Rethinking the effects of financial liberalization

During the last few decades, many emerging markets have lifted restrictions on cross-borderfinancial transactions. The conventional view was that this would allow these countries to: (i)receive capital inflows from advanced countries that would finance higher investment and growth;(ii) insure against aggregate shocks and reduce consumption volatility; and (iii) accelerate thedevelopment of domestic financial markets and achieve a more efficient domestic allocationof capital and better sharing of individual risks. However, the evidence suggests that thisconventional view was wrong.In this paper, we present a simple model that can account for the observed effects of financialliberalization. The model emphasizes the role of imperfect enforcement of domestic debts and theinteractions between domestic and international financial transactions. In the model, financialliberalization might lead to different outcomes: (i) domestic capital flight and ambiguous effectson net capital flows, investment, and growth; (ii) large capital inflows and higher investmentand growth; or (iii) volatile capital flows and unstable domestic financial markets. The modelshows how these outcomes depend on the level of development, the depth of domestic financialmarkets, and the quality of institutions.

Convertibility, currency controls and the cost of capital in Western Europe, 1950-1999

For most of the post-war period, Europe s capital markets remained largely closed to international capital flows. Thispaper explores the costs of this policy. Using an event-study methodology, I examine the extent to which restrictions ofcurrent and capital account convertibility affected stock returns. The delayed introduction of full currency convertibilityincreased the cost of capital. Also, a string of measures designed to reduce capital mobility before the ultimate collapseof the Bretton Woods System had considerable negative effects. These findings offer an explanation for the mountingevidence suggesting that capital account liberalization facilitates growth.

Responsiveness of astrocytes in serum-free aggregate cultures to epidermal growth factor: dependence on the cell cycle and the epidermal growth factor concentration.

Serum-free aggregating cell cultures of fetal rat telencephalon treated with low doses (0.5 nM) of epidermal growth factor (EGF) showed a small, transient increase in DNA synthesis but no significant changes in total DNA and protein content. By contrast, treatment with high doses (13 nM) of EGF caused a marked stimulation of DNA synthesis as well as a net increase in DNA and protein content. The expression of the astrocyte-specific enzyme, glutamine synthetase, was greatly enhanced both at low and at high EGF concentrations. These results suggest that at low concentration EGF stimulates exclusively the differentiation of astrocytes, whereas at high concentration, EGF has also a mitogenic effect. Nonproliferating astrocytes in cultures treated with 0.4 microM 1-beta-D-arabinofuranosyl-cytosine were refractory to EGF treatment, indicating that their responsiveness to EGF is cell cycle-dependent. Binding studies using a crude membrane fraction of 5-day cultures showed a homogeneous population of EGF binding sites (Kd approximately equal to 2.6 nM). Specific EGF binding sites were found also in non-proliferating (and nonresponsive) cultures, although they showed slightly reduced affinity and binding capacity. This finding suggests that the cell cycle-dependent control of astroglial responsiveness to EGF does not occur at the receptor level. However, it was found that the specific EGF binding sites disappear with progressive cellular differentiation.

Resurgence of HIV infection among men who have sex with men in Switzerland: mathematical modelling study.

BACKGROUND: New HIV infections in men who have sex with men (MSM) have increased in Switzerland since 2000 despite combination antiretroviral therapy (cART). The objectives of this mathematical modelling study were: to describe the dynamics of the HIV epidemic in MSM in Switzerland using national data; to explore the effects of hypothetical prevention scenarios; and to conduct a multivariate sensitivity analysis. METHODOLOGY/PRINCIPAL FINDINGS: The model describes HIV transmission, progression and the effects of cART using differential equations. The model was fitted to Swiss HIV and AIDS surveillance data and twelve unknown parameters were estimated. Predicted numbers of diagnosed HIV infections and AIDS cases fitted the observed data well. By the end of 2010, an estimated 13.5% (95% CI 12.5, 14.6%) of all HIV-infected MSM were undiagnosed and accounted for 81.8% (95% CI 81.1, 82.4%) of new HIV infections. The transmission rate was at its lowest from 1995-1999, with a nadir of 46 incident HIV infections in 1999, but increased from 2000. The estimated number of new infections continued to increase to more than 250 in 2010, although the reproduction number was still below the epidemic threshold. Prevention scenarios included temporary reductions in risk behaviour, annual test and treat, and reduction in risk behaviour to levels observed earlier in the epidemic. These led to predicted reductions in new infections from 2 to 26% by 2020. Parameters related to disease progression and relative infectiousness at different HIV stages had the greatest influence on estimates of the net transmission rate. CONCLUSIONS/SIGNIFICANCE: The model outputs suggest that the increase in HIV transmission amongst MSM in Switzerland is the result of continuing risky sexual behaviour, particularly by those unaware of their infection status. Long term reductions in the incidence of HIV infection in MSM in Switzerland will require increased and sustained uptake of effective interventions.

Effects of uncertain lifetime and annuity insurance on capital accumulation and growth

This paper studies the effects of uncertain lifetime on capitalaccumulation and growth and also the sensitivity of thoseeffects to the existence of a perfect annuities market. Themodel is an overlapping generations model with uncertainlifetimes. The technology is convex and such that the marginalproduct of capital is bounded away from zero. A contribution ofthis paper is to show that the existence of accidental bequestsmay lead the economy to an equilibrium that exhibits asymptoticgrowth, which is impossible in an economy with a perfect annuitiesmarket or with certain lifetimes. This paper also shows that ifindividuals face a positive probability of surviving in everyperiod, they may be willing to save at any age. This effect ofuncertain lifetime on savings may also lead the economy to anequilibrium exhibiting asymptotic growth even if there exists aperfect annuities market.

Book production and the onset of modern economic growth

Endogenous growth theory suggests that human capital formation plays a significant role for the wealth and poverty of nations. In contrast to previous studies which denied the role of human capital as a crucial determinant of for really long-term growth, we confirm its importance. Indicators of human capital like literacy rates are lacking for the period of 1450-1913; hence, we use per capita book production as a proxy for advanced literacy skills. This study explains how, and to what extent, growth disparities are a function of human capital formation.

Trade, extent of the market and economic growth 1960-1996

We find that trade and domestic market size are robust determinants of economic growth overthe 1960-1996 period when trade openness is measured as the US dollar value of imports andexports relative to GDP in PPP US$ ('real openness'). When trade openness is measured asthe US dollar value of imports and exports relative to GDP in exchange rate US$ ('nominalopenness') however, trade and the size of domestic markets are often non-robust determinantsof growth. We argue that real openness is the more appropriate measure of trade and that ourempirical results should be seen as evidence in favor of the extent-of-the-market hypothesis.

Trends in hours, balanced growth and the role of technology in the business cycle

The present paper revisits a property embedded in most dynamic macroeconomic models: the stationarity of hours worked. First, I argue that, contrary to what is often believed, there are many reasons why hours could be nonstationary in those models, while preserving the property of balanced growth. Second, I show that the postwar evidence for most industrialized economies is clearly at odds with the assumption of stationary hours per capita. Third, I examine the implications of that evidence for the role of technology as a source of economic fluctuations in the G7 countries.

Sovereign debt markets in turbulent times: Creditor discrimination and crowding-out effects

In 2007, countries in the Euro periphery were enjoying stable growth, low deficits, and lowspreads. Then the financial crisis erupted and pushed them into deep recessions, raising theirdeficits and debt levels. By 2010, they were facing severe debt problems. Spreads increased and,surprisingly, so did the share of the debt held by domestic creditors. Credit was reallocatedfrom the private to the public sectors, reducing investment and deepening the recessions evenfurther. To account for these facts, we propose a simple model of sovereign risk in which debtcan be traded in secondary markets. The model has two key ingredients: creditor discriminationand crowding-out effects. Creditor discrimination arises because, in turbulent times, sovereigndebt offers a higher expected return to domestic creditors than to foreign ones. This providesincentives for domestic purchases of debt. Crowding-out effects arise because private borrowingis limited by financial frictions. This implies that domestic debt purchases displace productiveinvestment. The model shows that these purchases reduce growth and welfare, and may lead toself-fulfilling crises. It also shows how crowding-out effects can be transmitted to other countriesin the Eurozone, and how they may be addressed by policies at the European level.

The role of MMP-9 and its fibronectin-like domain in tumor growth & invasion : certainties, controversies & discrepancies

Tumors are often compared to wounds that do not heal, where the crosstalk between tumor cells and their surrounding stroma is crucial at all stages of development, from the initial primary growth to metastasis. Similar to wound healing, fibroblasts in the tumor stroma differentiate into myofibroblasts, also referred to as "cancer-associated fibroblasts" (CAFs), primarily, but not exclusively, in response to transforming growth factor-ß (TGF-ß). Myofibroblasts in turn enhance tumor progression by remodeling the stroma. Among molecules implicated in stroma remodeling, matrix metalloproteinases (MMPs), and MMP-g in particular, play a prominent role. However, the mechanisms that regulate MMP-g activation and function remain poorly understood. Recent evidence indicates that tumor cell surface association of MMP-g is an important event in its activation, and more generally in tumor growth and invasion. In the present work we address the potential association of MMP-g activity with cell-surface recruitment to human fibroblasts. We show for the first time that recruitment of MMP-g to the MRC-5 fibroblast cell surface occurs through the fibronectin-like (FN) domain, shared only by MMP-g and MMP-2 among all the MMPs. Functional assays suggest that both the pro- and active form of MMP-g trigger a-smooth muscle actin (aSMA) expression in resting fibroblasts that reflects myofibroblast differentiation, possibly through TGF-ß activation. Moreover, the FN domain of MMP-g inhibits both MMP-g-induced TGF-ß activation and aSMA expression by sequestering MMP-g. Xenograft experiments in NOD/SCID mice using HT1080 fibrosarcoma or MDA-MD231 breast adenocarcinoma cells stably expressing the FN domain of MMP-g revealed no changes in primary tumor growth. However, in the context of metastasis, expression of the FN domain by these same tumor cells dramatically increased their metastatic proclivity whereas expression of wt MMP-g either promoted no change or actually reduced the number of metastases. We observed a decrease of an active form of MMP-g in MDA-MB231 cells overexpressing the FN domain suggesting that the FN domain may inhibit MMP-g activity in Tumors are often compared to wounds that do not heal, where the crosstalk between tumor cells and their surrounding stroma is crucial at all stages of development, from the initial primary growth to metastasis. Similar to wound healing, fibroblasts in the tumor stroma differentiate into myofibroblasts, also referred to as "cancer-associated fibroblasts" (CAFs), primarily, but not exclusively, in response to transforming growth factor-ß (TGF-ß). Myofibroblasts in turn enhance tumor progression by remodeling the stroma. Among molecules implicated in stroma remodeling, matrix metalloproteinases (MMPs), and MMP-g in particular, play a prominent role. However, the mechanisms that regulate MMP-g activation and function remain poorly understood. Recent evidence indicates that tumor cell surface association of MMP-g is an important event in its activation, and more generally in tumor growth and invasion. In the present work we address the potential association of MMP-g activity with cell-surface recruitment to human fibroblasts. We show for the first time that recruitment of MMP-g to the MRC-5 fibroblast cell surface occurs through the fibronectin-like (FN) domain, shared only by MMP-g and MMP-2 among all the MMPs. Functional assays suggest that both the pro- and active form of MMP-g trigger a-smooth muscle actin (aSMA) expression in resting fibroblasts that reflects myofibroblast differentiation, possibly through TGF-ß activation. Moreover, the FN domain of MMP-g inhibits both MMP-g-induced TGF-ß activation and aSMA expression by sequestering MMP-g. Xenograft experiments in NOD/SCID mice using HT1080 fibrosarcoma or MDA-MD231 breast adenocarcinoma cells stably expressing the FN domain of MMP-9 revealed no changes in primary tumor growth. However, in the context of metastasis, expression of the FN domain by these same tumor cells dramatically increased their metastatic proclivity whereas expression of wt MMP-g either promoted no change or actually reduced the number of metastases. We observed a decrease of an active form of MMP-9 in MDA-MB231 cells overexpressing the FN domain suggesting that the FN domain may inhibit MMP-9 activity in those cells and therefore prevent MMP-9-induced activation of TGF-b, which results in increased invasion. Curiously, xenografts of SW480 colorectal adenocarcinoma cells stably expressing the FN domain of MMP-9 displayed reduced growth at both the primary (subcutaneous) injection site and the lungs of NOD/SCID mice, in experimental metastasis assays, whilst the same cells overexpressing wt MMP-9 showed enhanced growth and dissemination. Gelatin zymography of conditioned medium revealed that these effects may be due to the FN domain, which displaces MMP-9 from SW480 cell surface. These observations suggest a dual role of MMP-9 and its FN domain in primary tumor growth and metastasis, underscoring the notion that the effect of MMP-9 on tumor cells may depend on the cell type and highlighting possible protective effects of MMPs in tumor progression.

Effects of differential taxation on factor accumulation and growth

In this paper we try to analyze the role of fiscal policy in fostering a higher participation of the different production factors in the human capital production sector in the long-run. Introducing a tax on physical capital and differentiating both a tax on raw labor wage and a tax on skills or human capital we also attempt to present a way to influence inequality as measured by the skill premium, thus trying to relate the increase in human capital with the decrease in income inequality. We will do that in the context of a non-scale growth model.The model here is capable to alter the shares of private factors devoted to each of the two production sectors, final output and human capital, and affect inequality in a different way according to the different tax changes. The simulation results derived in the paper show how a human capital (skills) tax cut, which could be interpreted as a reduction in progressivity, ends up increasing both the shares of labor and physical capital devoted to the production of knowledge and decreasing inequality. Moreover, a raw labor wage tax decrease, which could also be interpreted as an increase in the progressivity of the system, increases the share of labor devoted to the production of final output and increases inequality. Finally, a physical capital tax decrease reduces the share of physical capital devoted to the production of knowledge and allows for a lower inequality value. Nevertheless, none of the various types of taxes ends up changing the share of human capital in the knowledge production, which will deserve our future attention

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 effects of tax deductibility on the mix of property taxes and use charges: an empirical analysis of the spanish case

This paper tests some hypothesis about the determinants of the local tax structure. In particular, we focus on the effects that the property tax deductibility in the national income tax has on the relative use of the property tax and user charges. We deal with the incentive effects that local governments face regarding the different sources of revenue by means of a model in which the local tax structure and the level of public expenditure arise as a result of the maximizing behaviour of local politicians subject to the economic effects of the tax system. We attempt to test the hypothesis developed with data corresponding to a set of Spanish municipalities during the period 1987-9l. We find that tax deductibility provides incentives to raise revenues from the property tax but does not introduce a biass against user charges or in favor of overall spending growth

Positive effects of an angiotensin II type 1 receptor antagonist in Camurati-Engelmann disease: a single case observation.

Camurati-Engelmann disease is characterized by hyperostosis of the long bones and the skull, muscle atrophy, severe limb pain, and progressive joint contractures in some patients. It is caused by heterozygous mutations in the transforming growth factor β1 (TGFβ1) believed to result in improper folding of the latency-associated peptide domain of TGFβ1 and thus in increased or deregulated bioactivity. Losartan, an angiotensin II type 1 receptor antagonist, has been found to downregulate the expression of TGFβ type 1 and 2 receptors. Clinical trials with losartan have shown a benefit in Marfan syndrome, while trials are underway for Duchenne muscular dystrophy and other myopathies associated with TGFβ1 signaling. We hypothesized that due to its anti-TGFβ1 activity, losartan might be beneficial in Camurati-Engelmann disease. This report concerns a boy who presented at age 13 years with severe limb pain and difficulty in walking. Clinical and radiographic evaluation results were compatible with Camurati-Engelmann disease and the diagnosis was confirmed by mutation analysis (c.652C > T [p.Arg218Cys]). The boy underwent an experimental treatment with losartan at a dosage of 50 mg/day, orally. During the treatment period of 18 months, the intensity and frequency of limb pain decreased significantly (as shown by a pain diary), and muscle strength improved, allowing the boy to resume walking and climbing stairs. No obvious side effects were observed. We cautiously conclude that TGFβ1 inhibition with losartan deserves further evaluation in the clinical management of Camurati-Engelmann disease.

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