Fitness correlates with the extent of cheating in a bacterium.

There is growing awareness of the importance of cooperative behaviours in microbial communities. Empirical support for this insight comes from experiments using mutant strains, termed 'cheats', which exploit the cooperative behaviour of wild-type strains. However, little detailed work has gone into characterising the competitive dynamics of cooperative and cheating strains. We test three specific predictions about the fitness consequences of cheating to different extents by examining the production of the iron-scavenging siderophore molecule, pyoverdin, in the bacterium Pseudomonas aeruginosa. We create a collection of mutants that differ in the amount of pyoverdin that they produce (from 1% to 96% of the production of paired wild types) and demonstrate that these production levels correlate with both gene activity and the ability to bind iron. Across these mutants, we found that (1) when grown in a mixed culture with a cooperative wild-type strain, the relative fitness of a mutant is negatively correlated with the amount of pyoverdin that it produces; (2) the absolute and relative fitness of the wild-type strain in the mixed culture is positively correlated with the amount of pyoverdin that the mutant produces; and (3) when grown in a monoculture, the absolute fitness of the mutant is positively correlated with the amount of pyoverdin that it produces. Overall, we demonstrate that cooperative pyoverdin production is exploitable and illustrate how variation in a social behaviour determines fitness differently, depending on the social environment.

Of Coalition and Speed: Passage and Duration of Statutes in Uruguay's Parliament, 1985-2000

We report preliminary findings from analysis of a database under construction. The paper explores the legislative process in search for some of the alleged consequences of cabinet coalitions in a presidential system. Coalition effects should be less evident in the success of executive initiatives: strategic behavior hampers this intuitive measure of performance. Better measures, because less subject to strategic considerations, are the odds of passage of legislators' bills and the time proposals take to be approved. Thus measured, coalition effects are discernible. Analysis of the universe of proposals processed in the fragmented Uruguayan Parliament between 1985 and 2000 reveals that coalition, observed about half the period, swells success rates of coalition members by 60% on average (and by as much as 150% for those close to the president). Event history analysis shows that coalitions cut the wait for an executive bill by 3 months, 1/6th the average wait. The reverse effect is felt on the duration of legislators' bills.

Neuroendocrine, metabolic, and immune functions during the acute phase response of inflammatory stress in monosodium L-glutamate-damaged, hyperadipose male rat.

In rats, neonatal treatment with monosodium L-glutamate (MSG) induces several metabolic and neuroendocrine abnormalities, which result in hyperadiposity. No data exist, however, regarding neuroendocrine, immune and metabolic responses to acute endotoxemia in the MSG-damaged rat. We studied the consequences of MSG treatment during the acute phase response of inflammatory stress. Neonatal male rats were treated with MSG or vehicle (controls, CTR) and studied at age 90 days. Pituitary, adrenal, adipo-insular axis, immune, metabolic and gonadal functions were explored before and up to 5 h after single sub-lethal i.p. injection of bacterial lipopolysaccharide (LPS; 150 microg/kg). Our results showed that, during the acute phase response of inflammatory stress in MSG rats: (1) the corticotrope-adrenal, leptin, insulin and triglyceride responses were higher than in CTR rats, (2) pro-inflammatory (TNFalpha) cytokine response was impaired and anti-inflammatory (IL-10) cytokine response was normal, and (3) changes in peripheral estradiol and testosterone levels after LPS varied as in CTR rats. These data indicate that metabolic and neroendocrine-immune functions are altered in MSG-damaged rats. Our study also suggests that the enhanced corticotrope-corticoadrenal activity in MSG animals could be responsible, at least in part, for the immune and metabolic derangements characterizing hypothalamic obesity.

Covariation between colony social structure and immune defences of workers in the ant Formica selysi

Several ant species vary in the number of queens per colony, yet the causes and consequences of this variation remain poorly understood. In previous experiments, we found that Formica selysi workers originating from multiple-queen (=polygyne) colonies had a lower resistance to a fungal pathogen than workers originating from single-queen (=monogyne) colonies. In contrast, group diversity improved disease resistance in experimental colonies. This discrepancy between field and experimental colonies suggested that variation in social structure in the field had antagonistic effects on worker resistance, possibly through a down-regulation of the immune system balancing the positive effect of genetic diversity. Here, we examined if workers originating from field colonies with alternative social structure differed in three major components of their immune system. We found that workers from polygyne colonies had a lower bacterial growth inhibitory activity than workers from monogyne colonies. In contrast, workers from the two types of colonies did not differ significantly in bacterial cell wall lytic activity and prophenoloxidase activity. Overall, the presence of multiple queens in a colony correlated with a slight reduction in one inducible component of the immune system of individual workers. This reduced level of immune defence might explain the lower resistance of workers originating from polygyne colonies despite the positive effect of genetic diversity. More generally, these results indicate that social changes at the group level can modulate individual immune defences.

On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective

The paper employs a rank-dependent formulation of the social welfare function with time-separable utilities to evaluate the economic consequences of income mobility from an ex-ante perspective. The resultant class of measures can be decomposed not only in terms of structural and exchange mobility but also in terms of vertical and horizontal mobility, thereby encompassing two of the main approaches in the literature. We illustrate our measurement framework by comparing mobility in the USA and Germany using data from the Cross-National Equivalent File 1980-2005. We find that the pattern of income mobility in the USA was both less pro-poor and more horizontally inequitable than in Germany, but that the latter did not translate into higher levels of exchange mobility given higher levels of absolute inequality and the vertical stance of the growth process.

Mutations of the Serine Protease CAP1/Prss8 Lead to Reduced Embryonic Viability, Skin Defects, and Decreased ENaC Activity.

CAP1/Prss8 is a membrane-bound serine protease involved in the regulation of several different effectors, such as the epithelial sodium channel ENaC, the protease-activated receptor PAR2, the tight junction proteins, and the profilaggrin polypeptide. Recently, the V170D and the G54-P57 deletion mutations within the CAP1/Prss8 gene, identified in mouse frizzy (fr) and rat hairless (fr(CR)) animals, respectively, have been proposed to be responsible for their skin phenotypes. In the present study, we analyzed those mutations, revealing a change in the protein structure, a modification of the glycosylation state, and an overall reduction in the activation of ENaC of the two mutant proteins. In vivo analyses demonstrated that both fr and fr(CR) mutant animals present analogous reduction of embryonic viability, similar histologic aberrations at the level of the skin, and a significant decrease in the activity of ENaC in the distal colon compared with their control littermates. Hairless rats additionally had dehydration defects in skin and intestine and significant reduction in the body weight. In conclusion, we provided molecular and functional evidence that CAP1/Prss8 mutations are accountable for the defects in fr and fr(CR) animals, and we furthermore demonstrate a decreased function of the CAP1/Prss8 mutant proteins. Therefore, fr and fr(CR) animals are suitable models to investigate the consequences of CAP1/Prss8 action on its target proteins in the whole organism.

Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates

This paper reports on one of the first empirical attempts to investigate small firm growth and survival, and their determinants, in the Peoples’ Republic of China. The work is based on field work evidence gathered from a sample of 83 Chinese private firms (mainly SMEs) collected initially by face-to-face interviews, and subsequently by follow-up telephone interviews a year later. We extend the models of Gibrat (1931) and Jovanovic (1982), which traditionally focus on size and age alone (e.g. Brock and Evans, 1986), to a ‘comprehensive’ growth model with two types of additional explanatory variables: firm-specific (e.g. business planning); and environmental (e.g. choice of location). We estimate two econometric models: a ‘basic’ age-size-growth model; and a ‘comprehensive’ growth model, using Heckman’s two-step regression procedure. Estimation is by log-linear regression on cross-section data, with corrections for sample selection bias and heteroskedasticity. Our results refute a pure Gibrat model (but support a more general variant) and support the learning model, as regards the consequences of size and age for growth; and our extension to a comprehensive model highlights the importance of location choice and customer orientation for the growth of Chinese private firms. In the latter model, growth is explained by variables like planning, R&D orientation, market competition, elasticity of demand etc. as well as by control variables. Our work on small firm growth achieves two things. First, it upholds the validity of ‘basic’ size-age-growth models, and successfully applies them to the Chinese economy. Second, it extends the compass of such models to a ‘comprehensive’ growth model incorporating firm-specific and environmental variables.

The Timing of Asset Trade and Optimal Policy in Dynamic Open Economies

Using a standard open economy DSGE model, it is shown that the timing of asset trade relative to policy decisions has a potentially important impact on the welfare evaluation of monetary policy at the individual country level. If asset trade in the initial period takes place before the announcement of policy, a national policymaker can choose a policy rule which reduces the work effort of households in the policymaker’s country in the knowledge that consumption is fully insured by optimally chosen international portfolio positions. But if asset trade takes place after the policy announcement, this insurance is absent and households in the policymaker’s country bear the full consumption consequences of the chosen policy rule. The welfare incentives faced by national policymakers are very different between the two cases. Numerical examples confirm that asset market timing has a significant impact on the optimal policy rule.

The Rise and Fall of the ABS Market

The nancial crisis has raised some concern about the quality of information available on some traded assets on the securities markets to market participants and regulators. Asset-backed securitization in general got partial blame for the paucity of liquidity on bank balance sheets and the consequent credit crunch. After the Asset-Backed Security (ABS) market fell to near inactivity in 2009, the US federal government's Term Asset-Backed Securities Loan Facility (TALF) provided backing and a boost to the issuance of asset-backed securitization. In this market condition, given the nature of ABS, it is di¢ cult for them not to be relatively illiquid, and this has resulted in unacceptable levels of market risk for most investors. Their liquidity before the crisis was driven by a market in continuous expansion, fed by Special Purpose Vehicle (SPV), Conduits, and other low capitalized term-transformation vehicles. Nowadays, the industry is concerned with the ongoing ABS reforms and how these will be implemented. This article reviews the ABS market in the last decade and the possible consequences of the recent regulatory proposals. It proposes a retention policy and the institution of a new nancial body to supervise the quality of the security in an ABS pool, its liquidity, and the model risk implied by the issuer's valuation model.

Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates

This paper reports on one of the first empirical attempts to investigate small firm growth and survival, and their determinants, in the Peoples’ Republic of China. The work is based on field work evidence gathered from a sample of 83 Chinese private firms (mainly SMEs) collected initially by face-to-face interviews, and subsequently by follow-up telephone interviews a year later. We extend the models of Gibrat (1931) and Jovanovic (1982), which traditionally focus on size and age alone (e.g. Brock and Evans, 1986), to a ‘comprehensive’ growth model with two types of additional explanatory variables: firm-specific (e.g. business planning); and environmental (e.g. choice of location). We estimate two econometric models: a ‘basic’ age-size-growth model; and a ‘comprehensive’ growth model, using Heckman’s two-step regression procedure. Estimation is by log-linear regression on cross-section data, with corrections for sample selection bias and heteroskedasticity. Our results refute a pure Gibrat model (but support a more general variant) and support the learning model, as regards the consequences of size and age for growth; and our extension to a comprehensive model highlights the importance of location choice and customer orientation for the growth of Chinese private firms. In the latter model, growth is explained by variables like planning, R&D orientation, market competition, elasticity of demand etc. as well as by control variables. Our work on small firm growth achieves two things. First, it upholds the validity of ‘basic’ size-age-growth models, and successfully applies them to the Chinese economy. Second, it extends the compass of such models to a ‘comprehensive’ growth model incorporating firm-specific and environmental variables.

Fiscal Sustainability in a New Keynesian Model

Recent work on optimal monetary and fiscal policy in New Keynesian models suggests that it is optimal to allow steady-state debt to follow a random walk. Leith and Wren-Lewis (2012) consider the nature of the timeinconsistency involved in such a policy and its implication for discretionary policy-making. We show that governments are tempted, given inflationary expectations, to utilize their monetary and fiscal instruments in the initial period to change the ultimate debt burden they need to service. We demonstrate that this temptation is only eliminated if following shocks, the new steady-state debt is equal to the original (efficient) debt level even though there is no explicit debt target in the government’s objective function. Analytically and in a series of numerical simulations we show which instrument is used to stabilize the debt depends crucially on the degree of nominal inertia and the size of the debt-stock. We also show that the welfare consequences of introducing debt are negligible for precommitment policies, but can be significant for discretionary policy. Finally, we assess the credibility of commitment policy by considering a quasi-commitment policy which allows for different probabilities of reneging on past promises. This on-line Appendix extends the results of this paper.

Fiscal Sustainability in a New Keynesian Model

Recent work on optimal monetary and fiscal policy in New Keynesian models suggests that it is optimal to allow steady-state debt to follow a random walk. Leith and Wren-Lewis (2012) consider the nature of the timeinconsistency involved in such a policy and its implication for discretionary policy-making. We show that governments are tempted, given inflationary expectations, to utilize their monetary and fiscal instruments in the initial period to change the ultimate debt burden they need to service. We demonstrate that this temptation is only eliminated if following shocks, the new steady-state debt is equal to the original (efficient) debt level even though there is no explicit debt target in the government’s objective function. Analytically and in a series of numerical simulations we show which instrument is used to stabilize the debt depends crucially on the degree of nominal inertia and the size of the debt-stock. We also show that the welfare consequences of introducing debt are negligible for precommitment policies, but can be significant for discretionary policy. Finally, we assess the credibility of commitment policy by considering a quasi-commitment policy which allows for different probabilities of reneging on past promises. This on-line Appendix extends the results of this paper.

Anticipation, Learning and Welfare: the Case of Distortionary Taxation

We study the impact of anticipated fiscal policy changes in a Ramsey economy where agents form long-horizon expectations using adaptive learning. We extend the existing framework by introducing distortionary taxes as well as elastic labour supply, which makes agents. decisions non-predetermined but more realistic. We detect that the dynamic responses to anticipated tax changes under learning have oscillatory behaviour that can be interpreted as self-fulfilling waves of optimism and pessimism emerging from systematic forecast errors. Moreover, we demonstrate that these waves can have important implications for the welfare consequences of .scal reforms. (JEL: E32, E62, D84)

An Empirical Assessment of Optimal Monetary Policy Delegation in the Euro Area

We estimate a New Keynesian DSGE model for the Euro area under alternative descriptions of monetary policy (discretion, commitment or a simple rule) after allowing for Markov switching in policy maker preferences and shock volatilities. This reveals that there have been several changes in Euro area policy making, with a strengthening of the anti-inflation stance in the early years of the ERM, which was then lost around the time of German reunification and only recovered following the turnoil in the ERM in 1992. The ECB does not appear to have been as conservative as aggregate Euro-area policy was under Bundesbank leadership, and its response to the financial crisis has been muted. The estimates also suggest that the most appropriate description of policy is that of discretion, with no evidence of commitment in the Euro-area. As a result although both ‘good luck’ and ‘good policy’ played a role in the moderation of inflation and output volatility in the Euro-area, the welfare gains would have been substantially higher had policy makers been able to commit. We consider a range of delegation schemes as devices to improve upon the discretionary outcome, and conclude that price level targeting would have achieved welfare levels close to those attained under commitment, even after accounting for the existence of the Zero Lower Bound on nominal interest rates.

An Empirical Assessment of Optimal Monetary Policy Delegation in the Euro Area

We estimate a New Keynesian DSGE model for the Euro area under alternative descriptions of monetary policy (discretion, commitment or a simple rule) after allowing for Markov switching in policy maker preferences and shock volatilities. This reveals that there have been several changes in Euro area policy making, with a strengthening of the anti-inflation stance in the early years of the ERM, which was then lost around the time of German reunification and only recovered following the turnoil in the ERM in 1992. The ECB does not appear to have been as conservative as aggregate Euro-area policy was under Bundesbank leadership, and its response to the financial crisis has been muted. The estimates also suggest that the most appropriate description of policy is that of discretion, with no evidence of commitment in the Euro-area. As a result although both ‘good luck’ and ‘good policy’ played a role in the moderation of inflation and output volatility in the Euro-area, the welfare gains would have been substantially higher had policy makers been able to commit. We consider a range of delegation schemes as devices to improve upon the discretionary outcome, and conclude that price level targeting would have achieved welfare levels close to those attained under commitment, even after accounting for the existence of the Zero Lower Bound on nominal interest rates.