Transparency and the Response of Interest Rates to the Publication of Macroeconomic Data

The benefits of transparency - the outcome of the measures taken by the central bank to allow financial markets and economic agents to understand the factors it takes into account in formulating monetary policy - are now widely recognized. These benefits include smoother implementation of monetary policy and increased effectiveness as markets improve their ability to anticipate the Bank's policy decisions and account for them in their operations. How interest rates respond to the publication of macroeconomic data depends on the degree of transparency in monetary policy, as the rates will rise or fall as a reflection of the market's revised expectations. Before the Bank of Canada adopted initiatives to improve transparency, such as the inflation-control targets, the semi-annual publication of the Monetary Policy Report and Updates, and the fixed announcement dates, changes to the overnight rate created some volatility in interest rates, and publishing Canadian macroeconomic data did not appear to have a major impact on rates. This article shows how the Bank of Canada's steps towards greater transparency have increased the impact of Canadian data on short-term interest rates and have improved financial markets' understanding of how monetary policy decisions are taken.

The Federal Reserve's Dual Mandate: A Time-Varying Monetary Policy Priority Index for the United States

In the United States, the Federal Reserve has a dual mandate of promoting stable inflation and maximum employment. Since the Fed directly controls only one instrument-the federal funds rate-the authors argue that the Fed's priorities continuously alternate between inflation and economic activity. In this paper, the authors assume that the effective weights put by the Fed on different indicators vary over time. To test this assumption, they estimate a monetary policy priority index by adding non-linear endogenous weights to a conventional Taylor-type rule.Monetary policy framework; Monetary policy implementation; Econometric and statistical methods

An Empirical Analysis of Foreign Exchange Reserves in Emerging Asia

Over the past few years, the ability of the United States to finance its current account deficit has been facilitated by massive purchases of U.S. Treasury bonds and agency securities by Asian central banks. In this process, Asian central banks have accumulated large stockpiles of U.S.-dollar foreign exchange reserves. How far is the current level of reserves from that predicted by the standard macroeconomic determinants? The authors answer this question by using Pedroni's (1999) panel cointegration tests as the basis for the estimation of a long-run reserve-demand function in a panel of eight Asian emerging-market economies. This is a key innovation relative to the existing research on international reserves modelling: although the data are typically I(1), the literature ignores this fact and makes statistical inference based on unadjusted standard errors. While the authors find evidence of a positive structural break in the demand for international reserves by Asian central banks in the aftermath of the financial crisis of 1997-98, their results indicate that the actual level of reserves accumulated in 2003-04 was still in excess relative to that predicted by the model. Therefore, as long as historical relationships hold, a slowdown in the rate of accumulation of reserves is likely. This poses negative risks for the U.S. dollar. However, both the substantial capital losses that Asian central banks would incur if they were to drastically change their holding policy and the evidence that the currency composition of reserves evolves only gradually mitigate the risks of a rapid depreciation of the U.S. dollar triggered by Asian central banks.Econometric and statistical methods; International topics; Financial stability

Anti-sedentarism and the anthropology of forced migration

Anthropologists of forced migration have advanced unique perspectives exploring identity and community as they relate to space. With its critique of naturalized conceptions of rootedness, boundedness, and territorialization, anti-sedentarism stands as an important conceptual development emanating from this work. And while expressions such as ‘sedentary bias’ and ‘sedentarist thinking’ are found throughout this body of literature, anti-sedentarism per se has not received a proper treatment of its disciplinary underpinnings and intellectual horizons. This article identifies some of the genealogical traces of anti-sedentarism, discussing it through anthropological contributions in both the cultural and mobility turns. Informed by the work of anthropologists of forced migration, a working definition of anti-sedentarism is provided, followed by a critical discussion on key debates related to this concept. A selection of migrant and refugee ethnographies produced during the mobility turn (1990s onward) is then used to explore the extent which anti-sedentarism has translated to the empirical work of anthropologists and ethnographers engaging with displacement, dispossession, and deterritorialization

Import price dynamics in major advanced economies and heterogeneity in exchange rate pass-through

This paper aims at showing heterogeneity in the degree of exchange rate pass-through to import prices in major advanced economies at three different levels: 1) across destination markets; 2) across types of exporters (distinguishing developed economy from emerging economy exporters); and 3) over time. Based on monthly data over the period 1991-2007, the results show first that large destination markets exhibit the lowest degree of pass-through. The degree of pass-through for goods imported from emerging economies is also significantly lower than for those from developed economies. Regarding the evolution over time, no clear change in pricing behaviours can be identified and particular events, like large exchange rates depreciations during the Asian crisis, seem to influence the degree of pass-through related to imports from emerging economies. JEL Classification: E31, F3, F41Exchange Rate Pass-Through, Import price modeling, Pricing to Market

Import Price Dynamics in Major Advanced Economies and Heterogeneity in Exchange Rate Pass-Through

This paper aims at showing heterogeneity in the degree of exchange rate pass-through to import prices in major advanced economies at three different levels: 1) across destination markets; 2) across types of exporters (distinguishing developed economy from emerging economy exporters); and 3) over time. Based on monthly data over the period 1991–2007, the results show first that large destination markets exhibit the lowest degrees of pass-through. The degree of pass-through for goods imported from emerging economies is also significantly lower than for those from developed economies. Regarding the evolution over time, no clear change in pricing behaviours can be identified and particular events, like large exchange rates depreciations during the Asian crisis, seem to influence the degree of pass-through related to imports from emerging economies.Exchange rates; Inflation and prices

An Evaluation of Fixed Announcement Dates

When it launched a new system for regularly announcing its decisions regarding the overnight rate of interest in December 2000, the Bank of Canada had a number of key objectives in mind. These included reduced uncertainty in financial markets, greater focus on the Canadian rather than the U.S. economic environment, more emphasis on the medium-term perspective of monetary policy, and increased transparency regarding the Bank's interest rate decisions. Evidence to date suggests that all four objectives have been met to a substantial degree. Fixed announcement dates have provided regular opportunities for the Bank to communicate its views on the state of the Canadian economy to the public. This has helped to improve understanding of the broad direction of monetary policy and of the rationale behind the Bank's policy decisions although the decisions themselves are not always fully anticipated.

MUSE: The Bank of Canada's New Projection Model of the U.S. Economy

Staff projections provided for the Bank of Canada's monetary policy decision process take into account the integration of Canada's very open economy within the global economy, as well as its close real and financial linkages with the United States. To provide inputs for this projection, the Bank has developed several models, including MUSE, NEUQ (the New European Quarterly Model), and BoC-GEM (Bank of Canada Global Economy Model), to analyze and forecast economic developments in the rest of the world. The authors focus on MUSE, the model currently used to describe interaction among the principal U.S. economic variables, including gross domestic product, inflation, interest rates, and the exchange rate. Brief descriptions are also provided of NEUQ and BoC-GEM.

Book review: digitalization, immigration and the welfare state by Mårten Blix

In Digitalization, Immigration and the Welfare State, Mårten Blix focuses on two major issues that Sweden must address in order to ensure that its often-lauded welfare economics are to survive – namely immigration and digitalisation. While the study could have benefited from the inclusion of migrant voices and greater consideration of the role to be played by civil society, this book will offer insight to those interested in Sweden’s economic model and the challenges faced by OECD welfare states, writes Nicolas Parent

Mécanismes d'activation de la voie lysosomale durant l'apoptose chimio-induite

L’apoptose est une forme de mort cellulaire essentielle au développement et au maintien de l’homéostase chez les animaux multicellulaires. La machinerie apoptotiq ue requiert la participation des caspases, des protéases conservées dans l’évolution et celle des organelles cytoplasmiques. Les lysosomes subissent des ruptures partielles, labilisation de la membrane lysosomale (LML), qui entraînent l’activation des cathepsines dans le cytoplasme de cellules cancéreuses humaines en apoptose induite par la camptothecin (CPT), incluant les histiocytes humains U-937. Ces modifications lysosomales se manifestent tôt durant l’activation de l’apoptose, concomitamment avec la perméabilisation de la mitochondrie et l’activation des caspases. Une étude protéomique quantitative et comparative a permis d’identifier des changements précoces dans l’expression/localisation de protéines lysosomales de cellules U-937 en apoptose. Lors de deux expériences indépendantes, sur plus de 538 protéines lysosomales identifiées et quantifiées grâce au marquage isobarique iTRAQ et LC-ESIMS/ MS, 18 protéines augmentent et 9 diminuent dans les lysosomes purifiés de cellules en cours d’apoptose comparativement aux cellules contrôles. Les candidats validés par immuno-buvardage et microscopie confocale incluent le stérol-4-alpha-carboxylate 3- déhydrogénase, le prosaposin et la protéine kinase C delta (PKC-d). Des expériences fonctionnelles ont démontrées que la translocation de PKC-d aux lysosomes est requise pour la LML puisque la réduction de son expression par ARN interférents ou l’inhibition de son activité à l’aide du rottlerin empêche la LML lors de l’apoptose induite par la CPT. La translocation de PKC-d aux lysosomes conduit à la phosphorylation et l’activation de la sphingomyelinase acide lysosomale (ASM), et à l’accroissement subséquent du contenu en céramide (CER) à la membrane lysosomale. Cette accumulation de CER endogène aux lysosomes est un évènement critique pour la LML induite par la CPT car l’inhibition de l’activité de PKC-d ou de ASM diminue la formation de CER et la LML.Ces résultats révèlent un nouveau mécanisme par lequel la PKC-d active l’ASM qui conduit à son tour à l’accumulation de CER à la membrane lysosomale et déclenche la LML et l’activation de la voie lysosomale de l’apoptose induite par la CPT. En somme, ce mécanisme confirme l’importance du métabolisme des sphingolipides dans l’activation de la voie lysosomale de l’apoptose.Apoptosis is a distinct form of regulated cell death which is essential for the development and homeostasis maintenance of multicellular animals. Apoptosis is an evolutionary conserved process involving a specific molecular pathway, known as the caspase cascade, and the different cytoplasmic organelles. A lysosomal pathway, characterized by partial rupture, labilization of lysosomal membranes (LML), and cathepsin activation in the cytoplasm, is evoked during camptothecin-induced apoptosis in human cancer cells, including human histiocytic lymphoma U-937 cells. These lysosomal events begin rapidly and simultaneously with mitochondrial permeabilization and caspase activation within 3 h after drug treatment. Comparative and quantitative proteome analyses were performed to identify early changes in lysosomal protein expression/localization from U-937 cells undergoing apoptosis. In two independent experiments, among a total of more than 538 proteins putatively identified and quantitated by iTRAQ isobaric labelling and LC-ESI-MS/MS, 18 proteins were found to be upregulated and 9 downregulated in lysosomes purified from early apoptotic compared to control cells. Protein expression was validated by Western blotting on enriched lysosome fractions, and protein localization confirmed by fluorescence confocal microscopy of representative protein candidates, whose functions are associated with lysosomal membrane fluidity and dynamics. These include sterol-4-alpha-carboxylate 3-dehydrogenase (NSDHL), prosaposin (PSAP) and protein kinase C delta (PKC-d). Functional experiments demonstrate that PKC-d translocation to lysosomes is required for LML, as silencing its expression with RNA interference or suppressing its activity with the inhibitor rottlerin prevents CPT-induced LLM. PKC-d translocation to lysosomes is associated with lysosomal acidic sphingomyelinase (ASM) phosphorylation and activation, which in turn leads to an increase of ceramide (CER) content at lysosomes. The accumulation of endogenous CER at lysosomes is a critical event for CPT-induced LLM as suppressing PKC-d or ASM activity reduces both CPT-mediated CER generation at lysosomes and CPT-induced LLM.These findings reveal a novel mechanism by which PKC-d mediates ASM phosphorylation/activation and CER accumulation at lysosomes in CPT-induced LLM, rapidly activating the lysosomal pathway of apoptosis after CPT treatment. Taken together, these results confirm the importance of sphingolipid metabolism in the activation of the lysosomal pathway of apoptosis