Rating Inflation versus Deflation: On Procyclical Credit Ratings

Credit rating agencies play a crucial role in financial markets. There are two competing views regarding their behavior: some argue that they engage in rating inflation, while others suggest that they deflate ratings. This article offers a rationale that reconciles the two opposite arguments. We find that both rating inflation and rating deflation can occur in equilibrium. Furthermore, we show that credit rating is procyclical: rating inflation is more likely to happen in a boom while rating deflation is more likely to happen in a recession

A Systematic Screen for Tube Morphogenesis and Branching Genes in the Drosophila Tracheal System

Many signaling proteins and transcription factors that induce and pattern organs have been identified, but relatively few of the downstream effectors that execute morphogenesis programs. Because such morphogenesis genes may function in many organs and developmental processes, mutations in them are expected to be pleiotropic and hence ignored or discarded in most standard genetic screens. Here we describe a systematic screen designed to identify all Drosophila third chromosome genes (∼40% of the genome) that function in development of the tracheal system, a tubular respiratory organ that provides a paradigm for branching morphogenesis. To identify potentially pleiotropic morphogenesis genes, the screen included analysis of marked clones of homozygous mutant tracheal cells in heterozygous animals, plus a secondary screen to exclude mutations in general “house-keeping” genes. From a collection including more than 5,000 lethal mutations, we identified 133 mutations representing ∼70 or more genes that subdivide the tracheal terminal branching program into six genetically separable steps, a previously established cell specification step plus five major morphogenesis and maturation steps: branching, growth, tubulogenesis, gas-filling, and maintenance. Molecular identification of 14 of the 70 genes demonstrates that they include six previously known tracheal genes, each with a novel function revealed by clonal analysis, and two well-known growth suppressors that establish an integral role for cell growth control in branching morphogenesis. The rest are new tracheal genes that function in morphogenesis and maturation, many through cytoskeletal and secretory pathways. The results suggest systematic genetic screens that include clonal analysis can elucidate the full organogenesis program and that over 200 patterning and morphogenesis genes are required to build even a relatively simple organ such as the Drosophila tracheal system

Modeling the Past: The Paleoethnological Evidence

This chapter considers the earliest Paleolithic, Oldowan (Mode 1), and Acheulean (Mode 2) cultures of the Old Continent and the traces left by the earliest hominids since their departure from Africa. According to the most recent archaeological data, they seem to have followed two main dispersal routes across the Arabian Peninsula toward the Levant, to the north, and the Indian subcontinent, to the east. According to recent discoveries at Dmanisi in the Caucasus, the first Paleolithic settlement of Europe is dated to some 1.75 Myr ago, which indicates that the first “out of Africa” took place at least slightly before this date. The data available for Western Europe show that the first Paleolithic sites can be attributed to the period slightly before 1.0 Myr ago. The first well-defined “structural remains” so far discovered in Europe are those of Isernia La Pineta in Southern Italy, where a semicircular artificial platform made of stone boulders and animal bones has been excavated. The first hand-thrown hunting weapons come from the site of Scho¨ningen in north Germany, where the first occurrence of wooden spears, more than 2 m long, has been recorded from a site attributed to some 0.37 Myr ago. Slightly later began the regular control of fire. Although most of the archaeological finds of these ages consist of chipped stone artifacts, indications of art seem to be already present in the Acheulean of Africa and the Indian subcontinent