Competition, Markups, and Predictable Returns

This paper jointly examines the link between competition and expected returns in the time series and in the cross-section. To this end, we build a general equilibrium model where markups vary because of firm entry with oligopolistic competition. When concentration is high, markups are more sensitive to entry risk. We find that higher markups are associated with higher expected returns over time and across industries, in line with the data. The model can also quantitatively account for the persistent rise in aggregate risk premiums and macroeconomic volatility associated with the secular increase trend industry concentration since the mid-1980s

Discount Rates, Debt Maturity, and the Fiscal Theory

This paper examines how the transmission of government portfolio risk arising from maturity operations depends on the stance of monetary/fiscal policy. Accounting for risk premia in the fiscal theory allows the government portfolio to affect expected inflation, even in a frictionless economy. The effects of maturity rebalancing on expected inflation in the fiscal theory depend directly on the conditional nominal term premium, giving rise to an optimal debt‐maturity policy that is state‐dependent. In a calibrated macrofinance model, we demonstrate that maturity operations have sizable effects on expected inflation and output through our novel risk transmission mechanism

Markup cyclicality, competition and liquidity constraints: Evidence from a panel VAR analysis

© 2020 The Author. This is an open access article under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits use, distribution and reproduction in any medium, provided the original work is properly cited.The main scope of this study is to investigate the effects of competition and liquidity constraints on the cyclical behaviour of the markup ratio. In particular, 79 2-digit NACE Rev.2 sectors across the UK manufacturing and services industry over 2008-2017 are taken into account in order to observe markup cyclicality and whether pricing decisions are significantly influenced by the degree of competition and liquidity restrictions. A panel VAR framework is used to take into account the presence of cross-section dependence and heterogeneity amongst the constituent regressors of the model. The empirical results provide the following significant insights: (i) the markup ratio across the UK sectors follows a countercyclical pattern, (ii) concentrated sectors tend to charge countercyclical price-cost margins as they attempt to increase their market share in normal periods, and (iii) sectors with liquidity constrained firms charge countercyclical markups in order to substitute lack of funding with additional revenue. Complementary findings also suggest that more profitable firms charge procyclical markup ratios, thus validating the predatory pricing strategy in more concentrated sectors.Peer reviewe

Relationship between FEV1 change and patient-reported outcomes in randomised trials of inhaled bronchodilators for stable COPD: a systematic review.

BACKGROUND: Interactions between spirometry and patient-reported outcomes in COPD are not well understood. This systematic review and study-level analysis investigated the relationship between changes in FEV1 and changes in health status with bronchodilator therapy. METHODS: Six databases (to October 2009) were searched to identify studies with long-acting bronchodilator therapy reporting FEV1 and health status, dyspnoea or exacerbations. Mean and standard deviations of treatment effects were extracted for each arm of each study. Relationships between changes in trough FEV1 and outcomes were assessed using correlations and random-effects regression modelling. The primary outcome was St George's Respiratory Questionnaire (SGRQ) total score. RESULTS: Thirty-six studies (≥ 3 months) were included. Twenty-two studies (23,654 patients) with 49 treatment arms each contributing one data point provided SGRQ data. Change in trough FEV1 and change in SGRQ total score were negatively correlated (r = -0.46, p < 0.001); greater increases in FEV1 were associated with greater reductions (improvements) in SGRQ. The correlation strengthened with increasing study duration from 3 to 12 months. Regression modelling indicated that 100 mL increase in FEV1 (change at which patients are more likely to report improvement) was associated with a statistically significant reduction in SGRQ of 2.5 (95% CI 1.9, 3.1), while a clinically relevant SGRQ change (4.0) was associated with 160.6 (95% CI 129.0, 211.6) mL increase in FEV1. The association between change in FEV1 and other patient-reported outcomes was generally weak. CONCLUSIONS: Our analyses indicate, at a study level, that improvement in mean trough FEV1 is associated with proportional improvements in health status

Clinical characteristics and airway inflammation profile of COPD persistent sputum producers

SummaryBackgroundCOPD patients with chronic bronchitis include a subgroup with persistent sputum production on most or every day. We hypothesized that COPD patients with persistent sputum production have a different profile of airway inflammation, and more severe clinical characteristics.ObjectiveTo compare the airway inflammation profile and clinical characteristics of COPD persistent and non-persistent sputum producers.MethodsCOPD persistent sputum producers (n = 26) and non-persistent sputum producers (n = 26) underwent sputum induction and pulmonary function tests. Exacerbation history was recorded; the St. George's Respiratory Questionnaire, Modified Medical Research Council Dyspnoea scale and COPD Assessment Tool were completed. 33 COPD patients provided sputum for bacteriology.ResultsPersistent sputum producers had lower post-bronchodilator FEV1% predicted (p = 0.01), diffusion capacity (p = 0.04), 6 min walk test distance (p = 0.05), and higher closing volume (p = 0.01), BODE index (p = 0.01), rate of bacterial colonization (p = 0.004) and exacerbations (p = 0.03) compared to non-persistent sputum producers. The mean SGRQ and CAT scores were higher in persistent sputum producers (p = 0.01 and 0.03 respectively). Sputum neutrophil and eosinophil total cell counts were higher in persistent sputum producers (p = 0.02 and 0.05 respectively). Sputum levels of eotaxin (p = 0.02), MCP-1 (p = 0.02), TNF-α (p = 0.03) and IL-6 (p = 0.05) were higher in persistent sputum producers.ConclusionCOPD persistent sputum producers have more severe clinical characteristics and increased concentrations of some inflammatory mediators in the airways

Stock price reaction to profit warnings: The role of time-varying betas

This study investigates the role of time-varying betas, event-induced variance and conditional heteroskedasticity in the estimation of abnormal returns around important news announcements. Our analysis is based on the stock price reaction to profit warnings issued by a sample of firms listed on the Hong Kong Stock Exchange. The standard event study methodology indicates the presence of price reversal patterns following both positive and negative warnings. However, incorporating time-varying betas, event-induced variance and conditional heteroskedasticity in the modelling process results in post-negative-warning price patterns that are consistent with the predictions of the efficient market hypothesis. These adjustments also cause the statistical significance of some post-positive-warning cumulative abnormal returns to disappear and their magnitude to drop to an extent that minor transaction costs would eliminate the profitability of the contrarian strategy

Iron Behaving Badly: Inappropriate Iron Chelation as a Major Contributor to the Aetiology of Vascular and Other Progressive Inflammatory and Degenerative Diseases

The production of peroxide and superoxide is an inevitable consequence of aerobic metabolism, and while these particular "reactive oxygen species" (ROSs) can exhibit a number of biological effects, they are not of themselves excessively reactive and thus they are not especially damaging at physiological concentrations. However, their reactions with poorly liganded iron species can lead to the catalytic production of the very reactive and dangerous hydroxyl radical, which is exceptionally damaging, and a major cause of chronic inflammation. We review the considerable and wide-ranging evidence for the involvement of this combination of (su)peroxide and poorly liganded iron in a large number of physiological and indeed pathological processes and inflammatory disorders, especially those involving the progressive degradation of cellular and organismal performance. These diseases share a great many similarities and thus might be considered to have a common cause (i.e. iron-catalysed free radical and especially hydroxyl radical generation). The studies reviewed include those focused on a series of cardiovascular, metabolic and neurological diseases, where iron can be found at the sites of plaques and lesions, as well as studies showing the significance of iron to aging and longevity. The effective chelation of iron by natural or synthetic ligands is thus of major physiological (and potentially therapeutic) importance. As systems properties, we need to recognise that physiological observables have multiple molecular causes, and studying them in isolation leads to inconsistent patterns of apparent causality when it is the simultaneous combination of multiple factors that is responsible. This explains, for instance, the decidedly mixed effects of antioxidants that have been observed, etc...Comment: 159 pages, including 9 Figs and 2184 reference

New evidence on beta stationarity and forecast for belgian common stocks

Based on a comprehensive sample of 170 securities traded continuously on the Brussels Stock Exchange from December 1966 to December 1983 this paper presents evidence which indicates that the stationarity of beta-coefficients is not as strong as reported in previous studies which were based on smaller samples. It is shown, however, that beta forecast can be generally improved using an adjustment method and that the improvement is highest for portfolios of increasing size