On the Empirical Separability of News Shocks and Sunspots

In this note we discuss the possibility of empirically evaluating the relative importance of different drivers of forecast errors in linear rational expectations frameworks, using the predictions generated by the theory. By means of a few simple examples, we show that, when accounting for indeterminate equilibria, empirical difficulties are likely to arise in distinguishing between determinate models driven by news shocks or rather by indeterminate ones under nonfundamental – or arbitrarily related to fundamentals – sunspot noise.

News Shocks or Correlated Sunspots? An Observational Equivalence Result in Linear Rational Expectations Model

This paper studies identification of linear rational expectations models under news shocks. Exploiting the general martingale difference solution approach, we show that news shocks models are observationally equivalent to a class of indeterminate equilibrium frameworks which are subject only, though arbitrarily, to i.i.d. fundamental shocks. The equivalent models are characterized by a lagged expectations structure, which arises typically when choice variables are predetermined or rather based on past information with respect to current observables. This particular feature creates room for serially correlated sunspot variables to arise in equilibrium reduced forms, whose dynamics can be equivalently induced by news shocks processes. This finding, which is inherent to the rational expectations theoretical construct, calls for carefully designing empirical investigations of news shocks in estimated DSGE models.Rational expectations; News shocks; Indeterminacy; Observational equivalence.

The Role of the Judiciary in the Public Decision Making Process

In this paper we investigate the role of judicial control of lobbying activities in an endogenous policy framework, focusing on two dimensions of quality of the judiciary, namely efficiency and integrity. We present a multi-layer lobbying model where a self-interested group is allowed to inuence a public decision maker – and possibly the judicial authority itself, which performs an anti-corruption task – with the payment of illegal contributions, and provide general conditions for the existence of a zero-contribution equilibrium. Furthermore, we study how sensitive the main findings are to different institutional arrangements as to judicial independence.Illegal lobbying, Endogenous policy making, Judicial control

On the Solution of Markov-switching Rational Expectations Models

This paper describes a method for solving a class of forward-looking Markov-switching Rational Expectations models under noisy measurement, by specifying the unobservable expectations component as a general-measurable function of the observable states of the system, to be determined optimally via stochastic control and filtering theory. Solution existence is proved by setting this function to the regime-dependent feedback control minimizing the mean-square deviation of the equilibrium path from the corresponding perfect-foresight autoregressive Markov jump state motion. As the exact expression of the conditional (rational) expectations term is derived both in finite and infinite horizon model formulations, no (asymptotic) stationarity assumptions are needed to solve forward the system, for only initial values knowledge is required. A simple sufficient condition for the mean-square stability of the obtained rational expectations equilibrium is also provided.Rational Expectations, Markov-switching dynamic systems, Dynamic programming, Time-varying Kalman filter

Essays in Dynamic Macroeconomics and Political Economy

This dissertation attempts in four essays to contribute to economic research in two separate fields, and is therefore divided into two self-contained parts. Part I (Dynamic Macroeconomics) is rooted in the modern macroeconomic literature that aims at exploring theoretical departures from the classic rational expectations (RE) paradigm. According to the latter, economic agents know at all dates the full state of the economy as well as the structure which generated the state itself. Our study rather accounts for a time-varying structure and imperfect observability of the model's variables (chapter 1), and for advanced information on the future states - that is, for news shocks and anticipation (chapter 2). In chapter 1, the problem of finding a solution to time-varying linear RE systems involving past expectations of the future state values and noisy observations is addressed. It is shown that there exists always an equilibrium path having the property of being the closest, in mean square, to the state motion of the autoregressive dynamic equation governing the perfect foresight behavior of the economic system. Chapter 2 explores the empirical separability of news shocks and sunspots models. By means of the general martingale solution approach, we show that it may prove impossible to decide on an econometric basis whether the actually observed data is generated by determinate models driven by news shocks or rather by indeterminate ones forced by sunspot variables. Part II of the dissertation (Political Economy) aims to contribute to the literature on the role of self-interested groups in the political arena. In chapter 3, we investigate theoretically how the presence of (corruptible) judiciaries that oversee the political process impacts on one of the mechanisms by which lobby groups can influence policy outcomes, that is, bribery. We show that judicial independence is a necessary condition for deterrence effects to arise, as dependent judges are notable to prevent the interest group and the government from maximizing the profits from the deals between them. Judges must be subject to mechanisms that hold them accountable for their institutional role. Our analysis suggests that preserving the efficiency of independent judiciaries can serve as an instrument for self-enforced judicial accountability, even in the presence of corrupt societies. In chapter 4, we study the process of legislative delegation in the presence of bureaucratic lobbying. We show that the possibility of strategic agency selection fully restores general results from the conventional theory of delegation. In particular, bureaucratic lobbying never reduces the scope of delegation across different political systems (parliamentary versus separation of powers), as it engenders no influence on the extent of (expected) policy bias induced by delegated legislation

Intensive intervention for children and adolescents with autism in a community setting in Italy: a single-group longitudinal study

<p>Abstract</p> <p>Background</p> <p>Previous studies have shown favourable results with intensive behavioural treatment for children with autism: evidence has emerged that treatment can be successfully implemented in a community setting and in adolescent participants. The aim of this study was to describe the 2-year adaptive functioning outcome of children and adolescents with autism treated intensively within the context of special autism centres, as well as to evaluate family satisfaction with the activity of the centres.</p> <p>Methods</p> <p>Sixty participants with autism (20 females and 40 males, aged between 4 and 18 years) attending the semi-residential rehabilitation centres for autism located in the Abruzzo region (Central Italy) were followed up and their adaptive functioning was evaluated both at baseline and after one and two years using the Vineland Adaptive Behaviour Scales (VABS). Parents' satisfaction with the service was evaluated using the Orbetello Satisfaction Scale for Children and Adolescent Mental Health.</p> <p>Results</p> <p>The increase in VABS scores was significant on several domains in the different gender and age categories. It is worth noting that male children had improved a great deal (roughly, an effect size >0.20) in the domains of communication, daily living and motor skills (effect sizes 0.34, 0.45 and 0.27 respectively) whereas in male adolescents, a notable increase in VABS scores was recorded in the domain of socialization only (effect size 0.23). On the other hand, adaptive behaviour in female children increased in the domains of socialization and motor skills (effect sizes 0.27 and 0.42 respectively) whereas in female adolescents, good results were achieved in the domains of daily living, socialization and motor skills (effect sizes 0.22, 0.26 and 0.20 respectively).</p> <p>The level of satisfaction of users of the service over time was found to be substantial, even when they had recently started the program.</p> <p>Conclusions</p> <p>Our results support the implementation of special autism treatment community centres, based on a parent co-directed rehabilitative, intensive and early intervention. Further experimental research designed to document the effectiveness of services provided to children and adolescents with autism in the community is recommended.</p

Antagonistic Regulation of Apoptosis and Differentiation by the Cut Transcription Factor Represents a Tumor-Suppressing Mechanism in Drosophila

Apoptosis is essential to prevent oncogenic transformation by triggering self-destruction of harmful cells, including those unable to differentiate. However, the mechanisms linking impaired cell differentiation and apoptosis during development and disease are not well understood. Here we report that the Drosophila transcription factor Cut coordinately controls differentiation and repression of apoptosis via direct regulation of the pro-apoptotic gene reaper. We also demonstrate that this regulatory circuit acts in diverse cell lineages to remove uncommitted precursor cells in status nascendi and thereby interferes with their potential to develop into cancer cells. Consistent with the role of Cut homologues in controlling cell death in vertebrates, we find repression of apoptosis regulators by Cux1 in human cancer cells. Finally, we present evidence that suggests that other lineage-restricted specification factors employ a similar mechanism to put the brakes on the oncogenic process