Monetary Policy and the Term Structure of Interest Rates

Term Structure of Interest Rates, Monetary Policy, Sticky Prices, Habit Formation, Expectations Hypothesis

Asset Prices and Business Cycles Under Limited Commitment

This paper presents a business-cycle model with heterogeneous agents that have access to complete markets but face endogenous borrowing and savings constraints. These constraints are motivated by the agents' limited commitment technology. In this environment, aggregate fluctuations are close to the ones generated by Pareto Optimal (full commitment) risk-sharing arrangements. However, endogenous borrowing and savings constraints force agents to underinvest in capital and increase the volatilities of both the stochastic discount factor and the price of equity. The mechanism explains simultaneously both high average returns on equity and low average returns on bonds. This is accomplished in the economy with relatively small exogenous shocks and a high degree of patience, and a low degree of risk-aversion on the part of the agents. Previous work on limited commitment has concentrated on endowment economies and has emphasized borrowing constraints. Numerical results in this paper suggest that when capital is added to such models, savings constraints play even more central role.

Optimal taxation without state-contingent debt

To recover a version of Barro's (1979) `random walk' tax smoothing outcome, we modify Lucas and Stokey's (1983) economy to permit only risk--free debt. This imparts near unit root like behavior to government debt, independently of the government expenditure process, a realistic outcome in the spirit of Barro's. We show how the risk--free--debt--only economy confronts the Ramsey planner with additional constraints on equilibrium allocations that take the form of a sequence of measurability conditions. We solve the Ramsey problem by formulating it in terms of a Lagrangian, and applying a Parameterized Expectations Algorithm to the associated first--order conditions. The first--order conditions and numerical impulse response functions partially affirm Barro's random walk outcome. Though the behaviors of tax rates, government surpluses, and government debts differ, allocations are very close for computed Ramsey policies across incomplete and complete markets economies.Optimal taxation, incomplete markets, recursive contracts, tax smoothing, parameterized expectations

The Term Structure of Real Interest Rates: Theory and Evidence from the U.K. Index-Linked Bonds

This paper argues that a simple general equilibrium model can explain two of the most persistent term structure puzzles. First, Donaldson, Johnsen, and Mehra (1990) show that while in the U.S. nominal term structure the interest rates are pro-cyclical and term spreads counter-cyclical the stochastic growth model predicts that the interest rates are counter-cyclical and term spreads pro-cyclical. The resolution of this puzzle is simple. Using the data on the U.K. index-linked bonds, I show that during the sample period 1984:1--1995:8 the (ex-ante) real interest rates were counter-cyclical and term spreads pro-cyclical. Second, according to Backus, Gregory, and Zin (1989) a complete markets model can account for neither the sign nor the magnitude of average risk premiums in forward prices. This paper applies recent research by Alvarez and Jermann (1999ab) to the term premium puzzle. It is shown that the model produces a large risk premium with the correct sign, and unlike the complete markets model can generate enough variation in the risk premia to account for the rejections of the expectations hypothesis. In addition, when the model is calibrated to the U.K. aggregate and household data, the regressions of future spot rates and consumption growth on the term spread behave in a similar manner both in simulated and in actual data. Keywords: Business Cycles, Term Structure of Interest Rates, General Equilibrium, Risk Premia.

Diagnostic yield of genetic testing in a heterogeneous cohort of 1376 HCM patients

Background Genetic testing in hypertrophic cardiomyopathy (HCM) is a published guideline-based recommendation. The diagnostic yield of genetic testing and corresponding HCM-associated genes have been largely documented by single center studies and carefully selected patient cohorts. Our goal was to evaluate the diagnostic yield of genetic testing in a heterogeneous cohort of patients with a clinical suspicion of HCM, referred for genetic testing from multiple centers around the world. Methods A retrospective review of patients with a suspected clinical diagnosis of HCM referred for genetic testing at Blueprint Genetics was undertaken. The analysis included syndromic, myopathic and metabolic etiologies. Genetic test results and variant classifications were extracted from the database. Variants classified as pathogenic (P) or likely pathogenic (LP) were considered diagnostic. Results A total of 1376 samples were analyzed. Three hundred and sixty-nine tests were diagnostic (26.8%); 373 P or LP variants were identified. Only one copy number variant was identified. The majority of diagnostic variants involved genes encoding the sarcomere (85.0%) followed by 4.3% of diagnostic variants identified in the RASopathy genes. Two percent of diagnostic variants were in genes associated with a cardiomyopathy other than HCM or an inherited arrhythmia. Clinical variables that increased the likelihood of identifying a diagnostic variant included: an earlier age at diagnosis (p <0.0001), a higher maximum wall thickness (MWT) (p <0.0001), a positive family history (p <0.0001), the absence of hypertension (p = 0.0002), and the presence of an implantable cardioverter-defibrillator (ICD) (p = 0.0004). Conclusion The diagnostic yield of genetic testing in this heterogeneous cohort of patients with a clinical suspicion of HCM is lower than what has been reported in well-characterized patient cohorts. We report the highest yield of diagnostic variants in the RASopathy genes identified in a laboratory cohort of HCM patients to date. The spectrum of genes implicated in this unselected cohort highlights the importance of pre-and post-test counseling when offering genetic testing to the broad HCM population.Peer reviewe

Associations of functional alanine-glyoxylate aminotransferase 2 gene variants with atrial fibrillation and ischemic stroke

Asymmetric and symmetric dimethylarginines (ADMA and SDMA) impair nitric oxide bioavailability and have been implicated in the pathogenesis of atrial fibrillation (AF). Alanine-glyoxylate aminotransferase 2 (AGXT2) is the only enzyme capable of metabolizing both of the dimethylarginines. We hypothesized that two functional AGXT2 missense variants (rs37369, V140I; rs16899974, V498L) are associated with AF and its cardioembolic complications. Association analyses were conducted using 1,834 individulas with AF and 7,159 unaffected individuals from two coronary angiography cohorts and a cohort comprising patients undergoing clinical exercise testing. In coronary angiography patients without structural heart disease, the minor A allele of rs16899974 was associated with any AF (OR = 2.07, 95% CI 1.59-2.68), and with paroxysmal AF (OR = 1.98, 95% CI 1.44-2.74) and chronic AF (OR = 2.03, 95% CI 1.35-3.06) separately. We could not replicate the association with AF in the other two cohorts. However, the A allele of rs16899974 was nominally associated with ischemic stroke risk in the meta-analysis of WTCCC2 ischemic stroke cohorts (3,548 cases, 5,972 controls) and with earlier onset of first-ever ischemic stroke (360 cases) in the cohort of clinical exercise test patients. In conclusion, AGXT2 variations may be involved in the pathogenesis of AF and its age-related thromboembolic complications.Peer reviewe

A Missense Change in the ATG4D Gene Links Aberrant Autophagy to a Neurodegenerative Vacuolar Storage Disease

Inherited neurodegenerative disorders are debilitating diseases that occur across different species. We have performed clinical, pathological and genetic studies to characterize a novel canine neurodegenerative disease present in the Lagotto Romagnolo dog breed. Affected dogs suffer from progressive cerebellar ataxia, sometimes accompanied by episodic nystagmus and behavioral changes. Histological examination revealed unique pathological changes, including profound neuronal cytoplasmic vacuolization in the nervous system, as well as spheroid formation and cytoplasmic aggregation of vacuoles in secretory epithelial tissues and mesenchymal cells. Genetic analyses uncovered a missense change, c.1288G>A; p.A430T, in the autophagy-related ATG4D gene on canine chromosome 20 with a highly significant disease association (p = 3.8 x 10(-136)) in a cohort of more than 2300 Lagotto Romagnolo dogs. ATG4D encodes a poorly characterized cysteine protease belonging to themacroautophagy pathway. Accordingly, our histological analyses indicated altered autophagic flux in affected tissues. The knockdown of the zebrafish homologue atg4da resulted in a widespread developmental disturbance and neurodegeneration in the central nervous system. Our study describes a previously unknown canine neurological disease with particular pathological features and implicates the ATG4D protein as an important autophagy mediator in neuronal homeostasis. The canine phenotype serves as a model to delineate the disease-causing pathological mechanism(s) and ATG4D function, and can also be used to explore treatment options. Furthermore, our results reveal a novel candidate gene for human neurodegeneration and enable the development of a genetic test for veterinary diagnostic and breeding purposes.Peer reviewe