An examination of the effects of government purchases in an open economy

This paper examines the effects of permanent and transitory changes in government purchases in the context of a model of a small open economy that produces and consumes both traded and nontraded goods. The model incorporates an equilibrium interpretation of the business cycle that emphasizes the responsiveness of agents to intertemporal relative price changes. It is demonstrated that transitory increases in government purchases lead to an appreciation of the real exchange rate and an ambiguous change (although a likely worsening) in the current account, while permanent increases have an ambiguous impact on the real exchange rate and no effect on the current account. When agents do not know whether a given increase in government purchases is permanent or transitory the effect is a weighted average of these separate effects. The weights depend on the relative variances of the transitory and permanent components of government purchases. © 1985.

Modeling economy-wide vs sectoral climate policies using combined aggregate-sectoral models

Economic analyses of climate change policies frequently focus on reductions of energy-related carbon dioxide emissions via market-based, economy-wide policies. The current course of environment and energy policy debate in the United States, however, suggests an alternative outcome: sector-based and/or inefficiently designed policies. This paper uses a collection of specialized, sector-based models in conjunction with a computable general equilibrium model of the economy to examine and compare these policies at an aggregate level. We examine the relative cost of different policies designed to achieve the same quantity of emission reductions. We find that excluding a limited number of sectors from an economy-wide policy does not significantly raise costs. Focusing policy solely on the electricity and transportation sectors doubles costs, however, and using non-market policies can raise cost by a factor of ten. These results are driven in part by, and are sensitive to, our modeling of pre-existing tax distortions. Copyright © 2006 by the IAEE. All rights reserved.

Punctuated evolution and transitional hybrid network in an ancestral cell cycle of fungi.

Although cell cycle control is an ancient, conserved, and essential process, some core animal and fungal cell cycle regulators share no more sequence identity than non-homologous proteins. Here, we show that evolution along the fungal lineage was punctuated by the early acquisition and entrainment of the SBF transcription factor through horizontal gene transfer. Cell cycle evolution in the fungal ancestor then proceeded through a hybrid network containing both SBF and its ancestral animal counterpart E2F, which is still maintained in many basal fungi. We hypothesize that a virally-derived SBF may have initially hijacked cell cycle control by activating transcription via the cis-regulatory elements targeted by the ancestral cell cycle regulator E2F, much like extant viral oncogenes. Consistent with this hypothesis, we show that SBF can regulate promoters with E2F binding sites in budding yeast.