Monetary Policy, Private Debt and Financial Stability Risks

Can monetary policy be used to promote financial stability? We answer this question by estimating the impact of a monetary policy shock on private-sector leverage and the likelihood of a financial crisis. Impulse responses obtained from a panel VAR model of 18 advanced countries suggest that the debt-to-GDP ratio rises in the short run following an unexpected tightening in monetary policy. As a consequence, the likelihood of a financial crisis increases, as estimated from a panel logit regression. However, in the long run, output recovers and higher borrowing costs discourage new lending, leading to a deleveraging of the private sector. A lower debt-to-GDP ratio in turn reduces the likelihood of a financial crisis. These results suggest that monetary policy can achieve a less risky financial system in the long run but could fuel financial instability in the short run. We also find that the ultimate effects of a monetary policy tightening on the probability of a financial crisis depend on the leverage of the private sector: the higher the initial value of the debt-to-GDP ratio, the more beneficial the monetary policy intervention in the long run, but the more destabilizing in the short run

On numerical density approximations of solutions of SDEs with unbounded coefficients

We study a numerical method to compute probability density functions of solutions of stochastic differential equations. The method is sometimes called the numerical path integration method and has been shown to be fast and accurate in application oriented fields. In this paper we provide a rigorous analysis of the method that covers systems of equations with unbounded coefficients. Working in a natural space for densities, L1, we obtain stability, consistency, and new convergence results for the method, new well-posedness and semigroup generation results for the related Fokker-Planck-Kolmogorov equation, and a new and rigorous connection to the corresponding probability density functions for both the approximate and the exact problems. To prove the results we combine semigroup and PDE arguments in a new way that should be of independent interest.submittedVersion© Springer Verlag. This is the authors' submitted manuscript to the article. The final publication is available at https://link.springer.com/article/10.1007%2Fs10444-017-9558-

Sagittal plane gait characteristics in hip osteoarthritis patients with mild to moderate symptoms compared to healthy controls: a cross-sectional study

<p>Abstract</p> <p>Background</p> <p>Existent biomechanical studies on hip osteoarthritic gait have primarily focused on the end stage of disease. Consequently, there is no clear consensus on which specific gait parameters are of most relevance for hip osteoarthritis patients with mild to moderate symptoms. The purpose of this study was to explore sagittal plane gait characteristics during the stance phase of gait in hip osteoarthritis patients not eligible for hip replacement surgery. First, compared to healthy controls, and second, when categorized into two subgroups of radiographic severity defined from a minimal joint space of ≤/>2 mm.</p> <p>Methods</p> <p>Sagittal plane kinematics and kinetics of the hip, knee and ankle joint were calculated for total joint excursion throughout the stance phase, as well as from the specific events initial contact, midstance, peak hip extension and toe-off following 3D gait analysis. In addition, the Western Ontario and McMaster Universities Osteoarthritis Index, passive hip range of motion, and isokinetic muscle strength of hip and knee flexion and extension were included as secondary outcomes. Data were checked for normality and differences evaluated with the independent Student’s t-test, Welch’s t-test and the independent Mann–Whitney U-test. A binary logistic regression model was used in order to control for velocity in key variables.</p> <p>Results</p> <p>Fourty-eight hip osteoarthritis patients and 22 controls were included in the final material. The patients walked significantly slower than the controls (<it>p</it>=0.002), revealed significantly reduced joint excursions of the hip (<it>p</it><0.001) and knee (<it>p</it>=0.011), and a reduced hip flexion moment at midstance and peak hip extension (<it>p</it><0.001). Differences were primarily manifested during the latter 50% of stance, and were persistent when controlling for velocity. Subgroup analyses of patients with minimal joint space ≤/>2 mm suggested that the observed deviations were more pronounced in patients with greater radiographic severity. The biomechanical differences were, however, not reflected in self-reported symptoms or function.</p> <p>Conclusions</p> <p>Reduced gait velocity, reduced sagittal plane joint excursion, and a reduced hip flexion moment in the late stance phase of gait were found to be evident already in hip osteoarthritis patients with mild to moderate symptoms, not eligible for total hip replacement. Consequently, these variables should be considered as key features in studies regarding hip osteoarthritic gait at all stages of disease. Subgroup analyses of patients with different levels of radiographic OA further generated the hypothesis that the observed characteristics were more pronounced in patients with a minimal joint space ≤2 mm.</p