Non-Keynesian effects of fiscal contraction in new member states

Many economists are convinced that longer-term benefits from fiscal consolidation are in a trade-off with short-term deceleration in output growth. However, more recent research suggests that curbing fiscal imbalances contributes to faster growth already in the short term. This paper is about such non-Keynesian effects. Section two systematizes theoretical explanations. Section three reviews previous empirical research. Section four uses panel estimation techniques to examine the consequences of fiscal consolidation in New Member States. This analysis provides evidence that in those countries fiscal consolidation contributed substantially to the acceleration of output growth even in the short term. However, the exact channels through which non-Keynesian effects occurred could not be unambiguously identified in the paper. Section five takes the new step of a qualitative analysis of the outcomes of strong fiscal adjustments in the countries under consideration. That analysis shows that their experiences were quite similar to those of developed countries. JEL Classification: E62, E65, C33fiscal consolidation, new Member States, non-Keynesian effects

Interest rates close to zero, post-crisis restructuring and natural interest rate

Central banks seem not to account for the influence of interest rates close to zero on the natural interest rate after the bursting of the asset bubble which triggered financial crisis. We claim that this omission may have deleterious consequences. Should interest rates close to zero persistently decrease natural interest rates, that would mean fall in TFP growth and more limited central bank’s capacity to influence aggregate demand and price dynamics. We explain that interest rates close to zero may persistently reduce the natural interest rate because in economy requiring post-crisis restructuring they impede that process and facilitate forbearance lending, which crowds viable economic agents out of credit through a number of channels. To reduce these risks central bank could voluntarily set the lower bound for interest rates cuts at, say, 2%. The bound appropriate for a given economy should be a function of its growth and interest rates in the pre-crisis period. We argue that irrespective of central bank’s credibility such a change in the monetary policy conducting in economies requiring post-crisis restructuring would bring better outcomes than keeping there interest rates close to zero

Membership in the Euro area and fiscal sustainability. Analysis through panel fiscal reaction functions.

We estimate various panel fiscal reaction functions, including those of the main categories of general government revenue and expenditure for 12 Euro area member states over the 1970-2013 period. We find that in the peripheral countries where sovereign bond yields decreased sharply in the years 1996-2007, fiscal stance ceased to respond to sovereign debt accumulation. This was due to lack of sufficient adjustment in government non-investment expenditure and direct taxes. In contrast, in the core member states ,which did not benefit from yields’ convergence related to the Euro area establishment, responsiveness of fiscal stance to sovereign debt increased during 1996-2007. It was achieved mainly through pronounced adjustments in government non-investment expenditure. Our findings are in accordance with predictions of theoretical model by Aguiar et al. (2014) and are robust to various changes in modelling approach

Membership in the Euro area and fiscal sustainability. Analysis through panel fiscal reaction functions.

We estimate various panel fiscal reaction functions, including those of the main categories of general government revenue and expenditure for 12 Euro area member states over the 1970-2013 period. We find that in the peripheral countries where sovereign bond yields decreased sharply in the years 1996-2007, fiscal stance ceased to respond to sovereign debt accumulation. This was due to lack of sufficient adjustment in government non-investment expenditure and direct taxes. In contrast, in the core member states ,which did not benefit from yields’ convergence related to the Euro area establishment, responsiveness of fiscal stance to sovereign debt increased during 1996-2007. It was achieved mainly through pronounced adjustments in government non-investment expenditure. Our findings are in accordance with predictions of theoretical model by Aguiar et al. (2014) and are robust to various changes in modelling approach

The Effects of Polish Special Economic Zones on Employment and Investment: Spatial Panel Modelling Perspective.

We estimate the set of panel and spatial panel data models of employment and investments for 379 Polish counties over the period 2003-2012. We take advantage of a unique firm-level dataset for Polish Special Economic Zones (SSEs), which includes about 30,000 observations. We find that SSEs have substantial positive effects on employment: jobs in a given SSE create jobs outside the SSE in hosting county and even more jobs in neighbouring counties. Effect of SSEs on investments is weaker, but still positive. Investments in a given SSE neither crowd out nor crowd in investments outside the SSE. Thereby, they add one to one to capital stock in hosting county. Our findings are robust to changes in estimation methods, sample composition, set of explanatory variables and spatial weight matrix

Timed Colored Petri Net-Based Event Generators for Web Systems Simulation

Simulation is a powerful process for perfectly planning and dimensioning web systems. However, a successful analysis using a simulation model usually requires variable load intensities. Furthermore, as the client’s behavior is subject to frequent changes in modern web systems, such models need to be adapted as well. Based on web systems observation, we come across the need for tools that allow flexible definitions of web systems load profiles. We propose Timed Colored Petri Nets (TCPN) event generators for web environments that could be used to drive simulations for performance evaluation. The article proposes the systematization of the generators for future development. The theoretical part focuses on a classification with a division into deterministic/stochastic and untimed/timed generators. Next, in this study, we investigate representative models of generators from different classes based on the formalism of TCPN. We perform model design and simulation processes using CPN Tools software. Finally, we present a case study involving workload analysis of a web system that processes requests from the designed generator

Destabilization of mutated human PUS3 protein causes intellectual disability

Pseudouridine (Ψ) is an RNA base modification ubiquitously found in many types of RNAs. In humans, the isomerization of uridine is catalyzed by different stand-alone pseudouridine synthases (PUS). Genomic mutations in the human pseudouridine synthase 3 gene (PUS3) have been identified in patients with neurodevelopmental disorders. However, the underlying molecular mechanisms that cause the disease phenotypes remain elusive. Here, we utilize exome sequencing to identify genomic variants that lead to a homozygous amino acid substitution (p.[(Tyr71Cys)];[(Tyr71Cys)]) in human PUS3 of two affected individuals and a compound heterozygous substitution (p.[(Tyr71Cys)];[(Ile299Thr)]) in a third patient. We obtain wild-type and mutated full-length human recombinant PUS3 proteins and characterize the enzymatic activity in vitro. Unexpectedly, we find that the p.Tyr71Cys substitution neither affect tRNA binding nor pseudouridylation activity in vitro, but strongly impair the thermostability profile of PUS3, while the p.Ile299Thr mutation causes protein aggregation. Concomitantly, we observe that the PUS3 protein levels as well as the level of PUS3-dependent Ψ levels are strongly reduced in fibroblasts derived from all three patients. In summary, our results directly illustrate the link between the identified PUS3 variants and reduced Ψ levels in the patient cells, providing a molecular explanation for the observed clinical phenotypes