Desirable role in an international duopoly model with tariffs

In this paper, we study an international market model in which the home government imposes a tariff on the imported goods. The model has two stages. In the first stage, the home government chooses an import tariff to maximize a function that cares about the home firm’s profit and the total revenue. Then, the firms engage in a Cournot or in a Stackelberg competition. We compare the results obtained in the three different ways of moving on the decision make of the firms.

Exposição de pequenos animais à hiperóxia: um modelo para estudo do papel do músculo liso na hiper reactividade brônquica = Hyperoxia - a model to syudy the role of airway smooth muscle on bronchial hyperresponsiveness

Revista Portuguesa de Pneumologia. VIII(3): 223-235.

The role of functional polymorphisms in immune response genes as biomarkers of BCG Immunotherapy outcome in bladder cancer: Establishment of a predictive profile in a Southern Europe population

OBJECTIVE: To evaluate the predictive value of genetic polymorphisms in the context of BCG immunotherapy outcome and create a predictive profile that may allow discriminating the risk of recurrence. MATERIAL AND METHODS: In a dataset of 204 patients treated with BCG, we evaluate 42 genetic polymorphisms in 38 genes involved in the BCG mechanism of action, using Sequenom MassARRAY technology. Stepwise multivariate Cox Regression was used for data mining. RESULTS: In agreement with previous studies we observed that gender, age, tumor multiplicity and treatment scheme were associated with BCG failure. Using stepwise multivariate Cox Regression analysis we propose the first predictive profile of BCG immunotherapy outcome and a risk score based on polymorphisms in immune system molecules (SNPs in TNFA-1031T/C (rs1799964), IL2RA rs2104286 T/C, IL17A-197G/A (rs2275913), IL17RA-809A/G (rs4819554), IL18R1 rs3771171 T/C, ICAM1 K469E (rs5498), FASL-844T/C (rs763110) and TRAILR1-397T/G (rs79037040) in association with clinicopathological variables. This risk score allows the categorization of patients into risk groups: patients within the Low Risk group have a 90% chance of successful treatment, whereas patients in the High Risk group present 75% chance of recurrence after BCG treatment. CONCLUSION: We have established the first predictive score of BCG immunotherapy outcome combining clinicopathological characteristics and a panel of genetic polymorphisms. Further studies using an independent cohort are warranted. Moreover, the inclusion of other biomarkers may help to improve the proposed model.

The role of IFNγ in higher brain function: in health and under chronic stress

Tese de Doutoramento em Ciências da Saúde

Childhood history of abuse and child abuse potential: the role of parent’s gender and timing of childhood abuse

It has been suggested that being physically abused leads to someone becoming a perpetrator of abuse which could be associated to parents' gender, timing of the physical abuse and specific socio-demographic variables. This study aims to investigate the role the parents' gender, timing of childhood abuse and socio-demographic variables on the relationship between parents' history of childhood physical abuse and current risk for children. The sample consisted of 920 parents (414 fathers, 506 mothers) from the Portuguese National Representative Study of Psychosocial Context of Child Abuse and Neglect who completed the Childhood History Questionnaire and the Child Abuse Potential Inventory. The results showed that fathers had lower current potential risk of becoming physical abuse perpetrators with their children than mothers although they did not differed in their physical victimization history. Moreover, the risk was higher in parents (both genders) with continuous history of victimization than in parents without victimization. Prediction models showed that for fathers and mothers separately similar socio-demographic variables (family income, number of children at home, employment status and marital status) predicted the potential risk of becoming physical abuses perpetrators. Nevertheless, the timing of victimization was different for fathers (before 13 years old) and mothers (after 13 years old). Then our study targets specific variables (timing of physical abuse, parents' gender and specific socio-demographic variables), which may enable professionals to select groups of parents at greater need of participating in abuse prevention programs.

Use of a human-like low-grade bacteremia model of experimental endocarditis to study the role of Staphylococcus aureus adhesins and platelet aggregation in early endocarditis.

Animal models of infective endocarditis (IE) induced by high-grade bacteremia revealed the pathogenic roles of Staphylococcus aureus surface adhesins and platelet aggregation in the infection process. In humans, however, S. aureus IE possibly occurs through repeated bouts of low-grade bacteremia from a colonized site or intravenous device. Here we used a rat model of IE induced by continuous low-grade bacteremia to explore further the contributions of S. aureus virulence factors to the initiation of IE. Rats with aortic vegetations were inoculated by continuous intravenous infusion (0.0017 ml/min over 10 h) with 10(6) CFU of Lactococcus lactis pIL253 or a recombinant L. lactis strain expressing an individual S. aureus surface protein (ClfA, FnbpA, BCD, or SdrE) conferring a particular adhesive or platelet aggregation property. Vegetation infection was assessed 24 h later. Plasma was collected at 0, 2, and 6 h postinoculation to quantify the expression of tumor necrosis factor (TNF), interleukin 1α (IL-1α), IL-1β, IL-6, and IL-10. The percentage of vegetation infection relative to that with strain pIL253 (11%) increased when binding to fibrinogen was conferred on L. lactis (ClfA strain) (52%; P = 0.007) and increased further with adhesion to fibronectin (FnbpA strain) (75%; P < 0.001). Expression of fibronectin binding alone was not sufficient to induce IE (BCD strain) (10% of infection). Platelet aggregation increased the risk of vegetation infection (SdrE strain) (30%). Conferring adhesion to fibrinogen and fibronectin favored IL-1β and IL-6 production. Our results, with a model of IE induced by low-grade bacteremia, resembling human disease, extend the essential role of fibrinogen binding in the initiation of S. aureus IE. Triggering of platelet aggregation or an inflammatory response may contribute to or promote the development of IE.

The Role of model uncertainty and learning in the U.S. postwar policy response to oil prices

This paper studies optimal monetary policy in a framework that explicitly accounts for policymakers' uncertainty about the channels of transmission of oil prices into the economy. More specfically, I examine the robust response to the real price of oil that US monetary authorities would have been recommended to implement in the period 1970 2009; had they used the approach proposed by Cogley and Sargent (2005b) to incorporate model uncertainty and learning into policy decisions. In this context, I investigate the extent to which regulator' changing beliefs over different models of the economy play a role in the policy selection process. The main conclusion of this work is that, in the specific environment under analysis, one of the underlying models dominates the optimal interest rate response to oil prices. This result persists even when alternative assumptions on the model's priors change the pattern of the relative posterior probabilities, and can thus be attributed to the presence of model uncertainty itself.

Using group role-playing games with gifted children and adolescents: A psychosocial intervention model

Gifted children develop asynchronously, often advanced for their age cognitively, but at or between their chronological and mental ages socially and emotionally (Robinson, 2008). In order to help gifted children and adolescents develop and practice social and emotional self-regulation skills, we investigated the use of an Adlerian play therapy approach during pen-and-paper role-playing games. Additionally, we used Goffman's (1961, 1974) social role identification and distance to encourage participants to experiment with new identities. Herein, we propose a psychosocial model of interactions during role-playing games based on Goffman's theory and Adlerian play therapy techniques, and suggest that role-playing games are an effective way of intervening with gifted children and adolescents to improve their intra- and interpersonal skills. We specifically targeted intrapersonal skills of exercising creativity, becoming self-aware, and setting individual goals by raising participants' awareness of their privately logical reasons for making decisions and their levels of social interest. We also targeted their needs and means of seeking significance in the group to promote collaboration and interaction skills with other gifted peers through role analysis, embracement, and distancing. We report results from a case study and conclude that role-playing games deserve more attention, both from researchers and clinical practitioners, because they encourage change while improving young clients' social and emotional development.

The role of C-Jun N-terminal kinase in a mouse model of intracerebral hemorrhage

Background: Intracerebral hemorrhage (ICH) is a subtype of stroke characterized by a haematoma within the brain parenchyma resulting from blood vessel rupture and with a poor outcome. In ICH, the blood entry into the brain triggers toxicity resulting in a substantial loss of neurons and an inflammatory response. At the same time, blood-brain barrier (BBB) disruption increases water content (edema) leading to growing intracranial pressure, which in turn worsens neurological outcome. Although the clinical presentation is similar in ischemic and hemorrhagic stroke, the treatment is different and the stroke type needs to be determined beforehand by imaging which delays the therapy. C-Jun N-terminal kinases (JNKs) are a family of kinases activated in response to stress stimuli and involved in several pathways such as apoptosis. Specific inhibition of JNK by a TAT-coupled peptide (XG-102) mediates strong neuroprotection in several models of ischemic stroke in rodents. Recently, we have observed that the JNK pathway is also activated in a mouse model of ICH, raising the question of the efficacy of XG-102 in this model. Method: ICH was induced in the mouse by intrastriatal injection of bacterial collagenase (0,1 U). Three hours after surgery, animals received an intravenous injection of 100 mg/kg of XG-102. The neurological outcome was assessed everyday until sacrifice using a score (from 0 to 9) based on 3 behavioral tests performed daily until sacrifice. Then, mice were sacrificed at 6 h, 24 h, 48 h, and 5d after ICH and histological studies performed. Results: The first 24 h after surgery are critical in our ICH mice model, and we have observed that XG-102 significantly improves neurological outcome at this time point (mean score: 1,8 + 1.4 for treated group versus 3,4+ 1.8 for control group, P<0.01). Analysis of the lesion volume revealed a significant decrease of the lesion area in the treated group at 48h (29+ 11mm3 in the treated group versus 39+ 5mm3 in the control group, P=0.04). XG-102 mainly inhibits the edema component of the lesion. Indeed, a significant inhibition Journal of Cerebral Blood Flow & Metabolism (2009) 29, S490-S493 & 2009 ISCBFM All rights reserved 0271-678X/09 $32.00 www.jcbfm.com of the brain swelling was observed in treated animals at 48h (14%+ 13% versus 26+ 9% in the control group, P=0.04) and 5d (_0.3%+ 4.5%versus 5.1+ 3.6%in the control group, P=0.01). Conclusions: Inhibition of the JNK pathway by XG- 102 appears to lead to several beneficial effects. We can show here a significant inhibition of the cerebral edema in the ICH model providing a further beneficial effect of the XG-102 treatment, in addition to the neuroprotection previously described in the ischemic model. This result is of interest because currently, clinical treatment for brain edema is limited. Importantly, the beneficial effects observed with XG-102 in models of both stroke types open the possibility to rapidly treat stroke patients before identifying the stroke subtype by imaging. This will save time which is precious for stroke outcome.

The role of Toll-like Receptor (TLR) 9 in the development of a T-helper (Th)1/Th2 response in the murine model of infection with " Leishmania major "

1.1 SUMMARY The role of the non-specific innate immune system is as important as the elaboration of the adaptive immune system in the initiation of an immune response to pathogens. The role of the Toll-like receptors (TLRs) in the innate immune response to virus and bacterial pathogens is widely recognised, however, little is known about the role of TLRs in host defence against eukaryotic pathogens. Immunologic investigations on the marine model of infection with Leishmania major (L. major) have correlated the outcome of the disease with expansion of different subsets of CD4+ cells, designated Th1 and Th2. The resistance of C57BL/6, CBA and C3H/He mice is linked with an IL-12 driven Th1 response. In BALB/c mice the susceptibility correlates with an IL-4 driven Th2 response. The initial event promoting the development of a Th1 or Th2 response still remains elusive. Recently, the contribution of the TLR signalling pathway in the innate and acquired immune response to infection with the intracellular protozoan parasite L. major has been demonstrated. Thus, the purpose of this study is to determine whether TLRs may play a role in influencing the outcome of the infection by directing the development of a Th1 or a Th2 response during infection with L, major parasites, in resistant C57BL/6 and susceptible BALB/c mice, respectively. We demonstrated that MyD88, the major TLR adaptor molecule is necessary for C57BL/6 to develop a resistant Th1 response following L. major infection. Our data show the essential role of MyD88 in the establishment of a protective Th1 response. We subsequently aimed to determine which TLRs may be involved in the protective response. Since TLR2 and TLR4 have shown to have a potential role for Leishmania recognition, we analysed the course of infection in TLR2 and TLR4 deficient mice on a C57BL/6 resistant background following L. major infection. Our results clearly demonstrate that TLR2 or TLR4 aze dispensable to control the outcome of the disease as the TLR2 and TLR4 knockout mice developed a protective Th1 response. With the aim of determining a potential TLR candidate important in the initiation of the Thl response, we assessed the mRNA expression of different TLRs (TLR1 to TLR9) using quantitative real-time RT-PCR at different time points during the first week of infection. The results clearly showed an upregulation of TLR7 and TLR9 mRNA expression during the early phase of infection in resistant C57BL/6 mice but not in susceptible BALB/c mice. To provide in vivo evidence for the role for, these TLRs in the outcome of cutaneous leishmaniasis, studies using TLR7 and TLR9 deficient mice on a resistant C57BL/6 background were performed. The TLR7 deficient mice developed a resistance phenotype that was comparable with C57BL/6 wild type mice. Thus, the presence of TLR7 is not indispensable for the development of a Th1 response and resistance to infection. On the contrary, TLR9 deficient mice on the C57BL/6 resistant background showed high variability in the outcome of the disease. Although some mice behave as resistant C57BL/6 mice, half of them developed high lesion following infection and showed a decrease in IFN-γ production and an increase in IL-4 as compared to wild type mice. These results suggest that TLR9 may be involved in the control of infection. To test the hypothesis that regulatory T cells (Treg) are playing a role in the high variability in the disease outcome in TLR9 deficient mice, depletion of CD4+CD25+ T cells with a specific antibody three days before infection with L. major were performed Interestingly, these treated mice developed large lesions, low IL-4 and decreased IFN-γ producion when compared to untreated mice. A better understanding of the mechanism by which Treg cells influence the outcome of the disease in TLR9 deficient mice following L. major infection is currently under investigation. Altogether, this study demonstrates the importance of TLR9 in the induction of a protective T'h1 response, a process that is involved in the resolution of the lesion induced by L. major infection. 1.2 RÉSUMÉ Le rôle de la réponse immunitaire innée a longtemps été négligé quant à l'impact qu'elle pourrait avoir dans l'initiation d'une réponse immune adaptative efficace dirigée contre un pathogène. Si l'importance des récepteurs Toll-like (TLR) du système inné dans la reconnaissance des virus et bactéries a été démontrée, son rôle dans la défense contre les pathogènes eucaryotes reste encore très élusif. Récemment, il a été montré que les voies de signalisation provenant de l'activation des TLRs pouvaient initier la réponse immunitaire innée et adaptative après une infection avec le parasite protozoaire Leishmania major (L. major). Dans un modèle marin d'infection avec L. major alors que la plupart des souches de souris telles que C57BL/6 sont résistantes à l'infection et développent une réponse immunitaire de type T helper 1 (Th1) induite par IL-12, peu de souches dont les BALB/c sont sensibles et développent une réponse Th2 induite par IL-4. La différentiation Th1/Th2 est un événement qui prend place de manière définitive lors de la première semaine après infection. Les événements précoces promouvant le développement d'une réponse Th1 ou Th2 n'étant pas connus, l'objectif de ce travail a été de démontrer un rôle des TLRs dans l'initiation d'une réponse immune innée et adaptative suite à l'infection par L. major. Nous avons démontré que MyD88, une molécule importante dans le processus de signalisation des TLRs, est nécessaire pour que les souris résistantes C57BL/6 développent une réponse Th1 protectrice. L'importance du rôle de TLR2 et TLR4 dans la reconnaissance du parasite Leishmania ayant été démontrée, nous avons privilégié l'analyse de la réponse immunitaire suite à une infection in vivo de souris déficiente en TLR2 ou TLR4 sur un fond génétique résistant. Les résultats obtenus montrent que la présence de ces récepteurs n'est pas indispensable pour le contrôle de l'infection et la polarisation d'une réponse Th1 caractéristique de la résistance à L. major. Cependant d'autres TLRs peuvent aussi activer la voie de signalisation MyD88 dépendante. L'expression de l'ARNm des différents TLRs dans les ganglions drainant de souris sensibles et résistantes pendant la première semaine d'infection a été déterminée par PCR quantitative en temps réel. Les résultats obtenus montrent que l'ARNm de TLR7 et TLR9 était régulé positivement suite à l'infection par L. major chez les souris résistantes C57BL/6 alors qu'aucune modulation n'était détectable chez les souris sensibles BALB/c. Le rôle des récepteurs TLR7 et TLR9 a donc été évalué par l'infection par L. major des souris déficientes en TLR7 et TLR9 sur fond génétique C57BL/6. Nos résultats ont clairement démontré que les souris déficientes en TLR7 montrent une réponse immunitaire identique à celle des souris résistantes C57BL/6, signifiant que TLR7 n'est pas indispensable au développement d'une Th1 ainsi qu'au contrôle de la parasitémie. Paz contre, les souris déficientes en TLR9 sur un fond génétique résistant ont montré une grande variabilité dans la réponse à l'infection. En effet, la moitié des souris deviennent sensibles à l'infection, ceci étant associé à une diminution dans la production d'IFN-γ et à une augmentation de la production d'IL-4. Ces résultats suggèrent que TLR9 est impliqué dans le contrôle de la lésion et de la réponse immunitaire suite à l'infection avec L. major. Cependant les résultats avec les souris déficientes en TLR9 montrant une grande hétérogénéité et une balance Th1/Th2 instable, nous avons émis l'hypothèse que les cellules T régulatrices pouvaient être impliquées dans ce phénomène. Nous avons effectivement constaté qu'après déplétion des cellules CD4+CD25+, les souris déficientes en TLR9 développent des lésions aussi grandes que les souris BALB/c après infection par L. major. Cependant le nombre de parasites reste le même que chez les souris C57BL/6. De plus la production d'IL-4 ainsi que celle d'IFN-γ reste extrêment bas. Les mécanismes régulateurs impliqués dans ce processus sont en cours d'analyse. Ce travail met en évidence l'importance du TLR9 dans le développement d'une réponse Th1 lors d'une infection avec L. major, un processus nécessaire pour la résistance à l'infection. 1.3 RESUME POUR UN LARGE PUBLIC La leishmaniose est une maladie parasitaire répandue dans le monde entier et touchant plus de 88 pays. L'incidence mondiale de la leishmaniose cutanée et de 1 à 1,5 million de nouveaux cas par année. Plus de 12 millions de personnes sont affectées par la maladie et 350 millions de personnes sont une population à risque. Un modèle marin d'infection avec Leishmania major (L. major) a été établi qui reproduit plusieurs tableaux cliniques observés dans le cas de la leishmaniose cutanée chez l'homme. L'analyse de la réponse immunitaire dans les souris infectées par L. major a permis de distinguer deux groupes : les souris de la plupart des souches telles que C57BL/6 sont résistantes à l'infection et développent une réponse immunitaire de type T helper 1 (Th1), alors que quelques souches dont les BALB/c sont sensibles et développent une réponse de type Th2. La réponse immune adaptative dans le modèle d'infection avec L. major à été largement étudiée. Cependant, les événements précoces déterminants pour le développement d'une réponse Th1 ou Th2 restent encore très flous. Récemment, plusieurs publications ont montré que les récepteurs Toll-like (TLR) peuvent contribuer à l'initiation de la réponse immunitaire lors d'une infection avec le parasite intracellulaire L. major. Dans ce travail de thèse, nous avons étudié le rôle de MyD88, une molécule importante dans le processus de signalisation des TLRs, dans la réponse immune suite à une infection avec L. major. En l'absence de MyD88, les souris normalement résistantes à l'infection avec L. major deviennent sensibles et développent des lésions importantes. Ces souris ne sont plus capables de développer une réponse Thl, normalement caractéristique de leur phénotype résistant. Nous avons ensuite tenté de comprendre quels TLRs, plus précisément, pouvait être impliqué dans ce processus. Malgré quelques évidences démontrant que TLR2 et TLR4 pouvaient avoir un rôle important dans l'initiation d'une réponse immunitaire adaptative à Leishmania, nous avons montré que, in vivo après infection avec L. major, la déficience d'un de ces récepteurs n'était pas suffisante à faire basculer la réponse immunitaire. Les souris C57BL/6 déficient en TLR2 ou TLR4 peuvent parfaitement contrôler l'évolution de la maladie. De plus, ces souris, malgré l'absence de TLR2 ou TLR4, sont capables de monter une parfaite réponse Thl. Etant donné que TLR2 et TLR4 n'étaient pas essentiels pour la résistance à la maladie, nous avons analysé les TLRs, parmi les 12 décrits qui pouvaient être indispensables au développement d'une réponse de type Th1 associée à la résistance à l'infection par Leishmania. Nos expériences ont montré que l'expression de l'ARN messager (ARNm) de TLR7 et TLR9 était modulée suite à l'infection par L. major chez la souris résistante C57BL/6 alors qu'aucune modulation n'était visible chez les souris sensible BALB/c. Pensant que ces TLRs pourraient jouer un rôle dans la réponse immunitaire au parasite, nous avons étudié l'évolution de l'infection dans les souris déficientes en TLR7 et TLR9. Nos résultats ont clairement démontré que TLR7 n'était pas indispensable à la résistance au parasite alors que l'absence de TLR9 avait des conséquences radicales sur le contrôle de la lésion et de la réponse immunitaire suite à l'infection avec L. major. Ce travail révèle ainsi l'importance du TLR9 dans le développement d'une réponse Th1 lors d'une infection avec L. major, un processus nécessaire pour la résistance à l'infection. Il est a noté que nos résultats sont en accord avec le fait que les motifs CpG, qui sont des immunostimulateurs interagissant avec le TLR9, ont une activité adjuvante importante dans la préparation de vaccins contre la leishmaniose. Une meilleure compréhension des mécanismes immunologiques impliquant le TLR9 dans la reconnaissance du parasite est alors indispensable pour le développement de vaccins thérapeutiques efficaces.

Dispensable role of myeloid differentiation primary response gene 88 (MyD88) and MyD88-dependent toll-like receptors (TLRs) in a murine model of osteoarthritis.

OBJECTIVES: The aim of our study was to evaluate the role of cell-membrane expressed TLRs and the signaling molecule MyD88 in a murine model of OA induced by knee menisectomy (surgical partial removal of the medial meniscus [MNX]). METHODS: OA was induced in 8-10weeks old C57Bl/6 wild-type (WT) female (n=7) mice and in knockout (KO) TLR-1 (n=7), -2 (n=8), -4 (n=9) -6 (n=5), MyD88 (n=8) mice by medial menisectomy, using the sham-operated contralateral knee as a control. Cartilage destruction and synovial inflammation were evaluated by knee joint histology using the OARSI scoring method. Apoptotic chondrocytes and cartilage metabolism (collagen II synthesis and MMP-mediated aggrecan degradation) were analyzed using immunohistochemistry. RESULTS: Operated knees exhibited OA features at 8weeks post-surgery compared to sham-operated ones. In menisectomized TLR-1, -2, -4, and -6 deficient mice, cartilage lesions, synovial inflammation and cartilage metabolism were similar to that in operated WT mice. Accordingly, using the same approach, we found no significant protection in MyD88-deficient mice in terms of OA progression as compared to WT littermates. CONCLUSIONS: Deficiency of TLRs or their signalling molecule MyD88 did not impact on the severity of experimental OA. Our results demonstrate that MyD88-dependent TLRs are not involved in this murine OA model. Moreover, the dispensable role of MyD88, which is also an adaptor for IL-1 receptor signaling, suggests that IL-1 is not a key mediator in the development of OA. This latter hypothesis is strengthened by the lack of efficiency of IL-1β antagonist in the treatment of OA.

Role of islet microRNAs in diabetes: which model for which question?

MicroRNAs are important regulators of gene expression. The vast majority of the cells in our body rely on hundreds of these tiny non-coding RNA molecules to precisely adjust their protein repertoire and faithfully accomplish their tasks. Indeed, alterations in the microRNA profile can lead to cellular dysfunction that favours the appearance of several diseases. A specific set of microRNAs plays a crucial role in pancreatic beta cell differentiation and is essential for the fine-tuning of insulin secretion and for compensatory beta cell mass expansion in response to insulin resistance. Recently, several independent studies reported alterations in microRNA levels in the islets of animal models of diabetes and in islets isolated from diabetic patients. Surprisingly, many of the changes in microRNA expression observed in animal models of diabetes were not detected in the islets of diabetic patients and vice versa. These findings are unlikely to merely reflect species differences because microRNAs are highly conserved in mammals. These puzzling results are most probably explained by fundamental differences in the experimental approaches which selectively highlight the microRNAs directly contributing to diabetes development, the microRNAs predisposing individuals to the disease or the microRNAs displaying expression changes subsequent to the development of diabetes. In this review we will highlight the suitability of the different models for addressing each of these questions and propose future strategies that should allow us to obtain a better understanding of the contribution of microRNAs to the development of diabetes mellitus in humans.

The role of interbank markets in monetary policy: A model with rationing

This paper analyses the impact of asymmetric information in the interbankmarket and establishes its crucial role in the microfoundations of the monetarypolicy transmission mechanism. We show that interbank market imperfectionsinduce an equilibrium with rationing in the credit market. This has two majorimplications: first, it reconciles the irresponsiveness of business investment to theuser cost of capital with the large impact of monetary policy (magnitude effect)and, second, it shows that banks liquidity positions condition their reaction tomonetary policy (Kashyap and Stein liquidity effect).