This paper empirically assesses determinants of countries' fiscal rules suggested by the political science, sociology, and economics literature. We find several of these variables to be related to the stringency of fiscal rules, providing indirect evidence for the relevance of governments' deficit bias. These determinants may also serve as instruments in models with (endogenous) fiscal rules as explanatory variable.

This paper estimates the effects of fiscal institutions on fiscal policy outcomes, addressing issues related to measurement and endogeneity in a novel way. Recently developed indices, based on partially ordered set theory, are used to quantify the stringency of fiscal rules. Identification of their effects is achieved by exploiting the exogeneity of institutional variables (checks and balances, government fragmentation, inflation targeting), which are found to be relevant determinants of fiscal rules. Our two-stage least squares estimates for (up to) 79 countries over the period 1985-2012 provide strong evidence that countries with more stringent fiscal rules have higher fiscal balances (lower deficits), lower interest rate spreads on government bonds, and lower output volatility. (authors' abstract) / Series: Department of Economics Working Paper Series

Embryonic stem (ES) cells possess the remarkable ability to form cells and tissues from all three germ layers, a characteristic known as pluripotency. In particular, the generation of ES cell-derived hematopoietic cells could serve as an alternate source of hematopoietic stem cells for transplantation in place of bone marrow cells, which are limited by donor availability and high immunogenicity. The advantages of ES cell-derived hematopoietic cells over bone marrow cells include a greater proliferative capacity, which alleviates the problems of donor shortage, and low level expression of MHC antigens, which suggests immune privilege. However, it is unclear whether the immune system is capable of recognizing and rejecting ES cell-derived hematopoietic cells following transplantation. The observation that ES cell-derivatives express low levels of MHC class I, the predominant inhibitory ligand for NK cells, led us to hypothesize that ES cell-derived hematopoietic progenitor cells (HPC) are susceptible to NK cell-mediated killing. To test this hypothesis, we first generated HPCs from murine ES cells ectopically expressing HOXB4, a homeobox transcription factor that confers hematopoietic self-renewal, and confirmed that HPCs expressed low levels of MHC class I antigens. To specifically investigate the role of NK cells in regulating the in vivo engraftment of HPCs, we transplanted NK-replete Rag2-/- or NK-deficient Rag2-/-γc-/- mice with HPCs. We observed permanent HPC engraftment in Rag2-/-γc-/- mice; however, HPC engraftment was significantly reduced in Rag2-/- mice and was eventually eliminated over time. Bone marrow harvested from these animals showed that HPC-derived Lin-c-kit+ and Lin-Sca-1+ progenitor cells, critical progenitor cells for long-term hematopoietic engraftment, were deleted in Rag2-/- but not in Rag2-/-γc-/- mice. Next, we focused on the mechanism of NK cell activation by HPCs. Increased expression of the cytotoxic proteins Granzyme B and Perforin in the NK cells of HPC-transplanted Rag2-/- mice confirmed in vivo NK cell activation. Phenotypic analysis of HPCs revealed high level expression of H60, a ligand of the NK activating receptor NKG2D, and neutralization of H60 rescued HPCs from NK cell-mediated killing. Altogether, our results demonstrate that NK cells are a major barrier to the successful engraftment of ES cell-derived hematopoietic cells, underlining an important role of the innate immune system in regulating the long-term engraftment of ES cell derivatives.

The widespread use of composite indices has often been motivated by their practicality to quantify qualitative data in an easy and intuitive way. At the same time, this approach has been challenged due to the subjective and partly ad hoc nature of computation, aggregation and weighting techniques as well as the handling of missing data. Partially ordered set (POSET) theory offers an alternative approach for summarizing qualitative data in terms of quantitative indices, which relies on a computation scheme that fully exploits the available information and does not require the subjective assignment of weights. The present paper makes the case for an increased use of POSET theory in the social sciences and provides a comparison of POSET indices and composite indices (from previous studies) measuring the 'stringency' of fiscal frameworks using data from the OECD Budget Practices and Procedures survey (2007/08). (authors' abstract) / Series: Department of Economics Working Paper Series