Bailouts in federations : is a hard budget constraint always best?

This article analyses hard and soft budget constraints in a federation, where there is a moral hazard problem between the central and the regional governments. Regional governments can avoid a bailout from the center by exerting costly effort. In this setting, a hard budget constraint is not always optimal because it can provide excessive incentives for high effort, and thus discourage investment that is socially efficient. Thus, a hard budget constraint can imply the opposite kind of inefficiency that emerges under a soft budget constraint, where the common pool problem can give rise to inefficiently low effort and overinvestment

Parabolic Harnack Inequality and Local Limit Theorem for Percolation Clusters

We consider the random walk on supercritical percolation clusters in the d-dimensional Euclidean lattice. Previous papers have obtained Gaussian heat kernel bounds, and a.s. invariance principles for this process. We show how this information leads to a parabolic Harnack inequality, a local limit theorem and estimates on the Green's function.Comment: 29 page

Are Hard Budget Constraints for Sub-National Governments Always Efficient?

In fiscally decentralized countries, sub-national governments (SNGs) may face soft budget constraints and consequently invest and borrow too much. The policy literature claims that, with competitive capital markets and central governments imposing hard budget constraints (HBCs), inefficient investment by SNGs should not arise. We present a model where this is not the case : HBCs can be too "hard" and discourage investment that is socially efficient. The model combines a dynamic commitment problem as in Kornai, Maskin and Roland (2004) for central government with a moral hazard problem between central and SNG. The HBC over-incentivises the SNG to provide effort by penalizing it too much for project failure, thus leading ultimately to the possibility that socially efficient projects may not be undertaken.Fiscal federalism ; Bailouts ; Hard budget constraints

Belief Approach for Social Networks

Nowadays, social networks became essential in information exchange between individuals. Indeed, as users of these networks, we can send messages to other people according to the links connecting us. Moreover, given the large volume of exchanged messages, detecting the true nature of the received message becomes a challenge. For this purpose, it is interesting to consider this new tendency with reasoning under uncertainty by using the theory of belief functions. In this paper, we tried to model a social network as being a network of fusion of information and determine the true nature of the received message in a well-defined node by proposing a new model: the belief social network

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ATPase cycle and DNA unwinding kinetics of RecG helicase

The superfamily 2 bacterial helicase, RecG, is a monomeric enzyme with a role in DNA repair by reversing stalled replication forks. The helicase must act specifically and rapidly to prevent replication fork collapse. We have shown that RecG binds tightly and rapidly to four-strand oligonucleotide junctions, which mimic a stalled replication fork. The helicase unwinds such DNA junctions with a step-size of approximately four bases per ATP hydrolyzed. To gain an insight into this mechanism, we used fluorescent stopped-flow and quenched-flow to measure individual steps within the ATPase cycle of RecG, when bound to a DNA junction. The fluorescent ATP analogue, mantATP, was used throughout to determine the rate limiting steps, effects due to DNA and the main states in the cycle. Measurements, when possible, were also performed with unlabeled ATP to confirm the mechanism. The data show that the chemical step of hydrolysis is the rate limiting step in the cycle and that this step is greatly accelerated by bound DNA. The ADP release rate is similar to the cleavage rate, so that bound ATP and ADP would be the main states during the ATP cycle. Evidence is provided that the main structural rearrangements, which bring about DNA unwinding, are linked to these states

Definable equivalence relations and zeta functions of groups

We prove that the theory of the $p$-adics ${\mathbb Q}_p$ admits elimination of imaginaries provided we add a sort for ${\rm GL}_n({\mathbb Q}_p)/{\rm GL}_n({\mathbb Z}_p)$ for each $n$. We also prove that the elimination of imaginaries is uniform in $p$. Using $p$-adic and motivic integration, we deduce the uniform rationality of certain formal zeta functions arising from definable equivalence relations. This also yields analogous results for definable equivalence relations over local fields of positive characteristic. The appendix contains an alternative proof, using cell decomposition, of the rationality (for fixed $p$) of these formal zeta functions that extends to the subanalytic context. As an application, we prove rationality and uniformity results for zeta functions obtained by counting twist isomorphism classes of irreducible representations of finitely generated nilpotent groups; these are analogous to similar results of Grunewald, Segal and Smith and of du Sautoy and Grunewald for subgroup zeta functions of finitely generated nilpotent groups.Comment: 89 pages. Various corrections and changes. To appear in J. Eur. Math. So

How uncertain are the welfare costs of inflation?

This paper quantifies some of the general equilibrium costs of inflation for the UK using a shopping-time model. It tests whether money balances tend to a finite number as nominal interest rates tend to zero, and explores how uncertainties about the shape of the money demand curve translate into uncertainties about these welfare costs of inflation. A key uncertainty is the existence of a satiation point for money balances. We show that without observations at nominal interest rates close to zero, the power of satiation tests can be low.