Establishing Credibility: Evolving Perceptions of the European Central Bank

The credibility of a central bank’s anti-inflation stance, a key determinant of its success, may reflect institutional structure or, more dynamically, the history of policy decisions. The first years of the European Central Bank (ECB) provide a natural experiment for considering whether, and how, central bank credibility evolves. In this paper, we present a model demonstrating how the high-frequency response of asset prices to news reflects market perceptions of the anti-inflation stance of a central bank. Empirical tests of this model on high frequency data, regressing both the change in the slope of the German yield curve and the change in the euro/dollar exchange rate on the surprise component of price news, suggest significant instability in the market’s perception of the policy stance of the ECB during its first five years of operation. Estimated smoothed paths of the coefficients linking news to asset prices show that these coefficients change with policies undertaken by the ECB. In contrast, there is no evidence of parameter instability for the response of the slope of the United States yield curve to price news during this period, suggesting no comparable evolution in the market perceptions of the commitment to inflation fighting by the Federal Reserve.Central Banking, European Central Bank, Federal Reserve, inflation, exchange rate, credibility, yield curve

The real exchange rate and foreign direct investment in the United States: relative wealth vs. relative wage effects

There has been a significant correlation between inward foreign direct investment in the United States and the U.S. real exchange rate since the 1970s. Two alternative reasons for this relationship are that the real exchange rate affects the relative cost of production and that the real exchange rate alters reTative wealth across countries. In this paper we explore these alternatives by examining the determinants of four measures of inward foreign direct investment to the United States from seven industrial countries over the period 1979 to 1988. We find strong evidence that relative wealth significantly affects foreign direct investment in the United States. We find little evidence that relative wages have a significant impact on the determination of foreign direct investment in the United States. These results are robust to the choice of countries in our sample and when controlling for changes in tax codes.Investments, Foreign - United States ; Foreign exchange rates

Establishing Credibility: Evolving Perceptions of the European Central Bank

The perceptions of a central bank’s inflation aversion may reflect institutional structure or, more dynamically, the history of its policy decisions. In this paper, we present a novel empirical framework that uses high frequency data to test for persistent variation in market perceptions of central bank inflation aversion. The first years of the European Central Bank (ECB) provide a natural experiment for this model. Tests of the effect of news announcements on the slope of yield curves in the euro-area, and on the euro/dollar exchange rate, suggest that the market’s perception of the policy stance of the ECB during its first six years of operation significantly evolved, with a belief in its inflation aversion increasing in the wake of its monetary tightening. In contrast, tests based on the response of the slope of the United States yield curve to news offer no comparable evidence of any change in market perceptions of the inflation aversion of the Federal Reserve.Central Banking, European Central Bank, Federal Reserve, inflation, exchange rate, monetary policy, credibility, yield curve

Establishing Credibility: Evolving Perceptions of the European Central Bank

The perceptions of a central bank's inflation aversion may reflect institutional structure or, more dynamically, the history of its policy decisions. In this paper, we present a novel empirical framework that uses high frequency data to test for persistent variation in market perceptions of central bank inflation aversion. The first years of the European Central Bank (ECB) provide a natural experiment for this model. Tests of the effect of news announcements on the slope of yield curves in the euro-area, and on the euro/dollar exchange rate, suggest that the market's perception of the policy stance of the ECB during its first six years of operation significantly evolved, with a belief in its inflation aversion increasing in the wake of its monetary tightening. In contrast, tests based on the response of the slope of the United States yield curve to news offer no comparable evidence of any change in market perceptions of the inflation aversion of the Federal Reserve.

Markets, Contracts, or Integration? The Adoption, Diffusion, and Evolution of Organizational Form

The rise of contract farming and vertical integration is one of the most important changes in modern agriculture. Yet the adoption and diffusion of these new forms of organization has varied widely across regions, commodities, or farm types, however. Transaction cost theories and the like are not fully effective at explaining the variation of adoption rates of different organizational forms, in part because of their inherent static nature. In order to explain the adoption, diffusion and evolution of organizational form, a more dynamic framework is required. This paper lays out such a framework for understanding the evolution of organizational practices in U.S. agriculture by drawing on existing theories of economic organization, the diffusion of technological innovation, and organizational complementarities. Using recent trends as stylized facts we argue that the agrifood sector is characterized by strong complementarities among its constituent features and that these complementarities help explain the stylized facts. We also discuss several testable hypotheses concerning changes in organizational form in agriculture.contracting, vertical integration, organizational innovation, diffusion, Institutional and Behavioral Economics, L14, L22, Q13, O33,

Stable isochronal synchronization of mutually coupled chaotic lasers

The dynamics of two mutually coupled chaotic diode lasers are investigated experimentally and numerically. By adding self feedback to each laser, stable isochronal synchronization is established. This stability, which can be achieved for symmetric operation, is essential for constructing an optical public-channel cryptographic system. The experimental results on diode lasers are well described by rate equations of coupled single mode lasers

Congenitally acquired persistent lymphocytic choriomeningitis viral infection reduces neuronal progenitor pools in the adult hippocampus and subventricular zone

Lymphocytic choriomeningitis virus (LCMV) can be transmitted through congenital infection, leading to persistent infection of numerous organ systems including the central nervous system (CNS). Adult mice persistently infected with LCMV (LCMV-cgPi mice) exhibit learning deficits, such as poor performance in spatial discrimination tests. Given that deficits in spatial learning have been linked to defects in adult neurogenesis, we investigated the impact of congenital LCMV infection on generation of neuroblasts from neural progenitor cells within neurogenic zones of adult mice. In LCMV-cgPi mice, QPCR and immunohistochemistry detected presence of LCMV glycoprotein-coding RNA and nucleoprotein in the hippocampal dentate gyrus and subventricular zone (SVZ), sites of neurogenesis that harbor populations of neuroblasts. Numbers of neuroblasts were reduced in LCMV-cgPi mice, as determined by IHC quantification, and analysis of BrdU incorporation by flow cytometry revealed lower numbers of BrdU-labeled neuroblasts. Additionally, TUNEL assays performed in situ showed increased numbers of apoptotic cells in the two neurogenic regions. Next, neurosphere cultures were infected in vitro with LCMV and differentiated to create a population of cells that consisted of both transit amplifying cells and neuroblasts. Immunocytochemical and TUNEL assays revealed increased numbers of TUNEL-positive cells that express nestin, suggesting that the drop in numbers of neuroblasts was due to a combination of impaired proliferation and apoptosis of progenitor cells. LCMV-cgPi mice exhibited transcriptional up-regulation several cytokines and chemokines, including gamma-interferon inducible chemokines CXCL9 and CXCL10. Chronic up-regulation of these chemokines can facilitate a pro-inflammatory niche that may contribute to defects in neurogenesis

Forces between functionalized silica nanoparticles in solution

To prevent the flocculation and phase separation of nanoparticles in solution, nanoparticles are often functionalized with short chain surfactants. Here we present fully-atomistic molecular dynamics simulations which characterize how these functional coatings affect the interactions between nanoparticles and with the surrounding solvent. For 5 nm diameter silica nanoparticles coated with poly(ethylene oxide) (PEO) oligomers in water, we determined the hydrodynamic drag on two approaching nanoparticles moving through solvent and on a single nanoparticle as it approaches a planar surface. In most circumstances, acroscale fluid theory accurately predicts the drag on these nano-scale particles. Good agreement is seen with Brenner's analytical solutions for wall separations larger than the soft nanoparticle radius. For two approaching coated nanoparticles, the solvent-mediated (velocity-independent) and lubrication (velocity-dependent) forces are purely repulsive and do not exhibit force oscillations that are typical of uncoated rigid spheres.Comment: 4 pages, 3 fig

DIET OF JUVENILE BURBOT AND INSIGHT INTO GAPE LIMITATION

Throughout much of their distribution, Burbot (Lota lota ) populations are declining or have been extirpated.  Burbot in the Kootenai River, Idaho represent one such imperiled population.  In an effort to restore Burbot in the Kootenai River, managers have turned to conservation aquaculture.  However, no appreciable increase in natural recruitment has been observed in the system.  The lack of natural recruitment is believed to be partly due to a deficiency of high-quality prey.  As a result, we sought to i) describe the diet of juvenile Burbot, ii) evaluate the influence of Burbot mouth gape on diet and iii) estimate prey availability at release locations.  Burbot were stocked into two earthen ponds at the Boundary Creek Wildlife Management Area (BCWMA) and sampled weekly to evaluate diet.  Zooplankton were sampled weekly from each pond and from release locations of hatchery-reared Burbot (i.e., Kootenai River, Goat River, Boundary Creek, Deep Creek) to quantify prey availability.  Over the course of the study (~3 months), Burbot primarily fed on Cyclopoida.  Burbot never appeared to be gape limited and exhibited little variability in the size of zooplankton ingested.  Zooplankton densities at stocking locations were relatively low in comparison to BCWMA ponds.  Low zooplankton densities at release sites indicate that alternative management actions may need to be considered to enhance Burbot recruitment in the Kootenai River drainage