The Asymmetric Effect of the Business Cycle on the Realtion between Stock Market Returns and their Volatility

We examine the relation between US stock market returns and the US business cycle for the period 1960 - 2003 using a new methodology that allows us to estimate a time-varying equity premium. We identify two channels in the transmission mechanism. One is through the mean of stock returns via the equity risk premium, and the other is through the volatility of returns. We provide support for previous findings based on simple correlation analysis that the relation is asymmetric with downturns in the business cycle having a greater negative impact on stock returns than the positive effect of upturns. We also obtain a new result, that demand and supply shocks affect stock returns differently. Our model of the relation between returns and their volatility encompasses CAPM, consumption CAPM and Merton's (1973) inter-temporal CAPM. It is implemented using a multi-variate GARCH-in-mean model with an asymmetric time-varying conditional heteroskedasticity and correlation structure.Equity returns, risk premium, asymmetry

An Asset Market Integration Test Based on Observable Macroeconomic Stochastic Discount Factors

There are a number of tests and measures of the degree of integration in the literature. An example is the idea that integrated markets should provide rates of return that are highly correlated with one another and that a measure of correlation provides an appropriate test. This particular idea is clearly false; for substantial periods of time we don't ever see stocks traded on the same market moving together. Specific models of what prices risk in individual markets could provide the basis of a test of integration. However, as has been widely shown, any differences between these pricing models will be subject to arbitrage by informed traders and so cannot form the basis for a test. In this paper we exploit the absence of arbitrage possibilities and the operation of the 'Law of One Price' in stochastic discount factor (SDF) theory to construct a test of integration based on a common approach to pricing assets in all markets, not only for stocks. The SDF approach that we adopt says that one SDF should price all assets as the model is not market or asset-specific.Unlike much of the literature, we adopt a direct parametric approach which takes estimates of an identical SDF from two asset markets and asks whether the price of risk associated with this SDF is the same for the two assets as SDF theory says it should. Another distinctive feature of our approach is that we employ observable macroeconomic factors. This allows us to estimate and compare the estimated risk premia in the markets concerned, with and without the integration restriction being applied. The paper uses this methodology to test market integration between the UK equity and FOREX markets. Our test rejects market integration for the consumption-based capital asset pricing model (CCAPM) and two variable SDF models based on consumption growth and inflation and on output and money growth. As equity and FOREX returns have a similar degree of variability, the finding that the risk premium in the FOREX market is generally much more variable than that in the equity market may contribute to the the test outcome.

Macroeconomic Sources of Equity Risk

There are very few estimates of a time-varying equity risk premium based on models that satisfy a no-arbitrage condition. The main aim of this paper is to estimate the US and UK equity risk premia implied by a number of well-known asset pricing models using monthly data for 1975-2001. The models include consumption-based CAPM with power utility, the Epstein-Zin general equilibrium model with time non-separable preferences, CAPM, and the SDF model. We show that most of the theoretical models of the equity risk premium that have been proposed in the literature are special cases the SDF model. We explain why some of them are unable to do this as formulated. In addition to examining existing theories of the equity risk premium, we use the SDF model to generate new theories. We find that macroeconomic variables not previously considered, and not consistent with standard general equilibrium theory, such as production, appear to be priced for the equity risk premium. This suggests that traditional general equilibrium considerations may not be the sole explanation for the equity risk premium; other short-term factors associated with pure price risk may also be involved. A related, and rapidly growing, literature adopts a more statistical approach. It focusses on the empirical relation between the return on equity (or the Sharpe ratio) and return volatility. We use SDF theory to show that this relation is misconceived. The reason for the absence of estimates of the equity risk premium is the difficulty of estimating it. Most of the empirical evidence on these asset pricing models is based on calibration, or the estimation of the Euler equation by GMM, neither of which delivers an estimate of the risk premium. We use a new empirical approach that does produce estimates of the risk premium and allows tests of the theories. As a result we provide the first estimates of the equity risk premium for some of these models. We then use our estimates to investigate the importance of different components of the equity risk premium including, amongst others, return volatility.

Social Constructs of Online Feminine Identities in Social Media: A Thematic Analysis

It has been argued that femininity is a form of control over women’s identity, and that femininity is predominantly performative. This research examines the performative nature of femininity in Instagram posts, based on the idea that social media is a means through which young women negotiate and perform their feminine identity. Self-presentation theories suggest that female social media users perform aspects of self-presentation as influenced by the audience, the situation, and implicit social constructs of gender. This study used Reflexive Thematic analysis of semi-structured interviews with ten women Instagram users aged between 18 – 27, who post regularly to Instagram. The focus was on exploring the participant's detailed accounts of how they manage their online identity and self-presentation of femininity on Instagram. Emerging themes emphasised the performative aspects of self-presentation, such as self-surveillance and self-monitoring and impression management in relation to online social situations. Findings highlight the significant, influential aspect the audience plays in performative femininity as well as the importance of Goffman’s (1959) dramaturgical theory of self-presentation and Walkerdine’s (1989) concept of femininity as a performance. The study raises important questions about the presentation and performative elements of femininity on Instagram and how femininity is still a form of hegemonic control over women

Early childhood caries, primary caregiver oral health knowledge and behaviours and associated sociological factors in Australia: A systematic scoping review

Background Early childhood caries disproportionately affects vulnerable groups and remains a leading cause of preventable hospital admissions for Western Australian children. The Western Australia State Oral Health Plan seeks to improve child oral health through universal and targeted health promotion initiatives with primary caregivers. These initiatives require evidence of primary caregiver oral health knowledge and behaviours and baseline data on early childhood caries. The objective of this systematic scoping review was to understand current oral health knowledge and practices of primary caregivers of children aged 0–4 years, identify influential socioecological determinants, and identify data on early childhood caries in the Western Australian context. Methods A systematic scoping review framework identified articles published between 2010 and 2021, using Scopus, PubMed, Medline, CINAHL, PsycINFO, selected article reference lists, and oral health websites. The lack of Western Australian specific literature prompted the inclusion of Australia-wide articles. Articles were screened via author consensus, with eight selected. Results Western Australia and nation-wide data on early childhood caries are limited and mostly dated. WA data from children aged 2–3 years, collected in 2006, suggests the prevalence is 2.9% in this state, with national data of children from 0 to 3 years, collected from 2006 and 2008, suggesting an early childhood caries prevalence of 3.4–8% of children aged 18 months, rising sharply by 36 months of age. Nationally, fewer than half the primary caregivers reported following evidence-based oral health recommendations for their young children. Perceptions of the role of dental services for young children tends to be focussed on treatment, rather than surveillance and prevention. Knowledge of dietary and oral hygiene practices is inconsistent and awareness of the Child Dental Benefit Schedule low. Young children’s oral health status is clearly associated with socioecological factors, including socioeconomic status. Conclusions Recent early childhood caries data and evidence of primary care-givers’ oral health knowledge and behaviours are unavailable in Western Australia, a similar situation exists nationwide. To realise the Western Australian and National Oral Health Plans, research is required to address this knowledge gap

Attention and automation: New perspectives on mental underload and performance

There is considerable evidence in the ergonomics literature that automation can significantly reduce operator mental workload. Furthermore, reducing mental workload is not necessarily a good thing, particularly in cases where the level is already manageable. This raises the issue of mental underload, which can be at least as detrimental to performance as overload. However, although it is widely recognized that mental underload is detrimental to performance, there are very few attempts to explain why this may be the case. It is argued in this paper that, until the need for a human operator is completely eliminated, automation has psychological implications relevant in both theoretical and applied domains. The present paper reviews theories of attention, as well as the literature on mental workload and automation, to synthesize a new explanation for the effects of mental underload on performance. Malleable attentional resources theory proposes that attentional capacity shrinks to accommodate reductions in mental workload, and that this shrinkage is responsible for the underload effect. The theory is discussed with respect to the applied implications for ergonomics research

Interfacing with Neural Activity via Femtosecond Laser Stimulation of Drug-Encapsulating Liposomal Nanostructures

External control over rapid and precise release of chemicals in the brain potentially provides a powerful interface with neural activity. Optical manipulation techniques, such as optogenetics and caged compounds, enable remote control of neural activity and behavior with fine spatiotemporal resolution. However, these methods are limited to chemicals that are naturally present in the brain or chemically suitable for caging. Here, we demonstrate the ability to interface with neural functioning via a wide range of neurochemicals released by stimulating loaded liposomal nanostructures with femtosecond lasers. Using a commercial two-photon microscope, we released inhibitory or excitatory neurochemicals to evoke subthreshold and suprathreshold changes in membrane potential in a live mouse brain slice. The responses were repeatable and could be controlled by adjusting laser stimulation characteristics. We also demonstrate the release of a wider range of chemicals—which previously were impossible to release by optogenetics or uncaging—including synthetic analogs of naturally occurring neurochemicals. In particular, we demonstrate the release of a synthetic receptor-specific agonist that exerts physiological effects on long-term synaptic plasticity. Further, we show that the loaded liposomal nanostructures remain functional for weeks in a live mouse. In conclusion, we demonstrate new techniques capable of interfacing with live neurons, and extendable to in vivo applications

Telephone conversation impairs sustained visual attention via a central bottleneck

Recent research has shown that holding telephone conversations disrupts one's driving ability. We asked whether this effect could be attributed to a visual attention impairment. In Experiment 1, participants conversed on a telephone or listened to a narrative while engaged in multiple object tracking (MOT), a task requiring sustained visual attention. We found that MOT was disrupted in the telephone conversation condition, relative to single-task MOT performance, but that listening to a narrative had no effect. In Experiment 2, we asked which component of conversation might be interfering with MOT performance. We replicated the conversation and single-task conditions of Experiment 1 and added two conditions in which participants heard a sequence of words over a telephone. In the shadowing condition, participants simply repeated each word in the sequence. In the generation condition, participants were asked to generate a new word based on each word in the sequence. Word generation interfered with MOT performance, but shadowing did not. The data indicate that telephone conversation disrupts attention at a central stage, the act of generating verbal stimuli, rather than at a peripheral stage, such as listening or speaking