Electoral competition under the threat of political unrest

We study elections in which one party (the strong party) controls a source of political unrest; e.g., this party could instigate riots if it lost the election. We show that the strong party is more likely to win the election when there is less information about its ability to cause unrest. This is because when theweak party is better informed, it can more reliably prevent political unrest by implementing a ``centrist'' policy. When there is uncertainty over the credibility of the threat, ``posturing'' by the strong party leads to platform divergence.

The Rise of democracy in Europe and the fight against mass poverty in Latin America: the implications for marxist thought of some recent mainstream papers

Recently a number of mainstream papers have treated the rise of democracy in 19th century Europe and its instability in Latin America in an eminently Marxist fashion. This paper sets out their implications for Marxist thought. With respect to Europe, Marx's emphasis on political action backed by the threat of violence is vindicated but his justification for socialism is not. With respect to Latin America, the unequal distribution of wealth is the cause of political instability that is, in turn, the root cause of mass poverty. In addition it is possible to explain some of the paradoxical characteristics of neo-liberalism and to make a weak argument for socialism in spite of its rejection in Europe.

Heterogeneous dynamics, aggregation and the persistence of economic shocks

It has been recently emphasized that, if individuals have heterogeneous dynamics, estimates of shock persistence based on aggregate data are significatively higher than those derived from its disaggregate counterpart. However, a careful examination of the implications of this statement on the various tools routinely employed to measure persistence is missing in the literature. This paper formally examines this issue. We consider a disaggregate linear model with heterogeneous dynamics and compare the values of several measures of persistence across aggregation levels. Interestingly, we show that the average persistence of aggregate shocks, as measured by the impulse response function (IRF) of the aggregate model or by the average of the individual IRFs, is identical on all horizons. This result remains true even in situations where the units are (short-memory) stationary but the aggregate process is long-memory or even nonstationary. In contrast, other popular persistence measures, such as the sum of the autoregressive coefficients or the largest autoregressive root, tend to be higher the higher the aggregation level. We argue, however, that this should be seen more as an undesirable property of these measures than as evidence of different average persistence across aggregation levels. The results are illustrated in an application using U.S. inflation data.

The New Institutions of Transatlantic Aviation

This article focuses on the institutions of transatlantic aviation since 1945, and aims at extracting from this historical process topical policy implications. Using the methodology of an analytic narrative, we describe and explain the creation of the international cartel institutions in the 1940s, their operation throughout the 1950s and 60s, their increasing vulnerability in the 1970s, and then the progressive liberalization of the whole system. Our analytic narrative has a natural end, marked by the signing of an Open Skies Agreement between the US and the EU in 2007. We place particular explanatory power on (a) the progressive liberalization of the US domestic market, and (b) the active role of the European Commission in Europe. More specifically, we explain these developments using two frameworks. First, a “political limit pricing” model, which seemed promising, then failed, and then seemed promising again because it failed. Second, a strategic bargaining model inspired by Susanne Schmidt’s analysis of how the European Commission uses the threat of infringement proceedings to force member governments into line and obtain the sole negotiating power in transatlantic aviation.

A dynamic analysis of asymmetric shocks in EU manufacturing

Available empirical evidence regarding the degree of symmetry between European economies in the context of Monetary Unification is not conclusive. This paper offers new empirical evidence concerning this issue related to the manufacturing sector. Instead of using a static approach as most empirical studies do, we analyse the dynamic evolution of shock symmetry using a state-space model. The results show a clear reduction of asymmetries in terms of demand shocks between 1975 and 1996, with an increase in terms of supply shocks at the end of the period.

Interbank Competition with Costly Screening

We analyse credit market equilibrium when banks screen loan applicants. When banks have a convex cost function of screening, a pure strategy equilibrium exists where banks optimally set interest rates at the same level as their competitors. This result complements Broecker s (1990) analysis, where he demonstrates that no pure strategy equilibrium exists when banks have zero screening costs. In our set up we show that interest rate on loans are largely independent of marginal costs, a feature consistent with the extant empirical evidence. In equilibrium, banks make positive profits in our model in spite of the threat of entry by inactive banks. Moreover, an increase in the number of active banks increases credit risk and so does not improve credit market effciency: this point has important regulatory implications. Finally, we extend our analysis to the case where banks have differing screening abilities.

Credit Constraints, Firms' Precautionary Investment, and the Business Cycle

This paper studies the macroeconomic implications of firms' precautionary investment behavior in response to the anticipation of future financing constraints. Firms increase their demand for liquid and safe investments in order to alleviate future borrowing constraints and decrease the probability of having to forego future profitable investment opportunities. This results in an increase in the share of short-term projects that produces a temporary increase in output, at the expense of lower long-run investment and future output. I show in a calibrated model that this behavior is at the source of a novel and powerful channel of shock transmission of productivity shocks that produces short-run dampening and long-run propagation. Furthermore, it can account for the observed business cycle patterns of the aggregate and firm-level composition of investment.

Sovereign risk and secondary markets

Conventional wisdom views the problem of sovereign risk as one of insufficient penalties.Foreign creditors can only be repaid if the government enforces foreign debts. And this will onlyhappen if foreign creditors can effectively use the threat of imposing penalties to the country.Guided by this assessment of the problem, policy prescriptions to reduce sovereign risk havefocused on providing incentives for governments to enforce foreign debts. For instance, countriesmight want to favor increased trade ties and other forms of foreign dependence that make themvulnerable to foreign retaliation thereby increasing the costs of default penalties.

Interbank comptetition with costly screening

We analyse credit market equilibrium when banks screen loan applicants. When banks have a convex cost function of screening, a pure strategy equilibrium exists where banks optimally set interest rates at the same level as their competitors. This result complements Broecker s (1990) analysis, where he demonstrates that no pure strategy equilibrium exists when banks have zero screening costs. In our set up we show that interest rate on loansare largely independent of marginal costs, a feature consistent with the extant empirical evidence. In equilibrium, banks make positive profits in our model in spite of the threat of entry by inactive banks. Moreover, an increase in the number of active banks increases credit risk and so does not improve credit market effciency: this point has important regulatory implications. Finally, we extend our analysis to the case where banks havediffering screening abilities.

Drug price differentials caused by de-listing and price cap policies

This paper analyses the behaviour of pharmaceutical companies that face the threat of having their drugs excluded from reimbursement and the markets characterised also by price caps. We conclude that price elasticity of demand and cost differentials cause the price discounts which drug firms offer to health care organisations. Additionally, we conclude that price cap regulations affect the time path of prices, resulting in higher prices for new products and lower prices for old products.

Drug price differentials caused by de-listing and price cap policies

This paper analyses the behaviour of pharmaceutical companies that face the threat of having their drugs excluded from reimbursement and the markets characterised also by price caps. We conclude that price elasticity of demand and cost differentials cause the price discounts which drug firms offer to health care organisations. Additionally, we conclude that price cap regulations affect the time path of prices, resulting in higher prices for new products and lower prices for old products.

Patrons de distribució de la flora invasora a la Vall d'Alinyà, evolució de la presència i propostes de gestió des de la perspectiva de l'ecologia aplicada

Tot i que la creixent amenaça de les plantes exòtiques invasores en els espais naturals és un fet evident, aquest problema és gairebé desconegut a la Vall d'Alinyà. Es van estudiar set punts de mostreig associats a quatre tipologies d'hàbitat per esbrinar la distribució de les plantes invasores en la Vall d'Alinyà, així com canvis recents en la seva composició, abundància i en el rang de distribució a partir de fonts bibliogràfiques. Es va desenvolupar un índex per quantificar la problemàtica de les invasions de flora exòtica en els diferents hàbitats estudiats. Els focus d'invasió van resultar estar associats a zones pertorbades, nuclis de població i baixes altituds. El canvi climàtic i els canvis en els usos del sòl podrien estar jugant un paper essencial en l'aparició de noves plantes invasores i en l'increment tant de l'abundància com de la cota altitudinal dels nivells més grans d'invasió. Tot i que la problemàtica associada a les plantes invasores en la Vall d'Alinyà és generalment baixa, algunes espècies com Senecio inaequidens representen una amenaça per a l'espai, motiu pel qual es proposa un pla de gestió per a la flora invasora.

Escuela, familia de origen inmigrante y participación

Las relaciones entre las familias y la escuela se inscriben en la articulación entre dos instituciones con asimetría de poder y en un contexto social y político que las sitúa en el debate entre intereses públicos y privados. Aunque deben considerarse espacios yuxtapuestos, a menudo lo que se percibe es la separación, la distancia, cuando no el conflicto, entre ambos. Y esto comporta que el territorio de la escuela y el de la familia se vigile, se controle, por la amenaza de invasión o intrusión. El artículo analiza la participación de los progenitores de origen inmigrante en la escuela en España.Realizando una breve referencia a la legislación, se centra en la situación organizativa confederal, federal y asociativa (utilizando como fuente de información datos propios obtenidos en cinco grupos de discusión organizados en los diferentes niveles organizativos) y, por último, se aproxima la realidad de las Asociaciones de Padres de Alumnos (a través de una encuesta a 594 presidentes de asociaciones).Además de constatar la baja participación general y, en particular, la de las familias de origen inmigrante (menor entre unos orígenes que entre otros) se evidencia la necesidad de trabajar para incorporarlos al movimiento de padres, hecho que se considera imprescindible para su desarrollo.

Use of physiological constraints to identify quantitative design principles for gene expression in yeast adaptation to heat shock

Background: Understanding the relationship between gene expression changes, enzyme activity shifts, and the corresponding physiological adaptive response of organisms to environmental cues is crucial in explaining how cells cope with stress. For example, adaptation of yeast to heat shock involves a characteristic profile of changes to the expression levels of genes coding for enzymes of the glycolytic pathway and some of its branches. The experimental determination of changes in gene expression profiles provides a descriptive picture of the adaptive response to stress. However, it does not explain why a particular profile is selected for any given response. Results: We used mathematical models and analysis of in silico gene expression profiles (GEPs) to understand how changes in gene expression correlate to an efficient response of yeast cells to heat shock. An exhaustive set of GEPs, matched with the corresponding set of enzyme activities, was simulated and analyzed. The effectiveness of each profile in the response to heat shock was evaluated according to relevant physiological and functional criteria. The small subset of GEPs that lead to effective physiological responses after heat shock was identified as the result of the tuning of several evolutionary criteria. The experimentally observed transcriptional changes in response to heat shock belong to this set and can be explained by quantitative design principles at the physiological level that ultimately constrain changes in gene expression. Conclusion: Our theoretical approach suggests a method for understanding the combined effect of changes in the expression of multiple genes on the activity of metabolic pathways, and consequently on the adaptation of cellular metabolism to heat shock. This method identifies quantitative design principles that facilitate understating the response of the cell to stress.