A Survey of Empirical Research on Nominal Exchange Rates

We survey the empirical literature on floating nominal exchange rates over the past decade. Exchange rates are difficult to forecast at short- to medium-term horizons. There is a bit of explanatory power to monetary models such as the Dornbusch 'overshooting' theory, in the form of reaction to 'news' and in forecasts at long-run horizons. Nevertheless, at short horizons, a driftless random walk characterizes exchange rates better than standard models based on observable macroeconomic fundamentals. Unexplained large shocks to floating rates must then, logically, be due either to innovations in unobservable fundamentals, or to non-fundamental factors such as speculative bubbles. The observed difference in exchange rate and macroeconomic volatility under different nominal exchange rate regimes makes us skeptical of the first view. The theory and evidence on speculative bubbles, however, is not conclusive. We conclude with the hope that promising new studies of the microstructure of the foreign exchange market might eventually rise to insights into these phenomena.

The Endogeneity of the Optimum Currency Area Criteria

A country's suitability for entry into a currency union depends on a number of economic conditions. These include, inter alia, the intensity of trade with other potential members of the currency union, and the extent to which domestic business cycles are correlated with those of the other countries. But international trade patterns and international business cycle correlations are endogenous. This paper develops and investigates the relationship between the two phenomena. Using thirty years of data for twenty industrialized countries, we uncover a strong and striking empirical finding: countries with closer trade links tend to have more tightly correlated business cycles. It follows that countries are more likely to satisfy the criteria for entry into a currency union after taking steps toward economic integration than before.

A Panel Project on Purchasing Power Parity: Mean Reversion Within and Between Countries

Previous time-series studies have shown evidence of mean- reversion in real exchange rates. Deviations from purchasing power parity (PPP) appear to have half-lives of approximately four years. However, the long samples required for statistical significance are unavailable for most currencies, and may be inappropriate because of regime changes. In this study, we re-examine deviations from PPP using a panel of 150 countries and 45 annual observations. Our panel shows strong evidence of mean-reversion that is similar to that from long time-series. PPP deviations are eroded at a rate of approximately 15% annually, i.e., their half-life is around four years. Such findings can be masked in time-series data, but are relatively easy to find in cross-sections.

Doctor of Philosophy

dissertationParalysis due to spinal cord injury or stroke can leave a person with intact peripheral nerves and muscles, but deficient volitional motor control, thereby reducing their health and quality of life. Functional neuromuscular stimulation (FNS) has been widely studied and employed in clinical devices to aid and restore lost or deficient motor function. Strong, selective, and fatigue-resistant muscle forces can be evoked by asynchronously stimulating small independent groups of motor neurons via multiple intrafascicular electrodes on an implanted Utah slanted electrode array (USEA). Determining the parameters of asynchronous intrafascicular multi-electrode stimulation (aIFMS), i.e., the per-electrode stimulus intensities and the interelectrode stimulus phasing, to evoke precise muscle force or joint motion presents unique challenges because this system has multiple-inputs, the n independently stimulated electrodes, but only one measurable output, the evoked endpoint isometric force or joint position. This dissertation presents three studies towards developing robust real-time control of aIFMS. The first study developed an adaptive feedforward algorithm for selecting aIFMS per-electrode stimulus intensities and interelectrode stimulus phasing to evoke a variety of isometric ankle plantar-flexion force trajectories. In simulation and experiments, desired step, sinusoidal, and more-complex time-varying isometric forces were successfully evoked. The second study developed a closed-loop feedback control method for determining aIFMS per-electrode stimulus intensities to evoke precise single-muscle isometric ankle plantar-flexion force trajectories, in real-time. Using a proportional closed-loop force-feedback controller, desired step, sinusoid, and more complex time-varying forces were evoked with good response characteristics, even in the presence of nonlinear system dynamics, such as muscle fatigue. The third study adapted and extended the closed-loop feedback controller to the more demanding task of controlling joint position in the presence of opposing joint torques. A proportional-plus-velocity-plus-integral (PIV) joint-angle feedback controller evoked and held desired steps in position with responses th a t were stable, consistent, and robust to disturbances. The controller evoked smooth ramp-up (concentric) and ramp-down (eccentric) motion, as well as precise slow moving sinusoidal motion. The control methods developed in this dissertation provide a foundation for new lower-limb FNS-based neuroprostheses that can generate sustained and coordinated muscle forces and joint motions that will be desired by paralyzed individuals on a daily basis. proportional-plus-velocity-plus-integral (PIV) joint-angle feedback controller evoked and held desired steps in position with responses th a t were stable, consistent, and robust to disturbances. The controller evoked smooth ramp-up (concentric) and ramp-down (eccentric) motion, as well as precise slow moving sinusoidal motion. The control methods developed in this dissertation provide a foundation for new lower-limb FNS-based neuroprostheses that can generate sustained and coordinated muscle forces and joint motions that will be desired by paralyzed individuals on a daily basis

Currency Crashes in Emerging Markets: Empirical Indicators

We use a panel of annual data for over one hundred developing countries from 1971 through 1992 to characterize currency crashes. We define a currency crash as a large change of the nominal exchange rate that is also a substantial increase in the rate of change of nominal depreciation. We examine the composition of the debt as well as its level, and a variety of other macroeconomic factors, external and foreign. Crashes tend to occur when: output growth is low; the growth of domestic credit is high; and the level of foreign interest rates is high. A low ratio of FDI to debt is consistently associated with a high likelihood of a crash.

Introduction of the \u3csup\u3e305\u3c/sup\u3eArg→\u3csup\u3e305\u3c/sup\u3eSer mutation in the large extrinsic loop E of the CP43 protein of Synechocystis sp. PCC 6803 leads to the loss of cytochrome c\u3csub\u3e550\u3c/sub\u3e binding to Photosystem II

CP43, a component of Photosystem II (PSII) in higher plants, algae and cyanobacteria, is encoded by the psbC gene. Previous work demonstrated that alteration of an arginine residue occurring at position 305 to serine produced a strain (R305S) with altered PSII characteristics including lower oxygen-evolving activity, fewer assembled reaction centers, higher sensitivity to photoinactivation, etc. [Biochemistry 38 (1999) 1582]. Additionally, it was determined that the mutant exhibited an enhanced stability of its S2 state. Recently, we observed a significant chloride effect under chloride-limiting conditions. The mutant essentially lost the ability to grow photoautotrophically, assembled fewer fully functional PSII reaction centers and exhibited a very low rate of oxygen evolution. Thus, the observed phenotype of this mutation is very similar to that observed for the psbV mutant, which lacks cytochrome c550 (Biochemistry 37 (1998) 1551). A His-tagged version of the R305S mutant was produced to facilitate the isolation of PSII particles. These particles were analyzed for the presence of cytochrome c550. Reduced minus oxidized difference spectroscopy and chemiluminescence examination of Western blots indicated that cytochrome c550 was absent in these PSII particles. Whole cell extracts from the R305S mutant, however, contained a similar amount of cytochrome c550 to that observed in the control strain. These results indicate that the mutation R305S in CP43 prevents the strong association of cytochrome c550 with the PSII core complex. We hypothesize that this residue is involved in the formation of the binding domain for the cytochrome. © 2002 Elsevier Science B.V. All rights reserved

Economic Structure and the Decision to Adopt a Common Currency

Everyone studying EMU cites the theory of Optimum Currency Areas: whether a country like Sweden should join the currency union depends on such parameters as the extent of Swedish trade with other EU members and the correlation of Sweden’s income with that of other members. Few economists have focused on what we consider one of the most interesting aspects of this issue. Trade patterns and income correlations are endogenous. Sweden could fail the OCA criterion for membership today, and yet, if it goes ahead and joins anyway, could, as the result of joining, pass the Optimum Currency Area (OCA) criterion in the future. (Further, even if Sweden does not enter EMU quickly, it will be more likely to satisfy the OCA criteria in the future as a result of its recent accession to the EU.) The few economists who have identified the importance of the endogeneity of trade patterns and income correlation are divided on the nature of the relationship between the two. This is an important empirical question, which may hold the key to the answer regarding whether it is in Sweden’s interest to join EMU. We review the OCA theory, highlighting the role of trade links and income links. Then we discuss and analyze the endogeneity of these parameters. We present econometric evidence suggesting strongly that if trade links between Sweden and the rest of Europe strengthen in the future, then Sweden’s income will become more highly correlated with European income in the future (not less correlated, as some have claimed). This has important implications for the OCA criterion. It means that a naïve examination of historical data gives a biased picture of the effects of EMU entry on Sweden. It also means that EMU membership is more likely to make sense for Sweden in the future than it does today.EMU; Optimum Currency Area; trade patterns; income correlations