The clathrin heavy chain is a fundamental element in endocytosis and therefore, in the internaliz... more The clathrin heavy chain is a fundamental element in endocytosis and therefore, in the internalization of several cell-surface receptors through which cells interact with their environment. Here we show that the only non-lethal mutant allele of the clathrin heavy chain identified to date in metazoans, the DrosophilaChc4, involves the substitution of a residue at the knee region of the molecule that impairs clathrin-dependent endocytosis. We have investigated the consequences of this endocytic defect in Drosophila retinal development and found that it produces an inhibition of programmed cell death in the retinal lattice, followed by widespread death of interommatidial pigment cells once retinal development has been completed. Through genetic interactions and transgenic analyses, we show that Chc4 phenotypes are caused by a Notch receptor gain-of-function, providing a dramatic example of the importance of Notch down-regulation by endocytosis. An increase in Notch signaling is also observed in Drosophila wings in response to the mutant clathrin, suggesting that Notch levels are controlled by clathrin-dependent endocytosis. We discuss the implications of these findings for current models on eye-development and for the role of endocytosis in Notch signaling.
This paper presents a fiscal competition model in which policy decisions are not only corporate t... more This paper presents a fiscal competition model in which policy decisions are not only corporate taxes but also whether or not to control the multinational firms'(MNF) profit shifting activities. MNFs manipulate transfer prices as a means to shift profits from high to low tax countries. National governments may hinder such a behavior by monitoring the MNF's accounts. We show that a country may optimally decide not to monitor the MNF for two different reasons. On the one hand, that makes it an attractive location for the MFN even if the corporate tax is high. On the other hand, not monitoring increases the mobility of the MFN's profits. This shifts the focus of tax competition in that corporate taxation then influences not only the MNF's location as the place where it declares its profits.
We study the impact of transfer pricing rules on sales prices, firms' organizational structure, a... more We study the impact of transfer pricing rules on sales prices, firms' organizational structure, and consumers' utility within a two-country monopolistic competition model featuring source-based profit taxes that differ across countries. Firms can either become multinationals, i.e., they serve the foreign market through a fully controlled affiliate; or they can become exporters, i.e., they serve the foreign market by contracting with an independent distributor. Compared to the benchmark cases, where tax authorities are either unable to audit firms or where they are able to audit them perfectly, the use of the OECD's Comparable Uncontrolled Price (CUP) or Cost-Plus (CP) rule distorts firms' output and pricing decisions. The reason is that the comparable arm's length transactions between exporters and distributors, which serve as benchmarks, are not efficient. We show that implementing the CUP or CP rules is detrimental to consumers in the low tax country, yet benefits consumers in the high tax country.
This paper addresses the issue of capital tax competition among an arbitrary number of countries.... more This paper addresses the issue of capital tax competition among an arbitrary number of countries. Countries are allowed to be asymmetric not only in their population endowment but also in their capital endowment per inhabitant. National governmentstax capital and labor in order to finance a public good. Asymmetric capital taxation arises at equilibrium leading to a distortion on the international capital market. We provide conditions for the existence of a Nash Equilibrium. We fully characterize how equilibrium taxes and welfare levels depend upon countries population and capital endowments.
In 1997, the OECD published guidelines to assess transfer prices, prescribing the application of ... more In 1997, the OECD published guidelines to assess transfer prices, prescribing the application of the "arm's length principle" whereby transfer prices should equal the transaction prices with non-affiliated firms. While the two mostly used rules are the "Comparable Uncontrolled Price" and the "cost-plus" rules, arm's length transfer pricing has been translated mostly into marginal cost pricing in the exist- ing literature. This paper proposes a two-country Dixit-Stiglitz model with iceberg transport costs and with two (endogenous) firm structures — multinationals and ex- porters — allowing us to translate the actual proposed rules into observable variables of a monopolistic competitive market. The firms that operate as exporters use an arm's length relationship with an independent foreign firm, generating double mar- ginalization. Those operating under a multinational structure incur firm-specific distribution costs. In the presence of tax di...
We study a firm which serves two unequally-sized markets and must choose where to locate its firs... more We study a firm which serves two unequally-sized markets and must choose where to locate its first production plant, and whether to open a second plant to serve the other market through local sales rather than exports. An exporter pays taxes only to the country where it locates its single production plant. A double-plant multinational pays taxes in both countries, but may shift taxable profits across them, at a cost. We show that the usual proximity-concentration trade-o between fixed and trade costs is modified, depending on both the aver- age tax of, and the tax dierence between, the two countries. Moreover, increased market size asymmetry may make it more likely that the firm engages in horizon- tal FDI in order to exploit profit shifting opportunities. From a global welfare viewpoint, it is always desirable to control the firm's tax avoidance ability when the multinational structure is given. However, the fact that the firm may react to corporate taxation by changing its pro...
This paper tackles the issue of international fiscal coordination in a world of integrated market... more This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We
Molecular therapy : the journal of the American Society of Gene Therapy, Jan 10, 2015
We have designed mitochondrially targeted Transcription Activator-Like Effector Nucleases or mito... more We have designed mitochondrially targeted Transcription Activator-Like Effector Nucleases or mitoTALENs to cleave specific sequences in the mitochondrial DNA (mtDNA) with the goal of eliminating mtDNA carrying pathogenic point mutations. To test the generality of the approach we designed mitoTALENs to target two relatively common pathogenic mtDNA point mutations associated with mitochondrial diseases: the m.8344A>G tRNA(Lys) gene mutation associated with Myoclonic Epilepsy with Ragged-Red Fibers (MERRF) and the m.13513G>A ND5 mutation associated with MELAS/Leigh Syndrome. Transmitochondrial cybrid cells harbouring the respective heteroplasmic mtDNA mutations were transfected with the respective mitoTALEN and analysed after different time periods. MitoTALENs efficiently reduced the levels of the targeted pathogenic mtDNAs in the respective cell lines. Functional assays showed that cells with heteroplasmic mutant mtDNA were able to recover respiratory capacity and oxidative phos...
Mitochondrial disorders are the most common inborn errors of metabolism affecting the oxidative p... more Mitochondrial disorders are the most common inborn errors of metabolism affecting the oxidative phosphorylation system (OXPHOS). Because of the poor knowledge of the pathogenic mechanisms, a cure for these disorders is still unavailable and all the treatments currently in use are supportive more than curative. Therefore, in the past decade a great variety of mouse models have been developed to assess the in vivo function of several mitochondrial proteins involved in human diseases. Due to the genetic and physiological similarity to humans, mice represent reliable models to study the pathogenic mechanisms of mitochondrial disorders and are precious to test new therapeutic approaches. Here we summarize the features of several mouse models of mitochondrial diseases directly related to defects in subunits of the OXPHOS complexes or in assembly factors. We discuss how these models recapitulate many human conditions and how they have contributed to the understanding of mitochondrial function in health and disease.
Mitochondrial disorders are defined as defects that affect the oxidative phosphorylation system (... more Mitochondrial disorders are defined as defects that affect the oxidative phosphorylation system (OXPHOS). They are characterized by a heterogeneous array of clinical presentations due in part to a wide variety of factors required for proper function of the components of the OXPHOS system. There is no cure for these disorders owing to our poor knowledge of the pathogenic mechanisms of disease. To understand the mechanisms of human disease numerous mouse models have been developed in recent years. Here we summarize the features of several mouse models of mitochondrial diseases directly related to those factors affecting mtDNA maintenance, replication, transcription, translation as well as other proteins that are involved in mitochondrial dynamics and quality control which affect mitochondrial OXPHOS function without being intrinsic components of the system. We discuss how these models have contributed to our understanding of mitochondrial diseases and their pathogenic mechanisms.
In this paper, we revisit the classical trade-off between centralized and decentralized provision... more In this paper, we revisit the classical trade-off between centralized and decentralized provision of local public goods, in a setting where interregional spillovers depend on the level of a national public good. We compare the standard benevolent planner approach with a political economy in which decisions, in a centralized system, are undertaken by a non-cooperative legislature with no separation of powers. We observe that the policy-maker in a centralized system is able to play both with local public goods and spillovers, a mechanism that is not available under a decentralized system. When compared to the traditional exogenous spillovers assumption, this improves the case for centralization under the standard benevolent planner approach. However, the same is not necessarily true in the non-cooperative legislature, as in this case the interests of the legislator do not need to be aligned with those of the society. Finally, we extend the traditional political economy analysis by considering a legislature in which decisions are undertaken by different committees (separation of powers), and show that it performs better than the original non-cooperative legislature, greatly improving the case for centralization. JEL classification: D70, H11, H41, H70.
We study a firm which serves two unequally-sized markets and must choose where to locate its firs... more We study a firm which serves two unequally-sized markets and must choose where to locate its first production plant, and whether to open a second plant to serve the other market through local sales rather than exports. An exporter pays taxes only to the country where it locates its single production plant. A double-plant multinational pays taxes in both countries, but may shift taxable profits across them, at a cost. We show that the usual proximity-concentration trade-o between fixed and trade costs is modified, depending on both the aver- age tax of, and the tax dierence between, the two countries. Moreover, increased market size asymmetry may make it more likely that the firm engages in horizon- tal FDI in order to exploit profit shifting opportunities. From a global welfare viewpoint, it is always desirable to control the firm's tax avoidance ability when the multinational structure is given. However, the fact that the firm may react to corporate taxation by changing its pr...
This paper studies international fiscal coordination in a world of integrated markets and soverei... more This paper studies international fiscal coordination in a world of integrated markets and sovereign national governments. Mobile capital and immobile labor are taxed in order to finance a fixed budget. This generates productive inefficiency. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. It is shown that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound (i.e., a tax range) which is unanimously accepted.
The human gene C10orf2 encodes the mitochondrial replicative DNA helicase Twinkle, mutations of w... more The human gene C10orf2 encodes the mitochondrial replicative DNA helicase Twinkle, mutations of which are responsible for a significant fraction of cases of autosomal dominant progressive external ophthalmoplegia (adPEO), a human mitochondrial disease caused by defects in intergenomic communication. We report the analysis of orthologous mutations in the Drosophila melanogaster mitochondrial DNA (mtDNA) helicase gene, d-mtDNA helicase. Increased expression of wild type d-mtDNA helicase using the UAS-GAL4 system leads to an increase in mtDNA copy number throughout adult life without any noteworthy phenotype, whereas overexpression of d-mtDNA helicase containing the K388A mutation in the helicase active site results in a severe depletion of mtDNA and a lethal phenotype. Overexpression of two d-mtDNA helicase variants equivalent to two human adPEO mutations shows differential effects. The A442P mutation exhibits a dominant negative effect similar to that of the active site mutant. In contrast, overexpression of d-mtDNA helicase containing the W441C mutation results in a slight decrease in mtDNA copy number during the third instar larval stage, and a moderate decrease in life span in the adult population. Overexpression of d-mtDNA helicase containing either the K388A or A442P mutations causes a mitochondrial oxidative phosphorylation (OXPHOS) defect that significantly reduces cell proliferation. The mitochondrial impairment caused by these mutations promotes apoptosis, arguing that mitochondria regulate programmed cell death in Drosophila. Our study of d-mtDNA helicase overexpression provides a tractable Drosophila model for understanding the cellular and molecular effects of human adPEO mutations.
This paper addresses capital tax competition among an arbitrary number of countries. Countries ar... more This paper addresses capital tax competition among an arbitrary number of countries. Countries are asymmetric not only in their population endowment but also in their capital endowment per inhabitant. National governments tax capital and labor in order to finance a fixed public budget. Asymmetric capital taxation arises at equilibrium leading to a distortion on the international capital market. We fully characterize how equilibrium taxes and welfare levels depend upon countries' population and capital endowments. We compare it to the autarchy situation and show that fiscal competition erodes some, but not all, of the gains from capital markets liberalization. .
The clathrin heavy chain is a fundamental element in endocytosis and therefore, in the internaliz... more The clathrin heavy chain is a fundamental element in endocytosis and therefore, in the internalization of several cell-surface receptors through which cells interact with their environment. Here we show that the only non-lethal mutant allele of the clathrin heavy chain identified to date in metazoans, the DrosophilaChc4, involves the substitution of a residue at the knee region of the molecule that impairs clathrin-dependent endocytosis. We have investigated the consequences of this endocytic defect in Drosophila retinal development and found that it produces an inhibition of programmed cell death in the retinal lattice, followed by widespread death of interommatidial pigment cells once retinal development has been completed. Through genetic interactions and transgenic analyses, we show that Chc4 phenotypes are caused by a Notch receptor gain-of-function, providing a dramatic example of the importance of Notch down-regulation by endocytosis. An increase in Notch signaling is also observed in Drosophila wings in response to the mutant clathrin, suggesting that Notch levels are controlled by clathrin-dependent endocytosis. We discuss the implications of these findings for current models on eye-development and for the role of endocytosis in Notch signaling.
This paper presents a fiscal competition model in which policy decisions are not only corporate t... more This paper presents a fiscal competition model in which policy decisions are not only corporate taxes but also whether or not to control the multinational firms'(MNF) profit shifting activities. MNFs manipulate transfer prices as a means to shift profits from high to low tax countries. National governments may hinder such a behavior by monitoring the MNF's accounts. We show that a country may optimally decide not to monitor the MNF for two different reasons. On the one hand, that makes it an attractive location for the MFN even if the corporate tax is high. On the other hand, not monitoring increases the mobility of the MFN's profits. This shifts the focus of tax competition in that corporate taxation then influences not only the MNF's location as the place where it declares its profits.
We study the impact of transfer pricing rules on sales prices, firms' organizational structure, a... more We study the impact of transfer pricing rules on sales prices, firms' organizational structure, and consumers' utility within a two-country monopolistic competition model featuring source-based profit taxes that differ across countries. Firms can either become multinationals, i.e., they serve the foreign market through a fully controlled affiliate; or they can become exporters, i.e., they serve the foreign market by contracting with an independent distributor. Compared to the benchmark cases, where tax authorities are either unable to audit firms or where they are able to audit them perfectly, the use of the OECD's Comparable Uncontrolled Price (CUP) or Cost-Plus (CP) rule distorts firms' output and pricing decisions. The reason is that the comparable arm's length transactions between exporters and distributors, which serve as benchmarks, are not efficient. We show that implementing the CUP or CP rules is detrimental to consumers in the low tax country, yet benefits consumers in the high tax country.
This paper addresses the issue of capital tax competition among an arbitrary number of countries.... more This paper addresses the issue of capital tax competition among an arbitrary number of countries. Countries are allowed to be asymmetric not only in their population endowment but also in their capital endowment per inhabitant. National governmentstax capital and labor in order to finance a public good. Asymmetric capital taxation arises at equilibrium leading to a distortion on the international capital market. We provide conditions for the existence of a Nash Equilibrium. We fully characterize how equilibrium taxes and welfare levels depend upon countries population and capital endowments.
In 1997, the OECD published guidelines to assess transfer prices, prescribing the application of ... more In 1997, the OECD published guidelines to assess transfer prices, prescribing the application of the "arm's length principle" whereby transfer prices should equal the transaction prices with non-affiliated firms. While the two mostly used rules are the "Comparable Uncontrolled Price" and the "cost-plus" rules, arm's length transfer pricing has been translated mostly into marginal cost pricing in the exist- ing literature. This paper proposes a two-country Dixit-Stiglitz model with iceberg transport costs and with two (endogenous) firm structures — multinationals and ex- porters — allowing us to translate the actual proposed rules into observable variables of a monopolistic competitive market. The firms that operate as exporters use an arm's length relationship with an independent foreign firm, generating double mar- ginalization. Those operating under a multinational structure incur firm-specific distribution costs. In the presence of tax di...
We study a firm which serves two unequally-sized markets and must choose where to locate its firs... more We study a firm which serves two unequally-sized markets and must choose where to locate its first production plant, and whether to open a second plant to serve the other market through local sales rather than exports. An exporter pays taxes only to the country where it locates its single production plant. A double-plant multinational pays taxes in both countries, but may shift taxable profits across them, at a cost. We show that the usual proximity-concentration trade-o between fixed and trade costs is modified, depending on both the aver- age tax of, and the tax dierence between, the two countries. Moreover, increased market size asymmetry may make it more likely that the firm engages in horizon- tal FDI in order to exploit profit shifting opportunities. From a global welfare viewpoint, it is always desirable to control the firm's tax avoidance ability when the multinational structure is given. However, the fact that the firm may react to corporate taxation by changing its pro...
This paper tackles the issue of international fiscal coordination in a world of integrated market... more This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We
Molecular therapy : the journal of the American Society of Gene Therapy, Jan 10, 2015
We have designed mitochondrially targeted Transcription Activator-Like Effector Nucleases or mito... more We have designed mitochondrially targeted Transcription Activator-Like Effector Nucleases or mitoTALENs to cleave specific sequences in the mitochondrial DNA (mtDNA) with the goal of eliminating mtDNA carrying pathogenic point mutations. To test the generality of the approach we designed mitoTALENs to target two relatively common pathogenic mtDNA point mutations associated with mitochondrial diseases: the m.8344A>G tRNA(Lys) gene mutation associated with Myoclonic Epilepsy with Ragged-Red Fibers (MERRF) and the m.13513G>A ND5 mutation associated with MELAS/Leigh Syndrome. Transmitochondrial cybrid cells harbouring the respective heteroplasmic mtDNA mutations were transfected with the respective mitoTALEN and analysed after different time periods. MitoTALENs efficiently reduced the levels of the targeted pathogenic mtDNAs in the respective cell lines. Functional assays showed that cells with heteroplasmic mutant mtDNA were able to recover respiratory capacity and oxidative phos...
Mitochondrial disorders are the most common inborn errors of metabolism affecting the oxidative p... more Mitochondrial disorders are the most common inborn errors of metabolism affecting the oxidative phosphorylation system (OXPHOS). Because of the poor knowledge of the pathogenic mechanisms, a cure for these disorders is still unavailable and all the treatments currently in use are supportive more than curative. Therefore, in the past decade a great variety of mouse models have been developed to assess the in vivo function of several mitochondrial proteins involved in human diseases. Due to the genetic and physiological similarity to humans, mice represent reliable models to study the pathogenic mechanisms of mitochondrial disorders and are precious to test new therapeutic approaches. Here we summarize the features of several mouse models of mitochondrial diseases directly related to defects in subunits of the OXPHOS complexes or in assembly factors. We discuss how these models recapitulate many human conditions and how they have contributed to the understanding of mitochondrial function in health and disease.
Mitochondrial disorders are defined as defects that affect the oxidative phosphorylation system (... more Mitochondrial disorders are defined as defects that affect the oxidative phosphorylation system (OXPHOS). They are characterized by a heterogeneous array of clinical presentations due in part to a wide variety of factors required for proper function of the components of the OXPHOS system. There is no cure for these disorders owing to our poor knowledge of the pathogenic mechanisms of disease. To understand the mechanisms of human disease numerous mouse models have been developed in recent years. Here we summarize the features of several mouse models of mitochondrial diseases directly related to those factors affecting mtDNA maintenance, replication, transcription, translation as well as other proteins that are involved in mitochondrial dynamics and quality control which affect mitochondrial OXPHOS function without being intrinsic components of the system. We discuss how these models have contributed to our understanding of mitochondrial diseases and their pathogenic mechanisms.
In this paper, we revisit the classical trade-off between centralized and decentralized provision... more In this paper, we revisit the classical trade-off between centralized and decentralized provision of local public goods, in a setting where interregional spillovers depend on the level of a national public good. We compare the standard benevolent planner approach with a political economy in which decisions, in a centralized system, are undertaken by a non-cooperative legislature with no separation of powers. We observe that the policy-maker in a centralized system is able to play both with local public goods and spillovers, a mechanism that is not available under a decentralized system. When compared to the traditional exogenous spillovers assumption, this improves the case for centralization under the standard benevolent planner approach. However, the same is not necessarily true in the non-cooperative legislature, as in this case the interests of the legislator do not need to be aligned with those of the society. Finally, we extend the traditional political economy analysis by considering a legislature in which decisions are undertaken by different committees (separation of powers), and show that it performs better than the original non-cooperative legislature, greatly improving the case for centralization. JEL classification: D70, H11, H41, H70.
We study a firm which serves two unequally-sized markets and must choose where to locate its firs... more We study a firm which serves two unequally-sized markets and must choose where to locate its first production plant, and whether to open a second plant to serve the other market through local sales rather than exports. An exporter pays taxes only to the country where it locates its single production plant. A double-plant multinational pays taxes in both countries, but may shift taxable profits across them, at a cost. We show that the usual proximity-concentration trade-o between fixed and trade costs is modified, depending on both the aver- age tax of, and the tax dierence between, the two countries. Moreover, increased market size asymmetry may make it more likely that the firm engages in horizon- tal FDI in order to exploit profit shifting opportunities. From a global welfare viewpoint, it is always desirable to control the firm's tax avoidance ability when the multinational structure is given. However, the fact that the firm may react to corporate taxation by changing its pr...
This paper studies international fiscal coordination in a world of integrated markets and soverei... more This paper studies international fiscal coordination in a world of integrated markets and sovereign national governments. Mobile capital and immobile labor are taxed in order to finance a fixed budget. This generates productive inefficiency. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. It is shown that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound (i.e., a tax range) which is unanimously accepted.
The human gene C10orf2 encodes the mitochondrial replicative DNA helicase Twinkle, mutations of w... more The human gene C10orf2 encodes the mitochondrial replicative DNA helicase Twinkle, mutations of which are responsible for a significant fraction of cases of autosomal dominant progressive external ophthalmoplegia (adPEO), a human mitochondrial disease caused by defects in intergenomic communication. We report the analysis of orthologous mutations in the Drosophila melanogaster mitochondrial DNA (mtDNA) helicase gene, d-mtDNA helicase. Increased expression of wild type d-mtDNA helicase using the UAS-GAL4 system leads to an increase in mtDNA copy number throughout adult life without any noteworthy phenotype, whereas overexpression of d-mtDNA helicase containing the K388A mutation in the helicase active site results in a severe depletion of mtDNA and a lethal phenotype. Overexpression of two d-mtDNA helicase variants equivalent to two human adPEO mutations shows differential effects. The A442P mutation exhibits a dominant negative effect similar to that of the active site mutant. In contrast, overexpression of d-mtDNA helicase containing the W441C mutation results in a slight decrease in mtDNA copy number during the third instar larval stage, and a moderate decrease in life span in the adult population. Overexpression of d-mtDNA helicase containing either the K388A or A442P mutations causes a mitochondrial oxidative phosphorylation (OXPHOS) defect that significantly reduces cell proliferation. The mitochondrial impairment caused by these mutations promotes apoptosis, arguing that mitochondria regulate programmed cell death in Drosophila. Our study of d-mtDNA helicase overexpression provides a tractable Drosophila model for understanding the cellular and molecular effects of human adPEO mutations.
This paper addresses capital tax competition among an arbitrary number of countries. Countries ar... more This paper addresses capital tax competition among an arbitrary number of countries. Countries are asymmetric not only in their population endowment but also in their capital endowment per inhabitant. National governments tax capital and labor in order to finance a fixed public budget. Asymmetric capital taxation arises at equilibrium leading to a distortion on the international capital market. We fully characterize how equilibrium taxes and welfare levels depend upon countries' population and capital endowments. We compare it to the autarchy situation and show that fiscal competition erodes some, but not all, of the gains from capital markets liberalization. .
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Papers by Susana Peralta