The EMU sovereign-debt crisis: Fundamentals, expectations and contagion

We offer a detailed empirical investigation of the European sovereign debt crisis based on the theoretical model by Arghyrou and Tsoukalas (2010). We find evidence of a marked shift in market pricing behaviour from a ‘convergence-trade’ model before August 2007 to one driven by macro-fundamentals and international risk thereafter. The majority of EMU countries have experienced contagion from Greece. There is no evidence of significant speculation effects originating from CDS markets. Finally, the escalation of the Greek debt crisis since November 2009 is confirmed as the result of an unfavourable shift in countryspecific market expectations. Our findings highlight the necessity of structural, competitiveness-inducing reforms in periphery EMU countries and institutional reforms at the EMU level enhancing intra-EMU economic monitoring and policy co-ordination.

Delay and Haircuts in Sovereign Debt: Recovery and Sustainability

One of the striking aspects of recent sovereign debt restructurings is, conditional on default, delay length is positively correlated with the size of haircut. In this paper, we develop an incomplete information model of debt restructuring where the prospect of uncertain economic recovery and the signalling about sustainability concerns together generate multi-period delay. The results from our analysis show that there is a correlation between delay length and size of haircut. Such results are supported by evidence. We show that Pareto ranking of equilibria, conditional on default, can be altered once we take into account the ex ante incentive of sovereign debtor. We use our results to evaluate proposals advocated to ensure orderly resolution of sovereign debt crises.

The EMU sovereign-debt crisis: fundamentals, expectations and contagion

In a research project conducted while visiting the DG-ECFIN in June 2010, we provided a detailed empirical investigation of the EMU sovereign-debt crisis up to February 2010.

The determinants of sovereign bond yield spreads in the EMU

We use a panel of euro area countries to assess the determinants of long-term sovereign bond yield spreads over the period 1999.01-2010.12. We find that, unlike the period preceding the global financial crisis, European government bond yield spreads are wellexplained by macro- and fiscal fundamentals over the crisis period. We also find that the menu of macro and fiscal risks priced by markets has been significantly enriched since March 2009, including the risk of the crisis’ transmission among EMU member states, international risk and liquidity risk. Finally, we find that sovereign credit ratings are statistically significant in explaining spreads, yet compared to macro- and fiscal fundamentals their role is limited.

Gas6 and its receptors are implicated in sepsis as modulators of innate immunity

Gas6 downregulates the activation state of macrophages and thereby their production of proinflammatory cytokines induced by various stimuli. We aimed to determine whether Gas6 is involved in sepsis. We measured Gas6 plasma levels in 13 healthy subjects, 29 patients with severe sepsis, and 18 patients with non-infectious inflammatory diseases. Gas6 level was higher in septic patients than in control groups (P 0.0001). The sensitivity and specificity of Gas6 levels to predict fatal outcome were 83% and 88%. We next investigated whether Gas6 affects cytokine production and outcome in experimental models of endotoxemia and peritonitis in wild-type (WT) and Gas6-/- mice. Circulating levels of Gas6 after LPS 25mg/kg i.p. peaked at 1 hour (P<0.001). Similarly, TNF- was higher in Gas6-/- than in WT mice 1 hour after LPS (P<0.05). Furthermore, 62 anti- and pro-inflammatory cytokines were quantified in plasma after LPS injection. Their levels were globally higher in Gas6-/- plasma after LPS, 47/62 cytokines being at least 50% higher in Gas6-/- than in WT plasma after 1 hour. Mortality induced by 25mg/kg LPS was 25% in WT versus 87% in Gas6-/- mice (P<0.05). LPS-induced mortality in Gas6 receptors Axl-/-, Tyro3-/- and Merkd was also enhanced when compared to WT mice (P<0.001). In peritonitis models (cecal ligation and puncture, CLP, and i.p. injection of E. coli), Gas6 plasma levels increased and remained elevated at least 24 hours. CLP increased mortality in Gas6-/- mice. Finally, we explored the role of Gas6 in LPS-treated macrophages. We found that Gas6 was released by LPS-stimulated WT macrophages and that Gas6-/- macrophages produced more TNF- and IL-6 than WT macrophages. Cytokine release by Gas6-/- macrophages was higher than by WT macrophages (cytokine array). Adjunction of recombinant Gas6 to the culture medium of Gas6-/- macrophages diminished the cytokine production to WT levels. In LPS-treated Gas6-/- macrophages, Akt and Erk1/2 phosphorylation was reduced whereas p38 and NF B activation was enhanced. Thus, in septic patients, elevated Gas6 levels were associated with fatal outcome. In mice, they raised in experimental endotoxemia and peritonitis models, and correlated also with sepsis severity. However, Gas6-/- mice survival in these models was reduced compared to WT. Gas6 secreted by macrophages in response to LPS activated Akt and restrained p38 and NF B activation, thereby dampening macrophage activation. Altogether these data suggest that, during endotoxemia, Gas6-/- mice phenotype resembles that of mice which have undergone PI3K inhibition, indicating that Gas6 is a major modulator of innate immunity.

Determinants of hepatitis A vaccine immunity in a cohort of human immunodeficiency virus-infected children living in Switzerland.

Vaccination in HIV-infected children is often less effective than in healthy children. The goal of this study was to assess vaccine responses to hepatitis A virus (HAV) in HIV-infected children. Children of the Swiss Mother and Child HIV Cohort Study (MoCHiV) were enrolled prospectively. Recommendations for initial, catch-up, and additional HAV immunizations were based upon baseline antibody concentrations and vaccine history. HAV IgG was assessed by enzyme-linked immunosorbent assay (ELISA) with a protective cutoff value defined as ≥10 mIU/ml. Eighty-seven patients were included (median age, 11 years; range, 3.4 to 21.2 years). Forty-two patients were seropositive (48.3%) for HAV. Among 45 (51.7%) seronegative patients, 36 had not received any HAV vaccine dose and were considered naïve. Vaccine responses were assessed after the first dose in 29/35 naïve patients and after the second dose in 33/39 children (25 initially naïve patients, 4 seronegative patients, and 4 seropositive patients that had already received 1 dose of vaccine). Seroconversion was 86% after 1 dose and 97% after 2 doses, with a geometric mean concentration of 962 mIU/ml after the second dose. A baseline CD4(+) T cell count below 750 cells/μl significantly reduced the post-2nd-dose response (P = 0.005). Despite a high rate of seroconversion, patients with CD4(+) T cell counts of <750/μl had lower anti-HAV antibody concentrations. This may translate into a shorter protection time. Hence, monitoring humoral immunity may be necessary to provide supplementary doses as needed.

On the time-varying relationship between EMU sovereign spreads and their determinants

We use a dynamic multipath general-to-specific algorithm to capture structural instability in the link between euro area sovereign bond yield spreads against Germany and their underlying determinants over the period January 1999 – August 2011. We offer new evidence suggesting a significant heterogeneity across countries, both in terms of the risk factors determining spreads over time as well as in terms of the magnitude of their impact on spreads. Our findings suggest that the relationship between euro area sovereign risk and the underlying fundamentals is strongly timevarying, turning from inactive to active since the onset of the global financial crisis and further intensifying during the sovereign debt crisis. As a general rule, the set of financial and macro spreads’ determinants in the euro area is rather unstable but generally becomes richer and stronger in significance as the crisis evolves.

Delay and Haircuts in Sovereign Debt: Recovery and Sustainability

One of the striking aspects of recent sovereign debt restructurings is, conditional on default, delay length is positively correlated with the size of "haircut", which is size of creditor losses. In this paper, we develop an incomplete information model of debt restructuring where the prospect of uncertain economic recovery and the signalling about sustainability concerns together generate multi-period delay. The results from our analysis show that there is a correlation between delay length and size of haircut. Such results are supported by evidence. We show that Pareto ranking of equilibria, conditional on default, can be altered once we take into account the ex ante incentive of sovereign debtor. We use our results to evaluate proposals advocated to ensure orderly resolution of sovereign debt crises.

Cell mediated immunity in Chagas' disease: Trypanosoma cruzi antigens induce suppression of the in vitro proliferative response of mononuclear cells

The partial suppression of the cell-mediated immune response by Trypanosoma cruzi antigens in patients with Chagas' disease is demonstrated in a costimulation assay with T. cruzi antigens and Mycobacterium tuberculosis purified protein derivative (PPD) or Tetanus toxoid (TT). ononuclear cells from 13 patients with chagasic infection without evidence of heart disease, 10 patients with chagasic cardiomyopathy and 7 healthy blood donors were stimulated with antigen A (autoclaved epimastigotes), PPD, TT, PPD + A, PPD + TT and TT + A. The average percentage of suppression induced by costimulation of mononuclear cells with PPD and antigen A was 47.1% in patients with chagasic infection without heart disease (INF), 38.8% in patients with chagasic cardiomyopathy (CDM) and 23.3% in healthy controls. Similar values were observed when living trypomastigotes were used. A costimulatory study with PPD and TT, PPD and A and TT and A was carried out in 8 patients with chagasic infection, in order to evaluate the possibility that this difference could be due to a nonspecific inhibitory effect. The mean suppression induced by TT + PPD was -8.9, with TT + A was 52.7 and with PPD + A was 50.1. The data reported show that T. cruzi antigens induce a specific suppression of the proliferative responseof mononuclear cells, that might be relevant to the persistence of the parasite in the host.

Transmission immunity in malaria: reflections on the underlying immune mechanisms during natural infections and following artificial immunization

Malaria transmission-blocking immunity has been studied in natural malaria infections in man, during infections in animals and following artificial immunization of animals with sexual stage malaria parasites. Effective immunity, which prevents infectivity of a malarial infection to mosquitoes, has been observed under all of these circumstances. Two general types of effector mechanism have been identified. One is an antibody mediated mechanism which acts against the extracellular sexual stages of the parasite within the midgut of a blood feeding mosquito. The other is a cytokine mediated mechanism which inactivates the gametocytes of the parasites while in the circulation of the vertebrate host. Both effects have been observed during natural infections and following artificial immunization. The basis of induction of transmission-blocking immunity, including the nature of the memory for such immunity, however, may be very different in different host/parasite systems and during natural infection of following artificial immunization. Following artificial immunization a strong immune memory for transmission blocking immunity has been observed in animal systems. By contrast, following natural infections in man immune memory for transmission blocking immunity has been found to be weak and short lived if it occurs at all. It is suggested that the immunogens which induce natural transmission blocking immunity may be CD4+ independent.

Mechanisms of protective immunity against asexual blood stages of Plasmodium falciparum in the experimental host Saimiri

In the Saimiri monkey, an experimental host for human malaria, acquired protection against Plasmodium falciparum blood stages depends on the IgG antibody populations developed. In vivo protective anti-falciparum activity of IgG antibodies is correlated with the in vivo opsonizing activity promoting phagocytosis of parasited red bloood cells. In contrast, non protective antibodies inhibit this mechanism by competing at the target level. A similar phenomenon can be and human infection. Anti-cytoadherent and anti-rosette antibodies developed by Saimiri and humans prevent the development of physiopathological events like cerebral malaria which can also occur in this experimental host. Furthermore, transfer to protective human anti-falciparum IgG antibodies into infected Saimiri monkeys exerts an anti parasite activity as efficient as that observed when it is transfered into acute falciparum malaria patients, making the Saimiri an even more attractive host. Studies on the role of immunocompetent cells in the protective immune reponse are still in their infancy, however the existance of a restricted polymorphism of MHC II class molecules in the Saimiri confers additional theoretical and practical importance to this model.

Recent advances in immunity to human schistosomiasis

For many years the epidemiological significance of immunity in human schistosomiasis has been the subject of inconclusive debate. Recently, the results of studies from Brazil and Kenya, on Shistosoma mansoni and from Zimbabwe and The Gambia on S. haematobium have confirmed the importance of protective immunity. In communities in endemic areas the development of immunity to infection only occurs after many years of exposure. In part this due to the slow development of antibodies wich are protective but also to the earlier development of antibody isotypes which lack protective capacity and wich are capable of interfering with the functioning of protective antibodies. Protective antibodies appear to be of the IgE class but some IgG subclasses may be also be important. Initially, blocking antibodies were thought to be predominantly IgM and IgG2 but IgG4 also seems to posses blocking activity. The early production of blocking antibodies and late production of protective antibodies may be indicative of cytokine induced immunoglobulin class swiching caused by the sequential involvment of different lymphokines.

T cell derived cytokines in lung-phase immunity to Schistosoma mansoni

In C57Bl/6 strain mice vaccinated with radiation-attenuated cercariae of Schistosoma mansoni immune elimination of challenge parasites occurs in the lungs. Leococytes were recovered from the lungs of such mice by bronchoalveolar lavage and cultured in vitro with larval antigen; the profile of cytokines released was then analyzed. From 14 days after vaccination, BAL cultures contained infiltrating lymphocytes wich produced abundant quantitties of IFN-g and IL-3. Challenge of vaccinated mice resulted in a second influx of IFN-g nd IL-3- producing cells, earlier than after vaccination or in the appropriate contropls. Ablation studies revealed that CD4+ T cells were the source of IFN-g. The timing of cytokine production after vaccination, and challenge was coincident with the phases of macrophage activation previously reported. At no time could lymphocytes in BAL cultures to stimulated to proliferate with either larval Ag or mitogen, in contrast to splenocytes from the same mice. Furthermore, T cell growth factor activity was not detected in BAL cultures stimulated with Ag. We suggest that the lymphocytes recruited to the lungs are memory/effector cells, When Ag. released challenge schistosomula is presented to these cells, they respond by secreting cytokines wich mediate the formation of cellular aggregates around the parasites, blocking their onward migration.

Effects of azadirachtin on Rhodnius prolixus: immunity and trypanosoma interaction

The effects of azadirachtin, a tetranortriterpenoid from the neem tree Aradirachta indica J. on both immunity and Trypanosoma cruzi interaction within Rhodniusprolixus and other triatomines, were presented Given through a blood meal, azadirachtin affected the immune reactivity as shown by a significant reduction in numbers of hemocytes and consequently nodule formation follwing challenge with Enterobacter cloacae ß12, reduction in ability to produce antibacterial activities in the hemolymph when injected with bacteria, and decreased ability to destroy the infection caused by inoculation of E. cloacae cells. A single dose of azadirachtin was able to block the development of T. cruzi in R. prolixus if given through the meal at different intervals, together with, before or after parasite infection. Similary, these results were observed with different triatomine species and different strains of T. cruzi. Azadirachtin induced a permanent resistance of the vector against reinfection with T. cruzi. The significance of these data is discussed in relation to the general mode of azadirachtin action in insects.

Dual function of eosinophils in pathogenesis and protective immunity against parasites

The functional duality of eosinophils, involved in a protective response or in pathogenesis is illustrated in various parasitic infections. In schistosomiasis, eosinophils have been shown to mediate schistosomula killing, in the presence of antibodies. The association of eosinophil-dependent cytotoxic antibody isotypes with resistance of reinfection (IgE and IgA antibodies), whereas in vitro blocking antibody isotypes (IgG4, IgM) were detected in susceptible subjects, suggested a participation of eosinophils in antibody-dependent protective response. However eosinophils could participate to granuloma formation and consequently to the pathological reactions during schistosomiasis. Activation of eosinophils by antibodies, leading to release of granule proteins have been studied in patients with filariasis. Eosinophil peroxidase, EPO was released safter IgE-dependent activation whereas Eosinophil Cationic Protein, ECP, was released after IgG- and IgA-dependent activation of eosinophils, results suggesting a process of differential release mediators. Interactions between eosinophils and interleukins, and specially IL-5 are discussed. Whereas a receptor for IL-5 has been characterized on human eosinophils, recent studies have shown that eosinophils, expressed the messenger RNA encoding IL-5. These results associated to data showing the synthesis of other cytokines indicate that eosinophils are not only the source of cytotoxic mediators involved in the effector phase of immunity but also of growth and regualtory factors, participating to immunoregulation.