Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

Growth and reproduction of the dolphinfish (Coryphaena equiselis and Coryphaena hippurus) in the Canary Islands, Central-East Atlantic (preliminary results)

The size, growth and spawning characteristics of pompano dolphin (N=150) and common dolphinfish (N=36) caught off the Canary Islands between May and September 1995 and between July and September 1996 were examined. Fork length (FL) of pompano dolphin was in the range 28.3-62.8 cm. In 1995, the mean length increased significantly from June to September. However, in 1996, the mean length was significantly larger in July than in September. The overall length-weight relationship was W=0.0287*FL2.774 (r=0.97), while these relationships by sex were as follows: W=0.031*FL2.758 (r=0.98) and W=0.0282*FL2.776 (r=0.97), for males and females respectively. Spawning takes place at the beginning of the Summer (June-July). All the individuals obtained showed developing gonads, but females showed a higher gonadosomatic index (GSI) than males. The highest GSI values were obtained in June (x- =3.10±1.73), and decreased progressively towards the end of the season (September), when the average of this index was x- = 1.86±0.87. Similarly, the condition index decreased significantly from June to September. The proportion of females was always significantly higher than males, except in July 1996 when it was 1:1. There was a high correspondence between growth rates determined by annuli scale interpretation and modal progression analysis. According to scale annuli interpretation, the individuals caught showed more than five age classes. However, there are doubts about age assignation from scales. Fork length of common dolphinfish was in the range of 76.5-103.0 cm. The length-weight relationships obtained for all the specimens caught was W=0.00095FL3.527 (r=0.96), while these relationships by sex were as follows: W=0.00398FL3.222 (r=0.94) and W=0.01656FL2.873 (r=0.91), for males and females respectively. Spawning probably takes place at the beginning of the Summer. All the individuals obtained showed developing gonads, although the GSI of females were higher than males. The highest GSI values were obtained in June (x- =5.50±2.17). In the same way, the condition index decreased from May to June. The proportion of females was always slightly higher than males (1:1.4), but the ratio was not significantly different from 1:1

Intangible Capital: four years of growth as an open-access scientific publication

Con este nuevo número, la revista Intangible Capital, inicia el cuarto volumen avanzando hacia el quinto año de publicación. Como ya es tradición en la revista, iniciamos este nuevo volumen evaluando el anterior y presentando las nuevas direcciones. Como principales aportaciones del 2007, se destacan hechos relevantes como la renovación de convenios para la indexación científica de la revista, el cambio de plataforma a OJS, la inclusión de un nuevo editor, la nueva composición del editorial board, el equipo de revisores, el cambio a un modelo bilingüe de revista, la nueva financiación obtenida y el trabajo que estamos realizando gran número de editores científicos de acceso abierto en España para el reconocimiento por parte de la Comisión Nacional Evaluadora de la Actividad Investigadora.This issue opens the fourth volume of the Intangible Capital journal, which makes its way towards the fifth year of publication. As usually, we start this volume by evaluating the previous one and tracing new directions. Among the main contributions during the year 2007, we consider important to highlight the following aspects: the renewal of the scientific indexation agreements, the platform change to OJS, the appointment of a new editor, new members included in the editorial board, the board of reviewers, the change towards a bilingual model, the new financing obtained and, the last but not the least, the work undertaken together with many scientific editors of open access Spanish journals for obtaining the positive evaluation of the CNEAI (National Commission for the Evaluation of the Research Activity) and thus, being a proof of scientific excellence

Anomalous Proper-Motions in the Cygnus Super Bubble Region

In an analysis of proper motions of O and B stars contained the Input Catalogue for Hipparcos, we have found a clear deviation from the expected pattern of systematic motions which can be readily identified with the associations Cygnus OB1 and Cygnus OB9, located near de the edge of the Cygnus Superbubble. Teha anomalous motions are directed outwards from the center of the Superbubble, which is coincident with tha association Cygnus OB2. This seems to support the hypothesis of a strong stellar and supernova activity in Cygnus 0B2 giving rise to the Superbubble and, by means of gravitational instabilities in its boundaries, to Cygnus 0B1 and Cygnus OB9. New uvby-beta aperture photometry of selected O and B stars in the area of Cygnus OB1 and Cygnus OB9 is also presented and analyzed in this paper.

Age and growth of leaping grey mullet (Liza saliens (Risso, 1810)) in Minorca (Balearic Islands)

A population of leaping grey mullet (Liza saliens (Risso, 1810) was studied in order to measure seasonal and annual growth rates. The annual growth rates were similar to those reported for other populations from the central Western Mediterranean and intermediate between those living in northern and southern areas. As usual, the growth rate of adult males was slower than that of females. Males reached adulthood in their third summer. Females of the same age showed a moderate gonadal development, but did not ripen until the next summer. Mullets of all ages gained weight only when the water temperature was higher than 20°C. However adults and immature fish showed reduced growth in mid-summer, when that of the juveniles peaked. This difference is not a consequence of the reproductive cost, because the growth rate of immatures was greatly reduced although they did not spawn.

Calmodulin Regulates Intracellular Trafficking of Epidermal Growth Factor Receptor and the MAPK Signaling Pathway

The epidermal growth factor receptor (EGFR) is a member of the tyrosine kinase receptor family involved in signal transduction and the regulation of cellular proliferation and differentiation. It is also a calmodulin-binding protein. To examine the role of calmodulin in the regulation of EGFR, the effect of calmodulin antagonist, W-13, on the intracellular trafficking of EGFR and the MAPK signaling pathway was analyzed. W-13 did not alter the internalization of EGFR but inhibited its recycling and degradation, thus causing the accumulation of EGF and EGFR in enlarged early endosomal structures. In addition, we demonstrated that W-13 stimulated the tyrosine phosphorylation of EGFR and consequent recruitment of Shc adaptor protein with EGFR, presumably through inhibition of the calmodulin-dependent protein kinase II (CaM kinase II). W-13¿mediated EGFR phosphorylation was blocked by metalloprotease inhibitor, BB94, indicating a possible involvement of shedding in this process. However, MAPK activity was decreased by W-13; dissection of this signaling pathway showed that W-13 specifically interferes with Raf-1 activity. These data are consistent with the regulation of EGFR by calmodulin at several steps of the receptor signaling and trafficking pathways.

Immunoelectron microscopic localization of transforming growth factor alpha in rat colon

Transforming growth factor alpha (TGF alpha) is a polypeptide, which binds to the epidermal growth factor receptor to carry out its function related to cell proliferation and differentiation. The ultrastructural localisation of TGF alpha was studied in both the proximal and the distal colon. The columnar cells, lining the surface epithelium of the proximal colon, showed a strong immunoreactivity in the polyribosomes and in the interdigitations of the lateral membrane. The columnar cells of the crypts and the goblet cells in both the proximal and the distal colon showed the immunostaining in the cis and trans cisternae of the Golgi apparatus. TGF alpha seems to be processed differently in the surface columnar cells and in the crypt columnar cells and goblet cells. Moreover, it probably has different roles in proliferation and differentiation.

E2F1 regulates cellular growth by mTOR signaling

During cell proliferation, growth must occur to maintain homeostatic cell size. Here we show that E2F1 is capable of inducing growth by regulating mTORC1 activity. The activation of cell growth and mTORC1 by E2F1 is dependent on both E2F1's ability to bind DNA and to regulate gene transcription, demonstrating that a gene induction expression program is required in this process. Unlike E2F1, E2F3 is unable to activate mTORC1, suggesting that growth activity could be restricted to individual E2F members. The effect of E2F1 on the activation of mTORC1 does not depend on Akt. Furthermore, over-expression of TSC2 does not interfere with the effect of E2F1, indicating that the E2F1-induced signal pathway can compensate for the inhibitory effect of TSC2 on Rheb. Immunolocalization studies demonstrate that E2F1 induces the translocation of mTORC1 to the late endosome vesicles, in a mechanism dependent of leucine. E2F1 and leucine, or insulin, together affect the activation of S6K stronger than alone suggesting that they are complementary in activating the signal pathway. From these studies, E2F1 emerges as a key protein that integrates cell division and growth, both of which are essential for cell proliferation.

Beta cell mass and growth after syngeneic islet cell transplantation in normal and streptozocin diabetic C57BL/6 mice

In islet transplantation, nonimmunological factors such as limited growth capacity or increased death rate could reduce the beta cell mass in the graft and lead to failure of the transplant. We studied the evolution of beta cell replication and mass after transplantation of insufficient, minimally sufficient, or excessive islet tissue. Streptozocin diabetic C57BL/6 mice received 150 or 300 syngeneic islets under the kidney capsule and normal mice received 300 islets. In streptozocin diabetic mice 300 islets restored normoglycemia; beta cell replication in transplanted islets was similar to replication in normal pancreas and beta cell mass in the graft remained constant. In contrast, 150 islets were insufficient to achieve normoglycemia; beta cell replication was increased initially but not by 18 or 30 d despite persistent hyperglycemia, and beta cell mass fell progressively. When islets were transplanted into normal recipients, beta cell replication remained normal but beta cells underwent atrophy and mass in the graft was substantially reduced. Therefore, with a successful islet transplant, in diabetic mice beta cell replication and mass remain constant. In contrast, when insufficient islet tissue is transplanted an initial increase in beta cell replication can not compensate for a decline in beta cell mass. When excessive islet tissue is transplanted, beta cell mass is reduced despite normal beta cell replication.

Vascular endothelial growth factor and angiopoietin-2 play a major role in the pathogenesis of vascular leakage in cirrhotic rats.

Background and aims: The extent and molecular mechanisms governing plasma extravasation and formation of ascites in cirrhosis are unknown. Vascular endothelial growth factor-A (VEGF-A) and angiopoietin-2 (Ang-2) are endogenous substances with powerful vascular permeability effects. We assessed regional blood flow, vascular leakage, mRNA and tissular expression of VEGF-A and Ang-2 and vascular permeability following VEGF receptor 2 blockade in control and cirrhotic rats to define the vascular territories showing altered vascular permeability in cirrhosis and to determine whether VEGF-A and Ang-2 are involved in this phenomenon. Methods: Arterial blood flow was analysed with the coloured microsphere method. Vascular leakage was measured and visualised with the dye Evan¿s Blue and colloidal carbon techniques, respectively. VEGF-A and Ang-2 expression were determined by real-time polymerase chain reaction (RT-PCR), immunohistochemistry and western blot. The effect on vascular permeability induced by VEGFR2 blockade was assessed by administration of the receptor inhibitor SU11248. Results: Arterial blood flow was increased in the mesentery, pancreas and small intestine but not in the kidney and spleen of cirrhotic rats as compared to controls. Increased vascular leakage was observed in the mesentery and liver, where colloidal carbon spread from microvessels to the adjacent fibrotic tracts. Increased hepatic and mesenteric expression of VEGF-A and Ang-2 was found in cirrhotic rats as compared to controls. Blockade of VEGFR2 markedly reduced hepatic and mesenteric vascular leakage in cirrhotic rats. Conclusions: Enhanced endothelial permeability is restricted to the hepatic and mesenteric vascular beds in cirrhotic rats with ascites and VEGF-A and Ang-2 are key factors in the signalling pathways regulating this dysfunction.

Effects of differential taxation on factor accumulation and growth

In this paper we try to analyze the role of fiscal policy in fostering a higher participation of the different production factors in the human capital production sector in the long-run. Introducing a tax on physical capital and differentiating both a tax on raw labor wage and a tax on skills or human capital we also attempt to present a way to influence inequality as measured by the skill premium, thus trying to relate the increase in human capital with the decrease in income inequality. We will do that in the context of a non-scale growth model.The model here is capable to alter the shares of private factors devoted to each of the two production sectors, final output and human capital, and affect inequality in a different way according to the different tax changes. The simulation results derived in the paper show how a human capital (skills) tax cut, which could be interpreted as a reduction in progressivity, ends up increasing both the shares of labor and physical capital devoted to the production of knowledge and decreasing inequality. Moreover, a raw labor wage tax decrease, which could also be interpreted as an increase in the progressivity of the system, increases the share of labor devoted to the production of final output and increases inequality. Finally, a physical capital tax decrease reduces the share of physical capital devoted to the production of knowledge and allows for a lower inequality value. Nevertheless, none of the various types of taxes ends up changing the share of human capital in the knowledge production, which will deserve our future attention

Growth and externalities across economies : an empirical analysis using spatial econometrics

Recent theoretical models of economic growth have emphasised the role of external effects on the accumulation of factors of production. Although most of the literature has considered the externalities across firms within a region, in this paper we go a step further and consider the possibility that these externalities cross the barriers of regional economies. We assess the role of these external effects in explaining growth and economic convergence. We present a simple growth model, which includes externalities across economies, developing a methodology for testing their existence and estimating their strength. In our view, spatial econometrics is naturally suited to an empirical consideration of these externalities. We obtain evidence on the presence of significant externalities both across Spanish and European regions.