This paper examines the joint determination of deviations in long-term covered interest rate parity and differences in the credit spread of bonds of similar risk but different currency denomination. ...These two pricing anomalies are highly aligned in both the time series and the cross-section of currencies. The sum of these two pricing deviations—the corporate basis—represents the currency-hedged borrowing cost difference between currency regions and explains up to a third of the variation in the aggregate corporate debt issuance flow. I show that arbitrage aimed at exploiting one type of security anomaly can give rise to the other.
We develop a model in which capital moves quickly within an asset class but slowly between asset classes. While most investors specialize in a single asset class, a handful of generalists gradually ...reallocate capital across markets. Upon the arrival of a large supply shock, prices of risk in the directly affected asset class become disconnected from those in others. Over the long run, capital flows cause prices of risk to become more closely aligned. While prices in the directly affected market initially overreact, prices in related markets may underreact. We use the model to reassess event-study evidence on quantitative easing.
We derive an options-pricing formula from recursive preferences and estimate rare disaster probability. The new options-pricing formula applies to far out-of-the-money put options on the stock market ...when disaster risk dominates, the size distribution of disasters follows a power law, and the economy has a representative agent with a constant-relative-risk-aversion utility function. The formula conforms with options data on the Standard & Poor's (S&P) 500 Index from 1983 to 2018 and for analogous indices for other countries. The disaster probability, inferred from monthly fixed effects, is highly correlated across countries, peaks during the Global Financial Crisis, and forecasts rates of economic growth.
There is a large body of empirical and theoretical literature on the effects of technological change on individuals, labor markets, and overall economic activity. Theories of skill-biased technical ...change (SBTC) suggest that technology increases the earnings power of skilled workers, but substitutes for less skilled workers. Distributed ledger technologies (DLTs) provide a new context for examining and understanding the impact of technology change on labor, competition, and economic outcomes. This paper explores the theoretical frameworks through which DLTs could enhance economic mobility and provides examples from several areas, including: i) the creation of new jobs and higher value-added jobs, and the modularization of complex tasks; ii) improvements in the way people learn and acquire human capital; iii) increased competition in the marketplace; and iv) more inclusive access to financial services with fewer intermediaries.
Inhibition of immune checkpoints, including cytotoxic T-lymphocyte antigen-4 (CTLA-4), programmed death-1 (PD-1), and its ligand PD-L1, has demonstrated exciting and durable remissions across a ...spectrum of malignancies. Combinatorial regimens blocking complementary immune checkpoints further enhance the therapeutic benefit. The activity of these agents for patients with glioblastoma, a generally lethal primary brain tumor associated with significant systemic and microenvironmental immunosuppression, is not known. We therefore systematically evaluated the antitumor efficacy of murine antibodies targeting a broad panel of immune checkpoint molecules, including CTLA-4, PD-1, PD-L1, and PD-L2 when administered as single-agent therapy and in combinatorial regimens against an orthotopic, immunocompetent murine glioblastoma model. In these experiments, we observed long-term tumor-free survival following single-agent anti-PD-1, anti-PD-L1, or anti-CTLA-4 therapy in 50%, 20%, and 15% of treated animals, respectively. Combination therapy of anti-CTLA-4 plus anti-PD-1 cured 75% of the animals, even against advanced, later-stage tumors. In long-term survivors, tumor growth was not seen upon intracranial tumor rechallenge, suggesting that tumor-specific immune memory responses were generated. Inhibitory immune checkpoint blockade quantitatively increased activated CD8(+) and natural killer cells and decreased suppressive immune cells in the tumor microenvironment and draining cervical lymph nodes. Our results support prioritizing the clinical evaluation of PD-1, PD-L1, and CTLA-4 single-agent targeted therapy as well as combination therapy of CTLA-4 plus PD-1 blockade for patients with glioblastoma.
Left atrial appendage closure with the WATCHMAN device is an alternative to anticoagulation for stroke prevention in selected patients with atrial fibrillation (AF). LA device-related thrombus (DRT) ...is poorly defined and understood. We aimed to (1) develop consensus echocardiographic diagnostic criteria for DRT; (2) estimate the incidence of DRT; and (3) determine clinical event rates in patients with DRT. In phase 1 (training), a training manual was developed and reviewed by 3 echocardiographers with left atrial appendage closure device experience. All available transesophageal (TEE) studies in the WATCHMAN left atrial appendage system for embolic protection in patients with atrial fibrillation (PROTECT-AF) trial patients with suspected DRT were reviewed in 2 subsequent phases. In phase 2 (primary blind read), each reviewer independently scored each study for DRT, and final echo criteria were developed. Unanimously scored studies were considered adjudicated, whereas all others were reevaluated by all reviewers in phase 3 (group adjudication read). DRT was suspected in 35 of 485 patients by the site investigator, the echocardiography core laboratory, or both; 93 of the individual TEE studies were available for review. In phase 2, 3 readers agreed on 67 (72%) of time points. Based on phases 1 and 2, 5 DRT criteria were developed. In phase 3, studies without agreement in phase 2 were adjudicated using these criteria. Overall, at least 1 TEE was DRT positive in 27 (5.7%) PROTECT-AF patients. Stroke, peripheral embolism, or cardiac/unexplained death occurred in subjects with DRT at a rate of 3.4 per 100 patient-years follow-up. In conclusion, DRT were identified on at least 1 TEE in 27 PROTECT-AF patients, indicating a DRT incidence of 5.7%. Primary efficacy events in patients with DRT occurred at a rate of 3.4 per 100 patient-years follow-up, intermediate in frequency between event rates previously reported for the overall device and warfarin arms in PROTECT-AF.
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