The forward- and the equity-premium puzzles: two symptoms of the same illness?

We build a pricing kernel using only US domestic assets data and check whether it accounts for foreign markets stylized facts that escape consumption based models. By interpreting our stochastic discount factor as the projection of a pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets. We address predictability issues associated with the forward premium puzzle by: i) using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations, and; ii) by pricing Lustig and Verdelhan (2007)'s foreign currency portfolios. Our results indicate that the relevant state variables that explain foreign-currency market asset prices are also the driving forces behind U.S. domestic assets behavior.

The forward- and the equity-premium puzzles: two symptoms of the same illness?

Using information on US domestic financial data only, we build a stochastic discount factor—SDF— and check whether it accounts for foreign markets stylized facts that escape consumption based models. By interpreting our SDF as the projection of a pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets prices. We address predictability issues associated with the forward premium puzzle by: i) using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations, and; ii) by pricing Lustig and Verdelhan (2007)’s foreign currency portfolios. Our results indicate that the relevant state variables that explain foreign-currency market asset prices are also the driving forces behind U.S. domestic assets behavior.

The forward- and the equity-premium puzzles: two symptoms of the same illness?

Using information on US domestic financial data only, we build a stochastic discount factor—SDF— and check whether it accounts for foreign markets stylized facts that escape consumption based models. By interpreting our SDF as the projection of a pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets prices. We address predictability issues associated with the forward premium puzzle by: i) using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations, and; ii) by comparing this out-of-sample results with the one obtained performing an in-sample exercise, where the return-based SDF captures sources of risk of a representative set of developed and emerging economies government bonds. Our results indicate that the relevant state variables that explain foreign-currency market asset prices are also the driving forces behind U.S. domestic assets behavior.

The forward and the equity-premium puzzles: a straightforward test of whether they are two symptoms of the same illness

We build a stochastic discount factor—SDF— using information on US domestic financial data only, and provide evidence that it accounts for foreign markets stylized facts that escape SDF’s generated by consumption based models. By interpreting our SDF as the projection of the pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets prices. In our tests, we address predictability, a defining feature of the Forward Premium Puzzle—FPP— by using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations both in the equity and the foreign markets.

A note on the forward and the equity-premium puzzles: two symptoms of the same illness?

We build a stochastic discount factor—SDF— using information on US domestic financial data only, and provide evidence that it accounts for foreign markets stylized facts that escape SDF’s generated by consumption based models. By interpreting our SDF as the projection of the pricing kernel from a fully specified model in the space of returns, our results indicate that a model that accounts for the behavior of domestic assets goes a long way toward accounting for the behavior of foreign assets prices. In our tests, we address predictability, a defining feature of the Forward Premium Puzzle—FPP— by using instruments that are known to forecast excess returns in the moments restrictions associated with Euler equations both in the equity and the foreign markets.

The forward and the equity premium puzzles: two symptoms of the same illness?

The Forward Premium Puzzle (FPP) is how the empirical observation of a negative relation between future changes in the spot rates and the forward premium is known. Modeling this forward bias as a risk premium and under weak assumptions on the behavior of the pricing kernel, we characterize the potential bias that is present in the regressions where the FPP is observed and we identify the necessary and sufficient conditions that the pricing kernel has to satisfy to account for the predictability of exchange rate movements. Next, we estimate the pricing kernel applying two methods: i) one, du.e to Araújo et aI. (2005), that exploits the fact that the pricing kernel is a serial correlation common feature of asset prices, and ii) a traditional principal component analysis used as a procedure 1;0 generate a statistical factor modeI. Then, using on the sample and out of the sample exercises, we are able to show that the same kernel that explains the Equity Premi um Puzzle (EPP) accounts for the FPP in all our data sets. This suggests that the quest for an economic mo deI that generates a pricing kernel which solves the EPP may double its prize by simultaneously accounting for the FPP.

Sex Trade Involvement in São Paulo, Brazil and Toronto, Canada: Narratives of Social Exclusion and Fragmented Identities

An extensive international literature has been developed regarding the risk trajectories of sex trade-involved children and youth. This literature has not, however, substantially incorporated the narratives of youths regarding their experiences. In this article, the contemporary literature on child and youth sex trade-involvement is reviewed and the findings of a qualitative analysis of the narratives of 14 youth from São Paulo, Brazil and 58 youth from Toronto, Canada are presented. Substantial similarities were found between the groups of narratives with respect to abusive and unstable home experiences, pathways into the sex trade, social exclusion, and the impacts of the sex trade on physical and mental health. Key areas of divergence included the roles of poverty and drug use in entering the sex trade. The implications of shared experiences of social exclusion and fragmented identity across differing sociocultural contexts for policy and intervention are discussed.

Acute respiratory infection and influenza-like illness viral etiologies in Brazilian adults

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Experiencing Manipulative Material for the Teaching and Learning of Mathematics

This paper presents some outcomes from research based on classroom experiences. The main themes are the use of mirrors, kaleidoscopes, dynamic geometry software, and manipulative material considering their possibilities for the teaching and learning of Euclidean and non-Euclidean geometries.

Unfaithful narratives: methodological and affective notes about experiences of masculinity in a dating website for married people

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

The complex construction of psychological identities in Palestine: Integrating narratives and life experiences

Palestinian youth is challenged by multiple discourses in the process of constitution of its identity. This discursive multiplicity, characteristic of contemporary global societies, is confronted with personal life experiences, giving meaning to primarily nebulous affective impacts in the social environment. Starting from a semiotic-cultural perspective in cultural psychology one can establish a link between the notion of master narrative used by Hammack (2010) and the notion of myth-using the conception of ideology as a bridge that articulates both. Antinomies in the self-biographic narratives presented and discussed by Hammack (2010) support the master narrative of Palestinian identity and enter into interactions with other psychological identities of the interviewed youngsters, such as their religious tradition and secular education. Symbolic elements that are brought to the identity-making process by the diverse narratives are to be seen as resources for the comprehension of life experiences, demanding an integrative effort in the face of what is known and unknown in relation to alterity.

Discourse and bipolar disorder: Narrative therapy on northeast Brazil

Background: The expression 'bipolar disorder' refers to any of several psychological disorders of mood that alternate episodes of depression and mania. Also called manic depression or manic-depressive illness, it is a relatively common but unknown pathology that brings some stigmas for patients and provokes deleterious effects for their lives. This research aimed to comprehend actions, behaviors and emotions involved with bipolar disorder, through narratives of patient's personal and familiar histories. Methods: We surveyed 30 patients from a psychiatric service located in Aparecida, Paraiba, Brazil. Selected patients had bipolar disorder according to DSM-IV. For data collection, we used non-structured interview, approaching specific aspects related to bipolar disorder. Quantitative and qualitative analysis were done and Hamilton Rating Scale for Depression (HAMD) was used. Results: Most of patients presented depressive actions associated with moderate euphoria. 11 of them related familiar history of psychopathology. Mania and hippomania were prevalent on male gender, while psychotic symptoms overlay ate female. Conclusion: Patients lack a translation of behavioral and temperamental processes to minimize harm caused to their lives.