To Lean or Not to Lean Against an Asset Price Bubble? Empirical Evidence

Since the Global Financial Crisis of 2007–2009, economists are reconsidering the appropriate role of monetary policy towards equity bubbles. This paper contributes to these deliberations by estimating the response of the stock market to monetary policy tightening by using a Bayesian time‐varying VAR model. By introducing the cyclically adjusted price/earnings ratio, we propose a method that estimates its fundamental and bubble components. We find that asset prices will initially fall and eventually rise again but without the risk of feeding the bubble. Counterfactual policy experiments provide additional evidence that monetary policy can lean against equity and housing prices. (JEL E50, E52, E58

Monetary Policy, Financial Shocks and Economic Activity

This paper contributes to a fuller understanding of macroeconomic outcomes to financial market disturbances and the central bank’s role in financial stability. Our two major contributions are conceptual and econometric. Conceptually, we introduce phases of the business cycle and econometrically we employ Bayesian VARs. We document that a shock that increases credit to non-financial sector leads to a persistent decline in economic activity. In addition, we examine whether the behavior of financial variables is useful in signaling the 2007–2009 recession. The answer is positive as our BVAR generates early warning signals pointing to a sustained slowdown in growth. We propose that the expansion phase of the business cycle can be subdivided into an early and a late expansion. Based on this distinction, we show that if the Fed had raised the policy rate when the economy moved from the early to late expansion, it could have mitigated the severity of the 2007–2009 recession

House Bubbles, Global Imbalances and Monetary Policy in the US

This paper examines the factors driving housing price exuberance in the United States, specifically the influence of expansionary monetary policies and the global saving glut. We employ medium scale Bayesian VAR and time-varying VAR models to estimate the effects of monetary policy and global saving glut shocks on US housing bubbles. We find that, prior to the Global Financial Crisis, the impact of the saving glut shock is more enduring, powerful, and rapid in generating housing bubbles compared to monetary policy shocks. However, the recent housing boom that commenced in 2019 demonstrates a different pattern. Our results suggest that both monetary policy and the global saving glut contribute to the increase in house prices. Counterfactual policy experiments validate this conclusion

The Influence of a Firms\u27 Business Strategy on the Downside Risk of Earnings, Accruals and Cash Flow

This study examines whether a firm\u27s business strategy is an underlying determinant of downside risk in accounting earnings and its components. Based on organizational theory we predict that firms following an innovative prospector strategy exhibit lower profitability tendencies than firms following a cost-oriented defender strategy. Further, we anticipate that these strategies are asymmetrically positioned towards environmental uncertainty, with defenders focusing their efforts to efficiency, cost control, and minimizing exposure to downside risk, whereas prospectors direct their resources to flexibility, innovation, and maximizing the growth potential through aggressive expansion to new product markets. We find that prospectors are indeed less profitable than defenders. We also demonstrate that prospectors have greater total and downside earnings risk. Finally, we decompose earnings into accruals and cash flow and show that the higher exposure of prospectors to earnings downside risk is driven by the cash flow component rather than the accrual component. Collectively, our results suggest that considering how strategy interacts with financial reporting attributes is a useful way for evaluating a firms\u27 risk profile

Impact of Safety-Related Dose Reductions or Discontinuations on Sustained Virologic Response in HCV-Infected Patients: Results from the GUARD-C Cohort.

BACKGROUND: Despite the introduction of direct-acting antiviral agents for chronic hepatitis C virus (HCV) infection, peginterferon alfa/ribavirin remains relevant in many resource-constrained settings. The non-randomized GUARD-C cohort investigated baseline predictors of safety-related dose reductions or discontinuations (sr-RD) and their impact on sustained virologic response (SVR) in patients receiving peginterferon alfa/ribavirin in routine practice. METHODS: A total of 3181 HCV-mono-infected treatment-naive patients were assigned to 24 or 48 weeks of peginterferon alfa/ribavirin by their physician. Patients were categorized by time-to-first sr-RD (Week 4/12). Detailed analyses of the impact of sr-RD on SVR24 (HCV RNA <50 IU/mL) were conducted in 951 Caucasian, noncirrhotic genotype (G)1 patients assigned to peginterferon alfa-2a/ribavirin for 48 weeks. The probability of SVR24 was identified by a baseline scoring system (range: 0-9 points) on which scores of 5 to 9 and <5 represent high and low probability of SVR24, respectively. RESULTS: SVR24 rates were 46.1% (754/1634), 77.1% (279/362), 68.0% (514/756), and 51.3% (203/396), respectively, in G1, 2, 3, and 4 patients. Overall, 16.9% and 21.8% patients experienced ≥1 sr-RD for peginterferon alfa and ribavirin, respectively. Among Caucasian noncirrhotic G1 patients: female sex, lower body mass index, pre-existing cardiovascular/pulmonary disease, and low hematological indices were prognostic factors of sr-RD; SVR24 was lower in patients with ≥1 vs. no sr-RD by Week 4 (37.9% vs. 54.4%; P = 0.0046) and Week 12 (41.7% vs. 55.3%; P = 0.0016); sr-RD by Week 4/12 significantly reduced SVR24 in patients with scores <5 but not ≥5. CONCLUSIONS: In conclusion, sr-RD to peginterferon alfa-2a/ribavirin significantly impacts on SVR24 rates in treatment-naive G1 noncirrhotic Caucasian patients. Baseline characteristics can help select patients with a high probability of SVR24 and a low probability of sr-RD with peginterferon alfa-2a/ribavirin.This study was sponsored by F. Hoffmann-La Roche Ltd, Basel, Switzerland. Support for third-party writing assistance for this manuscript, furnished by Blair Jarvis MSc, ELS, of Health Interactions, was provided by F. Hoffmann-La Roche Ltd, Basel, Switzerland

Impact of safety-related dose reductions or discontinuations on sustained virologic response in HCV-infected patients: Results from the GUARD-C Cohort

Background: Despite the introduction of direct-acting antiviral agents for chronic hepatitis C virus (HCV) infection, peginterferon alfa/ribavirin remains relevant in many resource-constrained settings. The non-randomized GUARD-C cohort investigated baseline predictors of safety-related dose reductions or discontinuations (sr-RD) and their impact on sustained virologic response (SVR) in patients receiving peginterferon alfa/ribavirin in routine practice. Methods: A total of 3181 HCV-mono-infected treatment-naive patients were assigned to 24 or 48 weeks of peginterferon alfa/ribavirin by their physician. Patients were categorized by time-to-first sr-RD (Week 4/12). Detailed analyses of the impact of sr-RD on SVR24 (HCV RNA <50 IU/mL) were conducted in 951 Caucasian, noncirrhotic genotype (G)1 patients assigned to peginterferon alfa-2a/ribavirin for 48 weeks. The probability of SVR24 was identified by a baseline scoring system (range: 0-9 points) on which scores of 5 to 9 and <5 represent high and low probability of SVR24, respectively. Results: SVR24 rates were 46.1 % (754/1634), 77.1% (279/362), 68.0% (514/756), and 51.3% (203/396), respectively, in G1,2, 3, and 4 patients. Overall, 16.9% and 21.8% patients experienced 651 sr-RD for peginterferon alfa and ribavirin, respectively. Among Caucasian noncirrhotic G1 patients: female sex, lower body mass index, pre-existing cardiovascular/pulmonary disease, and low hematological indices were prognostic factors of sr-RD; SVR24 was lower in patients with 651 vs. no sr-RD by Week 4 (37.9% vs. 54.4%; P = 0.0046) and Week 12 (41.7% vs. 55.3%; P = 0.0016); sr-RD by Week 4/12 significantly reduced SVR24 in patients with scores <5 but not 655. Conclusions: In conclusion, sr-RD to peginterferon alfa-2a/ribavirin significantly impacts on SVR24 rates in treatment-naive G1 noncirrhotic Caucasian patients. Baseline characteristics can help select patients with a high probability of SVR24 and a low probability of sr-RD with peginter-feron alfa-2a/ribavirin

Principal Component and Cluster Analysis as a Tool in the Assessment of Tomato Hybrids and Cultivars

Determination of germplasm diversity and genetic relationships among breeding materials is an invaluable aid in crop improvement strategies. This study assessed the breeding value of tomato source material. Two commercial hybrids along with an experimental hybrid and four cultivars were assessed with cluster and principal component analyses based on morphophysiological data, yield and quality, stability of performance, heterosis, and combining abilities. The assessment of commercial hybrids revealed a related origin and subsequently does not support the identification of promising offspring in their crossing. The assessment of the cultivars discriminated them according to origin and evolutionary and selection effects. On the Principal Component 1, the largest group with positive loading included, yield components, heterosis, general and specific combining ability, whereas the largest negative loading was obtained by qualitative and descriptive traits. The Principal Component 2 revealed two smaller groups, a positive one with phenotypic traits and a negative one with tolerance to inbreeding. Stability of performance was loaded positively and/or negatively. In conclusion, combing ability, yield components, and heterosis provided a mechanism for ensuring continued improvement in plant selection programs

REUSE OF RECLAIMED MUNICIPAL WASTEWATER FOR CORN IRRIGATION

Μελετήθηκε η επίδραση του νερού άρδευσης (επεξεργασμένα λύματα της Θεσσαλονίκης με δύο τρόπους, ενεργός ιλύς & χλωρίωση-δεξαμενές σταθεροποίησης) στην απόδοση του καρπού αραβοσίτου, τη φυτομάζα και το ύψος φυτών και σπαδίκων. Η μεταχείριση των επεξεργασμένων αστικών λυμάτων με ενεργό ιλύ έδωσε απόδοση σε καρπό ελαφρά μειωμένη σε σχέση με το μάρτυρα (νερό γεώτρησης). Ανάλογα ήταν τα αποτελέσματα της φυτομάζας και του ύψους φυτών και σπαδίκων. Τα αντίστοιχα αποτελέσματα που έδωσε η μεταχείριση των αστικών λυμάτων που επεξεργάσθηκαν σε δεξαμενές σταθεροποίησης δεν ήταν ικανοποιητικά λόγω υψηλής αλατότητας. Σε ότι αφορά στην άρδευση με αυλάκια και σταγόνες δεν υπήρξαν σημαντικές διαφορές. Το επίπεδο των αλάτων στο έδαφος αυξήθηκε με τη χρήση των αστικών λυμάτων, ενώ δυσμενείς επιπτώσεις από πλευράς νατρίωσης και υψηλής συγκέντρωσης ιχνοστοιχείων στο έδαφος δεν παρατηρήθηκαν. Κολοβακτήρια εντερικής προέλευσης σε αριθμό μεγαλύτερο του 1000/100ml δεν ανιχνεύθηκαν στη χλωριωμένη εκροή. Στη μη χλωριωμένη εκροή των δεξαμενών σταθεροποίησης ανιχνεύθηκαν ελάχιστες συγκεντρώσεις (3%).The effect of the effluent fiom Thessaloniki, Greece, reclaimed either by activated sludge or by stabilization ponds on field-grown corn was studied. The treatment of activated sludge effluent succeeded yield in grain-dry matter and height of corn-ears similar to the treatment of control (potable water) while the treatment of stabilization ponds effluent gave poor results due to high water salinity. No significant differences have been observed in grain yield, dry matter, height of plant and ears between furrow and drip irrigation. The use of wastewater increased the level of soil salinity while there is no any particular problem in relation to alkalinity. Trace element concentrations in the soil and plant tissues were low. The chlorinated effluent was flee of fecal coliforms. Less than 3% fecal coliforms were detected in the stabilization ponds effluent