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.

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.

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.

A medium-scale open economy model of Australia

We estimate an open economy dynamic stochastic general equilibrium (DSGE)model of Australia with a number of shocks, frictions and rigidities, matching alarge number of observable time series. We find that both foreign and domesticshocks are important drivers of the Australian business cycle.We also find that theinitial impact on inflation of an increase in demand for Australian commoditiesis negative, due to an improvement in the real exchange rate, though there is apersistent positive effect on inflation that dominates at longer horizons.

Avalanches in a fluctuationless first-order phase transition in a random-bond Ising model

We study the behavior of the random-bond Ising model at zero temperature by numerical simulations for a variable amount of disorder. The model is an example of systems exhibiting a fluctuationless first-order phase transition similar to some field-induced phase transitions in ferromagnetic systems and the martensitic phase transition appearing in a number of metallic alloys. We focus on the study of the hysteresis cycles appearing when the external field is swept from positive to negative values. By using a finite-size scaling hypothesis, we analyze the disorder-induced phase transition between the phase exhibiting a discontinuity in the hysteresis cycle and the phase with the continuous hysteresis cycle. Critical exponents characterizing the transition are obtained. We also analyze the size and duration distributions of the magnetization jumps (avalanches).

Inclusion of soil erosion impacts in life cycle assessment on a global scale: application to energy crops in Spain

Purpose: Despite the fundamental role of ecosystem goods and services in sustaining human activities, there is no harmonized and internationally agreed method for including them in life cycle assessment (LCA). The main goal of this study was to develop a globally applicable and spatially resolved method for assessing land-use impacts on the erosion regulation ecosystem service.Methods: Soil erosion depends much on location. Thus, unlike conventional LCA, the endpoint method was regionalized at the grid-cell level (5 arc-minutes, approximately 10×10 km2) to reflect the spatial conditions of the site. Spatially explicit characterization factors were not further aggregated at broader spatial scales. Results and discussion: Life cycle inventory data of topsoil and topsoil organic carbon (SOC) losses were interpreted at the endpoint level in terms of the ultimate damage to soil resources and ecosystem quality. Human health damages were excluded from the assessment. The method was tested on a case study of five three-year agricultural rotations, two of them with energy crops, grown in several locations in Spain. A large variation in soil and SOC losses was recorded in the inventory step, depending on climatic and edaphic conditions. The importance of using a spatially explicit model and characterization factors is shown in the case study.Conclusions and outlook: The regionalized assessment takes into account the differences in soil erosion-related environmental impacts caused by the great variability of soils. Taking this regionalized framework as the starting point, further research should focus on testing the applicability of the method trough the complete life cycle of a product and on determining an appropriate spatial scale at which to aggregate characterization factors, in order to deal with data gaps on location of processes, especially in the background system. Additional research should also focus on improving reliability of the method by quantifying and, insofar as it is possible, reducing uncertainty.

INDISIM-YEAST, an individual-based model to study yeast

INDISIM-YEAST, an individual-based simulator, models the evolution of a yeast population by settingup rules of behaviour for each individual cell according to their own biological rules and characteristics. Ittakes into account the uptake, metabolism, budding reproduction and viability of the yeast cells, over aperiod of time in the bulk of a liquid medium, occupying a three dimensional closed spatial grid with twokinds of particles (glucose and ethanol). Each microorganism is characterized by its biomass, genealogicalage, states in the budding cellular reproduction cycle and position in the space among others. Simulationsare carried out for population properties (global properties), as well as for those properties that pertain toindividual yeast cells (microscopic properties). The results of the simulations are in good qualitativeagreement with established experimental trends.

The transcriptional network activated by Cln3 cyclin at the G1-to-S transition of the yeast cell cycle

Background: The G1-to-S transition of the cell cycle in the yeast Saccharomyces cerevisiae involves an extensive transcriptional program driven by transcription factors SBF (Swi4-Swi6) and MBF (Mbp1-Swi6). Activation of these factors ultimately depends on the G1 cyclin Cln3. Results: To determine the transcriptional targets of Cln3 and their dependence on SBF or MBF, we first have used DNA microarrays to interrogate gene expression upon Cln3 overexpression in synchronized cultures of strains lacking components of SBF and/or MBF. Secondly, we have integrated this expression dataset together with other heterogeneous data sources into a single probabilistic model based on Bayesian statistics. Our analysis has produced more than 200 transcription factor-target assignments, validated by ChIP assays and by functional enrichment. Our predictions show higher internal coherence and predictive power than previous classifications. Our results support a model whereby SBF and MBF may be differentially activated by Cln3. Conclusions: Integration of heterogeneous genome-wide datasets is key to building accurate transcriptional networks. By such integration, we provide here a reliable transcriptional network at the G1-to-S transition in the budding yeast cell cycle. Our results suggest that to improve the reliability of predictions we need to feed our models with more informative experimental data.

Integrating quantitative proteomics and metabolomics in a cellular model of diabetic retinopathy

Diabetic retinopathy is the leading cause of visual loss in individuals under the age of 55. Most investigations into the pathogenesis of diabetic retinopathy have been concentrated on the neural retina since this is where clinical lesions are manifested. Recently, however, various abnormalities in the structural and secretory functions of retinal pigment epithelium that are essential for neuroretina survival, have been found in diabetic retinopathy. In this context, here we study the effect of hyperglycemic and hypoxic conditions on the metabolism of a human retinal pigment epithelial cell line (ARPE-19) by integrating quantitative proteomics using tandem mass tagging (TMT), untargeted metabolomics using MS and NMR, and 13C-glucose isotopic labeling for metabolic tracking. We observed a remarkable metabolic diversification under our simulated in vitro hyperglycemic conditions of diabetes, characterized increased flux through polyol pathways and inhibition of the Krebs cycle and oxidative phosphorylation. Importantly, under low oxygen supply RPE cells seem to consume rapidly glycogen storages and stimulate anaerobic glycolysis. Our results therefore pave the way to future scenarios involving new therapeutic strategies addressed to modulating RPE metabolic impairment, with the aim of regulating structural and secretory alterations of RPE. Finally, this study shows the importance of tackling biomedical problems by integrating metabolomic and proteomics results.

Simulation of Delamination Propagation in Composites Under High-Cycle Fatigue by Means of Cohesive-Zone Models

A damage model for the simulation of delamination propagation under high-cycle fatigue loading is proposed. The basis for the formulation is a cohesive law that links fracture and damage mechanics to establish the evolution of the damage variable in terms of the crack growth rate dA/dN. The damage state is obtained as a function of the loading conditions as well as the experimentally-determined coefficients of the Paris Law crack propagation rates for the material. It is shown that by using the constitutive fatigue damage model in a structural analysis, experimental results can be reproduced without the need of additional model-specific curve-fitting parameters