Measuring Interest Rate Expectations in Canada

Financial market expectations regarding future changes in the target for the overnight rate of interest are an important source of information for the Bank of Canada. Financial markets are the mechanism through which the policy rate affects other financial variables, such as longer-term interest rates, the exchange rate, and other asset prices. An accurate measure of their expectations can therefore help policy-makers assess the potential impact of contemplated changes. Johnson focuses on the expectations hypothesis, which measures expectations of future levels of the target overnight rate as implied by current money market yields. Although expectations can be derived from the current yield on any short-term fixed-income asset, some assets have proven to be more accurate predictors than others. The implementation of a policy of fixed-announcements dates has coincided with the increased predictive power of these short-term assets. As a result of this improvement, a relatively simple model of the yield curve can now provide an accurate measure of financial market expectations.

Government of Canada Yield-Curve Dynamics, 1986-2003

A database of historical Government of Canada zero-coupon yield curves developed at the Bank of Canada is introduced in this article, which also includes an initial statistical analysis of the behaviour and evolution of the zero-coupon interest (spot) rates over the full period and two distinct subperiods. Specific areas of interest include the evolution of the levels of key interest rates and yield-curve measures over the sample as well as daily changes in the key interest rates and the yield-curve measures; the identification of a relatively small number of factors that drove the evolution of the yield curve; and the total returns that would have been realized by holding bonds of different maturities for a given holding period.

Measuring Interest Rate Expectations in Canada

Financial market expectations regarding future policy actions by the Bank of Canada are an important input into the Bank's decision-making process, and they can be measured using a variety of sources. The author develops a simple expectations-based model to focus on measuring interest rate expectations that are implied by the current level of money market yields. The explanatory power of this model increases markedly in the period following the implementation of the Bank's regime of fixed announcement dates in November 2000, and it appears to accurately describe the behaviour of short-term yields. Term premiums are estimated for the various instruments examined, and observed market yields are adjusted by those amounts. Once the market yields are adjusted, they can be used to calculate implied forward rates for a series of dates in the future. These forward rates can be interpreted as representing the market's expectations for the future level of overnight rates at a specific date.Financial markets; Interest rates

An Empirical Analysis of the Canadian Term Structure of Zero-Coupon Interest Rates

Zero-coupon interest rates are the fundamental building block of fixed-income mathematics, and as such have an extensive number of applications in both finance and economics. The risk-free government zero-coupon term structure is, however, not directly observable and needs to be generated from the prices of marketable, coupon-bearing bonds. The authors introduce the first public-domain database of constant-maturity zero-coupon yield curves for the Government of Canada bond market. They first outline the mechanics of the curve-fitting algorithm that underlie the model, and then perform some preliminary statistical analysis on the resulting yield curves. The full sample period extends from January 1986 to May 2003; it is broken down into two subsamples, reflecting the structural and macroeconomic changes that impacted the Canadian fixed-income markets over that time. The authors examine the evolution of a number of key interest rates and yield-curve measures over the period, perform a principal-components analysis of the common factors that have influenced yield changes over time, and compare holding-period returns over the sample for assets of various maturities.Financial markets; Interest rates; Econometric and statistical methods

AMPK-dependent phosphorylation of MTFR1L regulates mitochondrial morphology

Mitochondria are dynamic organelles that undergo membrane remodeling events in response to metabolic alterations to generate an adequate mitochondrial network. Here, we investigated the function of mitochondrial fission regulator 1-like protein (MTFR1L), an uncharacterized protein that has been identified in phosphoproteomic screens as a potential AMP-activated protein kinase (AMPK) substrate. We showed that MTFR1L is an outer mitochondrial membrane-localized protein modulating mitochondrial morphology. Loss of MTFR1L led to mitochondrial elongation associated with increased mitochondrial fusion events and levels of the mitochondrial fusion protein, optic atrophy 1. Mechanistically, we show that MTFR1L is phosphorylated by AMPK, which thereby controls the function of MTFR1L in regulating mitochondrial morphology both in mammalian cell lines and in murine cortical neurons in vivo. Furthermore, we demonstrate that MTFR1L is required for stress-induced AMPK-dependent mitochondrial fragmentation. Together, these findings identify MTFR1L as a critical mitochondrial protein transducing AMPK-dependent metabolic changes through regulation of mitochondrial dynamics.</p

Revisiting the university front

dc.subject: Postdemocracy / Public function of the university / Governance / Knowledge society / research university / Managerialism / Academic audit / Quality contro

Particles, air quality, policy and health

The diversity of ambient particle size and chemical composition considerably complicates pinpointing the specific causal associations between exposure to particles and adverse human health effects, the contribution of different sources to ambient particles at different locations, and the consequent formulation of policy action to most cost-effectively reduce harm caused by airborne particles. Nevertheless, the coupling of increasingly sophisticated measurements and models of particle composition and epidemiology continue to demonstrate associations between particle components and sources (and at lower concentrations) and a wide range of adverse health outcomes. This article reviews the current approaches to source apportionment of ambient particles and the latest evidence for their health effects, and describes the current metrics, policies and legislation for the protection of public health from ambient particles. A particular focus is placed on particles in the ultrafine fraction. The review concludes with an extended evaluation of emerging challenges and future requirements in methods, metrics and policy for understanding and abating adverse health outcomes from ambient particles

AMP-Activated Protein Kinase:A Target for Drugs both Ancient and Modern

The AMP-activated protein kinase (AMPK) is a sensor of cellular energy status. It is activated, by a mechanism requiring the tumor suppressor LKB1, by metabolic stresses that increase cellular ADP:ATP and/or AMP:ATP ratios. Once activated, it switches on catabolic pathways that generate ATP, while switching off biosynthetic pathways and cell-cycle progress. These effects suggest that AMPK activators might be useful for treatment and/or prevention of type 2 diabetes and cancer. Indeed, AMPK is activated by the drugs metformin and salicylate, the latter being the major breakdown product of aspirin. Metformin is widely used to treat diabetes, while there is epidemiological evidence that both metformin and aspirin provide protection against cancer. We review the mechanisms of AMPK activation by these and other drugs, and by natural products derived from traditional herbal medicines

Herbivore regulation of plant abundance in aquatic ecosystems.

Herbivory is a fundamental process that controls primary producer abundance and regulates energy and nutrient flows to higher trophic levels. Despite the recent proliferation of small-scale studies on herbivore effects on aquatic plants, there remains limited understanding of the factors that control consumer regulation of vascular plants in aquatic ecosystems. Our current knowledge of the regulation of primary producers has hindered efforts to understand the structure and functioning of aquatic ecosystems, and to manage such ecosystems effectively. We conducted a global meta-analysis of the outcomes of plant-herbivore interactions using a data set comprised of 326 values from 163 studies, in order to test two mechanistic hypotheses: first, that greater negative changes in plant abundance would be associated with higher herbivore biomass densities; second, that the magnitude of changes in plant abundance would vary with herbivore taxonomic identity. We found evidence that plant abundance declined with increased herbivore density, with plants eliminated at high densities. Significant between-taxa differences in impact were detected, with insects associated with smaller reductions in plant abundance than all other taxa. Similarly, birds caused smaller reductions in plant abundance than echinoderms, fish, or molluscs. Furthermore, larger reductions in plant abundance were detected for fish relative to crustaceans. We found a positive relationship between herbivore species richness and change in plant abundance, with the strongest reductions in plant abundance reported for low herbivore species richness, suggesting that greater herbivore diversity may protect against large reductions in plant abundance. Finally, we found that herbivore-plant nativeness was a key factor affecting the magnitude of herbivore impacts on plant abundance across a wide range of species assemblages. Assemblages comprised of invasive herbivores and native plant assemblages were associated with greater reductions in plant abundance compared with invasive herbivores and invasive plants, native herbivores and invasive plants, native herbivores and mixed-nativeness plants, and native herbivores and native plants. By contrast, assemblages comprised of native herbivores and invasive plants were associated with lower reductions in plant abundance compared with both mixed-nativeness herbivores and native plants, and native herbivores and native plants. However, the effects of herbivore-plant nativeness on changes in plant abundance were reduced at high herbivore densities. Our mean reductions in aquatic plant abundance are greater than those reported in the literature for terrestrial plants, but lower than aquatic algae. Our findings highlight the need for a substantial shift in how biologists incorporate plant-herbivore interactions into theories of aquatic ecosystem structure and functioning. Currently, the failure to incorporate top-down effects continues to hinder our capacity to understand and manage the ecological dynamics of habitats that contain aquatic plants