Is lumpy investment really irrelevant for the business cycle?

New-Keynesian (NK) models can only account for the dynamic effects of monetary policy shocks if it is assumed that aggregate capital accumulation is much smoother than it would be the case under frictionless firm-level investment, as discussed in Woodford (2003, Ch. 5). We find that lumpy investment, when combined with price stickiness and market power of firms,can rationalize this assumption. Our main result is in stark contrast with the conclusions obtained by Thomas (2002) in the context of a real business cycle (RBC) model. We use our model to explain the economic mechanism behind this difference in the predictions of RBC and NK theory.

Disability, capacity for work and the business cycle: An international perspective

An important policy issue in recent years concerns the number of people claimingdisability benefits for reasons of incapacity for work. We distinguish between workdisability , which may have its roots in economic and social circumstances, and healthdisability which arises from clear diagnosed medical conditions. Although there is a linkbetween work and health disability, economic conditions, and in particular the businesscycle and variations in the risk of unemployment over time and across localities, mayplay an important part in explaining both the stock of disability benefit claimants andinflows to and outflow from that stock. We employ a variety of cross?country andcountry?specific household panel data sets, as well as administrative data, to testwhether disability benefit claims rise when unemployment is higher, and also toinvestigate the impact of unemployment rates on flows on and off the benefit rolls. Wefind strong evidence that local variations in unemployment have an importantexplanatory role for disability benefit receipt, with higher total enrolments, loweroutflows from rolls and, often, higher inflows into disability rolls in regions and periodsof above?average unemployment. Although general subjective measures of selfreporteddisability and longstanding illness are also positively associated withunemployment rates, inclusion of self?reported health measures does not eliminate thestatistical relationship between unemployment rates and disability benefit receipt;indeed including general measures of health often strengthens that underlyingrelationship. Intriguingly, we also find some evidence from the United Kingdom and theUnited States that the prevalence of self?reported objective specific indicators ofdisability are often pro?cyclical that is, the incidence of specific forms of disability arepro?cyclical whereas claims for disability benefits given specific health conditions arecounter?cyclical. Overall, the analysis suggests that, for a range of countries and datasets, levels of claims for disability benefits are not simply related to changes in theincidence of health disability in the population and are strongly influenced by prevailingeconomic conditions. We discuss the policy implications of these various findings.

Inequality over the business cycle: Estimating income risk using micro-data on consumption

We use CEX repeated cross-section data on consumption and income, to evaluate the nature of increased income inequality in the 1980s and 90s. We decompose unexpected changes in family income into transitory and permanent, and idiosyncratic and aggregate components, and estimate the contribution of each component to total inequality. The model we use is a linearized incomplete markets model, enriched to incorporate risk-sharing while maintaining tractability. Our estimates suggest that taking risk sharing into account is important for the model fit; that the increase in inequality in the 1980s was mainly permanent; and that inequality is driven almost entirely by idiosyncratic income risk. In addition we find no evidence for cyclical behavior of consumption risk, casting doubt on Constantinides and Duffie s (1995) explanation for the equity premium puzzle.

Heterogeneous life-cycle profiles, income risk and consumption inequality

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in income explain all of the increase in inequality in the 1980s and 90s. Second, we reconcile this finding with the fact that consumption inequality did not increase much over this period. Our results support the view that many permanent changes in income are predictable for consumers, even if they look unpredictable to the econometrician, consistent withmodels of heterogeneous income profiles.

Skill-biased technological change and the business cycle

Over the past two decades, technological progress in the United States hasbeen biased towards skilled labor. What does this imply for business cycles?We construct a quarterly skill premium from the CPS and use it to identifyskill-biased technology shocks in a VAR with long-run restrictions. Hours fallin response to skill-biased technology shocks, indicating that at least part of thetechnology-induced fall in total hours is due to a compositional shift in labordemand. Skill-biased technology shocks have no effect on the relative price ofinvestment, suggesting that capital and skill are not complementary in aggregateproduction.

An evaluation of the life-cycle effects of minimum pensions on retirement behavior

In this paper we explore the effects of the minimum pension program on welfare andretirement in Spain. This is done with a stylized life-cycle model which provides a convenient analytical characterization of optimal behavior. We use data from the Spanish Social Security to estimate the behavioral parameters of the model and then simulate the changes induced by the minimum pension in aggregate retirement patterns. The impact is substantial: there is threefold increase in retirement at 60 (the age of first entitlement) with respect to the economy without minimum pensions, and total early retirement (before or at 60) is almost 50% larger.

Endogenous labor market participation and the business cycle

Existing models of equilibrium unemployment with endogenous labor market participation are complex, generate procyclical unemployment rates and cannot match unemployment variability relative to GDP. We embed endogenous participation in a simple, tractable job market matching model, show analytically how variations in the participation rate are driven by the cross-sectional density of home productivity near the participation threshold, andhow this density translates into an extensive-margin labor supply elasticity. A calibration of the model to macro data not only matches employment and participation variabilities but also generates strongly countercyclical unemployment rates. With some wage rigidity the model also matches unemployment variations well. Furthermore, the labor supply elasticity implied by our calibration is consistent with microeconometric evidence for the US.

Credit constraints, firms' precautionary investment and the business cycle

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit constraints. Following a negative andpersistent aggregate productivity shock, firms shift into short-term investments because they produce more pledgeable output and because they help alleviate futureborrowing constraints. This produces a short-run dampening of the effects of theshock, at the expense of lower long-term investment and future output, relativeto an economy with no credit market imperfections. The effects are exacerbatedby a steepening of the term structure of interest rates that further encourages ashift towards short-term investments in the short-run. Small temporary shocks tothe severity of financing frictions generate large and long-lasting effects on outputthrough their impact on the composition of investment. A positive financial shockproduces much stronger effects than an identical negative shock, while the responsesto positive and negative shocks to aggregate productivity are roughly symmetric.Finally, the paper introduces a novel explanation for the countercyclicality of financing constraints of firms.

Trends in hours, balanced growth and the role of technology in the business cycle

The present paper revisits a property embedded in most dynamic macroeconomic models: the stationarity of hours worked. First, I argue that, contrary to what is often believed, there are many reasons why hours could be nonstationary in those models, while preserving the property of balanced growth. Second, I show that the postwar evidence for most industrialized economies is clearly at odds with the assumption of stationary hours per capita. Third, I examine the implications of that evidence for the role of technology as a source of economic fluctuations in the G7 countries.

Annual reproductive cycle and fecundity of Scorpaena notata (Teleostei, Scorpaenidae)

Scorpaena notata (Teleostei: Scorpaenidae) is an oviparous species with external fertilisation that shows some unusual features in its gonadal morphology and gametogenesis. In this work we analyse the annual reproductive cycle and the fecundity of this species by studying the monthly histological changes in the gonads and of various indices related to reproduction. Sexual dimorphism does not occur in the population we studied, which is clearly dominated by males. Multiple spawning takes place between July and October, consisting of between 6,000 and 33,000 eggs per female, each of about 500 µm in diameter. The fecundity of the species is determined by the size and weight of the individuals

Radar analysis of the life cycle of mesoscale convective systems during the 10 June 2000 event

The 10 June 2000 event was the largest flash flood event that occurred in the Northeast of Spain in the late 20th century, both as regards its meteorological features and its considerable social impact. This paper focuses on analysis of the structures that produced the heavy rainfalls, especially from the point of view of meteorological radar. Due to the fact that this case is a good example of a Mediterranean flash flood event, a final objective of this paper is to undertake a description of the evolution of the rainfall structure that would be sufficiently clear to be understood at an interdisciplinary forum. Then, it could be useful not only to improve conceptual meteorological models, but also for application in downscaling models. The main precipitation structure was a Mesoscale Convective System (MCS) that crossed the region and that developed as a consequence of the merging of two previous squall lines. The paper analyses the main meteorological features that led to the development and triggering of the heavy rainfalls, with special emphasis on the features of this MCS, its life cycle and its dynamic features. To this end, 2-D and 3-D algorithms were applied to the imagery recorded over the complete life cycle of the structures, which lasted approximately 18 h. Mesoscale and synoptic information were also considered. Results show that it was an NS-MCS, quasi-stationary during its stage of maturity as a consequence of the formation of a convective train, the different displacement directions of the 2-D structures and the 3-D structures, including the propagation of new cells, and the slow movement of the convergence line associated with the Mediterranean mesoscale low.

Ultrastructural data on the life cycle of the parasite, Perkinsus atlanticus (Apicomplexa), on the clam, Ruditapes phillipinarum, in the Mediterranean

An Apicomplexan Perkinsus species has been found parasitizing the clam Ruditapes philippinarum (= Tapes semidecussatus) collected on the Mediterranean coast in the region of the Ebro Delta (Tarragona, Spain). Light and transmission electron microscopy were used to study different stages of this parasite during zoosporulation induced by incubation in thioglycollate medium and seawater. During incubation the trophozoites began zoosporulation, which originated prezoosporangia and zoosporangia at different developmental stages. Successive cytokinesis and nucleokinesis gave rise to prezoospores, which became elongate and differentiated in biflagellated zoospores. The latter presented large mitochondria and an apical complex formed by a conoid, polar ring, micronemes, rhophtries and subpellicular microtubules. The zoosporangium wall showed some typical lamosomes and a discharge tube developed in early phases of incubation. Ultrastructural data were compared with the only four species of the genus Perkinsus previously described. The morphological data, the host and the geographic proximity suggest that the species located on the Mediterranean coast was Perkinsus atlanticus.

ß-Catenin Regulation during the Cell Cycle: Implications in G2/M and Apoptosis

ß-catenin is a multifunctional protein involved in cell-cell adhesion and Wnt signal transduction. ß-Catenin signaling has been proposed to act as inducer of cell proliferation in different tumors. However, in some developmental contexts and cell systems ß-catenin also acts as a positive modulator of apoptosis. To get additional insights into the role of ß-Catenin in the regulation of the cell cycle and apoptosis, we have analyzed the levels and subcellular localization of endogenous ß-catenin and its relation with adenomatous polyposis coli (APC) during the cell cycle in S-phase¿synchronized epithelial cells. ß-Catenin levels increase in S phase, reaching maximum accumulation at late G2/M and then abruptly decreasing as the cells enter into a new G1 phase. In parallel, an increased cytoplasmic and nuclear localization of ß-catenin and APC is observed during S and G2 phases. In addition, strong colocalization of APC with centrosomes, but not ß-catenin, is detected in M phase. Interestingly, overexpression of a stable form of ß-catenin, or inhibition of endogenous ß-catenin degradation, in epidermal keratinocyte cells induces a G2 cell cycle arrest and leads to apoptosis. These results support a role for ß-catenin in the control of cell cycle and apoptosis at G2/M in normal and transformed epidermal keratinocytes.