Mean Reversion of Real Exchange Rates and Purchasing Power Parity in Turkey

The important concept of purchasing power parity (PPP) has a number of practical implications. Our central objective is to examine the stationarity of Turkey’s real exchange rates to test for the empirical validity of PPP. Our results from conventional univariate unit root tests fail to support PPP. However, when we use the empirical methodology developed by Caner and Hansen (2001), which allows us to jointly consider non-stationarity and non-linearity, we find evidence of non-linear mean reversion in Turkey’s real exchange rates. This implies that PPP holds in one threshold regime but not in another.Turkey, purchasing power parity, real exchange rate, unit root, non-linearity

Foreign Output Shocks and Monetary Policy Regimes in Small Open Economies: A DSGE Evaluation of East Asia

East Asia’s small open economies were hit in varying degrees by the sharp drop in the output of major industrial countries during the global financial and economic crisis of 2008-2009. This highlights the role of monetary policy regimes in cushioning small open economies from adverse external output shocks. To assess the welfare impact of external shocks on key macroeconomic variables under different monetary policy regimes, we numerically solve and calculate the welfare loss function of a dynamic stochastic general equilibrium (DSGE) model. We find that CPI inflation targeting minimizes welfare losses for import-to-GDP ratios from 0.3 to 0.9. However, welfare under the pegged exchange rate regime is almost equivalent to CPI inflation targeting when the import-to-GDP ratio is one while the Taylor-type rule minimizes welfare when the import-to-GDP ratio is 0.1. We calibrate the model and derive welfare implications for eight East Asian small open economies.

Foreign Output Shocks and Monetary Policy Regimes in Small Open Economies: A DSGE Evaluation of East Asia

East Asia’s small open economies were hit in varying degrees by the sharp drop in the output of major industrial countries during the global financial and economic crisis of 2008-2009. This highlights the role of monetary policy regimes in cushioning small open economies from adverse external output shocks. To assess the welfare impact of external shocks on key macroeconomic variables under different monetary policy regimes, we numerically solve and calculate the welfare loss function of a dynamic stochastic general equilibrium (DSGE) model. We find that CPI inflation targeting minimizes welfare losses for import-to-GDP ratios from 0.3 to 0.9. However, welfare under the pegged exchange rate regime is almost equivalent to CPI inflation targeting when the import-to-GDP ratio is one while the Taylor-type rule minimizes welfare when the import-to-GDP ratio is 0.1. We calibrate the model and derive welfare implications for eight East Asian small open economies.Trade channel, Import-to-GDP ratio, small open economies, welfare, exchange rate regimes, inflation targeting, Taylor rule, foreign output shock

Predictability of exchange rates with Taylor rule fundamentals: Evidence from inflation-targeting emerging countries

We investigate the out-of-sample predictability of U.S. dollar exchange rates with Taylor rule fundamentals in thirteen emerging countries with inflation-targeting monetary policy regimes. We find some evidence of out-of-sample exchange rate predictability for Brazil, Czech Republic, Hungary, Philippines, Thailand, and South Africa. Plots of the coefficients of U.S. inflation and Philippine inflation predict the direction of the U.S. dollar-Philippine peso exchange rates to be opposite to that predicted by the Taylor principle

Purchasing power parity and country characteristics: evidence fron panel data tests

Abstract We examine long-run purchasing power parity (PPP) using panel data methods to test for unit roots in US dollar real exchange rates of 84 countries. We find stronger evidence of PPP in countries more open to trade, closer to the United States, with lower inflation and moderate nominal exchange rate volatility, and with similar economic growth rates as the United States. We also show that PPP holds for panels of European and Latin American countries, but not for African and Asian countries. Our findings demonstrate that country characteristics can help explain both adherence to and deviations from long-run PPP. JEL classification: F31, O5

Does wage-inflation targeting complement foreign exchange intervention? An evaluation of a multi-target, two-instrument monetary policy framework

We assess the inclusion of wage inflation as an intermediate target of an emerging central bank using a dynamic stochastic general equilibrium model with sticky wages and prices calibrated for the South Korean economy. The model includes wage inflation as an additional target jointly with domestic price inflation and the output gap in a Taylor- type interest rate rule operating with a sterilized foreign exchange (FX) intervention rule. Our results show a complementary relationship between wage inflation targeting and price inflation targeting. That is, by supplementing price inflation targeting with wage inflation targeting, welfare improves for cases with and without sterilized FX intervention. When intervention is in place, wage inflation targeting has the added advantage of reducing the volatilities of nominal exchange rate and foreign exchange reserves thereby promoting a more sustainable conduct of FX intervention.Accepted versio

Comparison of the CDC Backpack aspirator and the Prokopack aspirator for sampling indoor- and outdoor-resting mosquitoes in southern Tanzania.

BACKGROUND\ud \ud Resting mosquitoes can easily be collected using an aspirating device. The most commonly used mechanical aspirator is the CDC Backpack aspirator. Recently, a simple, and low-cost aspirator called the Prokopack has been devised and proved to have comparable performance. The following study evaluates the Prokopack aspirator compared to the CDC backpack aspirator when sampling resting mosquitoes in rural Tanzania.\ud \ud METHODS\ud \ud Mosquitoes were sampled in- and outdoors of 48 typical rural African households using both aspirators. The aspirators were rotated between collectors and households in a randomized, Latin Square design. Outdoor collections were performed using artificial resting places (large barrel and car tyre), underneath the outdoor kitchen (kibanda) roof and from a drop-net. Data were analysed with generalized linear models.\ud \ud RESULTS\ud \ud The number of mosquitoes collected using the CDC Backpack and the Prokopack aspirator were not significantly different both in- and outdoors (indoors p = 0.735; large barrel p = 0.867; car tyre p = 0.418; kibanda p = 0.519). The Prokopack was superior for sampling of drop-nets due to its smaller size. The number mosquitoes collected per technician was more consistent when using the Prokopack aspirator. The Prokopack was more user-friendly: technicians preferred using the it over the CDC backpack aspirator as it weighs considerably less, retains its charge for longer and is easier to manoeuvre.\ud \ud CONCLUSIONS\ud \ud The Prokopack proved in the field to be more advantageous than the CDC Backpack aspirator. It can be self assembled using simple, low-cost and easily attainable materials. This device is a useful tool for researchers or vector-control surveillance programs operating in rural Africa, as it is far simpler and quicker than traditional means of sampling resting mosquitoes. Further longitudinal evaluations of the Prokopack aspirator versus the gold standard pyrethrum spray catch for indoor resting catches are recommended

Genomic and serologic characterization of enterovirus A71 brainstem encephalitis

OBJECTIVE: In 2016, Catalonia experienced a pediatric brainstem encephalitis outbreak caused by enterovirus A71 (EV-A71). Conventional testing identified EV in the periphery but rarely in CSF. Metagenomic next-generation sequencing (mNGS) and CSF pan-viral serology (VirScan) were deployed to enhance viral detection and characterization. METHODS: RNA was extracted from the CSF (n = 20), plasma (n = 9), stool (n = 15), and nasopharyngeal samples (n = 16) from 10 children with brainstem encephalitis and 10 children with meningitis or encephalitis. Pathogens were identified using mNGS. Available CSF from cases (n = 12) and pediatric other neurologic disease controls (n = 54) were analyzed with VirScan with a subset (n = 9 and n = 50) validated by ELISA. RESULTS: mNGS detected EV in all samples positive by quantitative reverse transcription polymerase chain reaction (qRT-PCR) (n = 25). In qRT-PCR-negative samples (n = 35), mNGS found virus in 23% (n = 8, 3 CSF samples). Overall, mNGS enhanced EV detection from 42% (25/60) to 57% (33/60) (p-value = 0.013). VirScan and ELISA increased detection to 92% (11/12) compared with 46% (4/12) for CSF mNGS and qRT-PCR (p-value = 0.023). Phylogenetic analysis confirmed the EV-A71 strain clustered with a neurovirulent German EV-A71. A single amino acid substitution (S241P) in the EVA71 VP1 protein was exclusive to the CNS in one subject. CONCLUSION: mNGS with VirScan significantly increased the CNS detection of EVs relative to qRT-PCR, and the latter generated an antigenic profile of the acute EV-A71 immune response. Genomic analysis confirmed the close relation of the outbreak EV-A71 and neuroinvasive German EV-A71. A S241P substitution in VP1 was found exclusively in the CSF.Grants supporting this project include the National Multiple Sclerosis Society and the American Academy of Neurology award FAN-1608-25607 (R.D.S.), Clinical Research Training Scholarship P0534134 (P.S.R.), Sandler and William K. Bowes Jr Foundations (M.R.W., J.L.D., L.M.K., H.A.S., K.C.Z.), Rachleff Family Foundation (M.R.W.), and NINDS of the NIH under award K08NS096117 (M.R.W.) and F31NS113432 (K.E.L.). This study was partially supported by a grant from the Spanish National Health Institute [grant number PI15CIII-00020] and the European Regional Development Fund (FEDER funds). UCSF Biomedical Sciences Program (I.A.H., K.E.L.), UCSF Medical Scientist Training Program (K.E.L.), and the Chan Zuckerberg Biohub (J.E.P., W.W., C.K.C., J.L.D., E.D.C.) also supported this project.S

Calibration and Characterization of the IceCube Photomultiplier Tube

Over 5,000 PMTs are being deployed at the South Pole to compose the IceCube neutrino observatory. Many are placed deep in the ice to detect Cherenkov light emitted by the products of high-energy neutrino interactions, and others are frozen into tanks on the surface to detect particles from atmospheric cosmic ray showers. IceCube is using the 10-inch diameter R7081-02 made by Hamamatsu Photonics. This paper describes the laboratory characterization and calibration of these PMTs before deployment. PMTs were illuminated with pulses ranging from single photons to saturation level. Parameterizations are given for the single photoelectron charge spectrum and the saturation behavior. Time resolution, late pulses and afterpulses are characterized. Because the PMTs are relatively large, the cathode sensitivity uniformity was measured. The absolute photon detection efficiency was calibrated using Rayleigh-scattered photons from a nitrogen laser. Measured characteristics are discussed in the context of their relevance to IceCube event reconstruction and simulation efforts.Comment: 40 pages, 12 figure