Forecast Evaluation of Nonlinear Models: The Case of Long‐Span Real Exchange Rates

This paper deals with the nonlinear modeling and forecasting of the dollar–sterling and franc–sterling real exchange rates using long spans of data. Our contribution is threefold. First, we provide significant evidence of smooth transition dynamics in the series by employing a battery of recently developed in‐sample statistical tests. Second, we investigate the small‐sample properties of several evaluation measures for comparing recursive forecasts when one of the competing models is nonlinear. Finally, we run a forecasting race for the post‐Bretton Woods era between the nonlinear real exchange rate model, the random walk, and the linear autoregressive model. The nonlinear model outperforms all rival models in the dollar–sterling case but cannot beat the linear autoregressive in the franc–sterling. Copyright © 2011 John Wiley & Sons, Ltd.     

Are Analysts' Loss Functions Asymmetric?

Despite displaying a statistically significant optimism bias, analysts' earnings forecasts are an important input to investors’ valuation models. Understanding the possible reasons for any bias is important if information is to be extracted from earnings forecasts and used optimally by investors. Extant research into the shape of analysts' loss functions explains optimism bias as resulting from analysts minimizing the mean absolute forecast error under symmetric, linear loss functions. When the distribution of earnings outcomes is skewed, optimalforecasts can appear biased. In contrast, research into analysts' economic incentives suggests that positive and negative earnings forecast errors made by analysts are not penalized or rewarded symmetrically, suggesting that asymmetric loss functions are an appropriate characterization. To reconcile these findings, we exploit results from economic theory relating to the Linex loss function to discriminate between the symmetric linear loss and the asymmetric loss explanations of analyst forecast bias. Under asymmetric loss functions optimal forecasts will appear biased even if earnings outcomes are symmetric. Our empirical results support the asymmetric loss function explanation. Further analysis also reveals that forecast bias varies systematically across firm characteristics that capture systematic variation in the earnings forecast error distribution. Copyright © 2011 John Wiley & Sons, Ltd.     

A Kuhnian defence of inference to the best explanation

According to inference to the best explanation (IBE), scientists infer the loveliest of competing hypotheses, ‘loveliness’ being explanatory virtue. This generates two key objections: that loveliness is too subjective to guide inference, and that it is no guide to truth. I defend IBE using Thomas Kuhn’s notion of exemplars: the scientific theories, or applications thereof, that define Kuhnian normal science and facilitate puzzle-solving. I claim that scientists infer the explanatory puzzle-solution that best meets the standard set by the relevant exemplar of loveliness. Exemplars are the subject of consensus, eliminating subjectivity; divorced from Kuhnian relativism, they give loveliness the context-sensitivity required to be truth-tropic. The resulting account, ‘Kuhnian IBE’, is independently plausible and offers a partial rapprochement between IBE and Kuhn’s account of science.     

Microscale screening systems for 3D cellular microenvironments: platforms,advances, and challenges

The increasing interest in studying cells using more in vivo-like three-dimensional (3D) microenvironments has created a need for advanced 3D screening platforms with enhanced functionalities and increased throughput. 3D screening platforms that better mimic in vivo microenvironments with enhanced throughput would provide more in-depth understanding of the complexity and heterogeneity of microenvironments. The platforms would also better predict the toxicity and efficacy of potential drugs in physiologically relevant conditions. Traditional 3D culture models (e.g., spinner flasks, gyratory rotation devices, non-adhesive surfaces, polymers) were developed to create 3D multicellular structures. However, these traditional systems require large volumes of reagents and cells, and are not compatible with high-throughput screening (HTS) systems. Microscale technology offers the miniaturization of 3D cultures and allows efficient screening of various conditions. This review will discuss the development, most influential works, and current advantages and challenges of microscale culture systems for screening cells in 3D microenvironments.     

The History of Chemistry: A Very Short Introduction

In 1668 Robert Hooke recognised the utility of a barometer which could foretell storms at sea, but neither he nor his contemporaries in Britain or elsewhere in Europe succeeded in constructing such an instrument which would work reliably on a moving ship. Theorists and instrument makers, including Hooke, Amontons, De Luc, Passement, Magellan and Blondeau proposed novel forms of tube, but at the time it was not possible to work glass to the suggested shape. The competition between France and England was won by Edward Nairne, who devised the constricted-tube barometer for Captain Cook's second voyage of 1772-75. Nairne barometers were soon taken on other British exploring voyages, but French ships were slow to follow the pattern, possibly in consequence of naval disruption following the Revolution. The earliest Nairne examples were adapted from the domestic barometer, with the tube mounted on a flat back, but within the lifetime of Nairne &; Blunt marine barometers adopted the form common for most of the nineteenth century, with the tube enclosed within a square or round-section wooden frame.     

X-linked protocadherin 19 mutations cause female-limited epilepsy and cognitive impairment

Epilepsy and mental retardation limited to females (EFMR) is a disorder with an X-linked mode of inheritance and an unusual expression pattern. Disorders arising from mutations on the X chromosome are typically characterized by affected males and unaffected carrier females. In contrast, EFMR spares transmitting males and affects only carrier females. Aided by systematic resequencing of 737 X chromosome genes, we identified different protocadherin 19 (PCDH19) gene mutations in seven families with EFMR. Five mutations resulted in the introduction of a premature termination codon. Study of two of these demonstrated nonsense-mediated decay of PCDH19 mRNA. The two missense mutations were predicted to affect adhesiveness of PCDH19 through impaired calcium binding. PCDH19 is expressed in developing brains of human and mouse and is the first member of the cadherin superfamily to be directly implicated in epilepsy or mental retardation.     

Common sequence variants on 20q11.22 confer melanoma susceptibility

We conducted a genome-wide association pooling study for cutaneous melanoma and performed validation in samples totaling 2,019 cases and 2,105 controls. Using pooling, we identified a new melanoma risk locus on chromosome 20 (rs910873 and rs1885120), with replication in two further samples (combined P < 1 x 10(-15)). The per allele odds ratio was 1.75 (1.53, 2.01), with evidence for stronger association in early-onset cases.     

Common variants at CD40 and other loci confer risk of rheumatoid arthritis

To identify rheumatoid arthritis risk loci in European populations, we conducted a meta-analysis of two published genome-wide association (GWA) studies totaling 3,393 cases and 12,462 controls. We genotyped 31 top-ranked SNPs not previously associated with rheumatoid arthritis in an independent replication of 3,929 autoantibody-positive rheumatoid arthritis cases and 5,807 matched controls from eight separate collections. We identified a common variant at the CD40 gene locus (rs4810485, P = 0.0032 replication, P = 8.2 x 10(-9) overall, OR = 0.87). Along with other associations near TRAF1 (refs. 2,3) and TNFAIP3 (refs. 4,5), this implies a central role for the CD40 signaling pathway in rheumatoid arthritis pathogenesis. We also identified association at the CCL21 gene locus (rs2812378, P = 0.00097 replication, P = 2.8 x 10(-7) overall), a gene involved in lymphocyte trafficking. Finally, we identified evidence of association at four additional gene loci: MMEL1-TNFRSF14 (rs3890745, P = 0.0035 replication, P = 1.1 x 10(-7) overall), CDK6 (rs42041, P = 0.010 replication, P = 4.0 x 10(-6) overall), PRKCQ (rs4750316, P = 0.0078 replication, P = 4.4 x 10(-6) overall), and KIF5A-PIP4K2C (rs1678542, P = 0.0026 replication, P = 8.8 x 10(-8) overall).     

MYH9 is a major-effect risk gene for focal segmental glomerulosclerosis

The increased burden of chronic kidney and end-stage kidney diseases (ESKD) in populations of African ancestry has been largely unexplained. To identify genetic variants predisposing to idiopathic and HIV-1-associated focal segmental glomerulosclerosis (FSGS), we carried out an admixture-mapping linkage-disequilibrium genome scan on 190 African American individuals with FSGS and 222 controls. We identified a chromosome 22 region with a genome-wide logarithm of the odds (lod) score of 9.2 and a peak lod of 12.4 centered on MYH9, a functional candidate gene expressed in kidney podocytes. Multiple MYH9 SNPs and haplotypes were recessively associated with FSGS, most strongly a haplotype spanning exons 14 through 23 (OR = 5.0, 95% CI = 3.5-7.1; P = 4 x 10(-23), n = 852). This association extended to hypertensive ESKD (OR = 2.2, 95% CI = 1.5-3.4; n = 433), but not type 2 diabetic ESKD (n = 476). Genetic variation at the MYH9 locus substantially explains the increased burden of FSGS and hypertensive ESKD among African Americans.