RecA-mediated strand exchange traverses substitutional heterologies more easily than deletions or insertions.

RecA protein in bacteria and its eukaryotic homolog Rad51 protein are responsible for initiation of strand exchange between homologous DNA molecules. This process is crucial for homologous recombination, the repair of certain types of DNA damage and for the reinitiation of DNA replication on collapsed replication forks. We show here, using two different types of in vitro assays, that in the absence of ATP hydrolysis RecA-mediated strand exchange traverses small substitutional heterologies between the interacting DNAs, whereas small deletions or insertions block the ongoing strand exchange. We discuss evolutionary implications of RecA selectivity against insertions and deletions and propose a molecular mechanism by which RecA can exert this selectivity.

With a bang, not a whimper: Pricking Germany's "stock market bubble" in 1927 and the slide into depression

In May 1927, the German central bank intervenedindirectly to reduce lending to equity investors.The crash that followed ended the only stockmarket boom during Germany s relative stabilization 1924-28. This paper examines thefactors that lead to the intervention as well asits consequences. We argue that genuine concernabout the exuberant level of the stock market,in addition to worries about an inflow offoreign funds, tipped the scales in favour ofintervention. The evidence strongly suggeststhat the German central bank under HjalmarSchacht was wrong to be concerned aboutstockprices-there was no bubble. Also, theReichsbank was mistaken in its belief thata fall in the market would reduce theimportance of short-term foreign borrowing,and help to ease conditions in the money market.The misguided intervention had important realeffects. Investment suffered, helping to tipGermany into depression.

Does foreign direct investment crowd out domestic entrepreneurship?

In analyzing firm entry and exit across Belgian manufacturing industries,this paper presents evidence that import competition and foreign directinvestment discourage entry and stimulate exit of domestic entrepreneurs.These results are in line with theoretical occupational choice modelsthat predict foreign direct investment would crowd out domesticentrepreneurs through their selections in product and labor markets.However, the empirical results also suggest that this crowding out effectmay be moderated or even reversed in the long-run due to the long termpositive effects of FDI on domestic entrpreneurship as a result oflearning, demonstration, networking and linkage effects between foreignand domestic firms.

Stock returns, term structure, inflation and real activity: An international perspective

This paper analyses the empirical interdependences among assetreturns, real activity and inflation from a multicountry and internationalpoint of view. We find that nominal stock returns are significantly relatedto inflation only in the US, that the US term structure of interest ratespredicts both domestic and foreign inflation rates while foreign termstructures do not have this predictive power and that innovations in inflationand exchange rates induce insignificant responses of real and financialvariables. An interpretation of the dynamics and some policy implicationsof the results are provided.

Altruism, equity and reciprocity in a gift-exchange experiment: An encompassing approach

Considerable experimental evidence suggests that non-pecuniary motivesmust be addressed when modeling behavior in economic contexts. Recentmodels of non-pecuniary motives can be classified as either altruism-based, equity-based, or reciprocity-based. We estimate and compareleading approaches in these categories, using experimental data. Wethen offer a flexible approach that nests the above three approaches,thereby allowing for nested hypothesis testing and for determiningthe relative strength of each of the competing theories. In addition,the encompassing approach provides a functional form for utility in different settings without the restrictive nature of the approaches nested within it. Using this flexible form for nested tests, we findthat intentional reciprocity, distributive concerns, and altruisticconsiderations all play a significant role in players' decisions.

Responsibility-allevation and effort provision in a gift-exchange experiment

Previous indirect evidence suggests that impulses towards pro-socialbehavior are diminished when an external authority is responsiblefor an outcome. The responsibility-alleviation effect states that ashift of responsibility to an external authority dampens internalimpulses toward honesty, loyalty, or generosity. In a gift-exchangeexperiment, we find that subjects respond with more generosity(higher effort) when a wage is determined by a random process thanwhen it is assigned by a third party, indicating that even a slightshift in perceived responsibility for the final payoffs can changebehavior. Responsibility-alleviation is a factor in economicenvironments featuring substantial personal interaction.

Foreign ownership and productivity dynamics

In analyzing the distinctive contribution of foreign subsidiaries anddomestic firms to productivity growth in aggregate Belgian manufacturing,this paper shows that foreign ownership is an important source of firmheterogeneity affecting productivity dynamics. Foreign firms havecontributed disproportionately large to aggregate productivity growth,but more importantly reallocation processes differ significantly betweenthe groups of foreign subsidiaries and domestic firms.

A medium-scale open economy model of Australia

We estimate an open economy dynamic stochastic general equilibrium (DSGE)model of Australia with a number of shocks, frictions and rigidities, matching alarge number of observable time series. We find that both foreign and domesticshocks are important drivers of the Australian business cycle.We also find that theinitial impact on inflation of an increase in demand for Australian commoditiesis negative, due to an improvement in the real exchange rate, though there is apersistent positive effect on inflation that dominates at longer horizons.

Monetary policy and exchange rate volatility in a small open economy

We lay out a small open economy version of the Calvo sticky price model, and show how the equilibrium dynamics can be reduced to simple representation in domestic inflation and the output gap. We use the resulting framework to analyze the macroeconomic implications of three alternative rule-based policy regimes for the small open economy: domestic inflation and CPI-based Taylor rules, and an exchange rate peg. We show that a key difference amongthese regimes lies in the relative amount of exchange rate volatility that they entail. We also discuss a special case for which domestic inflation targeting constitutes the optimal policy, and where a simple second order approximation to the utility of the representative consumer can be derived and used to evaluate the welfare losses associated with the suboptimal rules.

Geographical deviations in foreign trade statistics: A study into European trade with Latin American Countries, 1925

We have analyzed the spatial accuracy of European foreign trade statistics compared to Latin American. We have also included USA s data because of the importance of this country in Latin American trade. We have developed a method for mapping discrepancies between exporters and importers, trying to isolate systematic spatial deviations. Although our results don t allow a unique explanation, they present some interesting clues to the distribution channels in the Latin American Continent as well as some spatial deviations for statistics in individual countries. Connecting our results with the literature specialized in the accuracy of foreign trade statistics; we can revisit Morgernstern (1963) as well as Federico and Tena (1991). Morgernstern had had a really pessimistic view on the reliability of this statistic source, but his main alert was focused on the trade balances, not in gross export or import values. Federico and Tena (1991) have demonstrated howaccuracy increases by aggregation, geographical and of product at the same time. But they still have a pessimistic view with relation to distribution questions, remarking that perhaps it will be more accurate to use import sources in this latest case. We have stated that the data set coming from foreign trade statistics for a sample in 1925, being it exporters or importers, it s a valuable tool for geography of trade patterns, although in some specific cases it needs some spatial adjustments.

Earnings management in Spain. Some evidence from companies quoted in the Spanish stock exchange

After the accounting scandals that have taken place mainly in the UnitedStates during the last years, some Spanish leading authorities havedefended the idea that this kind of accounting problems cannot happen inSpain. They argue that accounting regulation in Europe, and specificallyin Spain, make more difficult the use of creative accounting practices.The objective of this paper is to identify some evidence about thesituacion in Spain. The study tries to demonstrate that some accountingpractices of several of the companies quoted in the Spanish Stock Exchangecould be qualified as earnings management.To carry out this study, the authors have analysed the accounts of the 35companies included in the stock market index IBEX 35. This index iscalculated with the share prices variations of the most importantcompanies quoted in the Spanish Stock Exchange.

The timing of foreign direct investment under uncertainty: Evidence from the Spanish banking sector

This paper investigates the timing of foreign direct investment (FDI) in the banking sector. The importance of this issue would arise from the existence of differential benefits associated to be the first entrant in a foreign location. Nevertheless, when uncertainty is considered, the existence of some Ownership-Location-Internalization (OLI) advantages can make FDI less reversible and/or more delayable and therefore it may be optimal for the firm to delay the investment until the uncertainty is resolved. In this paper, the nature of OLI advantages in the banking sector has been examined in order to propose a prognostic model of the timing of foreign direct investment. The model is then tested for the Spanish case using duration analysis.

Productivity growth and the exchange rate regime: The role of financial development

This paper offers empirical evidence that a country's choice of exchange rate regime can have a signifficant impact on its medium-term rate of productivity growth. Moreover, the impact depends critically on the country's level of financial development, its degree of market regulation, and its distance from the global technology frontier. We illustrate how each of these channels may operate in a simple stylized growth model in which real exchange rate uncertainty exacerbates the negative investment e¤ects of domestic credit market constraints. The empirical analysis is based on an 83 country data set spanning the years 1960-2000. Our approach delivers results that are in striking contrast to the vast existing empirical exchange rate literature, which largely finds the effects of exchange rate volatility on real activity to be relatively small and insignificant.

Trade liberalization in Uruguay: Domestic and foreign firms

The reallocation of resources is one of the main impacts of tradeliberalization processes. In the case of manufacturing industries resourceswill be reallocated from import--competing sectors to export--orientedsectors. This paper studies the effects that a more open economic environmenthas had on the entry conditions for foreign and domestic firms in Uruguayanmanufacturing industries. We find significant differences in the behaviorof foreign and domestic firms, both when they are incumbents or when theyact as potential entrants. In general, foreign firms seem to be moresuccessful in applying entry deterring strategies, due to advantages inforeign markets, deeper financial resources or better technological capabilities.They also appear to be more responsive to entry conditions when theyface the prospects of entering a given industry.