A fractionally integrated approach to monetary policy and inflation dynamics

This paper relaxes the standard I(0) and I(1) assumptions typically stated in the monetary VAR literature by considering a richer framework that encompasses the previous two processes as well as other fractionally integrated possibilities. First, a timevarying multivariate spectrum is estimated for post WWII US data. Then, a structural fractionally integrated VAR (VARFIMA) is fitted to each of the resulting time dependent spectra. In this way, both the coefficients of the VAR and the innovation variances are allowed to evolve freely. The model is employed to analyze inflation persistence and to evaluate the stance of US monetary policy. Our findings indicate a strong decline in the innovation variances during the great disinflation, consistent with the view that the good performance of the economy during the 80’s and 90’s is in part a tale of good luck. However, we also find evidence of a decline in inflation persistence together with a stronger monetary response to inflation during the same period. This last result suggests that the Fed may still play a role in accounting for the observed differences in the US inflation history. Finally, we conclude that previous evidence against drifting coefficients could be an artifact of parameter restriction towards the stationary region. Keywords: monetary policy, inflation persistence, fractional integration, timevarying coefficients, VARFIMA. JEL Classification: E52, C32

Rational Partisan Theory with fiscal policy and an independent central bank

The empirical evidence testing the validity of the rational partisan theory (RPT) has been mixed. In this article, we argue that the inclusion of other macroeconomic policies and the presence of an independent central bank can partly contribute to explain this inconclusiveness. This article expands Alesina s (1987) RPT model to include an extra policy and an independent central bank. With these extensions, the implications of RPT are altered signi ficantly. In particular, when the central bank is more concerned about output than public spending (an assumption made by many papers in this literature), then the direct relationship between in flation and output derived in Alesina (1987) never holds. Keywords: central bank, conservativeness, political uncertainty. JEL Classi fication: E58, E63.

Evidence-based Economic Policy - Three Essays in Applied Microeconometrics

Over thirty years ago, Leamer (1983) - among many others - expressed doubts about the quality and usefulness of empirical analyses for the economic profession by stating that "hardly anyone takes data analyses seriously. Or perhaps more accurately, hardly anyone takes anyone else's data analyses seriously" (p.37). Improvements in data quality, more robust estimation methods and the evolution of better research designs seem to make that assertion no longer justifiable (see Angrist and Pischke (2010) for a recent response to Leamer's essay). The economic profes- sion and policy makers alike often rely on empirical evidence as a means to investigate policy relevant questions. The approach of using scientifically rigorous and systematic evidence to identify policies and programs that are capable of improving policy-relevant outcomes is known under the increasingly popular notion of evidence-based policy. Evidence-based economic policy often relies on randomized or quasi-natural experiments in order to identify causal effects of policies. These can require relatively strong assumptions or raise concerns of external validity. In the context of this thesis, potential concerns are for example endogeneity of policy reforms with respect to the business cycle in the first chapter, the trade-off between precision and bias in the regression-discontinuity setting in chapter 2 or non-representativeness of the sample due to self-selection in chapter 3. While the identification strategies are very useful to gain insights into the causal effects of specific policy questions, transforming the evidence into concrete policy conclusions can be challenging. Policy develop- ment should therefore rely on the systematic evidence of a whole body of research on a specific policy question rather than on a single analysis. In this sense, this thesis cannot and should not be viewed as a comprehensive analysis of specific policy issues but rather as a first step towards a better understanding of certain aspects of a policy question. The thesis applies new and innovative identification strategies to policy-relevant and topical questions in the fields of labor economics and behavioral environmental economics. Each chapter relies on a different identification strategy. In the first chapter, we employ a difference- in-differences approach to exploit the quasi-experimental change in the entitlement of the max- imum unemployment benefit duration to identify the medium-run effects of reduced benefit durations on post-unemployment outcomes. Shortening benefit duration carries a double- dividend: It generates fiscal benefits without deteriorating the quality of job-matches. On the contrary, shortened benefit durations improve medium-run earnings and employment possibly through containing the negative effects of skill depreciation or stigmatization. While the first chapter provides only indirect evidence on the underlying behavioral channels, in the second chapter I develop a novel approach that allows to learn about the relative impor- tance of the two key margins of job search - reservation wage choice and search effort. In the framework of a standard non-stationary job search model, I show how the exit rate from un- employment can be decomposed in a way that is informative on reservation wage movements over the unemployment spell. The empirical analysis relies on a sharp discontinuity in unem- ployment benefit entitlement, which can be exploited in a regression-discontinuity approach to identify the effects of extended benefit durations on unemployment and survivor functions. I find evidence that calls for an important role of reservation wage choices for job search be- havior. This can have direct implications for the optimal design of unemployment insurance policies. The third chapter - while thematically detached from the other chapters - addresses one of the major policy challenges of the 21st century: climate change and resource consumption. Many governments have recently put energy efficiency on top of their agendas. While pricing instru- ments aimed at regulating the energy demand have often been found to be short-lived and difficult to enforce politically, the focus of energy conservation programs has shifted towards behavioral approaches - such as provision of information or social norm feedback. The third chapter describes a randomized controlled field experiment in which we discuss the effective- ness of different types of feedback on residential electricity consumption. We find that detailed and real-time feedback caused persistent electricity reductions on the order of 3 to 5 % of daily electricity consumption. Also social norm information can generate substantial electricity sav- ings when designed appropriately. The findings suggest that behavioral approaches constitute effective and relatively cheap way of improving residential energy-efficiency.

Global GacA-steered control of cyanide and exoprotease production in Pseudomonas fluorescens involves specific ribosome binding sites.

The conserved two-component regulatory system GacS/GacA determines the expression of extracellular products and virulence factors in a variety of Gram-negative bacteria. In the biocontrol strain CHA0 of Pseudomonas fluorescens, the response regulator GacA is essential for the synthesis of extracellular protease (AprA) and secondary metabolites including hydrogen cyanide. GacA was found to exert its control on the hydrogen cyanide biosynthetic genes (hcnABC) and on the aprA gene indirectly via a posttranscriptional mechanism. Expression of a translational hcnA'-'lacZ fusion was GacA-dependent whereas a transcriptional hcnA-lacZ fusion was not. A distinct recognition site overlapping with the ribosome binding site appears to be primordial for GacA-steered regulation. GacA-dependence could be conferred to the Escherichia coli lacZ mRNA by a 3-bp substitution in the ribosome binding site. The gene coding for the global translational repressor RsmA of P. fluorescens was cloned. RsmA overexpression mimicked partial loss of GacA function and involved the same recognition site, suggesting that RsmA is a downstream regulatory element of the GacA control cascade. Mutational inactivation of the chromosomal rsmA gene partially suppressed a gacS defect. Thus, a central, GacA-dependent switch from primary to secondary metabolism may operate at the level of translation.

On the foundations of well-being economics and policy

When one wishes to implement public policies, there is a previous need of comparing different actions and valuating and evaluating them to assess their social attractiveness. Recently the concept of well-being has been proposed as a multidimensional proxy for measuring societal prosperity and progress; a key research topic is then on how we can measure and evaluate this plurality of dimensions for policy decisions. This paper defends the thesis articulated in the following points: 1. Different metrics are linked to different objectives and values. To use only one measurement unit (on the grounds of the so-called commensurability principle) for incorporating a plurality of dimensions, objectives and values, implies reductionism necessarily. 2. Point 1) can be proven as a matter of formal logic by drawing on the work of Geach about moral philosophy. This theoretical demonstration is an original contribution of this article. Here the distinction between predicative and attributive adjectives is formalised and definitions are provided. Predicative adjectives are further distinguished into absolute and relative ones. The new concepts of set commensurability and rod commensurability are introduced too. 3. The existence of a plurality of social actors, with interest in the policy being assessed, causes that social decisions involve multiple types of values, of which economic efficiency is only one. Therefore it is misleading to make social decisions based only on that one value. 4. Weak comparability of values, which is grounded on incommensurability, is proved to be the main methodological foundation of policy evaluation in the framework of well-being economics. Incommensurability does not imply incomparability; on the contrary incommensurability is the only rational way to compare societal options under a plurality of policy objectives. 5. Weak comparability can be implemented by using multi-criteria evaluation, which is a formal framework for applied consequentialism under incommensurability. Social Multi-Criteria Evaluation, in particular, allows considering both technical and social incommensurabilities simultaneously.

The migration towards Digital Terrestrial Television: challenges for public policy and public broadcasters

This paper initially identifies the main transformations of the television system that are caused by digitalization. Its development in several broadcasting platforms is analyzed as well as the particular obstacles and requirements that are detected for each of them. Due to its technical characteristics and its historical link to the public services, the terrestrial network requires migration strategies different from those strictly commercial, and public intervention might be needed. The paper focuses on such migration strategies towards DTT and identifies the main issues for public intervention in the areas of the digital scenario: technology, business and market transformation and the reception field. Moreover, it describes and classifies the challenges that public broadcasters should confront due to digitalization. This paper finally concludes that the leadership of the public broadcasters during the migration towards DTT is an interesting tool for public policy. The need for foster the digitalization of the terrestrial platform and to achieve certain social and public goal besides the market interest brings an opportunity for public institutions and public broadcasters to work together. That leading role could also be positive for the public service to face its necessary redefinition and reallocation within the digital context.

Designation of Co-benefits and Its Implication for Policy: Water Quality versus Carbon Sequestration in Agricultural Soils, March 2005

Designation of Co-benefits and Its Implication for Policy: Water Quality versus Carbon Sequestration in Agricultural Soils, The

Comparison of splice sites in mammals and chicken

We have carried out an initial analysis of the dynamics of the recent evolution of the splice-sites sequences on a large collection of human, rodent (mouse and rat), and chicken introns. Our results indicate that the sequences of splice sites are largely homogeneous within tetrapoda. We have also found that orthologous splice signals between human and rodents and within rodents are more conserved than unrelated splice sites, but the additional conservation can be explained mostly by background intron conservation. In contrast, additional conservation over background is detectable in orthologous mammalian and chicken splice sites. Our results also indicate that the U2 and U12 intron classes seem to have evolved independently since the split of mammals and birds; we have not been able to find a convincing case of interconversion between these two classes in our collections of orthologous introns. Similarly, we have not found a single case of switching between AT-AC and GT-AG subtypes within U12 introns, suggesting that this event has been a rare occurrence in recent evolutionary times. Switching between GT-AG and the noncanonical GC-AG U2 subtypes, on the contrary, does not appear to be unusual; in particular, T to C mutations appear to be relatively well tolerated in GT-AG introns with very strong donor sites.

Prominent use of distal 5’ transcription start sites and discovery of a large number of additional exons in ENCODE regions

This report presents systematic empirical annotation of transcript products from 399 annotated protein-coding loci across the 1% of the human genome targeted by the Encyclopedia of DNA elements (ENCODE) pilot project using a combination of 5' rapid amplification of cDNA ends (RACE) and high-density resolution tiling arrays. We identified previously unannotated and often tissue- or cell-line-specific transcribed fragments (RACEfrags), both 5' distal to the annotated 5' terminus and internal to the annotated gene bounds for the vast majority (81.5%) of the tested genes. Half of the distal RACEfrags span large segments of genomic sequences away from the main portion of the coding transcript and often overlap with the upstream-annotated gene(s). Notably, at least 20% of the resultant novel transcripts have changes in their open reading frames (ORFs), most of them fusing ORFs of adjacent transcripts. A significant fraction of distal RACEfrags show expression levels comparable to those of known exons of the same locus, suggesting that they are not part of very minority splice forms. These results have significant implications concerning (1) our current understanding of the architecture of protein-coding genes; (2) our views on locations of regulatory regions in the genome; and (3) the interpretation of sequence polymorphisms mapping to regions hitherto considered to be "noncoding," ultimately relating to the identification of disease-related sequence alterations.

Allele variants in functional MicroRNA target sites of the neurotrophin-3 receptor gene (NTRK3) as susceptibility factors for anxiety disorders

Genetic and functional data indicate that variation in the expression of the neurotrophin-3 receptor gene (NTRK3) may have an impact on neuronal plasticity, suggesting a role for NTRK3 in the pathophysiology of anxiety disorders. MicroRNA (miRNA) posttranscriptional gene regulators act by base-pairing to specific sequence sites, usually at the 3'UTR of the target mRNA. Variants at these sites might result in gene expression changes contributing to disease susceptibility. We investigated genetic variation in two different isoforms of NTRK3 as candidate susceptibility factors for anxiety by resequencing their 3'UTRs in patients with panic disorder (PD), obsessive-compulsive disorder (OCD), and in controls. We have found the C allele of rs28521337, located in a functional target site for miR-485-3p in the truncated isoform of NTRK3, to be significantly associated with the hoarding phenotype of OCD. We have also identified two new rare variants in the 3'UTR of NTRK3, ss102661458 and ss102661460, each present only in one chromosome of a patient with PD. The ss102661458 variant is located in a functional target site for miR-765, and the ss102661460 in functional target sites for two miRNAs, miR-509 and miR-128, the latter being a brain-enriched miRNA involved in neuronal differentiation and synaptic processing. Interestingly, these two variants significantly alter the miRNA-mediated regulation of NTRK3, resulting in recovery of gene expression. These data implicate miRNAs as key posttranscriptional regulators of NTRK3 and provide a framework for allele-specific miRNA regulation of NTRK3 in anxiety disorders.

Governor's Office of Drug Control Policy, Notification Letter, July 25, 2005

State Audit Reports - Notification Letter