The outlook for housing: the role of demographic and cyclical factors

With the current U.S. economic expansion now in its sixth year, the economy appears to be on a path of stable growth. Such a development would be beneficial because it would foster steady gains in employment, income, and investment, all of which would help boost the overall standard of living. To maintain such a healthy course, most sectors of the economy need to be solid performers. The housing sector is an especially important component of the economy, having generated $1.5 trillion in output in 1995, or one-fifth of the nation's gross domestic product.> Whether housing activity will continue to perform well in the 1990s will depend in part on two key factors. First, will demographic factors, such as the aging "baby-boom" generation and the smaller "baby-bust" generation, lessen the demand for housing and thereby imperil the health of housing activity? And second, will cyclical factors enable housing activity to sustain its solid performance as the economy moderates to a stable growth path?> Filardo explores whether housing will continue to perform well in the rest of the decade. He concludes that favorable demographic trends and stable cyclical forces will lay the foundation for healthy housing activity for the rest of the decade.Demography ; Housing ; Population

New evidence on the output cost of fighting inflation

The Federal Reserve has made significant progress toward price stability over the last two decades. The annual inflation rate has declined from 13 percent in the early 1980s to roughly 2 percent today. But, to be sure, the current low-inflation environment has come at a price.> One key cost of achieving low inflation is the output loss that generally accompanies a permanent decline in inflation, as occurred in the early 1980s and early 1990s. Another more subtle output cost of fighting inflation is the cost of preventing inflation from rising. As incipient inflation pressures build, tighter monetary policy can slow the economy and thereby preemptively forestall the rise in actual inflation. The slower output growth is the cost of resisting inflation pressures. Together, these two output costs of fighting inflation play important roles in determining how best to maintain low inflation and how to seek further disinflation toward price stability.> A significant factor determining the output cost of fighting inflation is the tradeoff between inflation and output, often referred to as the Phillips curve. Traditionally, estimates of this relationship assume the shape of this curve is linear. This implies that the slope of the Phillips curve is a constant and, therefore, independent of the stage of the business cycle, the speed of the disinflation, and how aggressively incipient inflation pressures are fought. Recent research, however, has begun to question whether the slope is constant. Assessing the output cost of fighting inflation may be more complicated than traditionally assumed.> Filardo investigates the shape of the Phillips curve and the associated output cost of fighting inflation. He concludes that, while the Phillips curve traditionally has been thought of as approximately linear, closer examination of the inflation-output relationship reveals important nonlinearities. This new evidence and its implications for the output cost of fighting inflation may require new policy strategies.Inflation (Finance) ; Phillips curve

How reliable are recession prediction models?

The U.S. economy continues to advance briskly, defying forecasts of more moderate growth. Beginning in March 1991, the current expansion has become the longest peacetime expansion on record and is less than a year away from becoming the longest in U.S. history. To the surprise of some observers, economic growth has been particularly robust late in the expansion. In fact, over the last three years growth has averaged 4 percent annually, and indicators of growth for the first half of 1999 show no signs of significant slowing.> Despite these positive signs, few analysts believe the expansion can go on forever. As the expansion continues to age, economists will increasingly be called on to predict the next recession. Recession prediction models may help them gauge the likelihood of imminent recession.> Filardo examines the reliability of five popular recession prediction models. He concludes that these models have demonstrated some ability in the past to predict recessions. When judiciously interpreted, the models can help resolve uncertainty about the possibility of future recession.Recessions ; Forecasting

Recent evidence on the muted inventory cycle

Inventories play an important role in business cycles. Inventory build-ups add momentum to the economy during expansions, while inventory liquidations sap economic strength during recessions. In addition, because inventory fluctuations are notoriously difficult to predict, they present considerable uncertainty in assessing the economic outlook.> The role of inventories in shaping the current outlook for the U.S. economy is particularly uncertain. In the early 1990s, inventory swings appeared less pronounced than usual, leading some analysts to conclude the business cycle might now be more muted. New inventory control practices, they believed, were permanently diminishing the role of inventories in the business cycle. Yet, recent strong inventory restocking suggests this conclusion might be premature. Inventories may be just as important in the business cycle today as in the past.> Filardo examines recent inventory data to assess whether the role of inventories in the business cycle has changed. He finds little evidence to suggest inventories are playing a reduced role in the business cycle, and therefore rejects the view that a change in inventory behavior has muted the business cycle.Business cycles ; Inventories

Monetary policy and asset prices

Despite the low inflation of recent years, some observers have wondered whether rapid gains in U.S. asset prices foreshadow rising inflationary pressures. Would U.S. monetary policy be improved if Federal Reserve policymakers reacted systematically to changes in the prices of widely held assets such as stocks and houses? Some monetary experts believe so. In particular, Charles Goodhart, a former member of the Bank of England's Monetary Policy Committee, argues that central banks should consider using housing prices, and perhaps, but to a much lesser extent, stock market prices to guide their policy decisions.> Goodhart has recommended that central banks replace conventional inflation measures--such as the CPI or PCE price index--with a broader measure that includes housing and stock market prices (weighted appropriately). This measure has the potential to improve macroeconomic performance if asset prices reliably predict future consumer price inflation. Other experts, however, question the ability of housing and stock prices to predict future inflation. And, even if asset prices help predict inflation, a central bank's reactions to such volatile asset prices might not necessarily improve macroeconomic performance.> Filardo evaluates the net benefits to the U.S. economy of adopting Goodhart's recommendation. First he reviews the historical and theoretical motivation underlying the recommendation and discusses its monetary policy implications. Next he examines empirically whether U.S. housing and stock market prices help predict future consumer price inflation. Based on these findings, he simulates a macroeconomic model to explore the net benefits of a policy that responds to these asset prices. He concludes that adopting Goodhart's recommendation would not improve U.S. economic performance.Prices ; Monetary policy

Has the productivity trend steepened in the 1990s?

In the 1990s, conventional measures of productivity growth, or the growth in output per worker, have indicated a dramatic rise. If these measures are correct, the economic benefits are clear. In the short run, sustained, faster productivity growth would enable the economy to expand more rapidly without intensifying inflationary pressures. In the long run, sustained, faster productivity growth would boost real incomes and improve the standard of living.> Despite signs that productivity has recently begun to follow a steeper path, some analysts are skeptical. Episodes of faster productivity growth in the past have often reflected cyclical influences rather than fundamental trend shifts. And, the conventional productivity measure, which is based on fixed-weighted productivity data, has recently shown an upward bias.> To address these concerns, Filardo reexamines the conventional, fixed-weighted productivity measure and also uses a new chain- weighted measure to assess productivity growth. He concludes that the productivity trend has not steepened in the 1990s.Productivity

GPER mediates the angiocrine actions induced by IGF1 through the HIF-1α/VEGF pathway in the breast tumor microenvironment

The G protein estrogen receptor GPER/GPR30 mediates estrogen action in breast cancer cells as well as in breast cancer-associated fibroblasts (CAFs), which are key components of microenvironment driving tumor progression. GPER is a transcriptional target of hypoxia inducible factor 1 alpha (HIF-1α) and activates VEGF expression and angiogenesis in hypoxic breast tumor microenvironment. Furthermore, IGF1/IGF1R signaling, which has angiogenic effects, has been shown to activate GPER in breast cancer cells. We analyzed gene expression data from published studies representing almost 5000 breast cancer patients to investigate whether GPER and IGF1 signaling establish an angiocrine gene signature in breast cancer patients. Next, we used GPER-positive but estrogen receptor (ER)-negative primary CAF cells derived from patient breast tumours and SKBR3 breast cancer cells to investigate the role of GPER in the regulation of VEGF expression and angiogenesis triggered by IGF1. We performed gene expression and promoter studies, western blotting and immunofluorescence analysis, gene silencing strategies and endothelial tube formation assays to evaluate the involvement of the HIF-1α/GPER/VEGF signaling in the biological responses to IGF1. We first determined that GPER is co-expressed with IGF1R and with the vessel marker CD34 in human breast tumors (n = 4972). Next, we determined that IGF1/IGF1R signaling engages the ERK1/2 and AKT transduction pathways to induce the expression of HIF-1α and its targets GPER and VEGF. We found that a functional cooperation between HIF-1α and GPER is essential for the transcriptional activation of VEGF induced by IGF1. Finally, using conditioned medium from CAFs and SKBR3 cells stimulated with IGF1, we established that HIF-1α and GPER are both required for VEGF-induced human vascular endothelial cell tube formation. These findings shed new light on the essential role played by GPER in IGF1/IGF1R signaling that induces breast tumor angiogenesis. Targeting the multifaceted interactions between cancer cells and tumor microenvironment involving both GPCRs and growth factor receptors has potential in future combination anticancer therapies

THE CONCISE GUIDE TO PHARMACOLOGY 2021/22: G protein-coupled receptors

The Concise Guide to PHARMACOLOGY 2021/22 is the fifth in this series of biennial publications. The Concise Guide provides concise overviews, mostly in tabular format, of the key properties of nearly 1900 human drug targets with an emphasis on selective pharmacology (where available), plus links to the open access knowledgebase source of drug targets and their ligands (www.guidetopharmacology.org), which provides more detailed views of target and ligand properties. Although the Concise Guide constitutes over 500 pages, the material presented is substantially reduced compared to information and links presented on the website. It provides a permanent, citable, point-in-time record that will survive database updates. The full contents of this section can be found at http://onlinelibrary.wiley.com/doi/bph.15538. G protein-coupled receptors are one of the six major pharmacological targets into which the Guide is divided, with the others being: ion channels, nuclear hormone receptors, catalytic receptors, enzymes and transporters. These are presented with nomenclature guidance and summary information on the best available pharmacological tools, alongside key references and suggestions for further reading. The landscape format of the Concise Guide is designed to facilitate comparison of related targets from material contemporary to mid-2021, and supersedes data presented in the 2019/20, 2017/18, 2015/16 and 2013/14 Concise Guides and previous Guides to Receptors and Channels. It is produced in close conjunction with the Nomenclature and Standards Committee of the International Union of Basic and Clinical Pharmacology (NC-IUPHAR), therefore, providing official IUPHAR classification and nomenclature for human drug targets, where appropriate