Bond market co-movements, expected inflation and the equilibrium real exchange rate

Since the end of the fixed rates in 1973 and after the EMS sterling dismissal in 1992, the value of the pound has undergone large cyclical fluctuations on average. Of particular interest to policy makers is the understanding of whether such movements are consistent with the lack or not of a correction mechanism to some long-run equilibrium. The purpose of the present study is to understand those dynamics, how the external value of the British sterling relative to the USD evolved during the recent floating experiences, and what have been the driving forces. In this paper we assume the real exchange rate to be determined by forces relating to the goods and capital market in a general equilibrium framework. This entails testing the purchasing power parity and the uncovered interest parity together. Our findings have two important implications, both for monetary policy. First, we show that some of the observed changes in the real exchange rates can not be solely attributed to changes in inflation rates, but, possibly, also to investors’ behavior. Secondly, we show that the special US dollar status of World reserve currency results into a weaker behavior of the US bond rate on international markets. JEL Classification: E31, E43, E44, F31, C58international parity conditions, PPP, RIP, UIP

A VAR analysis for the uncovered interest parity and the ex-ante purchasing power parity: the role of macroeconomic and financial information

This study revisits the relation between the uncovered interest parity (UIP), the ex ante purchasing power parity (EXPPP) and the real interest parity (RIP) using a VAR approach for the US dollar, the British sterling and the Japanese yen interest rates, exchange rates and changes in prices. The original contribution is on developing some joint coefficient-based tests for the three parities conditions at a long horizon. Particularly, test results are derived by rewriting the UIP, the EXPPP and the RIP as a set of cross-equation restrictions in the VAR (see also Campbell and Shiller, 1987; Bekaert and Hodrick, 2001; and Bekaert et al., 2007; King and Kurmann, 2002). Consistent with the idea of some form of proportionality among the above three parities, we find a ”forward premium” bias in both the UIP - as it is normally found in empirical analysis (e.g. Fama, 1987) - and the ex ante PPP. The latter result is new in the literature and stems from testing the PPP in expectational terms, thus assuming agents to bear on the uncertainty of future exchange rate changes and inflation dynamics. The overall results confirm the UIP to be currency-based (see also Bekaert et al., 2007) and the EXPPP to be horizon-dependent (see also Lothian and Taylor, 1996; Taylor, 2002). Moreover, we find (weak) evidence that conditioning the VAR on variables having a strong forward-looking component (i.e. share prices) helps recover a unitary coefficient in the UIP equation. JEL Classification: E31, E43, E44, F31, C58international parity conditions, PPP, RIP, UIP

Bond market co-movements, expected inflation and the equilibrium real exchange rate

Since the end of the fixed rates in 1973 and after the EMS sterling dismissal in 1992, the value of the pound has undergone large cyclical fluctuations on average. Of particular interest to policy makers is the understanding of whether such movements are consistent with the lack or not of a correction mechanism to some long-run equilibrium. The purpose of the present study is to understand those dynamics, how the external value of the British sterling relative to the USD evolved during the recent floating experiences, and what have been the driving forces. In this paper we assume the real exchange rate to be determined by forces relating to the goods and capital market in a general equilibrium framework. This entails testing the purchasing power parity and the uncovered interest parity together. Our findings have two important implications, both for monetary policy. First, we show that some of the observed changes in the real exchange rates can not be solely attributed to changes in inflation rates, but, possibly, also to investors’ behavior. Secondly, we show that the special US dollar status of World reserve currency results into a weaker behavior of the US bond rate on international markets

GDP-Inflation cyclical similarities in the CEE countries and the euro area

In this paper we look at business cycles similarities between CEE countries and the euro area. Particularly, we uncover GDP-inflation cycles by adopting a trend-cycle decomposition model which allows the trend to be either stochastic or deterministic i.e. of the non-linear type. Once cyclical components are derived, we test for ex post restrictions at both with-in (GDP-to-inflation) and cross-country (CEECs vs. euro area) levels. Allowing for different degrees of cyclical similarity, we find that a similar inflation vs. GDP cycle is not rejected only for Poland, Lithuania, Romania and Estonia (with Latvia and the euro area being at the boundary). Looking at cross-country results, almost all countries feature a fair degree of similarity with respect to the euro area. Exceptions are Poland, Hungary, Latvia and Slovenia because of lack of a similar cycle either occurring in GDP or inflation, yet not in both. Finally, observing how concurrence between each CEECs cycle and the euro area evolved over time, we find that inflation conditional correlation increased stemming from the EU accession of most CEECs and as a result of the commodity price shock preceding 2008. Further, inflation and GDP conditional correlations receded during the course of 2009-2010, possibly resulting from more idiosyncratic adjustments in the aftermath of the crisis on the monetary/fiscal side. Interestingly, Slovenia, Slovakia, Estonia and Bulgaria display a conditional correlation pattern in GDP and inflation which roughly suggest a strong out-of-phase recovery starting from 2005

Vitrification of human immature oocytes before and after in vitro maturation: a review

The use of immature oocytes subjected to in vitro maturation (IVM) opens interesting perspectives for fertility preservation where ovarian reserves are damaged by pathologies or therapies, as in PCO/PCOS and cancer patients. Human oocyte cryopreservation may offer some advantages compared to embryo freezing, such as fertility preservation in women at risk of losing fertility due to oncological treatment or chronic disease, egg donation and postponing childbirth. It also eliminates religious and/or other ethical, legal, and moral concerns of embryo freezing. In addition, a successful oocyte cryopreservation program could eliminate the need for donor and recipient menstrual cycle synchronization. Recent advances in vitrification technology have markedly improved the oocyte survival rate after warming, with fertilization and implantation rates comparable with those of fresh oocytes. Healthy live births can be achieved from the combination of IVM and vitrification, even if vitrification of in vivo matured oocytes is still more effective. Recently, attention is given to highlight whether vitrification procedures are more successful when performed before or after IVM, on immature GV-stage oocytes, or on in vitro matured MII-stage oocytes. In this review, we emphasize that, even if there are no differences in survival rates between oocytes vitrified prior to or post-IVM, reduced maturation rates of immature oocytes vitrified prior to IVM can be, at least in part, explained by underlying ultrastructural and biomolecular alterations

Financial (in)stability, low interest rates and (un)conventional monetary policy: potential risks and policy measures

Since the advent of the global financial crisis of 2007–08, major central banks in advanced economies - the US Fed, the Bank of England, the Bank of Japan and the ECB - have undertaken monetary policies with a view to keep interest rates low. They have also significantly expanded the monetary base (and their balance sheets) through the adoption of unconventional monetary policies, although at different times and in different forms. Several years of unconventional monetary policies and exceptionally low interest have improved banks’ health, eased credit conditions and, ultimately, helped supporting the economy. However, these policies may have undesirable side- effects that could put financial stability at risk the longer they are in place. Against this background, this paper discusses the main threats to financial stability potentially triggered by unconventional monetary policies, especially in an environment of low interest rates, analyse the interrelation between financial stability and monetary policy at the current juncture and briefly assess the viability of specific measures that could prove helpful to contain such risks, given the current institutional framework

The current state of financial (dis)integration in the euro area: in-depth analysis

The sovereign bond crisis which started in 2010 caused a major disruption in euro area financial markets. The rise of credit risk led banks from the “core” of the euro area to stop lending to the euro-area “periphery”. Only the huge liquidity support by the ECB through its unconventional monetary policy measures alleviated divergent financing conditions across euro area Member States. But the fragmentation of euro-area financial markets has not disappeared, and financial fragmentation still continues to divide the euro area. This is the case despite progress on the European Banking Union project and the ECB’s (conventional and unconventional) monetary policy. Against this background, this note assesses the implications and risks stemming from persistent fragmentation of euro area financial markets for the transmission of monetary policy. Secondly, it discusses some of the policy options available (to the ECB) which may reduce this fragmentation

Pre-implantation mouse embryos cultured In vitro under different oxygen concentrations show altered ultrastructures

Abstract Assisted Reproductive Technologies routinely utilize different culture media and oxygen (O2) concentrations to culture human embryos. Overall, embryos cultured under physiological O2 tension (5%) have improved development compared to embryos cultured under atmospheric O2 conditions (20%). The mechanisms responsible for this remain unclear. This study aimed to evaluate the effect of physiologic (5%) or atmospheric O2 (20%) tension on the microscopic ultrastructure of pre-implantation mouse embryos using Transmission Electron Microscopy (TEM). Embryos flushed out of the uterus after natural mating were used as the control. For use as the control, 2-cells, 4-cells, morulae, and blastocysts were flushed out of the uterus after natural fertilization. In vitro fertilization (IVF) was performed using potassium simplex optimized medium (KSOM) under different O2 tensions (5% and 20%) until the blastocyst stage. After collection, embryos were subjected to the standard preparative for light microscopy (LM) and TEM. We found that culture in vitro under 5% and 20% O2 results in an increase of vacuolated shaped mitochondria, cytoplasmic vacuolization and presence of multi-vesicular bodies at every embryonic stage. In addition, blastocysts generated by IVF under 5% and 20% O2 showed a lower content of heterochromatin, an interruption of the trophectodermal and inner cell mass cell membranes, an increased density of residual bodies, and high levels of glycogen granules in the cytoplasm. In conclusion, this study suggests that in vitro culture, particularly under atmospheric O2 tension, causes stage-specific changes in preimplantation embryo ultrastructure. In addition, atmospheric (20%) O2 is associated with increased alterations in embryonic ultrastructure; these changes may explain the reduced embryonic development of embryos cultured with 20% O2

Symmetry and Convergence in Monetary Unions. LEQS Discussion Paper No. 131/2018 March 2018

This paper has three main objectives, namely to (a) propose a new framework that can support placing countries along a core-periphery continuum (beyond the more common binary treatment as either core or periphery), (b) to construct a continuous dynamic theory-based measure (the first, to the best of our knowledge) illustrating the use of this framework for a set of European countries using yearly data from 1960 to 2015, and (c) provide a first preliminary assessment, based on endogenous Optimal Currency Area (OCA) theory, of the main potential explanatory factors of the dynamics of this measure over time and across countries. Our main finding is that this new measure allows us to identify sets of countries on the basis of not only its level but also in terms of its dynamic behaviour. Using the Phillips-Sul procedure, we show the emergence a newer set of core countries (composed by Austria, Belgium, Germany, France, Italy and Netherlands), a mixed set of countries (namely Denmark, Sweden, Greece, Spain and the UK), and a set of deep-rooted periphery countries (Finland, Ireland, Norway, Portugal, and Switzerland). There are valuable lessons from the dynamics of this measure. It increases for core countries (which confirms endogenous OCA predictions), remains worrisomely constant for a periphery, and varies substantially for the intermediate set of countries. Spain (Sweden and Greece) becomes consistently more (less) core over time, Denmark’s remains constant and the UK moves in and out of the core over time. Our panel estimates on a specification suggested by endogenous OCA theory imply that euro membership and more flexible product market regulations (or trade openness) make countries more likely to be in the core

Hand to mouth in a Neandertal : right-handedness in regourdou 1

We describe and analyze a Neandertal postcranial skeleton and dentition, which together show unambiguous signs of right-handedness. Asymmetries between the left and right upper arm in Regourdou 1 were identified nearly 20 years ago, then confirmed by more detailed analyses of the inner bone structure for the clavicle, humerus, radius and ulna. The total pattern of all bones in the shoulder and arm reveals that Regourdou 1 was a right-hander. Confirmatory evidence comes from the mandibular incisors, which display a distinct pattern of right oblique scratches, typical of right-handed manipulations performed at the front of the mouth. Regourdou's right handedness is consistent with the strong pattern of manual lateralization in Neandertals and further confirms a modern pattern of left brain dominance, presumably signally linguistic competence. These observations along with cultural, genetic and morphological evidence indicate language competence in Neandertals and their European precursors