We study the role of domestic financial institutions in sustaining capital flows to the private and public sector of a country whose government can default on its debt. As in recent public debt crises, in our model public defaults weaken banks' balance sheets, disrupting domestic financial markets. This effect leads to a novel complementarity between private capital inflows and public borrowing, where the former sustain the latter by boosting the government's cost of default. Our key message is that, by shaping the direction of private capital flows, financial institutions determine whether financial integration improves or reduces government discipline. We explore the implications of this complementarity for financial liberalization and debt-financed bailouts of banks. We present some evidence consistent with complementarity.JEL classification: F34, F36, G15, H63.

This paper provides an analysis of the distribution patterns of marine biodiversity and summarizes the major activities of the Census of Marine Life program in the Caribbean region. The coastal Caribbean region is a large marine ecosystem (LME) characterized by coral reefs, mangroves, and seagrasses, but including other environments, such as sandy beaches and rocky shores. These tropical ecosystems incorporate a high diversity of associated flora and fauna, and the nations that border the Caribbean collectively encompass a major global marine biodiversity hot spot. We analyze the state of knowledge of marine biodiversity based on the geographic distribution of georeferenced species records and regional taxonomic lists. A total of 12,046 marine species are reported in this paper for the Caribbean region. These include representatives from 31 animal phyla, two plant phyla, one group of Chromista, and three groups of Protoctista. Sampling effort has been greatest in shallow, nearshore waters, where there is relatively good coverage of species records; offshore and deep environments have been less studied. Additionally, we found that the currently accepted classification of marine ecoregions of the Caribbean did not apply for the benthic distributions of five relatively well known taxonomic groups. Coastal species richness tends to concentrate along the Antillean arc (Cuba to the southernmost Antilles) and the northern coast of South America (Venezuela – Colombia), while no pattern can be observed in the deep sea with the available data. Several factors make it impossible to determine the extent to which these distribution patterns accurately reflect the true situation for marine biodiversity in general: (1) highly localized concentrations of collecting effort and a lack of collecting in many areas and ecosystems, (2) high variability among collecting methods, (3) limited taxonomic expertise for many groups, and (4) differing levels of activity in the study of different taxa.

International audienceThe marine areas of South America (SA) include almost 30,000 km of coastline and encompass three different oceanic domains--the Caribbean, the Pacific, and the Atlantic--ranging in latitude from 12°N to 55°S. The 10 countries that border these coasts have different research capabilities and taxonomic traditions that affect taxonomic knowledge. This paper analyzes the status of knowledge of marine biodiversity in five subregions along the Atlantic and Pacific coasts of South America (SA): the Tropical East Pacific, the Humboldt Current, the Patagonian Shelf, the Brazilian Shelves, and the Tropical West Atlantic, and it provides a review of ecosystem threats and regional marine conservation strategies. South American marine biodiversity is least well known in the tropical subregions (with the exception of Costa Rica and Panama). Differences in total biodiversity were observed between the Atlantic and Pacific oceans at the same latitude. In the north of the continent, the Tropical East Pacific is richer in species than the Tropical West Atlantic, however, when standardized by coastal length, there is very little difference among them. In the south, the Humboldt Current system is much richer than the Patagonian Shelf. An analysis of endemism shows that 75% of the species are reported within only one of the SA regions, while about 22% of the species of SA are not reported elsewhere in the world. National and regional initiatives focusing on new exploration, especially to unknown areas and ecosystems, as well as collaboration among countries are fundamental to achieving the goal of completing inventories of species diversity and distribution. These inventories will allow accurate interpretation of the biogeography of its two oceanic coasts and latitudinal trends, and will also provide relevant information for science based policie

We develop a stylized model of economic growth with bubbles in which changes in investor sentiment lead to the appearance and collapse of macroeconomic bubbles or pyramid schemes. These bubbles mitigate the effects of financial frictions. During bubbly episodes, unproductive investors demand bubbles while productive investors supply them. These transfers of resources improve economic efficiency thereby expanding consumption, the capital stock and output. When bubbly episodes end, there is a fall in consumption, the capital stock and output. We argue that the stochastic equilibria of the model provide a natural way of introducing bubble shocks into business cycle models. (JEL E22, E23, E32, E44, O41)

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