Fiscal multipliers in the COVID19 recession.

In response to the record-breaking COVID19 recession, many governments have adopted unprecedented fiscal stimuli. While countercyclical fiscal policy is effective in fighting conventional recessions, little is known about the effectiveness of fiscal policy in the current environment with widespread shelter-in-place ("lockdown") policies and the associated considerable limits on economic activity. Using detailed regional variation in economic conditions, lockdown policies, and U.S. government spending, we document that the effects of government spending were stronger during the peak of the pandemic recession, but only in cities that were not subject to strong stay-at-home orders. We examine mechanisms that can account for our evidence and place our findings in the context of other recent evidence from microdata.

Inequality, fiscal policy and COVID19 restrictions in a demand-determined economy.

We evaluate the effects of inequality, fiscal policy, and COVID19 restrictions in a model of economic slack with potentially rigid capital operating costs. Rich households satiate their demand for goods/services (and consume an endowment on the margin), whereas poor households' spending on goods/services is limited by their income (which in turn depends on spending by the rich and on fiscal transfers). The model implies that inequality has large negative effects on output, while also diminishing the effects of demand-side fiscal stimulus. COVID restrictions can reduce current-period GDP by more than is directly associated with the restrictions themselves when rigid capital costs induce firm exit. Higher inequality is associated with larger restriction multipliers. The effectiveness of fiscal policies depends on inequality and the joint distribution of capital operating costs and firm revenues. Furthermore, COVID19 restrictions can cause future inflation, as households tilt their expenditure toward the future.

The effects of the COVID pandemic on the federal budget outlook.

We examine the impact of COVID-19 on the federal budget outlook. We find substantial but temporary effects on spending and revenues, with more moderate but permanent effects on the long-term projections. We project that the debt-to-GDP ratio, currently 98%, will rise to 190% in 2050 under current law, compared to a CBO pre-COVID projection of 180%. Sharply lower interest rates projected for the next dozen years help moderate future debt accumulation. Under a "current policy" projection that allows temporary tax provisions-such as those in the Tax Cut and Jobs Act of 2017-to be made permanent, the debt-to-GDP ratio would rise to 222% by 2050 and would continuing rising thereafter. The long-term projections are sensitive to interest rates. We discuss several aspects of these results, including how the current episode compares to past debt changes, the role of historically low interest rates, and the role of recent Federal Reserve Board policies and actions. Because of the macro-stabilization effects of fiscal tightening, and because low interest rates create "breathing room" for fiscal policy, we do not see the large, short-run debt accumulation resulting from the current pandemic as necessitating any immediate offsetting response. But the long-term projections show that significant fiscal imbalances remain and will eventually require attention.

Hyperactivation of TORC1 Drives Resistance to the Pan-HER Tyrosine Kinase Inhibitor Neratinib in HER2-Mutant Cancers.

We developed neratinib-resistant HER2-mutant cancer cells by gradual dose escalation. RNA sequencing identified TORC1 signaling as an actionable mechanism of drug resistance. Primary and acquired neratinib resistance in HER2-mutant breast cancer patient-derived xenografts (PDXs) was also associated with TORC1 hyperactivity. Genetic suppression of RAPTOR or RHEB ablated P-S6 and restored sensitivity to the tyrosine kinase inhibitor. The combination of the TORC1 inhibitor everolimus and neratinib potently arrested the growth of neratinib-resistant xenografts and organoids established from neratinib-resistant PDXs. RNA and whole-exome sequencing revealed RAS-mediated TORC1 activation in a subset of neratinib-resistant models. DNA sequencing of HER2-mutant tumors clinically refractory to neratinib, as well as circulating tumor DNA profiling of patients who progressed on neratinib, showed enrichment of genomic alterations that converge to activate the mTOR pathway.

Extended Adjuvant Therapy with Neratinib Plus Fulvestrant Blocks ER/HER2 Crosstalk and Maintains Complete Responses of ER+/HER2+ Breast Cancers: Implications to the ExteNET Trial.

PURPOSE: The phase III ExteNET trial showed improved invasive disease-free survival in patients with HER2+ breast cancer treated with neratinib versus placebo after trastuzumab-based adjuvant therapy. The benefit from neratinib appeared to be greater in patients with ER+/HER2+ tumors. We thus sought to discover mechanisms that may explain the benefit from extended adjuvant therapy with neratinib.Experimental Design: Mice with established ER+/HER2+ MDA-MB-361 tumors were treated with paclitaxel plus trastuzumab ± pertuzumab for 4 weeks, and then randomized to fulvestrant ± neratinib treatment. The benefit from neratinib was evaluated by performing gene expression analysis for 196 ER targets, ER transcriptional reporter assays, and cell-cycle analyses. RESULTS: Mice receiving "extended adjuvant" therapy with fulvestrant/neratinib maintained a complete response, whereas those treated with fulvestrant relapsed rapidly. In three ER+/HER2+ cell lines (MDA-MB-361, BT-474, UACC-893) but not in ER+/HER2- MCF7 cells, treatment with neratinib induced ER reporter transcriptional activity, whereas treatment with fulvestrant resulted in increased HER2 and EGFR phosphorylation, suggesting compensatory reciprocal crosstalk between the ER and ERBB RTK pathways. ER transcriptional reporter assays, gene expression, and immunoblot analyses showed that treatment with neratinib/fulvestrant, but not fulvestrant, potently inhibited growth and downregulated ER reporter activity, P-AKT, P-ERK, and cyclin D1 levels. Finally, similar to neratinib, genetic and pharmacologic inactivation of cyclin D1 enhanced fulvestrant action against ER+/HER2+ breast cancer cells. CONCLUSIONS: These data suggest that ER blockade leads to reactivation of ERBB RTKs and thus extended ERBB blockade is necessary to achieve durable clinical outcomes in patients with ER+/HER2+ breast cancer.

Neratinib after trastuzumab-based adjuvant therapy in HER2-positive breast cancer (ExteNET): 5-year analysis of a randomised, double-blind, placebo-controlled, phase 3 trial.

BACKGROUND: ExteNET showed that 1 year of neratinib, an irreversible pan-HER tyrosine kinase inhibitor, significantly improves 2-year invasive disease-free survival after trastuzumab-based adjuvant therapy in women with HER2-positive breast cancer. We report updated efficacy outcomes from a protocol-defined 5-year follow-up sensitivity analysis and long-term toxicity findings. METHODS: In this ongoing randomised, double-blind, placebo-controlled, phase 3 trial, eligible women aged 18 years or older (≥20 years in Japan) with stage 1-3c (modified to stage 2-3c in February, 2010) operable breast cancer, who had completed neoadjuvant and adjuvant chemotherapy plus trastuzumab with no evidence of disease recurrence or metastatic disease at study entry. Patients who were eligible patients were randomly assigned (1:1) via permuted blocks stratified according to hormone receptor status (hormone receptor-positive vs hormone receptor-negative), nodal status (0 vs 1-3 vs or ≥4 positive nodes), and trastuzumab adjuvant regimen (given sequentially vs concurrently with chemotherapy), then implemented centrally via an interactive voice and web-response system, to receive 1 year of oral neratinib 240 mg/day or matching placebo. Treatment was given continuously for 1 year, unless disease recurrence or new breast cancer, intolerable adverse events, or consent withdrawal occurred. Patients, investigators, and trial funder were masked to treatment allocation. The predefined endpoint of the 5-year analysis was invasive disease-free survival, analysed by intention to treat. ExteNET is registered with ClinicalTrials.gov, number NCT00878709, and is closed to new participants. FINDINGS: Between July 9, 2009, and Oct 24, 2011, 2840 eligible women with early HER2-positive breast cancer were recruited from community-based and academic institutions in 40 countries and randomly assigned to receive neratinib (n=1420) or placebo (n=1420). After a median follow-up of 5·2 years (IQR 2·1-5·3), patients in the neratinib group had significantly fewer invasive disease-free survival events than those in the placebo group (116 vs 163 events; stratified hazard ratio 0·73, 95% CI 0·57-0·92, p=0·0083). The 5-year invasive disease-free survival was 90·2% (95% CI 88·3-91·8) in the neratinib group and 87·7% (85·7-89·4) in the placebo group. Without diarrhoea prophylaxis, the most common grade 3-4 adverse events in the neratinib group, compared with the placebo group, were diarrhoea (561 [40%] grade 3 and one [<1%] grade 4 with neratinib vs 23 [2%] grade 3 with placebo), vomiting (grade 3: 47 [3%] vs five [<1%]), and nausea (grade 3: 26 [2%] vs two [<1%]). Treatment-emergent serious adverse events occurred in 103 (7%) women in the neratinib group and 85 (6%) women in the placebo group. No evidence of increased risk of long-term toxicity or long-term adverse consequences of neratinib-associated diarrhoea were identified with neratinib compared with placebo. INTERPRETATION: At the 5-year follow-up, 1 year of extended adjuvant therapy with neratinib, administered after chemotherapy and trastuzumab, significantly reduced the proportion of clinically relevant breast cancer relapses-ie, those that might lead to death, such as distant and locoregional relapses outside the preserved breast-without increasing the risk of long-term toxicity. An analysis of overall survival is planned after 248 events. FUNDING: Wyeth, Pfizer, and Puma Biotechnology.

HOW THE GROWING GAP IN LIFE EXPECTANCY MAY AFFECT RETIREMENT BENEFITS AND REFORMS.

Older Americans have experienced dramatic gains in life expectancy in recent decades, but an emerging literature reveals that these gains are accumulating mostly to those at the top of the income distribution. We explore how growing inequality in life expectancy affects lifetime benefits from Social Security, Medicare, and other programs and how this phenomenon interacts with possible program reforms. We first project that life expectancy at age 50 for males in the two highest income quintiles will rise by 7 to 8 years between the 1930 and 1960 birth cohorts, but that the two lowest income quintiles will experience little to no increase over that time period. This divergence in life expectancy will cause the gap between average lifetime program benefits received by men in the highest and lowest quintiles to widen by $130,000 (in $2009) over this period. Finally we simulate the effect of Social Security reforms such as raising the normal retirement age and changing the benefit formula to see whether they mitigate or enhance the reduced progressivity resulting from the widening gap in life expectancy.

Welfare and Generational Equity in Sustainable Unfunded Pension Systems.

Using stochastic simulations we analyze how public pension structures spread the risks arising from demographic and economic shocks across generations. We consider several actual and hypothetical sustainable PAYGO pension structures, including: (1) versions of the US Social Security system with annual adjustments of taxes or benefits to maintain fiscal balance; (2) Sweden's Notional Defined Contribution system and several variants developed to improve fiscal stability; and (3) the German system, which also includes annual adjustments to maintain fiscal balance. For each system, we present descriptive measures of uncertainty in representative outcomes for a typical generation and across generations. We then estimate expected utility for generations based on simplifying assumptions and incorporate these expected utility calculations in an overall social welfare measure. Using a horizontal equity index, we also compare the different systems' performance in terms of how neighboring generations are treated.While the actual Swedish system smoothes stochastic fluctuations more than any other and produces the highest degree of horizontal equity, it does so by accumulating a buffer stock of assets that alleviates the need for frequent adjustments. In terms of social welfare, this accumulation of assets leads to a lower average rate of return that more than offsets the benefits of risk reduction, leaving systems with more frequent adjustments that spread risks broadly among generations as those most preferred.

Toward a 21st-century health care system: recommendations for health care reform.

The coverage, cost, and quality problems of the U.S. health care system are evident. Sustainable health care reform must go beyond financing expanded access to care to substantially changing the organization and delivery of care. The FRESH-Thinking Project (www.fresh-thinking.org) held a series of workshops during which physicians, health policy experts, health insurance executives, business leaders, hospital administrators, economists, and others who represent diverse perspectives came together. This group agreed that the following 8 recommendations are fundamental to successful reform: 1. Replace the current fee-for-service payment system with a payment system that encourages and rewards innovation in the efficient delivery of quality care. The new payment system should invest in the development of outcome measures to guide payment. 2. Establish a securely funded, independent agency to sponsor and evaluate research on the comparative effectiveness of drugs, devices, and other medical interventions. 3. Simplify and rationalize federal and state laws and regulations to facilitate organizational innovation, support care coordination, and streamline financial and administrative functions. 4. Develop a health information technology infrastructure with national standards of interoperability to promote data exchange. 5. Create a national health database with the participation of all payers, delivery systems, and others who own health care data. Agree on methods to make de-identified information from this database on clinical interventions, patient outcomes, and costs available to researchers. 6. Identify revenue sources, including a cap on the tax exclusion of employer-based health insurance, to subsidize health care coverage with the goal of insuring all Americans. 7. Create state or regional insurance exchanges to pool risk, so that Americans without access to employer-based or other group insurance could obtain a standard benefits package through these exchanges. Employers should also be allowed to participate in these exchanges for their employees' coverage. 8. Create a health coverage board with broad stakeholder representation to determine and periodically update the affordable standard benefit package available through state or regional insurance exchanges.

The small-caliber esophagus: an unappreciated cause of dysphagia for solids in patients with eosinophilic esophagitis.

BACKGROUND: Dysphagia for solids usually indicates a structural esophageal abnormality. This article is a description of a group of 5 young men referred with chronic dysphagia for solids. Esophagoscopy and barium esophagogram failed to show a cause. Our evaluation showed that these patients had eosinophilic esophagitis and a "small-caliber esophagus." This article describes the clinical features, diagnosis, and management of the small-caliber esophagus. METHODS: Patients were evaluated by barium esophagogram with marshmallow challenge, esophageal manometry, Bernstein test, and EGD with biopsies. All patients underwent empiric esophageal dilation with wire-guided dilators. OBSERVATIONS: A diffusely narrow esophagus was appreciated in 3 of 5 patients radiographically, endoscopically, or both. However, the latter studies showed normal findings in 2 patients. Eosinophilic esophagitis was found in all 4 patients in whom biopsy specimens were obtained. Esophageal manometry was performed in 4 patients and showed normal findings in all. The feature that most confirmed the diagnosis of small-caliber esophagus in all patients was the unusually long rents (8 to 17 cm) in the esophageal wall after empiric dilation. Dilation relieved the symptoms in all cases. CONCLUSIONS: The small-caliber esophagus is a cause of dysphagia for solids in young men with eosinophilic esophagitis. It frequently defies detection by routine diagnostic studies. The clue to diagnosis lies in endoscopic reinspection after dilation and the finding of unusually long rents in the esophageal wall.