Transfers, social safety nets and economic growth

The role of social safety nets in the form of redistributional transfersand wage subsidies is analyzed using a simple model of criminal behavior. Itis argued that public welfare programs act as a crime--preventing ordisruption--preventing devices because they tend to increase the opportunitycost of engaging in crime or disruptive activities. It is shown that, in thepresence of a leisure choice, wage subsidies may be better than pure transfers. Using a simple growth model, it is shown that it is not optimal for the governmentto try to fully eliminate crime. The optimal size of the public welfare programis found and it is argued that public welfare should be financed with income(not lump--sum) taxes, despite the fact that income taxes are distortionary.The intuition for this result is that income taxes act as a user fee oncongested public goods and transfers can be thought of as {\it productive}public goods {\it subject to congestion}. Finally, using a cross-section of 75 countries, the partial correlation betweentransfers and growth is shown to be significantly positive.

Interbank liquidity crunch and the firm credit crunch: Evidence from the 2007-2009 crisis

We study the credit supply effects of the unexpected freeze of the Europeaninterbank market, using exhaustive Portuguese loan-level data. We find thatbanks that rely more on interbank borrowing before the crisis decrease theircredit supply more during the crisis. The credit supply reduction is stronger forfirms that are smaller, with weaker banking relationships. Small firms cannotcompensate the credit crunch with other sources of debt. Furthermore, theimpact of illiquidity on the credit crunch is stronger for less solvent banks.Finally, there are no overall positive effects of central bank liquidity, but higherhoarding of liquidity.

Simple models for multi-attribute choice with many alternatives: When it does and does not pay to face tradeoffs with binary attributes

Working Paper no longer available. Please contact the author.

A simple adaptive procedure leading to correlated equilibrium

We propose a simple adaptive procedure for playing a game. In thisprocedure, players depart from their current play with probabilities thatare proportional to measures of regret for not having used other strategies(these measures are updated every period). It is shown that our adaptiveprocedure guaranties that with probability one, the sample distributionsof play converge to the set of correlated equilibria of the game. Tocompute these regret measures, a player needs to know his payoff functionand the history of play. We also offer a variation where every playerknows only his own realized payoff history (but not his payoff function).

Monetary policy in a systemic crisis

This paper examines the monetary policy followed during the current financial crisisfrom the perspective of the theory of the lender of last resort. It is argued that standardmonetary policy measures would have failed because the channels through whichmonetary policy is implemented depend upon the well functioning of the interbankmarket. As the crisis developed, liquidity vanished and the interbank market collapsed,central banks had to inject much more liquidity at low interest rates than predicted bystandard monetary policy models. At the same time, as the interbank market did notallow for the redistribution of liquidity among banks, central banks had to design newchannels for liquidity injection.

On certain greedoid polyhedra, partially indexable scheduling problems and extended restless bandit allocation indices

We present a polyhedral framework for establishing general structural properties on optimal solutions of stochastic scheduling problems, where multiple job classes vie for service resources: the existence of an optimal priority policy in a given family, characterized by a greedoid(whose feasible class subsets may receive higher priority), where optimal priorities are determined by class-ranking indices, under restricted linear performance objectives (partial indexability). This framework extends that of Bertsimas and Niño-Mora (1996), which explained the optimality of priority-index policies under all linear objectives (general indexability). We show that, if performance measures satisfy partial conservation laws (with respect to the greedoid), which extend previous generalized conservation laws, then theproblem admits a strong LP relaxation over a so-called extended greedoid polytope, which has strong structural and algorithmic properties. We present an adaptive-greedy algorithm (which extends Klimov's) taking as input the linear objective coefficients, which (1) determines whether the optimal LP solution is achievable by a policy in the given family; and (2) if so, computes a set of class-ranking indices that characterize optimal priority policies in the family. In the special case of project scheduling, we show that, under additional conditions, the optimal indices can be computed separately for each project (index decomposition). We further apply the framework to the important restless bandit model (two-action Markov decision chains), obtaining new index policies, that extend Whittle's (1988), and simple sufficient conditions for their validity. These results highlight the power of polyhedral methods (the so-called achievable region approach) in dynamic and stochastic optimization.

Partial cricotracheal resection for severe pediatric subglottic stenosis: update of the Lausanne experience.

Until recently, severe pediatric subglottic stenosis (SGS) has been treated almost exclusively by laryngotracheoplasty procedures. Even in the most experienced centers, the results of single-stage operations for Cotton's grade III and IV stenoses have been disappointing. This paper reports our experience on 31 partial cricotracheal resections for severe SGS in infants and children. The stenosis was congenital in 6 cases and acquired after prolonged intubation in 25 cases. Twenty-seven patients were tracheotomy-dependent at the time of surgery. Twenty-two cases were classified as grade III and 9 cases as grade IV stenoses according to Cotton. The decannulation rate was 97% (30 of 31 cases) after an open procedure. There were no fatalities and no lesions to the recurrent laryngeal nerves, but there was 1 complete restenosis. Twenty-seven patients show no exertional dyspnea, 3 have a slight stridor with some dyspnea while exercising, and 1 patient is not decannulated. The voice is normal in 21 cases, a dysphonia is present in 9 cases, and the patient with complete restenosis acquired an esophageal voice. Postoperative follow-up is longer than 10 years in 8 cases and longer than 5 years in an additional 6 cases. All patients who reached adulthood show normal growth of the larynx and trachea. Considering the excellent results obtained in this consecutive series of 31 cases, partial cricoid resection with primary thyrotracheal anastomosis should be considered an important treatment option for severe SGS in infants and children.

Take-the-best and other simple strategies: Why and when they work 'well' in binary choice

The effectiveness of decision rules depends on characteristics of bothrules and environments. A theoretical analysis of environments specifiesthe relative predictive accuracies of the lexicographic rule 'take-the-best'(TTB) and other simple strategies for binary choice. We identify threefactors: how the environment weights variables; characteristics of choicesets; and error. For cases involving from three to five binary cues, TTBis effective across many environments. However, hybrids of equal weights(EW) and TTB models are more effective as environments become morecompensatory. In the presence of error, TTB and similar models do not predictmuch better than a naïve model that exploits dominance. We emphasizepsychological implications and the need for more complete theories of theenvironment that include the role of error.

Restless bandits, partial conservation laws and indexability

We show that if performance measures in a stochastic scheduling problem satisfy a set of so-called partial conservation laws (PCL), which extend previously studied generalized conservation laws (GCL), then the problem is solved optimally by a priority-index policy for an appropriate range of linear performance objectives, where the optimal indices are computed by a one-pass adaptive-greedy algorithm, based on Klimov's. We further apply this framework to investigate the indexability property of restless bandits introduced by Whittle, obtaining the following results: (1) we identify a class of restless bandits (PCL-indexable) which are indexable; membership in this class is tested through a single run of the adaptive-greedy algorithm, which also computes the Whittle indices when the test is positive; this provides a tractable sufficient condition for indexability; (2) we further indentify the class of GCL-indexable bandits, which includes classical bandits, having the property that they are indexable under any linear reward objective. The analysis is based on the so-called achievable region method, as the results follow fromnew linear programming formulations for the problems investigated.

Simple method for detection of MYH11 DNA rearrangements in patients with inv(16)(p13q22) and acute myeloid leukemia.

The pericentric inversion on chromosome 16 [inv(16)(p13q22)] and related t(16;16)(p13;q22) are recurrent aberrations associated with acute myeloid leukemia (AML) M4 Eo. Both abberations result in a fusion of the core binding factor beta (CBFB) and smooth muscle myosin heavy chain gene (MYH11). A selected genomic 6.9-kb BamHl probe detects MYH11 DNA rearrangements in 18 of 19 inv(16)/t(16;16) patients tested using HindIII digested DNA. The rearranged fragments were not detectable after remission in two cases tested, while they were present after relapse in one of these two cases tested.

Liver segmentation: Practical tips.

The liver segmentation system, described by Couinaud, is based on the identification of the three hepatic veins and the plane passing by the portal vein bifurcation. Nowadays, Couinaud's description is the most widely used classification since it is better suited for surgery and more accurate for the localisation and monitoring of intra-parenchymal lesions. Knowledge of the anatomy of the portal and venous system is therefore essential, as is knowledge of the variants resulting from changes occurring during the embryological development of the vitelline and umbilical veins. In this paper, the authors propose a straightforward systematisation of the liver in six steps using several additional anatomical points of reference. These points of reference are simple and quickly identifiable in any radiological examination with section imaging, in order to avoid any mistakes in daily practice. In fact, accurate description impacts on many diagnostic and therapeutic applications in interventional radiology and surgery. This description will allow better preparation for biopsy, portal vein embolisation, transjugular intrahepatic portosystemic shunt, tumour resection or partial hepatectomy for transplantation. Such advance planning will reduce intra- and postoperative difficulties and complications.

World population growth and fertility patterns, 1960-2000. A simple model explaining the evolution of world's fertility during the second half of the 20th Century

In this paper we attempt to describe the general reasons behind the world populationexplosion in the 20th century. The size of the population at the end of the century inquestion, deemed excessive by some, was a consequence of a dramatic improvementin life expectancies, attributable, in turn, to scientific innovation, the circulation ofinformation and economic growth. Nevertheless, fertility is a variable that plays acrucial role in differences in demographic growth. We identify infant mortality, femaleeducation levels and racial identity as important exogenous variables affecting fertility.It is estimated that in poor countries one additional year of primary schooling forwomen leads to 0.614 child less per couple on average (worldwide). While it may bepossible to identify a global tendency towards convergence in demographic trends,particular attention should be paid to the case of Africa, not only due to its differentdemographic patterns, but also because much of the continent's population has yet toexperience improvement in quality of life generally enjoyed across the rest of theplanet.