed by using intra CIC injections (0 2 mu l) of the GABA-Bzp agonists muscimol (121 ng) and diazepam (30 mu g) or the GABA inhibitors bicuculline (10 ng) and semicarbazide (7 mu g) In a second experiment, we evaluate the effects of contextual aversive conditioning on AEP using foot shocks as unconditioned stimuli On the unconditioned fear paradigm GABA inhibition in creased AEP in LA rats and decreases this measure in HA counterparts Muscimol was effective in reducing AEP in both LA and HA rats Contextual fear stimuli increased the magnitude of AEP In spite of no effect obtained with diazepam in LA rats the drug inhibited AEP in HA animals The specificity of the regulatory mechanisms mediated by GABA Bzp for the ascending neurocircuits responsible for the acquisition of aversive information in LA and HA animals shed light on the processing of sensory information underlying the generation of defensive reactions (C) 2010 IBRO Published by Elsevier Ltd All rights reserved

Prolonged recruitment manoeuvre improves lung function with less ultrastructural damage in experimental mild acute lung injury

The effects of prolonged recruitment manoeuvre (PRM) were compared with sustained inflation (SI) in paraquat-induced mild acute lung injury (ALI) in rats. Twenty-four hours after ALI induction, rats were anesthetized and mechanically ventilated with VT = 6 ml/kg and positive end-expiratory pressure (PEEP) = 5 cmH(2)O for 1 h. SI was performed with an instantaneous pressure increase of 40 cmH(2)O that was sustained for 40 s, while PRM was done by a step-wise increase in positive inspiratory pressure (PIP) of 15-20-25 cmH(2)O above a PEEP of 15 cm H(2)O (maximal PIP = 40 cmH(2)O), with interposed periods of PIP = 10 cmH(2)O above a PEEP = 15 cmH(2)O. Lung static elastance and the amount of alveolar collapse were more reduced with PRM than SI, yielding improved oxygenation. Additionally, tumour necrosis factor-alpha, interleukin-6, interferon-gamma, and type III procollagen mRNA expressions in lung tissue and lung epithelial cell apoptosis decreased more in PRM. In conclusion, PRM improved lung function, with less damage to alveolar epithelium, resulting in reduced pulmonary injury. (C) 2009 Elsevier BLV. All rights reserved.

Population-based mammography screening and breast cancer incidence in New South Wales, Australia

To analyse breast cancer incidence trends in New South Wales (NSW), Australia, in relation to population-based mammography screening targeting women aged 50 to 69 years. Trends in age-specific incidence of invasive breast cancers in NSW women aged >= 40 years were examined in relation to mammography screening rates and screening cancer detection rates. Incidence of invasive breast cancer in NSW women increased in all age-groups over 1972 to 2002. The incidence trend for women aged 50 to 69 years showed that the steepest rise was associated with increased participation in population-based mammography screening, which was implemented from 1988 and achieved state-wide coverage in 1995. The elevated incidence of invasive cancer significantly exceeded pre-screening levels, and persisted after rates of initial screens declined. This elevated incidence was sustained by the contribution of cancers diagnosed through subsequent screening, and resulted from increased cancer detection rates in subsequent screens. The recent increase in invasive breast cancer incidence in NSW is associated with mammography screening, and occurred mostly in the target age-group women. Persistence of higher incidence after 1994 was not explicable by inflation of cancer incidence due to detection of prevalent screen cases, but was associated with a trend of increased cancer detection rates in subsequent screening rounds, probably consequent to quality improvements in mammography screening diagnosis.

A comparison of methods to identify open-lung PEEP

Purpose: Many methods exist in the literature for identifying PEEP to set in ARDS patients following a lung recruitment maneuver (RM). We compared ten published parameters for setting PEEP following a RM. Methods: Lung injury was induced by bilateral lung lavage in 14 female Dorset sheep, yielding a PaO(2) 100-150 mmHg at F(I)O(2) 1.0 and PEEP 5 cmH(2)O. A quasi-static P-V curve was then performed using the supersyringe method; PEEP was set to 20 cmH(2)O and a RM performed with pressure control ventilation (inspiratory pressure set to 40-50 cmH(2)O), until PaO(2) + PaCO(2) > 400 mmHg. Following the RM, a decremental PEEP trial was performed. The PEEP was decreased in 1 cmH(2)O steps every 5 min until 15 cmH(2)O was reached. Parameters measured during the decremental PEEP trial were compared with parameters obtained from the P-V curve. Results: For setting PEEP, maximum dynamic tidal respiratory compliance, maximum PaO(2), maximum PaO(2) + PaCO(2), and minimum shunt calculated during the decremental PEEP trial, and the lower Pflex and point of maximal compliance increase on the inflation limb of the P-V curve (Pmci,i) were statistically indistinguishable. The PEEP value obtained using the deflation upper Pflex and the point of maximal compliance decrease on the deflation limb were significantly higher, and the true inflection point on the inflation limb and minimum PaCO(2) were significantly lower than the other variables. Conclusion: In this animal model of ARDS, dynamic tidal respiratory compliance, maximum PaO(2), maximum PaO(2) + PaCO(2), minimum shunt, inflation lower Pflex and Pmci,i yield similar values for PEEP following a recruitment maneuver.

Effects of frequency and inspiratory plateau pressure during recruitment manoeuvres on lung and distal organs in acute lung injury

To evaluate the effects of frequency and inspiratory plateau pressure (Pplat) during recruitment manoeuvres (RMs) on lung and distal organs in acute lung injury (ALI). We studied paraquat-induced ALI rats. At 24 h, rats were anesthetized and RMs were applied using continuous positive airway pressure (CPAP, 40 cmH(2)O/40 s) or three-different sigh strategies: (a) 180 sighs/h and Pplat = 40 cmH(2)O (S180/40), (b) 10 sighs/h and Pplat = 40 cmH(2)O (S10/40), and (c) 10 sighs/h and Pplat = 20 cmH(2)O (S10/20). S180/40 yielded alveolar hyperinflation and increased lung and kidney epithelial cell apoptosis as well as type III procollagen (PCIII) mRNA expression. S10/40 resulted in a reduction in epithelial cell apoptosis and PCIII expression. Static elastance and alveolar collapse were higher in S10/20 than S10/40. The reduction in sigh frequency led to a protective effect on lung and distal organs, while the combination with reduced Pplat worsened lung mechanics and histology.

Recruitment maneuver in pulmonary and extrapulmonary experimental acute lung injury

Objective. The aim of this study is to test the hypothesis that recruitment maneuvers (RMs) might act differently in models of pulmonary (p) and extrapulmonary (exp) acute lung injury (ALI) with similar transpulmonary pressure changes. Design: Prospective, randomized, controlled experimental study. Setting. University research laboratory. Subjects: Wistar rats were randomly divided into four groups. In control groups, sterile saline solution was intratracheally (0.1 mL, Cp) or intraperitoneally (1 mL, Cexp) injected, whereas ALI animals received Escherichia coli lipopolysaccharide intratracheally (100 jig, ALIp) or intraperitoneally (1 mg, ALIexp). After 24 hrs, animals were mechanically ventilated (tidal volume, 6 mL/kg; positive end-expiratory pressure, 5 cm H2O) and three RMs (pressure inflations to 40 cm H2O for 40 secs, 1 min apart) applied. Measurements and Main Results. Pao(2), lung resistive and viscoelastic pressures, static elastance, lung histology (light and electron microscopy), and type III procollagen messenger RNA expression in pulmonary tissue were measured before RMs and at the end of 1 hr of mechanical ventilation. Mechanical variables, gas exchange, and the fraction of area of alveolar collapse were similar in both ALI groups. After RMs, lung resistive and viscoelastic pressures and static elastance decreased more in ALIexp (255%,180%, and 118%, respectively) than in ALIp (103%, 59%, and 89%, respectively). The amount of atelectasis decreased more in ALIexp than in ALIp (from 58% to 19% and from 59% to 33%, respectively). RMs augmented type III procollagen messenger RNA expression only in the ALIp group (19%), associated with worsening in alveolar epithelium injury but no capillary endothelium lesion, whereas the ALIexp group showed a minor detachment of the alveolar capillary membrane. Conclusions. Given the same transpulmonary pressures, RMs are more effective at opening collapsed alveoli in ALIexp than in ALIp, thus improving lung mechanics and oxygenation with limited damage to alveolar epithelium.

Pulmonary morphofunctional effects of mechanical ventilation with high inspiratory air flow

Objective: Uncertainties about the numerous degrees of freedom in ventilator settings leave many unanswered questions about the biophysical determinants of lung injury. We investigated whether mechanical ventilation with high air flow could yield lung mechanical stress even in normal animals. Design. Prospective, randomized, controlled experimental study. Setting: University research laboratory. Subjects. Thirty normal male Wistar rats (180-230 g). Interventions: Rats were ventilated for 2 hrs with tidal volume of 10 mL/kg and either with normal inspiratory air flow (V`) of 10 mL/s (F10) or high V` of 30 mL/s (F30). In the control group, animals did not undergo mechanical ventilation. Because high flow led to elevated respiratory rate (200 breaths/min) and airway peak inspiratory pressure (PIP,aw = 17 cm H2O), two additional groups were established to rule out the potential contribution of these variables: a) normal respiratory rate = 100 breaths/min and V` = 30 mL/sec; and b) PIP,aw = 17 cm H2O and V` 10 mL/sec. Measurements and Main Results: Lung mechanics and histology (light and electron microscopy), arterial blood gas analysis, and type III procollagen messenger RNA expression in lung tissue were analyzed. Ultrastructural microscopy was similar in control and F10 groups. High air flow led to increased lung plateau and peak pressures, hypoxemia, alveolar hyperinflation and collapse, pulmonary neutrophilic infiltration, and augmented type III procollagen messenger RNA expression compared with control rats. The reduction of respiratory rate did not modify the morphofunctional behavior observed in the presence of increased air flow. Even though the increase in peak pressure yielded mechanical and histologic changes, type III procollagen messenger RNA expression remained unaltered. Conclusions: Ventilation with high inspiratory air flow may lead to high tensile and shear stresses resulting in lung functional and morphologic compromise and elevation of type III procollagen messenger RNA expression.

Impact of pressure profile and duration of recruitment maneuvers on morphofunctional and biochemical variables in experimental lung injury

Objective: To investigate the effects of the rate of airway pressure increase and duration of recruitment maneuvers on lung function and activation of inflammation, fibrogenesis, and apoptosis in experimental acute lung injury. Design: Prospective, randomized, controlled experimental study. Setting: University research laboratory. Subjects: Thirty-five Wistar rats submitted to acute lung injury induced by cecal ligation and puncture. Interventions: After 48 hrs, animals were randomly distributed into five groups (seven animals each): 1) nonrecruited (NR); 2) recruitment maneuvers (RMs) with continuous positive airway pressure (CPAP) for 15 secs (CPAP15); 3) RMs with CPAP for 30 secs (CPAP30); 4) RMs with stepwise increase in airway pressure (STEP) to targeted maximum within 15 secs (STEP15); and 5) RMs with STEP within 30 secs (STEP30). To perform STEP RMs, the ventilator was switched to a CPAP mode and positive end-expiratory pressure level was increased stepwise. At each step, airway pressure was held constant. RMs were targeted to 30 cm H(2)O. Animals were then ventilated for 1 hr with tidal volume of 6 mL/kg and positive end-expiratory pressure of 5 cm H(2)O. Measurements and Main Results: Blood gases, lung mechanics, histology (light and electronic microscopy), interleukin-6, caspase 3, and type 3 procollagen mRNA expressions in lung tissue. All RMs improved oxygenation and lung static elastance and reduced alveolar collapse compared to NR. STEP30 resulted in optimal performance, with: 1) improved lung static elastance vs. NR, CPAP15, and STEP15; 2) reduced alveolar-capillary membrane detachment and type 2 epithelial and endothelial cell injury scores vs. CPAP15 (p < .05); and 3) reduced gene expression of interleukin-6, type 3 procollagen, and caspase 3 in lung tissue vs. other RMs. Conclusions: Longer-duration RMs with slower airway pressure increase efficiently improved lung function, while minimizing the biological impact on lungs. (Crit Care Med 2011; 39:1074-1081)

Recruitment maneuver in experimental acute lung injury: The role of alveolar collapse and edema

Objective: In acute lung injury, recruitment maneuvers have been used to open collapsed lungs and set positive end-expiratory pressure, but their effectiveness may depend on the degree of lung injury. This study uses a single experimental model with different degrees of lung injury and tests the hypothesis that recruitment maneuvers may have beneficial or deleterious effects depending on the severity of acute lung injury. We speculated that recruitment maneuvers may worsen lung mechanical stress in the presence of alveolar edema. Design: Prospective, randomized, controlled experimental study. Setting: University research laboratory. Subjects: Thirty-six Wistar rats randomly divided into three groups (n = 12 per group). Interventions: In the control group, saline was intraperitoneally injected, whereas moderate and severe acute lung injury animals received paraquat intraperitoneally (20 mg/kg [moderate acute lung injury] and 25 mg/kg [severe acute lung injury]). After 24 hrs, animals were further randomized into subgroups (n = 6/each) to be recruited (recruitment maneuvers: 40 cm H(2)O continuous positive airway pressure for 40 secs) or not, followed by 1 hr of protective mechanical ventilation (tidal volume, 6 mL/kg; positive end-expiratory pressure, 5 cm H(2)O). Measurements and Main Results: Only severe acute lung injury caused alveolar edema. The amounts of alveolar collapse were similar in the acute lung injury groups. Static lung elastance, viscoelastic pressure, hyperinflation, lung, liver, and kidney cell apoptosis, and type 3 procollagen and interleukin-6 mRNA expressions in lung tissue were more elevated in severe acute lung injury than in moderate acute lung injury. After recruitment maneuvers, static lung elastance, viscoelastic pressure, and alveolar collapse were lower in moderate acute lung injury than in severe acute lung injury. Recruitment maneuvers reduced interleukin-6 expression with a minor detachment of the alveolar capillary membrane in moderate acute lung injury. In severe acute lung injury, recruitment maneuvers were associated with hyperinflation, increased apoptosis of lung and kidney, expression of type 3 procollagen, and worsened alveolar capillary injury. Conclusions: In the presence of alveolar edema, regional mechanical heterogeneities, and hyperinflation, recruitment maneuvers promoted a modest but consistent increase in inflammatory and fibrogenic response, which may have worsened lung function and potentiated alveolar and renal epithelial injury. (Crit Care Med 2010; 38: 2207-2214)