Jacks of All Trades and Masters of One: Declining Search Frictions and Unequal Growth

Declining search frictions generate productivity growth by allowing workers to find jobs for which they are better suited. For “jacks of all trades”—workers whose productivity is similar across different jobs in their labor market—declining search frictions lead to minimal growth. For “masters of one trade”—workers whose productivity varies a great deal across different jobs in their labor market—declining search frictions lead to fast growth. A rudimentary calibration suggests that differential returns to declining search frictions may account for a non-negligible fraction of the wage growth differential between routine and nonroutine workers. (JEL J24, J31, J63, J64, O33)

The Regulation of Circulating Hepatokines by Fructose Ingestion Levels in Humans

Background Fibroblast growth factor 21 (FGF21), follistatin, angiopoietin-like 4 (ANGPTL4) and growth differential factor 15 (GDF15) are regulated by the energy metabolism. Recent findings in humans demonstrate that fructose ingestion increases circulating FGF21 with increased response in conditions of insulin resistance. Objective to study the acute effect of fructose and somatostatin on circulating FGF21, follistatin, ANGPTL4 and GDF15 in humans. Methods Plasma FGF21, follistatin, ANGPTL4 and GDF15 concentrations were measured in response to oral ingestion of 75g of fructose in 10 young healthy males with and without a 15-minute infusion of somatostatin to block insulin secretion. A control infusion of somatostatin was also performed in the same subjects. Results Following fructose ingestion, plasma FGF21 peaked at 3.7-fold basal concentration (p<0.05) and increased 4.9-fold compared with basal concentration. (p<0.05) when somatostatin was infused. Plasma follistatin increased 1.8-fold after fructose ingestion (p<0.05), but this increase was blunted by concomitant somatostatin infusion. For plasma ANGPTL4 and GDF-15, no increases were obtained following fructose ingestion. Infusion of somatostatin alone slightly increased plasma FGF21 and follistatin. Conclusions Here we show in humans that 1) the fructose-induced increase in plasma FGF21 was enhanced when somatostatin was infused suggesting an inhibitory role of insulin on the fructose-induced FGF21 increase; 2) fructose ingestion also increased plasma follistatin, but somatostatin infusion had no effect on the increase; 3) fructose ingestion had no stimulating effect on ANGPTL4 and GDF15 levels demonstrating differences in the hepatokine response to fructose ingestion.

Examination of Interest-Growth Differentials and the Risk of Sovereign Insolvency

The objective of this research was to demonstrate the (nonlinear) risks of sovereign insolvency and explore the applicability of stochastic modeling in public debt management, given a structural economic model of stochastic government debt dynamics. A stochastic optimal control model was developed to model public debt dynamics based on the debt accounting identity, where the interest-growth differential obeys a continuous random process. This stochasticity represents both the interest rate risk of public debt and the variability of the growth rate of the nominal Gross Domestic Product combined. The optimal fiscal policy was analyzed in terms of the model parameters. The model was simulated, and results were visualized. The insolvency risk was demonstrated by examining the variance of the optimal process. The model was amended with hidden credit risk premia and fiscal multipliers, which forces the debt dynamics to be nonlinear in the debt ratio. The results, on the other hand, confirm that the volatility of the interest-growth differential is crucial in terms of sovereign solvency and in addition, it demonstrates the large risks stemming from the multiplier effect, which underlines the need for prudent debt management and fiscal policy.

The Growth-Differential Effects of Domestic Investment and Foreign Direct Investment in Africa

This paper employs dynamic panel models; Pooled Mean Group (PMG) and Mean Group (MG) estimators to assess the growth-differential effects of Foreign Direct Investment (FDI) and Domestic Investment (DI) among 41 selected African countries from 1970 to 2017. The result of Hausman test shows that PMG estimator is preferred. The study found that FDI and DI are important grease for growth of African countries in the long-run. The study also found that inflows of FDI crowds-in DI in Africa and that there is significant difference in the growth effects of foreign direct investment and domestic investment while the joint effects of foreign direct investment and domestic investment on growth of African countries is found to be statistically significant. In the short-run, estimates show that foreign direct investment has negative influence on growth of 24 countries out of which four (Benin, Madagascar, Nigeria and Equatorial Guinea) are highly significant at 5% level, while the estimated influence of domestic investment on growth of most African countries was positive. This shows that foreign direct investment in Africa has negative effects on growth of host economies in the short-run. The study recommends that African governments should continually encourage domestic savings and investment as major source of growth and only consider FDI as a growth supplement.

Determinants of Public Indebtedness in European Union Countries

The paper strives to determine the impact of fiscal variables on factors determining the dynamics of public debt in European Union countries. Based on the literature, the dynamics of public debt are determined by changes of three elements: the primary balance, interest-rate-growth-differential and the change of government assets. Therefore, it seems reasonable to estimate the dynamics of these three values to find the variables crucial for limiting the growth of public debt. Three groups of dynamic panel regressions were estimated based on the one-step Generalized Method of Moments. The data was collected for the 1995-2015 period for 27 EU countries. Dependent variables included: primary balance, interest-rate-growth-differential and change of government assets. Independent variables consisted of: interest payable to GDP ratio, unemployment rate, squared unemployment rate, FDI stock to GDP, net FDI inflow to GDP, general government expenditures to GDP, share of social security expenditures and openness of the economy measured by the ratio of export and import to GDP. On the basis of statistical data, three components of debt changes were distinguished, and estimations of the dynamic panel regressions were applied to find the impact of independent variables. According to the basic models, the primary balance is lower for: countries with higher unemployment, greater FDI stock and higher general government expenditures. The interest-rate-growth-differential is lower in the case of: high subsidies and for a more open economy. However, unemployment and FDI remain the most important determinants of this variable. The change of government’s assets ratio decreases as FDI net inflows or the share of expenditures to GDP increase as well as in the case of very high unemployment.

Growth Differential Factor 15 (GDF%15), Possible Biomarker in Heart Failure

The present study aims at determining on the one hand the growth differentiation factor 15 significance as possible risk biomarker for this condition and, on the other hand, the degree of correlation between its serum concentration and the class of inotropism deficit.The value of the current research stems from the very selected theme, the activity of GDF-15, member of the superfamily of cytokines TGF-b recognized as having implication in atherosclerosis, but almost unexplored as role in the myocardiumremodeling processes, more precisely in fibrosis.