The Inflation Risk Premium on Government Debt in an Overlapping Generations Model

This paper presents a general equilibrium model in which nominal government debt pays an inflation risk premium. The model predicts that the inflation risk premium will be higher in economies which are exposed to unanticipated inflation through nominal asset holdings. In particular, the inflation risk premium is higher when government debt is primarily nominal, steady-state inflation is low, and when cash and nominal debt account for a large fraction of consumers' retirement portfolios. These channels do not appear to have been highlighted in previous models or tested empirically. Numerical results suggest that the inflation risk premium is comparable in magnitude to standard representative agent models. These findings have implications for management of government debt, since the inflation risk premium makes it more costly for governments to borrow using nominal rather than indexed debt. Simulations of an extended model with Epstein-Zin preferences suggest that increasing the share of indexed debt would enable governments to permanently lower taxes by an amount that is quantitatively non-trivial.

Pharmacokinetic drug interaction potential of risperidone with cytochrome p450 isozymes as assessed by the dextromethorphan, the caffeine, and the mephenytoin test.

Two published case reports showed that addition of risperidone (1 and 2 mg/d) to a clozapine treatment resulted in a strong increase of clozapine plasma levels. As clozapine is metabolized by cytochrome P450 isozymes, a study was initiated to assess the in vivo interaction potential of risperidone on various cytochrome P450 isozymes. Eight patients were phenotyped with dextromethorphan (CYP2D6), mephenytoin (CYP2C19), and caffeine (CYP1A2) before and after the introduction of risperidone. Before risperidone, all eight patients were phenotyped as being extensive metabolizers of CYP2D6 and CYP2C19. Risperidone at dosages between 2 and 6 mg/d does not appear to significantly inhibit CYP1A2 and CYP2C19 in vivo (median plasma paraxanthine/caffeine ratios before and after risperidone: 0.65, 0.69; p = 0.89; median urinary (S)/(R) mephenytoin ratios before and after risperidone:0.11, 0.12; p = 0.75). Although dextromethorphan metabolic ratio is significantly increased by risperidone (median urinary dextromethorphan/dextrorphan ratios before and after risperidone: 0.010, 0.018; p = 0.042), risperidone can be considered a weak in vivo CYP2D6 inhibitor, as this increase is modest and none of the eight patients was changed from an extensive to a poor metabolizer. The reported increase of clozapine concentrations by risperidone can therefore not be explained by an inhibition of CYP1A2, CYP2D6, CYP2C19 or by any combination of the three.

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.

Perceiving Prospects Properly

When an agent chooses between prospects, noise in information processing generates an effect akin to the winner’s curse. Statistically unbiased perception systematically overvalues the chosen action because it fails to account for the possibility that noise is responsible for making the preferred action appear to be optimal. The optimal perception patterns share key features with prospect theory, namely, overweighting of small probability events (and corresponding underweighting of high probability events), status quo bias, and reference-dependent S-shaped valuations. These biases arise to correct for the winner’s curse effect.

Out of sight, out of mind? Educational outcomes of children with parents working abroad.

Impact of parental emigration on educational outcomes of children is theoretically ambiguous. Using novel data I collected on migration experience and its timing, family background and school performance of lower secondary pupils in Poland, I analyse the question empirically. Migration is mostly temporary in nature, with one parent engaging in employment abroad. As many as 63% of migrant parents have vocational qualifications, 29% graduated from high school, 4% have no qualifications and the remaining 4% graduated from university. Almost 18% of children are affected by parental migration. Perhaps surprisingly, estimates suggest that parental employment abroad has a positive immediate impact on a pupil’s grade. Parental education appears pivotal; children of high school graduates benefit most. Longer term effects appear more negative, however, suggesting that a prolonged migration significantly lowers a child’s grade. Interestingly, siblings’ foreign experiences exert a large, positive impact on pupils’ grades.

The response of the external finance premium in Asian corporate bond markets to financial characteristics, financial constraints and two financial crises

Empirical investigation of the external finance premium has been conducted on the margin between internal finance and bank borrowing or equities but little attention has been given to corporate bonds, especially for the emerging Asian market. In this paper, we hypothesize that balance sheet indicators of creditworthiness could affect the external finance premium for bonds as they do for premia in other markets. Using bond-specific and firm-specific data for China, Hong Kong, Indonesia, Korea, Philippines, Singapore and Thailand during 1995-2009 we find that firms with better financial health face lower external finance premia in all countries. When we introduce firm-level heterogeneity, we show that financial variables appear to be both statistically and quantitatively more important for financially constrained firms. Finally, when we examine the effects of the 1997-98 Asian crisis and the 2007-09 global financial crisis, we find that the sensitivity of the premium is greater for constrained firms during the Asian crisis compared to other times.

Tracking cost savings from competitive tendering in the short and long run

A major initiative of the Thatcher and Major Conservative administrations was that public sector ancillary and professional services provided by incumbent direct service organisations [DSOs] be put out to tender. Analyses of this initiative, in the UK and elsewhere, found costs were often reduced in the short run. However, few if any studies went beyond the first round of tendering. We analyze data collected over successive rounds of tendering for cleaning and catering services of Scottish hospitals in order to assess the long term consequences of this initiative. The experience of the two services was very different. Cost savings for cleaning services tended to increase with each additional round of tendering and became increasingly stable. In accordance with previous results in the literature, DSOs produced smaller cost reductions than private contractors: probably an inevitable consequence of the tendering process at the time. Cost savings from DSOs tended to disappear during the first round of tendering, but they appear to have been more permanent in successive rounds. Cost savings for catering, on the other hand, tended to be much smaller, and these were not sustained.

Outcome of Patients with Platelet-Derived Growth Factor Receptor Alpha-Mutated Gastrointestinal Stromal Tumors in the Tyrosine Kinase Inhibitor Era.

PURPOSE: Platelet-derived growth factor receptor-alpha (PDGFRA) mutations are found in approximately 5% to 7% of advanced gastrointestinal stromal tumors (GIST). We sought to extensively assess the activity of imatinib in this subgroup. EXPERIMENTAL DESIGN: We conducted an international survey among GIST referral centers to collect clinical data on patients with advanced PDGFRA-mutant GISTs treated with imatinib for advanced disease. RESULTS: Fifty-eight patients were included, 34 were male (59%), and median age at treatment initiation was 61 (range, 19-83) years. The primary tumor was gastric in 40 cases (69%). Thirty-two patients (55%) had PDGFRA-D842V substitutions whereas 17 (29%) had mutations affecting other codons of exon 18, and nine patients (16%) had mutation in other exons. Fifty-seven patients were evaluable for response, two (4%) had a complete response, eight (14%) had a partial response, and 23 (40%) had stable disease. None of 31 evaluable patients with D842V substitution had a response, whereas 21 of 31 (68%) had progression as their best response. Median progression-free survival was 2.8 [95% confidence interval (CI), 2.6-3.2] months for patients with D842V substitution and 28.5 months (95% CI, 5.4-51.6) for patients with other PDGFRA mutations. With 46 months of follow-up, median overall survival was 14.7 months for patients with D842V substitutions and was not reached for patients with non-D842V mutations. CONCLUSIONS: This study is the largest reported to date on patients with advanced PDGFRA-mutant GISTs treated with imatinib. Our data confirm that imatinib has little efficacy in the subgroup of patients with D842V substitution in exon 18, whereas other mutations appear to be sensitive to imatinib. Clin Cancer Res; 18(16); 4458-64. ©2012 AACR.

Deadlock avoidance with virtual channels

High Performance Computing is a rapidly evolving area of computer science which attends to solve complicated computational problems with the combination of computational nodes connected through high speed networks. This work concentrates on the networks problems that appear in such networks and specially focuses on the Deadlock problem that can decrease the efficiency of the communication or even destroy the balance and paralyze the network. Goal of this work is the Deadlock avoidance with the use of virtual channels, in the switches of the network where the problem appears. The deadlock avoidance assures that will not be loss of data inside network, having as result the increased latency of the served packets, due to the extra calculation that the switches have to make to apply the policy.

Human Primary Auditory Cortex Follows the Shape of Heschl's Gyrus.

The primary auditory cortex (PAC) is central to human auditory abilities, yet its location in the brain remains unclear. We measured the two largest tonotopic subfields of PAC (hA1 and hR) using high-resolution functional MRI at 7 T relative to the underlying anatomy of Heschl's gyrus (HG) in 10 individual human subjects. The data reveals a clear anatomical-functional relationship that, for the first time, indicates the location of PAC across the range of common morphological variants of HG (single gyri, partial duplications, and complete duplications). In 20/20 individual hemispheres, two primary mirror-symmetric tonotopic maps were clearly observed with gradients perpendicular to HG. PAC spanned both divisions of HG in cases of partial and complete duplications (11/20 hemispheres), not only the anterior division as commonly assumed. Specifically, the central union of the two primary maps (the hA1-R border) was consistently centered on the full Heschl's structure: on the gyral crown of single HGs and within the sulcal divide of duplicated HGs. The anatomical-functional variants of PAC appear to be part of a continuum, rather than distinct subtypes. These findings significantly revise HG as a marker for human PAC and suggest that tonotopic maps may have shaped HG during human evolution. Tonotopic mappings were based on only 16 min of fMRI data acquisition, so these methods can be used as an initial mapping step in future experiments designed to probe the function of specific auditory fields.

Medium-term protocols for in vivo evaluation of chemical modifiers of carcinogenesis

Cancer development is a long-term multistep process which allows interventional measure before the clincial disease emerges. the detection of natural substances which can block the process of carcinogenesis is a important as the identification of anti-tumoral drugs since they might be used in chemoprevention of cancer in high-risk groups. In vivo rodent models of chemical caecinogenesis have been used to study plant-derived inhibitors of carcinofenesis such as indols, coumarins, isothiocyanates, flavones, phenols and allyl-sulfides. Since the standard in vivo rodent bioassay is prolonged and expensive, shorter reliable protocols are needed. Two in vivo medium-term protocols for evaluation of modifiers of carcinogenesis are presented, one related to liver and the other to bladder cancer. Both protocols use rats, last 8 and 36 weeks and are based on the two-step concept of carcinogenesis: initiation and promotion. The protocols use respectively the development of altered foci of hepatocytes expressing immunochistochemically the placental form of gluthation S-transferase and the appearence of pre-neoplastic urothelium and papillomas as the "end-points". the use of these protocols for detection of plantpderived inhibitors of carcinogenesis appear warranted.

Molecular epidemiology of predominant clones and sporadic strains of methicillin resistant Staphylococcus aureus in Switzerland and comparison with European epidemic clones.

OBJECTIVE: To assess the molecular epidemiology and risk factors of predominant clones and sporadic strains of methicillin-resistant Staphylococcus aureus (MRSA) in Swiss hospitals and to compare them with European strains of epidemic clones. MATERIAL AND METHODS: One-year national survey of MRSA cases. Analysis of epidemiological and molecular typing data (PFGE) of MRSA strains. RESULTS: In 1997, 385 cases of MRSA were recorded in the five Swiss university hospitals and in 47 community hospitals. Half of the cases were found in Geneva hospitals where MRSA was already known to be endemic. Molecular typing of 288 isolates (one per case) showed that 186 (65%) belong to four predominant clones, three of which were mostly present in Geneva hospitals. In contrast, the fourth clone (85 cases) was found in 23 hospitals (in one to 16 cases per hospital). The remaining 35% of the strains were clustered into 62 pulsed field gel electrophoresis types. They accounted for one to five patients per hospital and were defined as sporadic. Multivariate analysis revealed no independent risk factors for harboring a predominant versus a sporadic strain, except that transfer from a foreign hospital increases the risk of harboring a sporadic strain (OR, 42; 95% CI, 5-360). CONCLUSION: While cases with predominant clones were due to the local spread of these clones, most sporadic cases appear to be due to the continuous introduction of new strains into the country. With the exception of a transfer from a hospital outside Switzerland, no difference in the clinical or epidemiological characteristics was observed between patients harboring a predominant clone and those with a sporadic strain.

Incentives in university technology transfers

There are two main ways in which the knowledge created in universities has been transferred to firms: licensing agreements and the creation of spin-offs. In this paper, we describe the main steps in the transfer of university innovations, the main incentive issues that appear in this process, and the contractual solutions proposed to address them.

The determinants of university patenting: Do incentives matter?

In recent years various studies have examined the factors that may explain academic patents. Existing analyses have also underlined the substantial differences to be found in European countries in the institutional framework that defines property rights for academic patents. The objective of this study is to contribute to the empirical literature on the factors explaining academic patents and to determine whether the incentives that universities offer researchers contribute towards explaining the differences in academic patenting activity. The results of the econometric analysis for the Spanish universities point towards the conclusion that the principal factor determining the patents is funding of R&D while royalty incentives to researchers do not appear to be significant.