A Small Model of the Australian Macroeconomy

This paper presents a small model of the Australian macroeconomy. The model is empirically based, aggregate in nature and consists of five estimated equations – for non-farm output, the real exchange rate, import prices, unit labour costs and consumer prices. The stylised facts underlying each equation are discussed and estimation results are presented. The model’s primary use is to examine macroeconomic developments over the short to medium term, although it also has a well-defined steady state in the longer run with appropriate theoretical properties. Dynamic responses of the model to monetary policy changes and selected shocks are illustrated in the paper.Australian economy; macroeconomic model; monetary policy

Estimating the US trend short-term interest rate

We estimate the trend short-term interest rate in the United States using an unobserved-components stochastic-volatility model with interest-rate and survey data from 1998Q2 to 2022Q4. Our results indicate that the trend short-term interest rate has drifted down during most of the sample and remains low in a historical perspective, despite the recent sharp increase in the short-term interest rate

Characterization of acetate transport in colorectal cancer cells and potential therapeutic implications

Acetate, together with other short chain fatty acids has been implicated in colorectal cancer (CRC) prevention/therapy. Acetate was shown to induce apoptosis in CRC cells. The precise mechanism underlying acetate transport across CRC cells membrane, that may be implicated in its selectivity towards CRC cells, is not fully understood and was addressed here. We also assessed the effect of acetate in CRC glycolytic metabolism and explored its use in combination with the glycolytic inhibitor 3-bromopyruvate (3BP). We provide evidence that acetate enters CRC cells by the secondary active transporters MCT1 and/or MCT2 and SMCT1 as well as by facilitated diffusion via aquaporins. CRC cell exposure to acetate upregulates the expression of MCT1, MCT4 and CD147, while promoting MCT1 plasma membrane localization. We also observed that acetate increases CRC cell glycolytic phenotype and that acetate-induced apoptosis and anti-proliferative effect was potentiated by 3BP. Our data suggest that acetate selectivity towards CRC cells might be explained by the fact that aquaporins and MCTs are found overexpressed in CRC clinical cases. Our work highlights the importance that acetate transport regulation has in the use of drugs such as 3BP as a new therapeutic strategy for CRC.This work was supported by Fundacao para a Ciencia e Tecnologia (FCT) by the FCT-ANR/BEX-BCM/0175/2012 and the strategic programme UID/BIA/04050/2013 (POCI-01-0145-FEDER-007569) funded by national funds through the FCT I.P. and by the ERDF through the COMPETE2020 - Programa Operacional Competitividade e Internacionalizacao (POCI), as well as by the FCT fellowships: Suellen Ferro (SFRH/BD/77449/2011) and J. Azevedo-Silva (SFRH/BD/76038/2011). This work was also supported by the Marie Curie Initial Training Network: GLYCOPHARM, PITN-GA-2012-317297. This work was also supported by Projeto Estrategico - LA 26 - 2013-2014 (PEst-C/SAU/LA0026/2013), Fundo Europeu de Desenvolvimento Regional (FEDER), through COMPETE (FCOMP-01-0124-FEDER-037298) and Project "ON.2 SR&TD Integrated Program (NORTE-07-0124-FEDER-000017)" co-funded by Programa Operacional Regional do Norte (ON.2 - O Novo Norte), Quadro de Referencia Estrategico Nacional (QREN), through (FEDER).info:eu-repo/semantics/publishedVersio

A closer look at the sensitivity puzzle: the sensitivity of expected future short rates and term premia to macroeconomic news

Nominal forward rates are sensitive at surprisingly long horizons to macroeconomic news and monetary-policy surprises. This paper takes advantage of affine term-structure modelling to demonstrate that movements in term premia, not expected future short rates, account for most of the reaction of forward rates at long horizons. Specifically, term premia account for about three quarters of the reaction of nominal forward rates 10 to 15 years hence to the surprise component of numerous macroeconomic news announcements. This has strong implications for the interpretation of interest-rate sensitivity. Contrary to some recent conjectures, long-horizon expectations of the level of inflation and real rates appear reasonably well anchored in the United States, but the associated term premia are quite variable.Interest rates ; Derivative securities

Excess Sensitivity and Volatility of Long Interest Rates: The Role of Limited Information in Bond Markets

Asymmetric information between the central bank and bond markets creates an inference problem that affects the behaviour of long interest rates. This paper employs a simple macroeconomic model with a time-varying infation target to illustrate the implications of asymmetry for the sensitivity of long rates and volatility of bond returns. When the central bank's infation target is not communicated and macroeconomic shocks are imperfectly observed, bond markets infer the value of the target from noisy signals. This heightens the sensitivity of long-run infation expectations to transitory shocks, thereby raising the measured reaction of long rates to monetary policy and to infation surprises. Calibrated coe±cients from such regressions are more than twice as large when bond markets lack knowledge of the target compared with a full information scenario. Time variation in the infation target is the main source of volatility, but learning adds to the ability of the model to explain the observed volatility of returns along the yield curve.Term structure of interest rates; yield curve; limited information; learning; excess sensitivity; excess volatility.

Lowering the anchor: how the Bank of England's inflation-targeting policies have shaped inflation expectations and perceptions of inflation risk

Inflation targeting as practiced by the Bank of England has undergone several changes since its adoption in 1992, including redefinition of the goal, measures to increase transparency and the granting of independence to the central bank. These changes are likely to have affected long-run inflation expectations and perceptions of future inflation risk. To that end, this paper estimates a no-arbitrage, affine, factor model of the term structure of inflation compensation in the United Kingdom. The model yields time series of expected inflation and inflation risk premia at short and long horizons estimated in a theoretically consistent manner. The results reveal that long-run inflation expectations drifted down slowly during the first five years of inflation targeting, but inflation risk premia moved down abruptly only once the Bank of England was granted independence. This event, which arguably signaled more credible commitment by the central bank to its inflation anchor, appears to have been more important in shaping inflation expectations and perceptions of inflation risk than changes in the definition of the target or measures to increase transparency.Inflation (Finance)

The Rise and Fall of U.S. Inflation Persistence

This paper estimates the path of inflation persistence in the United States over the last 50 years and draws implications about the evolution of the Federal Reserve's monetary policy preferences. Standard models of central bank optimization predict that the central bank's preference for output stability is a determinant of inflation persistence. Hence, time variation of that preference should be reflected in changes in inflation persistence. We estimate an ARMA(1,q) model with a time-varying autoregressive parameter for monthly U.S. inflation data from 1955 to 2006.The coefficients provide an estimate of the inflation target and the path of inflation persistence. The estimated inflation target over the sample is approximately 2.8 percent and we find that inflation persistence declined substantially during Volcker and Greenspan's tenures to a level significantly less than one and significantly below that of the 1970s and early 1980s

The Rise and Fall of U.S. Inflation Persistence

This paper estimates the path of inflation persistence in the United States over the last 50 years and draws implications about the evolution of the Federal Reserve's monetary policy preferences. Standard models of central bank optimization predict that the central bank's preference for output stability is a determinant of inflation persistence. Hence, time variation of that preference should be reflected in changes in inflation persistence. We estimate an ARMA(1,q) model with a time-varying autoregressive parameter for monthly U.S. inflation data from 1955 to 2006.The coefficients provide an estimate of the inflation target and the path of inflation persistence. The estimated inflation target over the sample is approximately 2.8 percent and we find that inflation persistence declined substantially during Volcker and Greenspan's tenures to a level significantly less than one and significantly below that of the 1970s and early 1980s

Revisiting the uncertain unit root in GDP and CPI: Testing for non-linear trend reversion

We test for the presence of a unit root in U.S. GDP and CPI, allowing for non-linear trend reversion under the alternative hypothesis. In contrast to most previous results, we find evidence in favour of trend stationarity for both variables.