A Sunspot Paradox

Calibrated models of the business cycle typically assume a certain frequency at which economic agents take decisions. In this paper I show that the local stability properties of dynamic stochastic general equilibrium macro models may depend on the length of a period in the model economy. This leads to the following paradoxical situation: For given parameters, and in particular those assigning values of imperfections in the economy, the economy may be driven by sunspots at some frequencies while sunspots can have no impact at other frequencies.Sunspots, Indeterminacy, High frequency, Temporal aggregation

Occupational Choice and the Private Equity Premium Puzzle

This paper suggests a solution to what has become known as the "private equity premium puzzle" (Moskowitz and Vissing-Jorgensen (2002)). We interpret occupational choice as a dynamic portfolio choice problem of a life-cycle investor facing a liquidity constraint and imperfect information about the profitability of potential businesses. In this setting, becoming an entrepreneur is equivalent to investing in non-traded private equity capital subject to transaction costs. We model the return on private equity as the sum of two components, the individual ability of the entrepreneur and idiosyncratic business risk. Information is imperfect, because only entrepreneurs observe their own business risk realizations. Using numerical techniques we find that the model generates the observed return structure for private equity using standard CRRA-preferences and fully rational expectations.Portfolio choice, Life-cycle models, Private equity

Debt Portfolios

We provide a model with endogenous portfolios of secured and unsecured household debt. Secured debt is collateralized by owner-occupied housing whereas unsecured debt can be discharged according to bankruptcy regulations. We show that the calibrated model matches important quantitative characteristics of observed wealth and debt portfolios for prime-age consumers in the U.S. We then establish the quantitative result that home equity does not serve as informal collateral for unsecured debt since, as in the data, unsecured debtors hold small amounts of home equity in equilibrium. Thus, observed variations in homestead exemptions, which are an important part of U.S. bankruptcy regulation, have a small effect on the quantity and price of unsecured debt.household debt portfolios, housing, collateral, bankruptcy, commitment, income risk

Debt Portfolios

We provide a model with endogenous portfolios of secured and unsecured household debt. Secured debt is collateralized by durables whereas unsecured debt can be discharged in bankruptcy procedures. We show that the model matches the main quantitative characteristics of observed wealth and debt portfolios in the US and some of the observed changes over time. Furthermore, we establish two quantitative results. Firstly, modest levels of risk aversion are necessary to match observed debt portfolios. Secondly, durables do not improve consumers' access to unsecured credit, and plausible variations of durable exemptions in bankruptcy procedures have very small effects on the equilibrium.Household debt portfolios, Durables, Collateral, Income risk, Bankruptcy

A Sunspot Paradox

Abstract: Calibrated models of the business cycle typically assume a certain frequency at which economic agents take decisions. In this paper I show that the local stability properties of dynamic stochastic general equilibrium macro models may depend on the length of a period in the model economy. This leads to the following paradoxical situation: For given parameters, and in particular those assigning values of imperfections in the economy, the economy may be driven by sunspots at some frequencies while sunspots can have no impact at other frequencies.

Kaposi's sarcoma‐associated herpesvirus serology in Europe and Uuganda: Multicentre study with multiple and novel assays

AbstractA multicentre study was undertaken to define novel assays with increased inter‐assay concordance, sensitivity, specificity and predictive value for serological diagnosis of human herpesvirus type 8 (HHV‐8) infection. A total of 562 sera from European and Ugandan human immunodeficiency virus (HIV)‐infected or uninfected individuals with or without Kaposi's sarcoma (KS) and blood donors were examined under code by 18 different assays in seven European laboratories. Sera from KS patients and all non‐KS sera found positive by at least 70%, 80%, or 90% of the assays were considered "true positive." The validity of the assays was then evaluated by univariate logistic regression analysis. Two immunofluorescence assays (IFA) for detection of antibodies against HHV‐8 lytic (Rlyt) or latent (LLANA) antigens and two enzyme‐linked‐immunosorbent assays (ELISA) (M2, EK8.1) for detection of antibodies against HHV‐8 structural proteins were found to be highly concordant, specific, and sensitive, with odds ratios that indicated a high predictive value. When used together, the two IFA (Rlyt‐LLANA) showed the best combination of sensitivity (89.1%) and specificity (94.9%). The performance of these assays indicate that they may be used for the clinical management of individuals at risk of developing HHV‐8 associated tumours such as allograft recipients. J. Med. Virol. 65:123–132, 2001. © 2001 Wiley‐Liss, Inc