Will improved access to capital dampen the need for more agricultural land? A CGE analysis of agricultural capital markets and world-wide biofuel policies. Factor Markets Working Paper No. 48, May 2013

This paper analyses the consequences of enhanced biofuel production in regions and countries of the world that have announced plans to implement or expand on biofuel policies. The analysis considers biofuel policies implemented as binding blending targets for transportation fuels. The chosen quantitative modelling approach is two-fold: it combines the analysis of biofuel policies in a multi-sectoral economic model (MAGNET) with systematic variation of the functioning of capital and labour markets. This paper adds to existing research by considering biofuel policies in the EU, the US and various other countries with considerable agricultural production and trade, such as Brazil, India and China. Moreover, the application multi-sectoral modelling system with different assumptions on the mobility of factor markets allows for the observation of changes in economic indicators under different conditions of how factor markets work. Systematic variation of factor mobility indicates that the ‘burden’ of global biofuel policies is not equally distributed across different factors within agricultural production. Agricultural land, as the pre-dominant and sector-specific factor, is, regardless of different degrees of inter-sectoral or intra-sectoral factor mobility, the most important factor limiting the expansion of agricultural production. More capital and higher employment in agriculture will ease the pressure on additional land use – but only partly. To expand agricultural production at global scale requires both land and mobile factors adapted to increase total factor productivity in agriculture in the most efficient way.

Spatial aspects of trade liberalization in Colombia: A general equilibrium approach

This paper offers some preliminary steps in the marriage of some of the theoretical foundations of new economic geography with spatial computable general equilibrium models. Modelling the spatial economy of Colombia using the traditional assumptions of computable general equilibrium (CGE) models makes little sense when one territorial unit, Bogota, accounts for over one quarter of GDP and where transportation costs are high and accessibility low compared to European or North American standards. Hence, handling market imperfections becomes imperative as does the need to address internal spatial issues from the perspective of Colombia`s increasing involvement with external markets. The paper builds on the Centro de Estudios de Economia Regional (CEER) model, a spatial CGE model of the Colombian economy; non-constant returns and non-iceberg transportation costs are introduced and some simulation exercises carried out. The results confirm the asymmetric impacts that trade liberalization has on a spatial economy in which one region, Bogota, is able to more fully exploit scale economies vis--vis the rest of Colombia. The analysis also reveals the importance of different hypotheses on factor mobility and the role of price effects to better understand the consequences of trade opening in a developing economy.

Inter-jurisdictional fiscal competition: a review of the literature and policy recommendations

This paper surveys the literature on fiscal competition. We consider tax and expenditure competition in a more general set up where different jurisdictions within a federation may compete in the provision of public goods in order to attract some residents (Tiebout, 1956) and expel others (Brueckner, 1999); and/or for business. We address the vast literature on welfare gains or losses of these types of competition. Then, we discuss the empirical evidence, focusing on estimates of the sensitiveness of production factors to tax differentials and on the importance of the strategic interdependence among jurisdictions. We combine econometric studies with some case studies. Last we discuss the design of mechanisms to cope with fiscal competition, especially under a more global environment where factors become more mobile.

The balassa-samuelson hypothesis and elderly migration

We present an Overlapping Generations Model with two final goods: tradable goods are produced with a standard Cobb-Douglas production function and non-tradable goods are produced with linear production function where the only factor is labor. We maintain the fundamental assumption of factor mobility between sectors so model is consistent with the Balassa-Samuelson hypothesis. Given the general equilibrium structure of our model we can examine the effect of the saving rate on migration and non-tradable relative prices. Under this setting, we find that the elderly have incentives to migrate from economies where productivity is high to economies with low productivity because of the lower cost of living. In more general terms the elderly migration is likely to go from rich to poor countries. We also find that, for poor countries, the elderly migration has a positive effect in wages and capital accumulation.

Essays on the general equilibrium effects of barriers to trade on economic growth, foreign trade and the location of economic activity in Brazil

This work presents a fully operational interstate CGE model implemented for the Brazilian economy that tries to quantify both the role of barriers to trade on economic growth and foreign trade performance and how the distribution of the economic activity may change as the country opens up to foreign trade. Among the distinctive features embedded in the model, modeling of external scale economies, port efficiency and land-maritime transport costs provides an innovative way of dealing explicitly with theoretical issues related to integrated regional systems. In order to illustrate the role played by the quality of infrastructure and geography on the country‟s foreign and interregional trade performance, a set of simulations is presented where barriers to trade are significantly reduced. The relative importance of trade policy, port efficiency and land-maritime transport costs for the country trade relations and regional growth is then detailed and quantified, considering both short run as well as long run scenarios. A final set of simulations shed some light on the effects of liberal trade policies on regional inequality, where the manufacturing sector in the state of São Paulo, taken as the core of industrial activity in the country, is subjected to different levels of external economies of scale. Short-run core-periphery effects are then traced out suggesting the prevalence of agglomeration forces over diversion forces could rather exacerbate regional inequality as import barriers are removed up to a certain level. Further removals can reverse this balance in favor of diversion forces, implying de-concentration of economic activity. In the long run, factor mobility allows a better characterization of the balance between agglomeration and diversion forces among regions. Regional dispersion effects are then clearly traced-out, suggesting horizontal liberal trade policies to benefit both the poorest regions in the country as well as the state of São Paulo. This long run dispersion pattern, on one hand seems to unravel the fragility of simple theoretical results from recent New Economic Geography models, once they get confronted with more complex spatially heterogeneous (real) systems. On the other hand, it seems to capture the literature‟s main insight: the possible role of horizontal liberal trade policies as diversion forces leading to a more homogeneous pattern of interregional economic growth.

Latin American South-South integration and cooperation: from a regional public goods perspective

Includes bibliography

Trade Liberalization and Organizational Change

We embed a simple incomplete-contracts model of organization design in a standard two-country perfectly-competitive trade model to examine how the liberalization of product and factor markets affects the ownership structure of firms.In our model, managers decide whether or not to integrate their firms, trading off the pecuniary benefits of coordinating production decisions with the private benefits of operating in their preferred ways. The price of output is a crucial determinant of this choice, since it affects the size of the pecuniary benefits. In particular, non-integration is chosen at “low” and “high” prices, while integration occurs at moderate prices. Organizational choices also depend on the terms of trade in supplier markets, which affect the division of surplus between managers. We obtain three main results. First, even when firms do not relocate across countries, the price changes triggered by liberalization of product markets can lead to significant organizational restructuring within countries. Second, the removal of barriers to factor mobility can lead to inefficient reorganization and adversely affect consumers. Third, “deep integration” — the liberalization of both product and factor markets — leads to the convergence of organizational design across countries.

Air trapping: The major factor limiting diaphragm mobility in chronic obstructive pulmonary disease patients

Background and objective: Patients with COPD can have impaired diaphragm mechanics. A new method of assessing the mobility of the diaphragm, using ultrasound, has recently been validated. This study evaluated the relationship between pulmonary function and diaphragm mobility, as well as that between respiratory muscle strength and diaphragm mobility, in COPD patients. Methods: COPD patients with pulmonary hyperinflation (n = 54) and healthy subjects (n = 20) were studied. Patients were tested for pulmonary function, maximal respiratory pressures and diaphragm mobility using ultrasound to measure the craniocaudal displacement of the left branch of the portal vein. Results: COPD patients had less diaphragm mobility than did healthy individuals (36.5 +/- 10.9 mm vs 46.3 +/- 9.5 mm, P = 0.001). In COPD patients, diaphragm mobility correlated strongly with pulmonary function parameters that quantify air trapping (RV: r = -0.60, P < 0.001; RV/TLC: r = -0.76, P < 0.001), moderately with airway obstruction (FEV1: r = 0.55, P < 0.001; airway resistance: r = -0.32, P = 0.02) and weakly with pulmonary hyperinflation (TLC: r = -0.28, P = 0.04). No relationship was observed between diaphragm mobility and respiratory muscle strength (maximal inspiratory pressure: r = -0.11, P = 0.43; maximal expiratory pressure: r = 0.03, P = 0.80). Conclusion: The results of this study suggest that the reduction in diaphragm mobility in COPD patients is mainly due to air trapping and is not influenced by respiratory muscle strength or pulmonary hyperinflation.

A mechanism of insulin-like growth factor binding protein 2-induced cell mobility in glioma

Insulin-like growth factor binding protein 2 (IGFBP2) is a protein known to be overexpressed in a majority of glioblastoma multiforme (GBM) tumors. While it is known the IGFBP2 is involved in promoting GBM tumor cell invasion, no mechanism exists for how the protein is involved in signal transduction pathways leading to enhanced cell invasion. ^ We follow up on preliminary microarray data on IGFBP2-overexpressing GBM cells and protein sequence analysis of IGFBP2 in generating the hypothesis that IGFBP2 interacts with integnn α5 in regulating cell mobility. Microarray data showing upregulation of integrin α5 by IGFBP2 is validated and evidence of protein-protein interaction between IGFBP2 and integrin α5 is found. The exact binding domain on IGFBP2 responsible for its interaction with integrin α5 is also determined, confirming our initial findings and reaffirming that the IGFBP2/integrin α5 interaction is specific. Disruption of this interaction resulted in attenuation of IGFBP2-enhanced cell mobility. Further, we found that cell mobility is only enhanced when IGFBP2 and integrin α5 are both overexpressed and able to interact with each other. ^ We also determined fibronectin to be a critical player in the activation of the IGFBP2/integrin α5 pathway. The activation of this pathway appears to be progressive and initiates once GBM cells have sufficiently established anchorage. ^

High mobility group I(Y)-like DNA-binding domains on a bacterial transcription factor.

The bacterium Myxococcus xanthus responds to blue light by producing carotenoids. It also responds to starvation conditions by developing fruiting bodies, where the cells differentiate into myxospores. Each response entails the transcriptional activation of a separate set of genes. However, a single gene, carD, is required for the activation of both light- and starvation-inducible genes. Gene carD has now been sequenced. Its predicted amino acid sequence includes four repeats of a DNA-binding domain present in mammalian high mobility group I(Y) proteins and other nuclear proteins from animals and plants. Other peptide stretches on CarD also resemble functional domains typical of eukaryotic transcription factors, including a very acidic region and a leucine zipper. High mobility group yI(Y) proteins are known to bind the minor groove of A+T-rich DNA. CarD binds in vitro an A+T-rich element that is required for the proper operation of a carD-dependent promoter in vivo.

Structure and function of a human transcription factor TFIIIB subunit that is evolutionarily conserved and contains both TFIIB- and high-mobility-group protein 2-related domains.

Transcription factor TFIIIB plays a central role in transcription initiation by RNA polymerase III on genes encoding tRNA, 5S rRNA, and other small structural RNAs. We report the purification of a human TFIIIB-derived complex containing only the TATA-binding polypeptide (TBP) and a 90-kDa subunit (TFIIIB90) and the isolation of a cDNA clone encoding the 90-kDa subunit. The N-terminal half of TFIIIB90 exhibits sequence similarity to the yeast TFIIIB70 (BRF) and the class II transcription factor TFIIB and interacts weakly with TBP. The C-terminal half of TFIIIB90 contains a high-mobility-group protein 2 (HMG2)-related domain and interacts strongly with TBP. Recombinant TFIIIB90 plus recombinant human TBP substitute for human TFIIIB in a complementation assay for transcription of 5S, tRNA, and VA1 RNA genes, and both the TFIIB-related domain and the HMG2-related domain are required for this activity. TFIIIB90 is also required for transcription of human 7SK and U6 RNA genes by RNA polymerase III, but apparently within a complex distinct from the TBP/TFIIIB90 complex.

Effects of glutamine on the nuclear factor-kappaB signaling pathway of murine peritoneal macrophages

The aim of this study was to evaluate the effect of glutamine on the expression of proteins involved in the nuclear factor-kappaB (NF-kappa B) signaling pathway of murine peritoneal macrophages. Since glutamine is essential for the normal functioning of macrophages, it was hypothesized that in vitro glutamine supplementation would increase NF-kappa B activation. Peritoneal macrophages were pretreated with glutamine (0, 0.6, 2 and 10 mM) before incubation with lipopolysaccharide (LPS), and the effects of glutamine on the production of tumor necrosis factor-alpha and on the expression and activity of proteins involved in the NF-kappa B signaling pathway were studied by an enzyme linked immuno-sorbent assay, Western blotting, and an electrophoretic mobility shift assay. Glutamine treatment (2 and 10 mM) increased the activation of NF-kappa B in LPS-stimulated peritoneal macrophages (P < 0.05). In non-stimulated cells, glutamine treatment (2 and 10 mM) significantly reduced I kappa B-alpha protein expression (P < 0.05). Glutamine modulates NF-kappa B signaling pathway by reducing the level of I kappa B-alpha, leading to an increase in NF-kappa B within the nucleus in peritoneal macrophages.

The VCAM-1 gene that encodes the vascular cell adhesion molecule is a target of the Sry-related high mobility group box gene, Sox18

VCAM-1 (vascular cell adhesion molecule-1) and Sox18 are involved in vascular development. VCAM-1 is an important adhesion molecule that is expressed on endothelial cells and has a critical role in endothelial activation, inflammation, lymphatic pathophysiology, and atherogenesis. The Sry-related high mobility group box factor Sox18 has previously been implicated in endothelial pathologies. Mutations in human and mouse Sox18 leads to hypotrichosis and lymphedema. Furthermore, both Sox18 and VCAM-1 have very similar spatio-temporal patterns of expression, which is suggestive of crosstalk. We use biochemical techniques, cell culture systems, and the ragged opossum (RaOP) mouse model with a naturally occurring mutation in Sox18 to demonstrate that VCAM-1 is an important target of Sox18. Transfection, site-specific mutagenesis, and gel shift analyses demonstrated that Sox18 directly targeted and trans-activated VCAM-1 expression. Importantly, the naturally occurring Sox18 mutant attenuates the expression and activation of VCAM-1 in vitro. Furthermore, in vivo quantitation of VCAM-1 mRNA levels in wild type and RaOP mice demonstrates that RaOP animals show a dramatic and significant reduction in VCAM-1 mRNA expression in lung, skin, and skeletal muscle. Our observation that the VCAM-1 gene is an important target of SOX18 provides the first molecular insights into the vascular abnormalities in the mouse mutant ragged and the human hypotrichosis-lymphedematelangiectasia disorder.