An important and unresolved question is how the human brain processes speech for meaning after initial analyses in early auditory cortical regions. A variety of left-hemispheric areas have been identified that clearly support semantic processing, although a systematic analysis of directed interactions among these areas is lacking. We applied dynamic causal modeling of functional magnetic resonance imaging responses and Bayesian model selection to investigate, for the first time, experimentally induced changes in coupling among three key multimodal regions that were activated by intelligible speech: the posterior and anterior superior temporal sulcus (pSTS and aSTS, respectively) and pars orbitalis (POrb) of the inferior frontal gyrus. We tested 216 different dynamic causal models and found that the best model was a “forward” system that was driven by auditory inputs into the pSTS, with forward connections from the pSTS to both the aSTS and the POrb that increased considerably in strength (by 76 and 150%, respectively) when subjects listened to intelligible speech. Task-related, directional effects can now be incorporated into models of speech comprehension.
The acknowledged importance of uncertainty in economic decision making has stimulated the search for neural signals that could influence learning and inform decision mechanisms. Current views distinguish two forms of uncertainty, namely risk and ambiguity, depending on whether the probability distributions of outcomes are known or unknown. Behavioural neurophysiological studies on dopamine neurons revealed a risk signal, which covaried with the standard deviation or variance of the magnitude of juice rewards and occurred separately from reward value coding. Human imaging studies identified similarly distinct risk signals for monetary rewards in the striatum and orbitofrontal cortex (OFC), thus fulfilling a requirement for the mean variance approach of economic decision theory. The orbitofrontal risk signal covaried with individual risk attitudes, possibly explaining individual differences in risk perception and risky decision making. Ambiguous gambles with incomplete probabilistic information induced stronger brain signals than risky gambles in OFC and amygdala, suggesting that the brain's reward system signals the partial lack of information. The brain can use the uncertainty signals to assess the uncertainty of rewards, influence learning, modulate the value of uncertain rewards and make appropriate behavioural choices between only partly known options.
We explored potential contributing psychological factors in a patient (‘XF’) with focal retrograde amnesia, within the framework proposed by Kopelman (2000). In particular, we investigated the psychological trait of self-enhancement. We constructed a self-report questionnaire measure of self-enhancement and compared XF’s score on this measure with the scores of 61 control participants. XF was found to have a significantly greater level of self-enhancement than the entire control group, and also than a smaller sample of age- and sex-matched controls. We propose that heightened self-enhancement may reflect a premorbid tendency that potentially predisposes individuals to develop retrograde amnesia.
The bulk of evidence on the lack of international risk sharing is based on regressions of idiosyncratic consumption growth on idiosyncratic output growth. This paper argues that the results from such regressions obtained from international data are, however, not directly comparable to those based on regional data: the standard practice of running such regressions on international data fails to account for persistent international differentials in consumer prices, whereas - implicitly - most of the literature based on regional data has accounted for these differences. When risk sharing regressions are set up in conceptually the same way in international and regional data sets, the estimated coefficients are also very similar. To explore this result further, we adapt the variance decomposition of Asdrubali Sørensen and Yosha (QJE
1996) to allow for deviations from purchasing power parity across countries. While quantity (income and credit) flows are the dominant channel of risk sharing among regions, relative consumption and output price (internal terms
of trade) fluctuations account for the bulk of the deviation from the complete markets outcome in international data. To the extent that persistent differences in consumer prices are an indication of goods market segmentation, our findings provide empirical evidence for the proposition by Obstfeld and Rogoff (2000) that segmented international goods markets rather than asset
market incompleteness may account for the (apparent) lack of risk sharing between countries.
We present a model of structural change due to non-linear Engel-curves for consumer goods. Goods are sequentially introduced starting out as a luxury with high income elasticity and ending up as a necessity with low income elasticity. Although this leads to rising and falling sectoral employment shares, the model exhibits a steady growth path along which the Kaldor facts are satisfied. Extending the basic model to the case of endogenous product innovations shows that complementarities between aggregate and sectoral growth may give rise to multiple equilibria.
This paper provides further evidence on the recent increase in international consumption risk sharing. We show that this increase is more pronounced among EU and EMU countries than among non-E(M)U industrialised countries. We also show that the patterns of international but intra-European risk
sharing have started to diverge from what is found at the level of the OECD as a whole. During the 1990s, capital income flows have started to play a relatively more important role between European countries, whereas the increase in international risk sharing among the OECD as a whole is almost exclusively driven by better consumption smoothing through the accumulation or decumulation of foreign assets. This EMU effect on the pattern of risk sharing survives once we control for differences in international portfolio holdings: while we find that countries with higher equity cross-holdings also tend to share more risk through capital income flows there remains an independent EMU-effect on the way how risk is shared. While it is too early to evaluate these findings conclusively, we discuss some possible interpretations
and their implications for economic policy.
This paper studies the long-run relationship between consumption, asset wealth and income - the consumption-wealth ratio - based on German data from 1980 to 2003. We find that departures from this long-run relationship
mainly predict adjustments in income. The German consumption-wealth ratio also contains considerable forecasting power for a range of business cycle indicators, including the unemployment rate. This finding is in contrast to earlier studies for some of the Anglo-Saxon economies that have shown that the consumption-wealth ratio reverts to its long-run mean mainly through subsequent adjustments in asset prices. While the German consumption
wealth ratio contains little information about future changes in German asset prices, we report that the U.S. consumption-wealth ratio has considerable forecasting power for the German stock market. One explanation of these findings is that in Germany - due to structural differences in the financial and pension systems - the share of publicly traded equity in aggregate household wealth is much smaller than in the Anglo-Saxon countries. We discuss the implications of our results for the measurement of a potential wealth effect on consumption.
Relative Einkommensunterschiede lösen innerhalb einer Referenzgruppe oftmals Neid aus. Damit wird das soziale Verhalten und die individuelle Leistungsbereitschaft beeinflusst. In der ökonomischen Forschung ist dennoch bislang der Zusammenhang zwischen relativen Einkommensunterschieden und individueller Leistung wenig untersucht worden. Ein wesentlicher Grund dafür ist sicherlich die schwierige Messbarkeit von „Leistung“. Unser
Beitrag analysiert den Einfluss von relativen Einkommensunterschieden auf die Leistung von Fußballprofis der deutschen Bundesliga, weil deren Leistung erfolgreich erfasst wurde. Insgesamt werden 1040 Spieler über einen Zeitraum von 8 Spielzeiten zwischen 1995 und 2004 untersucht. Relative Einkommensunterschiede zwischen Mannschaftskollegen erweisen sich als entscheidender Einfluss auf die individuelle Leistung der Spieler. Eine
Verschlechterung in der relativen Einkommensposition vermindert ceteris paribus die individuelle Leistungsbereitschaft. Eine höhere Einkommensungleichheit verstärkt solche positionalbedingten Externalitäten. Auch eine Veränderung der Teamkonstellation bewirkt signifikante Änderungen der individuellen Leistungen.
Terrorism has large social costs that are difficult to quantify for the well-known problems of eliciting people’s preferences for public goods. We use the LSA to assess these costs in utility and monetary terms. Based on combined cross-section time-series data, we estimate the costs of terrorism for France and the British Isles. We find large negative effects of terrorism on life satisfaction that translate into considerable compensating surpluses for a hypothetical reduction in terrorism, in particular for the serious conflict in Northern Ireland. The effects of terrorism are robust and differ across groups in accordance with prior expectations.
