The reception of public signals in financial markets - what if central bank communication becomes stale?

How do financial markets price new information? This paper analyzes price setting at the intersection of private and public information, by testing whether and how the reaction of financial markets to public signals depends on the relative importance of private information in agents’ information sets at a given point in time. It studies the reaction of UK short-term interest rates to the Bank of England’s inflation report and to macroeconomic announcements. Due to the quarterly frequency at which the Bank of England releases one of its main publications, it can become stale over time. In the course of this process, financial market participants need to rely more on private information. The paper develops a stylized model which predicts that, the more time has elapsed since the latest release of an inflation report, market volatility should increase, the price response to macroeconomic announcements should be more pronounced, and macroeconomic announcements should play a more important role in aligning agents’ information set, thus leading to a stronger volatility reduction. The empirical evidence is fully supportive of these hypotheses. JEL Classification: E58, E43, G12, G14announcement effects, Bank of England, co-ordination of beliefs, inflation reports, Interest Rates, monetary policy, public signals

Towards More Resilient Economies: The role of well-functioning economic structures. CEPS Working Document No. 2017-03 /January 2017

Economic resilience is essential to better withstand adverse shocks and reduce the economic costs associated with them. We propose different measures of resilience and empirically gauge how countries differ in their shock absorption capacity, while controlling for the quality of their economic structures. The paperfindsrobust evidence that sound labour and product markets, framework conditions and political institutions increase resilience to adverse shocks and reduce the incidence of crisis more generally. In the presence of a common shock, a country with weaker economic structures can, on average, suffer up to twice the output loss in a given year compared to a country with sound institutional parameters. Similarly, the likelihood of a severe economic crisis is reduced significantly if a country exhibits flexible and adaptable institutions. The proposed measures can be used to establish a governance process towards more resilient economic structures, as suggested for the euro area in the so-called Five Presidents’ Report

Estimating the degree of interventionist policies in the run-up to EMU

Based on a theoretical monetary exchange-rate model in continuous time this paper establishes a sequential estimation framework which is capable of indicating central bank intervention in the run-up to a currency union. Using daily pre-EMU exchange-rate data for the countries of the current euro zone, we find mixed evidence of active pre-EMU intervention policies (so-called institutional frontloading strategies). Our estimation framework is highly relevant to economic and political agents operating in financial markets of the upcoming EMU accession countries

Baldwin vs. Cecchini Revisited: The Growth Impact of the European Single Market

The European Single Market created a common market for millions of Europeans. However, thirty years after its introduction, it appears that the benefits of the common European project are occasionally being questioned at least by some parts of the population. Others, by contrast, strive for deeper integration. Against this background, we empirically gauge the growth effect that arose from the Single Market. Using the Synthetic Control Method, we establish the growth premium for the Single Market overall and for its founding members. Broadly in line with the predictions made by Baldwin (1989) at the onset of the Single Market project, we find significantly higher real GDP per capita for the overall Single Market area of around 12-22%. In comparison, smaller EU Member States seem to have benefited somewhat more compared to larger countries. The estimated growth effects underline the case for further deepening and broadening the Single Market where possible.</p

Baldwin versus Cecchini revisited: the growth impact of the European Single Market

The European Single Market created a common market for millions of Europeans. However, 30 years after its introduction, it appears that the benefits of the common European project are occasionally being questioned at least by some parts of the population. Others, by contrast, strive for deeper integration. Against this background, we empirically gauge the growth effect that arose from the Single Market. Using the synthetic control method, we establish the growth premium for the Single Market overall and for its founding members. Broadly in line with the predictions made by Richard Baldwin at the onset of the Single Market project, we find significantly higher real GDP per capita for the overall Single Market area of around 12-22 %. In comparison, smaller EU Member States seem to have benefited somewhat more compared to larger countries. The estimated growth effects underline the case for further deepening and broadening the Single Market where possible

Region-Resolved Quantitative Proteome Profiling Reveals Molecular Dynamics Associated With Chronic Pain in the PNS and Spinal Cord

To obtain a thorough understanding of chronic pain, large-scale molecular mapping of the pain axis at the protein level is necessary, but has not yet been achieved. We applied quantitative proteome profiling to build a comprehensive protein compendium of three regions of the pain neuraxis in mice: the sciatic nerve (SN), the dorsal root ganglia (DRG), and the spinal cord (SC). Furthermore, extensive bioinformatics analysis enabled us to reveal unique protein subsets which are specifically enriched in the peripheral nervous system (PNS) and SC. The immense value of these datasets for the scientific community is highlighted by validation experiments, where we monitored protein network dynamics during neuropathic pain. Here, we resolved profound region-specific differences and distinct changes of PNS-enriched proteins under pathological conditions. Overall, we provide a unique and validated systems biology proteome resource (summarized in our online database painproteome.em.mpg.de), which facilitates mechanistic insights into somatosensory biology and chronic pain—a prerequisite for the identification of novel therapeutic targets

Novel cyclic di-GMP effectors of the YajQ protein family control bacterial virulence

Bis-(3 ',5 ') cyclic di-guanylate (cyclic di-GMP) is a key bacterial second messenger that is implicated in the regulation of many critical processes that include motility, biofilm formation and virulence. Cyclic di-GMP influences diverse functions through interaction with a range of effectors. Our knowledge of these effectors and their different regulatory actions is far from complete, however. Here we have used an affinity pull-down assay using cyclic di-GMP-coupled magnetic beads to identify cyclic di-GMP binding proteins in the plant pathogen Xanthomonas campestris pv. campestris (Xcc). This analysis identified XC_3703, a protein of the YajQ family, as a potential cyclic di-GMP receptor. Isothermal titration calorimetry showed that the purified XC_3703 protein bound cyclic di-GMP with a high affinity (K-d similar to 2 mu M). Mutation of XC_3703 led to reduced virulence of Xcc to plants and alteration in biofilm formation. Yeast two-hybrid and far-western analyses showed that XC_3703 was able to interact with XC_2801, a transcription factor of the LysR family. Mutation of XC_2801 and XC_3703 had partially overlapping effects on the transcriptome of Xcc, and both affected virulence. Electromobility shift assays showed that XC_3703 positively affected the binding of XC_2801 to the promoters of target virulence genes, an effect that was reversed by cyclic di-GMP. Genetic and functional analysis of YajQ family members from the human pathogens Pseudomonas aeruginosa and Stenotrophomonas maltophilia showed that they also specifically bound cyclic di-GMP and contributed to virulence in model systems. The findings thus identify a new class of cyclic di-GMP effector that regulates bacterial virulence

Crystal Structure of the HSV-1 Fc Receptor Bound to Fc Reveals a Mechanism for Antibody Bipolar Bridging

Herpes simplex virus type-1 expresses a heterodimeric Fc receptor, gE-gI, on the surfaces of virions and infected cells that binds the Fc region of host immunoglobulin G and is implicated in the cell-to-cell spread of virus. gE-gI binds immunoglobulin G at the basic pH of the cell surface and releases it at the acidic pH of lysosomes, consistent with a role in facilitating the degradation of antiviral antibodies. Here we identify the C-terminal domain of the gE ectodomain (CgE) as the minimal Fc-binding domain and present a 1.78-Å CgE structure. A 5-Å gE-gI/Fc crystal structure, which was independently verified by a theoretical prediction method, reveals that CgE binds Fc at the C (H)2-C (H)3 interface, the binding site for several mammalian and bacterial Fc-binding proteins. The structure identifies interface histidines that may confer pH-dependent binding and regions of CgE implicated in cell-to-cell spread of virus. The ternary organization of the gE-gI/Fc complex is compatible with antibody bipolar bridging, which can interfere with the antiviral immune response

Ion traps with enhanced optical and physical access

Small, controllable, highly accessible quantum systems can serve as probes at the single quantum level to study multiple physical effects, for example in quantum optics or for electric and magnetic field sensing. The applicability of trapped atomic ions as probes is highly dependent on the measurement situation at hand and thus calls for specialized traps. Previous approaches for ion traps with enhanced optical access included traps consisting of a single ring electrode or two opposing endcap electrodes. Other possibilities are planar trap geometries, which have been investigated for Penning traps and rf-trap arrays. By not having the electrodes lie in a common plane the optical access in the latter cases can be substantially increased. Here, we discuss the fabrication and experimental characterization of a novel radio-frequency (rf) ion trap geometry. It has a relatively simple structure and provides largely unrestricted optical and physical access to the ion, of up to 96% of the total 4pi solid angle in one of the three traps tested. We also discuss potential applications in quantum optics and field sensing. As a force sensor, we estimate sensitivity to forces smaller than 1 yN Hz^(-1/2).Comment: 6 pages, 3 figures. Corrections of some typos, application section expanded to account for reviewer comment