Analysis of the transcriptional activity of endogenous NFAT5 in primary cells using transgenic NFAT-luciferase reporter mice

Background: The transcription factor NFAT5/TonEBP regulates the response of mammalian cells to hypertonicity. However, little is known about the physiopathologic tonicity thresholds that trigger its transcriptional activity in primary cells. Wilkins et al. recently developed a transgenic mouse carrying a luciferase reporter (9xNFAT-Luc) driven by a cluster of NFAT sites, that was activated by calcineurin-dependent NFATc proteins. Since the NFAT site of this reporter was very similar to an optimal NFAT5 site, we tested whether this reporter could detect the activation of NFAT5 in transgenic cells.Results: The 9xNFAT-Luc reporter was activated by hypertonicity in an NFAT5-dependent manner in different types of non-transformed transgenic cells: lymphocytes, macrophages and fibroblasts. Activation of this reporter by the phorbol ester PMA plus ionomycin was independent of NFAT5 and mediated by NFATc proteins. Transcriptional activation of NFAT5 in T lymphocytes was detected at hypertonic conditions of 360–380 mOsm/kg (isotonic conditions being 300 mOsm/kg) and strongly induced at 400 mOsm/kg. Such levels have been recorded in plasma in patients with osmoregulatory disorders and in mice deficient in aquaporins and vasopressin receptor. The hypertonicity threshold required to activate NFAT5 was higher in bone marrow-derived macrophages (430 mOsm/kg) and embryonic fibroblasts (480 mOsm/kg). Activation of the 9xNFAT-Luc reporter by hypertonicity in lymphocytes was insensitive to the ERK inhibitor PD98059, partially inhibited by the PI3-kinase inhibitor wortmannin (0.5 μM) and the PKA inhibitor H89, and substantially downregulated by p38 inhibitors (SB203580 and SB202190) and by inhibition of PI3-kinase-related kinases with 25 μM LY294002. Sensitivity of the reporter to FK506 varied among cell types and was greater in primary T cells than in fibroblasts and macrophages.Conclusion: Our results indicate that NFAT5 is a sensitive responder to pathologic increases in extracellular tonicity in T lymphocytes. Activation of NFAT5 by hypertonicity in lymphocytes was mediated by a combination of signaling pathways that differed from those required in other cell types. We propose that the 9xNFAT-Luc transgenic mouse model might be useful to study the physiopathological regulation of both NFAT5 and NFATc factors in primary cells.

Endogenous Credit Cycles and Financial Dampening in an Adverse Selection Economy

We propose an adverse selection framework in which the financial sector has a dual role. It amplifies or dampens exogenous shocks and also generates endogenous fluctuations. We fully characterize constrained optimal contracts in a setting in which entrepreneurs need to borrow and are privately informed about the quality of their projects. Our characterization is novel in analyzing pooling and separating allocations in a context of multi-dimensional screening: specifically, the amounts of investment undertaken and of entrepreneurial net worth are used to screen projects. We then embed these results in a dynamic competitive economy. First, we show how endogenous regime switches in financial contracts may generate fluctuations in an economy that exhibits no dynamics under full information. Unlike previous models of endogenous cycles, our result does not rely on entrepreneurial net worth being counter-cyclical or inconsequential for determining investment. Secondly, the model shows the different implications of adverse selection as opposed to pure moral hazard. In particular, and contrary to standard results in the macroeconomic literature, the financial system may dampen exogenous shocks in the presence of adverse selection.

Oil price shocks, income and democracy

We examine the effect of oil price fluctuations ondemocratic institutions over the 1960-2007 period. We also exploitthe very persistent response of income to oil price fluctuations tostudy the effect of persistent (oil price-driven) income shocks ondemocracy. Our results indicate that countries with greater net oilexports over GDP see improvements in democratic institutionsfollowing upturns in international oil prices. We estimate that a 1percentage point increase in per capita GDP growth due to apositive oil price shock increases the Polity democracy score byaround 0.2 percentage points on impact and by around 2 percentagepoints in the long run. The effect on the probability of a democratictransition is around 0.4 percentage points.

Endogenous spillovers, increased competition and re-organization waves

We consider an entrepreneur that is the sole producer of a costreducing skill, but the entrepreneur that hires a team to usethe skill cannot prevent collusive trade for the innovation related knowledge between employees and competitors. We showthat there are two types of diffusion avoiding strategies forthe entrepreneur to preempt collusive communication i) settingup a large productive capacity (the traditional firm) and ii)keeping a small team (the lean firm). The traditional firm ischaracterized by its many "marginal" employees that work shortdays, receive flat wages and are incompletely informed about the innovation. The lean firm is small in number of employees,engages in complete information sharing among members, that are paid with stock option schemes. We find that the lean firm is superior to the traditional firm when technological entry costsare low and when the sector is immature.

Endogenous credit cycles

I develop an overlapping-generations framework in which changes in lending standards generateendogenous cycles. In my economy, entrepreneurs who are privately informed about thequality of their projects need to borrow funds. Intermediaries screen entrepreneurs both throughthe amount of investment undertaken and through the level of entrepreneurial net worth.I show that endogenous regime switches in financial contracts from pooling to separatingand vice-versa may generate fluctuations even in the absence of exogenous shocks. Whenthe economy is in the pooling (separating) regime, lending standards seem lax ( tight ) andinvestment is high (low). Differently from the existing literature, my model does not requireentrepreneurial net worth to be counter cyclycal or inconsequential for determining aggregateinvestment.

Consistent solutions in exchange economies: A characterization of the price mechanism

We characterize the Walrasian allocations correspondence by means offour axioms: consistency, replica invariance, individual rationality andPareto optimality. It is shown that for any given class of exchange economiesany solution that satisfies the axioms is a selection from the Walrasianallocations with slack. Preferences are assumed to be smooth, but may besatiated and non--convex. A class of economies is defined as all economieswhose agents' preferences belong to an arbitrary family (finite or infinite)of types. The result can be modified to characterize equal budget Walrasianallocations with slack by replacing individual rationality with individualrationality from equal division. The results are valid also for classes ofeconomies in which core--Walras equivalence does not hold.

Dynamic price competition with fixed capacities

Many revenue management (RM) industries are characterized by (a) fixed capacities in theshort term (e.g., hotel rooms, seats on an airline flight), (b) homogeneous products (e.g., twoairline flights between the same cities at similar times), and (c) customer purchasing decisionslargely influenced by price. Competition in these industries is also very high even with just twoor three direct competitors in a market. However, RM competition is not well understood andpractically all known implementations of RM software and most published models of RM donot explicitly model competition. For this reason, there has been considerable recent interestand research activity to understand RM competition. In this paper we study price competitionfor an oligopoly in a dynamic setting, where each of the sellers has a fixed number of unitsavailable for sale over a fixed number of periods. Demand is stochastic, and depending on howit evolves, sellers may change their prices at any time. This reflects the fact that firms constantly,and almost costlessly, change their prices (alternately, allocations at a price in quantity-basedRM), reacting either to updates in their estimates of market demand, competitor prices, orinventory levels. We first prove existence of a unique subgame-perfect equilibrium for a duopoly.In equilibrium, in each state sellers engage in Bertrand competition, so that the seller withthe lowest reservation value ends up selling a unit at a price that is equal to the equilibriumreservation value of the competitor. This structure hence extends the marginal-value conceptof bid-price control, used in many RM implementations, to a competitive model. In addition,we show that the seller with the lowest capacity sells all its units first. Furthermore, we extendthe results transparently to n firms and perform a number of numerical comparative staticsexploiting the uniqueness of the subgame-perfect equilibrium.