Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth

Soil organic matter and fertility of anthropogenic dark earths (Terra Preta de Índio) in the Brazilian Amazon basin

Fertility properties, total C (Ctot), and chemical soil organic matter fractions (fulvic acid fraction - FA, humic acid fraction - HA, humin fraction - H) of anthropogenic dark earths (Terra Preta de Índio) of the Amazon basin were compared with those of Ferralsols with no anthropogenic A horizon. Terra Preta soils had a higher fertility (pH: 5.1-5.4; Sum of bases, SB: 8.93-10.33 cmol c kg-1 , CEC: 17.2-17.5 cmol c kg-1 , V: 51-59 %, P: 116-291 mg kg-1) and Ctot (44.6-44.7 g kg-1) than adjacent Ferralsols (pH: 4.4; SB: 2.04 cmol c kg-1, CEC: 9.5 cmol c kg-1, V: 21 %, P 5 mg kg-1, C: 37.9 g kg-1). The C distribution among humic substance fractions (FA, HA, H) in Terra Preta soils was also different, as shown by the ratios HA:FA and EA/H (EA=HA+FA) (2.1-3.0 and 1.06-1.08 for Terra Preta and 1.2 and 0.72 for Ferralsols, respectively). While the cation exchange capacity (CEC), of Ferralsols correlated with FA (r = 0.97), the CEC of Terra Preta correlated with H (r = 0.82). The correlation of the fertility of Terra Preta with the highly stable soil organic matter fraction (H) is highly significant for the development of sustainable soil fertility management models in tropical ecosystems.

Production of fungal volatile organic compounds in bedding materials

Selostus: Haihtuvien orgaanisten yhdisteiden muodostuminen kuivikkeissa

Soil fertility, organic carbon and fractions of the organic matter at different distances from eucalyptus stumps

Knowledge on variations in vertical, horizontal and temporal characteristics of the soil chemical properties under eucalyptus stumps left in the soil is of fundamental importance for the management of subsequent crops. The objective of this work was to evaluate the effect of eucalyptus stumps (ES) left after cutting on the spatial variability of chemical characteristics in a dystrophic Yellow Argisol in the eastern coastal plain region of Brazil. For this purpose, ES left for 31 and 54 months were selected in two experimental areas with similar characteristics, to assess the decomposition effects of the stumps on soil chemical attributes. Soil samples were collected directly around these ES, and at distances of 30, 60, 90, 120 and 150 cm away from them, in the layers 0-10, 10-20 and 20-40 cm along the row of ES, which is in-between the rows of eucalyptus trees of a new plantation, grown at a spacing of 3 x 3 m. The soil was sampled in five replications in plots of 900 m² each and the samples analyzed for pH, available P and K (Mehlich-1), exchangeable Al, Ca and Mg, total organic carbon (TOC) and C content in humic substances (HS) and in the free light fraction. The pH values and P, K, Ca2+, Mg2+ and Al3+ contents varied between the soil layers with increasing distance from the 31 and 54-monthold stumps. The highest pH, P, K, Ca2+ and Mg2+ values and the lowest Al3+ content were found in the surface soil layer. The TOC of the various fractions of soil organic matter decreased with increasing distance from the 31 and 54-month-old ES in the 0-10 and 10-20 cm layers, indicating that the root (and stump) cycling and rhizodeposition contribute to maintain soil organic matter. The C contents of the free light fraction, of the HS and TOC fractions were higher in the topsoil layer under the ES left for 31 months due to the higher clay levels of this layer, than in those found under the 54-month-old stumps. However, highest C levels of the different fractions of soil organic matter in the topsoil layer reflect the deposition and maintenance of forest residues on the soil surface, mainly after forest harvest.

Comparison of H/Al stoichiometry of mineral and organic soils in Brazil

Exchangeable Al has been used as a criterion for the calculation of lime requirement in several Brazilian States. However, the laboratory method with extraction by a 1 mol L-1 KCl solution followed by indirect alkaline titration is not accurate for some Brazilian soils, mainly in the case of soils with high organic matter content. The objective of this study was therefore to evaluate the stoichiometry of H+/Al3+ in KCl soil extracts. The results suggested that organically complexed Al is the main contributor to exchangeable acidity in soils enriched with organic matter. Liming recommendations for organic soils based exclusively on exchangeable Al determined by the NaOH titration method should therefore be revised.

A comment on the cost of capital for investments with non-homogeneous components

In this paper, the expression for the cost of capital is derived when net and replacement investments exhibit differences in their effective prices due to a different fiscal treatment. It is shown that, contrary to previous results in the literature, the cost of capital should be constructed under an opportunity cost criterion rather than a historical one. This result has some important economic consequences, since the optimizing firm will take into account not only the effective price for the new investments but also consider the opportunity cost of replacing them.

User cost of capital with delayed investment grants

The usual assumption when considering investment grants is that grant payments are automatic when investments are undertaken. However, evidence from case studies shows that there can exist some time lag until funds are received by granted firms. In this paper the effects of delays in grant payments on the optimal investment policy of the firm are analyzed. It is shown how these delays lead not only to a higher financing cost but to an effective reduction in the investment grant rate, and in some cases, how benefits from investment grants could be canceled due to interactions with tax effects.

Deficit, human capital and economic growth dynamics

Long-run economic growth arouses a great interest since it can shed light on the income-path of an economy and try to explain the large differences in income we observe across countries and over time. The neoclassical model has been followed by several endogenous growth models which, contrarily to the former, seem to predict that economies with similar preferences and technological level, do not necessarily tend to converge to similar per capita income levels. This paper attempts to show a possible mechanismthrough which macroeconomic disequilibria and inefficiencies, represented by budget deficits, may hinder human capital accumulation and therefore economic growth. Using a mixed education system, deficit is characterized as a bug agent which may end up sharply reducing the resources devoted to education and training. The paper goes a step further from the literature on deficit by introducing a rich dynamic analysis of the effects of a deficit reduction on different economic aspects.Following a simple growth model and allowing for slight changes in the law of human capital accumulation, we reach a point where deficit might sharply reduce human capital accumulation. On the other hand, a deficit reduction carried on for a long time, taking that reduction as a more efficient management of the economy, may prove useful in inducing endogenous growth. Empirical evidence for a sample of countries seems to support the theoretical assumptions in the model: (1) evidence on an inverse relationship betweendeficit and human capital accumulation, (2) presence of a strongly negative associationbetween the quantity of deficit in the economy and the rate of growth. They may prove a certain role for budget deficit in economic growth

The effect of plantation silviculture on soil organic matter and particle-size fractions in Amazonia

Eucalyptus grandis and other clonal plantations cover about 3.5 million ha in Brazil. The impacts of intensively-managed short-rotation forestry on soil aggregate structure and Carbon (C) dynamics are largely undocumented in tropical ecosystems. Long-term sustainability of these systems is probably in part linked to maintenance of soil organic matter and good soil structure and aggregation, especially in areas with low-fertility soils. This study investigated soil aggregate dynamics on a clay soil and a sandy soil, each with a Eucalyptus plantation and an adjacent primary forest. Silvicultural management did not reduce total C stocks, and did not change soil bulk density. Aggregates of the managed soils did not decrease in mass as hypothesized, which indicates that soil cultivation in 6 year cycles did not cause large decreases in soil aggregation in either soil texture. Silt, clay, and C of the sandy plantation soil shifted to greater aggregate protection, which may represent a decrease in C availability. The organic matter in the clay plantation soil increased in the fractions considered less protected while this shift from C to structural forms considered more protected was not observed.

Factor shares, the price markup, and the elasticity of substitution between capital and labor

[spa] La participación del trabajo en la renta nacional es constante bajo los supuestos de una función de producción Cobb-Douglas y competencia perfecta. En este artículo se relajan estos supuestos y se investiga si el comportamiento no constante de la participación del trabajo en la renta nacional se explica por (i) una elasticidad de sustitución entre capital y trabajo no unitaria y (ii) competencia no perfecta en el mercado de producto. Nos centramos en España y los U.S. y estimamos una función de producción con elasticidad de sustitución constante y competencia imperfecta en el mercado de producto. El grado de competencia imperfecta se mide a través del cálculo del price markup basado en laaproximación dual. Mostramos que la elasticidad de sustitución es mayor que uno en España y menor que uno en los US. También mostramos que el price markup aleja la elasticidad de sustitución de uno, lo aumenta en España, lo reduce en los U.S. Estos resultados se utilizan para explicar la senda decreciente de la participación del trabajo en la renta nacional, común a ambas economías, y sus contrastadas sendas de capital.

Complementarity between human capital and trade in regional technological progress

The effect of openness and trade orientation on economic growth remains a highly contentious issue in the literature. Trade facilitates the spread of knowledge and the adoption of more advanced and efficient technologies, which hastens total factor productivity (TFP) growth and, hence, per capita income. New technologies that spread through trade require a sufficiently skilled labour force to adapt them to the domestic productive environment. Thus, openness and human capital accumulation will lead to TFP growth and the greater the complementarity between both variables, the higher the TFP growth. This paper discusses the implications of these assumptions and tests their empirical validity, using a pool of data for manufacturing industry in Spanish regions in a period in which both the stock of human capital and openness experienced a notable increase.

Capital humano local y productividad en las provincias españolas

En la última década, distintos estudios han intentado contrastar empíricamente la existencia de una relación entre el stock de capital humanolocal y la productividad del territorio, así como la posible presencia de economías externas asociadas a aquél. El resultado común de dichos estudios ha consistido en encontrar una correlación positiva entre ambas variables Losdiversos autores no coinciden, en cambio, a la hora de explicar dicho resultado: un primer grupo de autores argumenta la presencia de economíasexternas vinculadas al capital humano mientras que un segundo grupo plantea la existencia de relaciones de complementariedad entre los diversos factores productivos y, más en concreto, entre el capital humano y el capital físico.El objetivo de este trabajo es analizar la existencia de una posible relación positiva entre el nivel de capital humano de las provincias españolas y su productividad de éstas y, a continuación, averiguar si el canal a través delcual se produce el efecto son las economías externas. Para ello, se aplica unametodología que consta de dos etapas. En la primera, se estima una ecuación de Mincer utilizando información de la Encuesta de Presupuestos Familiares a fin de obtener una estimación de la productividad media de cada una de las provincias españolas una vez controlado el efecto del capital humano de los individuos sobre su propia productividad. En una segunda etapa, la estimación de la productividad provincial media estimada se introduce como variable endógena en una nueva ecuación cuyas variables explicativas intentan aproximar el nivel de capital humano de cada una de las provincias. A partir de esta segunda regresión se detecta una relación positiva entre la productividad media estimada del territorio y el nivel educativo medio delmismo. Sin embargo, la principal conclusión del análisis realizado es que dicha relación no puede explicarse por el impacto de las economías externas generadas exógenamente por el capital humano, sino que debe atribuirse a otros efectos que, actuando también por lado de la demanda, impulsen al alza la productividad.

Microbial and enzymatic activity in soil after organic composting

Microbial activity and biochemical properties are important indicators of the impact of organic composting on soil. The objective of this study was to evaluate some indicators of soil microbial and biochemical processes after application of compost (household waste). A Typic Acrustox, sampled at a depth of 10 cm under Cerrado biome vegetation, was evaluated in three treatments: control (soil without organic compost amendment) and soil with two doses of domestic organic compost (10 and 20 g kg-1 soil). The following properties were evaluated: released C (C-CO2): microbial respiration 15 days after incubation; microbial biomass C (MBC); total glucose (TG); metabolic quotient (qCO2); and enzyme activity of β-glucosidase and acid and alkaline phosphatase. The application of household compost, at doses of 10 and 20 g kg-1 Typic Acrustox, resulted in significant gains in microbial activity, organic C and C stock, as evidenced by increased MBC and TG levels. On the other hand, qCO2 decreases indicated greater microbial diversity and more efficient energy use. The addition of compost, particularly the 20 g kg-1 dose, strongly influenced the enzyme β-glucosidase and phosphatase (acid and alkaline). The β-glucosidase activity was significantly increased and acid phosphatase activity increased more than the alkaline. The ratio of β-glucosidase to MBC was greater in the control than in the composted treatments which suggests that there were more enzymes in the control than in the substrate or that the addition of compost induced a great MBC increase.