Disequilibrium Adjustment Research Articles

Strategic complementarities, coordination failures, and macroeconomic fluctuations: from multiplicity of equilibria to disequilibrium dynamics

This paper retraces the main research avenues explored by some Keynesian macroeconomists from the mid-1980s to model aggregate fluctuations with strategic complementarities. Starting from the static coordination failure framework we identify the different devices implemented to deal with dynamics in deterministic or stochastic settings. The text examines how the analysis shifted from a multiplicity of equilibria to a multiplicity of steady states or equilibrium paths. From this standpoint, we confront the properties obtained under perfect foresight and alternative expectation formation schemes focussing on disequilibrium adjustments. The article also includes a tentative exploration of the reasons for the decline of this view.

Monetary Policy and Commercial Banks Profitability in Nigeria

This study examines the impact of monetary policy on profitability of commercial banks in Nigeria over the period from 1988 to 2021. Data on credit to deposit ratio, return on asset, return on equity, Z-score, money supply, income per head, interest rate, interest spread, and inflation were obtained from the statistical bulletin of the Central Bank of Nigeria. Autoregressive distributed lag (ARDL) techniques were used to estimate the short and long-term dynamic equilibrium relationship between monetary policy and commercial banks' profitability in Nigeria. The analysis confirms mixed integration through unit root tests, which justifies the use of the ARDL approach for the four baseline models. The estimation results for these models provide evidence of a cointegrating relationship between monetary policy and commercial bank profitability in Nigeria, indicating that all the variables are bound in the long run. Among the indicators of commercial bank profitability, return on asset responds more quickly to changes in monetary policy, compared to return on equity, credit-deposit ratio, and Z-score. The long-term disequilibrium adjustment further supports the presence of a cointegrating relationship among these variables. The estimated level equations demonstrate that money supply and inflation have positive multiplier effects on the bank credit-deposit ratio in the long run. Based on these findings, the study strongly recommends increasing the Z-score of the Nigerian banking sector by reducing the standard deviation of return on asset. The volatility of ROA in the Nigerian banking system contributes to a low Z-score, therefore, bank management teams should strive to maintain relatively stable ROA over time. The government should work on reducing inflation, particularly inflation resulting from reckless spending of public funds, excessive quoting by public officers, and corruption-induced inflation. The interest spread is too wide, and any increase in this margin has a negative impact on return on asset and equity. Accordingly, the study suggests meaningfully shrinking the margin between lending rate and deposit rate, aiming for a one-digit margin. Banks can achieve this by simply reducing lending rates to single digits.

Monetary Policy and Commercial Banks Profitability in Nigeria

This study examines the impact of monetary policy on profitability of commercial banks in Nigeria over the period from 1988 to 2021. Data on credit to deposit ratio, return on asset, return on equity, Z-score, money supply, income per head, interest rate, interest spread, and inflation were obtained from the statistical bulletin of the Central Bank of Nigeria. Autoregressive distributed lag (ARDL) techniques were used to estimate the short and long- term dynamic equilibrium relationship between monetary policy and commercial banks' profitability in Nigeria. The analysis confirms mixed integration through unit root tests, which justifies the use of the ARDL approach for the four baseline models. The estimation results for these models provide evidence of a cointegrating relationship between monetary policy and commercial bank profitability in Nigeria, indicating that all the variables are bound in the long run. Among the indicators of commercial bank profitability, return on asset responds more quickly to changes in monetary policy, compared to return on equity, credit-deposit ratio, and Z-score. The long-term disequilibrium adjustment further supports the presence of a cointegrating relationship among these variables. The estimated level equations demonstrate that money supply and inflation have positive multiplier effects on the bank credit-deposit ratio in the long run. Based on these findings, the study strongly recommends increasing the Z-score of the Nigerian banking sector by reducing the standard deviation of return on asset. The volatility of ROA in the Nigerian banking system contributes to a low Z-score, therefore, bank management teams should strive to maintain relatively stable ROA over time. The government should work on reducing inflation, particularly inflation resulting from reckless spending of public funds, excessive quoting by public officers, and c

Effect of Land Allocation on Agricultural Productivity in Nigeria Using ARDL Approach to Cointegration

To test the validity of the inverse relationship between land productivity and land size within the context of Nigeria, this study employed the use of Autoregressive Distributed Lag (ARDL) model to test for the presence of long-run relationship between the two variables using data from 1980 to 2017 sourced from the Food and Agriculture Organisation. Prior to the test for cointegration, the Modified Granger Causality of the Toda and Yamamoto (1995) was used to test for the causality to be sure that causality indeed runs from land size to land productivity. The Granger Causality confirmed that land size Granger-cause land productivity. Given this result, the semi-log ARDL model was estimated to test for cointegration and also estimate the elasticity of the relationship in both the short and long runs. The result showed that while land size has inverse relationship with land productivity in both the short and long run, its influence in determining yield was only significant in the short run. The Error Correction Term, ECT(−1) which is the speed of adjustment of short-run disequilibrium to long-run steady state was both negative and significant, implying that there is going to be convergence to long-run equilibrium at the speed of about 24%.

The Bielefeld School of economics, Post Keynesian economics, and dynamic complexity

The Bielefeld School of economics emerged in the 1990s, led by economists located at/or regularly visiting the University of Bielefeld in that period and the following decades, with Peter Flaschel as arguably its central leading figure based at that university. This school drew especially on the work of Richard Goodwin and his nonlinear dynamical models of macroeconomic growth and fluctuations. His work, in turn, drew on both Keynes and Marx as well as Schumpeter. Besides these influences, the school would also eventually add inventory adjustment models due to Lloyd Metzler to model endogenous fluctuations with associated income distribution dynamics with economic growth. While drawing on both classical and Keynesian sources, these models differ from modern New Keynesian models by eschewing rational expectations as well as equilibrium, emphasizing instead ongoing disequilibrium adjustment. While they have some similarities to Post Keynesian models, there has been relatively little interchange or interaction between the two schools. Several in the Bielefeld group appeared to be sometimes critical of Post Keynesians for a perceived lack of rigor in a number of their models. At the same time though there are several sub-schools of Post Keynesian economics similar to the Bielefeld School in approach than others. Probably the clearest area of overlap and similarity involves models exhibiting dynamic complexity, irregular endogenous fluctuations. Indeed one Post Keynesian tradition derives from nonlinear dynamical models due to Kaldor, which resemble those of Goodwin, the main foundation for the Bielefeld School models.

Factors Affecting Demand and Supply in the Housing Market: A Study on Three Major Cities in Turkey

This paper aims to identify the economic factors that significantly affect the demand for and supply of housing in three major cities in Turkey, such as Istanbul, Ankara, and Izmir. This study uses monthly data ranges from January 2010 to December 2020 because of the limited housing price data from each city. For smooth measurement, the logarithm of all data except measurements of nominal interest rate, real interest rate and inflation is used. This research uses the Co-integration Analysis and Vector Error Correction Model (VECM) to investigate the macroeconomic variables’ effects on the demand and supply. Mortgage credit volume, as a dependent variable, is influenced by real per capita GDP, real house prices, projected inflation, and nominal interest rates. On the contrary, the building site is used as a dependent variable on the supply side that is determined by the real housing price, the real interest rate, and the real cost of construction. In the VECM model, the mortgage credit volume and constriction cost were dominated by error correction variables, showing the adjustment of disequilibrium towards an equilibrium point. In the case of Ankara, supply-side variables have a long-term relationship. Both housing demand and supply-related factors have a long-term impact on the housing market in Istanbul and Izmir. Given a significant p-value, the coefficient of C1 derived from system equations is negative.

The Effect of Housing Assets on Private Consumption Expenditures in Iran

The purpose of this study is to measure and analyze the effect of housing assets on private sector consumption using time series data in Iran for 1991-2021. This study analyzes the relationship in the form of a autoregressive distributed lag (ARDL) econometric model using Eviews software. The final trend for short- and long-term consumption of permanent income, housing and financial assets is also obtained. It is 0.55 and 0.69 for permanent income and 0.56 and 0.70 for housing, respectively. The error correction model shows the adjustment of short-term disequilibrium with a coefficient of 0.48, which is a reasonable relative adjustment rate. Another result of this study is the positive insignificant effect of financial assets on private consumption in Iran

Short-run disequilibrium adjustment and long-run equilibrium in the international stock markets: A network-based approach

In this paper, we propose a network-based analytical framework that exploits cointegration and the error correction model to systematically investigate the directions and intensities in terms of the short-run disequilibrium adjustment towards long-run equilibrium affecting the international stock markets during the period of 5 January 2007 to 30 June 2017. Under this setting, we investigate whether and how the cross-border directional interconnectedness within the world’s 23 developed and 23 emerging stock markets altered during the entire period of 2007–2017, and two specific periods of 2007–2009 Global Financial Crisis and 2010–2012 European Sovereign Debt Crisis. The main results indicate that the magnitude of the short-run disequilibrium adjustment towards long-run equilibrium for individual stock markets is not homogeneous over different time scales. We report that the changes in directional interconnectedness within stock markets worldwide did occur under the impact of the recent financial crises. The derived networks of stock markets interconnectedness allow us to visually characterize how specific stock markets from different regions form interconnected groups when exhibiting similar behaviours, which none the less provides significant information for strategic portfolio and risk management.

HLA class I genes modulate disease risk and age at onset together with DR-DQ in Chinese patients with insulin-requiring type 1 diabetes

Aims/hypothesisThe study aimed to investigate the effects of HLA class I genes on susceptibility to type 1 diabetes with different onset ages, in addition to the well-established effects of HLA class II genes.MethodsA total of 361 patients with type 1 diabetes (192 patients with onset <18 years and 169 patients with onset ≥18 years) and 500 healthy control participants from China were enrolled and genotyped for the HLA-A, -B, -C, -DQA1, -DQB1 and -DRB1 genes using next-generation sequencing.ResultsThe susceptible DR3 (β = −0.09, p = 0.0009) and DR4-DQ8 (β = −0.13, p = 0.0059) haplotypes were negatively associated with onset age, while the protective DR11 (β = 0.21, p = 0.0314) and DR12 (β = 0.27, p < 0.0001) haplotypes were positively associated with onset age. After adjustment for linkage disequilibrium with DR-DQ haplotypes, A*11:01:01 was positively associated with onset age (β = 0.06, p = 0.0370), while the susceptible C*15:02:01 was negatively associated with onset age (β = −0.21, p = 0.0050). The unit for β was double square-root (fourth root) transformed years of change in onset age associated with per copy of the HLA haplotype/allele. In addition, B*46:01:01 was protective (OR 0.41, 0.46; pc [corrected for multiple comparisons] = 0.0044, 0.0040), whereas A*24:02:01 (OR 2.71, 2.25; pc = 0.0003, 0.0002) and B*54:01:01 (OR 3.96, 3.79; pc = 0.0018, 0.0004) were predisposing in both the <18 group and the ≥18 group compared with healthy control participants. In the context of DR4-DQ4, A*11:01:01 (61.29% vs 28.26%, pc = 0.0144) was increased while the predisposing A*24:02:01 (19.35% vs 47.83%, pc = 0.0403) was decreased in patients with onset ≥18 years when compared with patients with onset <18 years.Conclusions/interpretationIn addition to DR-DQ haplotypes, novel HLA class I alleles were detected to play a role in susceptibility to type 1 diabetes with different onset ages, which could improve the understanding of disease heterogeneity and has implications for the design of future studies.Graphical abstract

The association of HLA-DP loci with autoimmune diabetes in Chinese

AimsTo determine if HLA-DP loci independently contribute to classic type 1 diabetes (T1D) of all ages, childhood-onset T1D and latent autoimmune diabetes in adults (LADA) among Chinese Han population. MethodsA total of 518 patients with classic T1D (Among them 180 participants manifested T1D between 1 and 14 years), 519 patients with LADA and 527 normal controls were genotyped for both HLA-DPA1 and -DPB1 loci. The frequencies of DP alleles and haplotypes in patients were directly compared to those in controls, followed by adjustment for linkage disequilibrium (LD) with DR-DQ haplotypes. ResultsIn the direct comparison, DPA1*01:03, DPB1*04:01 and DPA1*01:03-DPB1*04:01 showed disease-predisposing effects in both the overall T1D group and the childhood-onset T1D group mainly due to their conjunction with the known susceptible DR3 haplotype. Conditioning on DR-DQ haplotypes, only DPA1*02:02-DPB1*02:02 significantly increased T1D risk among those diagnosed during childhood (OR = 2.02, 95% CI = 1.35–3.01). Whether or not adjusted for LD, no statistically significant HLA-DP association could be observed for LADA. ConclusionHLA-DP is implicated in the pathogenesis of childhood-onset T1D in Chinese, independent of the predominant DR-DQ loci and might serve as additional markers in genetic models for the recognition of those genetically at-risk individuals.

COVID-19 Challenges to ASEAN-5 Currencies Dynamic Linkages: Unity or Disunity?

This paper aim to empirically investigate the dynamic linkages of ASEAN-5 currencies market pre-and during COVID-19. The study started with Structural VAR by imposing structure to the regional exchange rates, followed by co-integration and Error Correction Model (VECM) within the VAR framework to capture the dynamic linkages of regional currencies. There are three main findings from this study. First, there is one co-integration relationship in both periods. Second, prior to the COVID -19, only Indonesia Rupiah that is statistically significant in bringing the exchange rate back to its long run path by 0.31% adjustment. The speed of adjustments back to this long run equilibrium is about 10 months. Third, the value of ECTs across all the countries were larger during COVID -19 implying to an extent there are some degree of intervention in an individual country. However, only Singapore Dollar and Indonesian Rupiah’s ECT are statistically significant in bringing their currencies back to the regional long run equilibrium. In other words, when there is any disequilibrium during the COVID -19, 57.32% and 67.67% of disequilibrium adjustment respectively come from Singapore Dollar and Indonesian Rupiah, correction takes about 2 days. This study add value to as to the first to investigate the subtleties movement of ASEAN-5 currencies during the recent COVID -19 pandemic.

Private Domestic Investment and Manufacturing Sector Output in Nigeria

This study examined the impact of private domestic investment on manufacturing sector output in Nigeria from 1970 to 2017. The study specifically looked at the impact of private domestic investment on manufacturing sector’s output in a static and dynamic model. Six variables were employed in the study and were sourced from CBN statistical bulletin and World Development Indicators for the period covering from 1970 to 2017. The analysis of the variables undergoes three approaches, the pre-analysis of data, model estimation and the diagnostic analysis of the model. The first approach employed tables and graphs to explain the behaviour of the data, equally the univariate analysis of the data were examine with the Augmented Dickey-Fuller equations and the possibility of long-term relationship. The models were estimated with the ARDL estimator and model selected with the Akaike Information Criteria, and finally the models estimated were tested using the Jaque-Bera statistics, Ramsey RESET Test, Breusch-Godfrey and Harvey test for residual normality, specification bias, autocorrelation and heteroskedasticity respectively. The results from the analytical methods shows that there is over 82 percent increase in the output of Manufacturing sector in the late 1970s and early 1980s and over 98 percent increase the output of the manufacturing sector in the late within 2010 and 2015. Also, the study observed that the responses of output of the manufacturing sector to private domestic investment are positive and significant in the static and dynamic models. The study found that the impact of private domestic investment on manufacturing sector output were fairly elastic in the static model and fairly inelastic in the dynamic model. Finally, the study found that the model have a weak adjustment mechanism. The adjustment of disequilibrium between static and dynamic equilibrium is weak or just 24.9 percent. Since private domestic investment is significant and positively impacted on the performance of the manufacturing sector irrespective of the time zone, the study recommended for increase in the credit to private sector by the apex monetary authority.

109-OR: Genetic Discrepancy of HLA Class I Alleles in Chinese Patients with Type 1 Diabetes at Different Onset Ages

Association between HLA class I genes and onset ages of type 1 diabetes (T1D) has been reported in Europeans—risk A*2402 and B*3906 were associated with an earlier age at onset. However, there exists considerable heterogeneity in different populations and individuals of T1D. Its incidence varies dramatically by country and region, ranging from &amp;gt; 60 per 100000 persons years in Finland to 1.01 per 100000 persons years in China. With latter, as many as 65% of the newly diagnosed patients occurred among adults. Furthermore, little is known about the distribution of HLA class I alleles in Chinese patients with T1D at different onset ages. To clarify the contribution of HLA class I genes to T1D with different onset ages in Chinese, 376 patients with T1D and 500 healthy controls were enrolled in this study to analyze HLA-A, B, C alleles conditioning on DRB1-DQA1-DQB1 haplotypes. Among them, 159 patients with an onset age &amp;lt; 15 years were assigned into early-onset group (EG) while the rest 217 patients constituted the late-onset group (LG). After adjustment for linkage disequilibrium with HLA class II, A*24:02:01 (OR 2.7), B*54:01:01 (OR 4.1) and C*15:02:01 (OR 7.8) were associated with susceptibility in EG patients, while A*24:02:01 (OR 2.3), B*15:02:01 (OR 2.5), B*54:01:01 (OR 3.6) and C*08:01:01 (OR 2.0) were predisposing in LG patients when compared with control subjects. Besides, B*46:01:01 (OR 0.4) conferred protection against T1D in EG patients, while B*46:01:01 (OR 0.5) and A*02:07:01 (OR 0.6) were protective in LG patients. When comparing the distribution of HLA class I genes between EG and LG, the data showed that the frequency of A*11:01:01 was higher in LG than EG. When A*11:01:01 was analyzed in patients at all ages using linear regression, it showed a positive correlation between A*11:01:01 and T1D onset age. In conclusion, the data showed that HLA class I alleles play a role in susceptibility to T1D with different onset ages among Chinese patients, which is independent from DR-DQ haplotypes. Disclosure Z. Jiang: None. W. Ren: None. Y. Xian: None. J. Yan: None. D. Yang: None. S. Luo: None. X. Zheng: None. W. Xu: None. J. Bei: None. L. Groop: None. J. Weng: None. Funding National Natural Science Foundation of China (81530025); National Key Research and Development Program of China (2017YFC1309603); Sun Yat-sen University (2007030)

Short-Run Disequilibrium Adjustment and Long-Run Equilibrium in the International Stock Markets: A Network-Based Approach

In this paper, we propose a network-based analytical framework that exploits cointegration and the error correction model to systematically investigate the directional interconnectedness of the short-run disequilibrium adjustment towards long-run equilibrium affecting the international stock market during the period of 5 January 2007 to 30 June 2017. Under this setting, we investigate whether and how the cross-border directional interconnectedness within the world's 23 developed and 23 emerging stock markets altered during the 2007-2009 Global Financial Crisis, 2010-2012 European Sovereign Debt Crisis, and the entire period of 2007-2017. The main results indicate that changes in directional interconnectedness within stock markets worldwide did occur under the impact of the recent financial crises. The extent of the short-run disequilibrium adjustment towards long-run equilibrium for individual stock markets is not homogeneous over different time scales. The derived networks of stock markets interconnectedness allow us to visually characterize how specific stock markets from different regions form interconnected groups when exhibiting similar behaviours, which none the less provides significant information for strategic portfolio and risk management.

Impact of Financial Development Indicators on Economic Growth in Pakistan: Empirical Evidence from Time Series Data Analysis

The Current research has analyzed impacts of financial development both short run and long run, on economic growth of Pakistan during the period 1980-2014. To measure financial development, study has utilized principal component analysis (PCA) to form a single proxy index that covers four important dimensions such as banking and non-banking financial institutions and both financial access and markets simultaneously. It consists of five financial development ratios e.g. financial system deposits to GDP, private sector credit of banks to GDP, commercial bank assets to commercial and central banks assets, foreign direct investments to GDP and financial market capitalization to GDP. Empirical findings suggest that long run relationship is more evident in case Pakistan’s context for financial development and growth of an economy. While the mechanism of short run dis-equilibrium adjustment in case of estimated, error correction model is expected towards the long run relation. Policy makers can use results for parallel and successful expansion of both financial and economic development.

Effects of Iran's WTO Accession on the Cement Industry: A Dynamic Disequilibrium Adjustment Model (DDAM) of Simultaneous Equations

Many companies around the globe are re-examining their business operations to explore profitable growth in international markets.The attractiveness of the membership in WTO can be recognized not only in the growing number of its members but also as a result of increasing access to potential markets around the world. Iranian economy suffers from huge inefficiency in its trade relationships with other countries due to import compression policy and strict import controls. Iran's import profile is heavily skewed towards those tradable that are not strongly under the effects of WTO, indicating protectionism policy in the industry sector. Besides the need for easing protectionism, the emphasis placed on the growth of non-oil exports and reducing oil dependency as an objective in the five-year development plans provides a strong argument for joining WTO. Measuring technical efficiency in the cement industry in Iran suggests that companies with export-orientation policy have potentials to succeed in increasing their technical efficiency.The new discovering realm of WTO for Iran's trade policy has been evaluated in this paper. The pros and cons for joining induced us to investigate the effects of Iran's membership on the cement industry. By designing a dynamic disequilibrium adjustment model (DDAM), we use annual data for the period 1963-2002 to estimate a simultaneous system of econometric equations including cement supply, exports, imports, and consumption functions in order to quantify the effects of joining on the cement industry of Iran. One of the main challenges confronting the Iranian cement industry is to improve the competitiveness of the industry by reducing the subsidies, removing restrictions, and price controls. Indeed, the experience of other counties after joining WTO portrays a conflicting profile on the effects of accession on domestic economies. While some countries have developed important trading partners, others have suffered due to the loss of domestic industries. In this paper, we intend to examine the hypothesis of whether reducing the tariff rates will promote Iranian cement industry. The results reveal that joining WTO has negligible effects on consumption, production, and exports, though, will raise imports substantially.

Characterization of DSM-IV Opioid Dependence Among Individuals of European Ancestry

The opioid epidemic in the United States has led to unprecedented increases in morbidity and mortality, posing a serious public health crisis. Although twin and family studies, as well as genome-wide association studies (GWAS), all identify significant genetic factors contributing to opioid dependence, no studies to date have estimated marker-based heritability estimates of opioid dependence. The goal of the current study was to use a large, genetically imputed, case/control sample of 4,064 participants (after quality control and imputation) with genome-wide data to estimate the unbiased heritability tagged by single nucleotide polymorphisms (SNPs). Study data were part of the Genome-wide Study of Heroin Dependence obtained via the Database for Genotypes and Phenotypes (dbGaP). Genomic-Relatedness-Matrix Restricted Maximum Likelihood with adjustment for minor allele frequency (MAF) and linkage disequilibrium (LD; GREML-LDMS) was used to determine the variation in opioid dependence attributable to common SNPs from imputed data. Mixed linear models were used in an exploratory GWAS to assess effects of single SNPs. At least 45% of the variance in opioid dependence according to the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, was attributable to common SNPs, after stratifying to account for differences in MAF and LD across the genome. Most of the genetic variance was tagged by SNPs in the 1%-9% MAF range and in low LD with other SNPs in the region. Two markers in LOC101927293 survived multiple-testing correction (i.e., q value < .05). Nearly half of the variation in opioid dependence can be attributed to common SNPs. Most of this variation is due to rare variants in low LD with other markers in the region.

Relationship between Exchange Rate and Gross Domestic Product in Nigeria ARDL Approach

Relationship between Exchange Rate and Gross Domestic Product in Nigeria ARDL Approach Idris Muhammad Idris, Baba Ali Ashemi and MohammedMusa Abstract This paper empirically investigates the relationship between exchange rate and the Gross Domestic Product (GDP) in Nigeria from 1981 to 2017. The annual data was obtained from CBN statistical bulletin. Using the Auto-Regressive Distributed Lag (ARDL) co-integration procedure. The result indicates that GDP in Nigeria is not responsive to official exchange rate movement. A long run relationship was found to exist between GDP and official exchange rate, but not statistically significant. The Error Correction Mechanism (ECM) estimate was rightly signed but was found to have a short-run disequilibrium adjustment of less than 2% for correcting any deviation from long-run equilibrium. The models are found not to have serial correlation and also found to be stable meaning that the result is appropriate for policy consideration. It is therefore suggested that policy makers should not totally rely on exchange rate manipulation as an instrument to boost the economy, but should consider other economic variables to strengthen the GDP. Full Text: PDF DOI: 10.15640/jeds.v7n3a6

The Trouble with Harrod: The fundamental instability of the warranted rate in the light of the Sraffian Supermultiplier

AbstractThe paper argues that Harrodian instability is an instance of what Hicks in his book Capital and Growth (1965) called static instability, related to the direction (and not to the intensity) of the disequilibrium adjustment process. We show why such instability obtains in demand‐led growth models in which the ratio of capacity creating private investment to output ratio is given exogenously by the aggregate marginal propensity to save. We also show that Sraffian Supermultiplier model overcomes the Harrodian instability and that its demand‐led equilibrium is statically stable. It is explained that the latter results do not follow from the presence of autonomous non‐capacity creating expenditure component as such but from its presence within a model in which investment is driven by the capital stock adjustment principle (i.e., the flexible accelerator). Finally, we argue that, although being statically stable, the equilibrium growth path of the Sraffian Supermultiplier model can be dynamically stable or unstable depending on the intensity of the reaction of investment to demand. We then provide a discrete time sufficient condition for the dynamic stability of such equilibrium that implies that the marginal propensity to invest remains lower than the marginal propensity to save during the adjustment process, a modified Keynesian stability condition.

POLARIS: Polygenic LD-adjusted risk score approach for set-based analysis of GWAS data.

ABSTRACTPolygenic risk scores (PRSs) are a method to summarize the additive trait variance captured by a set of SNPs, and can increase the power of set‐based analyses by leveraging public genome‐wide association study (GWAS) datasets. PRS aims to assess the genetic liability to some phenotype on the basis of polygenic risk for the same or different phenotype estimated from independent data. We propose the application of PRSs as a set‐based method with an additional component of adjustment for linkage disequilibrium (LD), with potential extension of the PRS approach to analyze biologically meaningful SNP sets. We call this method POLARIS: POlygenic Ld‐Adjusted RIsk Score. POLARIS identifies the LD structure of SNPs using spectral decomposition of the SNP correlation matrix and replaces the individuals' SNP allele counts with LD‐adjusted dosages. Using a raw genotype dataset together with SNP effect sizes from a second independent dataset, POLARIS can be used for set‐based analysis. MAGMA is an alternative set‐based approach employing principal component analysis to account for LD between markers in a raw genotype dataset. We used simulations, both with simple constructed and real LD‐structure, to compare the power of these methods. POLARIS shows more power than MAGMA applied to the raw genotype dataset only, but less or comparable power to combined analysis of both datasets. POLARIS has the advantages that it produces a risk score per person per set using all available SNPs, and aims to increase power by leveraging the effect sizes from the discovery set in a self‐contained test of association in the test dataset.