International Transmission under Floating Exchange Rates

International Transmission under Floating Exchange Rates

Real Exchange Rate Behavior Under Floating and Fixed Regimes

In this paper we examine the stability of the real exchange rate and the macroeconomic effects of alternative exchange-rate regimes, including currency union, on real exchange-rate behaviour. We focus on the Irish punt in order to exploit its diversity of experience over different nominal exchange rate regimes. We make both temporal and cross-country comparisons of real-exchange-rate stability for the Irish punt with sterling, the US dollar and the German mark. We reach two conclusions on the basis of our results. The first is that for Ireland, as for most other countries, purchasing power parity provides a reasonably good description of actual exchange rate behaviour over the long run. Our second principal conclusion concerns regime effects. Currency union appears to matter. The real exchange rates we analyse are unambiguously less variable under currency union than under alternative exchange-rate systems. Otherwise, however, we find no clear-cut differences in behaviour across regimes.Exchange Rates, purchasing power parity, exchange-rate regimes, currency union

Equity Returns and Inflation: The Puzzlingly Long Lags

This paper examines data for stock prices and price levels of 14 developed countries during the post-WWII era and compares their behavior in that sample with behavior over the past two centuries in the UK and the US. Contrary to much of the literature of the past several decades, we find that nominal equity prices do, in fact, keep pace with movements in the overall price level. Our results suggest, however, that this is only the case over long periods. The puzzle therefore is not that equities fail the test as inflation hedges, as had been quite widely believed, but that they take so long to pass.Stock prices, inflation, Fisher effect, neutrality, cointegration,Equity Returns,Inflation ,Long Lags

The use of loan loss provisions for capital management, earnings management and signalling by Australian banks

The objective of this study is to examine whether and to what extent Australian banks use loan loss provisions (LLPs) for capital management, earnings management and signalling. We examine if there were changes in the use of LLPs due to the implementation of banking regulations consistent with the Basel Accord of 1988 which made loan loss reserves no longer part of Tier I capital in the numerator of the capital adequacy ratio. We find some evidence to indicate that Australian banks use LLPs for capital management, but no evidence of a change in this behaviour after the implementation of the Basel Accord. Our results indicate that banks in Australia use LLPs to manage earnings. Further, listed commercial banks engage more aggressively in earnings management using LLPs than unlisted commercial banks. We also find that earnings management behaviour is more pronounced in the post-Basel period. Overall, we find a significant understating of LLPs in the post-Basel period relative to the pre-Basel period. This indicates that reported earnings may not reflect the true economic reality underlying those numbers. Finally, Australian banks do not appear to use LLPs for signalling future intentions of higher earnings to investors.capital management; earnings management; signalling; Australian banks

Currency Union and Real Exchange Rate Behavior

In this paper we study the behavior of the real exchange rate of three North American currencies vis-a-vis the U.S. dollar: the Canadian dollar the Mexican peso, and the Panamanian Balboa. Our principal object is to design an experiment in which meaningful comparisons of behavior across regimes would be possible. In the main we were unable to find any. The allegation of problems created due to aggregating data across regimes therefore receives no support at all in these data. A second criterion for choosing the countries in our sample was differences in level of economic development. The object here was to provide ample leeway for real variables to operate. For Mexico such factors do not appear to matter. For Panama they might be of some importance, but a modified form of PPP nevertheless continues to perform well.Real exchange rates, purchasing power parity, exchange rate regimes, currency unions.

Scattering of dipole-mode vector solitons: Theory and experiment

We study, both theoretically and experimentally, the scattering properties of optical dipole-mode vector solitons - radially asymmetric composite self-trapped optical beams. First, we analyze the soliton collisions in an isotropic two-component model with a saturable nonlinearity and demonstrate that in many cases the scattering dynamics of the dipole-mode solitons allows us to classify them as ``molecules of light'' - extremely robust spatially localized objects which survive a wide range of interactions and display many properties of composite states with a rotational degree of freedom. Next, we study the composite solitons in an anisotropic nonlinear model that describes photorefractive nonlinearities, and also present a number of experimental verifications of our analysis.Comment: 8 pages + 4 pages of figure

Observation of dipole-mode vector solitons

We report on the first experimental observation of a novel type of optical vector soliton, a {\em dipole-mode soliton}, recently predicted theoretically. We show that these vector solitons can be generated in a photorefractive medium employing two different processes: a phase imprinting, and a symmetry-breaking instability of a vortex-mode vector soliton. The experimental results display remarkable agreement with the theory, and confirm the robust nature of these radially asymmetric two-component solitary waves.Comment: 4 pages, 8 figures; pictures in the PRL version are better qualit

Discovery of Sexual Dimorphisms in Metabolic and Genetic Biomarkers

Metabolomic profiling and the integration of whole-genome genetic association data has proven to be a powerful tool to comprehensively explore gene regulatory networks and to investigate the effects of genetic variation at the molecular level. Serum metabolite concentrations allow a direct readout of biological processes, and association of specific metabolomic signatures with complex diseases such as Alzheimer's disease and cardiovascular and metabolic disorders has been shown. There are well-known correlations between sex and the incidence, prevalence, age of onset, symptoms, and severity of a disease, as well as the reaction to drugs. However, most of the studies published so far did not consider the role of sexual dimorphism and did not analyse their data stratified by gender. This study investigated sex-specific differences of serum metabolite concentrations and their underlying genetic determination. For discovery and replication we used more than 3,300 independent individuals from KORA F3 and F4 with metabolite measurements of 131 metabolites, including amino acids, phosphatidylcholines, sphingomyelins, acylcarnitines, and C6-sugars. A linear regression approach revealed significant concentration differences between males and females for 102 out of 131 metabolites (p-values<3.8 x 10(-4); Bonferroni-corrected threshold). Sex-specific genome-wide association studies (GWAS) showed genome-wide significant differences in beta-estimates for SNPs in the CPS1 locus (carbamoyl-phosphate synthase 1, significance level: p<3.8 x 10(-10); Bonferroni-corrected threshold) for glycine. We showed that the metabolite profiles of males and females are significantly different and, furthermore, that specific genetic variants in metabolism-related genes depict sexual dimorphism. Our study provides new important insights into sex-specific differences of cell regulatory processes and underscores that studies should consider sex-specific effects in design and interpretation

Rhamm-/- mice are defective in skin wound repair due to aberrantERK1,2 signaling in fibroblast migration

Rhamm (receptor for hyaluronan-mediated motility) is an hyaluronan binding protein with limited expression in normal tissues and high expression in advanced cancers. To understand its physiological functions and identify the molecular mechanisms underlying these functions, we created mice with a genetic deletion of Rhamm. We show that Rhamm(−/−) fibroblasts fail to resurface scratch wounds >3 mm or invade hyaluronan-supplemented collagen gels in culture. We identify a requirement for Rhamm in the localization of CD44 to the cell surface, formation of CD44–ERK1,2 (extracellular-regulated kinase 1,2) complexes, and activation/subcellular targeting of ERK1,2 to the cell nucleus. We also show that cell surface Rhamm, restricted to the extracellular compartment by linking recombinant protein to beads, and expression of mutant active mitogen-activated kinase kinase 1 (Mek1) are sufficient to rescue aberrant signaling through CD44–ERK1,2 complexes in Rh(−/−) fibroblasts. ERK1,2 activation and fibroblast migration/differentiation is also defective during repair of Rh(−/−) excisional skin wounds and results in aberrant granulation tissue in vivo. These results identify Rhamm as an essential regulator of CD44–ERK1,2 fibroblast motogenic signaling required for wound repair

A Methodological Perspective on Genetic Risk Prediction Studies in Type 2 Diabetes: Recommendations for Future Research

Fueled by the successes of genome-wide association studies, numerous studies have investigated the predictive ability of genetic risk models in type 2 diabetes. In this paper, we review these studies from a methodological perspective, focusing on the variables included in the risk models as well as the study designs and populations investigated. We argue and show that differences in study design and characteristics of the study population have an impact on the observed predictive ability of risk models. This observation emphasizes that genetic risk prediction studies should be conducted in those populations in which the prediction models will ultimately be applied, if proven useful. Of all genetic risk prediction studies to date, only a few were conducted in populations that might be relevant for targeting preventive interventions