Capital, wages and growth: Theory and evidence

Returns to scale to capital and the strength of capital externalities play a key role for the empirical predictions and policy implications of different growth theories. We show that both can be identified with individual wage data and implement our approach at the city-level using US Census data on individuals in 173 cities for 1970, 1980, and 1990. Estimation takes into account fixed effects, endogeneity of capital accumulation, and measurement error. We find no evidence for human or physical capital externalities and decreasing aggregate returns to capital. Returns to scale to physical and human capital are around 80 percent. We also find strong complementarities between human capital and labor and substantial total employment externalities.

An overall perspective on banking regulation

We survey the theory of banking regulation from the general perspectiveof regulatory theory. Starting by considering the different justificationsof financial intermediation, we proceed to identify the market failuresthat make banking regulation necessary. We then succinctly compare how theanalysis of regulation compares in the domains of banking and industrialorganization. Finally we analyse why a safety net for banks could be partof banking regulation and how it can be structured in an efficient way.

Macroprudential policy, countercyclical bank capital buffers and credit supply: Evidence from the Spanish dynamic provisioning experiments

We analyze the impact of countercyclical capital buffers held by banks on the supplyof credit to firms and their subsequent performance. Spain introduced dynamicprovisioning unrelated to specific bank loan losses in 2000 and modified its formulaparameters in 2005 and 2008. In each case, individual banks were impacteddifferently. The resultant bank-specific shocks to capital buffers, coupled withcomprehensive bank-, firm-, loan-, and loan application-level data, allow us toidentify its impact on the supply of credit and on real activity. Our estimates showthat countercyclical dynamic provisioning smooths cycles in the supply of credit andin bad times upholds firm financing and performance.

Civil conflict and human capital accumulation: The long-term effects of political violence in Perú

This paper provides empirical evidence of the persistent effect of exposure to political violence on humancapital accumulation. I exploit the variation in conflict location and birth cohorts to identify the longandshort-term effects of the civil war on educational attainment. Conditional on being exposed toviolence, the average person accumulates 0.31 less years of education as an adult. In the short-term,the effects are stronger than in the long-run; these results hold when comparing children within thesame household. Further, exposure to violence during early childhood leads to permanent losses. I alsoexplore the potential causal mechanisms.

Social capital, government expenditures, and growth

Countries with greater social capital have higher economic growth. We show that socialcapital is also highly positively correlated across countries with government expenditureon education. We develop an infinite-horizon model of public spending and endogenousstochastic growth that explains both facts through frictions in political agency whenvoters have imperfect information. In our model, the government provides servicesthat yield immediate utility, and investment that raises future productivity. Voters aremore likely to observe public services, so politicians have electoral incentives to underprovidepublic investment. Social capital increases voters' awareness of all governmentactivity. As a consequence, both politicians' incentives and their selection improve.In the dynamic equilibrium, both the amount and the efficiency of public investmentincrease, permanently raising the growth rate.

Capital formation in machinery and industrialization. Chile 1844-1938

The present paper revisits an old theme in Latin American and Chilean economic history; the early industrialization in the XIX - XX centuries. The difference with previous approaches is the elaboration of new quantitative series of Chilean machinery investment in the long run and its relative prices and composition, in the period when some authors have sited the beginning of the industrialization in the continent. Initial findings, based on the participation of capital formation in machinery imports and GDP, do not reinforce the idea of early industrialization in Chile.

Sources of comparative advantage in polluting industries (with appendix)

We study the determinants of comparative advantage in polluting industries. We combine dataon environmental policy at the country level with data on pollution intensity at the industry levelto show that countries with laxer environmental regulation have a comparative advantage in polluting industries. Further, we address the potential problem of reverse causality. We propose aninstrument for environmental regulation based on meteorological determinants of pollution dispersion identified by the atmospheric pollution literature. We find that the effect of environmentalregulation on the pattern of trade is causal and comparable in magnitude to the effect of physicaland human capital.

Human capital and regional development

We investigate the determinants of regional development using a newly constructed database of 1569 sub-national regions from 110 countries covering 74 percent of the world s surface and 97 percent of its GDP. We combine the cross-regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several thousand establishments located in these regions. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements of both the Lucas (1978) model of the allocation of talent between entrepreneurship and work, and the Lucas (1988) model of human capital externalities. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and possibly human capital externalities help understand the data.

Role and regulation of polyphosphate in leishmania parasites

Le protozoaire unicellulaire Leishmania est l'agent responsable de la leishmaniose, une maladie parasitaire humaine qui se manifeste par des lésions de la peau, se résolvant le plus souvent spontanément, jusqu'à des lésions viscérales fatales. Le parasite est transmis de l'insecte à l'hôte mammifère lors d'un repas sanguin de la mouche des sables et y réside respectivement sous formes extra- et intracellulaires. On estime que cette maladie touche environ 12 millions de personnes dans 98 pays. Etant donné que les médicaments disponibles à ce jour sont faiblement efficaces et/ou hautement toxiques, il est indispensable de consolider les connaissances sur le fonctionnement et la survie du parasite pour pouvoir développer de nouvelles stratégies de traitements et de préventions. Tous les organismes vivants, dont Leishmania, contiennent du polyphopshate (polyP). Cette molécule chargée négativement est constituée de trois jusqu'à plusieurs centaines de résidus de phosphates reliées par des liaisons à haute énergie. Le polyP sert donc de source d'énergie et de réservoir de phosphate; dans certaines espèces, il joue aussi un rôle dans l'adaptation au stress et la virulence de pathogènes. Ceci nous a amené à étudier le rôle du polyP dans le parasite Leishmania. L'enzyme responsable de la synthèse de polyP a été identifié récemment dans la levure : il s'agit de la chaperone de transport vacuolaire 4 (Vtc4). Nous avons identifié un homologue de Vtc4 chez les Trypanosomatidae, et avons donc décidé d'examiner sa fonction dans le métabolisme du polyP chez Leishmania. En éliminant l'expression de Vtc4 chez L. major et L. guyanensis, nous avons pu démontrer qu'il est indispensable pour la production de polyP chez Leishmania. De plus, nous avons constaté que ces parasites possèdent des chaînes de polyP allant de trois jusqu'à environ 300 résidus de phosphate. Le taux de polyP dans la cellule est précisément régulé et varie entre un très haut niveau durant la phase proliférative des promastigotes à un niveau bas en phase stationnaire tardive, alors que l'expression de Vtc4p reste stable. Dans les amastigotes intracellulaires, seulement des petites quantités de polyP et de Vtc4p sont détectées. En outre, l'absence de Vc4p et de polyP n'a pas d'effet significatif sur les infections in vivo de souris, ce qui indique que le polyP n'est pas nécessaire au développement de la leishmaniose. Ceci suggère que Vtc4p n 'est pas une bonne cible pour le développement de nouveaux traitements contre Leishmania. "Néanmoins, la présence du polyP favorise fortement la survie du parasite suite à un choc de température (37°C) et aide ainsi à sa persistance intracellulaire pendant les premiers jours d'infection de macrophages. En résumé, nos résultats indiquent que si le polyP a peu d'importance pendant l'infection et le développement de la leishmaniose chez la souris, il est par contre crucial pour l'adaptation à des situations de stress comme l'augmentation de la température. Le fait que le polyP a été conservé dans tous les organismes durant l'évolution suggère toutefois que cette molécule joue un rôle fondamental. Etant donné que l'absence de polyP n'a pas d'effet sur la survie des amastigotes, il pourrait être plus important dans la forme promastigote infectant la mouche des sables. - The unicellular protozoan parasite Leishmania is the causative agent of the human disease leishmaniasis, which can range from self-healing skin lesions to fatal visceral lesions. The parasite is transmitted from the insect vector to the mammalian host when the sand fly takes its blood meal and exists in an extra- and an intracellular form, respectively. The disease is estimated to affect 12 million people in 98 countries and currently available drug treatments are of relatively low potency and/or high toxicity. Thus, investigating parasite survival mechanisms and parasite adaptation to the two host environments contributes to the general understanding of Leishmania propagation and might therefore help to develop future treatments or preventions. All living cells, including Leishmania, contain a negatively charged polymer of a few up to several hundred phosphate residues. These so-called polyphosphates (polyPs) serve as an energy source and phosphate reservoir. In some organisms, polyP is also involved in adaptation to stresses and virulence of pathogens. Therefore we were interested in investigating the importance of polyP in Leishmania parasites. Recently, an eukaryotic enzyme responsible for polyP synthesis has been identified as the vacuolar transporter chaperone 4 (Vtc4) in yeast. We, and others, found a Vtc4 homologue in trypanosomatids and decided to examine its potential function in polyP metabolism. By generating VTC4 knock-out cell lines in L. major and Vtc4 knock-down cell lines in L. guyanensis, we were able to demonstrate that Vtc4p is responsible for the total amount of cellular polyP. We also observed that Leishmania polyP chain length ranges from a few up to around 300 residues and that its level is tightly regulated. PolyP abundance is highest during the logarithmic proliferating phase of promastigotes and decreases in the stationary phase, while Vtc4 protein expression remains stable during both phases. In the intracellular amastigote form, only low amounts of polyP and Vtc4p were detectable. Furthermore, absence of Vtc4p and polyP did not have a significant effect on in vivo mouse infections, indicating that polyP is not necessary for Leishmania disease progression. This suggests that Vtc4p would be a poor drug target against Leishmania infection. However, presence of the polymer strongly supported parasite survival during heat shock (37°C) and thereby promoted intracellular persistence during the first days of macrophage infections. Taken together, we found that polyP has little importance in Leishmania {in vivo) infection but that it plays a crucial role during adaptation to stress, such as heat shock. Given that polyP has been preciously conserved in all organisms during evolution it seems to play a fundamental role. Since absence of polyP does not affect amastigote survival, it might be significant for promastigote existence in the sand fly vector.

Entry regulation and intersectoral reallocation

We study how restrictions on firm entry affect intersectoral factor reallocation when openeconomies experience global economic shocks. In our theoretical framework, countries trade freelyin a range of differentiated sectors that are subject to country-specific and global shocks. Entryrestrictions are modeled as an upper bound on the introduction of new differentiated goods followingshocks. Prices and quantities adjust to clear international goods markets, and wages adjustto clear national labor markets. We show that in general equilibrium, countries with tighter entryrestrictions see less factor reallocation compared to the frictionless benchmark. In our empiricalwork, we compare sectoral employment reallocation across countries in the 1980s and 1990s withproxies for frictionless benchmark reallocation. Our results indicate that the gap between actualand frictionless reallocation is greater in countries where it takes longer to start a firm.