A-1 Monthly Public Assistance Statistical Report Family Investment Program, October 2007

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

Rate of convergence of a particle method to the solution of the Mc Kean-Vlasov's equation

This paper studies the rate of convergence of an appropriatediscretization scheme of the solution of the Mc Kean-Vlasovequation introduced by Bossy and Talay. More specifically,we consider approximations of the distribution and of thedensity of the solution of the stochastic differentialequation associated to the Mc Kean - Vlasov equation. Thescheme adopted here is a mixed one: Euler/weakly interactingparticle system. If $n$ is the number of weakly interactingparticles and $h$ is the uniform step in the timediscretization, we prove that the rate of convergence of thedistribution functions of the approximating sequence in the $L^1(\Omega\times \Bbb R)$ norm and in the sup norm is of theorder of $\frac 1{\sqrt n} + h $, while for the densities is ofthe order $ h +\frac 1 {\sqrt {nh}}$. This result is obtainedby carefully employing techniques of Malliavin Calculus.

Schumpeterian technology shocks

We analyze the labor market effects of neutral and investment-specific technologyshocks along the intensive margin (hours worked) and the extensive margin(unemployment). We characterize the dynamic response of unemploymentin terms of the job separation and the job finding rate. Labor market adjustmentsoccur along the extensive margin in response to neutral shocks, along theintensive margin in response to investment specific shocks. The job separationrate accounts for a major portion of the impact response of unemployment. Neutralshocks prompt a contemporaneous increase in unemployment because of asharp rise in the separation rate. This is prolonged by a persistent fall in thejob finding rate. Investment specific shocks rise employment and hours worked.Neutral shocks explain a substantial portion of the volatility of unemploymentand output; investment specific shocks mainly explain hours worked volatility.This suggests that neutral progress is consistent with Schumpeterian creative destruction,while investment-specific progress operates as in a neoclassical growthmodel.

A-1 Monthly Public Assistance Statistical Report Family Investment Program, June 2008

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

Signalling, mating success and paternal investment in sticklebacks (Gasterosteus aculeatus): A theoretical model

I present an optimisation model that links paternal investment, male display and female choice. Although deviced for sticklebacks, it readily applies to other fish with male guarding behaviour. It relies on a few basic assumptions on the ways hatching success depends on paternal investment and clutch size, and male survival on paternal investment and signaling. Paternal investment is here a state-dependent decision, and signal a condition-dependent handicap by which males inform females of how much they are willing to invest. Series of predictions are derived on female and male breeding strategies, including optimal levels of signaling and paternal investment as functions of clutch size, own condition, and residual reproductive value, as well as alternative strategies such as egg kleptoparasitism. Some predictions already have empirical support, for which the present model provides new interpretations. Other might readily be tested, e.g. by simple clutch-size manipulations.

Interest rate restrictions in a natural experiment: loan allocation and the change in the usury laws in 1714

This article studies the effects of interest rate restrictions on loan allocation. The British governmenttightened the usury laws in 1714, reducing the maximum permissible interest rate from 6% to5%. A sample of individual loan transactions reveals that average loan size and minimum loan sizeincreased strongly, while access to credit worsened for those with little social capital. Collateralisedcredits, which had accounted for a declining share of total lending, returned to their former role ofprominence. Our results suggest that the usury laws distorted credit markets significantly; we findno evidence that they offered a form of Pareto-improving social insurance.

Health investment complementarities under competing risks

Applying the competing--risks model to multi--cause mortality,this paper provides a theoretical and empirical investigation of the positive complementarities that occur between disease--specific policy interventions. We argue that since an individual cannot die twice, competing risks imply that individuals will not waste resources on causes that are not the most immediate, but will make health investments so as to equalize cause--specific mortality. However, equal mortality risk from a variety of diseases does not imply that disease--specific public health interventions are a waste. Rather, a cause--specific intervention produces spillovers to other disease risks, so that the overall reduction in mortality will generally be larger than the direct effect measured on the targeted disease. The assumption that mortality from non--targeted diseases remains the same after a cause--specific intervention under--estimates the true effect of such programs, since the background mortality is also altered as a result of intervention. Analyzing data from one of the most important public health programs ever introduced, the Expanded Program on Immunization (EPI) of the United Nations, we find evidence for the existence of such complementarities, involving causes that are not biomedically, but behaviorally, linked.

Resting metabolic rate in six- to ten-year-old obese and nonobese children.

The resting metabolic rate (RMR) and body composition of 130 obese and nonobese prepubertal children, aged 6 to 10 years, were assessed by indirect calorimetry and skin-fold thickness, respectively. The mean (+/- SD) RMR was 4619 +/- 449 kJ.day-1 (164 +/- 31 kJ.kg body weight-1 x day-1) in the 62 boys and 4449 +/- 520 kJ.day-1 (147 +/- 32 kJ.kg body weight-1 x day-1) in the 68 girls. Fat-free mass was the best single predictor of RMR (R2 = 0.64; p < 0.001). Step-down multiple regression analysis, with independent variables such as age, gender, weight, and height, allowed several RMR predictive equations to be developed. An equation for boys is as follows: RMR (kJ.day-1) = 1287 + 28.6 x Weight(kg) + 23.6 x Height(cm) - 69.1 x Age(yr) (R2 = 0.58; p < 0.001). An equation for girls is as follows: RMR (kJ.day-1 = 1552 + 35.8 x Weight (kg) + 15.6 x Height (cm) - 36.3 x Age (yr) (R2 = 0.69; p < 0.001). Comparison between the measured RMR and that predicted by currently used formulas showed that most of these equations tended to overestimate the RMR of both genders, especially in overweight children.

A-1 Monthly Public Assistance Statistical Report Family Investment Program, July 2008

A-1 - Monthly Public Assistance Statistical Report Family Investment Program

The effect of treatment with calcitonin on vertebral fracture rate in osteoporosis.

The efficacy of treatments for osteoporosis does not become evident when evaluated by fracture incidence (FI). Vertebral FI decreased in all controlled studies on calcitonin, but not significantly. Small sample sizes and short periods of treatment may have masked a possible therapeutic benefit, but longer, controlled studies with sodium fluoride or etidronate in larger groups of patients also failed to show a decrease in FI. The present analysis of nine published, therapeutic studies which indicate the FI per year and the initial prevalence of vertebral fractures, examines the question of whether the initial prevalence of fractures has an effect on the subsequent incidence of new fractures and whether the therapeutic effects have to be evaluated as a function of the initial prevalence of fractures. Bearing in mind the differences in roentgenological evaluation and in the size and quality of the various studies, the analysis revealed (1) that in the control groups there was a higher FI in patients with more than three vertebral fractures at baseline (estimated odds ratio (OR) = 49, p = 0.011); (2) that a similar trend, although not statistically significant, was observed in treated patients; (3) that the groups of control patients treated for more than 1 year showed in general an increase in FI beyond the first year and that the reverse was true in treated patients. In conclusion, failure to allow for the initial prevalence of vertebral fractures at the individual level in therapeutic trials of calcitonin to treat osteoporosis and prevent new fractures might have contributed to the absence of a demonstrable benefit of the treatment in those studies.

Pitfalls in the modeling of forward-looking price setting and investment decisions

The present paper makes progress in explaining the role of capital for inflation and output dynamics. We followWoodford (2003, Ch. 5) in assuming Calvo pricing combined with a convex capital adjustment cost at the firm level. Our main result is that capital accumulation affects inflation dynamics primarily through its impact on the marginal cost. This mechanism is much simpler than the one implied by the analysis in Woodford's text. The reason is that his analysis suffers from a conceptual mistake, as we show. The latter obscures the economic mechanism through which capital affects inflation and output dynamics in the Calvo model, as discussed in Woodford (2004).

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.

Constant interest rate projections without the curse of indeterminacy

Constant interest rate (CIR) projections are often criticized on the grounds that they are inconsistent with the existence of a unique equilibrium in a variety of forward-looking models. This note shows howto construct CIR projections that are not subject to that criticism, using a standard New Keynesian model as a reference framework.

A-1 Monthly Public Assistance Statistical Report Family Investment Program, August 2008

A-1 - Monthly Public Assistance Statistical Report Family Investment Program