Convergence and Long Run Uncertainty

In this paper the neoclassical convergence hypothesis is tested for the thirteen regions of Chile using crosssection and time-series techniques. Cross-section analysis in combination with a Bayesian Modeling Averaging strategy supports the convergence hypothesis, despite of some instability detected in the estimated speed of convergence. When applying time-series based tests, the no convergence null hypothesis cannot be rejected at usual significance levels. When clustering the Chilean regions into three different groups, however, evidence of cointegration within these groups is found, indicating that the regional growth process in Chile is driven by a lower number of common trends. The implementation of both cross-section and time-series tests allows coverage of two different situations: economies in transition dynamics and economies in stationary distribution. Because cross-section and time-series tests place different implications on the data one can claim that under the assumption that Chilean regions are in transition towards a stationary distribution, the convergence hypothesis is supported by the data. If one assumes, however, that Chilean regions already achieved their limiting distribution, the convergence hypothesis is not supported by the data.

A Real Time Evaluation of the Central Bank of Chile GDP Growth Forecasts.

In this paper we evaluate the Central Bank of Chile annual GDP growth forecasts over the period 1991-2009 using a real-time database. We compare the Central Bank of Chile forecasts with those of the Survey of Professional Forecasters (SPF), Consensus Forecasts, and simple time-series models. We compare all forecasts to first and quasi-final GDP growth vintages. We evaluate a number of different forecast properties, including forecast accuracy and efficiency. We report mixed results in terms of root mean squared prediction errors. Depending on the sample period, the forecast horizon and the vintage used in the analysis, forecasts from the Central Bank of Chile may outperform or be outperformed by the benchmarks. Despite these mixed results, differences in root mean squared prediction errors are generally moderate and have no statistical significance. Nevertheless, our efficiency analysis, in addition to the fact that in some periods the forecasts produced by the Central Bank of Chile have been outperformed by alternative forecasts, opens the question about the room for improvement in the accuracy of the Central Bank of Chile forecasts. While the room for improvement may actually exist, our results suggest that this room seems to be small for point forecasts and larger for interval forecasts.

Forecasting Inflation Forecast Errors

We evaluate inflation forecasts from the Survey of Professional Forecasters (SPF) of the Central Bank of Chile. Forecast errors for the period 2000-2008 show an excess of autocorrelation and a statistically significant bias at the end of the sample. We take advantage of the autocorrelation structure of the forecast errors to build new and more accurate inflation forecasts. We evaluate these new forecasts in an out-of-sample exercise. The new forecasts display important reductions in bias and Mean Square Prediction Error. Moreover, these reductions are, in general, statistically significant.

Cooperatives and Area Yield Insurance:A Theoretical Analysis

The purpose of this paper is to theoretically investigate the potential benefits that arise from a cooperative selling a government subsidized area-yield contract (i.e., the Group Risk Plan). The indeminities in area-yield contracts are triggered by a geographically determined yield (e.g., a county-wide yield average) instead of the more conventional individual actual production history. Therefore, an area-yield contract would be appropriate for managing the cooperative's systemic throughput risk. The cooperative would also capture some of the substantial government subsidies that are normally given to a private insurance company. Our primary finding is that farmers should be indifferent when considering the decision to purchase area-yield insurance from a private company or encompass that business in their cooperative. We derive this result for the specific case of costless insurance and assume a Pareto Optimal contract. Under these assumptions, the government subsidies that the cooperative would hope to capture are simply a net deduction in their premiums. In other words, the benefit they capture from the subsidies is the same when they purchase the insurance from an outside firm or internally.Cooperatives, Area Yield Insurance, Optimal indemnity

Communicational Bias In Monetary Policy: Can Words Forecast Deeds?

Communication with the public is an ever-growing practice among central banks and complements their decisions of interest rate setting. In this paper we examine one feature of the communicational practice of the Central Bank of Chile (CBC) which summarizes the assessment of the Board about the most likely future of the monetary policy interest rate. We show that this assessment, known as communicational bias or simply c-bias, contains valuable information regarding the future stance of monetary policy. We do this by comparing, against several benchmarks, the c-bias’s ability to correctly forecast the direction of monetary policy rates. Our results indicate that the CBC has (in our sample period) matched words and deeds. The c-bias is a more accurate predictor of the future direction of monetary policy rates than a random walk and a uniformly-distributed random variable. It also improves the predictive ability of a discrete Taylor-Rule-type model that uses persistence, output gap and inflation-deviation-from-target as arguments. We also show that the c-bias can provide information to improve monetary policy rate forecasts based on the forward rate curve.

External Imbalances, Valuation Adjustments and Real Exchange Rate: Evidence of Predictability in an Emerging Economy

We evaluate the ability of a measure of external imbalances that combines the trade and the financial channels to forecast the real effective exchange rate for Chile. By making use of a quarterly database of external assets and liabilities for the period 1983 to 2005, and employing a recently developed test of out-of-sample predictive ability, we show that this measure is able to predict the real exchange rate at horizons of up to 2 years. Out-of-sample evidence of predictability tends to get stronger as the size of the window used to estimate the parameters increases. This is probably because of the greater relative importance of the external balance in the dynamics of the exchange rate in the last few years, or because of the increasing precision of parameter estimates with the sample size. When we break down our measure of external imbalances into its three components: exports to imports ratio, exports to assets ratio and assets to liabilities ratio, we find that out-of-sample predictability is mainly driven by the last two ratios.

The G2 checkpoint activated by DNA damage does not prevent genome instability in plant cells

Root growth, G2 length, and the frequency of aberrant mitoses and apoptotic nuclei were recorded after a single X-ray irradiation, ranging from 2.5 to 40 Gy, in Allium cepa L. root meristematic cells. After 72 h of recovery, root growth was reduced in a dose-dependent manner from 10 to 40 Gy, but not at 2.5 or 5 Gy doses. Flow cytometry plus TUNEL (TdT-mediated dUTP nick end labeling) showed that activation of apoptosis occurred only after 20 and 40 Gy of X-rays. Nevertheless, irrespective of the radiation dose, conventional flow cytometry showed that cells accumulated in G2 (4C DNA content). Simultaneously, the mitotic index fell, though a mitotic wave appeared later. Cell accumulation in G2 was transient and partially reversed by caffeine, thus it was checkpoint-dependent. Strikingly, the additional G2 time provided by this checkpoint was never long enough to complete DNA repair. Then, in all cases, some G2 cells with still-unrepaired DNA underwent checkpoint adaptation, i.e., they entered into the late mitotic wave with chromatid breaks. These cells and those produced by the breakage of chromosomal bridges in anaphase will reach the G1 of the next cell cycle unrepaired, ensuring the appearance of genome instabilit

Predictable Variation of Range-Sizes across an Extreme Environmental Gradient in a Lizard Adaptive Radiation: Evolutionary and Ecological Inferences

Large-scale patterns of current species geographic range-size variation reflect historical dynamics of dispersal and provide insights into future consequences under changing environments. Evidence suggests that climate warming exerts major damage on high latitude and elevation organisms, where changes are more severe and available space to disperse tracking historical niches is more limited. Species with longer generations (slower adaptive responses), such as vertebrates, and with restricted distributions (lower genetic diversity, higher inbreeding) in these environments are expected to be particularly threatened by warming crises. However, a well-known macroecological generalization (Rapoport's rule) predicts that species range-sizes increase with increasing latitude-elevation, thus counterbalancing the impact of climate change. Here, I investigate geographic range-size variation across an extreme environmental gradient and as a function of body size, in the prominent Liolaemus lizard adaptive radiation. Conventional and phylogenetic analyses revealed that latitudinal (but not elevational) ranges significantly decrease with increasing latitude-elevation, while body size was unrelated to range-size. Evolutionarily, these results are insightful as they suggest a link between spatial environmental gradients and range-size evolution. However, ecologically, these results suggest that Liolaemus might be increasingly threatened if, as predicted by theory, ranges retract and contract continuously under persisting climate warming, potentially increasing extinction risks at high latitudes and elevations