Employee Heterogeneity and Within-Firm Experience-Earnings Profiles: A Nonparametric Analysis

Abstract Motivated by a priori uncertainty with respect to the parametric specification of the earnings function, I model the earnings function as semiparametric partially linear model and follow the estimation approach described in Robinson (1988). Using data from the personnel records of a large major UK based financial sector employer, I let years of within-firm and pre-firm experience form the nonparametrically modelled component of the earnings function. It is shown that the estimated within-firm experience earnings profiles, which are conditional upon a given number years of pre-firm experience accumulated before entry, converge and even overtake as years of pre-firm experience increases. This result can be explained with the recognition of unobservable explanatory variables, such as the match and individual quality of the employees, both of which are a function of years of within- and pre-firm experience and wages

Upside and Downside Risk Exposures of Currency Carry Trades via Tail Dependence

Currency carry trade is the investment strategy that involves selling low interest rate currencies in order to purchase higher interest rate currencies, thus profiting from the interest rate differentials. This is a well known financial puzzle to explain, since assuming foreign exchange risk is uninhibited and the markets have rational risk-neutral investors, then one would not expect profits from such strategies. That is, according to uncovered interest rate parity (UIP), changes in the related exchange rates should offset the potential to profit from such interest rate differentials. However, it has been shown empirically, that investors can earn profits on average by borrowing in a country with a lower interest rate, exchanging for foreign currency, and investing in a foreign country with a higher interest rate, whilst allowing for any losses from exchanging back to their domestic currency at maturity. This paper explores the financial risk that trading strategies seeking to exploit a violation of the UIP condition are exposed to with respect to multivariate tail dependence present in both the funding and investment currency baskets. It will outline in what contexts these portfolio risk exposures will benefit accumulated portfolio returns and under what conditions such tail exposures will reduce portfolio returns.Comment: arXiv admin note: substantial text overlap with arXiv:1303.431

Discovery of a dsRNA virus infecting the marine photosynthetic protist Micromonas pusilla

AbstractWe report the isolation of the first double-stranded (ds) RNA virus in the family Reoviridae that infects a protist (microalga Micromonas pusilla, Prasinophyceae). The dsRNA genome was composed of 11 segments ranging between 0.8 and 5.8 kb, with a total size of approximately 25.5 kb. The virus (MpRNAV-01B) could not be assigned to the genus level because host type, genome size, and number of segments smaller than 2 kb did not correspond to either of the two existing 11-segmented dsRNA genera Rotavirus and Aquareovirus. MpRNAV-01B has a particle size of 65–80 nm, a narrow host range, a latent period of 36 h, and contains five major proteins (120, 95, 67, 53, and 32 kDa). MpRNAV-01B was stable to freeze–thawing, resistant to chloroform, ether, nonionic detergents, chelating and reducing agents. The virus was inactivated at temperatures above 35 °C and by ionic detergent, ethanol, acetone, and acidic conditions (pH 2–5)

Assessing extrema of empirical principal component functions

The difficulties of estimating and representing the distributions of functional data mean that principal component methods play a substantially greater role in functional data analysis than in more conventional finite-dimensional settings. Local maxima and minima in principal component functions are of direct importance; they indicate places in the domain of a random function where influence on the function value tends to be relatively strong but of opposite sign. We explore statistical properties of the relationship between extrema of empirical principal component functions, and their counterparts for the true principal component functions. It is shown that empirical principal component funcions have relatively little trouble capturing conventional extrema, but can experience difficulty distinguishing a ``shoulder'' in a curve from a small bump. For example, when the true principal component function has a shoulder, the probability that the empirical principal component function has instead a bump is approximately equal to 1/2. We suggest and describe the performance of bootstrap methods for assessing the strength of extrema. It is shown that the subsample bootstrap is more effective than the standard bootstrap in this regard. A ``bootstrap likelihood'' is proposed for measuring extremum strength. Exploratory numerical methods are suggested.Comment: Published at http://dx.doi.org/10.1214/009053606000000371 in the Annals of Statistics (http://www.imstat.org/aos/) by the Institute of Mathematical Statistics (http://www.imstat.org

Viewpoint Development of Stochastic Hybrid Systems

Nowadays, due to the explosive spreading of networked and highly distributed systems, mastering system complexity becomes a critical issue. Two development and verification paradigms have become more popular: viewpoints and randomisation. The viewpoints offer large freedom and introduce concurrency and compositionality in the development process. Randomisation is now a traditional method for reducing complexity (comparing with deterministic models) and it offers finer analytical analysis tools (quantification over non-determinism, multi-valued logics, etc). In this paper, we propose a combination of these two paradigms introducing a viewpoint methodology for systems with stochastic behaviours

An UML+Z Framework For Validating And Verifying the Static Aspect of Safety Critical System

AbstractThe aim of this paper is to propose an augmented framework for verifying and validating the static aspect of safety critical systems by analysing the UML class diagrams and the relationship between them. Since UML is a semi formal language which is provn to ambiguities due to its various graphical notations, hence Formal analysis of UML class diagram is required. Moreover, class diagram play an important role in system designing phase especially in safety critical systems. Any ambiguity or inconsistency in design can result in potential failure. Formal methods are the mathematical tools and methodology which are sandwiched at various stages of software development process to ensure the correctness, consistency and completeness of software artifacts such as requirement specifications, design etc. In this article, Z notation is used for the purpose of analysis formally and later on verified by the Z/EVES tool