A smoke screen theory of financial intermediation

This paper explores the role of diversification and size in protecting information. We present a simple two period credit market with a sophisticated lender faced with competitors who free ride on his screening activity. Absent commitment problems, the lender funds one borrower and exerts optimal evaluation. When borrowers cannot commit to a long term relationship, the free riding problem is responsible for too little evaluation. We show how this problem can be mitigated by simultaneously financing several borrowers. This effect provides a rationale for intermediaries as an `information garbling' device.financial intermediation, informational rent, asymmetric information, free riding, diversification.

The long-term evolution of the X-ray pulsar XTE J1814-338: a receding jet contribution to the quiescent optical emission?

We present a study of the quiescent optical counterpart of the Accreting Millisecond X-ray Pulsar XTE J1814-338, carrying out multiband (BVR) orbital phase-resolved photometry using the ESO VLT/FORS2. The optical light curves are consistent with a sinusoidal variability modulated with the orbital period, showing evidence for a strongly irradiated companion star, in agreement with previous findings. The observed colours cannot be accounted for by the companion star alone, suggesting the presence of an accretion disc during quiescence. The system is fainter in all analysed bands compared to previous observations. The R band light curve displays a possible phase offset with respect to the B and V band. Through a combined fit of the multi-band light curves we derive constraints on the companion star and disc fluxes, on the system distance and on the companion star mass. The irradiation luminosity required to account for the observed day-side temperature of the companion star is consistent with the spin-down luminosity of a millisecond radio pulsar. The flux decrease and spectral evolution of the quiescent optical emission observed comparing our data with previous observations, collected over 5 years, cannot be well explained with the contribution of an irradiated companion star and an accretion disc alone. The progressive flux decrease as the system gets bluer could be due to a continuum component evolving towards a lower, bluer spectrum. While most of the continuum component is likely due to the disc, we do not expect it to become bluer in quiescence. Hence we hypothesize that an additional component, such as synchrotron emission from a jet was contributing significantly in the earlier data obtained during quiescence and then progressively fading or moving its break frequency toward longer wavelengths.Comment: 7 pages, 8 figures, accepted for publication in Section 7. Stellar structure and evolution of Astronomy and Astrophysic

A perspective on the Healthgrid initiative

This paper presents a perspective on the Healthgrid initiative which involves European projects deploying pioneering applications of grid technology in the health sector. In the last couple of years, several grid projects have been funded on health related issues at national and European levels. A crucial issue is to maximize their cross fertilization in the context of an environment where data of medical interest can be stored and made easily available to the different actors in healthcare, physicians, healthcare centres and administrations, and of course the citizens. The Healthgrid initiative, represented by the Healthgrid association (http://www.healthgrid.org), was initiated to bring the necessary long term continuity, to reinforce and promote awareness of the possibilities and advantages linked to the deployment of GRID technologies in health. Technologies to address the specific requirements for medical applications are under development. Results from the DataGrid and other projects are given as examples of early applications.Comment: 6 pages, 1 figure. Accepted by the Second International Workshop on Biomedical Computations on the Grid, at the 4th IEEE/ACM International Symposium on Cluster Computing and the Grid (CCGrid 2004). Chicago USA, April 200

Education and Growth: Where All the Education Went

We investigate why the economics literature often finds a negative relationship between increased schooling and GDP growth over short periods. We show that increases in GDP in 98 countries during five-year intervals are correlated with the increases in adults´ average schooling during the prior 40 years. We find that an additional year of schooling of the work force raised GDP by 7% on average during 1980-2005, but its initial effect on GDP was much smaller. The delayed effect of increased schooling on national productivity explains why recent increases in schooling cannot explain near-term increases in GDP

Observations of Doppler Boosting in Kepler Lightcurves

Among the initial results from Kepler were two striking lightcurves, for KOI 74 and KOI 81, in which the relative depths of the primary and secondary eclipses showed that the more compact, less luminous object was hotter than its stellar host. That result became particularly intriguing because a substellar mass had been derived for the secondary in KOI 74, which would make the high temperature challenging to explain; in KOI 81, the mass range for the companion was also reported to be consistent with a substellar object. We re-analyze the Kepler data and demonstrate that both companions are likely to be white dwarfs. We also find that the photometric data for KOI 74 show a modulation in brightness as the more luminous star orbits, due to Doppler boosting. The magnitude of the effect is sufficiently large that we can use it to infer a radial velocity amplitude accurate to 1 km/s. As far as we are aware, this is the first time a radial-velocity curve has been measured photometrically. Combining our velocity amplitude with the inclination and primary mass derived from the eclipses and primary spectral type, we infer a secondary mass of 0.22+/-0.03 Msun. We use our estimates to consider the likely evolutionary paths and mass-transfer episodes of these binary systems.Comment: 8 pages, 4 figures, ApJ 715, 51 (v4 is updated to match the published version, including a note added in proof with measured projected rotational velocities)

World Total Factor Productivity Growth and the Steady-State Rate in the 20th Century

I estimate a Solow model augmented with human capital in 42 countries for 1910-2000. Estimated TFP growth is 0.3%/year, and the steady-state rate for GDP/capita is 1.0%/year. Implicitly for high-income countries maintaining growth above this rate will be increasingly difficult

A Revision to the Theory and the Practice of Development Accounting

Los profesionales de la contabilidad del desarrollo asumen que el rendimiento privado de la educación es igual a su producto marginal social. Se Muestra que este supuesto es incompatible con la estructura matemática de una función multiplicativa de producción, que especifica que el rendimiento privado es sólo una fracción del producto marginal social. A continuación, se muestra que los resultados empíricos de la contabilidad del desarrollo en la literatura subestiman considerablemente la contribución del capital humano para la producción nacional y sobreestiman las diferencias de productividad nacional.Practitioners of development accounting assume that the private return on schooling equals its social marginal product. I show that this assumption is inconsistent with the mathematical structure of a multiplicative production function, which specifies that the private return is only a fraction of the social marginal product. I then show that the empirical results from development accounting in the literature substantially underestimate human capital’s contribution to national output and overestimate national productivity differences

Increases in human capital and growth: new data, more conclusive results.

Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment.Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment.Using a new data set for human capital/adult, I show that changes in human capital cause economic growth in 56 countries over the 1985 to 2005 period. I show that these results are superior to results using average schooling attainment

Cognitive Skills, Schooling Attainment, and Schooling Resources: What Drives Economic Growth?

This paper presents evidence that students’ test scores at ages 9 to 15 are not a good proxy for a nation’s stock of human capital. Across countries test scores rise with increases in human capital up to $40,000/adult (2000$), but then decline as human capital increases up to $125,000/adult. Schooling attainment is a better proxy for the human capital stock than test scores, but it is not very useful for statistical analysis because it is not a precise measure. The nation’s stock of human capital, calculated from cumulative investment in schooling, is the schooling measure most correlated with national income.This paper presents evidence that students’ test scores at ages 9 to 15 are not a good proxy for a nation’s stock of human capital. Across countries test scores rise with increases in human capital up to$40,000/adult (2000$), but then decline as human capital increases up to$125,000/adult. Schooling attainment is a better proxy for the human capital stock than test scores, but it is not very useful for statistical analysis because it is not a precise measure. The nation’s stock of human capital, calculated from cumulative investment in schooling, is the schooling measure most correlated with national income