Inflation and output dynamics with firm-owned capital

We model firm-owned capital in a stochastic dynamic New-Keynesian generalequilibrium model à la Calvo. We find that this structure impliesequilibrium dynamics which are quantitatively di¤erent from the onesassociated with a benchmark case where households accumulate capital andrent it to firms. Our findings therefore stress the importance ofmodeling an investment decision at the firm level in addition to ameaningful price setting decision. Along the way we argue that the problemof modeling firm-owned capital with Calvo price-setting has not been solvedin a correct way in the previous literature.

Downsizing, job insecurity and firm reputation

This paper studies how firms make layoff decisions in the presence of adverse shocks. In this uncertain environment, workers' expectations about their job security affect their on-the-job performance. This productivity effect on job insecurity forces firms to strike a balance between laying off redundant workers and maintaining survivors' commitment when deciding on the amount and timing of downsizing. This framework offers an explanation of conservative employment practices (such as zero or reduced layoffs) based on firms having private information about their future profits. High retention rates and wages can signal that the firm has a bright future, boosting workers' confidence. Moreover, the model provides clear predictions about when waves of downsizing will occur as opposed to one-time massive cuts.

The growth and diffusion of knowlegde and the theory of the firm

We analyze the implications of a market imperfection related to the inability to establish intellectual property rights, that we label {\it unverifiable communication}. Employees are able to collude with external parties selling ``knowledge capital'' of the firm. The firm organizer engages in strategic interaction simultaneously with employees and competitors, as she introduces endogenous transaction costs in the market for information between those agents. Incentive schemes and communication costs are the key strategic variables used by the firm to induce frictions in collusive markets. Unverifiable communication introduces severe allocative distortions, both at internal product development and at intended sale of information (technology transfer). We derive implications of the model for observable decisions like characteristics of the employment relationship (full employment, incompatibility with other jobs), firms' preferences over cluster characteristics for location decisions, optimal size at entry, in--house development vs sale strategies for innovations and industry evolution.

Social value orientation as a moral intuition: Decision-making in the dictator game

We studied the decision making process in the Dictator Game and showed that decisions are the result of a two-step process. In a first step, decision makers generate an automatic, intuitive proposal. Given sufficient motivation and cognitive resources, they adjust this in a second, more deliberated phase. In line with the social intuitionist model, we show that one s Social Value Orientation determines intuitive choice tendencies in the first step, and that this effect is mediated by the dictator s perceived interpersonal closeness with the receiver. Self-interested concerns subsequently leadto a reduction of donation size in step 2. Finally, we show that increasing interpersonal closeness can promote pro-social decision-making.

The Value of Private Information within Evolving Groups

This note offers an analytical framework aimed at explaining how individual agents purposefully act with the goal of managing the value of their information sets. Agents undertake a process of private accumulation of information, which takes into account the non-rival nature of this peculiar entity. Non rivalry introduces an externality that might trigger long-term endogenous fluctuations. The dynamics of interaction, namely the possibility of entering or exiting the group to which the individuals belong, wil l determine time trajectories for the information flows that are unique for the specific conditions of interaction that are being considered at a given momentEste artigo apresenta uma estrutura analítica que tem por objetivo explicar como é que os agentes individuais atuam, de modo intencional, com o propósito de gerir o valor da informação que detêm. Os agentes prosseguem um processo de acumulação privada de informação, o qual toma em consideração a natureza não rival desta entidade que detém características específicas. A não rivalidade introduz uma externalidade que pode despoletar flutuações endógenas de longo prazo. A dinâmica de interação, nomeadamente a possibilidade de entrar ou sair do grupo a que os indivíduos pertencem, vai determinar a formação de trajetórias no tempo para os fluxos de informação, as quais são únicas para as condições particulares de interação que estão a ser consideradas num determinado momento.

The social value of health programs: Is age a relevant factor?

In cost-effectiveness analysis (CEA) it is usually assumed that a QALY is of equal value to everybody, irrespective of the patient's age. However, it is possible that society assigns different social values to a QALY according to who gets it. In this paper we discuss the possibility of weighting health benefits for age in CEA. We also examinethe possibility that age-related preferences depend on the size of the health gain. An experiment was performedto test these hypotheses. The results assessing suggest that the patient's age is a relevant factor when assessing health gains.

Pitfalls to avoid when measuring institutions: Is "Doing Business" damaging business?

Over recent years, both governments and international aid organizations have been devoting large amounts of resources to simplifying the procedures for setting up and formalizing firms. Many of these actions have focused on reducing the initial costs of setting up the firm, disregarding the more important role of business registers as a source of reliable information for judges, government departments and, above all, other firms. This reliable information is essential for reducing transaction costs in future dealings with all sorts of economic agents, both public and private. The priorities of reform policies should therefore be thoroughly reviewed, stressing the value of the legal institutions rather than trivializing them as is often the case.

Weak and strong altruism in traitgGroups: Reproductive suicide, personal fitness and expected value

A simple variant of trait group selection, employing predators as themechanism underlying group selection, supports contingent reproductivesuicide as altruism (i.e., behavior lowering personal fitness whileaugmenting that of another) without kin assortment. The contingentsuicidal type may either saturate the population or be polymorphicwith a type avoiding suicide, depending on parameters. In addition tocontingent suicide, this randomly assorting morph may also exhibitcontinuously expressed strong altruism (sensu Wilson 1979) usuallythought restricted to kin selection. The model will not, however,support a sterile worker caste as such, where sterility occurs beforelife history events associated with effective altruism; reproductivesuicide must remain fundamentally contingent (facultative sensu WestEberhard 1987; Myles 1988) under random assortment. The continuouslyexpressed strong altruism supported by the model may be reinterpretedas probability of arbitrarily committing reproductive suicide, withoutbenefit for another; such arbitrary suicide (a "load" on "adaptive"suicide) is viable only under a more restricted parameter spacerelative to the necessarily concomitant adaptive contingent suicide.

Irreversible investment in stochastically cyclical markets

This paper presents a new framework for studying irreversible (dis)investment whena market follows a random number of random-length cycles (such as a high-tech productmarket). It is assumed that a firm facing such market evolution is always unsure aboutwhether the current cycle is the last one, although it can update its beliefs about theprobability of facing a permanent decline by observing that no further growth phasearrives. We show that the existence of regime shifts in fluctuating markets suffices for anoption value of waiting to (dis)invest to arise, and we provide a marginal interpretationof the optimal (dis)investment policies, absent in the real options literature. Thepaper also shows that, despite the stochastic process of the underlying variable has acontinuous sample path, the discreteness in the regime changes implies that the samplepath of the firm s value experiences jumps whenever the regime switches all of a sudden,irrespective of whether the firm is active or not.

The predictive value of trabecular bone score (TBS) on whole lumbar vertebrae mechanics: an ex vivo study.

We investigated the association of trabecular bone score (TBS) with microarchitecture and mechanical behavior of human lumbar vertebrae. We found that TBS reflects vertebral trabecular microarchitecture and is an independent predictor of vertebral mechanics. However, the addition of TBS to areal BMD (aBMD) did not significantly improve prediction of vertebral strength. INTRODUCTION: The trabecular bone score (TBS) is a gray-level measure of texture using a modified experimental variogram which can be extracted from dual-energy X-ray absorptiometry (DXA) images. The current study aimed to confirm whether TBS is associated with trabecular microarchitecture and mechanics of human lumbar vertebrae, and if its combination with BMD improves prediction of fracture risk. METHODS: Lumbar vertebrae (L3) were harvested fresh from 16 donors. The anteroposterior and lateral bone mineral content (BMC) and areal BMD (aBMD) of the vertebral body were measured using DXA; then, the TBS was extracted using TBS iNsight software (Medimaps SA, France). The trabecular bone volume (Tb.BV/tissue volume, TV), trabecular thickness (Tb.Th), degree of anisotropy, and structure model index (SMI) were measured using microcomputed tomography. Quasi-static uniaxial compressive testing was performed on L3 vertebral bodies to assess failure load and stiffness. RESULTS: The TBS was significantly correlated to Tb.BV/TV and SMI (râeuro0/00=âeuro0/000.58 and -0.62; pâeuro0/00=âeuro0/000.02, 0.01), but not related to BMC and BMD. TBS was significantly correlated with stiffness (râeuro0/00=âeuro0/000.64; pâeuro0/00=âeuro0/000.007), independently of bone mass. Using stepwise multiple regression models, we failed to demonstrate that the combination of BMD and TBS was better at explaining mechanical behavior than either variable alone. However, the combination TBS, Tb.Th, and BMC did perform better than each parameter alone, explaining 79 % of the variability in stiffness. CONCLUSIONS: In our study, TBS was associated with microarchitecture parameters and with vertebral mechanical behavior, but TBS did not improve prediction of vertebral biomechanical properties in addition to aBMD.

The predictive value of preoperative B-type natriuretic peptide in children undergooing heart surgery.

Introduction: Low cardiac output syndrome is frequent in childrenafter heart surgery for congenital heart disease and may result in pooroutcome and increased morbidity. In the adult population, preoperativebrain natriuretic peptide (BNP) was shown to be predictive of postoperative complications. In children, the value of preoperative BNP onpostoperative outcome is not so clear. The aim of this study was todetermine the predictive value of preoperative BNP on postoperativeoutcome and low cardiac output syndrome in children after heartsurgery for congenital heart disease.Methods: We examined, retrospectively, the postoperative course of97 pediatric patients (mean age 3.7 years, range 0-14 years old) whounderwent heart surgery in a tertiary care pediatric intensive caresetting. NTproBNP was measured preoperatively in all patients(median 412 pg/ml, range 12-35'000 pg/ml). Patients were divided intothree groups according to their NTproBNP levels (group 1: 0-300 pg/ml, group 2: 300-600 pg/ml, group 3: >600 pg/ml) and then,correlations with postoperative outcomes were examined.Results: We found that patients with a high preoperative BNP requiredmore frequently prolonged (>2 days) mechanical ventilation (33%vs 40% vs 61%, p = 0.045) and stayed more frequently longer than6 days in the intensive care unit (42% vs 50% vs 71%, p = 0.03).However, high preoperative BNP was not correlated with occurrenceof low cardiac output syndrome.Conclusion: Preoperative BNP cannot be used, in children, as areliable and sole predictor of postoperative low cardiac outputsyndrome. However it may help identify, before surgery, those patientsat risk of having a difficult postoperative course.

Predictive value of the MGMT promoter methylation status in metastatic melanoma patients receiving first-line temozolomide plus bevacizumab in the trial SAKK 50/07.

The O6-methylguanine-DNA-methyltransferase (MGMT) promoter methylation status is a predictive parameter for the response of malignant gliomas to alkylating agents such as temozolomide. First clinical trials with temozolomide plus bevacizumab therapy in metastatic melanoma patients are ongoing, although the predictive value of the MGMT promoter methylation status in this setting remains unclear. We assessed MGMT promoter methylation in formalin-fixed, primary tumor tissue of metastatic melanoma patients treated with first-line temozolomide and bevacizumab from the trial SAKK 50/07 by methylation-specific polymerase chain reaction. In addition, the MGMT expression levels were also analyzed by MGMT immunohistochemistry. Eleven of 42 primary melanomas (26%) revealed a methylated MGMT promoter. Promoter methylation was significantly associated with response rates CR + PR versus SD + PD according to RECIST (response evaluation criteria in solid tumors) (p<0.05) with a trend to prolonged median progression-free survival (8.1 versus 3.4 months, p>0.05). Immunohistochemically different protein expression patterns with heterogeneous and homogeneous nuclear MGMT expression were identified. Negative MGMT expression levels were associated with overall disease stabilization CR+PR+SD versus PD (p=0.05). There was only a poor correlation between MGMT methylation and lack of MGMT expression. A significant proportion of melanomas have a methylated MGMT promoter. The MGMT promoter methylation status may be a promising predictive marker for temozolomide therapy in metastatic melanoma patients. Larger sample sizes may help to validate significant differences in survival type endpoints.

Transportation choices and the value of statistical life

This paper exploits an unusual transportation setting to estimate the value of a statistical life(VSL). We estimate the trade-offs individuals are willing to make between mortality risk andcost as they travel to and from the international airport in Sierra Leone (which is separated fromthe capital Freetown by a body of water). Travelers choose from among multiple transportoptions ? namely, ferry, helicopter, hovercraft, and water taxi. The setting and original datasetallow us to address some typical omitted variable concerns in order to generate some of the firstrevealed preference VSL estimates from Africa. The data also allows us to compare VSLestimates for travelers from 56 countries, including 20 African and 36 non-African countries, allfacing the same choice situation. The average VSL estimate for African travelers in the sample isUS$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularlyjob earnings, can largely account for the difference between Africans and non-Africans; Africansin the sample typically earn somewhat less. There is little evidence that individual VSL estimatesare driven by a lack of information, predicted life expectancy, or cultural norms around risktakingor fatalism. The data implies an income elasticity of the VSL of 1.77. These revealedpreference VSL estimates from a developing country fill an important gap in the existingliterature, and can be used for a variety of public policy purposes, including in current debateswithin Sierra Leone regarding the desirability of constructing new transportation infrastructure.

Do Agglomeration Economies Reduce the Sensitivity of Firm Location to Tax Differentials?

Recent theoretical work in economic geography has shown that agglomeration forces can mitigate 'race-to-the-bottom' tax competition, by partly or fully offsetting firms' sensitivity to tax differentials. We test this proposition using data on firm births across Swiss municipalities. We find that corporate taxes deter firm births less in more spatially concentrated sectors. Firms in sectors with an agglomeration intensity in the top quintile are less than half as responsive to differences in corporate tax burdens as firms in sectors with an agglomeration intensity in the bottom quintile. Hence, agglomeration economies do appear to attenuate the impact of tax differentials on firms' location choices.