bluuebunny/crossref_metadata_2025 huggingface dataset:
Effects of areca nut extracts on the functions of human neutrophils in vitro
Authors: Hung Shan‐Ling , Chen Yu‐Ling , Wan Hsiao‐Ching , Liu Tsung‐Yun , Chen Yen‐Ting , Ling Li‐Jane
Published: December 2003

Aqueous extracts of ripe areca nut without husk (ripe ANE) and fresh and tender areca nut with husk (tender ANE) were examined for their effects on the defensive functions of human neutrophils. Exposure of peripheral blood neutrophils to ripe ANE and tender ANE inhibited their bactericidal activity against oral pathogens, including Actinobacillus actinomycetemcomitans and Streptococcus mutans, in a dose‐dependent manner. At the concentrations tested, ripe and tender ANEs did not significantly affect the viability of neutrophils as verified by their ability to exclude trypan blue dye. However, both ANEs inhibited the production of bactericidal superoxide anion by neutrophils as measured by cytochrome c reduction. Moreover, the ripe ANE inhibited neutrophils more effectively than did tender ANE. Arecoline, a major alkaloid of areca nut, only exhibited an inhibitory effect on the functions of neutrophils when high concentrations were used. Therefore, arecoline could not be used to explain the inhibitory effects observed for ANEs. In conclusion, our results demonstrated that ripe and tender ANEs reduced the antibacterial activity and the superoxide anion production of neutrophils. This effect may contribute to a less efficient elimination of bacteria from the periodontal environment. Inhibition of the antimicrobial functions of neutrophils may alter the microbial ecology of the oral cavity, and this may be one possible mechanism by which areca nut compromises the oral health of users of areca nut products.
Nitric oxide synthase type‐II is synthesized by human gingival tissue and cultured human gingival fibroblasts
Authors: Kendall H. K. , Haase H. R. , Li H. , Xiao Y. , Bartold P. M.
Published: December 2003

Nitric oxide is known to be an important inflammatory mediator, and is implicated in the pathophysiology of a range of inflammatory disorders. The aim of this study was to determine the localization and distribution of endothelial NOS (NOSII) in human gingival tissue, and to ascertain if human gingival fibroblasts express NOS‐II when stimulated with interferon gamma (IFN‐γ) and bacterial lipopolysaccharide (LPS). The distribution of NOS‐II in inflamed and non‐inflamed specimens of human gingivae was studied using a monoclonal antibody against nitric oxide synthase II. Cultures of fibroblasts derived from healthy human gingivae were used for the cell culture experiments. The results from immunohistochemical staining of the tissues indicated an upregulation of NOS‐II expression in inflamed compared to non‐inflamed gingival tissue. Fibroblasts and inflammatory cells within the inflamed connective tissue were positively stained for NOS‐II. In addition, basal keratinocytes also stained strongly for NOS‐II, in both healthy and inflamed tissue sections. When cultured human gingival fibroblasts were stimulated by INF‐γ and Porphyromonas gingivalis LPS, NOS‐II was more strongly expressed than when the cells were exposed to LPS or IFN‐γ alone. These data suggest that, as for other inflammatory diseases, NO plays a role in the pathophysiology of periodontitis.
The fibrillar structure of cement lines on resorbed root surfaces of human teeth
Authors: Yamamoto T. , Domon T. , Takahashi S. , Suzuki R. , Islam M. N.
Published: December 2003

The cement lines between reparative cementum and resorbed dentin or cementum in human teeth were observed by light microscopy and scanning electron microscopy combined with NaOH maceration. The NaOH maceration was used to remove interfibrillar substances and to observe the fibrillar architecture of the cement lines directly. Light microscopy showed that the cement lines were rich in proteoglycans with mucopolysaccharides, but deficient in collagen fibrils. The cement lines were artificially broken after treatment with hyaluronidase, which digests some of the mucopolysaccharides, but digests no collagen fibrils. Scanning electron microscopy showed that fibril intermingling occurred only in some places between reparative cementum and resorbed tissue. These findings suggested that the proteoglycans in cement lines mediate the attachment between new and old mineralized tissue.
Prevalence of periodontal pathogens in localized and generalized forms of early‐onset periodontitis
Authors: Mullally Brian H. , Dace Barry , Shelburne Charles E. , Wolff Larry F. , Coulter Wilson A.
Published: December 2003

The primary objectives of this study were to investigate the prevalence of 8 putative periodontal pathogens in subjects with early‐onset periodontitis (EOP) and to evaluate the microbial differences between localized and generalized forms of this periodontal disease condition. Thirty‐one females and 11 males with a mean age of 30.3 (s.d. 4.0) years were examined. Seventeen subjects had generalized (GEOP) and 25 had localized early‐onset periodontitis (LEOP). Subgingival plaque samples were assayed using PCR which provided subject prevalence data for the pathogens; Bacteroides forsythus 78.6%, Treponema denticola 88.1%, Actinobacillus actinomycetemcomitans 19.0%, Porphyromonas gingivalis 16.7%, Prevotella intermedia 40.4%, Prevotella nigrescens 61.9%, Eikenella corrodens 42.3% and Campylobacter rectus 92.8%. Only 3 healthy sites harbored one or more of these periodontal pathogens. Seven of the 8 subjects positive for A. actinomycetemcomitans had LEOP. P. intermedia was present in 58.8% of GEOP compared with 28% of LEOP subjects (p=0.046). At 82.4% of GEOP sites P. nigrescens was present while this bacteria was detected at 52% of LEOP (p=0.044). P.gingivalis was isolated from 22.6% of females but no male subjects (p=0.084). C. rectus was recovered from all female subjects compared to 72.7% of males (p=0.014). A. actinomycetemcomitans(37.5%) and C. rectus(86.5%) were more frequently identified in non‐smokers compared to 7.6% and 68.8% of smokers, respectively (p<0.05). Microbial associations coincided with the clinical division of the cases into LEOP and GEOP in 83% of the subjects.
Herpesviruses 6, 7 and 8 in HIV‐ and non‐HIV‐associated periodontitis
Authors: Mardirossian A. , Contreras A. , Navazesh M. , Nowzari H. , Slots J.
Published: December 2003

Human herpesviruses, especially cytomegalovirus and Epstein–Barr virus type‐1, occur with higher frequency in subgingival specimens from periodontitis lesions than from healthy/gingivitis sites. Little or no information is available on the relationship between herpesvirus 6 (HHV‐6), herpesvirus 7 (HHV‐7) and herpesvirus 8 (HHV‐8) and periodontal disease. This study determined the periodontal occurrence of HHV‐6, HHV‐7 and HHV‐8 in 21 HIV‐seropositive and 14 HIV‐negative adults affected by periodontitis. Gingival biopsy specimens and paper‐point samples of subgingival plaque were collected from sites showing 5 mm or more in probing depth. Nested polymerase chain reaction methodology was employed in herpesvirus identification. In the HIV‐seropositive periodontitis group, 90% of gingival biopsies and 62% of subgingival plaque samples revealed at least one of the test viruses. HHV‐6 occurred in 71%, HHV‐7 in 67% and HHV‐8 in 24% of gingival biopsies. In the HIV‐negative adult periodontitis group, 43% of gingival biopsies showed at least 1 of the test viruses, with HHV‐6 present in 21% and HHV‐7 in 29% of gingival biopsies and with no detection of HHV‐8. The combined occurrence of the 3 test herpesviruses was significantly higher in HIV‐seropositive than in HIV‐negative adult periodontitis patients (p=0.008). The human periodontium might constitute a site of infection or reservoir for HHV‐6, ‐7, ‐8.
Glucocorticoid receptor antagonist RU 486 treatment reduces periodontitis in Fischer 344 rats
Authors: Breivik T. , Thrane P. S. , Gjermo P. , Opstad P. K.
Published: December 2003

Inappropriate hypothalamic–pituitary–adrenal (HPA) axis regulation of immune responses to bacterial challenges has been found to play an important role in infections and inflammatory disease susceptibility and progression. In the present study we investigated the tissue effects of experimental periodontitis in Fischer 344 rats, which were subcutaneously (s.c.) injected with 20 mg/kg of the glucocorticoid receptor antagonist and active antiglucocorticoid agent RU 486 every second day over a period of 14 d. Periodontitis was induced by placing a bacterial plaque retentive silk ligature in the gingival sulcus around the neck of maxillary right 2nd molar teeth 1 d after the first injection in 10 RU 486‐treated and 10 vehicle (1,2‐propanediol)‐treated control animals. The contralateral maxillary left 2nd molars served as internal control teeth for naturally occurring periodontitis. Disease progression was evaluated radiographically and histometrically. The average level of corticosterone in blood at sacrifice was significantly lower in the RU 486‐treated animals as compared to controls. The experimental animals also developed significantly less periodontal breakdown at both experimental and control teeth compared to the vehicle‐treated control animals. The results support our recent findings showing that HPA hyper‐reactivity, either genetically determined or experimentally induced, stimulates periodontal disease susceptibility. These findings suggest that central nervous regulation of inflammatory responses to dental plaque microorganisms in the gums may modulate periodontal disease susceptibility and progression.
Altered expression level of calbindin D28k in the periodontal ligament of rat molar in response to changes in occlusal force
Authors: Onishi Tomoyuki , Ooshima Takashi , Sobue Shizuo , El‐Sharaby Ashraf , Kurisu Kojiro , Wakisaka Satoshi
Published: December 2003

The present immunohistochemical study was designed to investigate the alteration in the expression level of calbindin D28k in the periodontal ligament of the rat molar in response to changes in occlusal force to clarify the physiological role(s) of this protein in the ligament. In normal periodontal ligament of the lower first molar, immunoreactivity for calbindin D28k was found in the spindle‐shaped cells, presumably fibroblasts, at the alveolar portion of the ligament at the distal side of the mesial root and mesial side of the distal root. Following the overload of occlusal force to the upper first molar by bite‐raising, the number and immunoreactivity of the positive cells in the periodontal ligament of the lower first molar increased gradually. A more significant increase was detected at 7 d following the bite‐raising compared to the normal animals. When occlusal force was removed by the extraction of the upper first molar, the expression level of calbindin D28k in the periodontal ligament of the lower first molar rapidly decreased, however a subsequent gradual increase was recognized. Statistical analysis of the spatial immunoreactivity of calbindin D28k in the periodontal ligament was performed and showed statistically significant differences. The present results suggest that calbindin D28k may play important roles in the homeostasis and cytoprotection of the periodontal fibroblasts against occlusal force.
Individual diversities in interferon gamma production by human peripheral blood mononuclear cells stimulated with periodontopathic bacteria
Authors: Kobayashi Hiroaki , Nagasawa Toshiyuki , Aramaki Maya , Mahanonda Rangsini , Ishikawa Isao
Published: December 2003

Polarization of type 1 (Th1) or type 2 (Th2) immune responses determines the prognosis of many infectious diseases. Interferon gamma (IFN‐γ) and IL‐4 are key cytokines for the development of type 1 and type 2 immune responses, respectively. The aim of this study was to examine individual diversities in the polarization of type 1 and type 2 responses against periodontopathic bacteria. Peripheral blood mononuclear cells (PBMCs) from adult periodontitis (AP) patients and healthy (H) subjects were stimulated with Porphyromonas gingivalis, Actinobacillus actinomycetemcomitans and Bacteroides forsythus with or without polymyxin‐B, CTLA‐4 Ig and anti‐IL‐12 antibody. IFN‐γ, IL‐4 and IL‐12 in the culture supernatant were measured. IFN‐γ and IL‐4 producing cells were also examined using a multiparameter flow cytometric assay. Bone resorption rate in AP patients was calculated using Schei's method, and the probing pocket depth was also measured. PBMCs from AP patients and H subjects produced IFN‐γ and IL‐12, whereas the production of IL‐4 was rarely observed. Among the bacteria tested, A. actinomycetemcomitans was the most potent inducer of IFN‐γ and IL‐12, and the reaction was inhibited by polymyxin‐B. IFN‐γ was found to be produced by T cells in the PBMCs, and the production was significantly reduced by CTLA‐4 Ig and anti‐IL‐12 neutralizing antibody. The amount of IFN‐γ produced by the PBMCs of AP patients and H subjects varied among individuals, and was significantly correlated with the amount of IL‐12 produced in a particular individual. The production of IFN‐γ was not related with periodontal condition which was evaluated using bone resorption and pocket depth. These results suggest that polarization of type 1 response against periodontopathic bacteria is dependent on the production of IL‐12 by monocytes, and that IL‐12 stimulates IFN‐γ production. However, individual diversities of IFN‐γ production might not be directly related to the severity of periodontitis.
Response of periodontal ligament fibroblasts and gingival fibroblasts to pulsating fluid flow: nitric oxide and prostaglandin E2 release and expression of tissue non‐specific alkaline phosphatase activity
Authors: Van Der Pauw M. T. M. , Klein‐Nulend J. , Van Den Bos T. , Burger E. H. , Everts V. , Beertsen W.
Published: December 2003

The capacity of the periodontal ligament to alter its structure and mass in response to mechanical loading has long been recognized. However, the mechanism by which periodontal cells can detect physical forces and respond to them is largely unknown. Besides transmission of forces via cell‐matrix or cell‐cell interactions, the strain‐derived flow of interstitial fluid through the periodontal ligament may mechanically activate the periodontal cells, as well as ensure transport of cell signaling molecules, nutrients and waste products. Mechanosensory cells, such as endothelial and bone cells, are reported to respond to a flow of fluid with stimulated prostaglandin E2(PGE2) and nitric oxide production. Therefore, we examined the PGE2 and nitric oxide response of human periodontal ligament and gingival fibroblasts to pulsating fluid flow and assessed the expression of tissue non‐specific alkaline phosphatase activity. Periodontal ligament and gingival fibroblasts were subjected to a pulsating fluid flow (0.7±0.02 Pa, 5 Hz) for 60 min. PGE2 and nitric oxide concentrations were determined in the conditioned medium after 5, 10, 30 and 60 min of flowing. After fluid flow the cells were cultured for another 60 min without mechanical stress. Periodontal ligament fibroblasts, but not gingival fibroblasts, responded to fluid flow with significantly elevated release of nitric oxide and decreased expression of tissue non‐specific alkaline phosphatase activity. In both periodontal ligament and gingival fibroblasts, PGE2 production was significantly increased after 60 min of flowing. Periodontal ligament fibroblasts, but not gingival fibroblasts, produced significantly higher levels of PGE2 during the postflow culture period. We conclude that human periodontal ligament fibroblasts are more responsive to pulsating fluid flow than gingival fibroblasts. The similarity of the early nitric oxide and PGE2 responses to fluid flow in periodontal fibroblasts with bone cells and endothelial cells suggests that these three cell types possess a similar sensor system for fluid shear stress.
Distribution and synthesis of elastin in porcine gingiva and alveolar mucosa
Authors: Bourke K. A. , Haase H. , Li H. , Daley T. , Bartold P. M.
Published: December 2003

Histologically, there are variations in the distribution of the types of elastic fibers within the tissues of the masticatory mucosa. For example, the alveolar mucosa has heavy deposits of elastin which decrease in quantity and size as it merges with the attached gingiva. These differences in elastin content may result from the tissues' different physiological workload modulating the expression of tropoelastin mRNA. Alternatively, these differences could be due to the presence of phenotypically different fibroblasts that have different basal levels of tropoelastin mRNA expression. The aim of this study was to determine whether the differences in the distribution of elastin between alveolar mucosa and attached gingiva could be due to phenotypic differences between fibroblasts derived from these tissues. Histochemical (Miller's elastin stain) and immunohistochemical staining were used to localize elastin within these tissues. Elastin production by cultured fibroblasts derived from alveolar mucosa and attached gingiva was assessed by Western blot analyses, and Northern blot analyses were used to detect levels of elastin mRNA by these cells. The results from this study have confirmed that elastin is richly expressed in oral mucosa and poorly expressed in attached gingiva. In vitro, the cells demonstrated a capacity to synthesize and secrete tropoelastin, however this was not found to differ between cells from the two different sources. These findings indicate that while some heterogeneity in fibroblast populations may exist within various tissues of the periodontium, other factors, such as functional requirements of the tissues in which they reside, may also play an important role in the phenotypic expression of these cells.
Central Bank and Commercial Banks' Liquidity Management – What is the Relationship?
Authors: Bindseil Ulrich , Weller Benedict , Wuertz Flemming
Published: December 2003

The paper explores the relation between individual banks' liquidity management in the euro area and the ECB's management of the aggregate current accounts held by banks with the Eurosystem. It is argued that, in the case of the euro area with its large, remunerated reserve requirements that have to be fulfilled only on average over a one‐month period, the banks' demand for working balances to serve as a buffer against market imperfections is always below reserve requirements. It is therefore normally sufficient for the ECB when steering short‐term interest rates to control aggregate liquidity in a way that the aggregate banking system is in a position to fulfil adequately its reserve requirements. In particular, the ECB normally does not need to take care of any factors that affect temporarily the demand for working balances, such as the level and uncertainties of interbank payment flows. However, two exceptions are noteworthy and are discussed in the paper: the banks' balance sheet management activities implying a regular end of month peak of the EONIA rate; and the liquidity situation in the case of substantive market tensions as in the days following the terrorist attacks of 11 September 2001. The need of the ECB's liquidity management to address the associated deviations from a model of perfect markets is discussed.
The Choice Among Interbank Settlement Systems: The European Experience
Authors: Baglioni Angelo , Hamaui Rony
Published: December 2003

This paper addresses the choice of banks between alternative channels for interbank payments. The conventional view assumes a tradeoff between the safety of real‐time gross settlement (RTGS) and the liquidity savings of multilateral netting. Moreover, correspondent banking is believed to be inefficient, both in terms of liquidity and of administrative costs. In the last decade, however, the impulse of the Committee on Payment and Settlement Systems, technological changes and the management of RTGS systems by central banks have reduced the difference between the various systems. This is especially true for risk, whereas liquidity cost crucially depends on the refinancing policy adopted by the central bank and the co‐ordination among the participants. On the basis of the recent evolution of payment systems in Europe, we verify the importance of liquidity, as well as other variables like transaction costs, for the choice of banks among different settlement systems. Cost factors imply that the nature of payments flows (value, commercial versus financial) and some structural features of the banking systems (dimension of the intermediaries, concentration of the banking sector) become important. The analysis is carried out both through a theoretical model and a cross‐country comparison based on three data sources: ECB (European Central Bank, EBA (Euro Banking Association) and SWIFT (Society for Worldwide Interbank Financial Telecommunication).
Gender issues in family poultry production systems in low-income food-deficit countries
Authors: Guèye E.F.
Published: December 2003

Despite efforts to develop intensive poultry production, family poultry (FP) is still very important in low-income, food-deficit countries (LIFDCs). In LIFDCs, the keeping of poultry by local communities has been practiced for many generations. FP is an appropriate system for supplying the fast-growing human population with high-quality protein. It can also provide additional income to the generally resource-poor small farmers, especially women. Although requiring low levels of inputs, FP contributes significantly to food security, poverty alleviation and ecologically sound management of natural resources. FP is also a source of employment for underprivileged groups and less-favored areas in LIFDCs. Developing schemes that aim to promote and improve the FP sub-sector in a way that is sustainable must not underestimate the roles and contributions of women. However, getting new information to the front line of production requires more gender-disaggregated data. This paper stresses the need to design, implement, monitor and evaluate FP development programs by taking into account socio-cultural, especially gender, issues.
Leishmania majorLACK Antigen Is Required for Efficient Vertebrate Parasitization
Authors: Kelly Ben L. , Stetson Daniel B. , Locksley Richard M.
Published: December 2003

The Leishmania major LACK antigen is a key target of the immune response in susceptible BALB/c mice and remains a viable vaccine candidate for human leishmaniasis. We describe the genomic organization of the four lack genes in the L. major diploid genome together with results of selected lack gene targeting. Parasites containing a single lack gene in either the upstream or downstream locus grew comparably to wild-type promastigotes in vitro, but failed to parasitize BALB/c mice efficiently, even in a T cell–deficient environment. The replication of single copy lack mutants as amastigotes was attenuated in macrophages in vitro, and parasites failed to increase in numbers in immunodeficient mice, despite their persistence over months. Complementation with an additional lack copy was sufficient to induce robust lesion development, which also occurred using parasites with two lack genes. Conversely, attempts to generate lack-null parasites failed, suggesting that LACK is required for parasite viability. These data suggest that LACK is critical for effective mammalian parasitization and thus represents a potential drug target for leishmaniasis.
Standards and the Form of Agreement 2002 Presidential Address Western Economic Association
Authors: Barzel Yoram
Published: December 2003

Contract stipulations tend to be subject to commodity standards. Standards make it clearer what transactors have agreed upon. They also bring stipulations from different contracts under a common denominator. The lower the cost of measuring an attribute and the wider the range of its application, the higher the likelihood that the attribute will become subject to new standards. New standards are predicted to increase the role of contracts in agreements and to reduce that of long‐term relations; to lower the prices of the commodities that use the standards; to increase the rate of theft of these commodities; and, by making it clearer what it is that parties exchange, to reduce the level of vertical integration. Finally, new standards propel markets toward perfect competition.
The Good, the Bad, and the Regulator: An Experimental Test of Two Conditional Audit Schemes
Authors: Clark Jeremy , Friesen Lana , Muller Andrew
Published: December 2003

Conditional audit rules are designed to achieve regulatory compliance with fewer inspections than required by random auditing. A regulator places individuals into audit pools that differ in probability of audit or severity of fine and specifies transition rules between pools. Future pool assignment is conditional on current audit results. We conduct an experiment to compare two specific schemes—Harrington's Past‐Compliance Targeting and Friesen's Optimal Targeting—against random auditing. We find a production possibility frontier between compliance and minimizing inspections. Optimal targeting generates the lowest inspection rates as predicted, but random auditing the highest compliance. Past‐compliance targeting is intermediate.
An Examination of the Asymmetric Effects of Money Supply Shocks in the Pre–World War I and Interwar Periods
Authors: Parker Randall E. , Rothman Philip
Published: December 2003

We test whether monetary shocks had asymmetric output effects before World War II. Ball and Mankiw (1994) show that expectations of persistent inflation under fiat money can explain why negative monetary shocks had larger effects than positive shocks after World War II. Consistent with this explanation, we find such asymmetry in the interwar period following the abandonment of the gold standard and before it, when agents arguably anticipated this development. We find no monetary asymmetry before World War I, which is consistent with Ball and Mankiw (1994), because under a credible gold standard, agents do not expect persistent inflation.
Are Branch Banks Better Survivors? Evidence from the Depression Era
Authors: Carlson Mark
Published: December 2003

It is widely argued in the literature on the Great Depression that the prevalence of unit banks aggravated the problem of financial instability that afflicted the United States. This article tests the theory that more widespread branch banking would have reduced financial turbulence by examining the survival of individual branch and unit banks. Results indicate that instead of being more likely to survive, branch banks were more likely to fail. Further investigation suggests that this higher failure rate occurred because branch banks systematically held riskier portfolios than unit banks.
Income, Environmental Disamenity, and Toxic Releases
Authors: Emerson Tisha L. N. , Pendleton Linwood H.
Published: December 2003

The literature argues that income growth leads to increased demand for environmental quality and thus reduction in pollution. Using a utility theoretic model, we hypothesize that the income–pollution relationship should depend on the level of disamenity of the pollutant. We proxy for disamenity using the toxicity of releases. For counties in the United States, the functional relationship between income and releases depends on the level of disamenity: the form is more concave for more toxic releases. We find that environmental improvements occur at lower levels of per capita income for more toxic pollutants.
You’re invited: XML’s fifth birthday celebration
Authors: Medeiros Norm
Published: December 2003

This article looks at XML’s first five years of existence. It reviews the original motivation for creating XML, and some of the applications this standard has made possible, specifically Rich Site Summary and Open eBook Publication Structure.
Deciding what to save
Authors: Jimerson Randall C.
Published: December 2003

Archival appraisal is the process of determining which manuscripts and archives acquired by a repository are worthy of long‐term preservation. The abundance of modern records prevents saving everything, so archivists must make difficult choices. Records have value as evidence of organizations’ functions and activities, or for their informational content. Appraisal criteria include analysis of functions, context, content, future uses, and cost‐benefit of retention. Decisions to discard manuscripts are irreversible, so choices must be carefully weighed. Reappraisal and deaccessioning may also be applied to legacy holdings. The challenging task of appraisal also contributes to the preservation of institutional evidence, cultural heritage, and social memory.
Office and Plant Location With Transport Costs of Information
Authors: Suda Masaya
Published: December 2003

In this paper, under the framework of profit maximization office and plant locations are analyzed, taking into account the existing cost of transporting information between the market and the office, and between the office and the plant. The conclusion is that if the office and the plant are located separately, the value of the unit transmission cost of information on production significantly decreases.
The Efficiency of Social and Economic Image Projection in Spatial Configurations
Authors: Athanassopoulos Antreas D. , Karkazis John
Published: December 2003

In this paper we examine issues related to the regional images of spatial configurations and their performance in attracting resources that are expressed in terms of regional gross domestic product. The concepts of social and economic image efficiency are introduced and their dual relationship is acknowledged. A non‐parametric frontier analysis methodology is proposed for assessing the two types of efficiency, based on the concept of data envelopment analysis. The method is applied to the twenty prefectures of Northern Greece on data that span the period 1981 to 1991.
Exports' Contribution to Economic Growth: Empirical Evidence for California, Massachusetts, and Texas, Using Employment Data
Authors: Nishiyama Yasuo
Published: December 2003

The paper shows an interregional trade model from which testable parameter restrictions for economic base theory, shown to be equivalent to the hypotheses of the Granger causality test, are derived. The results of the tests for three states, based on various bifurcation methods, suggest that economic base theory holds strongly for the crudest definition of the base, but not for others. The frequency analysis indicates a likely association between inherent cyclicalities in employment growth data and economic base theory. The regional multipliers and the timing of economic adjustments to exogenous shocks are also discussed.
Gaussian Estimation of a Two‐factor Continuous Time Model of the Short‐term Interest Rate
Authors: Bergstrom A. R. , Nowman K. B.
Published: December 2003

This paper considers the econometric estimation of a two‐factor model of the short‐term interest rate. We develop a procedure for the time series estimation of its parameters, based on recently developed Gaussian estimation methods which are extended to handle unobservable state variables. The main methodological contribution is the derivation of an exact discrete model and the exact Gaussian likelihood function in terms of the discrete observations and structural parameters of the two‐factor model. The model is estimated on one month euro‐currency interest rate data for seven currencies – the Belgium franc, Canadian dollar, Dutch guilder, French franc, German mark, Italian lira, and the US dollar over the period February 1981 to December 1995 – and our results indicate that the method works well in practice. The empirical estimates reported in this study can be used to compare estimates from the calibration of an arbitrage‐free analogue of the model to market prices of interest rate caps and swaptions for use in the financial markets. (J.E.L.: C13, E43).
Price Limits, Information Acquisition, and Bid–ask Spreads: Theory and Evidence
Authors: Anshuman V. Ravi , Subrahmanyam Avanidhar
Published: December 2003

A number of futures markets use price limits which, in effect, preclude trade from occurring at prices outside certain exogenous bounds. Noting that such markets are characterized by heterogeneously informed traders, whereas previous work on price limits assumes symmetrically informed traders, we examine the effects of price limits in a setting where market participants are asymmetrically informed. We find that imposing price limits generally lowers the quality of information acquired in equilibrium, but lowers bid–ask spreads as well. Thus, depending on the relative weights placed by society on liquidity versus price efficiency, there may exist a set of price limits that are most efficient in achieving a trade‐off between liquidity and informational efficiency. We perform empirical tests of some implications of the model using cross‐sectional data on price limits. We find that price limits are strongly negatively related to both price volatility and trading volume. Though other explanations for our empirical findings cannot be ruled out, these results are not inconsistent with the model's implication that price limits should be tighter for contracts which offer greater profit potential for informed traders.
What Caused the Asian Crises: An Early Warning System Approach
Authors: Berg A. , Pattillo C.
Published: December 2003

We estimate a simple probit model of the probability of balance‐of‐payments crises over a panel of developing countries through 1995. We then forecast crisis probabilities for 1997. We find that a simple model composed of four traditional macroeconomic variables and one ‘second generation’ variable performs well in predicting the Asia crises. The Thai and Malaysian crises had predominantly first‐generation features, while the crises in Korea and Indonesia are, to some extent, predictable largely on the basis of our second‐generation variable.

(J.E.L.: F31, F47).
Did the East Asian Crisis Disproportionately Hit Small Businesses in Korea?
Authors: Domac I. , Ferri G.
Published: December 2003

The paper demonstrates that Korean small and medium‐sized enterprises (SMEs) suffered disproportionately from the crisis and the severe monetary restriction. The descriptive analysis suggests that disruptions in credit markets were particularly pronounced for SMEs. The empirical results underscore that prior movements of the interest rate spreads influence the SMEs' industrial production, while they do not contain any significant information for the overall industrial production. Furthermore, the results from VAR analysis suggest that shocks to the interest rates and to the spreads contribute more to the variance of the SMEs' production than to that of overall production. Consequently, authorities should consider the credit channel effects to avoid ‘overkilling the economy’, and to provide relief to those particular business segments that face greater market imperfections.
The Macroeconomic Implications of Regulatory Capital Adequacy Requirements for Korean Banks
Authors: Choi G.
Published: December 2003

The capital adequacy requirement, combined with the flight to quality, contributed to a drastic credit slowdown and a sharp recession in Korea in the aftermath of the financial crisis. Since most banks were placed under the strengthened capital adequacy constraints, they reduced loans to firms with high credit risks. As a result, bank‐dependent small and medium‐sized enterprises (SMEs) were badly hit, and eventually demand for bank loans fell. The reduction in loans was most visible among banks with poor capital adequacy, yet the overall change in bank portfolios had a disproportionately large negative influence on financial conditions for SMEs. In conclusion, the banks' response to capital adequacy requirements resulted in changes in the loan/bond ratio which, in turn, reduced loans to SMEs and caused a sharp cut in production. The resulting contraction in SME production created a polarized industrial structure and a chronic depression in the traditional sectors of the economy. The introduction of capital adequacy requirements (CARs) in the wake of financial crisis worsened conditions for SMEs and weakened the validity of the CARs that were mainly necessitated by successive failures among larger firms.
Solving the Currency Conundrum
Authors: Eichengreen Barry
Published: December 2003

This paper reviews the prospects for the exchange rate system in different parts of the world. It discounts radical changes like a single world currency and a trio of regional monetary unions: in Europe, where intergration is political as well as economic and financial, the euro should provide the basis for an expanding zone of monetary stability; in the Americas, in contrast, dollarization is likely to be the solution for countries with strong financial links to the USA that find it difficult to run an autonomous monetary policy; and in Asia, continued floating is the only plausible outcome, given the obstacles to the alternatives.

(J.E.L.: F3)
Monetary Disequilibrium, Endogenous Money, Stability and the Determinacy of Inflation
Authors: Chappell David , Matthews Kent
Published: December 2003

This paper examines the stability of the disequilibrium money model, with endogenous money and transitory interest rate control by the Central Bank. In the tradition of the post‐Keynesian literature, the money supply is determined by bank lending and disequilibrium between money demand and supply determines the business cycle. The rate of interest is assumed to react to an inflation target and inflation responds to the business cycle. The paper examines the stability of the model under three inflation response systems: the accelerationist model, adaptive expectations and rational expectations.

(J.E.L.: E3, E4, E5).
The New Basel Capital Adequacy Framework
Authors: Carosio Giovanni
Published: December 2003

The Basel Committee on Banking Supervision is about to publish a second consultative paper on the reform of the 1988 Accord on capital adequacy. The new document takes into account the comments received on the June 1999 consultative paper, gives a much clearer picture of crucial aspects of the reform that were only presented in very general terms in the earlier paper, and quantifies most of the parameters that will be needed to calculate the capital requirements.

Although considerable progress has been made towards reaching operational status, several aspects of the regulation still need to be worked out and further reflection is needed on the best way to tackle some of the more problematic issues that have been identified. Comments, suggestions, criticisms such as today’s seminar will certainly provide, are therefore most welcome. There will be time to take them into consideration, as the final draft of the regulation will not be completed before the end of 2001.

My presentation is divided into three parts: I first illustrate the objectives of the reform, then describe the essential features of the new regulation, and finally discuss the possible impacts of its implementation.

(J.E.L. G21, G28).
Analytical and Empirical Features of Internal Ratings: An Empirical Consistency Test based on Statistical Models
Authors: Resti Andrea , Omacini Cristina
Published: December 2003

Internal ratings represent an important input to the new generation of ‘credit portfolio models’ and to the new capital requirements proposed by the Basel Committee on Banking Supervision; however, their reliability must be validated. In this paper, we first recall the main theoretical and practical aspects explaining the relevance gained by internal ratings in the banks’ operating practices and in the current reform proposals on bank capital regulation. We then show how some statistical models can be used to evaluate a rating system when no great amount on past data is available. To this goal, we first set up a binomial model to capture the main drivers of a borrower’s default; then, we build a separate multinomial model to ‘clone’ the judgements issued by human experts. Finally, we compare the two models: the degree of consistency between them looks reasonable, but is far from being perfect. The main causes of these disagreements are analysed, and some improvements of the current rating process are proposed.

(J.E.L. G290, C250)
The Organizational Structure of Banking Supervision
Authors: Goodhart Charles A. E.
Published: December 2003

Does it matter whether banking supervision is undertaken in‐house in the Central Bank or in a separate specialised supervisory institution? After all, bank supervisors and the Central Bank must continue to work closely together wherever the supervisors are located.

Nevertheless there has been a recent trend towards hiving off bank supervision to a separate agency, as in the UK. The main driving forces are the rise of the universal bank, increased conglomeration, and concerns with conflicts of interest.

Such separation, however, raises questions whether systemic stability might suffer. The ethos and culture of the separate supervisor might come to focus more on conduct of business, consumer protection, issues. Potentially systemic financial crises would have to be handled by a committee.

These are qualitative issues, and developed countries, with differing historical, legal and institutional backgrounds, will come to differing conclusions. But in less developed countries, more weight needs to be placed on ensuring the quality of the supervisory staff, i.e. their professional skills, independence from external pressures, and adequate funding. This tells strongly towards retaining banking supervision under the wing of the Central Bank in such emerging countries.

(J.E.L.: E5, F3, G2).
Optimization of Monte Carlo Procedures for Value at Risk Estimates
Authors: Antonelli Sabrina , Iovino Maria Gabriella
Published: December 2003

This paper proposes a methodology which improves the computational efficiency of the Monte Carlo simulation approach of value at risk (VaR) estimates. Principal components analysis is used to reduce the number of relevant sources of risk driving the portfolio dynamics. Moreover, large deviations techniques are used to provide an estimate of the minimum number of price scenarios to be simulated to attain a given accuracy. Numerical examples are provided and show the good performance of the methodolgy proposed.

(J.E.L.: C15, G1).
Economic Significance of the Predictable Movements in Futures Returns
Authors: Miffre Joelle
Published: December 2003

This paper tests whether the variation in expected futures returns reflects rational pricing in an efficient market or weak‐form market inefficiency. The issue is investigated by looking at the abnormal performance of a trading rule based on available information. Once one allows for time‐varying risk and time‐varying risk premia, the investment strategy can be used consistently to generate abnormal returns in seven out of 26 markets. With relatively few exceptions therefore, the predictable movements in futures returns reflect weak‐form market efficiency. The paper also shows that wrongly assuming constant expected returns may lead to incorrect inferences regarding market efficiency.

(J.E.L.: G14, G12).
Bank and Business Performance Measurement
Authors: Turnbull Stuart M.
Published: December 2003

Given the objective of maximizing the wealth of existing shareholders, this paper discusses some of the issues that arise in attempting to measure the performance of individual businesses within a bank. The paper describes two return measures – return on assets within a business and the return on the ‘equity’ of an individual business – and discusses the appropriate bench–marks. The paper ends with a discussion of the cost of unused allocated capital and the appropriate performance metric.

(J.E.L.: G30, G31).
Basic Insights in Pricing Basket Credit Derivatives
Authors: Esposito Marcello
Published: December 2003

Basket credit derivatives are those financial contracts whose pay–out depends on the credit events (‘failure to pay’, ‘default’, etc.) characterizing a portfolio of bonds or loans over a determined time horizon.

We have two main categories of basket credit derivatives. The first is characterized by a pay–out depending on the temporal ranking of the credit events: first–to–default, second–to–default, etc. The second is characterized by a pay–out depending on the percentiles of the portfolio's loss distribution induced by the credit events. The latter is often embedded in securitizations of portfolios of bonds or loans, i.e. CDO.

This paper proposes some basic insights in the pricing of these particularly complex credit derivatives. Whenever possible, we will try to find an analytical approximation to the exact pricing formula, if a closed form solution is not available.

(J.E.L.: G13).
Risk Management Using Quasi–static Hedging
Authors: Allen Steve , Padovani Otello
Published: December 2003

In this paper, we try to develop a comprehensive theory of risk management for illiquid trading instruments and exotics by examining the consequences of a quasi–static hedging strategy. In contrast to a static hedging strategy, in which an initial hedge once executed is kept in place for the life of the trade, and a dynamic hedging strategy, in which hedges are frequently adjusted over the life of the trade, a quasi–static hedging strategy utilizes hedge adjustments but tries to minimize the frequency. Almost all the examples studied in the framework introduced here take this minimization to the extreme by limiting hedge adjustments to at most one during the life of a trade. We examine the application of this approach to long–dated forwards, long–dated options and exotic options such as cliquet and barriers. The model we present for barriers is a new generation of the Derman–Ergener–Kani approach which combines the flexibility of the approach with a sizable increase in model independence.
Stochastic Models of Implied Volatility Surfaces
Authors: Cont Rama , Fonseca Jose da , Durrleman Valdo
Published: December 2003

We propose a market–based approach to the modelling of implied volatility, in which the implied volatility surface is directly used as the state variable to describe the joint evolution of market prices of options and their underlying asset. We model the evolution of an implied volatility surface by representing it as a randomly fluctuating surface driven by a finite number of orthogonal random factors. Our approach is based on a Karhunen–Loeve decomposition of the daily variations of implied volatilities obtained from market data on SP500 and DAX options.

We illustrate how this approach extends and improves the accuracy of the well–known ‘sticky moneyness’ rule used by option traders for updating implied volatilities. Our approach gives a justification for the use of ‘Vegas’ for measuring volatility risk and provides a decomposition of volatility risk as a sum of independent contributions from empirically identifiable factors.

(J.E.L.: G130, C14, C31).
Expected Shortfall: A Natural Coherent Alternative to Value at Risk
Authors: Acerbi Carlo , Tasche Dirk
Published: December 2003

We discuss the coherence properties of expected shortfall (ES) as a financial risk measure. This statistic arises in a natural way from the estimation of the ‘average of the 100% worst losses’ in a sample of returns to a portfolio. Here p is some fixed confidence level. We also compare several alternative representations of ES which turn out to be more appropriate for certain purposes

(J.E.L.: G20, C13, C14).
The Stability of the Relation Between the Stock Market and Macroeconomic Forces
Authors: Panetta Fabio
Published: December 2003

This paper identifies the macroeconomic factors that influence Italian equity returns and tests the stability of their relation with securities returns. The relation between stock returns and the macroeconomic factors is found to be unstable: not only are the factor loadings of individual securities virtually uncorrelated over time, but a high percentage of the shares experience a reversal of the sign of the estimated loadings. This result is not confined to single periods or to a small group of shares, but holds in different sub–periods and for securities in all risk classes. These findings suggest that research should carefully investigate the specification of the return generating process and the stability of the risk measures.

(J.E.L.: G12, E44).