Whither Japan's Economy?

The Japanese economy entered a long recession in spring 1997. Its economic growth has been much lower than in the US and the EU despite large fiscal stimulus packages, a monetary policy which has brought interest rates to zero since 1999, injections of public money to recapitalize banks, and programs of liberalization and deregulation. How could all these policies have failed to bring the Japanese economy back on a sustainable growth path? This paper argues that the failure of Japan's efforts to restore a sound economic environment is the result of having deliberately chosen inappropriate and inadequate monetary and fiscal instruments to tackle the macroeconomic and structural problems that have burdened the Japanese economy since the burst of the financial bubble at the beginning of the 90s. These choices were deliberate, since the "right" policies (in primis the resolution of the banking crisis) presented unbearable political costs, not only for the ruling parties, but also for the bureaucratic and business elites. The misfortunes of the Japanese economy during the long recession not only allow us to draw important economic policy lessons, but also stimulate reflections on the disruptive role on economic policies caused by powerful vested interests when an economy needs broad and deep structural changes. The final part of the paper focuses on ways to tackle Japan's banking crisis. In particular, it explores the Scandinavian solution, which, mutatis mutandis, might serve Japanese policy-makers well.

Understanding Subsystems in Biology through Dimensionality Reduction, Graph Partitioning and Analytical Modeling

Biological systems exhibit rich and complex behavior through the orchestrated interplay of a large array of components. It is hypothesized that separable subsystems with some degree of functional autonomy exist; deciphering their independent behavior and functionality would greatly facilitate understanding the system as a whole. Discovering and analyzing such subsystems are hence pivotal problems in the quest to gain a quantitative understanding of complex biological systems. In this work, using approaches from machine learning, physics and graph theory, methods for the identification and analysis of such subsystems were developed. A novel methodology, based on a recent machine learning algorithm known as non-negative matrix factorization (NMF), was developed to discover such subsystems in a set of large-scale gene expression data. This set of subsystems was then used to predict functional relationships between genes, and this approach was shown to score significantly higher than conventional methods when benchmarking them against existing databases. Moreover, a mathematical treatment was developed to treat simple network subsystems based only on their topology (independent of particular parameter values). Application to a problem of experimental interest demonstrated the need for extentions to the conventional model to fully explain the experimental data. Finally, the notion of a subsystem was evaluated from a topological perspective. A number of different protein networks were examined to analyze their topological properties with respect to separability, seeking to find separable subsystems. These networks were shown to exhibit separability in a nonintuitive fashion, while the separable subsystems were of strong biological significance. It was demonstrated that the separability property found was not due to incomplete or biased data, but is likely to reflect biological structure.

Causes and Effects of Chaos

Most of the recent literature on chaos and nonlinear dynamics is written either for popular science magazine readers or for advanced mathematicians. This paper gives a broad introduction to this interesting and rapidly growing field at a level that is between the two. The graphical and analytical tools used in the literature are explained and demonstrated, the rudiments of the current theory are outlined and that theory is discussed in the context of several examples: an electronic circuit, a chemical reaction and a system of satellites in the solar system.