Many postulated relations in finance imply that expected asset returns should monotonically increase in a certain characteristic. To examine the validity of such a claim, one
typically considers a finite number of return categories, ordered according to the underlying characteristic. A standard approach is to simply test for a difference in expected returns between the highest and the lowest return category. However, such an approach can be misleading, since the relation of expected returns could be flat, or even decreasing, in the range of intermediate categories. A new test, taking the entire range of categories into
account, has been proposed by Patton and Timmermann (2010). Unfortunately, the test is based on an additional assumption that can be violated in many applications of practical interest. As a consequence, it can be quite likely for the test to ‘establish’ strict monotonicity of expected asset returns when such a relation actually does not exist. We offer some alternative tests which do not share this problem. The behavior of the various tests is illustrated via Monte Carlo studies. We also present empirical applications to real data.
Dynamic causal modelling (DCM) for steady-state responses (SSR) is a framework for inferring the mechanisms that underlie observed electrophysiological spectra, using biologically plausible generative models of neuronal dynamics. In this paper, we examine the dynamic repertoires of nonlinear conductance-based neural population models and propose a generative model of their power spectra. Our model comprises an ensemble of interconnected excitatory and inhibitory cells, where synaptic currents are mediated by fast, glutamatergic and GABAergic receptors and slower voltage-gated NMDA receptors. We explore two formulations of how hidden neuronal states (depolarisation and conductances) interact: through their mean and variance (mean-field model) or through their mean alone (neural-mass model). Both rest on a nonlinear Fokker-Planck description of population dynamics, which can exhibit bifurcations (phase transitions). We first characterise these phase transitions numerically: by varying critical model parameters, we elicit both fixed points and quasiperiodic dynamics that reproduce the spectral characteristics (~2-100Hz) of real electrophysiological data. We then introduce a predictor of spectral activity using centre manifold theory and linear stability analysis. This predictor is based on sampling the system's Jacobian over the orbits of hidden neuronal states. This predictor behaves consistently and smoothly in the region of phase transitions, which permits the use of gradient descent methods for model inversion. We demonstrate this by inverting generative models (DCMs) of SSRs, using simulated data that entails phase transitions.
This paper constructs a growth model that is consistent with salient features of the recent Chinese growth experience: high output growth, sustained returns on capital investment, extensive reallocation within the manufacturing sector, falling labor share and accumulation of a large foreign surplus. The building blocks of the theory are asymmetric financial imperfections and heterogeneous productivity. Some firms use more productive technologies, but low-productivity firms survive because of better access to credit markets. Due to the financial imperfections, high-productivity firms — which are run by entrepreneurs — must be financed out of internal savings. If these savings are sufficiently large, the high-productivity firms outgrow the low-productivity firms and attract an increasing employment share. The downsizing of the financially integrated firms forces a growing share
of domestic savings to be invested in foreign assets, generating a foreign surplus. A calibrated version of the theory can account quantitatively for China’s growth
experience during 1992-2007.
Compassion has been suggested to be a strong motivator for prosocial behavior. While research has demonstrated that compassion training has positive effects on mood and health, we do not know whether it also leads to increases in prosocial behavior. We addressed this question in two experiments. In Experiment 1, we introduce a new prosocial game, the Zurich Prosocial Game (ZPG), which allows for repeated, ecologically valid assessment of prosocial behavior and is sensitive to the influence of reciprocity, helping cost, and distress cues on helping behavior. Experiment 2 shows that helping behavior in the ZPG increased in participants who had received short-term compassion training, but not in participants who had received short-term memory training. Interindividual differences in practice duration were specifically related to changes in the amount of helping under no-reciprocity conditions. Our results provide first evidence for the positive impact of short-term compassion training on prosocial behavior towards strangers in a training-unrelated task.
We used concurrent transcranial magnetic stimulation and functional MRI (TMS-fMRI) during a visuospatial cueing paradigm in humans, to study the causal role of the right angular gyrus (AG) as a source of attentional control. Our findings show that TMS over the right AG (high vs. low intensity) modulates neural responses interhemispherically, in a manner that varies dynamically with the current attentional condition. The behavioural impact of such TMS depended not only on the target hemifield but also on exogenous cue validity, facilitating spatial reorienting to invalidly cued right visual targets. On a neural level, right AG TMS had corresponding interhemispheric effects in the left AG and left retinotopic cortex, including area V1. We conclude that the direction of covert visuospatial attention can involve dynamic interplay between the right AG and remote interconnected regions of the opposite left hemisphere, whereas our findings also suggest that the right AG can influence responses in the retinotopic visual cortex.
Adolescence reflects a period of increased rates of anxiety, depression, and suicide. Yet most teens emerge from this period with a healthy, positive outcome. In this article, we identify biological factors that may increase risk for some individuals during this developmental period by: (1) examining changes in neural circuitry underlying core phenotypic features of anxiety as healthy individuals transition into and out of adolescence; (2) examining genetic factors that may enhance the risk for psychopathology in one individual over another using translation from mouse models to human neuroimaging and behavior; and (3) examining the effects of early experiences on core phenotypic features of anxiety using human neuroimaging and behavioral approaches. Each of these approaches alone provides only limited information on genetic and environmental influences on complex human behavior across development. Together, they reflect an emerging field of translational developmental neuroscience in forming important bridges between animal models of neurodevelopmental and neuropsychiatric disorders.
Consider the problem of testing s null hypotheses simultaneously. In order to deal with the multiplicity problem, the classical approach is to restrict attention to multiple testing procedures that control the familywise error rate (FWE). The closure method of Marcus et al. (1976) reduces the problem of constructing such procedures to one of constructing single tests that control the usual probability of a Type 1 error. It was shown by Sonnemann (1982, 2008) that any coherent multiple testing procedure can be constructed using the closure method. Moreover, it was shown by Sonnemann and Finner (1988) that any incoherent multiple testing procedure can be replaced by a coherent multiple testing procedure which is at least as good. In this paper, we first show an analogous result for dissonant and consonant multiple testing procedures. We show further that, in many cases, the improvement of the consonant multiple testing procedure over the dissonant multiple testing procedure may in fact be strict in the sense that it has strictly greater probability of detecting a false null hypothesis while still maintaining control of the FWE. Finally, we show how consonance can be used in the construction of some optimal maximin multiple testing procedures. This last result is especially of interest because there are very few results on optimality in the multiple testing literature.
Recent studies have shown that music is capable of conveying semantically meaningful concepts. Several questions have subsequently arisen particularly with regard to the precise mechanisms underlying the communication of musical meaning as well as the role of specific musical features. The present article reports three studies investigating the role of affect expressed by various musical features in priming subsequent word processing at the semantic level. By means of an affective priming paradigm, it was shown that both musically trained and untrained participants evaluated emotional words congruous to the affect expressed by a preceding chord faster than words incongruous to the preceding chord. This behavioral effect was accompanied by an N400, an ERP typically linked with semantic processing, which was specifically modulated by the (mis)match between the prime and the target. This finding was shown for the musical parameter of consonance/dissonance (Experiment 1) and then extended to mode (major/minor) (Experiment 2) and timbre (Experiment 3). Seeing that the N400 is taken to reflect the processing of meaning, the present findings suggest that the emotional expression of single musical features is understood by listeners as such and is probably processed on a level akin to other affective communications (i.e., prosody or vocalizations) because it interferes with subsequent semantic processing. There were no group differences, suggesting that musical expertise does not have an influence on the processing of emotional expression in music and its semantic connotations.
This contribution seeks to measure preferences for health insurance of individuals with and without chronic conditions in two countries, Germany and the Netherlands. The objective is to test the presumption that preferences between these two subpopulations differ and to see whether having a chronic condition has a different influence on preferences depending on the country. The evidence comes from two Discrete Choice Experiments performed in 2005 (Germany) and 2006 (the Netherlands, right after a major health reform). Results point to an even more marked resistance against restrictions of physician choice among individuals with chronic conditions in both countries. Thus, the alleged beneficiaries of Disease Management Programs would have to be highly compensated for accepting the restrictions that go with them.
Two pension reforms in Austria increased the early retirement age from 60 to 62 for men and from 55 to 58.25 for women. The reforms reduced early retirement by 18.9 percentage points among affected men aged 60-62 and by 22.3 percentage points among affected women aged 55-58.25. The associated increase in employment was merely 6.8 percentage points among men and 10.1 percentage points among women. The reforms had large spillover effects to the unemployment insurance program but negligible effects on disability insurance claims. Specifically, unemployment increased by roughly 10 percentage points both among men and women. Spillover effects had substantial fiscal implications. Absent spillover effects, the reduction of net government expenditures would have amounted to 264 million Euros per year. Due to higher unemployment insurance claims and associated foregone income tax revenues the actual reduction was only 148 million Euros. High-wage and healthy workers carried the bulk of the fall in net government expenditures. Low-wage and less healthy workers generated much less government savings as they either continue to retire early via disability pensions or bridge the gap to regular retirement by drawing unemployment benefits.
