A Comparison Of Forecasting Procedures For Macroeconomic Series: The Contribution Of Structural Break Models

This paper compares the forecasting performance of different models which have been proposed for forecasting in the presence of structural breaks. These models differ in their treatment of the break process, the parameters defining the model which applies in each regime and the out-of-sample probability of a break occurring. In an extensive empirical evaluation involving many important macroeconomic time series, we demonstrate the presence of structural breaks and their importance for forecasting in the vast majority of cases. However, we find no single forecasting model consistently works best in the presence of structural breaks. In many cases, the formal modeling of the break process is important in achieving good forecast performance. However, there are also many cases where simple, rolling OLS forecasts perform well.

Distinct neurophysiological mechanisms mediate mixing costs and switch costs.

Using event-related potentials (ERPs), we investigated the neural response associated with preparing to switch from one task to another. We used a cued task-switching paradigm in which the interval between the cue and the imperative stimulus was varied. The difference between response time (RT) to trials on which the task switched and trials on which the task repeated (switch cost) decreased as the interval between cue and target (CTI) was increased, demonstrating that subjects used the CTI to prepare for the forthcoming task. However, the RT on repeated-task trials in blocks during which the task could switch (mixed-task blocks) were never as short as RTs during single-task blocks (mixing cost). This replicates previous research. The ERPs in response to the cue were compared across three conditions: single-task trials, switch trials, and repeat trials. ERP topographic differences were found between single-task trials and mixed-task (switch and repeat) trials at approximately 160 and approximately 310 msec after the cue, indicative of changes in the underlying neural generator configuration as a basis for the mixing cost. In contrast, there were no topographic differences evident between switch and repeat trials during the CTI. Rather, the response of statistically indistinguishable generator configurations was stronger at approximately 310 msec on switch than on repeat trials. By separating differences in ERP topography from differences in response strength, these results suggest that a reappraisal of previous research is appropriate.

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.

Currency Forecast Errors at Times of Low Interest Rates: Evidence from Survey Data on the Yen/Dollar Exchange Rate

Using survey expectations data and Markov-switching models, this paper evaluates the characteristics and evolution of investors' forecast errors about the yen/dollar exchange rate. Since our model is derived from the uncovered interest rate parity (UIRP) condition and our data cover a period of low interest rates, this study is also related to the forward premium puzzle and the currency carry trade strategy. We obtain the following results. First, with the same forecast horizon, exchange rate forecasts are homogeneous among different industry types, but within the same industry, exchange rate forecasts differ if the forecast time horizon is different. In particular, investors tend to undervalue the future exchange rate for long term forecast horizons; however, in the short run they tend to overvalue the future exchange rate. Second, while forecast errors are found to be partly driven by interest rate spreads, evidence against the UIRP is provided regardless of the forecasting time horizon; the forward premium puzzle becomes more significant in shorter term forecasting errors. Consistent with this finding, our coefficients on interest rate spreads provide indirect evidence of the yen carry trade over only a short term forecast horizon. Furthermore, the carry trade seems to be active when there is a clear indication that the interest rate will be low in the future.

An Empirical Assessment of Optimal Monetary Policy Delegation in the Euro Area

We estimate a New Keynesian DSGE model for the Euro area under alternative descriptions of monetary policy (discretion, commitment or a simple rule) after allowing for Markov switching in policy maker preferences and shock volatilities. This reveals that there have been several changes in Euro area policy making, with a strengthening of the anti-inflation stance in the early years of the ERM, which was then lost around the time of German reunification and only recovered following the turnoil in the ERM in 1992. The ECB does not appear to have been as conservative as aggregate Euro-area policy was under Bundesbank leadership, and its response to the financial crisis has been muted. The estimates also suggest that the most appropriate description of policy is that of discretion, with no evidence of commitment in the Euro-area. As a result although both ‘good luck’ and ‘good policy’ played a role in the moderation of inflation and output volatility in the Euro-area, the welfare gains would have been substantially higher had policy makers been able to commit. We consider a range of delegation schemes as devices to improve upon the discretionary outcome, and conclude that price level targeting would have achieved welfare levels close to those attained under commitment, even after accounting for the existence of the Zero Lower Bound on nominal interest rates.

An Empirical Assessment of Optimal Monetary Policy Delegation in the Euro Area

We estimate a New Keynesian DSGE model for the Euro area under alternative descriptions of monetary policy (discretion, commitment or a simple rule) after allowing for Markov switching in policy maker preferences and shock volatilities. This reveals that there have been several changes in Euro area policy making, with a strengthening of the anti-inflation stance in the early years of the ERM, which was then lost around the time of German reunification and only recovered following the turnoil in the ERM in 1992. The ECB does not appear to have been as conservative as aggregate Euro-area policy was under Bundesbank leadership, and its response to the financial crisis has been muted. The estimates also suggest that the most appropriate description of policy is that of discretion, with no evidence of commitment in the Euro-area. As a result although both ‘good luck’ and ‘good policy’ played a role in the moderation of inflation and output volatility in the Euro-area, the welfare gains would have been substantially higher had policy makers been able to commit. We consider a range of delegation schemes as devices to improve upon the discretionary outcome, and conclude that price level targeting would have achieved welfare levels close to those attained under commitment, even after accounting for the existence of the Zero Lower Bound on nominal interest rates.

Series enlazadas de algunos agregados económicos nacionales y regionales, 1955-2007 Versión 2.1

I construct "homogeneous" series of GVA at current and constant prices, employment and population for the Spain and its regions covering the period 1955-2007. The series are obtained by linking the Regional Accounts of the National Statistical Institute with the series constructed by Julio Alcaide and his team for the BBVA Foundation. The "switching point" at which this last source stops being used as a reference to construct the linked series is determined using a procedure that allows me to estimate which of the two competing series would produce an estimator with the lowest MSE when it is used as dependent variable in a regression on an arbitrary independent variable. To the extent that it is possible, the difference between the two series found at the point of linkage is distributed between the initial levels of the older series and its subsequent growth using external estimates of the relevant variables at the beginning of the sample period.

Sociogenomics of Cooperation and Conflict during Colony Founding in the Fire Ant Solenopsis invicta.

One of the fundamental questions in biology is how cooperative and altruistic behaviors evolved. The majority of studies seeking to identify the genes regulating these behaviors have been performed in systems where behavioral and physiological differences are relatively fixed, such as in the honey bee. During colony founding in the monogyne (one queen per colony) social form of the fire ant Solenopsis invicta, newly-mated queens may start new colonies either individually (haplometrosis) or in groups (pleometrosis). However, only one queen (the "winner") in pleometrotic associations survives and takes the lead of the young colony while the others (the "losers") are executed. Thus, colony founding in fire ants provides an excellent system in which to examine the genes underpinning cooperative behavior and how the social environment shapes the expression of these genes. We developed a new whole genome microarray platform for S. invicta to characterize the gene expression patterns associated with colony founding behavior. First, we compared haplometrotic queens, pleometrotic winners and pleometrotic losers. Second, we manipulated pleometrotic couples in order to switch or maintain the social ranks of the two cofoundresses. Haplometrotic and pleometrotic queens differed in the expression of genes involved in stress response, aging, immunity, reproduction and lipid biosynthesis. Smaller sets of genes were differentially expressed between winners and losers. In the second experiment, switching social rank had a much greater impact on gene expression patterns than the initial/final rank. Expression differences for several candidate genes involved in key biological processes were confirmed using qRT-PCR. Our findings indicate that, in S. invicta, social environment plays a major role in the determination of the patterns of gene expression, while the queen's physiological state is secondary. These results highlight the powerful influence of social environment on regulation of the genomic state, physiology and ultimately, social behavior of animals.

The Design and efficiency of loyalty rewards

The goal of this paper is to reexamine the optimal design and efficiency of loyalty rewards in markets for final consumption goods. While the literature has emphasized the role of loyalty rewards as endogenous switching costs (which distort the efficient allocation of consumers), in this paper I analyze the ability of alternative designs to foster consumer participation and increase total surplus. First, the efficiency of loyalty rewards depend on their specific design. A commitment to the price of repeat purchases can involve substantial efficiency gains by reducing price-cost margins. However, discount policies imply higher future regular prices and are likely to reduce total surplus. Second, firms may prefer to set up inefficient rewards (discounts), especially in those circumstances where a commitment to the price of repeat purchases triggers Coasian dynamics.

Superinfection with drug-resistant HIV is rare and does not contribute substantially to therapy failure in a large European cohort.

BACKGROUND: Superinfection with drug resistant HIV strains could potentially contribute to compromised therapy in patients initially infected with drug-sensitive virus and receiving antiretroviral therapy. To investigate the importance of this potential route to drug resistance, we developed a bioinformatics pipeline to detect superinfection from routinely collected genotyping data, and assessed whether superinfection contributed to increased drug resistance in a large European cohort of viremic, drug treated patients. METHODS: We used sequence data from routine genotypic tests spanning the protease and partial reverse transcriptase regions in the Virolab and EuResist databases that collated data from five European countries. Superinfection was indicated when sequences of a patient failed to cluster together in phylogenetic trees constructed with selected sets of control sequences. A subset of the indicated cases was validated by re-sequencing pol and env regions from the original samples. RESULTS: 4425 patients had at least two sequences in the database, with a total of 13816 distinct sequence entries (of which 86% belonged to subtype B). We identified 107 patients with phylogenetic evidence for superinfection. In 14 of these cases, we analyzed newly amplified sequences from the original samples for validation purposes: only 2 cases were verified as superinfections in the repeated analyses, the other 12 cases turned out to involve sample or sequence misidentification. Resistance to drugs used at the time of strain replacement did not change in these two patients. A third case could not be validated by re-sequencing, but was supported as superinfection by an intermediate sequence with high degenerate base pair count within the time frame of strain switching. Drug resistance increased in this single patient. CONCLUSIONS: Routine genotyping data are informative for the detection of HIV superinfection; however, most cases of non-monophyletic clustering in patient phylogenies arise from sample or sequence mix-up rather than from superinfection, which emphasizes the importance of validation. Non-transient superinfection was rare in our mainly treatment experienced cohort, and we found a single case of possible transmitted drug resistance by this route. We therefore conclude that in our large cohort, superinfection with drug resistant HIV did not compromise the efficiency of antiretroviral treatment.

Antiretroviral treatment of adult HIV infection: 2012 recommendations of the International Antiviral Society-USA panel.

CONTEXT: New trial data and drug regimens that have become available in the last 2 years warrant an update to guidelines for antiretroviral therapy (ART) in human immunodeficiency virus (HIV)-infected adults in resource-rich settings. OBJECTIVE: To provide current recommendations for the treatment of adult HIV infection with ART and use of laboratory-monitoring tools. Guidelines include when to start therapy and with what drugs, monitoring for response and toxic effects, special considerations in therapy, and managing antiretroviral failure. DATA SOURCES, STUDY SELECTION, AND DATA EXTRACTION: Data that had been published or presented in abstract form at scientific conferences in the past 2 years were systematically searched and reviewed by an International Antiviral Society-USA panel. The panel reviewed available evidence and formed recommendations by full panel consensus. DATA SYNTHESIS: Treatment is recommended for all adults with HIV infection; the strength of the recommendation and the quality of the evidence increase with decreasing CD4 cell count and the presence of certain concurrent conditions. Recommended initial regimens include 2 nucleoside reverse transcriptase inhibitors (tenofovir/emtricitabine or abacavir/lamivudine) plus a nonnucleoside reverse transcriptase inhibitor (efavirenz), a ritonavir-boosted protease inhibitor (atazanavir or darunavir), or an integrase strand transfer inhibitor (raltegravir). Alternatives in each class are recommended for patients with or at risk of certain concurrent conditions. CD4 cell count and HIV-1 RNA level should be monitored, as should engagement in care, ART adherence, HIV drug resistance, and quality-of-care indicators. Reasons for regimen switching include virologic, immunologic, or clinical failure and drug toxicity or intolerance. Confirmed treatment failure should be addressed promptly and multiple factors considered. CONCLUSION: New recommendations for HIV patient care include offering ART to all patients regardless of CD4 cell count, changes in therapeutic options, and modifications in the timing and choice of ART in the setting of opportunistic illnesses such as cryptococcal disease and tuberculosis.

The Part-time pay penalty in a segmented labor market

This paper is the first to examine the implications of switching to PT work for women's subsequent earnings trajectories, distinguishing by their type of contract: permanent or fixedterm. Using a rich longitudinal Spanish data set from Social Security records of over 76,000 prime-aged women strongly attached to the Spanish labor market, we find that PT work aggravates the segmentation of the labor market insofar there is a PT pay penalty and this penalty is larger and more persistent in the case of women with fixed-term contracts. The paper discusses problems arising in empirical estimation (including a problem not discussed in the literature up to now: the differential measurement error of the LHS variable by PT status), and how to address them. It concludes with policy implications relevant for Continental Europe and its dual structure of employment protection.

Vedolizumab as induction and maintenance therapy for Crohn's disease.

BACKGROUND: The efficacy of vedolizumab, an α4β7 integrin antibody, in Crohn's disease is unknown. METHODS: In an integrated study with separate induction and maintenance trials, we assessed intravenous vedolizumab therapy (300 mg) in adults with active Crohn's disease. In the induction trial, 368 patients were randomly assigned to receive vedolizumab or placebo at weeks 0 and 2 (cohort 1), and 747 patients received open-label vedolizumab at weeks 0 and 2 (cohort 2); disease status was assessed at week 6. In the maintenance trial, 461 patients who had had a response to vedolizumab were randomly assigned to receive placebo or vedolizumab every 8 or 4 weeks until week 52. RESULTS: At week 6, a total of 14.5% of the patients in cohort 1 who received vedolizumab and 6.8% who received placebo were in clinical remission (i.e., had a score on the Crohn's Disease Activity Index [CDAI] of ≤150, with scores ranging from 0 to approximately 600 and higher scores indicating greater disease activity) (P=0.02); a total of 31.4% and 25.7% of the patients, respectively, had a CDAI-100 response (≥100-point decrease in the CDAI score) (P=0.23). Among patients in cohorts 1 and 2 who had a response to induction therapy, 39.0% and 36.4% of those assigned to vedolizumab every 8 weeks and every 4 weeks, respectively, were in clinical remission at week 52, as compared with 21.6% assigned to placebo (P<0.001 and P=0.004 for the two vedolizumab groups, respectively, vs. placebo). Antibodies against vedolizumab developed in 4.0% of the patients. Nasopharyngitis occurred more frequently, and headache and abdominal pain less frequently, in patients receiving vedolizumab than in patients receiving placebo. Vedolizumab, as compared with placebo, was associated with a higher rate of serious adverse events (24.4% vs. 15.3%), infections (44.1% vs. 40.2%), and serious infections (5.5% vs. 3.0%). CONCLUSIONS: Vedolizumab-treated patients with active Crohn's disease were more likely than patients receiving placebo to have a remission, but not a CDAI-100 response, at week 6; patients with a response to induction therapy who continued to receive vedolizumab (rather than switching to placebo) were more likely to be in remission at week 52. Adverse events were more common with vedolizumab. (Funded by Millennium Pharmaceuticals; GEMINI 2 ClinicalTrials.gov number, NCT00783692.).

No experimental evidence that sibling competition induces young to switch nests in the colonial Alpine swift, Apus melba

Adoption is frequent in colonial animals where opportunities for dependent young to receive care from nonbiological parents are high. The departure of dependent young from their original family to seek adoption in neighbouring families is thought to be induced by sibling competition for access to limited resources provided by poor-quality parents. We tested this hypothesis in the colonial Alpine swift by manipulating the number of young reared per brood, with the prediction that offspring from enlarged broods switch nests more frequently than those from reduced broods. Although nestling swifts hatch with little locomotor activity, from 20 days until their first flight at 50-70 days they frequently move out of their nests to seek adoption in neighbouring families. Although nestlings reared in experimentally enlarged broods were lighter and their body mass at day 20 after hatching was more variable than in nestlings reared in reduced broods, there was no difference between the two treatments in the frequency of nests switching and in the age when nestlings switched nests for the first time. However, consistent with other evidence that nest switching by nestling swifts evolved as a strategy to reduce ectoparasite load, young from broods with naturally high numbers of the ectoparasitic louse fly Crataerina melbae were more prone to switch nests. This shows that ectoparasitism rather than sibling competition is a key proximate factor promoting the evolution of nest switching in the colonial Alpine swift. (c) 2006 The Association for the Study of Animal Behaviour Published by Elsevier Ltd. All rights reserved.

Electro-cortical correlates of motor inhibition : a comparison between selective and non-selective stop tasks

In this study, we compared a selective stop task (transition from a bimanual in-phase to a unimanual index fingers' tapping), with a non-selective stop task (stopping a bimanual in-phase tapping at all), and with a switching task (transition from in-phase to anti-phase bimanual tapping). The aim was twofold: 1) to identify the electro-cortical correlates of selective and non-selective inhibition processes and 2) to investigate which type of inhibition - selective or not - is required when switching between two bimanual motor patterns. The results revealed that all tasks led to enhanced activation (alpha power) of the left sensorimotor and posterior regions which seems to reflect an overall effort to stop the preferred bimanual in-phase tendency. Each task implied specific functional connectivity reorganizations (beta coherence) between cerebral motor areas, probably reflecting engagement in a new unimanual or bimanual movement.