Three Essays on the Formation and Impact of Economic Policy

Introduction In my thesis I argue that economic policy is all about economics and politics. Consequently, analysing and understanding economic policy ideally has at least two parts. The economics part, which is centered around the expected impact of a specific policy on the real economy both in terms of efficiency and equity. The insights of this part point into which direction the fine-tuning of economic policies should go. However, fine-tuning of economic policies will be most likely subject to political constraints. That is why, in the politics part, a much better understanding can be gained by taking into account how the incentives of politicians and special interest groups as well as the role played by different institutional features affect the formation of economic policies. The first part and chapter of my thesis concentrates on the efficiency-related impact of economic policies: how does corporate income taxation in general, and corporate income tax progressivity in specific, affect the creation of new firms? Reduced progressivity and flat-rate taxes are in vogue. By 2009, 22 countries are operating flat-rate income tax systems, as do 7 US states and 14 Swiss cantons (for corporate income only). Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. In joint work, Marius Brülhart and I explore the implications of changes in these three parameters on entrepreneurial activity, measured by counts of firm births in a panel of Swiss municipalities. Our results show that lower average tax rates and reduced complexity of the tax code promote firm births. Controlling for these effects, reduced progressivity inhibits firm births. Our reading of these results is that tax progressivity has an insurance effect that facilitates entrepreneurial risk taking. The positive effects of lower tax levels and reduced complexity are estimated to be significantly stronger than the negative effect of reduced progressivity. To the extent that firm births reflect desirable entrepreneurial dynamism, it is not the flattening of tax schedules that is key to successful tax reforms, but the lowering of average tax burdens and the simplification of tax codes. Flatness per se is of secondary importance and even appears to be detrimental to firm births. The second part of my thesis, which corresponds to the second and third chapter, concentrates on how economic policies are formed. By the nature of the analysis, these two chapters draw on a broader literature than the first chapter. Both economists and political scientists have done extensive research on how economic policies are formed. Thereby, researchers in both disciplines have recognised the importance of special interest groups trying to influence policy-making through various channels. In general, economists base their analysis on a formal and microeconomically founded approach, while abstracting from institutional details. In contrast, political scientists' frameworks are generally richer in terms of institutional features but lack the theoretical rigour of economists' approaches. I start from the economist's point of view. However, I try to borrow as much as possible from the findings of political science to gain a better understanding of how economic policies are formed in reality. In the second chapter, I take a theoretical approach and focus on the institutional policy framework to explore how interactions between different political institutions affect the outcome of trade policy in presence of special interest groups' lobbying. Standard political economy theory treats the government as a single institutional actor which sets tariffs by trading off social welfare against contributions from special interest groups seeking industry-specific protection from imports. However, these models lack important (institutional) features of reality. That is why, in my model, I split up the government into a legislative and executive branch which can both be lobbied by special interest groups. Furthermore, the legislative has the option to delegate its trade policy authority to the executive. I allow the executive to compensate the legislative in exchange for delegation. Despite ample anecdotal evidence, bargaining over delegation of trade policy authority has not yet been formally modelled in the literature. I show that delegation has an impact on policy formation in that it leads to lower equilibrium tariffs compared to a standard model without delegation. I also show that delegation will only take place if the lobby is not strong enough to prevent it. Furthermore, the option to delegate increases the bargaining power of the legislative at the expense of the lobbies. Therefore, the findings of this model can shed a light on why the U.S. Congress often practices delegation to the executive. In the final chapter of my thesis, my coauthor, Antonio Fidalgo, and I take a narrower approach and focus on the individual politician level of policy-making to explore how connections to private firms and networks within parliament affect individual politicians' decision-making. Theories in the spirit of the model of the second chapter show how campaign contributions from lobbies to politicians can influence economic policies. There exists an abundant empirical literature that analyses ties between firms and politicians based on campaign contributions. However, the evidence on the impact of campaign contributions is mixed, at best. In our paper, we analyse an alternative channel of influence in the shape of personal connections between politicians and firms through board membership. We identify a direct effect of board membership on individual politicians' voting behaviour and an indirect leverage effect when politicians with board connections influence non-connected peers. We assess the importance of these two effects using a vote in the Swiss parliament on a government bailout of the national airline, Swissair, in 2001, which serves as a natural experiment. We find that both the direct effect of connections to firms and the indirect leverage effect had a strong and positive impact on the probability that a politician supported the government bailout.

Progressive Taxes and Firm Births

Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. We explore the implications of changes in these three parameters for entrepreneurial activity, measured by counts of firm births. The Swiss fiscal system offers sufficient intra-national variation in tax codes to allow us to estimate such effects with considerable precision. We find that high average taxes and complicated tax codes depress firm birth rates, while tax progressivity per se promotes firm births. The latter result supports the existence of an insurance effect from progressive corporate income taxes for risk averse entrepreneurs. However, implied elasticities with respect to the level and complexity of corporate taxes are an order of magnitude larger than elasticities with respect to the progressivity of tax schedules.

New measurements of energy expenditure and physical activity in chronic kidney disease.

The accurate estimation of total daily energy expenditure (TEE) in chronic kidney patients is essential to allow the provision of nutritional requirements; however, it remains a challenge to collect actual physical activity and resting energy expenditure in maintenance dialysis patients. The direct measurement of TEE by direct calorimetry or doubly labeled water cannot be used easily so that, in clinical practice, TEE is usually estimated from resting energy expenditure and physical activity. Prediction equations may also be used to estimate resting energy expenditure; however, their use has been poorly documented in dialysis patients. Recently, a new system called SenseWear Armband (BodyMedia, Pittsburgh, PA) was developed to assess TEE, but so far no data have been published in chronic kidney disease patients. The aim of this review is to describe new measurements of energy expenditure and physical activity in chronic kidney disease patients.

Serum anticholinergic activity and postoperative cognitive dysfunction in elderly patients

Background: Cerebral cholinergic transmission plays a key role in cognitive function and anticholinergic drugs are associated with impaired cognitive functions [1]. In the perioperative phase many substances with anticholinergic effects are administered and disturbed cholinergic transmission is a hypothetical cause of postoperative cognitive dysfunction (POCD). Serum anticholinergic activity (SAA; pmol/ml) may be measured as a summary marker of anticholinergic activity in an individual patient's blood. We hypothesised that an increase in SAA from preoperatively to one week postoperatively is associated with POCD in elderly patients. Methods: Thirty-two patients aged >65 yrs undergoing elective major surgery under standardized general anaesthesia (thiopental, sevoflurane, fentanyl) were investigated. Cognitive functions were measured preoperatively and 7 days postoperatively using the extended version of the Consortium to Establish a Registry for Alzheimer's Disease - Neuropsychological Assessment Battery. POCD was defined as a postoperative decline >1 z-score in at least 2 cognitive domains. SAA was measured preoperatively and 7 days postoperatively at the time of cognitive testing. Results: 50% of the investigated patients developed POCD. There were no statistically significant differences between patients with and without POCD regarding age, education, baseline cognitive function, duration of anaesthesia, SAA preoperatively (median (range) 1.0 (0.3 to 5.0) vs 1.5 (0.4 to 5.0), SAA 7 days postoperatively (median (range) 1.3 (0.1 to 7.0) vs 1.4 (0.6 to 5.5) or changes in SAA (median (range) 0.1 (-1.6 to 2.2) vs 0.2 (-1.4 to 2.8). The variability of SAA in individual patients was considerable and marked changes in SAA between the two examinations were observed in some patients. However, there was no significant relationship between changes in SAA and changes in cognitive function. Conclusion: In this preliminary analysis of a small group of patients, changes in SAA in the perioperative phase were highly variable. SAA was not associated with POCD suggesting that POCD is not simply caused by anticholinergic medications administered in the perioperative phase. A further analysis of a larger group of patients is in progress.

Relationship of physical activity with motor skills, aerobic fitness and body fat in preschool children: a cross-sectional and longitudinal study (Ballabeina).

Adiposity, low aerobic fitness and low levels of activity are all associated with clustered cardiovascular disease risk in children and their high prevalence represents a major public health concern. The aim of this study is to investigate the relationship of objectively measured physical activity (PA) with motor skills (agility and balance), aerobic fitness and %body fat in young children. This study is a cross-sectional and longitudinal analyses using mixed linear models. Longitudinal data were adjusted for baseline outcome parameters. In all, 217 healthy preschool children (age 4-6 years, 48% boys) participated in this study. PA (accelerometers), agility (obstacle course), dynamic balance (balance beam), aerobic fitness (20-m shuttle run) and %body fat (bioelectric impedance) at baseline and 9 months later. PA was positively associated with both motor skills and aerobic fitness at baseline as well as with their longitudinal changes. Specifically, only vigorous, but not total or moderate PA, was related to changes in aerobic fitness. Higher PA was associated with less %body fat at baseline, but not with its change. Conversely, baseline motor skills, aerobic fitness or %body fat were not related to changes in PA. In young children, baseline PA was associated with improvements in motor skills and in aerobic fitness, an important determinant of cardiovascular risk.

A novel anti-CD19 monoclonal antibody (GBR 401) with high killing activity against B cell malignancies.

BACKGROUND: CD19 is a B cell lineage specific surface receptor whose broad expression, from pro-B cells to early plasma cells, makes it an attractive target for the immunotherapy of B cell malignancies. In this study we present the generation of a novel humanized anti-CD19 monoclonal antibody (mAb), GBR 401, and investigate its therapeutic potential on human B cell malignancies. METHODS: GBR 401 was partially defucosylated in order to enhance its cytotoxic function. We analyzed the in vitro depleting effects of GBR 401 against B cell lines and primary malignant B cells from patients in the presence or in absence of purified NK cells isolated from healthy donors. In vivo, the antibody dependent cellular cytotoxicity (ADCC) efficacy of GBR 401 was assessed in a B cell depletion model consisting of SCID mice injected with healthy human donor PBMC, and a malignant B cell depletion model where SCID mice are xenografted with both primary human B-CLL tumors and heterologous human NK cells. Furthermore, the anti-tumor activity of GBR 401 was also evaluated in a xenochimeric mouse model of human Burkitt lymphoma using mice xenografted intravenously with Raji cells. Pharmacological inhibition tests were used to characterize the mechanism of the cell death induced by GBR 401. RESULTS: GBR 401 exerts a potent in vitro and in vivo cytotoxic activity against primary samples from patients representing various B-cell malignancies. GBR 401 elicits a markedly higher level of ADCC on primary malignant B cells when compared to fucosylated similar mAb and to Rituximab, the current anti-CD20 mAb standard immunotherapeutic treatment for B cell malignancies, showing killing at 500 times lower concentrations. Of interest, GBR 401 also exhibits a potent direct killing effect in different malignant B cell lines that involves homotypic aggregation mediated by actin relocalization. CONCLUSION: These results contribute to consolidate clinical interest in developing GBR 401 for treatment of hematopoietic B cell malignancies, particularly for patients refractory to anti-CD20 mAb therapies.

Food habits and sport activity during adolescence: differences between athletic and non-athletic teenagers in Switzerland.

OBJECTIVE: To describe food habits and dietary intakes of athletic and non-athletic adolescents in Switzerland. SETTING: College, high schools and professional centers in the Swiss canton of Vaud. METHOD: A total of 3,540 subjects aged 9-19 y answered a self-reported anonymous questionnaire to assess lifestyles, physical plus sports activity and food habits. Within this sample, a subgroup of 246 subjects aged 11-15 also participated in an in-depth ancillary study including a 3 day dietary record completed by an interview with a dietician. RESULTS: More boys than girls reported engaging in regular sports activities (P<0.001). Adolescent food habits are quite traditional: up to 15 y, most of the respondents have a breakfast and eat at least two hot meals a day, the percentages decreasing thereafter. Snacking is widespread among adolescents (60-80% in the morning, 80-90% in the afternoon). Food habits among athletic adolescents are healthier and also are perceived as such in a higher proportion. Among athletic adolescents, consumption frequency is higher for dairy products and ready to eat (RTE) cereals, for fruit, fruit juices and salad (P<0.05 at least). Thus the athletic adolescent's food brings more micronutrients than the diet of their non-athletic counterparts. Within the subgroup (ancillary study), mean energy intake corresponds to requirements for age/gender group. CONCLUSIONS: Athletic adolescents display healthier food habits than non-athletic adolescents: this result supports the idea that healthy behavior tends to cluster and suggests that prevention programs among this age group should target simultaneously both sports activity and food habits.

Opinions and attitudes of a sample of Swiss physicians about physical activity promotion in a primary care setting

Little is known about the opinions, beliefs and behavior of Swiss physicians regarding physical activity (PA) promotion in a primary care setting. A qualitative study was performed with semi-structured interviews. We purposively recruited and interviewed 16 physicians in the French speaking part of Switzerland. Their statements and ideas regarding the promotion of PA in a primary care setting were transcribed and synthesized from the tape recorded interviews. Les opinions, les représentations et les comportements des médecins suisses en matière de promotion de l'activité physique au cabinet médical restent largement méconnus en Suisse. Une étude qualitative a été réalisée au moyen d'entretiens semi-structurés. Nous avons intentionnellement recruté et interviewé 16 médecins en Suisse romande. Leurs opinions et attitudes concernant la promotion de l'activité physique au cabinet médical ont été transcrites et synthétisées à partir de l'enregistrement de ces entretiens.

Development of the First Disease Activity Index for Eosinophilic Esophagitis: Update on the EEsAI in 2011

Background a nd Aims: T he international E EsAI study g roupis currently developing the first activity index (EEsAI) specificfor Eosinophilic Esophagitis (EoE). Goal: To develop, evaluateand validate the EEsAI.Methods: T he d evelopment comprises three phases: 1.Selection of candidate items; 2. Evaluation of the activity indexin a f irst patient cohort; and 3. V alidation in a s econd EoEpatient cohort. Focus group interviews with patients were usedin p hase 1 to generate p atient r eported outcomes ( PRO)according to guidelines o f regulatory authorities ( FDA andEMA), whereas the section of biologic items was developed byDelphi r ounds of i nternational E oE experts from E urope andNorth America.Results: The EEsAI has a modular composition to assess thefollowing components o f EoE activity: p atient reportedoutcomes, endoscopic activity, histologic activity, laboratoryactivity, a nd quality of life. D efinitions f or all aspects o fendoscopic and histologic appearance were established byconsensus rounds among EoE experts. Symptom assessmenttools were created that take into account d ifferent foodconsistencies as w ell as f ood avoidance and specificprocessing strategies. T he EEsAI is evaluated in a c ohort ofadult EoE patients since March 2011.Conclusions: After successful validation, the EEsAI will allowto standardize outcome assessment in E oE t rials which w illlikely lead to its wide applicability.

Plasmodium falciparum merozoite surface protein 2: epitope mapping and biological activity analysis of specific antibodies

Background: Plasmodium falciparum(P. falciparum) merozoite surfaceprotein 2 (MSP-2) is one of bloodstage proteins that are associated withprotection from malaria. MSP-2 consistsof a highly polymorphic centralrepeat region flanked by a dimorphicregion that defines the two allelicfamilies, 3D7 and FC27; N- and Cterminalregions are conserved domains.Long synthetic peptides (LSP)representing the two allelic familiesof MSP-2 and constant regions arerecognized by sera from donors livingin endemic areas; and specific antibodies(Abs) are associated with protectionand active in antibody dependentcellular inhibition (ADCI) in vitro.However, the fine specificity ofAb response to the two allelic familiesof MSP-2 is unknown. Methods: Peptidesrepresenting dimorphic regionof 3D7 and FC27 families and theirC-terminal (common fragment to thetwo families) termed 3D7-D (88 aa),FC27-D (48 aa) and C (40 aa) respectivelywere synthesized. Overlapping20 mer peptides covering dimorphicand constant regions of two familieswere also synthesized for epitopemapping. Human sera were obtainedfrom donors living in malaria endemicareas. SpecificDand CregionsAbs were purified from single or poolhuman sera. Sera from mice were obtainedafter immunization with thetwo families LSP mixture in three differentadjuvants: alhydrogel (Alum),Glucopyranosyl Lipid Adjuvant-Stableoil-in-water Emulsion (GLA-SE)and Virosome. For ADCI, P. falciparum(strain 3D7) parasite wasmaintained in culture at 0.5% parasitemiaand 4% hematocrit in air tightbox at love oxygen (2%) and 37 ºC.Results: We identified several epitopesfrom the dimorphic and constantregions of both families of MSP-2, inmice and humans (adults and children).In human, most recognizedepitopes were the same in differentendemic regions for each domain ofthe two families of MSP-2. In mice,the differential recognition of epitopewas depending on the strain of mouseand interestingly on the adjuvantused. GLA-SE and alum as adjuvantswere more often associated with therecognition of multiple epitopes thanvirosomes. Epitope-specific Abs recognizednative merozoites of P.falciparum and were active in ADCIto block development of parasite.Conclusion: The delineation of a limitednumber of epitopes could be exploitedto develop MSP-2 vaccinesactive on both allelic families ofMSP-2.

A New Large-DNA-Fragment Delivery System Based on Integrase Activity from an Integrative and Conjugative Element.

During the past few decades, numerous plasmid vectors have been developed for cloning, gene expression analysis, and genetic engineering. Cloning procedures typically rely on PCR amplification, DNA fragment restriction digestion, recovery, and ligation, but increasingly, procedures are being developed to assemble large synthetic DNAs. In this study, we developed a new gene delivery system using the integrase activity of an integrative and conjugative element (ICE). The advantage of the integrase-based delivery is that it can stably introduce a large DNA fragment (at least 75 kb) into one or more specific sites (the gene for glycine-accepting tRNA) on a target chromosome. Integrase recombination activity in Escherichia coli is kept low by using a synthetic hybrid promoter, which, however, is unleashed in the final target host, forcing the integration of the construct. Upon integration, the system is again silenced. Two variants with different genetic features were produced, one in the form of a cloning vector in E. coli and the other as a mini-transposable element by which large DNA constructs assembled in E. coli can be tagged with the integrase gene. We confirmed that the system could successfully introduce cosmid and bacterial artificial chromosome (BAC) DNAs from E. coli into the chromosome of Pseudomonas putida in a site-specific manner. The integrase delivery system works in concert with existing vector systems and could thus be a powerful tool for synthetic constructions of new metabolic pathways in a variety of host bacteria.

Physical activity attenuates the influence of FTO variants on obesity risk: a meta-analysis of 218,166 adults and 19,268 children.

BACKGROUND: The FTO gene harbors the strongest known susceptibility locus for obesity. While many individual studies have suggested that physical activity (PA) may attenuate the effect of FTO on obesity risk, other studies have not been able to confirm this interaction. To confirm or refute unambiguously whether PA attenuates the association of FTO with obesity risk, we meta-analyzed data from 45 studies of adults (n = 218,166) and nine studies of children and adolescents (n = 19,268). METHODS AND FINDINGS: All studies identified to have data on the FTO rs9939609 variant (or any proxy [r(2)>0.8]) and PA were invited to participate, regardless of ethnicity or age of the participants. PA was standardized by categorizing it into a dichotomous variable (physically inactive versus active) in each study. Overall, 25% of adults and 13% of children were categorized as inactive. Interaction analyses were performed within each study by including the FTO×PA interaction term in an additive model, adjusting for age and sex. Subsequently, random effects meta-analysis was used to pool the interaction terms. In adults, the minor (A-) allele of rs9939609 increased the odds of obesity by 1.23-fold/allele (95% CI 1.20-1.26), but PA attenuated this effect (p(interaction)  = 0.001). More specifically, the minor allele of rs9939609 increased the odds of obesity less in the physically active group (odds ratio  = 1.22/allele, 95% CI 1.19-1.25) than in the inactive group (odds ratio  = 1.30/allele, 95% CI 1.24-1.36). No such interaction was found in children and adolescents. CONCLUSIONS: The association of the FTO risk allele with the odds of obesity is attenuated by 27% in physically active adults, highlighting the importance of PA in particular in those genetically predisposed to obesity.

The P450 oxidoreductase genotype is associated with CYP3A activity in vivo as measured by the midazolam phenotyping test.

CYP3A4, CYP3A5 and CYP3A7 are hepatic enzymes that metabolize about 50% of drugs on the market, with a large overlap in their specificities. We investigated the genetic bases that contribute to the variation of CYP3A activity. We phenotyped 251 individuals from two independent studies (182 patients treated with methadone and 69 patients with clozapine) for CYP3A activity using the midazolam phenotyping test and genotyped them for CYP3A4, CYP3A5, and CYP3A7 genetic variants, including the single nucleotide polymorphism (SNP) rs4646437C>T in intron 7 of CYP3A4. Owing to the fact that CYP enzymes require electron transfer through the P450 oxidoreductase (POR), and functional impairment has been shown for the POR*28 SNP, this polymorphism was also analysed. We show that CYP3A4, CYP3A5 and CYP3A7 genotypes, including the SNP rs4646437C>T, do not reflect the inter-individual variability of CYP3A activity (P>0.1). In contrast, POR*28 TT genotype presents a 1.6-fold increase in CYP3A activity compared with POR*28C carriers (n = 182, P = 0.004). This finding was replicated in the second independent dataset (n = 69, P = 0.04). The SNP POR*28 seems to be a better genetic marker of the variability of total CYP3A activity in vivo than CYP3A4, CYP3A5 and CYP3A7 genetic variants.

Sustaining sleep spindles through enhanced SK2-channel activity consolidates sleep and elevates arousal threshold.

Sleep spindles are synchronized 11-15 Hz electroencephalographic (EEG) oscillations predominant during nonrapid-eye-movement sleep (NREMS). Rhythmic bursting in the reticular thalamic nucleus (nRt), arising from interplay between Ca(v)3.3-type Ca(2+) channels and Ca(2+)-dependent small-conductance-type 2 (SK2) K(+) channels, underlies spindle generation. Correlative evidence indicates that spindles contribute to memory consolidation and protection against environmental noise in human NREMS. Here, we describe a molecular mechanism through which spindle power is selectively extended and we probed the actions of intensified spindling in the naturally sleeping mouse. Using electrophysiological recordings in acute brain slices from SK2 channel-overexpressing (SK2-OE) mice, we found that nRt bursting was potentiated and thalamic circuit oscillations were prolonged. Moreover, nRt cells showed greater resilience to transit from burst to tonic discharge in response to gradual depolarization, mimicking transitions out of NREMS. Compared with wild-type littermates, chronic EEG recordings of SK2-OE mice contained less fragmented NREMS, while the NREMS EEG power spectrum was conserved. Furthermore, EEG spindle activity was prolonged at NREMS exit. Finally, when exposed to white noise, SK2-OE mice needed stronger stimuli to arouse. Increased nRt bursting thus strengthens spindles and improves sleep quality through mechanisms independent of EEG slow waves (<4 Hz), suggesting SK2 signaling as a new potential therapeutic target for sleep disorders and for neuropsychiatric diseases accompanied by weakened sleep spindles.