Explaining High Economic Growth in Small Tourism Countries with a Dynamic General Equilibrium Model

This paper shows that tourism specialisation can help to explain the observed high growth rates of small countries. For this purpose, two models of growth and trade are constructed to represent the trade relations between two countries. One of the countries is large, rich, has an own source of sustained growth and produces a tradable capital good. The other is a small poor economy, which does not have an own engine of growth and produces tradable tourism services. The poor country exports tourism services to and imports capital goods from the rich economy. In one model tourism is a luxury good, while in the other the expenditure elasticity of tourism imports is unitary. Two main results are obtained. In the long run, the tourism country overcomes decreasing returns and permanently grows because its terms of trade continuously improve. Since the tourism sector is relatively less productive than the capital good sector, tourism services become relatively scarcer and hence more expensive than the capital good. Moreover, along the transition the growth rate of the tourism economy holds well above the one of the rich country for a long time. The growth rate differential between countries is particularly high when tourism is a luxury good. In this case, there is a faster increase in the tourism demand. As a result, investment of the small economy is boosted and its terms of trade highly improve.

How reliable is the monitoring of permanent vegetation plots? A test with multiple observers

Questions: A multiple plot design was developed for permanent vegetation plots. How reliable are the different methods used in this design and which changes can we measure? Location: Alpine meadows (2430 m a.s.l.) in the Swiss Alps. Methods: Four inventories were obtained from 40 m(2) plots: four subplots (0.4 m(2)) with a list of species, two 10m transects with the point method (50 points on each), one subplot (4 m2) with a list of species and visual cover estimates as a percentage and the complete plot (40 m(2)) with a list of species and visual estimates in classes. This design was tested by five to seven experienced botanists in three plots. Results: Whatever the sampling size, only 45-63% of the species were seen by all the observers. However, the majority of the overlooked species had cover < 0.1%. Pairs of observers overlooked 10-20% less species than single observers. The point method was the best method for cover estimate, but it took much longer than visual cover estimates, and 100 points allowed for the monitoring of only a very limited number of species. The visual estimate as a percentage was more precise than classes. Working in pairs did not improve the estimates, but one botanist repeating the survey is more reliable than a succession of different observers. Conclusion: Lists of species are insufficient for monitoring. It is necessary to add cover estimates to allow for subsequent interpretations in spite of the overlooked species. The choice of the method depends on the available resources: the point method is time consuming but gives precise data for a limited number of species, while visual estimates are quick but allow for recording only large changes in cover. Constant pairs of observers improve the reliability of the records.

The P450 oxidoreductase genotype is associated with CYP3A activity in vivo as measured by the midazolam phenotyping test.

CYP3A4, CYP3A5 and CYP3A7 are hepatic enzymes that metabolize about 50% of drugs on the market, with a large overlap in their specificities. We investigated the genetic bases that contribute to the variation of CYP3A activity. We phenotyped 251 individuals from two independent studies (182 patients treated with methadone and 69 patients with clozapine) for CYP3A activity using the midazolam phenotyping test and genotyped them for CYP3A4, CYP3A5, and CYP3A7 genetic variants, including the single nucleotide polymorphism (SNP) rs4646437C>T in intron 7 of CYP3A4. Owing to the fact that CYP enzymes require electron transfer through the P450 oxidoreductase (POR), and functional impairment has been shown for the POR*28 SNP, this polymorphism was also analysed. We show that CYP3A4, CYP3A5 and CYP3A7 genotypes, including the SNP rs4646437C>T, do not reflect the inter-individual variability of CYP3A activity (P>0.1). In contrast, POR*28 TT genotype presents a 1.6-fold increase in CYP3A activity compared with POR*28C carriers (n = 182, P = 0.004). This finding was replicated in the second independent dataset (n = 69, P = 0.04). The SNP POR*28 seems to be a better genetic marker of the variability of total CYP3A activity in vivo than CYP3A4, CYP3A5 and CYP3A7 genetic variants.

Dynamic Option Adjusted Spread and the Value of Mortgage Backed Securities (Draft 1)

We extend a reduced form model for pricing pass-through mortgage backed securities (MBS) and provide a novel hedging tool for investors in this market. To calculate the price of an MBS, traders use what is known as option-adjusted spread (OAS). The resulting OAS value represents the required basis points adjustment to reference curve discounting rates needed to match an observed market price. The OAS suffers from some drawbacks. For example, it remains constant until the maturity of the bond (thirty years in mortgage-backed securities), and does not incorporate interest rate volatility. We suggest instead what we call dynamic option adjusted spread (DOAS). The latter allows investors in the mortgage market to account for both prepayment risk and changes of the yield curve.

Endocrine response and perceived stress test during an experimental challenge task in adult survivors of a childhood cancer.

BACKGROUND: Although long-term implications of cancer in childhood or adolescence with regard to medical conditions are well documented, the impact on mental health and on response to stress, which may be an indicator of psychological vulnerability, is not yet well understood. In this study, psychological and physiological responses to stress were examined.¦PROCEDURE: Fifty-three participants aged 18-39 years (n = 25 survivors of childhood or adolescence cancer, n = 28 controls) underwent an experimental stress test, the Trier Social Stress Test (TSST). Participants were asked to provide repeated evaluations of perceived stress on visual-analogical scales and blood samples were collected before and after the TSST to measure plasma cortisol.¦RESULTS: The psychological perception of stress was not different between the two groups. However, the cancer survivors group showed a higher global plasma cortisol level as well as higher amplitude in the response to the TSST. The global cortisol level in cancer survivors was increased when depression symptoms were present. The subjective perception of stress and the plasma cortisol levels were only marginally correlated in both groups.¦CONCLUSIONS: It is suggested that the exposure to a life-threatening experience in childhood/adolescence increases the endocrine response to stress, and that the presence of depressive symptoms is associated with an elevation of plasma cortisol levels. A better knowledge of these mechanisms is important given that the dysregulations of the stress responses may cause psychological vulnerability. Pediatr Blood Cancer 2012; 59: 138-143. © 2011 Wiley Periodicals, Inc.

Dynamic Option Adjusted Spread and the Value of Mortgage Backed Securities (Draft 2)

We extend a reduced form model for pricing pass-through mortgage backed securities (MBS) and provide a novel hedging tool for investors in this market. To calculate the price of an MBS, traders use what is known as option-adjusted spread (OAS). The resulting OAS value represents the required basis points adjustment to reference curve discounting rates needed to match an observed market price. The OAS suffers from some drawbacks. For example, it remains constant until the maturity of the bond (thirty years in mortgage-backed securities), and does not incorporate interest rate volatility. We suggest instead what we call dynamic option adjusted spread (DOAS), which allows investors in the mortgage market to account for both prepayment risk and changes of the yield curve.

A New Test of the Real Interest Rate Parity Hypothesis: Bounds Approach and Structural Breaks

We test the real interest rate parity hypothesis using data for the G7 countries over the period 1970-2008. Our contribution is two-fold. First, we utilize the ARDL bounds approach of Pesaran et al. (2001) which allows us to overcome uncertainty about the order of integration of real interest rates. Second, we test for structural breaks in the underlying relationship using the multiple structural breaks test of Bai and Perron (1998, 2003). Our results indicate significant parameter instability and suggest that, despite the advances in economic and financial integration, real interest rate parity has not fully recovered from a breakdown in the 1980s.

IInflation and Globalisation: A Dynamic Factor Model with Stochastic Volatility

National inflation rates reflect domestic and international (regional and global) influences. The relative importance of these components remains a controversial empirical issue. We extend the literature on inflation co-movement by utilising a dynamic factor model with stochastic volatility to account for shifts in the variance of inflation and endogenously determined regional groupings. We find that most of inflation variability is explained by the country specific disturbance term. Nevertheless, the contribution of the global component in explaining industrialised countries’ inflation rates has increased over time.

The Timing of Asset Trade and Optimal Policy in Dynamic Open Economies

Using a standard open economy DSGE model, it is shown that the timing of asset trade relative to policy decisions has a potentially important impact on the welfare evaluation of monetary policy at the individual country level. If asset trade in the initial period takes place before the announcement of policy, a national policymaker can choose a policy rule which reduces the work effort of households in the policymaker’s country in the knowledge that consumption is fully insured by optimally chosen international portfolio positions. But if asset trade takes place after the policy announcement, this insurance is absent and households in the policymaker’s country bear the full consumption consequences of the chosen policy rule. The welfare incentives faced by national policymakers are very different between the two cases. Numerical examples confirm that asset market timing has a significant impact on the optimal policy rule.

Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries

This study examines the impact of globalization on cross-country inequality and poverty using a panel data set for 65 developing counties, over the period 1970-2008. With separate modelling for poverty and inequality, explicit control for financial intermediation, and comparative analysis for developing countries, the study attempts to provide a deeper understanding of cross country variations in income inequality and poverty. The major findings of the study are five fold. First, a non-monotonic relationship between income distribution and the level of economic development holds in all samples of countries. Second, both openness to trade and FDI do not have a favourable effect on income distribution in developing countries. Third, high financial liberalization exerts a negative and significant influence on income distribution in developing countries. Fourth, inflation seems to distort income distribution in all sets of countries. Finally, the government emerges as a major player in impacting income distribution in developing countries.

Forecasting Inflation Using Dynamic Model Averaging

We forecast quarterly US inflation based on the generalized Phillips curve using econometric methods which incorporate dynamic model averaging. These methods not only allow for coe¢ cients to change over time, but also allow for the entire forecasting model to change over time. We nd that dynamic model averaging leads to substantial forecasting improvements over simple benchmark regressions and more sophisticated approaches such as those using time varying coe¢ cient models. We also provide evidence on which sets of predictors are relevant for forecasting in each period.

A Nonlinear Panel Unit Root Test under Cross Section Dependence

We propose a nonlinear heterogeneous panel unit root test for testing the null hypothesis of unit-roots processes against the alternative that allows a proportion of units to be generated by globally stationary ESTAR processes and a remaining non-zero proportion to be generated by unit root processes. The proposed test is simple to implement and accommodates cross sectional dependence. We show that the distribution of the test statistic is free of nuisance parameters as (N, T) −! 1. Monte Carlo simulation shows that our test holds correct size and under the hypothesis that data are generated by globally stationary ESTAR processes has a better power than the recent test proposed in Pesaran [2007]. Various applications are provided.

Forecasting Inflation Using Dynamic Model Averaging

We forecast quarterly US inflation based on the generalized Phillips curve using econometric methods which incorporate dynamic model averaging. These methods not only allow for coe¢ cients to change over time, but also allow for the entire forecasting model to change over time. We nd that dynamic model averaging leads to substantial forecasting improvements over simple benchmark regressions and more sophisticated approaches such as those using time varying coe¢ cient models. We also provide evidence on which sets of predictors are relevant for forecasting in each period.

COLOX: a new blood-based test for colorectal cancer screening

INTRODUCTION/OBJECTIVES: Detection rates for adenoma and early colorectal cancer (CRC) are insufficient due to low compliance towards invasive screening procedures, like colonoscopy.Available non-invasive screening tests have unfortunately low sensitivity and specificity performances.Therefore, there is a large unmet need calling for a cost-effective, reliable and non-invasive test to screen for early neoplastic and pre-neoplastic lesions AIMS & Methods: The objective is to develop a screening test able to detect early CRCs and adenomas.This test is based on a nucleic acids multi-gene assay performed on peripheral blood mononuclear cells (PBMCs).A colonoscopy-controlled feasibility study was conducted on 179 subjects.The first 92 subjects was used as training set to generate a statistical significant signature.Colonoscopy revealed 21 subjects with CRC,30 with adenoma bigger than 1 cm and 41 with no neoplastic or inflammatory lesions.The second group of 48 subjects (controls, CRC and polyps) was used as a test set and will be kept blinded for the entire data analysis.To determine the organ and disease specificity 38 subjects were used:24 with inflammatory bowel disease (IBD),14 with other cancers than CRC (OC).Blood samples were taken from each patient the day of the colonoscopy and PBMCs were purified. Total RNA was extracted following standard procedures.Multiplex RT-qPCR was applied on 92 different candidate biomarkers.Different univariate and multivariate statistical methods were applied on these candidates and among them 60 biomarkers with significant p-values (<0.01) were selected.These biomarkers are involved in several different biological functions as cellular movement,cell signaling and interaction,tissue and cellular development,cancer and cell growth and proliferation.Two distinct biomarker signatures are used to separate patients without lesion from those with cancer or with adenoma, named COLOX CRC and COLOX POL respectively.COLOX performances were validated using random resampling method, bootstrap. RESULTS: COLOX CRC and POL tests successfully separate patients without lesions from those with CRC (Se 67%,Sp 93%,AUC 0.87) and from those with adenoma bigger than 1cm (Se 63%,Sp 83%,AUC 0.77),respectively. 6/24 patients in the IBD group and 1/14 patients in the OC group have a positive COLOX CRC CONCLUSION: The two COLOX tests demonstrated a high sensitivity and specificity to detect the presence of CRCs and adenomas bigger than 1 cm.A prospective, multicenter, pivotal study is underway in order to confirm these promising results in a larger cohort.