The Road from Marja: Wounded in Afghanistan, Capt. Erik Quist '99, USMC, sees another side of combat

Marine Corps Capt. Erik Quist ’99 had fought in two wars. Now he fights again as he recovers from severe wounds suffered in Afghanistan.

The ex-Ante non-optimality of the Dempster-Schafer updating rule for ambiguous beliefs

The most widely used updating rule for non-additive probalities is the Dempster-Schafer rule. Schmeidles and Gilboa have developed a model of decision making under uncertainty based on non-additive probabilities, and in their paper “Updating Ambiguos Beliefs” they justify the Dempster-Schafer rule based on a maximum likelihood procedure. This note shows in the context of Schmeidler-Gilboa preferences under uncertainty, that the Dempster-Schafer rule is in general not ex-ante optimal. This contrasts with Brown’s result that Bayes’ rule is ex-ante optimal for standard Savage preferences with additive probabilities.

Bailey's rule for the welfare of inflation: a theoretical foundation

This paper demonstrates that for a very general class of monetary models (the Sidrauski type models and the cash-in-advance models), Bailey’s rule to evaluate the welfare efect of infation is in deed accurate. The result applies for any technology or preference, if the long-run capital stock does not depend on the ination rate. In general, a dynamic version of Bailey’s rule is established. In particular, the result extends to models in which there is a banking sector that supplies money substitutes services. A dditionally, it is argued that the relevant money demand concept for this issue- the impact of in ination under welfare- is the monetary base.

Testing the optimality of aggregate consumption decisions: is there rule-of-thumb behavior?

Consumption is an important macroeconomic aggregate, being about 70% of GNP. Finding sub-optimal behavior in consumption decisions casts a serious doubt on whether optimizing behavior is applicable on an economy-wide scale, which, in turn, challenge whether it is applicable at all. This paper has several contributions to the literature on consumption optimality. First, we provide a new result on the basic rule-of-thumb regression, showing that it is observational equivalent to the one obtained in a well known optimizing real-business-cycle model. Second, for rule-of-thumb tests based on the Asset-Pricing Equation, we show that the omission of the higher-order term in the log-linear approximation yields inconsistent estimates when lagged observables are used as instruments. However, these are exactly the instruments that have been traditionally used in this literature. Third, we show that nonlinear estimation of a system of N Asset-Pricing Equations can be done efficiently even if the number of asset returns (N) is high vis-a-vis the number of time-series observations (T). We argue that efficiency can be restored by aggregating returns into a single measure that fully captures intertemporal substitution. Indeed, we show that there is no reason why return aggregation cannot be performed in the nonlinear setting of the Pricing Equation, since the latter is a linear function of individual returns. This forms the basis of a new test of rule-of-thumb behavior, which can be viewed as testing for the importance of rule-of-thumb consumers when the optimizing agent holds an equally-weighted portfolio or a weighted portfolio of traded assets. Using our setup, we find no signs of either rule-of-thumb behavior for U.S. consumers or of habit-formation in consumption decisions in econometric tests. Indeed, we show that the simple representative agent model with a CRRA utility is able to explain the time series data on consumption and aggregate returns. There, the intertemporal discount factor is significant and ranges from 0.956 to 0.969 while the relative risk-aversion coefficient is precisely estimated ranging from 0.829 to 1.126. There is no evidence of rejection in over-identifying-restriction tests.

Compliance to law and effectiveness of the rule of law in Brazil

The goal of this paper is to debate the degree of effectiveness of the rule of law in Brazil, through a survey measuring perceptions, attitudes and habits of Brazilians in regard to compliance to law. The survey conducted in Brazil is based on the study conducted by Tom R. Tyler in the United States, entitled Why People Obey the Law? (New Haven, CT: Yale University Press, 1990). The main argument of Tyler´s study is that people obey the law when they believe it’s legitimate, and not because they fear punishment. We test the same argument in Brazil, relying on five indicators: (i) behavior, which depicts the frequency with which respondents declared to have engaged in conducts in disobedience to the law; (ii) instrumentality, measuring perception of losses associated with the violation of the law, specially fear of punishment; (iii) morality, measuring perception of how much is right or wrong to engage in certain conducts in violation of the law; (iv) social control, which measures perception of social disapproval of certain types of behavior in violation of the law, and (v) legitimacy, which measures the perception of respect to the law and to some authorities. Results indicate that fear of sanctions is not the strongest drive in compliance to law, but more than legitimacy, indicators of morality and social control are the strongest in explaining why people obey the law in Brazil.

On the optimality of the Friedman Rule with heterogeneous agents and non-linear income taxation

We study the optimal “inflation tax” in an environment with heterogeneous agents and non-linear income taxes. We first derive the general conditions needed for the optimality of the Friedman rule in this setup. These general conditions are distinct in nature and more easily interpretable than those obtained in the literature with a representative agent and linear taxation. We then study two standard monetary specifications and derive their implications for the optimality of the Friedman rule. For the shopping-time model the Friedman rule is optimal with essentially no restrictions on preferences or transaction technologies. For the cash-credit model the Friedman rule is optimal if preferences are separable between the consumption goods and leisure, or if leisure shifts consumption towards the credit good. We also study a generalized model which nests both models as special cases.

The optimality of the Friedman rule when some distorting taxes are exogenous

This paper investigates the optimality of the Friedman rule in a two-sector small open economy. That policy prescription is found to be a necessary condition for Pareto efficiency. If a planner can select all conceivable distorting taxes, then, for some initial values of public debt, money balances and foreign assets, it is possible to decentralize a Pareto efficient allocation. If the planner can select only some of these tax rates, then second-best policies may also satisfy the Friedman rule. However, this last result depends on the set of tax instruments the planner can choose from.

The time consistency of the Friedman rule

We consider the problem of time consistency of the Ramsey monetary and fiscal policies in an economy without capital. Following Lucas and Stokey (1983) we allow the government at date t to leave its successor at t + 1 a profile of real and nominal debt of all maturities, as a way to influence its decisions. We show that the Ramsey policies are time consistent if and only if the Friedman rule is the optimal Ramsey policy.

A model of the rule of law

Economic development requires some limits on what those in power can do | the rule of law | but how can restraints be imposed on the powerful when there is no-one above them? This paper studies equilibrium rules allocating power and resources established by selfinterested incumbents under the threat of rebellions from inside and outside the group in power. Commitment to uphold individuals' rights can only be achieved if power is not as concentrated as incumbents would like it to be, ex post. Power sharing endogenously enables incumbents to commit to otherwise time-inconsistent laws by ensuring more people receive rents under the status quo, and thus want to defend it.

Purification and characterization of the biological effects of phospholipase A(2) from sea anemone Bunodosoma caissarum

Sea anemones contain a variety of biologically active substances. Bunodosoma caissarum is a sea anemone from the Cnidaria phylum, found only in Brazilian coastal waters. The aim of the present work was to study the biological effects of PLA(2) isolated from the sea anemone B. caissarum on the isolated perfused kidney, the arteriolar mesenteric bed and on insulin secretion. Specimens of B. caissarum were collected from the Sao Vicente Channel on the southern coast of the State of São Paulo, Brazil. Reverse phase HPLC analysis of the crude extract of B. caissarum detected three PLA(2) proteins (named BcPLA(2)1, BCPLA(2)2 and BcPLA(2)3) found to be active in B. caissarum extracts. MALDI-TOF mass spectrometry of BcPLA(2)1 showed one main peak at 14.7 kDa. The N-terminal amino acid sequence of BcPLA(2)1 showed high amino acid sequence identity with PLA(2) group III protein isolated from the Mexican lizard (PA23 HELSU, HELSU, PA22 HELSU) and with the honey bee Apis mellifera (PLA(2) and 1POC_A). In addition, BcPLA(2)1 also showed significant overall homology to bee PLA(2). The enzymatic activity induced by native BCPLA(2)1 (20 mu g/well) was reduced by chemical treatment with p-bromophenacyl bromide (p-BPB) and with morin. BcPLA(2)1 strongly induced insulin secretion in presence of high glucose concentration. In isolated kidney, the PLA(2) from B. caissarum increased the perfusion pressure, renal vascular resistance, urinary flow, glomerular filtration rate, and sodium, potassium and chloride levels of excretion. BcPLA(2)1, however, did not increase the perfusion pressure on the mesenteric vascular bed. In conclusion, PLA(2), a group III phospholipase isolated from the sea anemone B. caissarum, exerted effects on renal function and induced insulin secretion in conditions of high glucose concentration. (C) 2009 Elsevier Ltd. All rights reserved.

Evaluation of the RB-RB/LB-LB mnemonic rule for recording optimally projected intraoral images of dental implants: an in vitro study

Objective: The aim of this study was to evaluate a simple mnemonic rule (the RB-RB/LB-LB rule) for recording intra-oral radiographs with optimal projection for the control of dental implants.Methods: 30 third-year dental students received a short lesson in the RB-RB/LB-LB mnemonic rule. The rule is as follows: if right blur then raise beam (RB-RB), i.e. if implant threads are blurred at the right side of the implant, the X-ray beam direction must be raised towards the ceiling to obtain sharp threads on both implant sides; if left blur then lower beam (LB-LB), i.e. if implant threads are blurred at the left side of the implant, the X-ray beam direction must be lowered towards the floor to obtain sharp threads on both implant sides. Intra-oral radiographs of four screw-type implants placed with different inclination in a Frasaco upper or lower jaw dental model (Frasaco GmbH, Tettnang, Germany) were recorded. The students were unaware of the inclination of the implants and were instructed to re-expose each implant, implementing the mnemonic rule, until an image of the implant with acceptable quality (subjectively judged by the instructor) was obtained. Subsequently, each radiograph was blindly assessed with respect to sharpness of the implant threads and assigned to one of four quality categories: (1) perfect, (2) not perfect, but clinically acceptable, (3) not acceptable and (4) hopeless.Results: For all implants, from one non-perfect exposure to the following, a higher score was obtained in 64% of the cases, 28% received the same score and 8% obtained a lower score. Only a small variation was observed among exposures of implants with different inclination. on average, two exposures per implant (range: one to eight exposures) were needed to obtain a clinically acceptable image.Conclusion: The RB-RB/LB-LB mnemonic rule for recording intra-oral radiographs of dental implants with a correct projection was easy to implement by inexperienced examiners. Dentomaxillofacial Radiology (2012) 41, 298-304. doi: 10.1259/dmfr/20861598

The Gerasimov-Drell-Hearn Sum Rule and the Spin Structure of the Proton

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Strangeness content and structure function of the nucleon in a statistical quark model

The strangeness content of the nucleon is determined from a statistical model using confined quark levels, and is shown to have a good agreement with the corresponding values extracted from experimental data. The quark levels are generated in a Dirac equation that uses a linear confining potential (scalar plus vector). With the requirement that the result for the Gottfried sum rule violation, given by the New Muon Collaboration (NMC), is well reproduced, we also obtain the difference between the structure functions of the proton and neutron, and the corresponding sea quark contributions.