News and knowledge capital

We explore the ability of a model with knowledge capital to generate business cycles driven by expectations of future movement in total factor productivity (TFP). These cycles are characterized by a boom in which consumption, investment, output and hours-worked all rise in advance of any actual movement in TFP. We model knowledge capital as an input into production which is endogenously produced through a learning-by-doing process. When firms receive news of an impending productivity increase, the value of knowledge capital rises, inducing the firm to hire more hours to "invest" in knowledge capital. The rise in the value of knowledge capital immediately raises the value of the firm, causing an appreciation in share prices, a feature that has empirical support. The increase in output of the firm allows both consumption and investment to rise despite the absence of any contemporaneous productivity shock. If the expected increase in productivity fails to materialize, the model generates a recession as well as a crash in the stock market.Expectations-driven business cycle; Pigou cycle; News shock; Learning-by-doing; Asset pricing

Asymmetric Labor Adjustment, Organizational Capital and Aggregate Job Flows

This paper illustrates how the destruction of firm-specific organizational capital associated with changes in firm-level employment can influence the behavior of ag- gregate job flows, even in the presence of heterogeneity across rms and even in the absence of aggregate shocks. Our analysis highlights the potential importance of the distinction between adjustment costs that are associated with a loss of output (output-costs of labor adjustment) and those associated with a loss of organizational capital (OC-costs of labor adjustment). In particular, the analysis indicates how this link between organizational capital and labor demand can shape the behavior of net employment growth and gross job reallocation when conventional hiring and bring costs of adjustment may be unable to do so.

News, Intermediation Efficiency and Expectations-driven Boom-bust Cycles

The years leading up to the "great recession" were a time of rapid innovation in the financial industry. This period also saw a fall in interest rates, and a boom in liquidity that accompanied the boom in real activity, especially investment. In this paper we argue that these were not unrelated phenomena. The adoption of new financial products and practices led to a fall in the expected costs of intermediation which in turn engendered the flood of liquidity in the financial sector, lowered interest rate spreads and facilitated the boom in economic activity. When the events of 2007-2009 led to a re-evaluation of the effectiveness of these new products, agents revised their expectations regarding the actual efficiency gains available to the financial sector and this led to a withdrawal of liquidity from the financial system, a reversal in interest rates and a bust in real activity. We treat the efficiency of the financial sector as an exogenous process and study the impact of "news shocks" regarding this process. Following the expectations driven business cycle literature, we model the boom and bust cycle in terms of an expected future efficiency gain which is eventually not realized. The build up in liquidity and economic activity in expectation of these efficiency gains is then abruptly reversed when agent's hopes are dashed. The model generates counter-cyclical movements in the spread between lending rates and the risk-free rate which are driven purely by expectations, even in the absence of any exogenous movement in intermediation costs.externalities; expectations-driven business cycles, intermediation shocks, credit shocks, financial intermediation, financial innovation, news shocks, business cycles.

Hormonal regulation in green plant lineage families

The patterns of phytohormones distribution, their native function and possible origin of hormonal regulation across the green plant lineages (chlorophytes, charophytes, bryophytes and tracheophytes) are discussed. The five classical phytohormones - auxins, cytokinins, gibberellins (GA), abscisic acid (ABA) and ethylene occur ubiquitously in green plants. They are produced as secondary metabolites by microorganisms. Some of the bacterial species use phytohormones to interact with the plant as a part of their colonization strategy. Phytohormone biosynthetic pathways in plants seem to be of microbial origin and furthermore, the origin of high affinity perception mechanism could have preceded the recruitment of a metabolite as a hormone. The bryophytes represent the earliest land plants which respond to the phytohormones with the exception of gibberellins. The regulation by auxin and ABA may have evolved before the separation of green algal lineage. Auxin enhances rhizoid and caulonemal differentiation while cytokinins enhance shoot bud formation in mosses. Ethylene retards cell division but seems to promote cell elongation. The presence of responses specific to cytokinins and ethylene strongly suggest the origin of their regulation in bryophytes. The hormonal role of GAs could have evolved in some of the ferns where antheridiogens (compounds related to GAs) and GAs themselves regulate the formation of antheridia. During migration of life forms to land, the tolerance to desiccation may have evolved and is now observed in some of the microorganisms, animals and plants. Besides plants, sequences coding for late embryogenesis abundant-like proteins occur in the genomes of other anhydrobiotic species of microorganisms and nematodes. ABA acts as a stress signal and increases rapidly upon desiccation or in response to some of the abiotic stresses in green plants. As the salt stress also increases ABA release in the culture medium of cyanobacterium Trichormus variabilis, the recruitment of ABA in the regulation of stress responses could have been derived from prokaryotes and present at the level of common ancestor of green plants. The overall hormonal action mechanisms in mosses are remarkably similar to that of the higher plants. As plants are thought to be monophyletic in origin, the existence of remarkably similar hormonal mechanisms in the mosses and higher plants, suggests that some of the basic elements of regulation cascade could have also evolved at the level of common ancestor of plants. The networking of various steps in a cascade or the crosstalk between different cascades is variable and reflects the dynamic interaction between a species and its specific environment

Development and differentiation in plants

An overview of plant development has been presented. In lower plants like mosses, auxin and cytokinin regulate the creation and the stability of the differentiated state of various cell types. The differentiated state is plastic and all cell types dedifferentiate to ground state, the chloronema. Even in higher plants, embryonic cells become only roughly committed during shoot meristem formation. Their terminal destiny becomes specified during the post-germination phase when the rough outline gets refined. The lack of a firm determined state, clonally heritable through mitosis, indicates that the development in plants is unlikely to be specified by a rigid programme

Muscling In on PGC-1α for Improved Quality of Life in ALS

Impaired activity of peroxisome proliferator-activated receptor (PPAR)-γ coactivator (PGC)-1α has been implicated in the pathophysiology of several neurodegenerative disorders. In this issue, Da Cruz et al. (2012) show improved muscle function, but not survival, with increased PGC-1α activity in muscle in a mouse model of amyotrophic lateral sclerosis