Markups, Gaps, and the Welfare Costs of Business Fluctuations

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social marginal cost, and give some evidence in support of this interpretation. We then show that, with some auxilliary assumptions our gap variable may be used to measure the efficiency costs of business fluctuations. We find that the latter costs are modest on average. However, to the extent the flexible price equilibrium is distorted, the gross efficiency losses from recessions and gains from booms may be large. Indeed, we find that the major recessions involved large efficiency losses. These results hold for reasonable parameterizations of the Frisch elasticity of labor supply, the coefficient of relative risk aversion, and steady state distortions.

Weak approximations. A Malliavin calculus approach

We introduce a variation of the proof for weak approximations that issuitable for studying the densities of stochastic processes which areevaluations of the flow generated by a stochastic differential equation on a random variable that maybe anticipating. Our main assumption is that the process and the initial random variable have to be smooth in the Malliavin sense. Furthermore if the inverse of the Malliavin covariance matrix associated with the process under consideration is sufficiently integrable then approximations fordensities and distributions can also be achieved. We apply theseideas to the case of stochastic differential equations with boundaryconditions and the composition of two diffusions.

Competing engines of growth: Innovation and standardization

We study a dynamic general equilibrium model where innovation takes theform of the introduction of new goods whose production requires skilled workers.Innovation is followed by a costly process of standardization, whereby these newgoods are adapted to be produced using unskilled labor. Our framework highlightsa number of novel results. First, standardization is both an engine of growth anda potential barrier to it. As a result, growth is an inverse U-shaped function ofthe standardization rate (and of competition). Second, we characterize the growthand welfare maximizing speed of standardization. We show how optimal protection of intellectual property rights affecting the cost of standardization vary withthe skill-endowment, the elasticity of substitution between goods and other parameters. Third, we show that, depending on how competition between innovatingand standardizing firms is modelled and on parameter values, a new type of multiplicity of equilibria may arise. Finally, we study the implications of our model forthe skill-premium and we illustrate novel reasons for linking North-South trade tointellectual property rights protection.

Spanning tests in return and stochastic discount factor mean-variance frontiers: A unifying approach

We propose new spanning tests that assess if the initial and additional assets share theeconomically meaningful cost and mean representing portfolios. We prove their asymptoticequivalence to existing tests under local alternatives. We also show that unlike two-step oriterated procedures, single-step methods such as continuously updated GMM yield numericallyidentical overidentifyng restrictions tests, so there is arguably a single spanning test.To prove these results, we extend optimal GMM inference to deal with singularities in thelong run second moment matrix of the influence functions. Finally, we test for spanningusing size and book-to-market sorted US stock portfolios.

Markups, gaps and the welfare costs of business fluctuations

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social marginal cost, and give some evidence in support of this interpretation. We then show that, with some auxilliary assumptions our gap variable may be used to measure the efficiency costs of business fluctuations. We find that the latter costs are modest on average. However, to the extent the flexible price equilibrium is distorted,the gross efficiency losses from recessions and gains from booms may be large. Indeed, we find that the major recessions involved large efficiency losses. These results hold for reasonable parameterizations of the Frisch elasticity of labor supply, the coefficient of relative risk aversion, and steady state distortions.

On the concept of optimality interval

The approximants to regular continued fractions constitute `best approximations' to the numbers they converge to in two ways known as of the first and the second kind.This property of continued fractions provides a solution to Gosper's problem of the batting average: if the batting average of a baseball player is 0.334, what is the minimum number of times he has been at bat? In this paper, we tackle somehow the inverse question: given a rational number P/Q, what is the set of all numbers for which P/Q is a `best approximation' of one or the other kind? We prove that inboth cases these `Optimality Sets' are intervals and we give aprecise description of their endpoints.

La zonación estructural del hercínico del Pirineo Central en el anticlinorio de la Pallaresa

The Pyrenees are an alpine chain with hercynian basement rocks that outcrop in a large area called the Axial Zone. These rocks have been involved in the alpine deformation events although their main structural features resulted from the Hercynian orogeny. A relevant characteristic of the Hercynian basement is a change in structural style in depth which has been commonly studied and interpreted in the Pallaresa Anticlinorium, in the Central Pyrenees. This anticlinorium is a complex hercynian structural unit whose southern part belongs to the suprastructure whereas the northern part corresponds mostly to a transition zone between the infrastructure and the suprastructure. Rocks of the suprastructure show a steeply dipping slaty cleavage as the dominant structure, which is overprinting folds and thrusts rarely going with pervasive deformation. The transition zone results from a slaty cleavage, very often close to the bedding, overprinted by one or two steep crenulation cleavages. A gradual boundary exists between both structural levels and it can be observed that the deformation developing slaty cleavage in the suprastructure grades to a crenulation foliation in the transition zone. The gradual character of that boundary, as seen in the northern end of the transition zone, suggests that the southern sharp boundary is not original. That boundary is interpreted as a northward dipping inverse fault, possibly with Alpine age. That fault causes a relative uplift of the rocks of the transition zone and gives this sharp boundary with the suprastructural levels. It provokes the asymmetry in the Pallaresa anticlinorium

The Valentiner group as Galois group

We obtain the complete set of solutions to the Galois embedding problem given by the Valentiner group as a triple cover of the alternatinggroup A6.

A numerical model for the gamma-ray emission of the microquasar LS 5039

The possible association between the microquasar LS 5039 and the EGRET source 3EG J1824-1514 suggests that microquasars could also be sources of high energy gamma-rays. In this paper, we explore, with a detailed numerical model, if this system can produce the emission detected by EGRET (>100 MeV) through inverse Compton (IC) scattering. Our numerical approach considers a population of relativistic electrons entrained in a cylindrical inhomogeneous jet, interacting with both the radiation and the magnetic fields, taking into account the Thomson and Klein-Nishina regimes of interaction. The computed spectrum reproduces the observed spectral characteristics at very high energy.

High-energy gamma-ray emission from microquasars: LS 5039 and LS I+61303

The possible associations between the microquasars LS 5039 and LS I +61 303 and the EGRET sources 3EG J1824-1514 and 3EG J0241+6103 suggest that microquasars could also be sources of high-energy gamma-rays. In this work, we present a detailed numerical inverse Compton (IC) model, based on a microquasar scenario, that reproduces the high-energy gamma-ray spectra and variability observed by EGRET for the mentioned sources. Our model considers a population of relativistic electrons entrained in a cylindrical inhomogeneous jet that interact through IC scattering with both the radiation and the magnetic fields.

Exploring the high frequency emission of radio loud X-ray binaries

We report millimetre-wave continuum observations of the X-ray binaries Cygnus X-3, SS 433, LSI+61 303, Cygnus X-1 and GRS 1915+105. The observations were carried out with the IRAM 30 m-antenna at 250 GHz (1.25 mm) from 1998 March 14 to March 20. These millimetre measurements are complemented with centimetre observations from the Ryle Telescope, at 15 GHz (2.0 cm) and from the Green Bank Interferometer at 2.25 and 8.3 GHz (13 and 3.6 cm). Both Cygnus X-3 and SS 433 underwent moderate flaring events during our observations, whose main spectral evolution properties are described and interpreted. A significant spectral steepening was observed in both sources during the flare decay, that is likely to be caused by adiabatic expansion, inverse Compton and synchrotron losses. Finally, we also report 250 GHz upper limits for three additional undetected X-ray binary stars: LSI+65 010, LSI+61 235 and X Per.

INTEGRAL and XMM-Newton observations towards the unidentified MeV source GRO J1411-64.

The COMPTEL unidentified source GRO J1411-64 was observed by INTEGRAL, and its central part, also by XMM-Newton. The data analysis shows no hint for new detections at hard X-rays. The upper limits in flux herein presented constrain the energy spectrum of whatever was producing GRO J1411-64, imposing, in the framework of earlier COMPTEL observations, the existence of a peak in power output located somewhere between 300-700 keV for the so-called low state. The Circinus Galaxy is the only source detected within the 4$\sigma$ location error of GRO J1411-64, but can be safely excluded as the possible counterpart: the extrapolation of the energy spectrum is well below the one for GRO J1411-64 at MeV energies. 22 significant sources (likelihood $> 10$) were extracted and analyzed from XMM-Newton data. Only one of these sources, XMMU J141255.6-635932, is spectrally compatible with GRO J1411-64 although the fact the soft X-ray observations do not cover the full extent of the COMPTEL source position uncertainty make an association hard to quantify and thus risky. The unique peak of the power output at high energies (hard X-rays and gamma-rays) resembles that found in the SED seen in blazars or microquasars. However, an analysis using a microquasar model consisting on a magnetized conical jet filled with relativistic electrons which radiate through synchrotron and inverse Compton scattering with star, disk, corona and synchrotron photons shows that it is hard to comply with all observational constrains. This and the non-detection at hard X-rays introduce an a-posteriori question mark upon the physical reality of this source, which is discussed in some detail.

Mutant Huntingtin impairs post-Golgi trafficking to lysosomes by delocalizing optineurin/Rab8 complex from the Golgi apparatus

Huntingtin regulates post-Golgi trafficking of secreted proteins. Here, we studied the mechanism by which mutant huntingtin impairs this process. Colocalization studies and Western blot analysis of isolated Golgi membranes showed a reduction of huntingtin in the Golgi apparatus of cells expressing mutant huntingtin. These findings correlated with a decrease in the levels of optineurin and Rab8 in the Golgi apparatus that can be reverted by overexpression of full-length wild-type huntingtin. In addition, immunoprecipitation studies showed reduced interaction between mutant huntingtin and optineurin/Rab8. Cells expressing mutant huntingtin produced both an accumulation of clathrin adaptor complex 1 at the Golgi and an increase of clathrin-coated vesicles in the vicinity of Golgi cisternae as revealed by electron microscopy. Furthermore, inverse fluorescence recovery after photobleaching analysis for lysosomal-associated membrane protein-1 and mannose-6-phosphate receptor showed that the optineurin/Rab8-dependent post-Golgi trafficking to lysosomes was impaired in cells expressing mutant huntingtin or reducing huntingtin levels by small interfering RNA. Accordingly, these cells showed a lower content of cathepsin D in lysosomes, which led to an overall reduction of lysosomal activity. Together, our results indicate that mutant huntingtin perturbs post-Golgi trafficking to lysosomal compartments by delocalizing the optineurin/Rab8 complex, which, in turn, affects the lysosomal function.

Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth