Wealth Transfers, Contagion, and Portfolio Constraints

This paper examines the co-movement among stock market prices and exchange rates within a three-country Center-Periphery dynamic equilibrium model in which agents in the Center country face portfolio constraints. In our model, international transmission occurs through the terms of trade, through the common discount factor for cash flows, and, finally, through an additional channel reflecting the tightness of the portfolio constraints. Portfolio constraints are shown to generate endogenous wealth transfers to or from the Periphery countries. These implicit transfers are responsible for creating contagion among the terms of trade of the Periphery countries, as well as their stock market prices. Under a portfolio constraint limiting investment of the Center country in the stock markets of the Periphery, stock prices also exhibit a flight to quality: a negative shock to one of the Periphery countries depresses stock prices throughout the Periphery, while boosting the stock market in the Center.

Asset Prices and Exchange Rates

This paper develops a simple two-country, two-good model, in which the real exchange rate, stock and bond prices are jointly determined. The model predicts that stock market prices are correlated internationally even though their dividend processes are independent, providing a theoretical argument in favor of financial contagion. The foreign exchange market serves as a propagation channel from one stock market to the other. The model identifies interconnections between stock, bond and foreign exchange markets and characterizes their joint dynamics as a three-factor model. Contemporaneous responses of each market to changes in the factors are shown to have unambiguous signs. These implications enjoy strong empirical support. Estimation of various versions of the model reveals that most of the signs predicted by the model indeed obtain in the data, and the point estimates are in line with the implications of our theory. Furthermore, the uncovered interest rate parity relationship has a risk premium in our model, shown to be volatile. We also derive agents? portfolio holdings and identify economic environments under which they exhibit a home bias, and demonstrate that an international CAPM obtaining in our model has two additional factors.

An Asset-Pricing View of External Adjustment

Recent evidence on the importance of cross-border equity flows calls for a rethinking of the standard theory of external adjustment. We introduce equity holdings and portfolio choice into an otherwise conventional open-economy dynamic equilibrium model. Our model is simple and admits a closed-form solution regardless of whether financial markets are complete or incomplete. We find that the excessive emphasis put in the literature on solving models with incomplete markets for the sole purpose of obtaining nontrivial implications for the current account is misplaced. We revisit the current debate on the relative importance of the standard vs. the capital-gains-based (or "valuation'') channels of the external adjustment and establish that in our framework they are congruent. Our model's implications are consistent with a number of intriguing stylized facts documented in the recent empirical literature.

Magnetars: the physics behind observations

Magnetars are the strongest magnets in the present universe and the combination of extreme magnetic field, gravity and density makes them unique laboratories to probe current physical theories (from quantum electrodynamics to general relativity) in the strong field limit. Magnetars are observed as peculiar, burst--active X-ray pulsars, the Anomalous X-ray Pulsars (AXPs) and the Soft Gamma Repeaters (SGRs); the latter emitted also three "giant flares," extremely powerful events during which luminosities can reach up to 10^47 erg/s for about one second. The last five years have witnessed an explosion in magnetar research which has led, among other things, to the discovery of transient, or "outbursting," and "low-field" magnetars. Substantial progress has been made also on the theoretical side. Quite detailed models for explaining the magnetars' persistent X-ray emission, the properties of the bursts, the flux evolution in transient sources have been developed and confronted with observations. New insight on neutron star asteroseismology has been gained through improved models of magnetar oscillations. The long-debated issue of magnetic field decay in neutron stars has been addressed, and its importance recognized in relation to the evolution of magnetars and to the links among magnetars and other families of isolated neutron stars. The aim of this paper is to present a comprehensive overview in which the observational results are discussed in the light of the most up-to-date theoretical models and their implications. This addresses not only the particular case of magnetar sources, but the more fundamental issue of how physics in strong magnetic fields can be constrained by the observations of these unique sources.Comment: 81 pages, 24 figures, This is an author-created, un-copyedited version of an article submitted to Reports on Progress in Physic

One-dimensional carbon nanostructures for terahertz electron-beam radiation

One-dimensional carbon nanostructures such as nanotubes and nanoribbons can feature near-ballistic electronic transport over micron-scale distances even at room temperature. As a result, these materials provide a uniquely suited solid-state platform for radiation mechanisms that so far have been the exclusive domain of electron beams in vacuum. Here we consider the generation of terahertz light based on two such mechanisms, namely, the emission of cyclotronlike radiation in a sinusoidally corrugated nanowire (where periodic angular motion is produced by the mechanical corrugation rather than an externally applied magnetic field), and the Smith-Purcell effect in a rectilinear nanowire over a dielectric grating. In both cases, the radiation properties of the individual charge carriers are investigated via full-wave electrodynamic simulations, including dephasing effects caused by carrier collisions. The overall light output is then computed with a standard model of charge transport for two particularly suitable types of carbon nanostructures, i.e., zigzag graphene nanoribbons and armchair single-wall nanotubes. Relatively sharp emission peaks at geometrically tunable terahertz frequencies are obtained in each case. The corresponding output powers are experimentally accessible even with individual nanowires, and can be scaled to technologically significant levels using array configurations. These radiation mechanisms therefore represent a promising paradigm for light emission in condensed matter, which may find important applications in nanoelectronics and terahertz photonics.DMR-1308659/National Science Foundationhttp://ultra.bu.edu/papers/Tantiwanichapan-2016-PRB-CNT-THz.pd

Antiviral treatment of HBV positive pregnant women: an additional tool to reduce perinatal transmission

In a recent study published in New England Journal of Medicine, Pan and colleagues1 faced an important aspect for prevention of hepatitis B virus (HBV) infection: antiviral treatment with Tenofovir (TDF) during pregnancy to reduce perinatal transmission. This route of infection plays a crucial role for global diffusion of HBV, with frequency of chronic infection in mother-to-childtransmission (MTCT) of 90

Modelling Spatial Regimes in Farms Technologies

We exploit the information derived from geographical coordinates to endogenously identify spatial regimes in technologies that are the result of a variety of complex, dynamic interactions among site-specific environmental variables and farmer decision making about technology, which are often not observed at the farm level. Controlling for unobserved heterogeneity is a fundamental challenge in empirical research, as failing to do so can produce model misspecification and preclude causal inference. In this article, we adopt a two-step procedure to deal with unobserved spatial heterogeneity, while accounting for spatial dependence in a cross-sectional setting. The first step of the procedure takes explicitly unobserved spatial heterogeneity into account to endogenously identify subsets of farms that follow a similar local production econometric model, i.e. spatial production regimes. The second step consists in the specification of a spatial autoregressive model with autoregressive disturbances and spatial regimes. The method is applied to two regional samples of olive growing farms in Italy. The main finding is that the identification of spatial regimes can help drawing a more detailed picture of the production environment and provide more accurate information to guide extension services and policy makers

Modelling Ordinal Responses with Uncertainty: a Hierarchical Marginal Model with Latent Uncertainty components

In responding to rating questions, an individual may give answers either according to his/her knowledge/awareness or to his/her level of indecision/uncertainty, typically driven by a response style. As ignoring this dual behaviour may lead to misleading results, we define a multivariate model for ordinal rating responses, by introducing, for every item, a binary latent variable that discriminates aware from uncertain responses. Some independence assumptions among latent and observable variables characterize the uncertain behaviour and make the model easier to interpret. Uncertain responses are modelled by specifying probability distributions that can depict different response styles characterizing the uncertain raters. A marginal parametrization allows a simple and direct interpretation of the parameters in terms of association among aware responses and their dependence on explanatory factors. The effectiveness of the proposed model is attested through an application to real data and supported by a Monte Carlo study

Municipal Waste Production, Economic Drivers, and ‘New’ Waste Policies: EKC Evidence from Italian Regional and Provincial Panel Data

This paper provides empirical evidence on delinking and Environmental Kuznets Curve (EKC) for municipal waste production in Italy. First, methodological issues and literature on delinking and EKC for waste are critically re-examined. Secondly, we analyse two very disaggregated panel datasets on Italian Regions and Provinces (1996-2004 data for the 20 regions, 2000-2004 data for the 103 provinces) to estimate the extent to which delinking between waste production and economic drivers is taking place. The empirical analysis of different specifications shows mixed evidence in favour of an EKC relationship. Evidence supporting an EKC hypothesis significantly arises at a provincial level, which presents a very high data heterogeneity. Nevertheless, the turning point is at very high levels of added value per capita (around 23,000-26,000€), which characterise a very limited number of wealthy (Northern) Italian provinces. The analysis does not reveal a similar evidence for the regional dataset: only a relative delinking dynamic emerges at the provincial level, we also note a positive relationship between waste production and the share of separated waste collection, which can be explained by the sharp difference in income and waste-policy performance between Northern and Southern Italy. Population density is not significant. Finally, the test on some policy proxies, i.e. the diffusion of the new waste tariff regime at the local-level and the ability of utilities to recover waste service cost, leads to the conclusion that they are not (yet) impacting waste production. To lower the turning points and to avoid an increasing gap between geographical areas, innovative (market based) and more effective policy instruments should be implemented. In particular, the weight of waste policies should be rebalanced towards waste prevention targets and instruments, in line with the priorities stated by the EU and Member Countries. In fact, the indirect feedback effect of good post-production waste management policies/practices on reducing waste production at a source can be weak and slow. In general, the results confirm that more geographically-disaggregated data may offer more insights with respect to cross-country datasets, also from the policy perspective.Decoupling, Environmental Kuznets Curves, Environmental Efficiency, Waste Indicators, Waste Policy, Economic Drivers, Panel Data