Capital Accumulation in the Presence of Informal Credit Contracts: Does the Incentive Mechanism Work Better than Credit Rationing Under Asymmetric Information?

Credit markets with asymmetric information often prefer credit rationing as a profit maximizing device. This paper asks whether the presence of informal credit markets reduces the cost of credit rationing, that is, whether it can alleviate the impact of asymmetric information based on the available information. We used a dynamic general equilibrium model with heterogenous agents to assess this. Using Indian credit market data our study shows that the presence of informal credit market can reduce the cost of credit rationing by separating high risk firms from the low risk firms in the informal market. But even after this improvement, the steady state capital accumulation is still much lower as compared to incentive based market clearing rates. Through self revelation of each firm's type, based on the incentive mechanism, banks can diversify their risk by achieving a separating equilibrium in the loan market. The incentive mechanism helps banks to increase capital accumulation in the long run by charging lower rates and lending relatively higher amount to the less risky firms. Another important finding of this study is that self-revelation leads to very significant welfare improvement, as measured by consumptiuon equivalence.

Endogenous Growth in the Presence of Informal Credit Markets: A Comparative Analysis Between Credit Rationing and Self-Revelation Regimes

This paper examines whether the presence of informal credit markets reduces the cost of credit rationing in terms of growth. In a dynamic general equilibrium framework, we assume that firms are heterogenous with different degrees of risk and households invest in human capital development. With the help of Indian household level data we show that the informal market reduces the cost of rationing by increasing the growth rate by 0.7 percent. This higher growth rate, in the presence of an informal sector, is due to the ability of the informal market to separate the high risk from the low risk firms thanks to better information. But even after such improvement we do not get the optimum outcome. The findings, based on our second question, suggest that the revelation of firms' type, based on incentive compatible pricing, can lead to almost 2 percent higher growth rate as compared to the credit rationing regime with informal sector.

Research joint ventures and optimal R&D policy with asymmetric information

When to allow Research Joint Ventures (RJVs) or not is an importantinstrument in the development of an optimal R&D policy. Theregulator, however, is unlikely to know all the relevant informationto regulate R&D optimally. The extent to which there existappropriability problems between the firms is one such variable thatis private information to the firms in the industry. In a duopolysetting we analyze the characteristics of a second-best R&D policywhere the government can either allow RJVs or not and give lump-sumsubsidies to the parties involved. The second-best R&D policy withoutsubsidies will either block some welfare improving RJVs or allow somewelfare reducing ones. With lump-sum subsidies, the second-best policytrades off the expected subsidy cost with allowing welfare decreasingRJVs or blocking welfare increasing ones.

Electoral control in the presence of gridlocks

This article presents a game-theoretic partisan model of voting and political bargaining. In a two-period setup, voters ¯rst elect an executive incumbent and the legislators from a pool of candidates belonging to di®erent parties. Once elected, the executive and the legislature bargain over a budget. Party origin and a relevant parameter of the economy, the state of the world, in°uence the bargaining cost, such that political gridlocks may occur. At the end of the ¯rst period voters observe the outcome of bargaining but do not observe the true estate of the world, and decide whether or not to reelect the same parties for the Executive and the Legislature. The model con¯rms the very recent literature by showing that voters tend to have more °exible reelection criteria when they believe the true state of the world is likely to be unfavorable. On the other hand, when voters believe the true state of the world is likely to be favorable, they become more demanding in order to reelect the incumbents. In particular, there will be government shutdown with positive probability in equilibrium. Gridlocks occur due to the imperfect information of voters and they constitute indeed an information revelation mechanism that improves electoral control in the second period.

Liquidity Constraint and Child Labor In India: Is Market Really Incapable Of Eradicating It From Wage-Labor Households?

One way to measure the lower steady state equilibrium outcome in human capital development is the incidence of child labor in most of the developing countries. With the help of Indian household level data in an overlapping generation framework, we show that production loans under credit rationing are not optimally extended towards firms because of issues with adverse selection. More stringent rationing in the credit market creates a distortion in the labor market by increasing adult wage rate and the demand for child labor. Lower availability of funds under stringent rationing coupled with increased demand for loans induces the high risk firms to replace adult labor by child labor. A switch of regime from credit rationing to revelation regime can clear such imperfections in the labor market. The equilibrium higher wage rate elevates the household consumption to a significantly higher level than the subsistence under credit rationing and therefore higher level of human capital development is assured leading to no supply of child labor.

Triggering Of Protection Mechanism Against Phoneutria Nigriventer Spider Venom In The Brain.

Severe accidents caused by the armed spider Phoneutria nigriventer cause neurotoxic manifestations in victims. In experiments with rats, P. nigriventer venom (PNV) temporarily disrupts the properties of the BBB by affecting both the transcellular and the paracellular route. However, it is unclear how cells and/or proteins participate in the transient opening of the BBB. The present study demonstrates that PNV is a substrate for the multidrug resistance protein-1 (MRP1) in cultured astrocyte and endothelial cells (HUVEC) and increases mrp1 and cx43 and down-regulates glut1 mRNA transcripts in cultured astrocytes. The inhibition of nNOS by 7-nitroindazole suggests that NO derived from nNOS mediates some of these effects by either accentuating or opposing the effects of PNV. In vivo, MRP1, GLUT1 and Cx43 protein expression is increased differentially in the hippocampus and cerebellum, indicating region-related modulation of effects. PNV contains a plethora of Ca(2+), K(+) and Na(+) channel-acting neurotoxins that interfere with glutamate handling. It is suggested that the findings of the present study are the result of a complex interaction of signaling pathways, one of which is the NO, which regulates BBB-associated proteins in response to PNV interference on ions physiology. The present study provides additional insight into PNV-induced BBB dysfunction and shows that a protective mechanism is activated against the venom. The data shows that PNV has qualities for potential use in drug permeability studies across the BBB.

Triboelectricity In Insulating Polymers: Evidence For A Mechanochemical Mechanism.

Transfer of reaction products formed on the surfaces of two mutually rubbed dielectric solids makes an important if not dominating contribution to triboelectricity. New evidence in support of this statement is presented in this report, based on analytical electron microscopy coupled to electrostatic potential mapping techniques. Mechanical action on contacting surface asperities transforms them into hot-spots for free-radical formation, followed by electron transfer producing cationic and anionic polymer fragments, according to their electronegativity. Polymer ions accumulate creating domains with excess charge because they are formed at fracture surfaces of pulled-out asperities. Another factor for charge segregation is the low polymer mixing entropy, following Flory and Huggins. The formation of fractal charge patterns that was previously described is thus the result of polymer fragment fractal scatter on both contacting surfaces. The present results contribute to the explanation of the centuries-old difficulties for understanding the triboelectric series and triboelectricity in general, as well as the dissipative nature of friction, and they may lead to better control of friction and its consequences.

Down-regulation Of Slc8a1 As A Putative Apoptosis-evasion Mechanism By Modulation Of Calcium Levels In Penile Carcinoma.

The SLC8A1 gene, which encodes the Na(+)/Ca(2+) exchanger, plays a key role in calcium homeostasis. Our previous gene expression oligoarray data revealed SLC8A1 underexpression in penile carcinoma (PeCa). The aim of this study was to investigate whether the dysregulation of SLC8A1 expression is associated with apoptosis and cell proliferation in PeCa, via modulation of calcium concentration. The underlying mechanisms of SLC8A1 underexpression were also explored, focusing on copy number alteration and microRNA. Transcript levels of SLC8A1 gene and miR-223 were evaluated by quantitative PCR, comparing PeCa samples with normal glans tissues. SLC8A1 copy number was evaluated by microarray-based comparative genomic hybridization (array-CGH). Caspase-3 and Ki-67 immunostaining, as well as calcium distribution by Laser Ablation Imaging Inductively Coupled Plasma Mass Spectrometry [LA(i)-ICP-MS], were investigated in both normal and tumor samples. Confirming our previous data, SLC8A1 underexpression was detected in PeCa samples (P=0.001) and was not associated with gene copy number loss. In contrast, overexpression of miR-223 (P=0.002) was inversely correlated with SLC8A1 (P=0.015, r=-0.426), its putative repressor. In addition, SLC8A1 underexpression was associated with decreased calcium distribution, high Ki-67 and low caspase-3 immunoexpression in PeCa when compared with normal tissues. Down-regulation of the SLC8A1 gene, most likely mediated by its regulator miR-223, can lead to reduced calcium levels in PeCa and, consequently, to suppression of apoptosis and increased tumor cell proliferation. These data suggest that the miR-223-NCX1-calcium-signaling axis may represent a potential therapeutic approach in PeCa.

Inhibition Of Tumor Necrosis Factor-alpha And Cyclooxigenase-2 By Isatin: A Molecular Mechanism Of Protection Against Tnbs-induced Colitis In Rats.

Isatin, an indole alkaloid has been shown to have anti-microbial, anti-tumor and anti-inflammatory effects. Due to its findings, we evaluated whether this alkaloid would have any effect on TNBS-induced colitis. Animals (male Unib:WH rats, aged 8 weeks old) were induced colitis through a rectal administration of 2,4,6-trinitrobenzene sulphonic acid using a catheter inserted 8 cm into the rectum of the animals. The rats were divided into two major groups: non-colitic and colitic. The colitic group was sub-divided into 6 groups (10 animals per group): colitic non-treated, Isatin 3; 6; 12.5; 18.75 and 25 mg/kg. Our main results showed that the oral treatment with Isatin 6 and 25 mg/kg were capable of avoiding the increase in TNF-α, COX-2 and PGE₂ levels when compared to the colitic non-treated group. Interestingly, the same doses (6 and 25 mg/kg) were also capable of preventing the decrease in IL-10 levels comparing with the colitic non-treated group. The levels of MPO, (an indirect indicator of neutrophil presence), were also maintained lower than those of the colitic non-treated group. Isatin also prevented the decrease of SOD activity and increase of GSH-Px and GSH-Rd activity as well as the depletion of GSH levels. In conclusion, both pre-treatments (6 and 25 mg/kg) were capable of protecting the gut mucosa against the injury caused by TNBS, through the combination of antioxidant and anti-inflammatory properties, which, together, showed a protective activity of the indole alkaloid Isatin.

Cardioprotective Mechanism Of S-nitroso-n-acetylcysteine Via S-nitrosated Betadrenoceptor-2 In The Ldlr-/- Mice.

Previous studies from our group have demonstrated the protective effect of S-nitroso-N-acetylcysteine (SNAC) on the cardiovascular system in dyslipidemic LDLr-/- mice that develop atheroma and left ventricular hypertrophy after 15 days on a high fat diet. We have shown that SNAC treatment attenuates plaque development via the suppression of vascular oxidative stress and protects the heart from structural and functional myocardial alterations, such as heart arrhythmia, by reducing cardiomyocyte sensitivity to catecholamines. Here we investigate the ability of SNAC to modulate oxidative stress and cell survival in cardiomyocytes during remodeling and correlation with β₂-AR signaling in mediating this protection. Ventricular superoxide (O₂⁻) and hydrogen peroxide (H₂O₂) generation was measured by HPLC methods to allow quantification of dihydroethidium (DHE) products. Ventricular histological sections were stained using terminal dUTP nick-end labeling (TUNEL) to identify nuclei with DNA degradation (apoptosis) and this was confirmed by Western blot for cleaved caspase-3 and caspase-7 protein expression. The findings show that O₂⁻ and H₂O₂ production and also cell apoptosis were increased during left ventricular hypertrophy (LVH). SNAC treatment reduced oxidative stress during on cardiac remodeling, measured by decreased H₂O₂ and O₂⁻ production (65% and 52%, respectively), and a decrease in the ratio of p-Ser1177 eNOS/total eNOS. Left ventricle (LV) from SNAC-treated mice revealed a 4-fold increase in β₂-AR expression associated with coupling change to Gi; β₂-ARs-S-nitrosation (β₂-AR-SNO) increased 61%, while apoptosis decreased by 70%. These results suggest that the cardio-protective effect of SNAC treatment is primarily through its anti-oxidant role and is associated with β₂-ARs overexpression and β₂-AR-SNO via an anti-apoptotic pathway.

Mechanism of Heparin Acceleration of Tissue Inhibitor of Metalloproteases-1 (TIMP-1) Degradation by the Human Neutrophil Elastase

Heparin has been shown to regulate human neutrophil elastase (HNE) activity. We have assessed the regulatory effect of heparin on Tissue Inhibitor of Metalloproteases-1 [TIMP-1] hydrolysis by HNE employing the recombinant form of TIMP-1 and correlated FRET-peptides comprising the TIMP-1 cleavage site. Heparin accelerates 2.5-fold TIMP-1 hydrolysis by HNE. The kinetic parameters of this reaction were monitored with the aid of a FRET-peptide substrate that mimics the TIMP-1 cleavage site in pre-steady-state conditionsby using a stopped-flow fluorescence system. The hydrolysis of the FRET-peptide substrate by HNE exhibits a pre-steady-state burst phase followed by a linear, steady-state pseudo-first-order reaction. The HNE acylation step (k(2)=21 +/- 1 s(-1)) was much higher than the HNE deacylation step (k(3)=0.57 +/- 0.05 s(-1)). The presence of heparin induces a dramatic effect in the pre-steady-state behavior of HNE. Heparin induces transient lag phase kinetics in HNE cleavage of the FRET-peptide substrate. The pre-steady-state analysis revealed that heparin affects all steps of the reaction through enhancing the ES complex concentration, increasing k(1) 2.4-fold and reducing k(-1) 3.1-fold. Heparin also promotes a 7.8-fold decrease in the k(2) value, whereas the k(3) value in the presence of heparin was increased 58-fold. These results clearly show that heparin binding accelerates deacylation and slows down acylation. Heparin shifts the HNE pH activity profile to the right, allowing HNE to be active at alkaline pH. Molecular docking and kinetic analysis suggest that heparin induces conformational changes in HNE structure. Here, we are showing for the first time that heparin is able to accelerate the hydrolysis of TIMP-1 by HNE. The degradation of TIMP-1is associated to important physiopathological states involving excessive activation of MMPs.

Control of the Intracellular Redox State by Glucose Participates in the Insulin Secretion Mechanism

Background: Production of reactive oxygen species (ROS) due to chronic exposure to glucose has been associated with impaired beta cell function and diabetes. However, physiologically, beta cells are well equipped to deal with episodic glucose loads, to which they respond with a fine tuned glucose-stimulated insulin secretion (GSIS). In the present study, a systematic investigation in rat pancreatic islets about the changes in the redox environment induced by acute exposure to glucose was carried out. Methodology/Principal Findings: Short term incubations were performed in isolated rat pancreatic islets. Glucose dose- and time-dependently reduced the intracellular ROS content in pancreatic islets as assayed by fluorescence in a confocal microscope. This decrease was due to activation of pentose-phosphate pathway (PPP). Inhibition of PPP blunted the redox control as well as GSIS in a dose-dependent manner. The addition of low doses of ROS scavengers at high glucose concentration acutely improved beta cell function. The ROS scavenger N-acetyl-L-cysteine increased the intracellular calcium response to glucose that was associated with a small decrease in ROS content. Additionally, the presence of the hydrogen peroxide-specific scavenger catalase, in its membrane-permeable form, nearly doubled glucose metabolism. Interestingly, though an increase in GSIS was also observed, this did not match the effect on glucose metabolism. Conclusions: The control of ROS content via PPP activation by glucose importantly contributes to the mechanisms that couple the glucose stimulus to insulin secretion. Moreover, we identified intracellular hydrogen peroxide as an inhibitor of glucose metabolism intrinsic to rat pancreatic islets. These findings suggest that the intracellular adjustment of the redox environment by glucose plays an important role in the mechanism of GSIS.

Coleman-Weinberg mechanism in a three-dimensional supersymmetric Chern-Simons-matter model

Using the superfield formalism, we study the dynamical breaking of gauge symmetry and super-conformal invariance in the N = 1 three-dimensional supersymmetric Chern-Simons model, coupled to a complex scalar superfield with a quartic self-coupling. This is an analogue of the conformally invariant Coleman-Weinberg model in four spacetime dimensions. We show that a mass for the gauge and matter superfields are dynamically generated after two-loop corrections to the effective superpotential. We also discuss the N = 2 extension of our work, showing that the Coleman-Weinberg mechanism in such model is not feasible, because it is incompatible with perturbation theory.

Effects of the target spin on the reaction mechanism of the (16)O+(63)Cu system

Precise quasielastic and alpha-transfer excitation functions, at theta(lab) = 161 degrees, have been measured at energies near the Coulomb barrier for the (16)O + (63)Cu system. This is the first time reported quasielastic barrier distribution for a medium odd-A nucleus target deduced from the data. Additional elastic scattering angular distributions data available in the literature for this system were also used in the investigation of the role of several individual channels in the reaction dynamics, by comparing the data with free-parameter coupled-channels calculations. In order to do so, the nucleus-nucleus bare potential has a double-folding potential as the real component and only a very short-range imaginary potential. The quasielastic barrier distribution has been shown to be a powerful tool in this analysis at the barrier region. A high collectivity of the (63)Cu was observed, mainly due to the strong influence of its 5/2-and 7/2-states on all reaction channels investigated. A striking influence of the reorientation of the ground-state target-spin on the elastic cross sections, taken at backward angles, was also observed.

Mechanism of point-defect diffusion in a two-dimensional colloidal crystal

The dynamics and mechanism of migration of a vacancy point defect in a two-dimensional (2D) colloidal crystal are studied using numerical simulations. We find that the migration of a vacancy is always realized by topology switching between its different configurations. From the temperature dependence of the topology switch frequencies, we obtain the activation energies for possible topology transitions associated with the vacancy diffusion in the 2D crystal. (C) 2011 American Institute of Physics. [doi:10.1063/1.3615287]