Centre de Recerca en Economia Internacional

We characterize the macroeconomic performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labor markets, and (d) improvements in monetary policy. We conclude that all four have played an important role.

On 19 December 2014, the Centre for Economic Policy Research and the Bank of England hosted a discussion forum based around Thomas Piketty’s book, Capital in the twenty-first century, with a number of economists from academia, public sector bodies and private sector institutions. Four speakers presented research on various issues relating to inequality, including: access to education; wealth and taxation policy; and the role of governance and institutions. This article presents each speaker’s key arguments, and includes a summary of the open-floor debate that followed.

To study the impact of macroprudential policy on credit supply cycles and real effects, we analyze dynamic provisioning. Introduced in Spain in 2000, revised four times, and tested in its countercyclicality during the crisis, it affected banks differentially. We find that dynamic provisioning smooths credit supply cycles and, in bad times, supports firm performance. A 1 percentage point increase in capital buffers extends credit to firms by 9 percentage points, increasing firm employment (6 percentage points) and survival (1 percentage point). Moreover, there are important compositional effects in credit supply related to risk and regulatory arbitrage by nonregulated and regulated but less affected banks.

Abstract How persistent are cultural traits? Using data on anti-Semitism in Germany, we find local continuity over 600 years. Jews were often blamed when the Black Death killed at least a third of Europe’s population during 1348–50. We use plague-era pogroms as an indicator for medieval anti-Semitism. They reliably predict violence against Jews in the 1920s, votes for the Nazi Party, deportations after 1933, attacks on synagogues, and letters to Der Stürmer . We also identify areas where persistence was lower: cities with high levels of trade or immigration. Finally, we show that our results are not driven by political extremism or by different attitudes toward violence.

PURPOSE: Pathogenic variants affecting MLH1, MSH2, MSH6, and PMS2 cause Lynch syndrome and result in different but imprecisely known cancer risks. This study aimed to provide age and organ-specific cancer risks according to gene and gender and to determine survival after cancer. METHODS: We conducted an international, multicenter prospective observational study using independent test and validation cohorts of carriers of class 4 or class 5 variants. After validation the cohorts were merged providing 6350 participants and 51,646 follow-up years. RESULTS: There were 1808 prospectively observed cancers. Pathogenic MLH1 and MSH2 variants caused high penetrance dominant cancer syndromes sharing similar colorectal, endometrial, and ovarian cancer risks, but older MSH2 carriers had higher risk of cancers of the upper urinary tract, upper gastrointestinal tract, brain, and particularly prostate. Pathogenic MSH6 variants caused a sex-limited trait with high endometrial cancer risk but only modestly increased colorectal cancer risk in both genders. We did not demonstrate a significantly increased cancer risk in carriers of pathogenic PMS2 variants. Ten-year crude survival was over 80% following colon, endometrial, or ovarian cancer. CONCLUSION: Management guidelines for Lynch syndrome may require revision in light of these different gene and gender-specific risks and the good prognosis for the most commonly associated cancers.

In an economy studied by Lucas and Stokey, tax rates inherit the serial correlation structure of government expenditures, belying Barro's earlier result that taxes should be a random walk for any stochastic process of government expenditures. To recover a version of Barro's random walk tax-smoothing outcome, we modify Lucas and Stokey's economy to permit only risk-free debt. Having only risk-free debt confronts the Ramsey planner with additional constraints on equilibrium allocations beyond one imposed by Lucas and Stokey's assumption of complete markets. The Ramsey outcome blends features of Barro's model with Lucas and Stokey's. In our model, the contemporaneous effects of exogenous government expenditures on the government deficit and taxes resemble those in Lucas and Stokey's model, but incomplete markets put a nearunit root component into government debt and taxes, an outcome like Barro's. However, we show that without ad hoc limits on the government's asset holdings, outcomes can diverge in important ways from Barro's. Our results use and extend recent advances in the consumption-smoothing literature.

Biofilms are complex microbial associations anchored to abiotic or biotic surfaces, embedded in extracellular matrix produced by the biofilms themselves where they interact with each other and the environment. One of the main properties of biofilms is their capacity to be more resistant to antimicrobial agents than planktonic cells. Efflux pumps have been reported as one of the mechanisms responsible for the antimicrobial resistance in biofilm structures. Evidence of the role of efflux pump in biofilm resistance has been found in several microorganisms such as Pseudomonas aeruginosa, Escherichia coli and Candida albicans. However, in spite of the studies on the importance of efflux pumps in biofilm growth and about their relevance in antimicrobial resistance forming biofilm, the exact role of these efflux systems has not been determined as yet.

BACKGROUND: Planning and evaluating malaria control strategies relies on accurate definition of parasite prevalence in the population. A large proportion of asymptomatic parasite infections can only be identified by surveillance with molecular methods, yet these infections also contribute to onward transmission to mosquitoes. The sensitivity of molecular detection by PCR is limited by the abundance of the target sequence in a DNA sample; thus, detection becomes imperfect at low densities. We aimed to increase PCR diagnostic sensitivity by targeting multi-copy genomic sequences for reliable detection of low-density infections, and investigated the impact of these PCR assays on community prevalence data. METHODS AND FINDINGS: Two quantitative PCR (qPCR) assays were developed for ultra-sensitive detection of Plasmodium falciparum, targeting the high-copy telomere-associated repetitive element 2 (TARE-2, ∼250 copies/genome) and the var gene acidic terminal sequence (varATS, 59 copies/genome). Our assays reached a limit of detection of 0.03 to 0.15 parasites/μl blood and were 10× more sensitive than standard 18S rRNA qPCR. In a population cross-sectional study in Tanzania, 295/498 samples tested positive using ultra-sensitive assays. Light microscopy missed 169 infections (57%). 18S rRNA qPCR failed to identify 48 infections (16%), of which 40% carried gametocytes detected by pfs25 quantitative reverse-transcription PCR. To judge the suitability of the TARE-2 and varATS assays for high-throughput screens, their performance was tested on sample pools. Both ultra-sensitive assays correctly detected all pools containing one low-density P. falciparum-positive sample, which went undetected by 18S rRNA qPCR, among nine negatives. TARE-2 and varATS qPCRs improve estimates of prevalence rates, yet other infections might still remain undetected when absent in the limited blood volume sampled. CONCLUSIONS: Measured malaria prevalence in communities is largely determined by the sensitivity of the diagnostic tool used. Even when applying standard molecular diagnostics, prevalence in our study population was underestimated by 8% compared to the new assays. Our findings highlight the need for highly sensitive tools such as TARE-2 and varATS qPCR in community surveillance and for monitoring interventions to better describe malaria epidemiology and inform malaria elimination efforts.

A modern economy is an intricately linked web of specialized production units, each relying on the flow of inputs from their suppliers to produce their own output which, in turn, is routed towards other downstream units. In this essay, I argue that this network perspective on production linkages can offer novel insights on how local shocks occurring along this production network can propagate across the economy and give rise to aggregate fluctuations. First, I discuss how production networks can be mapped to a standard general equilibrium setup. In particular, through a series of stylized examples, I demonstrate how the propagation of sectoral shocks—and hence aggregate volatility— depends on different arrangements of production, that is, on different “shapes” of the underlying production network. Next I explore, from a network perspective, the empirical properties of a large-scale production network as given by detailed US input-output data. Finally I address how theory and data on production networks can be usefully combined to shed light on comovement and aggregate fluctuations.

BACKGROUND: Strongyloidiasis is frequently under diagnosed since many infections remain asymptomatic and conventional diagnostic tests based on parasitological examination are not sufficiently sensitive. Serology is useful but is still only available in reference laboratories. The need for improved diagnostic tests in terms of sensitivity and specificity is clear, particularly in immunocompromised patients or candidates to immunosuppressive treatments. This review aims to evaluate both conventional and novel techniques for the diagnosis of strongyloidiasis as well as available cure markers for this parasitic infection. METHODOLOGY/PRINCIPAL FINDINGS: The search strategy was based on the data-base sources MEDLINE, Cochrane Library Register for systematic review, EmBase, Global Health and LILACS and was limited in the search string to articles published from 1960 to August 2012 and to English, Spanish, French, Portuguese and German languages. Case reports, case series and animal studies were excluded. 2003 potentially relevant citations were selected for retrieval, of which 1649 were selected for review of the abstract. 143 were eligible for final inclusion. CONCLUSIONS: Sensitivity of microscopic-based techniques is not good enough, particularly in chronic infections. Furthermore, techniques such as Baermann or agar plate culture are cumbersome and time-consuming and several specimens should be collected on different days to improve the detection rate. Serology is a useful tool but it might overestimate the prevalence of disease due to cross-reactivity with other nematode infections and its difficulty distinguishing recent from past (and cured) infections. To evaluate treatment efficacy is still a major concern because direct parasitological methods might overestimate it and the serology has not yet been well evaluated; even if there is a decline in antibody titres after treatment, it is slow and it needs to be done at 6 to 12 months after treatment which can cause a substantial loss to follow-up in a clinical trial.

BACKGROUND: Diarrhea is a leading cause of illness and death among children aged <5 years in developing countries. This paper describes the clinical and epidemiological methods used to conduct the Global Enteric Multicenter Study (GEMS), a 3-year, prospective, age-stratified, case/control study to estimate the population-based burden, microbiologic etiology, and adverse clinical consequences of acute moderate-to-severe diarrhea (MSD) among a censused population of children aged 0-59 months seeking care at health centers in sub-Saharan Africa and South Asia. METHODS: GEMS was conducted at 7 field sites, each serving a population whose demography and healthcare utilization practices for childhood diarrhea were documented. We aimed to enroll 220 MSD cases per year from selected health centers serving each site in each of 3 age strata (0-11, 12-23, and 24-59 months), along with 1-3 matched community controls. Cases and controls supplied clinical, epidemiologic, and anthropometric data at enrollment and again approximately 60 days later, and provided enrollment stool specimens for identification and characterization of potential diarrheal pathogens. Verbal autopsy was performed if a child died. Analytic strategies will calculate the fraction of MSD attributable to each pathogen and the incidence, financial costs, nutritional consequences, and case fatality overall and by pathogen. CONCLUSIONS: When completed, GEMS will provide estimates of the incidence, etiology, and outcomes of MSD among infants and young children in sub-Saharan Africa and South Asia. This information can guide development and implementation of public health interventions to diminish morbidity and mortality from diarrheal diseases.

The present paper provides an overview of recent developments in the analysis of monetary policy in the presence of nominal rigidities. The paper emphasizes the existence of several dimensions in which the recent literature provides a new perspective on the linkages among monetary policy, inflation, and the business cycle. It is argued that the adoption of an explicitly optimizing, general equilibrium framework has not been superfluous; on the contrary, it has yielded many insights which, by their nature, could hardly have been obtained with earlier non-optimizing models.

Macroeconomic volatility, both a source and a reflection of underdevelopment, is a fundamental concern for developing countries. Their high aggregate instability results from a combination of large external shocks, volatile macroeconomic policies, microeconomic rigidities, and weak institutions. Volatility entails a direct welfare cost for risk-averse individuals, as well as an indirect one through its adverse effect on income growth and development. This article provides a brief overview of the recent literature on macroeconomic volatility in developing countries, highlighting its causes, consequences, and possible remedies. It then introduces the contributions of a recent conference on the subject, sponsored by the World Bank and Pompeu Fabra University, Barcelona.

I examine the impact of alternative monetary policy rules on a rational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interest rates in response to a growing bubble is shown to enhance the fluctuations in the latter, through its positive effect on bubble growth. The optimal monetary policy seeks to strike a balance between stabilization of the bubble and stabilization of aggregate demand. The paper's main findings call into question the theoretical foundations of the case for “leaning against the wind” monetary policies. (JEL E13, E32, E44, E52, G12)

Vulvar squamous cell carcinoma (VSCC) accounts for >90% of the malignant tumours of the vulva. Most VSCCs originate in intraepithelial lesions, named vulvar intraepithelial neoplasia (VIN), that precede the development of VSCC by a variable period of time. Strong evidence has accumulated showing that there are two different aetiopathogenic pathways for the development of VSCC and VIN, one associated with infection by human papillomavirus (HPV), and a second independent of HPV infection. These two different types of VSCC have different epidemiological, pathological and clinical characteristics, and should therefore be considered as two separate entities. Histologically, HPV-associated VSCCs are of the basaloid or warty type, and arise from VIN of the usual type. Inactivation of p53 and the retinoblastoma tumour suppressor gene product by the viral gene products E6 and E7 is involved in the process of malignant transformation. HPV-independent VSCCs are histologically keratinizing, are associated with differentiated VIN and lichen sclerosus, and frequently show mutations of p53. p16(INK4a) and p53 immunostaining can be useful for classifying VSCC into HPV-associated or HPV-independent. Although large, multicentre studies are needed to definitively assess the involvement of HPV in the prognosis of VSCC, most studies have not found clear differences in survival between HPV-associated and HPV-independent tumours.

We study a general equilibrium model in which entrepreneurs finance investment with optimal financial contracts. Because of enforceability problems, contracts are constrained efficient. We show that limited enforceability amplifies the impact of technological innovations on aggregate output. This implies that economies with lower enforceability of contracts are characterized by greater macroeconomic volatility. A key assumption for the amplification result is that defaulting entrepreneurs are not excluded from the market.

We describe some of the main features of the recent vintage of macroeconomic models used for monetary policy evaluation. We point to some of the key differences with respect to the earlier generation of macro models and highlight the insights for policy that these new frameworks have to offer. Our discussion emphasizes two key aspects of the new models: 1) the significant role of expectations of future policy actions in the monetary transmission mechanism and 2) the importance for the central bank of tracking the flexible price equilibrium values of the natural levels of output and the real interest rate. We argue that both features have important implications for the conduct of monetary policy.

The 1918-1919 influenza pandemic was the most devastating epidemic in modern history. Here, we review epidemiological and historical data about the 1918-1919 influenza epidemic in Spain. On 22 May 1918, the epidemic was a headline in Madrid's ABC newspaper. The infectious disease most likely reached Spain from France, perhaps as the result of the heavy railroad traffic of Spanish and Portuguese migrant workers to and from France. The total numbers of persons who died of influenza in Spain were officially estimated to be 147,114 in 1918, 21,235 in 1919, and 17,825 in 1920. However, it is likely that >260,000 Spaniards died of influenza; 75% of these persons died during the second period of the epidemic, and 45% died during October 1918 alone. The Spanish population growth index was negative for 1918 (net loss, 83,121 persons). Although a great deal of evidence indicates that the 1918 A(H1N1) influenza virus unlikely originated in and spread from Spain, the 1918-1919 influenza pandemic will always be known as the Spanish flu.

We introduce rule-of-thumb consumers in an otherwise standard dynamic sticky price model, and show how their presence can change dramatically the properties of widely used interest rate rules. In particular, the existence of a unique equilibrium is no longer guaranteed by an interest rate rule that satisfies the so called Taylor principle. Our findings call for caution when using estimates of interest rate rules in order to assess the merits of monetary policy in specific historical periods.

We develop a dynamic spatial growth theory with realistic geography. We characterize the model and its balanced-growth path and propose a methodology to analyze equilibria with different levels of migration frictions. Different migration scenarios change local market size, innovation incentives, and the evolution of technology. We bring the model to the data for the whole world economy at a 1° × 1° geographic resolution. We then use the model to quantify the gains from relaxing migration restrictions. Our results indicate that fully liberalizing migration would increase welfare about threefold and would significantly affect the evolution of particular regions of the world.