Financial Repression in a Natural Experiment: Loan Allocation and the Change in the Usury Laws in 1714

If financial deepening aids economic growth, then financial repression should be harmful. We use a natural experiment – the change in the English usury laws in 1714 – to analyze the effects of interest rate restrictions. We use a sample of individual loan transactions to demonstrate how the reduction of the legal maximum rate of interest affected the supply and demand for credit. Average loan size and minimum loan size increased strongly, and access to credit worsened for those with little ‘social capital.’ While we have no direct evidence that loans were misallocated, the discontinuity in loan receipts makes this highly likely. We conclude that financial repression can undermine the positive effects of financial deepening.

EWS-FLI-1 modulates miRNA145 and SOX2 expression to initiate mesenchymal stem cell reprogramming toward Ewing sarcoma cancer stem cells.

Cancer stem cells (CSCs) display plasticity and self-renewal properties reminiscent of normal tissue stem cells, but the events responsible for their emergence remain obscure. We recently identified CSCs in Ewing sarcoma family tumors (ESFTs) and showed that they retain mesenchymal stem cell (MSC) plasticity. In the present study, we addressed the mechanisms that underlie ESFT CSC development. We show that the EWS-FLI-1 fusion gene, associated with 85%-90% of ESFTs and believed to initiate their pathogenesis, induces expression of the embryonic stem cell (ESC) genes OCT4, SOX2, and NANOG in human pediatric MSCs (hpMSCs) but not in their adult counterparts. Moreover, under appropriate culture conditions, hpMSCs expressing EWS-FLI-1 generate a cell subpopulation displaying ESFT CSC features in vitro. We further demonstrate that induction of the ESFT CSC phenotype is the result of the combined effect of EWS-FLI-1 on its target gene expression and repression of microRNA-145 (miRNA145) promoter activity. Finally, we provide evidence that EWS-FLI-1 and miRNA-145 function in a mutually repressive feedback loop and identify their common target gene, SOX2, in addition to miRNA145 itself, as key players in ESFT cell differentiation and tumorigenicity. Our observations provide insight for the first time into the mechanisms whereby a single oncogene can reprogram primary cells to display a CSC phenotype.

The importance of relative performance feedback information: Evidence from a natural experiment using high school students

We study the effect of providing relative performance feedback information onperformance, when individuals are rewarded according to their absolute performance. Anatural experiment that took place in a high school offers an unusual opportunity to testthis effect in a real-effort setting. For one year only, students received information thatallowed them to know whether they were performing above (below) the class average aswell as the distance from this average. We exploit a rich panel data set and find that theprovision of this information led to an increase of 5% in students grades. Moreover, theeffect was significant for the whole distribution. However, once the information wasremoved, the effect disappeared. To rule out the concern that the effect may beartificially driven by teachers within the school, we verify our results using nationallevel exams (externally graded) for the same students, and the effect remains.

Debt sustainability in historical perspective: The role of fiscal repression

This article examines the debt history of two contenders for European hegemony: 16th-centurySpain and 18th-century Britain. We analyze their fiscal behavior using measures of overborrowingand fiscal policy functions. Our results suggest that stringency was not key for Britain ssuccess in avoiding default. Instead, fiscal repression allowed the United Kingdom to borrowat below-market rates, thereby outspending its continental rivals.

The benefits of limited feedback in organizations

In most firms, managers periodically assess workers' performance. Evidence suggeststhat managers withhold information during these reviews, and some observersargue that this necessarily reduces surplus. This paper assesses the validity of thisargument when workers have career concerns. Disclosure has two effects: it exposesthe worker to uncertainty about future effort levels, but allows him to use current effortto influence his employer's beliefs about future effort. The surplus-maximizingdisclosure policy reveals output realizations in the center of the distribution, butnot in the tails. Thus, it is efficient for firms to reveal some but not all performanceinformation.

Is confidence in decisions related to feedback? Evidence-and lack of evidence-from random samples of real-world managerial behavior?

Confidence in decision making is an important dimension of managerialbehavior. However, what is the relation between confidence, on the onehand, and the fact of receiving or expecting to receive feedback ondecisions taken, on the other hand? To explore this and related issuesin the context of everyday decision making, use was made of the ESM(Experience Sampling Method) to sample decisions taken by undergraduatesand business executives. For several days, participants received 4 or 5SMS messages daily (on their mobile telephones) at random moments at whichpoint they completed brief questionnaires about their current decisionmaking activities. Issues considered here include differences between thetypes of decisions faced by the two groups, their structure, feedback(received and expected), and confidence in decisions taken as well as inthe validity of feedback. No relation was found between confidence indecisions and whether participants received or expected to receivefeedback on those decisions. In addition, although participants areclearly aware that feedback can provide both confirming and disconfirming evidence, their ability to specify appropriatefeedback is imperfect. Finally, difficulties experienced inusing the ESM are discussed as are possibilities for further researchusing this methodology.

The provision of relative performance feedback information: An experimental analysis of performance and happiness

This paper studies the effect of providing relative performance feedback information onindividual performance and on individual affective response, when agents are rewardedaccording to their absolute performance. In a laboratory set-up, agents perform a realeffort task and when receiving feedback, they are asked to rate their happiness, arousaland feeling of dominance. Control subjects learn only their absolute performance, whilethe treated subjects additionally learn the average performance in the session.Performance is 17 percent higher when relative performance feedback is provided.Furthermore, although feedback increases the performance independent of the content(i.e., performing above or below the average), the content is determinant for theaffective response. When subjects are treated, the inequality in the happiness and thefeeling of dominance between those subjects performing above and below the averageincreases by 8 and 6 percentage points, respectively.

Modelling state dependence and feedback effects between poverty, employment and parental home emancipation among European youth

Youth is one of the phases in the life-cycle when some of the most decisivelife transitions take place. Entering the labour market or leaving parentalhome are events with important consequences for the economic well-beingof young adults. In this paper, the interrelationship between employment,residential emancipation and poverty dynamics is studied for eight Europeancountries by means of an econometric model with feedback effects. Resultsshow that youth poverty genuine state dependence is positive and highly significant.Evidence proves there is a strong causal effect between poverty andleaving home in Scandinavian countries, however, time in economic hardshipdoes not last long. In Southern Europe, instead, youth tend to leave theirparental home much later in order to avoid falling into a poverty state that ismore persistent. Past poverty has negative consequences on the likelihood ofemployment.

LRF-mediated Dll4 repression in erythroblasts is necessary for hematopoietic stem cell maintenance.

Hematopoietic stem cells (HSCs) are the most primitive cells in the hematopoietic system and are under tight regulation for self-renewal and differentiation. Notch signals are essential for the emergence of definitive hematopoiesis in mouse embryos and are critical regulators of lymphoid lineage fate determination. However, it remains unclear how Notch regulates the balance between HSC self-renewal and differentiation in the adult bone marrow (BM). Here we report a novel mechanism that prevents HSCs from undergoing premature lymphoid differentiation in BM. Using a series of in vivo mouse models and functional HSC assays, we show that leukemia/lymphoma related factor (LRF) is necessary for HSC maintenance by functioning as an erythroid-specific repressor of Delta-like 4 (Dll4) expression. Lrf deletion in erythroblasts promoted up-regulation of Dll4 in erythroblasts, sensitizing HSCs to T-cell instructive signals in the BM. Our study reveals novel cross-talk between HSCs and erythroblasts, and sheds a new light on the regulatory mechanisms regulating the balance between HSC self-renewal and differentiation.

Small RNA as global regulator of carbon catabolite repression in Pseudomonas aeruginosa.

In the metabolically versatile bacterium Pseudomonas aeruginosa, the RNA-binding protein Crc is involved in catabolite repression of a range of degradative genes, such as amiE (encoding aliphatic amidase). We found that a CA-rich sequence (termed CA motif) in the amiE translation initiation region was important for Crc binding. The small RNA CrcZ (407 nt) containing 5 CA motifs was able to bind the Crc protein with high affinity and to remove it from amiE mRNA in vitro. Overexpression of crcZ relieved catabolite repression in vivo, whereas a crcZ mutation pleiotropically prevented the utilization of several carbon sources. The sigma factor RpoN and the CbrA/CbrB two-component system, which is known to maintain a healthy carbon-nitrogen balance, were necessary for crcZ expression. During growth on succinate, a preferred carbon source, CrcZ expression was low, resulting in catabolite repression of amiE and other genes under Crc control. By contrast, during growth on mannitol, a poor carbon source, elevated CrcZ levels correlated with relief of catabolite repression. During growth on glucose, an intermediate carbon source, CrcZ levels and amiE expression were intermediate between those observed in succinate and mannitol media. Thus, the CbrA-CbrB-CrcZ-Crc system allows the bacterium to adapt differentially to various carbon sources. This cascade also regulated the expression of the xylS (benR) gene, which encodes a transcriptional regulator involved in benzoate degradation, in an analogous way, confirming this cascade's global role.

Macrophage migration inhibitory factor is involved in a positive feedback loop increasing aromatase expression in endometriosis.

Immune-endocrine interplay may play a major role in the pathogenesis of endometriosis. In the present study, we have investigated the interaction between macrophage migration inhibitory factor (MIF), a major pro-inflammatory and growth-promoting factor markedly expressed in active endometriotic lesions, and estradiol (E(2)) in ectopic endometrial cells. Our data showed a significant increase of MIF protein secretion and mRNA expression in endometriotic cells in response to E(2). MIF production was blocked by Fulvestrant, an estrogen receptor (ER) antagonist, and induced by ERα and ERβ selective agonists propyl-pyrazole-triol (PPT) and diarylpropionrile (DPN), respectively, thus demonstrating a specific receptor-mediated effect. Cell transfection with MIF promoter construct showed that E(2) significantly stimulates MIF promoter activity. Interestingly, our data further revealed that MIF reciprocally stimulates aromatase protein and mRNA expression via a posttranscriptional mRNA stabilization mechanism, that E(2) itself can upregulate aromatase expression, and that inhibition of endogenous MIF, using MIF specific siRNA, significantly inhibits E(2)-induced aromatase. Thus, the present study revealed the existence of a local positive feedback loop by which estrogen acts directly on ectopic endometrial cells to upregulate the expression of MIF, which, in turn, displays the capability of inducing the expression of aromatase, the key and rate-limiting enzyme for estrogen synthesis. Such interplay may have a considerable impact on the development of endometriosis.

Posttranscriptional repression of GacS/GacA-controlled genes by the RNA-binding protein RsmE acting together with RsmA in the biocontrol strain Pseudomonas fluorescens CHA0.

In the plant-beneficial soil bacterium Pseudomonas fluorescens CHA0, the production of biocontrol factors (antifungal secondary metabolites and exoenzymes) is controlled at a posttranscriptional level by the GacS/GacA signal transduction pathway involving RNA-binding protein RsmA as a key regulatory element. This protein is assumed to bind to the ribosome-binding site of target mRNAs and to block their translation. RsmA-mediated repression is relieved at the end of exponential growth by two GacS/GacA-controlled regulatory RNAs RsmY and RsmZ, which bind and sequester the RsmA protein. A gene (rsmE) encoding a 64-amino-acid RsmA homolog was identified and characterized in strain CHA0. Overexpression of rsmE strongly reduced the expression of target genes (hcnA, for a hydrogen cyanide synthase subunit; aprA, for the main exoprotease; and phlA, for a component of 2,4-diacetylphloroglucinol biosynthesis). Single null mutations in either rsmA or rsmE resulted in a slight increase in the expression of hcnA, aprA, and phlA. By contrast, an rsmA rsmE double mutation led to strongly increased and advanced expression of these target genes and completely suppressed a gacS mutation. Both the RsmE and RsmA levels increased with increasing cell population densities in strain CHA0; however, the amount of RsmA showed less variability during growth. Expression of rsmE was controlled positively by GacA and negatively by RsmA and RsmE. Mobility shift assays demonstrated specific binding of RsmE to RsmY and RsmZ RNAs. The transcription and stability of both regulatory RNAs were strongly reduced in the rsmA rsmE double mutant. In conclusion, RsmA and RsmE together account for maximal repression in the GacS/GacA cascade of strain CHA0.

Autoinduction of 2,4-diacetylphloroglucinol biosynthesis in the biocontrol agent Pseudomonas fluorescens CHA0 and repression by the bacterial metabolites salicylate and pyoluteorin.

The antimicrobial metabolite 2,4-diacetylphloroglucinol (2,4-DAPG) contributes to the capacity of Pseudomonas fluorescens strain CHA0 to control plant diseases caused by soilborne pathogens. A 2, 4-DAPG-negative Tn5 insertion mutant of strain CHA0 was isolated, and the nucleotide sequence of the 4-kb genomic DNA region adjacent to the Tn5 insertion site was determined. Four open reading frames were identified, two of which were homologous to phlA, the first gene of the 2,4-DAPG biosynthetic operon, and to the phlF gene encoding a pathway-specific transcriptional repressor. The Tn5 insertion was located in an open reading frame, tentatively named phlH, which is not related to known phl genes. In wild-type CHA0, 2, 4-DAPG production paralleled expression of a phlA'-'lacZ translational fusion, reaching a maximum in the late exponential growth phase. Thereafter, the compound appeared to be degraded to monoacetylphloroglucinol by the bacterium. 2,4-DAPG was identified as the active compound in extracts from culture supernatants of strain CHA0 specifically inducing phlA'-'lacZ expression about sixfold during exponential growth. Induction by exogenous 2,4-DAPG was most conspicuous in a phlA mutant, which was unable to produce 2, 4-DAPG. In a phlF mutant, 2,4-DAPG production was enhanced severalfold and phlA'-'lacZ was expressed at a level corresponding to that in the wild type with 2,4-DAPG added. The phlF mutant was insensitive to 2,4-DAPG addition. A transcriptional phlA-lacZ fusion was used to demonstrate that the repressor PhlF acts at the level of transcription. Expression of phlA'-'lacZ and 2,4-DAPG synthesis in strain CHA0 was strongly repressed by the bacterial extracellular metabolites salicylate and pyoluteorin as well as by fusaric acid, a toxin produced by the pythopathogenic fungus Fusarium. In the phlF mutant, these compounds did not affect phlA'-'lacZ expression and 2, 4-DAPG production. PhlF-mediated induction by 2,4-DAPG and repression by salicylate of phlA'-'lacZ expression was confirmed by using Escherichia coli as a heterologous host. In conclusion, our results show that autoinduction of 2,4-DAPG biosynthesis can be countered by certain bacterial (and fungal) metabolites. This mechanism, which depends on phlF function, may help P. fluorescens to produce homeostatically balanced amounts of extracellular metabolites.

A regulatory network for the efficient control of transgene expression.

BACKGROUND: Expression of heterologous genes in mammalian cells or organisms for therapeutic or experimental purposes often requires tight control of transgene expression. Specifically, the following criteria should be met: no background gene activity in the off-state, high gene expression in the on-state, regulated expression over an extended period, and multiple switching between on- and off-states. METHODS: Here, we describe a genetic switch system for controlled transgene transcription using chimeric repressor and activator proteins functioning in a novel regulatory network. In the off-state, the target transgene is actively silenced by a chimeric protein consisting of multimerized eukaryotic transcriptional repression domains fused to the DNA-binding tetracycline repressor. In the on-state, the inducer drug doxycycline affects both the derepression of the target gene promoter and activation by the GAL4-VP16 transactivator, which in turn is under the control of an autoregulatory feedback loop. RESULTS: The hallmark of this new system is the efficient transgene silencing in the off-state, as demonstrated by the tightly controlled expression of the highly cytotoxic diphtheria toxin A gene. Addition of the inducer drug allows robust activation of transgene expression. In stably transfected cells, this control is still observed after months of repeated cycling between the repressed and activated states of the target genes. CONCLUSIONS: This system permits tight long-term regulation when stably introduced into cell lines. The underlying principles of this network system should have general applications in biotechnology and gene therapy.

Turn-on-time statistics of modulated lasers subjected to resonant weak optical feedback

We present analytical calculations of the turn-on-time probability distribution of intensity-modulated lasers under resonant weak optical feedback. Under resonant conditions, the external cavity round-trip time is taken to be equal to the modulation period. The probability distribution of the solitary laser results are modified to give reduced values of the mean turn-on-time and its variance. Numerical simulations have been carried out showing good agreement with the analytical results.