The management of brain metastases

Brain metastases occur in 20-50% of NSCLC and 50-80% of SCLC. In this review, we will look at evidence-based medicine data and give some perspectives on the management of BM. We will address the problems of multiple BM, single BM and prophylactic cranial irradiation. Recursive Partitioning Analysis (RPA) is a powerful prognostic tool to facilitate treatment decisions. Dealing with multiple BM, the use of corticosteroids was established more than 40 years ago by a unique randomized trial (RCT). Palliative effect is high (_80%) as well as side-effects. Whole brain radiotherapy (WBRT) was evaluated in many RCTs with a high (60-90%) response rate; several RT regimes are equivalent, but very high dose per fraction should be avoided. In multiple BM from SCLC, the effect of WBRT is comparable to that in NSCLC but chemotherapy (CXT) although advocated is probably less effective than RT. Single BM from NSCLC occurs in 30% of all BM cases; several prognostic classifications including RPA are very useful. Several options are available in single BM: WBRT, surgery (SX), radiosurgery (RS) or any combination of these. All were studied in RCTs and will be reviewed: the addition of WBRT to SX or RS gives a better neurological tumour control, has little or no impact on survival, and may be more toxic. However omitting WBRT after SX alone gives a higher risk of cerebro-spinal fluid dissemination. Prophylactic cranial irradiation (PCI) has a major role in SCLC. In limited disease, meta-analyses have shown a positive impact of PCI in the decrease of brain relapse and in survival improvement, especially for patients in complete remission. Surprisingly, this has been recently confirmed also in extensive disease. Experience with PCI for NSCLC is still limited, but RCT suggest a reduction of BM with no impact on survival. Toxicity of PCI is a matter of debate, as neurological or neuro-cognitive impairment is already present prior to PCI in almost half of patients. However RT toxicity is probably related to total dose and dose per fraction. Perspectives : Future research should concentrate on : 1) combined modalities in multiple BM. 2) Exploration of treatments in oligo-metastases. 3) Further exploration of PCI in NSCLC. 4) Exploration of new, toxicity-sparing radiotherapy techniques (IMRT, Tomotherapy etc).

A Model of Near-Rational Exuberance

We study how the use of judgement or “add-factors” in forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in a standard self-referential environment. Local indeterminacy is not a requirement for existence. We construct a simple asset pricing example and find that exuberance equilibria, when they exist, can be extremely volatile relative to fundamental equilibria.

Learning about Risk and Return: A Simple Model of Bubbles and Crashes

This paper demonstrates that an asset pricing model with least-squares learning can lead to bubbles and crashes as endogenous responses to the fundamentals driving asset prices. When agents are risk-averse they need to make forecasts of the conditional variance of a stock’s return. Recursive updating of both the conditional variance and the expected return implies several mechanisms through which learning impacts stock prices. Extended periods of excess volatility, bubbles and crashes arise with a frequency that depends on the extent to which past data is discounted. A central role is played by changes over time in agents’ estimates of risk.

The Living Wage: Reducing inequality in the UK?

The revival of support for a living wage has reopened a long-run debate over the extent to which active regulation of labour markets may be necessary to attain desired outcomes. Market failure is suggested to result in lower wages and remuneration for low skilled workers than might otherwise be expected from models of perfect competition. This paper examines the theoretical underpinning of living wage campaigns and demonstrates that once we move away from idealised models of perfect competition to one where employers retain power over the bargaining process, such as monopsony, it is readily understandable that low wages may be endemic in low skilled employment contracts. The paper then examines evidence, derived from the UK Quarterly Labour Force Survey, for the extent to which a living wage will address low pay within the labour force. We highlight the greater incidence of low pay within the private sector and then focus upon the public sector where the Living Wage demand has had most impact. We examine the extent to which addressing low pay within the public sector increases costs. We further highlight the evidence that a predominance of low pay exists among public sector young and women workers (and in particular lone parent women workers) but not, perhaps surprisingly, among workers from ethnic minority backgrounds. The paper then builds upon the results from the Quarterly Labour Force Survey with analysis of the British Household Panel Survey in order to examine the impact the introduction of a living wage, within the public sector, would have in reducing household inequality. The paper concludes that a living wage is indeed an appropriate regulatory response to market failure for low skilled workers and can act to reduce age and gender pay inequality, and reduce household income inequality among in-work households below average earnings.

Transmission of macro-liquidity shocks to liquidity-sorted stock portfolios’ returns: The role of the financial crisis

This study examines the impact of macro-liquidity shocks on the returns of UK stock portfolios sorted on the basis of a series of micro-liquidity measures. The macro-liquidity shocks are extracted on the meeting days of the Bank of England Monetary Policy Committee relative to market expectations embedded in futures contracts on the 3-month LIBOR during the period June 1999- December 2009. We report definitive evidence that these shocks are transmitted to the cross-section of liquidity-sorted portfolios, with most liquid stocks playing a very active role. Our results emphatically document that the shocks-returns relationship has reversed its sign during the recent financial crisis; the standard inverse relationship between interest rate surprises and portfolios’ returns before the crisis has turned into positive during the crisis. This finding confirms the inability of interest rate cuts to boost returns in the shortrun during the crisis, because these were perceived by market participants as a signal of a deteriorating economic outlook.

Policy Shocks and Contract Renegotiation: Who Gets Raked Over the Coals?

Changes in climate policy have large influence on businesses. Firms anticipate and respond to such changes, but what if they have already engaged in a longterm relationship with other firms or customers at the time of policy change? For example, coal supply to power stations is typically based on long-term contracts, while the nature of the buyer-supplier relationship may well be affected substantially by climate regulations. However, there has been little evidence on whether or how firms amend their contractual agreements in response to a change in policy.

Horizontal Agreements and R&D Complementarities: Merger versus RJV

We study the decision of two rms within an oligopoly concerning whether to enter into a horizontal agreement to exploit complementarities between their R&D activities and, if so, whether to merge or form a research joint venture (RJV). In contrast to horizontal merger, there is a probability that an RJV contract will fail to enforce R&D sharing. We nd that a horizontal agreement always arises. The insiders' merger/RJV choice involves a trade-o : While merger o ers certainty that R&D complementarities will be exploited, it leads to a pro t-reducing reaction by outsiders on the product market, where competition is Cournot. Greater brand similarity and contract enforceability (\quality") both favour RJV, while greater R&D complementarity favours merger. Interestingly, the insiders may choose to merge even when RJV contracts are always enforceable, and they may opt to form an RJV even when the likelihood of enforceability is negligible.

Moral Hazard with Counterfeit Signals

In many moral hazard problems, the principal evaluates the agent's performance based on signals which the agent may suppress and replace with counterfeits. This form of fraud may affect the design of optimal contracts drastically, leading to complete market failure in extreme cases. I show that in optimal contracts, the principal deters all fraud, and does so by two complementary mechanisms. First, the principal punishes signals that are suspicious, i.e. appear counterfeit. Second, the principal is lenient on bad signals that the agent could suppress, but does not.

Liquidity, moral hazard and bank crises

Bank crises, by interrupting liquidity provision, have been viewed as resulting in welfare losses. In a model of banking with moral hazard, we show that second best bank contracts that improve on autarky ex ante require costly crises to occur with positive probability at the interim stage. When bank payoffs are partially appropriable, either directly via imposition of fines or indirectly by the use of bank equity as a collateral, we argue that an appropriately designed ex-ante regime of policy intervention involving conditional monitoring can prevent bank crises.

Contracting over Prices

We defi ne a solution concept, perfectly contracted equilibrium, for an intertemporal exchange economy where agents are simultaneously price takers in spot commodity markets while engaging in non-Walrasian contracting over future prices. In a setting with subjective uncertainty over future prices, we show that perfectly contracted equi- librium outcomes are a subset of Pareto optimal allocations. It is a robust possibility for perfectly contracted equilibrium outcomes to di er from Arrow-Debreu equilibrium outcomes. We show that both centralized banking and retrading with bilateral contracting can lead to perfectly contracted equilibria.

Social norms, morals and self-interest as determinants of pro-environment behaviour.

This paper considers the role which selfish, moral and social incentives and pressures play in explaining the extent to which stated choices over pro-environment behaviours vary across individuals. The empirical context is choices over household waste contracts and recycling actions in Poland. A theoretical model is used to show how cost-based motives and the desire for a positive self- and social image combine to determine the utility from alternative choices of recycling behaviour. We then describe a discrete choice experiment designed to empirically investigate the effects such drivers have on stated choices. Using a latent class model, we distinguish three types of individual who are described as duty-orientated recyclers, budget recyclers and homo oeconomicus. These groups vary in their preferences for how frequently waste is collected, and the number of categories into which household waste must be recycled. Our results have implications for the design of future policies aimed at improving participation in recycling schemes.

The Inflation Bias under Calvo and Rotemberg Pricing.

New Keynesian models rely heavily on two workhorse models of nominal inertia - price contracts of random duration (Calvo, 1983) and price adjustment costs (Rotemberg, 1982) - to generate a meaningful role for monetary policy. These alternative descriptions of price stickiness are often used interchangeably since, to a first order of approximation they imply an isomorphic Phillips curve and, if the steady-state is efficient, identical objectives for the policy maker and as a result in an LQ framework, the same policy conclusions. In this paper we compute time-consistent optimal monetary policy in bench-mark New Keynesian models containing each form of price stickiness. Using global solution techniques we find that the inflation bias problem under Calvo contracts is significantly greater than under Rotemberg pricing, despite the fact that the former typically significant exhibits far greater welfare costs of inflation. The rates of inflation observed under this policy are non-trivial and suggest that the model can comfortably generate the rates of inflation at which the problematic issues highlighted in the trend inflation literature emerge, as well as the movements in trend inflation emphasized in empirical studies of the evolution of inflation. Finally, we consider the response to cost push shocks across both models and find these can also be significantly different. The choice of which form of nominal inertia to adopt is not innocuous.

Integrated care organizations in Switzerland.

INTRODUCTION: The Swiss health care system is characterized by its decentralized structure and high degree of local autonomy. Ambulatory care is provided by physicians working mainly independently in individual private practices. However, a growing part of primary care is provided by networks of physicians and health maintenance organizations (HMOs) acting on the principles of gatekeeping. TOWARDS INTEGRATED CARE IN SWITZERLAND: The share of insured choosing an alternative (managed care) type of basic health insurance and therefore restrict their choice of doctors in return for lower premiums increased continuously since 1990. To date, an average of one out of eight insured person in Switzerland, and one out of three in the regions in north-eastern Switzerland, opted for the provision of care by general practitioners in one of the 86 physician networks or HMOs. About 50% of all general practitioners and more than 400 other specialists have joined a physician networks. Seventy-three of the 86 networks (84%) have contracts with the healthcare insurance companies in which they agree to assume budgetary co-responsibility, i.e., to adhere to set cost targets for particular groups of patients. Within and outside the physician networks, at regional and/or cantonal levels, several initiatives targeting chronic diseases have been developed, such as clinical pathways for heart failure and breast cancer patients or chronic disease management programs for patients with diabetes. CONCLUSION AND IMPLICATIONS: Swiss physician networks and HMOs were all established solely by initiatives of physicians and health insurance companies on the sole basis of a healthcare legislation (Swiss Health Insurance Law, KVG) which allows for such initiatives and developments. The relevance of these developments towards more integration of healthcare as well as their implications for the future are discussed.

Disputes, Debt and Equity

We show how the prospect of disputes over firms’ revenue reports promotes debt financing over equity. These findings are presented within a costly state verification model with a risk averse entrepreneur. The prospect of disputes encourages incentive regimes which limit penalties and avoid stochastic monitoring, even when the lender can commit to stochastic enforcement strategies. Consequently, optimal contracts shift away from equity and toward standard debt. For a useful special case of the model, closed form solutions are presented for leverage and consumption allocations under efficient debt contracts.

Money Cycles

Operating overheads are widespread and lead to concentrated bursts of activity. To transfer resources between active and idle spells, agents demand financial assets. Futures contracts and lotteries are unsuitable, as they have substantial overheads of their own.We show that money – under efficient monetary policy – is a liquid asset that leads to efficient allocations. Under all other policies, agents follow inefficient “money cycle” patterns of saving, activity, and inactivity. Agents spend their money too quickly – a “hot potato effect of inflation”. We show that inflation can stimulate inefficiently high aggregate output.