Central bank independence and the monetary instrument problem

We study the monetary instrument problem in a model of optimal discretionary fiscal and monetary policy. The policy problem is cast as a dynamic game between the central bank, the fiscal authority, and the private sector. We show that, as long as there is a conflict of interest between the two policy-makers, the central bank's monetary instrument choice critically affects the Markov-perfect Nash equilibrium of this game. Focusing on a scenario where the fiscal authority is impatient relative to the monetary authority, we show that the equilibrium allocation is typically characterized by a public spending bias if the central bank uses the nominal money supply as its instrument. If it uses instead the nominal interest rate, the central bank can prevent distortions due to fiscal impatience and implement the same equilibrium allocation that would obtain under cooperation of two benevolent policy authorities. Despite this property, the welfare-maximizing choice of instrument depends on the economic environment under consideration. In particular, the money growth instrument is to be preferred whenever fiscal impatience has positive welfare effects, which is easily possible under lack of commitment

Optimal Fiscal and Monetary Policy Without Commitment

This paper studies optimal fiscal and monetary policy in a stochastic economy with imperfectly competitive product markets and a discretionary government. We find that, in the flexible price economy, optimal time-consistent policy implements the Friedman rule independently of the degree of imperfect competition. This result is in contrast to the Ramsey literature, where the Friedman rule emerges as the optimal policy only if markets are perfectly competitive. Second, once nominal rigidities are introduced, the Friedman rule ceases to be optimal, inflation rates are low and stable, and tax rates are relatively volatile. Finally, optimal time-consistent policy under sticky prices does not generate the near-random walk behavior of taxes and real debt that can be observed under optimal policy in the Ramsey problem. A common reason for these results is that the discretionary government, in an effort to asymptotically eliminate its time-consistency problem, accumulates a large net asset position such that it can finance its expenditures via the associated interest earnings

Inflation dynamics under optimal discretionary fiscal and monetary policies

We examine the dynamic properties of inflation in a model of optimal discretionary fiscal and monetary policies. The lack of commitment and the presence of nominally risk-free debt provide the government with an incentive to implement policies which induce positive and persistent inflation rates. We show that this property obtains already in an environment with flexible prices and perfectly competitive product markets. Introducing nominal rigidities and imperfect competition has no qualitative but important quantitative implications. In particular, with a modest degree of price stickiness our model generates inflation dynamics very similar to those experienced in the U.S. since the Volcker disinflation of the early 1980s

Twenty-five years of two-dimensional rational conformal field theory

In this article we try to give a condensed panoramic view of the development of two-dimensional rational conformal field theory in the last twenty-five years.Comment: A review for the 50th anniversary of the Journal of Mathematical Physics. Some references added, typos correcte

Terahertz response of patterned epitaxial graphene

We study the interaction between polarized terahertz (THz) radiation and micro-structured large-area graphene in transmission geometry. In order to efficiently couple the radiation into the two-dimensional material, a lateral periodic patterning of a closed graphene sheet by intercalation doping into stripes is chosen. We observe unequal transmittance of the radiation polarized parallel and perpendicular to the stripes. The relative contrast, partly enhanced by Fabry-Perot oscillations reaches 20 %. The effect even increases up to 50 % when removing graphene stripes in analogy to a wire grid polarizer. The polarization dependence is analyzed in a large frequency range from < 80 GHz to 3 THz, including the plasmon-polariton resonance. The results are in excellent agreement with theoretical calculations based on the electronic energy spectrum of graphene and the electrodynamics of the patterned structureThe authors thank J. Jobst for fruitful discussions. The research was performed in the framework of the Sonderforschungsbereich 953 "Synthetic carbon allotropes", funded by Deutsche Forschungsgemeinschaft. We acknowledge support from the EC under Graphene Flagship (contract no. CNECT-ICT-604391)

Comparing Signaling Networks between Normal and Transformed Hepatocytes Using Discrete Logical Models

Substantial effort in recent years has been devoted to constructing and analyzing large-scale gene and protein networks on the basis of “omic” data and literature mining. These interaction graphs provide valuable insight into the topologies of complex biological networks but are rarely context specific and cannot be used to predict the responses of cell signaling proteins to specific ligands or drugs. Conversely, traditional approaches to analyzing cell signaling are narrow in scope and cannot easily make use of network-level data. Here, we combine network analysis and functional experimentation by using a hybrid approach in which graphs are converted into simple mathematical models that can be trained against biochemical data. Specifically, we created Boolean logic models of immediate-early signaling in liver cells by training a literature-based prior knowledge network against biochemical data obtained from primary human hepatocytes and 4 hepatocellular carcinoma cell lines exposed to combinations of cytokines and small-molecule kinase inhibitors. Distinct families of models were recovered for each cell type, and these families clustered topologically into normal and diseased sets.National Institutes of Health (U.S.) (Grant GM68762)National Institutes of Health (U.S.) (Grant CA112967

Small but crucial : the novel small heat shock protein Hsp21 mediates stress adaptation and virulence in Candida albicans

Peer reviewedPublisher PD

The yeast P5 type ATPase, Spf1, regulates manganese transport into the endoplasmic reticulum

The endoplasmic reticulum (ER) is a large, multifunctional and essential organelle. Despite intense research, the function of more than a third of ER proteins remains unknown even in the well-studied model organism Saccharomyces cerevisiae. One such protein is Spf1, which is a highly conserved, ER localized, putative P-type ATPase. Deletion of SPF1 causes a wide variety of phenotypes including severe ER stress suggesting that this protein is essential for the normal function of the ER. The closest homologue of Spf1 is the vacuolar P-type ATPase Ypk9 that influences Mn2+ homeostasis. However in vitro reconstitution assays with Spf1 have not yielded insight into its transport specificity. Here we took an in vivo approach to detect the direct and indirect effects of deleting SPF1. We found a specific reduction in the luminal concentration of Mn2+ in ∆spf1 cells and an increase following it’s overexpression. In agreement with the observed loss of luminal Mn2+ we could observe concurrent reduction in many Mn2+-related process in the ER lumen. Conversely, cytosolic Mn2+-dependent processes were increased. Together, these data support a role for Spf1p in Mn2+ transport in the cell. We also demonstrate that the human sequence homologue, ATP13A1, is a functionally conserved orthologue. Since ATP13A1 is highly expressed in developing neuronal tissues and in the brain, this should help in the study of Mn2+-dependent neurological disorders