Are Asset Price Guarantees Useful for Preventing Sudden Stops?: A Quantitative Investigation of the Globalization Hazard-Moral Hazard Tradeoff

The globalization hazard hypothesis maintains that the current account reversals and asset price collapses observed during 'Sudden Stops' are caused by global capital market frictions. A policy implication of this view is that Sudden Stops can be prevented by offering global investors price guarantees on emerging markets assets. These guarantees, however, introduce a moral hazard incentive for global investors, thus creating a tradeoff by which price guarantees weaken globalization hazard but strengthen international moral hazard. This paper studies the quantitative implications of this tradeoff using a dynamic stochastic equilibrium asset-pricing model. Without guarantees, distortions induced by margin calls and trading costs cause Sudden Stops driven by Fisher's debt-deflation mechanism. Price guarantees prevent this deflation by introducing a distortion that props up foreign demand for assets. Non-state-contingent guarantees contain Sudden Stops but they are executed often and induce persistent asset overvaluation. Guarantees offered only in high-debt states are executed rarely and prevent Sudden Stops without persistent asset overvaluation. If the elasticity of foreign asset demand is low, price guarantees can still contain Sudden Stops but domestic agents obtain smaller welfare gains at Sudden Stop states and suffer welfare losses on average in the stochastic steady state.

Putting the Brakes on Sudden Stops: The Financial Frictions-Moral Hazard Tradeoff of Asset Price Guarantees

The hypothesis that Sudden Stops to capital inflows in emerging economies may be caused by global capital market frictions, such as collateral constraints and trading costs, suggests that Sudden Stops could be prevented by offering price guarantees on the emerging-markets asset class. Providing these guarantees is a risky endeavor, however, because they introduce a moral-hazard-like incentive similar to those that are also viewed as a cause of emerging markets crises. This paper studies this financial frictions-moral hazard tradeoff using an equilibrium asset-pricing model in which margin constraints, trading costs, and ex-ante price guarantees interact in the determination of asset prices and macroeconomic dynamics. In the absence of guarantees, margin calls and trading costs create distortions that produce Sudden Stops driven by occasionally binding credit constraints and Irving Fisher's debt-deflation mechanism. Price guarantees contain the asset deflation by creating another distortion that props up the foreign investors' demand for emerging markets assets. Quantitative simulation analysis shows the strong interaction of these two distortions in driving the dynamics of asset prices, consumption and the current account. Price guarantees are found to be effective for containing Sudden Stops but at the cost of introducing potentially large distortions that could lead to 'overvaluation' of emerging markets assets.

Precautionary Demand for Foreign Assets in Sudden Stop Economies: An Assessment of the New Merchantilism

Financial globalization was off to a rocky start in emerging economies hit by Sudden Stops since the mid 1990s. Foreign reserves grew very rapidly during this period, and hence it is often argued that we live in the era of a New Merchantilism in which large stocks of reserves are a war-chest for defense against Sudden Stops. We conduct a quantitative assessment of this argument using a stochastic intertemporal equilibrium framework with incomplete asset markets in which precautionary saving affects foreign assets via three mechanisms: business cycle volatility, financial globalization, and Sudden Stop risk. In this framework, Sudden Stops are an equilibrium outcome produced by an endogenous credit constraint that triggers Irving Fisher's debt-deflation mechanism. Our results show that financial globalization and Sudden Stop risk are plausible explanations of the observed surge in reserves but business cycle volatility is not. In fact, business cycle volatility has declined in the post-globalization period. These results hold whether we use the formulation of intertemporal preferences of the Bewley-Aiyagari-Hugget class of precautionary savings models or the Uzawa-Epstein setup with endogenous time preference.

Ion-acoustic solitons in warm magnetoplasmas with super-thermal electrons

In this work, the phenomenon of formation of localised electrostatic waves (ESW) or soliton is considered in a warm magnetoplasma with the possibility of non-thermal electron distribution. The parameter regime considered here is relevant in case of magnetospheric plasmas. We show that deviation from a usual relaxed Maxwellian distribution of the electron population has a significant bearing in the allowed parameter regime, where these ESWs can be found. We further consider the presence of more than one electron temperature, which is inspired by recent space-based observations[key-2].Comment: 10 pages, 5 figure

Pulsed x-rays dose measurements from a hundred joules plasma focus device

Indexación: Scopus.Present work is aimed to perform dosimetric measurements to characterize dosis obtained from pulsed x-rays emitted from a hundred joules plasma focus device PF-400J using thermoluminescent dosimeters (TLD-100). Two dosimeter arrays (containing 21 dosimeters in each) were used. One of the arrays was kept inside the PF-400J vacuum chamber and other outside the vacuum chamber, simultaneously. It was found that dosis obtained from the inside array (∼200.7 mGy) were hundred times larger than the outside array (∼1.1 mGy) for hundred pulses of x-rays. Later, the vacuum window of PF-400J, which was made of 1 mm aluminum, was replaced by a plastic window and a similar dosimeter array was kept outside the chamber over the plastic window. With this arrangement, the obtained doses (100 pulses of x-rays) were of the same order of magnitude (∼106 mGy) as it was inside the vacuum chamber. Later, a lead piece was inserted inside the hollow anode of PF-400J, which increased dose (∼250 mGy) per hundred pulses of x-ray outside the vacuum chamber using plastic vacuum window. Our results suggest that PF-400J could be a useful device to study low dose pulsed radiation effects on cancer cell lines in in vitro experiments. © Published under licence by IOP Publishing Ltd.The work is supported by grant ACT-1115, CONICYT, Chile.https://iopscience.iop.org/article/10.1088/1742-6596/1043/1/01204

AAUOKHYB -1 : An excellent Okra hybrid developed by Assam Agricultural University (AAU) suitable for diverse agro-climatic situation of North East India

A hybrid development programme on okra (Abelmoschus esculentus) was undertaken at the Assam Agricultural University (AAU), Jorhat. The work included collection and evaluation of okra germplasm, identification of parents for hybridization, selfing of identified parental lines, making crosses and production of hybrid seeds, testing of hybrids for yield and resistance to Yellow Vein Mosaic Virus (YVMV) disease, adaptability under diverse agro-climatic condition and testing in all India trials. The programme resulted in development and identification of excellent Okra hybrid AAUOKHYB-1 in 2017.  The performance of the hybrid was very good under diverse agro-climatic conditions yielding about 162.0 q/ha fruit yield which is 32.5% higher than the best commercial check Arka Anamika. The hybrid showed resistant (R) reaction to YVMV disease. A wide range of heterosis upto 43% was exhibited by the hybrid in different vegetable research centers of the country as compared to the best check variety

Effect of some biocontrol agents against root-knot nematode (Meloidogyne incognita race2)

Culture filtrate of four rhizospheric fungi and four biocontrol agents were studied in vitro for their efficacy against Meloidogyne incognita race 2. The per cent mortality and egg hatching inhibition was proportional to the concentration of culture filtrate and the duration of exposure period. Culture filtrates of Trichoderma viride, Trichoderma harzianum, Trichoderma sp., Fusarium sp., Penicillium sp. and Aspergillus sp. significantly induced inhibition of egg hatching and mortality of Meloidogyne incognita race 2.The highest percentage of inhibition of egg hatching and juvenile mortality was recorded in Trichoderma harzianum followed by Trichoderma viride and Trichoderma sp

Analysis of Deterioration in a Plasma Focus Device

Indexación: Scopus.The Plasma Focus (PF) is a kind of dense transient plasmas in with high-pulsed voltage. To produce devices for eld application it is necessary to obtain PF equipment able to operate for a long period of time. Thus, a reliability analysis is indispensable. In this work a reliability analysis program for plasma focus devices is presented. The program considers a criticality analysis using Failure Modes and Effects Criticality Analysis (FMECA) to identify the most important failure modes of the system. Said failure modes are studied operating the Plasma Focus for many cycles, obtaining from them the characteristic curves of V(t) and İ(t). Feature Extraction (FE) techniques are applied to obtain a list of parameters that correlate to the degrading process. Furthermore, Machine Learning tools are used to learn from the obtained data, linking the changes in these parameters during its life cycle to the decay of the system in hope for future implementation of a predictive maintenance system and a reference for data analysis and prediction in PFs. The study was applied to a portable plasma focus device operated at 2 joules of stored energy. © Published under licence by IOP Publishing Ltd.The work is supported by IAEA CRP contract 20370 and by grant ACT-1115, CONICYT, Chile.https://iopscience.iop.org/article/10.1088/1742-6596/1043/1/01204