Monetary policy and commodity price shocks

This paper analyses the effects of commodity price shocks in a new Keynesian model. The focus is on the central bank's choice of inflation target and the degree of real wage rigidity. It turns out that using core inflation rather than headline inflation is the superior strategy. Targeting expected headline inflation, as practiced by most central banks, is a viable practical alternative to the core inflation target. Simulations illustrate these points. The introduction of real wage rigidity into the model does not change these conclusions. Real wage rigidity does, however, imply second-round effects, making the monetary policy response, the inflation peak and the output drop more pronounced. Although in practice many of the assumptions of the model, such as full information, do not hold, lessons can be drawn for monetary policy. In case of a commodity supply shock, central banks would do well to focus on some measure of core inflation rather than headline inflation so as to reduce the volatility of both inflation and output. A communication strategy that places greater emphasis on underlying and expected inflation could serve to anchor inflation expectations.

How European integration breaks the link between demand for social spending and its supply

How does European integration affect the welfare state? Drawing on a new study, Tobias Tober highlights two conflicting effects that the integration process generates in relation to welfare spending. While economic integration increases popular demand for social spending, political integration decreases its supply, effectively breaking the link between social policy preferences and social policy output

Political integration has contributed to rising inequality in the Eurozone

What effect has European integration had on inequality? Tobias Tober writes that while from a theoretical standpoint both economic and political integration can be linked to inequality, there is a lack of conclusive evidence on the actual effect in practice. Based on a study of 14 EU member states from 1999 until 2010, he illustrates that although economic integration appears to have no statistically significant impact on levels of inequality, political integration is consistently associated with a more unequal distribution of income

Reassessing the role of wages in the Eurozone

A popular explanation for the Eurozone crisis is that differences in wage bargaining institutions led to a major divergence in labour costs between northern and southern member states prior to the crisis. Drawing on a new study, Lucio Baccaro and Tobias Tober find that while this explanation led to wage moderation and labour market reforms ... Continue

Cystatin C is associated with adverse COVID-19 outcomes in diverse populations

COVID-19 has highly variable clinical courses. The search for prognostic host factors for COVID-19 outcome is a priority. We performed logistic regression for ICU admission against a polygenic score (PGS) for Cystatin C (CyC) production in patients with COVID-19. We analyzed the predictive value of longitudinal plasma CyC levels in an independent cohort of patients hospitalized with COVID-19. In four cohorts spanning European and African ancestry populations, we identified a significant association between CyC-production PGS and odds of critical illness (n cases=2,319), with the strongest association captured in the UKB cohort (OR 2.13, 95% CI 1.58-2.87, p=7.12e-7). Plasma proteomics from an independent cohort of hospitalized COVID-19 patients ( n cases = 131) demonstrated that CyC production was associated with COVID-specific mortality (p=0.0007). Our findings suggest that CyC may be useful for stratification of patients and it has functional role in the host response to COVID-19.Peer reviewe

Cystatin C is glucocorticoid responsive, directs recruitment of Trem2+ macrophages, and predicts failure of cancer immunotherapy

Cystatin C (CyC), a secreted cysteine protease inhibitor, has unclear biological functions. Many patients exhibit elevated plasma CyC levels, particularly during glucocorticoid (GC) treatment. This study links GCs with CyC’s systemic regulation by utilizing genome-wide association and structural equation modeling to determine CyC production genetics in the UK Biobank. Both CyC production and a polygenic score (PGS) capturing predisposition to CyC production were associated with increased all-cause and cancer-specific mortality. We found that the GC receptor directly targets CyC, leading to GC-responsive CyC secretion in macrophages and cancer cells. CyC-knockout tumors displayed significantly reduced growth and diminished recruitment of TREM2+ macrophages, which have been connected to cancer immunotherapy failure. Furthermore, the CyC-production PGS predicted checkpoint immunotherapy failure in 685 patients with metastatic cancer from combined clinical trial cohorts. In conclusion, CyC may act as a GC effector pathway via TREM2+ macrophage recruitment and may be a potential target for combination cancer immunotherapy.publishedVersio

The political and social economy of the Eurozone

The papers in this thesis explore the political and social economy of the Eurozone. The first part of the thesis examines the political economic effects of the Economic and Monetary Union (EMU). Here I ask why some countries fare better than others in the Eurozone (Chapter 1) and who the actors behind Germany's remarkable success are (Chapter 2). The second part of the thesis covers the socioeconomic effects of the EMU. This part studies how European integration in general and the EMU in particular affects the distribution of income (Chapter 3), and the link between social policy preferences and social policy output (Chapter 4). In the conclusion, I emphasize that any reform proposal for the Eurozone needs to rely on the insights of both parts of the thesis in order to be successful. Put differently, the political economy and the social economy of the Eurozone should always be considered jointly

Replication Data for: Tober, T. (2019) European Institutional Integration, Trade Unions and Income Inequality, Socio-Economic Review

What are the distributional implications of European institutional integration? This paper argues that European institutional integration exerts a moderating effect on the relationship between trade union strength and income inequality—particularly inequality at the top—within countries of the European Union. I contend that European institutional integration reduces the bargaining power of trade unions due to rising market competition and decreasing union control over the supply of labor. Thus, the effectiveness of trade unions in reducing inequality should decline with progressing European institutional integration. Based on a long-term within-country analysis of the EU15, I will show that the effect of trade unions on inequality varies strongly with European institutional integration. Consistent with the theoretical argument, the inequality-reducing effect of trade unions becomes substantially lower the more a country integrates in the European Union

European integration and the political economy of inequality

This study examines the role of European integration as a potential source of income inequality in countries of the European Union. We distinguish between both economic and political integration and identify theoretical mechanisms that link the two to rising levels of inequality. The empirical analysis draws on time-series-cross-section data covering 14 European Union member states for the time period 1999–2010. In particular, we make use of a newly available dataset that measures individual degrees of integration across different dimensions. Our main finding is a positive association between political integration and inequality on the one hand as well as a nonassociation between economic integration and inequality on the other hand. This suggests that the recent trend toward inequality at the European Union national level is at least partly related to deepening political integration at the supranational level.publishe