The effects of government deficit on equilibrium real exchange rates and stock prices

This paper studies the effect of government deficits on equilibrium real exchange rates and stock prices. The theoretical part modifies a two-country cash-in-advance model like used in Lucas(1982) and Sargent(1987) in order to accommodate an exchange rate market and a government that pursues fiscal and monetary policy targets. The implied result is that unanticipated shocks in government deficits raise expectations of both taxes and inflation and, therefore, are associated with real exchange rate devaluations and lower stock prices. This finding is strongly supported by empirical evidence for a group of 19 countries, representing 76% of world production

Inglorious revolution : sovereign debt, tropical credibility, and financial underdevelopment in imperial Brazil

In 1824 the creation of institutions that constrained the monarch’s ability to unilaterally tax, spend, and debase the currency put Brazil on a path toward a revolution in public finance, roughly analogous to the financial consequences of England’s Glorious Revolution. This credible commitment to honor sovereign debt resulted in successful long-term funded borrowing at home and abroad from the 1820s through the 1880s that was unrivalled in Latin America. Some domestic bonds, denominated in the home currency and bearing exchange clauses, eventually circulated in European financial markets. The share of total debt accounted for by long-term funded issues grew, and domestic debt came to dominate foreign debt. Sovereign debt yields fell over time in London and Rio de Janeiro, and the cost of new borrowing declined on average. The market’s assessment of the probability of default tended to decrease. Imperial Brazil enjoyed favorable conditions for borrowing, and escaped the strong form of “original sin” stressed by recent work on sovereign debt. The development of vibrant private financial markets did not, however, follow from the enhanced credibility of government debt. Private finance in Imperial Brazil suffered from politicized market interventions that undermined the development of domestic capital markets. Private interest rates remained high, entry into commercial banking was heavily restricted, and limited-liability joint-stock companies were tightly controlled. The Brazilian case provides a powerful counterexample to the general proposition of North and Weingast that institutional changes that credibly commit the government to honor its obligations necessarily promote the development of private finance. The very institutions that enhanced the credibility of sovereign debt permitted the systematic repression of private financial development. In terms of its consequences for domestic capital markets, the liberal Constitution of 1824 represented an “inglorious” revolution.

Inflation targeting, credibility and coordination aspects

There are plenty of economic studies pointing out some requirements, like the inexistence of fiscal dominance, for inflation targeting framework be implemented in successful (credible) way. Essays on how public targets could be used in the absence of such requirements are unusual. In this papel' we appraise how central banks could use inflation targeting before soundness economic fundamentaIs have been achieved. First, based on concise framework, where confidence crises and imperfect information are neglected, we conclude that less ambitious (greater) target for inflation increases the credibility in the precommitment. Optimal target is higher than the one obtained using the Cukierman-Liviatan [7] model, where increasing credibility effect is not considered. Second, extending the model to make confidence crises possible, multiple equilibria solutions becomes possible too. In this case, to set greater targets for inflation may stimulate confidence crises and reduce the policymaker credibility. On the other hand, multiple (bad) equilibria may be avoided. The optimal target depends on the likelihood of each equilibrium be selected. Finally, when perturbing common knowledge uniqueness is restored even considering confidence crises, as in Morris-Shin[ 14]. The first result, i.e. less ambitious target for inflation increases credibility in precommitment, is also recovered. Adding a precise public signal, cOOl'dinated self-fulfilling actions and equilibrium multiplicity may still exist for some lack of common knowledge (as in Angeleto and Weming[l]). In this case, to set greater targets for inflation may stimulate confidence crisis again, reducing the policymaker credibility. From another aspect, multiple (bad) equilibria may be avoided. Optimal policy prescriptions depend on the likelihood of each equilibrium be selected. Results also indicate that more precise public information may open the door for bad equilibrium, contrary to the conventional wisdom that more central oank transparency is always good when considering inflation targeting framework.

Indicadores fisiológicos da interação entre deficit hídrico e acidez do solo em cana-de-açúcar

O objetivo deste trabalho foi avaliar os indicadores fisiológicos da interação entre deficit hídrico e acidez do solo em plantas jovens de cana-de-açúcar. As plantas foram submetidas a três tratamentos de disponibilidade hídrica, medidos em percentagem de capacidade de campo (CC) - sem estresse (70% CC), estresse moderado (55% CC) e estresse severo (40% CC); e três tratamentos de acidez no solo, medidos em termos de saturação por bases (V) - baixa acidez (V = 55%), média acidez (V = 33%) e alta acidez (V = 23%). O experimento foi realizado em casa de vegetação a 29,7±4,3ºC e 75±10% UR. O delineamento experimental utilizado foi o de blocos ao acaso, em esquema fatorial 3x3, com quatro repetições. Após 60 dias, foram determinados os teores de solutos compatíveis - trealose, glicina betaína e prolina - na folha diagnóstico e o crescimento inicial da parte aérea. Os solutos compatíveis trealose, glicina betaína e prolina são indicadores do efeito da interação dos estresses hídrico e ácido no solo. O acúmulo dos solutos compatíveis nos tecidos foliares das plantas não é capaz de impedir a redução na produção de matéria seca da cana-de-açúcar, resultante do agravamento nas condições de disponibilidade hídrica e de acidez no solo.

Sugarcane genes differentially expressed during water deficit

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

Fiscal policy contradiction: a perspective on Brazil and Mexico

The aim of this paper is to discuss the quality of fiscal policy in Brazil and Mexico and investigate whether fiscal policy influence is favorable to reduce the unemployment rate. Public spending, which has a positive effect on the level of employment when results in additional aggregate demand, may cause a negative effect on employment, if its financing depends on persistent high interest rates. Brazil and Mexico have engaged in a long effort to control public spending and to reduce the public deficit to zero. Does this policy bring a positive result to the economic activity no matter how actual public deficit has been financed? We select variables related to public budget as public sector borrowing requirements, taxes, public debt and others to form a data base. The fiscal institutional arrangement and the data allow us to evaluate the fiscal policy as a whole and to discuss the importance of credibility and reputation of the government.

H1 but not H2 histamine antagonist receptors mediate anxiety-related behaviors and emotional memory deficit in mice subjected to elevated plus-maze testing

This study investigated the role of H1 and H2 receptors in anxiety and the retrieval of emotional memory using a Trial 1/Trial 2 (T1/T2) protocol in an elevated plus-maze (EPM). Tests were performed on 2 consecutive days, designated T1 and T2. Before T1, the mice received intraperitoneal injections of saline (SAL), 20 mg/kg zolantidine (ZOL, an H2 receptor antagonist), or 8.0 or 16 mg/kg chlorpheniramine (CPA, an H1 receptor antagonist). After 40 min, they were subjected to the EPM test. In T2 (24 h later), each group was subdivided into two additional groups, and the animals from each group were re-injected with SAL or one of the drugs. In T1, the Student t-test showed no difference between the SAL and ZOL or 8 mg/kg CPA groups with respect to the percentages of open arm entries (%OAE) and open arm time (%OAT). However, administration of CPA at the highest dose of 16 mg/kg decreased %OAE and %OAT, but not locomotor activity, indicating anxiogenic-like behavior. Emotional memory, as revealed by a reduction in open arm exploration between the two trials, was observed in all experimental groups, indicating that ZOL and 8 mg/kg CPA did not affect emotional memory, whereas CPA at the highest dose affected acquisition and consolidation, but not retrieval of memory. Taken together, these results suggest that H1 receptor, but not H2, is implicated in anxiety-like behavior and in emotional memory acquisition and consolidation deficits in mice subjected to EPM testing.

Differential responses between mature and young leaves of sunflower plants to oxidative stress caused by water deficit

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

Photosynthetic limitations caused by different rates of water-deficit induction in Glycine max and Vigna unguiculata

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

Temporal dynamics of stomatal conductance of plants under water deficit: can homeostasis be improved by more complex dynamics?

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

Transpiration and stomatal resistance variations of perennial tropical crops under soil water availability conditions and water deficit

O experimento foi realizado no Departamento de Produção Vegetal da Escola Superior de Agricultura Luiz de Queiroz, ESALQ/USP, Piracicaba, São Paulo, Brasil, utilizando-se as culturas de guaranazeiro (Paullinia cupana Kunth), cafeeiro (Coffea arabica L.), cajueiro (Anacardium occidentale L.), goiabeira (Psidium guajava L.) e seringueira (Hevea brasiliensis Muell. - Arg.). No período de seca (setembro/94) e de chuvas (novembro/94), realizaram-se determinações de resistência estomática (RE) (s cm-1) e transpiração (T) (µg cm-1 s-1) nas diferentes espécies. O delineamento experimental foi em blocos casualizados com cinco repetições. A partir das análises dos dados pode-se concluir: 1. diferenças significativas entre espécies, em termos das variáveis avaliadas no período de deficiência hídrica, com valores decrescentes de resistência estomática e crescente de transpiração na seguinte ordem: guaranazeiro > cafeeiro > cajueiro > goiabeira > seringueira; 2. Nas águas as diferenças entre espécies, para ambas as variáveis, foram menos evidentes, continuando a cultura da seringueira a apresentar menor resistência estomática e maior transpiração dentre as espécies; 3. As culturas de guaraná e café apresentaram maior resistência à perda de água, em relação às demais culturas.

Water deficit affects photosynthetic induction in Bauhinia forficata Link (Fabaceae) and Esenbeckia leiocarpa Engl. (Rutaceae) growing in understorey and gap conditions

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

Physiological parameters in sugarcane cultivars submitted to water deficit

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

Gaze pursuit and arm control of adolescent males diagnosed with attention deficit hyperactivity disorder (ADHD) and normal controls: evidence of a dissociation in processing visual information of short and long duration

Three-dimensional kinematic analysis of line of gaze, arm and ball was used to describe the visual and motor behaviour of male adolescents diagnosed with attention deficit hyperactivity disorder (ADHD). The ADHD participants were tested when both on (ADHD-On) and off (ADHD-Off) their medication and compared to age-matched normal controls in a modified table tennis task that required tracking the ball and hitting to cued right and left targets. Long-duration information was provided by a pre-cue, in which the target was illuminated approximately 2 s before the serve, and short-duration information by an early-cue illuminated about 350 ms after the serve, leaving -500 ms to select the target and perform the action. The ADHD groups differed significantly from the control group in both the pre-cue and early-cue conditions in being less accurate, in having a later onset and duration of pursuit tracking, and a higher frequency of gaze on and off the ball. The use of medication significantly reduced the gaze frequency of the ADHD participants, but surprisingly this did not lead to an increase in pursuit tracking, suggesting a barrier was reached beyond which ball flight information could not be processed. The control and ADHD groups did not differ in arm movement onset, duration and velocity in the short-duration early-cue condition; in the long-duration pre-cue condition, however, the ADHD group's movement time onset and arm velocity differed significantly from controls. The results show that the ADHD groups were able to process short-duration information without experiencing adverse effects on their motor behaviour; however, long-duration information contributed to irregular movement control.