Can Capital Mobility be Destabilizing?

In a standard two-sector neoclassical model with distortions, capital mobility can render the steady state indeterminate, in the sense that there exist infinitely many convergent paths. In the closed economy with no international capital mobility, the utility function must be linear or close to it for indeterminacy to occur, while in the open economy the shape of the utility function makes no difference. The reason is that in the no mobility case changes in aggregate investment must be matched by changes in aggregate consumption, while in the case of full capital mobility they can simply be financed by borrowing abroad. The paper provides some theoretical underpinnings to the concerns that de-regulating the capital account may be destabilizing.

Capital and macroeconomic instability in a discrete-time model with forward-looking interest rate rules

The authors establish the necessary and sufficient conditions for local real determinacy in a discrete-time production economy with monopolistic competition and a quadratic price adjustment cost under forward-looking policy rules, for the case where capital is in exogenously fixed supply and the case with endogenous capital accumulation. Using these conditions, they show that (i) indeterminacy is more likely to occur with a greater share of payment to capital in value-added production cost; (ii) indeterminacy can be more or less likely to occur with constant capital than with variable capital; (iii) indeterminacy is more likely to occur when prices are modelled as jump variables than as predetermined variables; (iv) indeterminacy is less likely to occur with a greater degree of steady-state monopolistic distortions; and (v) indeterminacy is less likely to occur with a greater degree of price stickiness or with a higher steady-state inflation rate. In contrast to some existing research, the authors' analysis indicates that capital tends to lead to macroeconomic instability by affecting firms' pricing behavior in product markets rather than households' arbitrage activity in asset markets even under forward-looking policy rules.Capital ; Interest rates

Expectational Stability of Sunspot Equilibria in Non-Convex Economies

We examine the stability under learning (E-stability) of sunspot equilibria in non-convex real business cycle models. The production technology is Cobb- Douglas with externalities generated by factor inputs. We establish that, with a general utility function, the well-known Benhabib-Farmer condition (Benhabib and Farmer, 1994) – that the labor-demand curve is upward-sloping and steeper than the Frisch labor-supply curve – is necessary for joint indeterminacy and E-stability. Then, with a separable utility function and allowing for negative externalities from capital inputs, we discover large regions in parameter space corresponding to stable indeterminacy, that is, learnable sunspot equilibria. These existence results overturn the conventional wisdom that sunspot equilib- ria in RBC-type models are inherently unstable, and provide concise closure to the stability puzzle of Evans and McGough (2005b).Keywords: Expectational stability, Real business cycle models, Externalities, Preferences, IndeterminacyKeywords: Expectational stability, Real business cycle models, Externalities, Preferences, Indeterminac

Activity fingerprinting of AMR β-lactamase towards a fast and accurate diagnosis

Antibiotic resistance has become a serious threat to global public health and economic development. Rapid and accurate identification of a patient status for antimicrobial resistance (AMR) are urgently needed in clinical diagnosis. Here we describe the development of an assay method for activity fingerprinting of AMR β-lactamases using panels of 7 β-lactam antibiotics in 35 min. New Deli Metallo β-lactamase-1 (NDM-1) and penicillinase were demonstrated as two different classes of β-lactamases. The panel consisted of three classes of antibiotics, including: penicillins (penicillin G, piperacillin), cephalosporins (cefepime, ceftriaxone, cefazolin) and carbapenems (meropenem and imipenem). The assay employed a scheme combines the catalytic reaction of AMR β-lactamases on antibiotic substrates with a flow-injected thermometric biosensor that allows the direct detection of the heat generated from the enzymatic catalysis, and eliminates the need for custom substrates and multiple detection schemes. In order to differentiate classes of β-lactamases, characterization of the enzyme activity under different catalytic condition, such as, buffer composition, ion strength and pH were investigated. This assay could provide a tool for fast diagnosis of patient AMR status which makes possible for the future accurate treatment with selected antibiotics

Indeterminacy in a small open economy with endogenous labor supply

We establish conditions under which indeterminacy can occur in a small open economy business cycle model with endogenous labor supply. Indeterminacy requires small externalities in technologies with social constant returns to scale, independently of the intertemporal elasticities in both consumption and labor