It's still 2%: evidence on convergence from 116 years of the US States panel data

A new debate over the speed of convergence in per capita income across economies is going on. Cross sectional estimates support the idea of slow convergence of about two percent per year. Panel data estimates support the idea of fast convergence of five, ten or even twenty percent per year. This paper shows that, if you ``do it right'', even the panel data estimation method yields the result of slow convergence of about two percent per year.

Financing constraints, irreversibility and investment dynamics

We develop a model of an industry with many heterogeneous firms that face both financingconstraints and irreversibility constraints. The financing constraint implies that firmscannot borrow unless the debt is secured by collateral; the irreversibility constraint thatthey can only sell their fixed capital by selling their business. We use this model to examinethe cyclical behavior of aggregate fixed investment, variable capital investment, and outputin the presence of persistent idiosyncratic and aggregate shocks. Our model yields threemain results. First, the effect of the irreversibility constraint on fixed capital investmentis reinforced by the financing constraint. Second, the effect of the financing constraint onvariable capital investment is reinforced by the irreversibility constraint. Finally, the interactionbetween the two constraints is key for explaining why input inventories and materialdeliveries of US manufacturing firms are so volatile and procyclical, and also why they arehighly asymmetrical over the business cycle.

Speculative dynamics in the term structure of interest rates

When long maturity bonds are traded frequently and traders have non-nestedinformation sets, speculative behavior in the sense of Harrison and Kreps (1978) arises.Using a term structure model displaying such speculative behavior, this paper proposesa conceptually and observationally distinct new mechanism generating time varying predictableexcess returns. It is demonstrated that (i) dispersion of expectations about futureshort rates is sufficient for individual traders to systematically predict excess returns and(ii) the new term structure dynamics driven by speculative trade is orthogonal to publicinformation in real time, but (iii) can nevertheless be quantified using only publicly availableyield data. The model is estimated using monthly data on US short to medium termTreasuries from 1964 to 2007 and it provides a good fit of the data. Speculative dynamicsare found to be quantitatively important, potentially accounting for a substantial fractionof the variation of bond yields and appears to be more important at long maturities.

On information and competition in private value auctions

How much information does an auctioneer want bidders to have in a private value environment?We address this question using a novel approach to ordering information structures based on the property that in private value settings more information leads to a more disperse distribution of buyers updated expected valuations. We define the class of precision criteria following this approach and different notions of dispersion, and relate them to existing criteria of informativeness. Using supermodular precision, we obtain three results: (1) a more precise information structure yields a more efficient allocation; (2) the auctioneer provides less than the efficient level of information since more information increases bidder informational rents; (3) there is a strategic complementarity between information and competition, so that both the socially efficient and the auctioneer s optimal choice of precision increase with the number of bidders, and both converge as the number of bidders goes to infinity.

Quantifying quantitative literacy: Age heaping and the history of human capital

Age data frequently display excess frequencies at round or attractive ages, such as even numbers and multiples of five. This phenomenon of age heaping has been viewed as a problem in previous research, especially in demography and epidemiology. We see it as an opportunity and propose its use as a measure of human capital that can yield comparable estimates across a wide range of historical contexts. A simulation study yields methodological guidelines for measuring and interpreting differences in ageheaping, while analysis of contemporary and historical datasets demonstrates the existence of a robust correlation between age heaping and literacy at both the individual and aggregate level. To illustrate the method, we generate estimates of human capital in Europe over the very long run, which support the hypothesis of a major increase in human capital preceding the industrial revolution.

Indentifying human capital externalities: Theory with an application to US cities

The identification of aggregate human capital externalities is still not fully understood. The existing (Mincerian) approach confounds positive externalities with wage changes due to a downward sloping demand curve for human capital. As a result, it yields positive externalities even when wages equal marginal social products. We propose an approach that identifies human capital externalities whether or not aggregate demand for human capital slopes downward. Another advantage of our approach is that it does not require estimates of the individual return to human capital. Applications to US cities and states between 1970 and 1990 yield no evidence of significant average -schooling externalities.

Estimating cross-industry cross-country models using benchmark industry characteristics

International industry data permits testing whether the industry-specific impact of cross-countrydifferences in institutions or policies is consistent with economic theory. Empirical implementationrequires specifying the industry characteristics that determine impact strength. Most of the literature has been using US proxies of the relevant industry characteristics. We show that usingindustry characteristics in a benchmark country as a proxy of the relevant industry characteristicscan result in an attenuation bias or an amplification bias. We also describe circumstances allowingfor an alternative approach that yields consistent estimates. As an application, we reexamine theinfluential conjecture that financial development facilitates the reallocation of capital from decliningto expanding industries.

Taking "Galton's problem" Seriously : Towards a Theory of Policy Diffusion

This article builds on the recent policy diffusion literature and attempts to overcome one of its major problems, namely the lack of a coherent theoretical framework. The literature defines policy diffusion as a process where policy choices are interdependent, and identifies several diffusion mechanisms that specify the link between the policy choices of the various actors. As these mechanisms are grounded in different theories, theoretical accounts of diffusion currently have little internal coherence. In this article we put forward an expected-utility model of policy change that is able to subsume all the diffusion mechanisms. We argue that the expected utility of a policy depends on both its effectiveness and the payoffs it yields, and we show that the various diffusion mechanisms operate by altering these two parameters. Each mechanism affects one of the two parameters, and does so in distinct ways. To account for aggregate patterns of diffusion, we embed our model in a simple threshold model of diffusion. Given the high complexity of the process that results, strong analytical conclusions on aggregate patterns cannot be drawn without more extensive analysis which is beyond the scope of this article. However, preliminary considerations indicate that a wide range of diffusion processes may exist and that convergence is only one possible outcome.

Protecting our bridges for the future, April 2006

Changes in agriculture operations over the past 35 years are having a dramatic impact on Iowa’s roads and bridges. The average size of an Iowa farm has increased to 352 acres in 2003, compared to 237 acres in 1970. Modern agricultural practices have also produced higher yields per acre, which means more grain to haul to market. In order to increase efficiency, farmers are beginning to use larger capacity wagons hauling more bushels per trip to the elevator, and using much heavier equipment in their farming operations. This trend is stressing Iowa bridges beyond the current capabilities to maintain them.

Incremental growth of the Patagonian Torres del Paine laccolith over 90 k.y.

The Miocene Paine Granite in the Torres del Paine Intrusive Complex, southern Chile, is an extraordinary example of an upper crustal mafic and granitic intrusion. The granite intruded as a series of three sheets, each one underplating the previous sheet along the top of the basal Paine Mafic Complex. High-precision U/Pb geochronology on single zircons using isotope dilution-thermal ionization mass spectrometry yields distinct ages of 12.59 +/- 0.02 Ma and 12.50 +/- 0.02 Ma, respectively, for the first and last sheet of the laccolith. This age relationship is consistent with field observations. The zircon ages define a time frame of 90 +/- 40 k.y. for the emplacement of a >2000-m-thick granite laccollith. These precise U-Pb zircon ages permit identification of the pulses in a 20 k.y. range. The data obtained for the Paine Granite fill the gap between 100 k.y. and 100-1000 yr pulses described in the literature for crustal magma chambers.

Soybean response to starter nitrogen and Bradyrhizobium inoculation on a Cerrado oxisol under no-tillage and conventional tillage systems

In Brazil, Bradyrhizobium inoculation has successfully replaced the use of N fertilizer on soybean [Glycine max (L) Merr.] crops. However, with the expansion of no-tillage cropping systems in the Cerrados region, the idea that it is necessary to use small N rates at the sowing to overcome problems related with N immobilization has become widespread, mainly when soybean is cultivated after a non-legume crop. In this study we examined soybean response to small rates of N fertilizer under no-tillage (NT) and conventional tillage (CT) systems. Four experiments (a completely randomized block with five replicates) were carried out in a red yellow oxisol, during the periods of 1998/1999 and 1999/ 2000, under NT and CT. The treatments consisted of four urea rates (0, 20, 30 and 40 kg ha-1 N). All treatments were inoculated with Bradyrhizobium japonicum strains SEMIA 5080 and SEMIA 5079, in the proportion 1 kg of peat inoculant (1,5 x 10(9) cells g-1) per 50 kg of seeds. In both experiments, soybean was cultivated after corn and the N fertilizer was band applied at sowing. In all experiments, N rates promoted reductions of up to 50 % in the nodule number at 15 days after the emergence. Regardless of the management system, these reductions disappeared at the flowering stage and there was no effect of N rates on either the number and dry weight of nodules or on soybean yields. Therefore, in the Brazilian Cerrados, when an efficient symbiosis is established, it is not necessary to apply starter N rates on soybean, even when cultivated under notillage systems.

Measuring risk aversion with lists: A new bias

Various experimental procedures aimed at measuring individual risk aversion involve alist of pairs of alternative prospects. We first study the widely used method by Holt andLaury (2002), for which we find that the removal of some items from the lists yields asystematic decrease in risk aversion. This bias is quite distinct from other confoundsthat have been previously observed in the use of the Holt and Laury method. It may berelated to empirical phenomena and theoretical developments where better prospectsincrease risk aversion. Nevertheless, we have also found that the more recent elicitationmethod due to Abdellaoui et al. (2011), also based on lists, does not display anystatistically significant bias when the corresponding items of the list are removed. Ourresults suggest that methods other than the popular Holt and Laury one may bepreferable for the measurement of risk aversion.

Multivalent display of the antimicrobial peptides BP100 and BP143

Carbohydrates are considered as promising templates for the display of multiple copies of antimicrobial peptides. Herein, wedescribe the design and synthesis of chimeric structures containing two or four copies of the antimicrobial peptidesKKLFKKILKYL-NH2 (BP100) and KKLfKKILKYL-NH2 (BP143) attached to the carbohydrate template cyclodithioerythritol(cDTE) or α-D-galactopyranoside (Galp). The synthesis involved the preparation of the corresponding peptide aldehyde followedby coupling to an aminooxy-functionalized carbohydrate template. After purification, the multivalent display systems were obtainedin high purities (90–98%) and in good yields (42–64%). These compounds were tested against plant and human pathogenic bacteriaand screened for their cytotoxicity on eukaryotic cells. They showed lower MIC values than the parent peptides against the bacteriaanalyzed. In particular, the carbopeptides derived from cDTE and Galp, which contained two or four copies of BP100, respectively,were 2- to 8-fold more active than the monomeric peptide against the phytopathogenic bacteria. These results suggest thatpreassembling antimicrobial peptides to multimeric structures is not always associated with a significant improvement of theactivity. In contrast, the carbopeptides synthesized were active against human red blood cells pointing out that peptide preassemblyis critical for the hemolytic activity. Notably, peptide preassembly resulted in an enhanced bactericidal effect

Serial protein labeling with infrared maleimide dyes to identify cysteine modifications

Cysteine thiol modifications are increasingly recognized to occur under both physiological and pathophysiological conditions, making their accurate detection, identification and quantification of growing importance. However, saturation labeling of thiols with fluorescent dyes results in poor protein recuperation and therefore requires the use of large quantities of starting material. This is especially important in sequential dye-labeling steps when applied for an identification of cysteine modifications. First, we studied the effects of different detergents during labeling procedure, i.e. Tween 20, Triton X-100 and CHAPS, on protein yield and composition. Tween 20 and Triton X-100 resulted in yields of around 50% labeled proteins compared to only 10% with PBS alone and a most diversified 2-DE protein pattern. Secondly, Tween 20 was used for serial protein labeling with maleimid fluorophores, first to conjugate to accessible thiols and after a reduction to label with another fluorophore previously masked di-sulphide and/or oxidized proteins in frontal cortex autopsy tissue of a subject with mild Alzheimer's disease. Two-DE DIGE revealed a complex protein pattern of readily labeled thiols and di-sulphide and/or oxidized proteins. Seventeen proteins were identified by MALDI-TOF and by peptide fingerprints. Several proteins were oxidized and involved in Alzheimer's disease. However methionine oxidation was prevalent. Infrared DIGE may provide an additional tool for an identification of oxidation susceptible proteins.

Application of K-feldspar-jadeite-quartz barometry to eclogite facies metagranites and metapelites in the Sesia Lanzo Zone (Western Alps, Italy)

The eclogite facies assemblage K-feldspar-jadeite-quartz in metagranites and metapelites from the Sesia-Lanzo Zone (Western Alps, Italy) records the equilibration pressure by dilution of the reaction jadeite + quartz = albite. The metapelites show partial transformation from a pre-Alpine assemblage of garnet (Alm(63)Prp(26)Grs(10))-K-feldspar-plagioclase-biotite +/- sillimanite to the Eo-Alpine high-pressure assemblage garnet (Alm(50)Prp(14)Grs(35))-jadeite (Jd(80-97)Di(0-4)Hd(0-8)Acm(0-7))=zoisite-phengite. Plagioclase is replaced by jadeite-zoisite-kyanite-K-feldspar-quartz and biotite is replaced by garnet-phengite or omphacite-kyanite-phengite. Equilibrium was attained only in local domains in the metapelites and therefore the K-feldspar-jadeite-quartz (KJQ) barometer was applied only to the plagioclase pseudomorphs and K-feldspar domains. The albite content of K-feldspar ranges from 4 to 11 mol% in less equilibrated assemblages from Val Savenca and from 4 to 7 mol% in the partially equilibrated samples from Monte Mucrone and the equilibrated samples from Montestrutto and Tavagnasco. Thermodynamic calculations on the stability of the assemblage K-feldspar-jadeite-quartz using available mixing data for K-feldspar and pyroxene indicate pressures of 15-21 kbar (+/- 1.6-1.9 kbar) at 550 +/- 50 degrees C. This barometer yields direct pressure estimates in high-pressure rocks where pressures are seldom otherwise fixed, although it is sensitive to analytical precision and the choice of thermodynamic mixing model for K-feldspar. Moreover, the KJQ barometer is independent of the ratio P-H2O/P-T. The inferred limiting a(H2O) for the assemblage jadeite-kyanite in the metapelites from Val Savenca is low and varies from 0.2 to 0.6.