Shocks and institutions in a job matching model

This paper explains the divergent behavior of European an US unemploymentrates using a job market matching model of the labor market with aninteraction between shocks an institutions. It shows that a reduction inTF growth rates, an increase in real interest rates, and an increase intax rates leads to a permanent increase in unemployment rates when thereplacement rates or initial tax rates are high, while no increase inunemployment occurs when institutions are "employment friendly". The paperalso shows that an increase in turbulence, modelle as an increase probabilityof skill loss, is not a robust explanation for the European unemploymentpuzzle in the context of a matching model with both endogenous job creationand job estruction.

Wealth, financial intermediation and growth

This paper presents empirical support for the existence of wealth effects in the contribution of financial intermediation to economic growth, and offers a theoretical explanation for these effects. Using GMM dynamic panel data techniques applied to study the growth-promoting effects of financial intermediation, we show that the exogenous contribution of financial development on economic growth has different effects for different levels of income per capita. We find that this contribution is generally increasing with thelevel of income per capita of the economy, up to a relatively high level of income. This contribution is consistently lower for poor countries; and for some low levels of income per capita it can be negative. We provide a model to account for these wealth effects. The model is a overlapping generations growth model where financial intermediaries implement liquidity risk sharing among depositors. We show that at early stages of economic development, a bank can increase welfare of its depositors only at the cost of lowering investment and growth. However, once the economy has crossed certain wealth threshold, the liquidity role of banks becomes unambiguously growth enhancing. As wealth increases, banks offer improving liquidity insurance, and higher growth; however, for high levels of wealth, growth generated byfinancial intermediation declines as the economy attains the optimal level of consumption risk sharing.

Education, growth and income inequality

Estimates of the e¤ect of education on GDP (the social return to education)have been hard to reconcile with micro evidence on the private return. We present a simple explanation that combines two ideas: imperfect substitution between worker types and endogenous skill biased technological progress. When types of workers are imperfect substitutes, the supply of human capital is negatively related to its return, and a higher education level compresses wage di¤erentials. We use cross-country panel data on income inequality to estimate the private return and GDP data to estimate the social return. The results show that the private return falls by 2 percentage points when the average education level increases by a year, which is consistent with Katz and Murphy's [1992] estimate of the elasticity of substitution between worker types. We find no evidence for dynamics in the private return, and certainly not for a reversal of the negative e¤ect as described in Acemoglu [2002]. The short run social return equals the private return.

The dog that did not bark: Insider trading and crashes

This paper documents that at the individual stock level insiders sales peak many months before a large drop in the stock price, while insiders purchases peak only the month before a large jump. We provide a theoretical explanation for this phenomenon based on trading constraints and asymmetric information. We test our hypothesis against competing stories such as patterns of insider trading driven by earnings announcement dates, or insiders timing their trades to evade prosecution. Finally we provide new evidence regarding crashes and the degree of information asymmetry.

Credit constraints, firms' precautionary investment and the business cycle

This paper studies the macroeconomic implications of firms' investment composition choices in the presence of credit constraints. Following a negative andpersistent aggregate productivity shock, firms shift into short-term investments because they produce more pledgeable output and because they help alleviate futureborrowing constraints. This produces a short-run dampening of the effects of theshock, at the expense of lower long-term investment and future output, relativeto an economy with no credit market imperfections. The effects are exacerbatedby a steepening of the term structure of interest rates that further encourages ashift towards short-term investments in the short-run. Small temporary shocks tothe severity of financing frictions generate large and long-lasting effects on outputthrough their impact on the composition of investment. A positive financial shockproduces much stronger effects than an identical negative shock, while the responsesto positive and negative shocks to aggregate productivity are roughly symmetric.Finally, the paper introduces a novel explanation for the countercyclicality of financing constraints of firms.

What form of relative performance evaluation?

We study relative performance evaluation in executive compensation whenexecutives have private information about their ability. We assume that thejoint distribution of an individual firm s profit and market movements dependson the ability of the executive that runs the firm. In the equilibrium of theexecutive labor market, compensation schemes exploit this fact to sortexecutives of di ?erent abilities. This implies that executive compensation isincreasing in own performance, but may also be increasing in industryperformance-a sharp departure from standard relative performance evaluation.This result provides an explanation for the scarcity of relative performanceconsiderations in executive compensation documented by the empirical literature.

Role of the NALP3 Inflammasome in the Development of Two-Kidney, One Clip Hypertension in Mice

Objective: The NALP3 inflammasome functions as a sensor of danger signals and triggers processing and release of IL-1b. Mutations of NALP3 are responsible for the cryopyrin associated periodic syndromes, a group of autoinflammatory disorders that respond to IL1 inhibition. Genetic studies have also linked NALP3 to hypertension in man, but the mechanism is not understood. The aim of this study is to investigate the role of NAPL3 inflammasome in the development of hypertension in an animal model. Design and Method: Six-week old male WT and NALP3 KO mice were used for generating a two-kidney, one clip (2K1C) renovascular hypertension. A U-shaped stainless steel clip (O^ ¼0.12mm) was placed on left renal artery under anaesthesia. The same surgery without clipping was performed in sham mice. At week 6 and 12 after the clipping, intra-arterial blood pressure (BP) was measured in conscious mice. Blood was collected for plasma renin analysis. Heart and kidney were excised and stored for molecular and morphological examinations. n¼5-6 mice per group. Data are mean_SEM. Results: Mean BP was significantly increased at week 6 and 12 in WT-2K1C mice compared to WT-sham group (MBPweek6: 138_2 vs.124_3 mmHg, p<0.01 and MBPweek12: 141_5 vs.122_3 mmHg, p<0.01) followed with an significant increase in heart weight (HW) and a decrease in clipped kidney weight indices in WT-2K1C mice compared to the WT-sham (HW/ BWweek6: 4.65_0.04 vs. 3.99_0.12 mg/g, p<0.001 and HW/BWweek12: 4.94_0.15 vs. 4.22_0.12 mg/g, p<0.001). Interestingly, NALP3 KO-2K1C mice did not develop hypertension. The MBP of KO-2K1C mice was comparable to the KO-sham (MBPweek6: 122_3 vs. 119_3 mmHg, p>0.05 and MBPweek6: 128_5 vs.122_4 mmHg, p>0.05). There was also no significant change in heart and kidney weight indices between KO- 2K1C and KO-sham mice. Conclusion: The preliminary results suggest that absence of NALP3 protects mice from the development of renin-dependent hypertension. Further molecular and morphological examinations are ongoing for the confirmation and mechanism explanation.

Drug innovation, prices and health

This article tries to reconcile economic-industrial policy with health policy when dealing with biomedical innovation and welfare state sustainability. Better health accounts for an increasingly large proportion of welfare improvements. Explanation is given to the welfare losses coming from the fact than industrial and health policy tend to ignore each other. Drug s prices reflecting their relative relative effectiveness send the right signal to the industry rewarding innovation with impact on quantity and quality of life- and to the buyers of health care services.The level of drug s public reimbursement indicates the social willingness to pay of the different national health systems, not only by means of inclusion, or rejection, in the basket of services covered, but especially establishing the proportion of the price that is going to be financed publicly.Reference pricing for therapeutic equivalents as the upper limit of the social willingness to pay- and two-tiered co-payments for users (avoidable and inversely related with the incremental effectiveness of de drug) are deemed appropriate for those countries concerned at the same time with increasing their productivity and maintaining its welfare state. Profits drive R&D but not its location. There is no intrinsic contradiction between high productivity and a consolidated National Health Service (welfare state) as the European Nordic Countries are telling us every day.

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.

Dual-energy CT behavior of heroin, cocaine, and typical adulterants.

PURPOSE: To investigate the dual-energy CT behavior of cocaine and heroin and of typical adulterants, and to evaluate the elemental composition of pure cocaine and heroin compared with cocaine and heroin in bodypacks. METHODS: Pure heroin and pure synthetic cocaine samples, eight different adulterants, and in each case ten different bodypacks containing cocaine or heroin, were imaged at 80, 100, 120, and 140 kVp in a dual source CT system at two different degrees of compression. Two radiologists, blinded to the samples, measured the attenuation. The dual-energy index (DEI) was calculated. We performed atomic mass spectrometry for the elemental analysis of pure cocaine, pure heroin, and heroin and cocaine in bodypacks, and 140 kVp in a dual-source CT system. RESULTS: Inter- and intra-observer agreement for attenuation measurements was good (r = 0.61-0.72; p < 0.01). The cocaine bodypacks had a positive DEI of 0.029, while the pure drugs and the heroin bodypacks had a negative DEI (-0.051 to -0.027). Levamisole was the only substance which expressed a positive DEI of 0.011, while the remaining adulterants had negative DEIs ranging between -0.015 and -0.215. Atomic mass spectrometry revealed a concentration of tin in the cocaine bodypack that was 67 times higher than in the pure synthetic cocaine sample. CONCLUSIONS: The different DEIs of bodypacks containing cocaine and heroin allow them to be distinguished with dual-energy CT. Although the material properties of pure cocaine, pure heroin, or common drug extenders do not explain the differences in DEI, tin contamination during illicit natural cocaine production may be a possible explanation.

On the sources of the Great Moderation

The remarkable decline in macroeconomic volatility experienced by the U.S. economy since the mid-80s (the so-called Great Moderation) has been accompanied by large changes in the patterns of comovements among output, hours and labor productivity. Those changes are reflected in both conditional and unconditional second moments as well as in the impulse responses to identified shocks. That evidencepoints to structural change, as opposed to just good luck, as an explanation for the Great Moderation. We use a simple macro model to suggest some of the immediate sources which are likely to be behindthe observed changes.

Ethnic polarization, potential conflict and civil wars

This paper analyzes the relationship between ethnic fractionalization, polarization, and conflict. In recent years many authors have found empirical evidence that ethnic fractionalization has a negative effect on growth. One mechanism that can explain this nexus is the effect of ethnic heterogeneity on rent-seeking activities and the increase in potential conflict, which is negative for investment. However the empirical evidence supporting the effect of ethnic fractionalization on the incidence of civil conflicts is very weak. Although ethnic fractionalization may be important for growth, we argue that the channel is not through an increase in potential ethnic conflict. We discuss the appropriateness of indices of polarization to capture conflictive dimensions. We develop a new measure of ethnic heterogeneity that satisfies the basic properties associated with the concept of polarization. The empirical section shows that this index of ethnic polarization is a significant variable in the explanation of the incidence of civil wars. This result is robust to the presence of other indicators of ethnic heterogeneity, other sources of data for the construction of the index, and other data structures.

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.

Maladie d'Alzheimer: de la pathogénie aux perspectives cliniques [Alzheimer disease: from pathogenetic issues to clinical perspectives].

The aim of this article is a critical review of the main pathogenetic issues debated in Alzheimer disease, with a focus on the clinical perspectives that could derive from. The pertinence of the amyloid cascade hypothesis as a unique and causal explanation of cognitive deterioration is challenged in the light of recent therapeutic failures of clinical trials and increasing role of tau protein in clinical expression. The detection of very early and possibly preclinical stages of the disease emerges as a necessary condition for the efficacy of future amyloid or tau-oriented curative strategies. In this respect, the possibility of finding individual vulnerability markers--in the group of patients with "mild cognitive impairment" or even in cognitively intact subjects--represents a major challenge of the clinical research in this field.

Do expectations matter? The Great Moderation revisited

We examine the role of expectations in the Great Moderation episode. We derive theoretical restrictions in a New-Keynesian model and test them using measures of expectations obtained from survey data, the Greenbook and bond markets. Expectations explain the dynamics of inflation and of interest rates but their importance is roughly unchanged over time. Systems with and without expectations display similar reduced form characteristics. Including or excluding expectations hardly changes the economic explanation of the Great Moderation. Results are robust to changes in the structure of the empirical model.