The Positive Link Between Financial Liberalization, Growth and Crises

There is no agreement regarding the growth-enhancing effects of financial liberalization, mainly because it is associated with risky international bank flows, lending booms, and crises. In this paper we make the case for liberalization despite the occurrence of crises. We show that in developing countries trade liberalization has typically been followed by financial liberalization, which has indeed led to financial fragility and a greater incidence of crises. However, financial liberalization also has led to higher GDP growth. In fact, the fastest-growing countries are typically those that have experienced boom-bust cycles. That is, there is a positive link between GDP growth and the bumpiness of credit, which is captured by the negative skewness --not by the variance-- of credit growth. To substantiate our interpretation of the data we present a model that shows why in countries with severe credit market imperfections, liberalization leads to higher growth and, as a by-product, to financial fragility. Thus, occasional crises need not forestall growth and may even be a necessary component of a developing country's growth experience. Finally, our analysis indicates that foreign direct investment does not obviate the need for risky international bank flows, as the latter are the only source of financing for most firms in the nontradables sector.

H-Theorem and Generalized Entropies Within the Framework of Non Linear Kinetics

In the present effort we consider the most general non linear particle kinetics within the framework of the Fokker-Planck picture. We show that the kinetics imposes the form of the generalized entropy and subsequently we demonstrate the H-theorem. The particle statistical distribution is obtained, both as stationary solution of the non linear evolution equation and as the state which maximizes the generalized entropy. The present approach allows to treat the statistical distributions already known in the literature in a unifying scheme. As a working example we consider the kinetics, constructed by using the $\kappa$-exponential $\exp_{_{\{\kappa\}}}(x)= (\sqrt{1+\kappa^2x^2}+\kappa x)^{1/\kappa}$ recently proposed which reduces to the standard exponential as the deformation parameter $\kappa$ approaches to zero and presents the relevant power law asymptotic behaviour $\exp_{_{\{\kappa\}}}(x){\atop\stackrel\sim x\to \pm \infty}|2\kappa x|^{\pm 1/|\kappa|}$. The $\kappa$-kinetics obeys the H-theorem and in the case of Brownian particles, admits as stationary state the distribution $f=Z^{-1}\exp_{_{\{\kappa\}}}[-(\beta mv^2/2-\mu)]$ which can be obtained also by maximizing the entropy $S_{\kappa}=\int d^n v [ c(\kappa)f^{1+\kappa}+c(-\kappa)f^{1-\kappa}]$ with $c(\kappa)=-Z^{\kappa}/ [2\kappa(1+\kappa)]$ after properly constrained.Comment: To appear in Phys. Lett.

Decentralization And Infrastructure: From Gaps To Solutions

The subnational dimension of infrastructure emerges as one of the greatest challenges in contemporary public finance policy and management. Given the localized nature of most infrastructures, ensuring its efficient provision represents a challenge for all countries irrespective of their level of centralization or decentralization. This paper introduces the fundamental questions surrounding the provision of infrastructure in decentralized settings and summarizes the findings from a collection of original essays prepared for this volume by a set of worldwide experts on this subject with the objective of advancing our understanding of the interplay between decentralization and infrastructure. More specifically, the paper discusses the extent of infrastructure gaps and the quality of subnational spending; inquires how functional responsibilities, financing and equalization can be designed; discusses sector-specific arrangements; drills down to the key steps of the public investment cycle and management aspects; and analyzes the political economy and corruption challenges that typically accompany decentralized infrastructure projects. The paper also presents avenues for the strengthening of decentralized public investment and infrastructure provision processes, concluding that they need to be country-, sector- and place-specific. While it is clear that institutional arrangements for infrastructure management will vary across countries, in all cases several decision-making steps need to be coordinated across levels of government in order to ensure efficiency in delivery, equity in spending, and accountability over final results

Teeth With Mild and Moderate Enamel Fluorosis Demonstrate Increased Caries Susceptibility In Vitro

Subjects In this laboratory study, 49 human unerupted third molars extracted for clinical reasons and classified as scores 0-4 using the Thylstrup and Fejerskov (TF) index (n = 9 for TF0, n = 10 for TF1, n = 10 for TF2, n = 10 for TF3, and n = 10 for TF4) were included. TF1-TF4 teeth were collected in Colombia, and TF0 teeth were obtained from the University of Copenhagen. Ethical approval was obtained. Key Risk/Study Factor Teeth in the study were subjected to pH cycling to induce caries lesions. Main Outcome Measure The primary outcome measure was resistance to a cariogenic challenge determined using cross-sectional microhardness. A series of indentations, starting at 10 μm below the anatomic surface down to 200 μm, were placed in the teeth using a Knoop indenter. These measurements were performed before and after pH cycling, yielding baseline and demineralization areas, both calculated “by numerical integration of the hardness vs depth values using the trapezoidal rule.” The demineralization data were then normalized for differences at baseline and a “percentage reduction” was calculated, with higher numbers being indicative of greater susceptibility to caries lesion formation. Main Results Teeth with scores of TF3 and TF4 exhibited greater susceptibility to caries lesion formation than all other teeth, with no differences being observed between unaffected teeth (TF0) and teeth with scores of TF1 and TF2. Teeth with scores of TF3 and TF4 also displayed a lower mean baseline area than those with TF1 and TF2, although not compared to TF0 teeth, indicative of greater hypomineralization. Conclusions The authors concluded that the results of their study suggest that teeth with moderate fluorosis had an increased caries susceptibility when compared to teeth with very mild or no fluorosis. They hypothesized that these differences in caries susceptibility are mainly due to dissimilarities in porosity of the enamel—in fluorotic teeth, a greater subsurface mineral area is exposed to demineralization, and deeper acid diffusion through enamel is facilitated