Interaction between economic and financial development

This paper presents a possible explanation of the interactive nature of the relationship between economic and financial development based on absorption of resources by the financial sector, and constant returns to physical capital accumulation in the production sector. Financial intermediaries operating in a credit market characterised by monopolistic competition emerge along with the process of economic development. This could initially have a detrimental effect on growth, so that the economy might be trapped in a low development region. If not, subsequent economic development stimulates competition among financial intermediaries which results in more efficient financial transactions, and therefore higher growth. While higher efficiency is always associated with higher growth, the laissez faire economy can still be characterised by sub-optimal levels of financial development

Financial institutions' expertise and growth effects of financial liberalisation

This paper analyses the real effects of financial development subsequent to financial liberalisation in an economy with risk averse savers and learning by lending. Transition from full financial repression to full financial liberalisation might initially slow down the growth process or even induce a recession, whenever the initial level of valuable investments known by the financial instutions (informed capital ) is suficiently scanty. However, lending activity leads to accumulation of information (learning by lending) regarding valuable investments. This way, as intermediaries become experts, the allocative efficiency they are able to guarantee ameliorates so that, in the long run, the effects of financial liberalisation are eventually positive

Concentration in the banking industry and economic growth

We present an OLG endogenous growth model in which a reduction in the level of concentration in the banking industry exterts two opposite effects on economic growth. On the one hand, it induces economies of specialisation which enhances intermediation efficiency and thereby eco- nomic growth. On the other hand, it results in duplication of fixed costs which is detrimental for efficiency and growth. The trade off between the two opposing effects is ambiguous and can vary along with the dynamic process of financial and economic development. Using cross country industry data we find that banking concentration is negatively associated with industrial growth only in low income countries while there is no such asssociation in high income countries. These empirical findings support the model's prediction that there exist a different relationship between banking concentration and growth depending on the level of economic development

Do we need more time for leisure?

”We need more time: more time for leisure” Linton Kwesi Jonhson used to dub. Indeed, the analysis of an OLG economy with endogenous labor supply gives some rational to the dub poet’s claims. In our setting, the golden rule is defined as the pair of capital-labour ratio and individual labour supply which maximises the steady state utility of each generation. When, other things equal, agents are motivated to work more the higher the level of wages, individual labor supply will be increasing (decreasing) in capital labor ratio according to whether the elasticity of wages per unit of labour is bigger (smaller) than the relative change of the value of the fraction of labour income saved. Hence, if the economy is dynamically efficient, agents tend to work more than in the Golden Age if the propensity to save evaluated at the golden rule is, other things equal, relatively high. Conversely, under dynamic inefficiency, they work too much if and only if the propensity to save is relatively low. For given values of the parameters determining the propensity to save, individuals in dynamic efficient (inefficient) economies work more than in the Golden Age as long as the labour share of income is sufficiently high (low). These findings appear to be of some interest with reference to the 35 hours working-week debate in Europe

Banks, financial markets and growth

We analyze the interaction between bank and market finance in a model where bankers gather information through monitoring and screening.We show that,if a market is established characterized by a disclosure law such that entrepreneurs wishing to raise market finance can credibly disclose their sources of financing,this might undermine bankers'incentive to screen,even when screening is effcient.Correspondingly,other things being equal,the change from a bank-based system to one in which market-finance and bank-finance coexist might have an adverse affect on economic growth.Consistent with this result,our empirical findings suggest that,althoug both bank and stock market development have a positive effect on growth, the growth impact of bank development is reduced by the development of the stock market

The Monopolist's blues

We consider the problem of trade between a price setting party who has private information about the quality of a good and a price taker who may also have private information. We restrict attention to the case in which, under full information, it is efficient to trade only a subset of all qualities. In particular, we assume that trading a low (high) quality is inefficient when the seller (buyer) sets the price. We show that there is a unique equilibrium outcome passing Cho and Kreps (1987) “Never a Weak Best Response”. The refined outcome is always characterized by no trade, although trade would be mutually beneficial in some state of nature. This occurs: 1. Even if the price taker has more precise information than the price setting party, and 2. Even when the information received by both parties is almost perfect. Both results imply that there are inefficiencies due to price setting that are not present in standard markets with adverse selection. We find that the price setting party can always increase her profits through ex-ante delegation of the price choice to an uninformed third party. We discuss applications to professional bodies and the market for unskilled labor

Few bad apples or plenty of lemons: which makes it harder to market plums?

We analyse a competitive commodity market with a large number of buyers and sellers where: a. Individual qualities, either high or low, are not observable by buyers; b. Sellers strategically announce prices and buyers decide whether to buy having observed sellers’ actions. We find that the set of robust equilibria includes only fully separating equilibria. In any robust equilibrium the low quality is always traded. The high quality is traded if demand is sufficiently strong, so that low quality sellers are unable to satisfy all buyers, and is never traded otherwise. Hence, few rotten apples is better than a plentiful of lemons for plums’ sellers

Bridging the gap between yoga and science : a mini review

Yoga is an ancient tradition arising from the evolving cultures of ancient India originating from a variety of sources like ancient texts, oral transmissions through lineages, iconography and songs. It has a complex history of spiritual exploration, philosophical reflection and creative expression. Yoga has evolved over time to suit the needs of the current populace and at present humanity at large views things, especially the mystical arts through the lens of the sceptical scientist. Despite countless benefits of yoga and meditation in the overall health of a person and his mind that have been documented over time, they have mostly been anecdotal and few studies using a rigorous scientific method have been performed. Most recently through the advent of cutting-edge scientific tools (i.e., electroencephalogram, EEG), the gap between the subjective and objective have been bridged. Nevertheless, the path to scientific inquiry supporting yoga is a work in progress. In this minireview, we will make a short historical resume of the scientific studies carried out to investigate the effect of yoga in the physiology of the body and the brain, and its possible use to ameliorate pathological condition.peer-reviewe

Hypericum scruglii Bacch., Brullo & Salmeri, a Potential Natural Remedy for Fibromyalgia: A Narrative Review

Abstract: Fibromyalgia (FM) is a disorder of central pain processing marked by widespread chronic pain together with fatigue, sleep disturbances, cognitive dysfunction, and depressive episodes. Tested treatments have expressed limited efficacy. Oxidative stress plays a role in the pathology of FM, while multiple neurotransmitters are involved in this syndrome. Antidepressants are used as conventional treatment, especially those with double action on serotonin and norepinephrine that leads to an increased risk of a manic switch. It should be noted that fibromyalgia is high-frequency comorbidity in bipolar disorder. This narrative review, given the limited literature, consisted of animal and in vitro studies, which aims to highlight the positive aspects of Hypericum scruglii as a potential remedy against FM. Many in vitro and clinical studies confirm the Hypericum genus as a natural antidepressant resource. The use of Hypericum derivatives in various acute and chronic diseases has been known for a long time. It is reported that the phloroglucinol derivatives from Hypericum longistylum improve and accelerate the differentiation of neural progenitor cells. The advantage of Hypericum scruglii is that it owns greater antioxidant potential than other species of the Hypericum genus. Suggestions for improving the oral bioavailability of very poor water-soluble molecules of hypericum extracts are also described in this pape

Neurotrophic-mimetic strategy to rescue synaptic plasticity and cognitive functions in a mouse model of Down syndrome

Down syndrome (DS) or trisomy 21 is the most frequent genetic cause of intellectual disability in children and adults. Although numerous studies have shown that cognitive impairment possibly arises from dysfunction of the hippocampal circuit, there has been little progress in defining effective treatments. Previous studies have shown that impaired synaptic plasticity of mature hippocampal neurons and decreased hippocampal adult neurogenesis are main determinants in reducing cognitive functions in DS animal models. Currently, most preclinical therapeutic approaches in DS mice have focused on rescuing either one or the other of these impairments. Here, we have found that the expression of Brain-Derived Neurotrophic Factor (BDNF) is decreased in the brains of individuals with DS. Interestingly, a large body of literature indicates that BDNF signaling modulates both synaptic plasticity, and adult neurogenesis. Therefore, we propose here to promote BDNF/TrkB signaling using a BDNF-mimetic drug with the twofold aim of rescuing synaptic plasticity and increase adult neurogenesis toward the rescue of cognitive functions in the Ts65Dn mouse model of DS. Our results indicate that indeed promoting BDNF/TrkB signaling rescued hippocampal synaptic plasticity, increased hippocampal adult neurogenesis and restored cognitive performances in different behavioral tasks in Ts65Dn mice. The molecular mechanisms of impaired BDNF/TrkB signaling in trisomic mice are currently under investigation. Overall, our experiments show in a reliable animal model of DS the efficacy of a novel and multifaceted therapeutic approach with good potential to be translated into clinical practice