Why is the Greek economy collapsing? A simple tale of high multipliers and low exports. CEPS Commentary, 21 December 2012

In an attempt to understand why the Greek economy is collapsing, this Commentary points out two key aspects that are often overlooked – the country’s large multiplier and a bad export performance. When combined with the need for a large fiscal adjustment, these factors help explain how fiscal consolidation in Greece has been associated with such a large drop in GDP.

Nitrogen recycling through the gut and the nitrogen economy of ruminants: An asynchronous symbiosis

The extensive development of the ruminant forestomach sets apart their N economy from that of nonruminants in a number of respects. Extensive pregastric fermentation alters the profile of protein reaching the small intestine, largely through the transformation of nitrogenous compounds into microbial protein. This process is fueled primarily by carbohydrate fermentation and includes extensive recycling of N between the body and gut lumen pools. Nitrogen recycling occurs via blood and gut lumen exchanges of urea and NH3, as well as endogenous gut and secretory N entry into the gut lumen, and the subsequent digestion and absorption of microbial and endogenous protein. Factors controlling urea transfer to the gut from blood, including the contributions of urea transporters, remain equivocal. Ammonia produced by microbial degradation of urea and dietary and endogenous AA is utilized by microbial fermentation or absorbed and primarily converted to urea. Therefore, microbial growth and carbohydrate fermentation affect the extent of NH3 absorption and urea N recycling and excretion. The extensive recycling of N to the rumen represents an evolutionary advantage of the ruminant in terms of absorbable protein supply during periods of dietary protein deficiency, or asynchronous carbohydrate and protein supply, but incurs a cost of greater N intakes, especially in terms of excess N excretion. Efforts to improve the efficiency of N utilization in ruminants by synchronizing fermentable energy and N availability have generally met with limited success with regards to production responses. In contrast, imposing asynchrony through oscillating dietary protein concentration, or infrequent supplementation, surprisingly has not negatively affected production responses unless the frequency of supplementation is less than once every 3 d. In some cases, oscillation of dietary protein concentration has improved N retention compared with animals fed an equal amount of dietary protein on a daily basis. This may reflect benefits of Orn cycle adaptations and sustained recycling of urea to the gut. The microbial symbiosis of the ruminant is inherently adaptable to asynchronous N and energy supply. Recycling of urea to the gut buffers the effect of irregular dietary N supply such that intuitive benefits of rumen synchrony in terms of the efficiency of N utilization are typically not observed in practice.

Shock persistence in a dual economy model of India

This article examines shock persistence in agricultural and industrial output in India. Drawing on the dual economy literature, the linkages between the sectors through the terms of trade are emphasised. However different dual economy models make differing assumptions regarding the categorisation of variables as being either endogenous or exogenous and this distinction is crucial in explaining the pattern of shock persistence. Using annual data for 1955-95, our results show that shocks to both output series are permanent while those to the terms of trade are transient.