A Generic Model of Financial Repression

The paper develops a growth model in an overlapping generations framework of a financially repressed small open economy, and analyzes the effects of financial liberalization. The following observations are made: An increase (decrease) of interest rate (reserve requirements) reduces (increases) the steady-state stock of capital and the trade balance, but improves (deteriorates) the level of foreign exchange reserves. However, financial liberalization, in any form, is always welfare-improving. The paper, thus, advocates financial liberalization policies to be oriented towards reduction of reserve requirements rather than interest rate deregulation, if foreign reserve holding is not in a critical position.

Analysis of the Phosphorylated Forms of Protein Kinase R

Protein Kinase R (PKR) is induced by interferon and activated by dsRNA. Subsequent autophosphorylation and phosphorylation of eIF2alpha inhibits viral replication. In the latent state PKR exists as an unphosphorylated monomer. Work in the Cole laboratory has shown two additional states, a phosphorylated monomeric state (pPKRm) and a phosphorylated dimeric state (pPKRd). RNA serves as a scaffold bringing two PKRs together allowing dimerization and autophosphorylation to occur. The contribution of each state to the function of PKR remains unclear. Western blots were performed to examine the phosphorylation states of the essential residues, T446 and T451. Activity assays have shown activation of pPKRm at a level comparable to pPKRd in its ability to phosphorylate eIF2alpha. Phosphorylation of eIF2alpha by both pPKRm and pPKRd was shown to be RNA independent. Despite reaching similar terminal levels of eIF2alpha phosphorylation, kinetic measurements revealed a faster reaction from pPKRd. Therefore, pPKRm and pPKRd may both contribute to the activity of PKR.