What Does the Yield Curve Tell Us About Exchange Rate Predictability?

This paper uses information contained in the cross-country yield curves to test the asset-pricing approach to exchange rate determination, which models the nominal exchange rate as the discounted present value of its expected future fundamentals. Research on the term structure of interest rates has long argued that the yield curve contains information about future economic activity such as GDP growth and inflation. Bringing this lesson to the international context, we extract the Nelson-Siegel (1987) factors of relative level, slope, and curvature from cross-country yield differences to proxy expected movements in future exchange rate fundamentals. Using monthly data between 1985-2005 for the United Kingdom, Canada, Japan and the US, we show that the yield curve factors indeed can explain and predict bilateral exchange rate movements and excess currency returns one month to two years ahead. Out-of-sample analysis also shows the yield curve factors to outperform a random walk in forecasting short-term exchange rate returns.

Estimating the Impacts of Climate Change on Mortality in OECD Countries

The major contribution of this study is to combines both climatic and macroeconomic factors simultaneously in the estimation of mortality using the capital city of 22 OECD countries from the period 1990 to 2008. The empirical results provide strong evidences that higher income and a lower unemployment rate could reduce mortality rates, while the increases in precipitation and temperature variation have significantly positive impacts on the mortality rates. The effects of changing average temperature on mortality rates in summer and winter are asymmetrical and also depend on the location. Combining the future climate change scenarios with the estimation outcomes show that mortality rates in OECD countries in 2100 will be increased by 3.77% to 5.89%.Climate change; mortality; panel data model

A Macro-Finance Approach to Exchange Rate Determination

The nominal exchange rate is both a macroeconomic variable equilibrating international markets and a financial asset that embodies expectations and prices risks associated with cross border currency holdings. Recognizing this, we adopt a joint macro-finance strategy to model the exchange rate. We incorporate into a monetary exchange rate model macroeconomic stabilization through Taylor-rule monetary policy on one hand, and on the other, market expectations and perceived risks embodied in the cross-country yield curves. Using monthly data between 1985 and 2005 for Canada, Japan, the UK and the US, we employ a state-space system to model the relative yield curves between country-pairs using the Nelson and Siegel (1987) latent factors, and combine them with monetary policy targets (output gap and inflation) into a vector autoregression (VAR) for bilateral exchange rate changes. We find strong evidence that both the financial and macro variables are important for explaining exchange rate dynamics and excess currency returns, especially for the yen and the pound rates relative to the dollar. Moreover, by decomposing the yield curves into expected future yields and bond market term premiums, we show that both expectations about future macroeconomic conditions and perceived risks are priced into the currencies. These findings provide support for the view that the nominal exchange rate is determined by both macroeconomic as well as financial forces.

Modulation of the slow/common gating of CLC channels by intracellular cadmium.

Members of the CLC family of Cl(-) channels and transporters are homodimeric integral membrane proteins. Two gating mechanisms control the opening and closing of Cl(-) channels in this family: fast gating, which regulates opening and closing of the individual pores in each subunit, and slow (or common) gating, which simultaneously controls gating of both subunits. Here, we found that intracellularly applied Cd(2+) reduces the current of CLC-0 because of its inhibition on the slow gating. We identified CLC-0 residues C229 and H231, located at the intracellular end of the transmembrane domain near the dimer interface, as the Cd(2+)-coordinating residues. The inhibition of the current of CLC-0 by Cd(2+) was greatly enhanced by mutation of I225W and V490W at the dimer interface. Biochemical experiments revealed that formation of a disulfide bond within this Cd(2+)-binding site is also affected by mutation of I225W and V490W, indicating that these two mutations alter the structure of the Cd(2+)-binding site. Kinetic studies showed that Cd(2+) inhibition appears to be state dependent, suggesting that structural rearrangements may occur in the CLC dimer interface during Cd(2+) modulation. Mutations of I290 and I556 of CLC-1, which correspond to I225 and V490 of CLC-0, respectively, have been shown previously to cause malfunction of CLC-1 Cl(-) channel by altering the common gating. Our experimental results suggest that mutations of the corresponding residues in CLC-0 change the subunit interaction and alter the slow gating of CLC-0. The effect of these mutations on modulations of slow gating of CLC channels by intracellular Cd(2+) likely depends on their alteration of subunit interactions

Genuine Entanglement of Four Qubit Cluster Diagonal States

We reduce the necessary and sufficient biseparable conditions of the four qubit cluster diagonal state to concise forms. Only 4 out of the 15 parameters are proved to be relevant in specifying the genuine entanglement of the state. Using the relative entropy of entanglement as the entanglement measure, we analytically find the genuine entanglement of all the four qubit cluster diagonal states. The formulas of the genuine entanglement are of five kinds, for seven different parameter regions of entanglement.Comment: 7 pages, 4 figure