Informal Credit in Village Economies: Contract Duration with Personal and Community Enforcement

This paper provides an explanation for several important features of informal credit contracts negotiated in economies where households lack collateral, and ready access to legal authorities and formal financial institutions is absent. Our analysis highlights the choice between loans with well-defined repayment periods (fixed durations) and those that are open-ended (no duration). We argue that households negotiate fixed- duration loans only when the borrower's ability to repay is private information, and borrowers enjoy non-credit (social) exchanges with lenders that can be withdrawn to encourage loan repayment. Other differences in loan terms can be explained by the exclusive availability of collective loan enforcement to lenders and borrowers residing in the same community. Drawing on a unique household-level survey, we find empirical support for our model's explanation for duration and the size of loans, as well as borrower's repayment behavior. Our analysis also highlights a negative externality among informal personal and community enforcement mechanisms whereby the availability of both mechanisms in the same village reduces the payments that can be credibly promised with either one.

Privately optimal severance pay

This paper constructs an equilibrium matching model with risk-averse workers and incomplete contracts to study both the optimal private provision of severance pay and the consequences of government mandates in excess of the private optimum. The privately-optimal severance payment is bounded below by the fall in lifetime wealth resulting from job loss. Despite market incompleteness, mandated minimum payments significantly exceeding the private optimum are effectively undone by adjustment of the contractual wage, and have only small allocational and welfare effects

Supporting Aspartate Biosynthesis Is an Essential Function of Respiration in Proliferating Cells

SummaryMitochondrial respiration is important for cell proliferation; however, the specific metabolic requirements fulfilled by respiration to support proliferation have not been defined. Here, we show that a major role of respiration in proliferating cells is to provide electron acceptors for aspartate synthesis. This finding is consistent with the observation that cells lacking a functional respiratory chain are auxotrophic for pyruvate, which serves as an exogenous electron acceptor. Further, the pyruvate requirement can be fulfilled with an alternative electron acceptor, alpha-ketobutyrate, which provides cells neither carbon nor ATP. Alpha-ketobutyrate restores proliferation when respiration is inhibited, suggesting that an alternative electron acceptor can substitute for respiration to support proliferation. We find that electron acceptors are limiting for producing aspartate, and supplying aspartate enables proliferation of respiration deficient cells in the absence of exogenous electron acceptors. Together, these data argue a major function of respiration in proliferating cells is to support aspartate synthesis

Amino Acids Rather than Glucose Account for the Majority of Cell Mass in Proliferating Mammalian Cells

Cells must duplicate their mass in order to proliferate. Glucose and glutamine are the major nutrients consumed by proliferating mammalian cells, but the extent to which these and other nutrients contribute to cell mass is unknown. We quantified the fraction of cell mass derived from different nutrients and found that the majority of carbon mass in cells is derived from other amino acids, which are consumed at much lower rates than glucose and glutamine. While glucose carbon has diverse fates, glutamine contributes most to protein, suggesting that glutamine's ability to replenish tricarboxylic acid cycle intermediates (anaplerosis) is primarily used for amino acid biosynthesis. These findings demonstrate that rates of nutrient consumption are indirectly associated with mass accumulation and suggest that high rates of glucose and glutamine consumption support rapid cell proliferation beyond providing carbon for biosynthesis.National Institutes of Health (U.S.) (Grant U54CA143874

Environment Dictates Dependence on Mitochondrial Complex I for NAD+ and Aspartate Production and Determines Cancer Cell Sensitivity to Metformin

Metformin use is associated with reduced cancer mortality, but how metformin impacts cancer outcomes is controversial. Although metformin can act on cells autonomously to inhibit tumor growth, the doses of metformin that inhibit proliferation in tissue culture are much higher than what has been described in vivo. Here, we show that the environment drastically alters sensitivity to metformin and other complex I inhibitors. We find that complex I supports proliferation by regenerating nicotinamide adenine dinucleotide (NAD)+, and metformin's anti-proliferative effect is due to loss of NAD+/NADH homeostasis and inhibition of aspartate biosynthesis. However, complex I is only one of many inputs that determines the cellular NAD+/NADH ratio, and dependency on complex I is dictated by the activity of other pathways that affect NAD+ regeneration and aspartate levels. This suggests that cancer drug sensitivity and resistance are not intrinsic properties of cancer cells, and demonstrates that the environment can dictate sensitivity to therapies that impact cell metabolism. Keywords: cancer metabolism; metformin; biguanide; NAD+/NADH ratio; drug sensitivity; complex I; mitochondria; aspartateNational Institutes of Health (U.S.) (Grant P30CA1405141)National Institutes of Health (U.S.) (Grant GG006413)National Institutes of Health (U.S.) (Grant R01 CA168653)National Institutes of Health (U.S.) (Grant R01 CA201276

How many educated workers for your economy? European targets, optimal public spending, and labor market impact

This paper studies optimal taxation schemes for education in a search- matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets - maximizing the total employment level and optimizing the social surplus - are studied according to three different public taxation strategies. We calibrate our model using evidence from thirteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market char- acteristics, the target set by governments seems compatible with the social surplus maximization objective for some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.info:eu-repo/semantics/publishedVersio

Public housing and the value of apartment quality to households

The application of hedonic price approaches to obtain estimates of the households' value of apartment characteristics is invalid for regulated housing markets such as public housing. We introduce and apply an alternative method that allows us to estimate the renters' marginal willingness to pay for apartment characteristics based on residential mobility. We focus on the households' marginal willingness to pay for quality of apartments. We find that, on average, households place a monetary value on quality which is close to the non-profit housing associations' costs of providing quality. © 2011 Elsevier B.V

Debt Maturity and the Liquidity of Secondary Debt Markets

We model the debt maturity choice of firms in the presence of fixed issuance costs in the primary market and search frictions in the secondary market for debt. In the secondary market, short maturities improve the bargaining position of sellers, which reduces the required issuance yield. Long maturities reduce reissuance costs. The optimally chosen maturity trades off both considerations. Equilibrium exhibits inefficiently short maturity choices: An individual firm does not internalize that a longer maturity increases expected gains from trade in the secondary market, which attracts more buyers, and hence also facilitates the sale of debt issued by other firms