Fiscal policy, pricing frictions and monetary accommodation

We investigate the theoretical conditions for effectiveness of government consumptionexpenditure expansions using US, Euro area and UK data. Fiscal expansions taking placewhen monetary policy is accommodative lead to large output multipliers in normal times.The 2009-2010 packages need not produce significant output multipliers, may havemoderate debt effects, and only generate temporary inflation. Expenditure expansionsaccompanied by deficit/debt consolidations schemes may lead to short run output gains buttheir success depends on how monetary policy and expectations behave. Trade opennessand the cyclicality of the labor wedge explain cross-country differences in the magnitude ofthe multipliers.

Dexamethasone induces posttranslational degradation of GLUT2 and inhibition of insulin secretion in isolated pancreatic beta cells. Comparison with the effects of fatty acids.

GLUT2 expression is strongly decreased in glucose-unresponsive pancreatic beta cells of diabetic rodents. This decreased expression is due to circulating factors distinct from insulin or glucose. Here we evaluated the effect of palmitic acid and the synthetic glucocorticoid dexamethasone on GLUT2 expression by in vitro cultured rat pancreatic islets. Palmitic acid induced a 40% decrease in GLUT2 mRNA levels with, however, no consistent effect on protein expression. Dexamethasone, in contrast, had no effect on GLUT2 mRNA, but decreased GLUT2 protein by about 65%. The effect of dexamethasone was more pronounced at high glucose concentrations and was inhibited by the glucocorticoid antagonist RU-486. Biosynthetic labeling experiments revealed that GLUT2 translation rate was only minimally affected by dexamethasone, but that its half-life was decreased by 50%, indicating that glucocorticoids activated a posttranslational degradation mechanism. This degradation mechanism was not affecting all membrane proteins, since the alpha subunit of the Na+/K+-ATPase was unaffected. Glucose-induced insulin secretion was strongly decreased by treatment with palmitic acid and/or dexamethasone. The insulin content was decreased ( approximately 55 percent) in the presence of palmitic acid, but increased ( approximately 180%) in the presence of dexamethasone. We conclude that a combination of elevated fatty acids and glucocorticoids can induce two common features observed in diabetic beta cells, decreased GLUT2 expression, and loss of glucose-induced insulin secretion.

On the term structure of Interbank interest rates: Jump-diffusion processes and option pricing

In this paper we study the dynamic behavior of the term structureof Interbank interest rates and the pricing of options on interest ratesensitive securities. We posit a generalized single factor model withjumps to take into account external influences in the market. Daily datais used to test for jump effects. Qualitative examination of the linkagebetween Monetary Authorities' interventions and jumps are studied. Pricingresults suggests a systematic underpricing in bonds and call options ifthe jumps component is not included. However, the pricing of put optionson bonds presents indeterminacies.

Fair pricing of deposit insurance. Is it possible? Yes. Is it desirable? No

This note elaborates on a recent article by Chan, Greenbaum and Thakor(1992) who contend that fairly priced deposit insurance is incompatiblewithfree competition in the banking sector, in the presence of adverseselection.We show here that at soon as one introduces a real economic motivationfromprivate banks to manage the deposits from the public, then fairly priceddeposit insurance becomes possible. However, we also show that sucha fairlypriced insurance is never desirable, precisely because of adverseselection.We compute the characteristics of the optimal premium schedule, whichtradesoff between the cost of adverse selection and the cost of ``unfaircompetition ''.

Solving non-linear stochastic models by parameterizing expectations: An application to asset pricing with production

A new algorithm called the parameterized expectations approach(PEA) for solving dynamic stochastic models under rational expectationsis developed and its advantages and disadvantages are discussed. Thisalgorithm can, in principle, approximate the true equilibrium arbitrarilywell. Also, this algorithm works from the Euler equations, so that theequilibrium does not have to be cast in the form of a planner's problem.Monte--Carlo integration and the absence of grids on the state variables,cause the computation costs not to go up exponentially when the numberof state variables or the exogenous shocks in the economy increase. \\As an application we analyze an asset pricing model with endogenousproduction. We analyze its implications for time dependence of volatilityof stock returns and the term structure of interest rates. We argue thatthis model can generate hump--shaped term structures.

Intraspecific competition reveals conditional fitness effects of single gene polymorphism at the Arabidopsis root growth regulator BRX.

Intraspecific genetic variation for morphological traits is observed in many organisms. In Arabidopsis thaliana, alleles responsible for intraspecific morphological variation are increasingly being identified. However, the fitness consequences remain unclear in most cases. Here, the fitness effects of alleles of the BRX gene are investigated. A brx loss-of-function allele, which was found in a natural accession, results in a highly branched but poorly elongated root system. Comparison between the control accession Sav-0 and an introgression of brx into this background (brxS) indicated that, surprisingly, brx loss of function did not negatively affect fitness in pure stands. However, in mixed, well-watered stands brxS performance and reproductive output decreased significantly, as the proportion of Sav-0 neighbors increased. Additional comparisons between brxS and a brxS line that was complemented by a BRX transgene confirmed a direct effect of the loss-of-function allele on plant performance, as indicated by restored competitive ability of the transgenic genotype. Further, because plant height was very similar across genotypes and because the experimental setup largely excluded shading effects, the impaired competitiveness of the brx loss-of-function genotype likely reflects below-ground competition. In summary, these data reveal conditional fitness effects of a single gene polymorphism in response to intraspecific competition in Arabidopsis.

A unifying approach to the empirical evaluation of asset pricing models

Two main approaches are commonly used to empirically evaluate linear factor pricingmodels: regression and SDF methods, with centred and uncentred versions of the latter.We show that unlike standard two-step or iterated GMM procedures, single-step estimatorssuch as continuously updated GMM yield numerically identical values for prices of risk,pricing errors, Jensen s alphas and overidentifying restrictions tests irrespective of the modelvalidity. Therefore, there is arguably a single approach regardless of the factors being tradedor not, or the use of excess or gross returns. We illustrate our results by revisiting Lustigand Verdelhan s (2007) empirical analysis of currency returns.

Competitive location and pricing on networks

In this paper we consider a location and pricing model for a retail firm that wants to enter a spatial market where a competitor firm is already operating as a monopoly with several outlets. The entering firms seeks to determine the optimal uniform mill price and its servers' locations that maximizes profits given the reaction in price of the competitor firm to its entrance. A tabu search procedure is presentedto solve the model together with computational experience.

A diversidade diferencial beta de Coleoptera (Insecta) em uma paisagem antropizada do Bioma Araucária

Este trabalho dá continuidade aos estudos sobre a fauna de Coleoptera do Parque Estadual de Vila Velha, Ponta Grossa, Paraná (PROVIVE). Teve como objeto conhecer a diversidade diferencial, ou seja, avaliar as mudanças que ocorrem na composição de espécies em áreas que sofreram ação antrópica. Os dados foram obtidos a partir de coletas através de armadilha malaise, de setembro de 1999 a agosto de 2000 (52 semanas), em cinco áreas reconhecidas como sendo diferentes habitats num capão de araucária (Floresta Ombrófila Mista), em diferentes níveis de conservação e de manejo:1) uma área de borda de mata (campo - floresta); 2) uma área com povoamento de Araucaria angustifolia, sem manejo; 3) uma área em estágio inicial a intermediário de sucessão vegetal; 4) uma área em estágio intermediário a avançado de sucessão vegetal e 5) uma área em estágio avançado de sucessão vegetal. Foram coletados 10.822 indivíduos de 1.659 espécies. A aplicação de diferentes índices de diversidade beta (b), baseados em medidas de continuidade de espécies e de ganho e perda de espécies, resultaram em altas taxas de mudança, indicando alta diversidade diferencial entre as áreas, onde já havia sido constatada a existência de alta diversidade inventarial (a). A área que mais se diferenciou na composição de espécies foi a borda de mata. As áreas em sucessão vegetal foram as mais assemelhadas entre si, em níveis crescentes da menos para a mais conservada. A alta riqueza de espécies e alta diversidade na composição de espécies de Coleoptera observadas no capão de araucária de Vila Velha, Ponta Grossa, corroboram outros estudos que indicaram ser possível envolver uma grande quantidade da riqueza regional de espécies se for mantido um mosaico de habitats em uma paisagem, envolvendo diferentes níveis de conservação e encraves com plantio de árvores nativas. A fauna de Coleoptera apresentou uma diversidade de composição de espécies que mostram ser um táxon sensível às alterações ambientais em pequena escala espacial, característica importante para ser um indicador de condições ambientais em áreas florestadas.

The ins and outs of unemployment: An analysis conditional on technology shocks

We analyze how unemployment, job finding and job separation rates reactto neutral and investment-specific technology shocks. Neutral shocks increaseunemployment and explain a substantial portion of it volatility; investment-specificshocks expand employment and hours worked and contribute to hoursworked volatility. Movements in the job separation rates are responsible for theimpact response of unemployment while job finding rates for movements alongits adjustment path. The evidence warns against using models with exogenousseparation rates and challenges the conventional way of modelling technologyshocks in search and sticky price models.

Tetracycline-regulated expression of VEGF-A in beta cells induces angiogenesis: improvement of engraftment following transplantation.

Early revascularization of pancreatic islet cells after transplantation is crucial for engraftment, and it has been suggested that vascular endothelial growth factor-A (VEGF-A) plays a significant role in this process. Although VEGF gene therapy can improve angiogenesis, uncontrolled VEGF secretion can lead to vascular tumor formation. Here we have explored the role of temporal VEGF expression, controlled by a tetracycline (TC)-regulated promoter, on revascularization and engraftment of genetically modified beta cells following transplantation. To this end, we modified the CDM3D beta cell line using a lentiviral vector to promote secretion of VEGF-A either in a TC-regulated (TET cells) or a constitutive (PGK cells) manner. VEGF secretion, angiogenesis, cell proliferation, and stimulated insulin secretion were assessed in vitro. VEGF secretion was increased in TET and PGK cells, and VEGF delivery resulted in angiogenesis, whereas addition of TC inhibited these processes. Insulin secretion by the three cell types was similar. We used a syngeneic mouse model of transplantation to assess the effects of this controlled VEGF expression in vivo. Time to normoglycemia, intraperitoneal glucose tolerance test, graft vascular density, and cellular mass were evaluated. Increased expression of VEGF resulted in significantly better revascularization and engraftment after transplantation when compared to control cells. In vivo, there was a significant increase in vascular density in grafted TET and PGK cells versus control cells. Moreover, the time for diabetic mice to return to normoglycemia and the stimulated plasma glucose clearance were also significantly accelerated in mice transplanted with TET and PGK cells when compared to control cells. VEGF was only needed during the first 2-3 weeks after transplantation; when removed, normoglycemia and graft vascularization were maintained. TC-treated mice grafted with TC-treated cells failed to restore normoglycemia. This approach allowed us to switch off VEGF secretion when the desired effects had been achieved. TC-regulated temporal expression of VEGF using a gene therapy approach presents a novel way to improve early revascularization and engraftment after islet cell transplantation.

A generalization of Hull and White formula and applications to option pricing approximation

By means of Malliavin Calculus we see that the classical Hull and White formulafor option pricing can be extended to the case where the noise driving thevolatility process is correlated with the noise driving the stock prices. Thisextension will allow us to construct option pricing approximation formulas.Numerical examples are presented.