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

Identification of Leishmania major cysteine proteinases as targets of the immune response in humans.

In this study, we report the identification of two parasite polypeptides recognized by human sera of patients infected with Leishmania major. Isolation and sequencing of the two genes encoding these polypeptides revealed that one of the genes is similar to the L. major cathepsin L-like gene family CPB, whereas the other gene codes for the L. major homologue of the cysteine proteinase a (CPA) of L. mexicana. By restriction enzyme digestion of genomic DNA, we show that the CPB gene is present in multiple copies in contrast to the cysteine proteinase CPA gene which could be unique. Specific antibodies directed against the mature regions of both types expressed in Escherichia coli were used to analyze the expression of these polypeptides in different stages of the parasite's life cycle. Polypeptides of 27 and 40 kDa in size, corresponding to CPA and CPB respectively, were detected at higher level in amastigotes than in stationary phase promastigotes. Purified recombinant CPs were also used to examine the presence of specific antibodies in sera from either recovered or active cases of cutaneous leishmaniasis patients. Unlike sera from healthy uninfected controls, all the sera reacted with recombinant CPA and CPB. This finding indicates that individuals having recovered from cutaneous leishmaniasis or with clinically apparent disease have humoral responses to cysteine proteinases demonstrating the importance of these proteinases as targets of the immune response and also their potential use for serodiagnosis.

The Persistence of Inflation in OECDCountries: a Fractionally Integrated Approach

The statistical properties of inflation and, in particular, its degree of persistence and stability over time is a subject of intense debate and no consensus has been achieved yet. The goal of this paper is to analyze this controversy using a general approach, with the aim of providing a plausible explanation for the existing contradictory results. We consider the inflation rates of 21 OECD countries which are modelled as fractionally integrated (FI) processes. First, we show analytically that FI can appear in inflation rates after aggregating individual prices from firms that face different costs of adjusting their prices. Then, we provide robust empirical evidence supporting the FI hypothesis using both classical and Bayesian techniques. Next, we estimate impulse response functions and other scalar measures of persistence, achieving an accurate picture of this property and its variation across countries. It is shown that the application of some popular tools for measuring persistence, such as the sum of the AR coefficients, could lead to erroneous conclusions if fractional integration is present. Finally, we explore the existence of changes in inflation inertia using a novel approach. We conclude that the persistence of inflation is very high (although non-permanent) in most post-industrial countries and that it has remained basically unchanged over the last four decades.

In vivo localization of a bispecific antibody which targets human T lymphocytes to lyse human colon cancer cells.

A bispecific MAb was derived from the fusion of a hybridoma producing MAb CD3 with a hybridoma producing MAb L-DI (which is directed against a 41-kDa glycoprotein expressed in most gastro-intestinal and pancreatic carcinomas). Bispecific antibody molecules were isolated from parental antibody molecules by the use of hydroxylapatite-HPLC and shown to target human cytolytic T lymphocytes, irrespective of their original specificity, to specifically lyse human colon carcinoma cells. Localization studies in vivo using nude mice bearing human colon carcinoma xenografts showed significant accumulation of the HPLC-purified 125I-labelled bispecific antibodies into the tumor compared to 131I-labelled control CD3 antibody.

The dynamics of US inflation: Can monetary policy explain the changes?

We investigate the relationship between monetary policy and inflation dynamics in theUS using a medium scale structural model. The specification is estimated with Bayesiantechniques and fits the data reasonably well. Policy shocks account for a part of the declinein inflation volatility; they have been less effective in triggering inflation responses overtime and qualitatively account for the rise and fall in the level of inflation. A number ofstructural parameter variations contribute to these patterns.

Evaluating predictive densities of U.S. output growth and inflation in a large macroeconomic data set

We evaluate conditional predictive densities for U.S. output growth and inflationusing a number of commonly used forecasting models that rely on a large number ofmacroeconomic predictors. More specifically, we evaluate how well conditional predictive densities based on the commonly used normality assumption fit actual realizationsout-of-sample. Our focus on predictive densities acknowledges the possibility that, although some predictors can improve or deteriorate point forecasts, they might have theopposite effect on higher moments. We find that normality is rejected for most modelsin some dimension according to at least one of the tests we use. Interestingly, however,combinations of predictive densities appear to be correctly approximated by a normaldensity: the simple, equal average when predicting output growth and Bayesian modelaverage when predicting inflation.

A Percepção da População Local Sobre os Impactos Económicos do Turismo na Ilha de São Vicente

A actividade turística só faz sentido, e torna-se viável, quando se proporciona uma experiência qualitativa aos principais agentes envolvidos, isto é, quando haja a optimização da experiência turística, a conservação ambiental e cultural e a inclusão social, pela participação activa das comunidades locais. Assim, esta monografia debruça-se sobre a análise de um desses pilares, mais concretamente, a população local, e como tal, objectiva-se analisar a sua percepção sobre os impactos económicos do turismo no desenvolvimento da ilha de São Vicente. Contudo, para dar uma resposta coerente à problemática deste estudo, que é identificar os impactos económicos do turismo percebido pelos residentes, recorreu-se à uma abordagem económica do turismo, tendo em conta as nomenclaturas desenvolvidas no âmbito da Conta Satélite do Turismo. Na avaliação dos impactos, fez-se a aplicação de um inquérito por questionário, dirigido aos residentes das zonas de Norte Baía, Ribeira de Calhau, São Pedro e o Centro da Cidade. Definiu-se uma amostra representativa de 200 indivíduos, analisando a relação entre o turismo e um conjunto de variáveis económicas tais como o emprego, o rendimento, as receitas governamentais, as infra-estruturas, a sazonalidade, os investimentos, e a inflação. Pelos resultados obtidos, concluiu-se que o turismo contribui positivamente para aumentar o emprego, o rendimento, melhorar a qualidade de vida, o aparecimento de novas empresas, o aumento do Produto Interno Bruto e ainda contribui para o desenvolvimento económico da ilha. Contudo, os resultados permitiram concluir que a ilha não depende, do ponto de vista económico, exclusivamente do turismo. Touristic activity only makes sense and becomes profitable when it brings a qualitative experience to the parties involved, i.e. when it results in an improvement of the touristic experience, with an environmental and cultural protection and social inclusion, through the active participation of the local communities, we developed this monograph based on the analysis of the people´s perception about the economic impact of the tourism in the development of São Vicente island. However, in order to have a coherent answer to the issues this document is concerned with, i.e to identify the economic impact of the tourism on people´s live, we went through an economic approach of the tourism, taking in consideration the nomenclature developed in the sphere of Tourism Satellite Account. For the evaluation of the impact we resorted to an enquiry to the residents of Norte Baía, Ribeira de Calhau, São Pedro, and Mindelo. A representative sample of 200 individuals has been defined, to analyze the relationship between the tourism itself and several economic targets, such as: employment, profits, infrastructure, season, investment, inflation. According to the analysis we concluded that the tourism has positively contributed to the uprising of new enterprise, to the increasing of the gross domestic product, to rise up the employment rate, to increase family´s incomes and consequently a better life quality and also to the economic development of São Vicente Island. Nevertheless we also concluded that economically São Vicente does not depend only on the tourism incomes.

Inflation, political instability and stockmarket volatility in interwar Germany

What determined the volatility of asset prices in Germany between thewars? This paper argues that the influence of political factors has beenoverstated. The majority of events increasing political uncertainty hadlittle or no effect on the value of German assets and the volatility ofreturns on them. Instead, it was inflation (and the fear of it) that islargely responsible for most of the variability in asset returns.

Characterization of pancreatic NMDA receptors as possible drug targets for diabetes treatment.

In the nervous system, NMDA receptors (NMDARs) participate in neurotransmission and modulate the viability of neurons. In contrast, little is known about the role of NMDARs in pancreatic islets and the insulin-secreting beta cells whose functional impairment contributes to diabetes mellitus. Here we found that inhibition of NMDARs in mouse and human islets enhanced their glucose-stimulated insulin secretion (GSIS) and survival of islet cells. Further, NMDAR inhibition prolonged the amount of time that glucose-stimulated beta cells spent in a depolarized state with high cytosolic Ca(2+) concentrations. We also noticed that, in vivo, the NMDAR antagonist dextromethorphan (DXM) enhanced glucose tolerance in mice, and that in vitro dextrorphan, the main metabolite of DXM, amplified the stimulatory effect of exendin-4 on GSIS. In a mouse model of type 2 diabetes mellitus (T2DM), long-term treatment with DXM improved islet insulin content, islet cell mass and blood glucose control. Further, in a small clinical trial we found that individuals with T2DM treated with DXM showed enhanced serum insulin concentrations and glucose tolerance. Our data highlight the possibility that antagonists of NMDARs may provide a useful adjunct treatment for diabetes.

The persistence of inflation in OECD countries: A fractionally integrated approach

The statistical properties of inflation and, in particular, its degree of persistence and stability over time is a subject of intense debate and no consensus has been achieved yet. The goal of this paper is to analyze this controversy using a general approach, with the aim of providing a plausible explanation for the existing contradictory results. We consider the inflation rates of 21 OECD countries which are modelled as fractionally integrated (FI) processes. First, we show analytically that FI can appear in inflation rates after aggregating individual prices from firms that face different costs of adjusting their prices. Then, we provide robust empirical evidence supporting the FI hypothesis using both classical and Bayesian techniques. Next, we estimate impulse response functions and other scalar measures of persistence, achieving an accurate picture of this property and its variation across countries. It is shown that the application of some popular tools for measuring persistence, such as the sum of the AR coefficients, could lead to erroneous conclusions if fractional integration is present. Finally, we explore the existence of changes in inflation inertia using a novel approach. We conclude that the persistence of inflation is very high (although non-permanent) in most post-industrial countries and that it has remained basically unchanged over the last four decades.

Stock returns, term structure, inflation and real activity: An international perspective

This paper analyses the empirical interdependences among assetreturns, real activity and inflation from a multicountry and internationalpoint of view. We find that nominal stock returns are significantly relatedto inflation only in the US, that the US term structure of interest ratespredicts both domestic and foreign inflation rates while foreign termstructures do not have this predictive power and that innovations in inflationand exchange rates induce insignificant responses of real and financialvariables. An interpretation of the dynamics and some policy implicationsof the results are provided.

New evidence on inflation persistence and price stickiness in the Euro area: Implications for macro modelling

This paper evaluates new evidence on price setting practices and inflation persistence in the euro area with respect to its implications for macro modelling. It argues that several of the most commonly used assumptions in micro-founded macro models are seriously challenged by the new findings.