The Predictive Information Content of External Imbalances for Exchange Rate Returns: How Much Is It Worth?

This paper examines the exchange rate predictability stemming from the equilibrium model of international financial adjustment developed by Gourinchas and Rey (2007). Using predictive variables that measure cyclical external imbalances for country pairs, we assess the ability of this model to forecast out-of-sample four major US dollar exchange rates using various economic criteria of model evaluation. The analysis shows that the model provides economic value to a risk-averse investor, delivering substantial utility gains when switching from a portfolio strategy based on the random walk benchmark to one that conditions on cyclical external imbalances.foreign exchange; predictability; global imbalances; fundamentals.

The expectation hypothesis of the term structure of very short-term rates: statistical tests and economic value

This paper re-examines the validity of the Expectation Hypothesis (EH) of the term structure of US repo rates ranging in maturity from overnight to three months. We extend the work of Longstaff (2000a) in two directions: (i) we implement statistical tests designed to increase test power in this context; (ii) more importantly, we assess the economic value of departures from the EH based on criteria of profitability and economic significance in the context of a simple trading strategy. The EH is rejected throughout the term structure examined on the basis of the statistical tests. However, the results of our economic analysis are favorable to the EH, suggesting that the statistical rejections of the EH in the repo market are economically insignificant.Interest rates

Volatility risk premia and exchange rate predictability

© 2016. We discover a new currency strategy with highly desirable return and diversification properties, which uses the predictive ability of currency volatility risk premia for currency returns. The volatility risk premium-the difference between expected realized volatility and model-free implied volatility-reflects the costs of insuring against currency volatility fluctuations. The strategy sells high insurance-cost currencies and buys low insurance-cost currencies. A distinctive feature of the strategy's returns is that they are mainly generated by movements in spot exchange rates instead of interest rate differentials. We explore explanations for the profitability of the strategy, which cannot be understood using traditional risk factors

Exchange rates and sovereign risk

An increase in a country's sovereign risk, as measured by credit default swap spreads, is accompanied by a contemporaneous depreciation of its currency and an increase of its volatility. The relation between currency excess returns and sovereign risk is mainly driven by default expectations (rather than distress risk premia) and exposure to global sovereign risk shocks, and also emerges in a predictive setting for currency risk premia. We show that a sovereign risk factor is priced in the cross-section of currency returns and that it is not subsumed by the carry factor.Christian Wagner acknowledges support from the Center for Financial Frictions (FRIC), grant no. DNRF10

Paediatric non-alcoholic fatty liver disease: impact on patients and mothers' quality of life

Background: Non-alcoholic fatty liver disease (NAFLD) is one of the causes of fatty liver in adults and is currently the primary form of chronic liver disease in children and adolescents. However, the psychological outcome (i.e. the behavioural problems that can in turn be related to psychiatric conditions, like anxiety and mood disorders, or lower quality of life) in children and adolescents suffering of NAFLD has not been extensively explored in the literature. Objectives: The present study aims at evaluating the emotional and behavioural profile in children suffering from NAFLD and the quality of life in their mothers. Patients and Methods: A total of 57 children (18 females/39 males) with NAFLD were compared to 39 age-matched control children (25 females/14 males). All participants were submitted to the following psychological tools to assess behavior, mood, and anxiety: the Multidimensional Anxiety Scale for Children (MASC), the Child Behavior Checklist (CBCL), and the Children's Depression Inventory (CDI). Moreover, the mothers of 40 NAFLD and 39 control children completed the World Health Organization Quality of Life-BREF (WHOQOL-BREF) questionnaire. Results: NAFLD children scored significantly higher as compared to control children in MASC (P = 0.001) and CDI total (P < 0.001) scales. The CBCL also revealed significantly higher scores for NAFLD children in total problems (P = 0.046), internalizing symptoms (P = 0.000) and somatic complaints (P < 0.001). The WHOQOL-BREF revealed significantly lower scores for the mothers of NAFLD children in the overall perception of the quality of life (P < 0.001), and in the "relationships" domain (P = 0.023). Conclusions: Increased emotional and behavioural problems were detected in children with NAFLD as compared to healthy control children, together with an overall decrease in their mothers' quality of life. These results support the idea that these patients may benefit from a psychological intervention, ideally involving both children and parents, whose quality of life is likely negatively affected by this disease

Virtual reality and live scenario simulation: options for training medical students in mass casualty incident triage

Introduction Multicasualty triage is the process of establishing the priority of care among casualties in disaster management. Recent mass casualty incidents (MCI) revealed that health personnel are unfamiliar with the triage protocols. The objective of this study is to compare the relative impact of two simulation-based methods for training medical students in mass casualty triage using the Simple Triage and Rapid Treatment (START) algorithm. Methods A prospective randomized controlled longitudinal study. Medical students enrolled in the emergency medicine course were randomized into two groups (A and B). On day 1, group A students were exposed to a virtual reality (VR) scenario and group B students were exposed to a live scenario (LS), both exercises aiming at triaging 10 victims in a limited period of time (30 seconds/victim). On day 2 all students attended a 2-hour lecture about medical disaster management and START. On day 3 group A and B students were exposed to a LS and to a VR scenario respectively. The vital signs and clinical condition of the 10 victims were identical in the two scenarios. Ability of the groups to manage a simulated triage scenario was then compared (times and triage accuracy). Results Groups A and B were composed of 25 and 28 students respectively. During day 1 group A LS triage accuracy was 58%, while the average time to assess all patients was 4 minutes 28 seconds. The group B VR scenario triage accuracy was 52%, while the average time to complete the assessment was 5 minutes 18 seconds. During day 3 the triage accuracy for group A VR simulation was 92%, while the average time was 3 minutes 53 seconds. Group B triage accuracy during the LS was 84%, with an average time of 3 minutes 25 seconds. Triage scores improved significantly during day 3 (P < 0.001) in the two groups. The time to complete each scenario decreased significantly from day 1 to day 3. Conclusions The study demonstrates that the training course generates significant improvement in triage accuracy and speed. It also reveals that VR simulation compared to live exercises has equivalent results in prompting critical decisions in mass casualty drills. In the beginning the average time to complete the VR scenario was higher than the LS. This could be due to the fact that on day 1 very detailed VR victims created a higher challenge for untaught students. However, the higher triage accuracy recorded at the end of day 3 in VR could be explained by a lower stress level compared to the LS, which could be creating a more stressful environment in taught students

Ethane-beta-Sultam Modifies the Activation of the Innate Immune System Induced by Intermittent Ethanol Administration in Female Adolescent Rats

Intermittent ethanol abuse or ‘binge drinking’ during adolescence induces neuronal damage, which may be associated with cognitive dysfunction. To investigate the neurochemical processes involved, rats were administered either 1 g/kg or 2 g/kg ethanol in a ‘binge drinking’ regime. After only 3 weeks, significant activation of phagocytic cells in the peripheral (alveolar macrophages) and the hippocampal brain region (microglia cells) was present,as exemplified by increases in the release of pro-inflammatory cytokines in the macrophages and of iNOS in the microglia. This was associated with neuronal loss in the hippocampus CA1 region. Daily supplementation with a taurine prodrug, ethane-β-sultam, 0.028 g/kg, during the intermittent ethanol loading regime, supressed the release of the pro-inflammatory cytokines and of reactive nitrogen species, as well as neuronal loss, particularly in the rats administered the lower dose of ethanol, 1 g/kg. Plasma, macrophage and hippocampal taurine levels increased marginally after ethane-β-sultam supplementation. The ‘binge drinking’ ethanol rats administered 1 g/kg ethanol showed increased latencies to those of the control rats in their acquisition of spacial navigation in the Morris Water Maze, which was normalised to that of the controls values after ethane-β-sultam administration. Such results confirm that the administration of ethane-β-sultam to binge drinking rats reduces neuroinflammation in both the periphery and the brain, suppresses neuronal loss, and improved working memory of rats in a water maze study

Comparison of two disaster drills' management performed by trained and not-trained students: key times evaluation

Introduction The aim of this report is to compare two disaster exercises' management of students with different backgrounds. To our knowledge nobody has ever compared two exercises, probably because of the difficulty in their evaluation. We implemented a tool for an objective evaluation [1] and we used it for this purpose. Methods Both drills represented a ceiling collapse over a crowded room with a similar amount of casualties and similar severity index. The START triage system was used. The trained students (T) were attending the European Master in Disaster Medicine (EMDM), while the not-trained students (NT) were at the beginning of an introductory course in disaster medicine. During the exercises we recorded key victim-provider interaction times [2] using victim-based data collection. Each victim had their own data card to record triage and time information. Results In this preliminary report we present data regarding the scene length of stay (LOS) and triage to collecting area/advanced medical post time (T-AMP). The LOS was 67.5 (50.0 to 111.0) minutes (25 to 75 IQR) for T as compared with 145.0 (110.0 to 150.0) minutes (25 to 75 IQR) for NT (P < 0.001). Stratification according to assigned triage code showed no difference for high-priority codes (reds and yellows) as opposed to the green code (55.0 (47.0 to 75.0) minutes for T vs 145.0 (141.0 to 155.0) minutes for NT with P < 0.01). T-AMP was 10.0 (3.0 to 34.5) minutes for T as compared with 63.5 (19.5 to 104.3) minutes for NT (P < 0.001). Stratification according to triage code showed no difference for red codes between T and NT but showed a difference for yellow codes (36.5 (15.0 to 82.0) vs 71.0 (30.0 to 99.0) minutes) and green codes (7.0 (3.0 to 12.0) vs 85.0 (17.3 to 115.0) minutes) with P < 0.01. Conclusions Both teams evacuated red codes before the yellow ones in similar time. T-AMP was shorter considering global, yellow and green codes for T as opposed to NT. Global and green LOS was also shorter in the T group as opposed to NT. Training seems to influence global exercise management, less affecting red codes but with an impact on yellow and green evacuation strategies