On the Static Efficiency of Secondary Bond Markets

The major strand of finance literature understands market efficiency through the market’s ability to process information into prices. Another strand of literature refers to the economists’ usual sense of the word, i.e. that markets ensure that resources are allocated to their most profitable expected use, and provide services at the lowest cost. This paper, deploying the second definition, suggests a concept of static efficiency, and claims this can also be seen as a measure of market quality. The paper develops a measure of qualitative static efficiency for bond markets built on four indicators: transparency, number of maturities and issuers, spread, and liquidity. Indicators of market quality should be easily accessible, and permit international and inter-temporal comparison. Using Nordic markets as case studies, we show that these markets became more efficient during the 1990’s, but that transparency of efficiency remains a problem. A number of measurement problems with the static efficiency indicators are discussed, as well as interdependence issues. The paper concludes with comments on future applications of the static efficiency measure.Efficiency; Transparency; Market Liquidity; Bond Markets

Financing of the private sector in Mexico, 2000-05 : evolution, composition, and determinants

The objective of this paper is to describe the evolution, composition, and determinants of financing to the nonfinancial private sector in Mexico between 2000 and 2005. Supported by the macroeconomic environment and financial system reforms, total financing to the private sector (particularly consumer credit) increased relative to GDP, while accessibilityand affordability generally improved. Equity issuance did not play an important role during the period under consideration. Although the supply of financing shifted toward domestic nonbank providers, commercial banks remain the primary source of funding. Significant progress was made in cleaning up bank loan portfolios and in strengthening financial system soundness and infrastructure. The prospects for continued private sector financing growth remain very positive, but financing is not spread out evenly across all market segments. The authors conclude with some policy implications to further facilitate deeper and broader financing of the private sector.Banks&Banking Reform,Financial Intermediation,Economic Theory&Research,Public Sector Economics&Finance,Financial Crisis Management&Restructuring

Deep Impact: China and the World Economy

Much of the debate about the impact of China on the international political economy arises from the many dimensions of the potential impact and the lack of historical precedent for such a large change. This paper provides some context for thinking about these issues by contrasting China’s recent expansion with the USA at the end of the last great wave of globalization, and reviewing recent quantitative modelling of China’s growth on other countries. It argues that China’s growth is good for the world economy with significant terms-of-trade gains being experienced in its trading partners, reductions in poverty and increases in living standards. Nevertheless it also suggests we should be cautious in predicting China’s future role in the world economy. It still commands only a fraction of the spending power of the USA and further growth will require China to embrace good institutions and continue the move to a more market-based economy.Economic Growth, India, Growth Accounting, Investment, Productivity

An analysis of Space Shuttle countdown activities: Preliminaries to a computational model of the NASA Test Director

Before all systems are go just prior to the launch of a space shuttle, thousands of operations and tests have been performed to ensure that all shuttle and support subsystems are operational and ready for launch. These steps, which range from activating the orbiter's flight computers to removing the launch pad from the itinerary of the NASA tour buses, are carried out by launch team members at various locations and with highly specialized fields of expertise. The liability for coordinating these diverse activities rests with the NASA Test Director (NTD) at NASA-Kennedy. The behavior is being studied of the NTD with the goal of building a detailed computational model of that behavior; the results of that analysis to date are given. The NTD's performance is described in detail, as a team member who must coordinate a complex task through efficient audio communication, as well as an individual taking notes and consulting manuals. A model of the routine cognitive skill used by the NTD to follow the launch countdown procedure manual was implemented using the Soar cognitive architecture. Several examples are given of how such a model could aid in evaluating proposed computer support systems

Revenue, Efficiency, and Equity Aspects of Major Taxes in Chile: A Preliminary Assessment

This paper assesses selected revenue, efficiency, and equity aspects of Chile’s major taxes, i.e., the income tax, the value-added tax (VAT), and excises. Chile’s present overall tax burden, at about 20 percent of GDP, is in line with that in its neighboring countries. Whether any change from this level is desirable depends in a fundamental way on the public expenditure needs of the country without jeopardizing macroeconomic stability. Chile has a top personal income tax (PIT) rate (45 percent) that is at the high end of the international spectrum, and a corporate income tax (CIT) rate (15 percent) that is an outlier at the low end. The gap between these two rates (the income rate gap) of 30 percentage points could entail important revenue, efficiency, and equity costs that must be weighed carefully against any perceived or actual benefits. It may be worthwhile to undertake an assessment of the revenue and efficiency costs relative to the expected benefits of some aspects of the income tax system. Namely, saving incentives presently available, the cost effectiveness of the global complementary tax in achieving its revenue and equity objectives of taxing income on a global income basis, simpler ways of taxing capital and labor incomes, the introduction of royalties for the exploitation of natural resources. There are also a number of areas where existing policies could be reevaluated to enhance the efficiency and revenue potential of the VAT and excises. They include: (1) the special VAT credit to the construction sector; (2) the present exclusion of the excise revenue on many excisable goods--especially petroleum products--from the VAT base; (3) the role of the stamp duties and the VAT treatment of the financial sector; and (4) the appropriate excise burdens on motor vehicles and petroleum products for revenue and environmental reasons.

Posture optimization algorithm for large structure assemblies based on skin model

Geometric deviations inevitably occur in product manufacturing and seriously affect the assembly quality and product functionality. Assembly simulations on the basis of computer-aided design (CAD) package could imitate the assembly process and thus find out the design deficiencies and detect the assemblability of the components. Although lots of researches have been done on the prediction of assembly variation considering the geometric errors, most of them only simplify the geometric variation as orientation and position deviation rather than the manufacturing deformation. However, in machinery manufacturing, even if the manufacturing defects are limited, they could propagate and accumulate through components and lead to a noncompliant assembly. Recently, many point-based models have been applied to assembly simulation; however they are mainly interested in simulating the resulting positions of the assembled parts and lack the consideration of the postprocessing after positioning. This paper enriches the complete assembly simulation process based on skin model and presents a simple and effective posture evaluation and optimization method. The studied approach includes a software algorithm applied to evaluate the contact state of the assembly parts and a mathematical model based on the particle swarm optimization to acquire the optimal assembly posture. To verify the efficiency and feasibility of the proposed method, a case study on the aircraft wing box scaling model assembly is performed