Regional Debt in Monetary Unions: Is it Inflationary?

This paper studies the inflationary implications of interest bearing regional debt in a monetary union. Is this debt simply backed by future taxation with no inflationary consequences? Or will the circulation of region debt induce monetization by a central bank? We argue here that both outcomes can arise in equilibrium. In the model economy, there are multiple equilibria which reflect the perceptions of agents regarding the manner in which the debt obligations will be met. In one equilibrium, termed Ricardian, the future obligations are met with taxation by a regional government while in the other, termed Monetization, the central bank is induced to print money to finance the region's obligations. The multiplicity of equilibria reflects a commitment problem of the central bank. A key indicator of the selected equilibrium is the distribution of the holdings of the regional debt. We show that regional governments, anticipating central bank financing of their debt obligations, have an incentive to create excessively large deficits. We use the model to assess the impact of policy measures within a monetary union.Monetary Union ; Inflation tax ; Seigniorage ; Public debt.

Microwave diode amplifiers with low intermodulation distortion

Distortions can be greatly reduced in narrow-band applications by using the second harmonic. The ac behavior of simplified diode amplifier has negative resistance depending on slope of equivalent I-V curve

Insulation impossible: monetary policy and regional fiscal spillovers in a federation

This paper studies the effects of monetary policy rules in a fiscal federation, such as the European Union. The focus of the analysis is the interaction between the fiscal policy of member countries (regions) and the monetary authority. Each of the countries structures its fiscal policy (spending and taxes) with the interests of its citizens in mind. Ricardian equivalence does not hold due to the presence of monetary frictions, modeled here as reserve requirements. When capital markets are integrated, the fiscal policy of one country influences equilibrium wages and interest rates. Under certain rules, monetary policy may respond to the price variations induced by regional fiscal policies. Depending on the type of rule it adopts, interventions by the monetary authority affect the magnitude and nature of the spillover from regional fiscal policy.Monetary Union, Inflation tax, Seigniorage, monetary rules, public debt.

Monetary rules and the spillover of regional fiscal policies in a federation.

This paper studies the effects of monetary policy rules in a fiscal federation, such as the European Union. The focus of the analysis is the interaction between the fiscal policy of member countries (regions) and the monetary authority. Each of the countries structures its fiscal policy (spending and taxes) with the interests of its citizens in mind. Ricardian equivalence does not hold due to the presence of monetary frictions, modelled here as reserve requirements. When capital markets are integrated, the fiscal policy of one country influences equilibrium wages and interest rates. Under certain rules, monetary policy may respond to the price variations induced by regional fiscal policies. Depending on the type of rule it adopts, interventions by the monetary authority affect the magnitude and nature of the spillover from regional fiscal policy.Monetary Union ; Inflation tax ; Seigniorage ; monetary rules ; public debt.

Non-equilibrium dynamics in quantum field theory at high density: the tsunami

The dynamics of a dense relativistic quantum fluid out of thermodynamic equilibrium is studied in the framework of the Phi^4 scalar field theory in the large N limit. The time evolution of a particle distribution in momentum space (the tsunami) is computed. The effective mass felt by the particles in such a high density medium equals the tree level mass plus the expectation value of the squared field. The case of negative tree level squared mass is particularly interesting. In such case dynamical symmetry restoration as well as dynamical symmetry breaking can happen. Furthermore, the symmetry may stay broken with vanishing asymptotic squared mass showing the presence of out of equilibrium Goldstone bosons. We study these phenomena and identify the set of initial conditions that lead to each case. We compute the equation of state which turns to depend on the initial state. Although the system does not thermalize, the equation of state for asymptotically broken symmetry is of radiation type. We compute the correlation functions at equal times. The two point correlator for late times is the sum of different terms. One stems from the initial particle distribution. Another term accounts for the out of equilibrium Goldstone bosons created by spinodal unstabilities when the symmetry is asymptotically broken.Both terms are of the order of the inverse of the coupling for distances where causal signals can connect the two points. The contribution of the out of equilibrium Goldstones exhibits scaling behaviour in a generalized sense.Comment: LaTex, 49 pages, 15 .ps figure

A proposed test of the Einstein theory of gravitation by means of an unshielded orbiting gyro using passive telemetry

Proposed test of theory of gravitation by an unshielded earth orbiting gyroscope using passive telemetr

The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications

[Excerpt] On June 30, 2007, U.S. and South Korean trade officials signed the proposed U.S.-South Korean Free Trade Agreement (KORUS FTA) for their respective countries. If approved, the KORUS FTA would be the second-largest FTA that South Korea has signed to date, after the agreement with the European Union (EU). It would be the second-largest (next to North American Free Trade Agreement, NAFTA) in which the United States participates. South Korea is the seventhlargest trading partner of the United States and the United States is South Korea’s third-largest trading partner. Various studies conclude that the agreement would increase bilateral trade and investment flows. The final text of the proposed KORUS FTA covers a wide range of trade and investment issues and, therefore, could have substantial economic implications for both the United States and South Korea. The agreement will not enter into force unless Congress approves implementation legislation. The negotiations were conducted under the trade promotion authority (TPA), also called fast-track trade authority, that Congress granted the President under the Bipartisan Trade Promotion Act of 2002 (P.L. 107-210). Under TPA the President has the discretion on when to submit the implementing legislation to Congress. President Bush did not submit the legislation because of differences with the Democratic leadership over treatment of autos and beef, among other issues. Early in his Administration, President Obama indicated the need to resolve those issues before he would submit the implementing legislation. On December 3, 2010, after a series of arduous negotiations and missed deadlines, President Obama and President Lee announced that their negotiators reached agreement on modifications in the KORUS FTA, and that they were prepared to move ahead to getting the agreement approved by the respective legislatures. The White House is expected to send implementing legislation to the 112th Congress and that it would like to see Congress approve the agreement by July 1 of this year. The modifications are in the form of changes in phase-out periods for tariffs on autos, a new safeguard provision on autos, and concessions by South Korea on allowing a larger number of U.S. cars into South Korea under U.S. safety standards than was the case under the original KORUS FTA provisions. The issue of full U.S. beef access was not resolved because of the political sensitivity of the issue in South Korea. In 2008, when President Lee reached a separate agreement with the United States to lift South Korea’s ban on U.S. beef imports, massive anti-South Korean government protests forced the two governments to renegotiate its terms. The U.S. beef sector has largely supported the KORUS FTA. A broad swath of the U.S. business community supports the KORUS FTA . With the modifications in the agreement reached in December, this group also includes the three Detroit-based auto manufacturers and the United Auto Workers (UAW) union. It still faces opposition from some labor unions and other groups, including Public Citizen. Many U.S. supporters view passage of the KORUS FTA as important to secure new opportunities in the South Korean market, while opponents claim that the KORUS FTA does not go far enough to break down South Korean trade barriers or that the agreement will encourage U.S. companies to move their production offshore at the expense of U.S. workers. Other observers have suggested the outcome of the KORUS FTA could have implications for the U.S.-South Korean alliance as a whole, as well as on U.S. Asia policy and U.S. trade policy, particularly in light of an FTA signed in by South Korea and the EU that is expected to go into effect on July 1, 2011

The EU-South Korea Free Trade Agreement and Its Implications for the United States

[Excerpt] On October 6,2010, the 27 member European Union (EU) and South Korea signed a bilateral free trade agreement (FTA). The agreement is expected to go into effect on July 1, 2011, pending approval by the European Parliament and the South Korean National Assembly. If enacted, the South Korea-EU FTA (KOREU FTA) would be the largest FTA in terms of market size that South Korea has entered into. The KOREU FTA reflects the EU and South Korean trade strategies to use FTAs to strengthen economic ties outside their home regions. It also builds upon the surge in trade and investment flows between South Korea and the EU over the past decade. This agreement has possible implications for U.S. trade with South Korea and congressional action on the proposed U.S.-South Korea FTA (KORUS FTA). The proposed KOREU FTA is very comprehensive. It would reduce and eliminate tariffs and other trade barriers in manufactured goods, agricultural products and services and would also cover such trade-related activities as government procurement, intellectual property rights, labor rights and environmental issues. Most studies done on the potential impact of the KOREU FTA estimate that the agreement will have a small but positive effect on the economies of the EU and South Korea as a whole and that the larger relative impact would be on the South Korean economy. The greatest economic impact of the KOREU FTA would be on specific sectors in each economy. EU services providers would be expected to experience gains from the agreement, especially in the areas of retail and wholesale trade, transportation services, financial services, and business services. In terms of trade in goods, EU exporters of pharmaceuticals, auto parts, industrial machinery, electronics parts, and some agricultural goods and processed foods would be expected to gain from the KOREU FTA\u27s implementation. At the same time, South Korean manufacturers of cars, ships, wireless telecommunications devices, chemical products, and imaging equipment would be expected to increase their exports to the EU market. The KOREU FTA is similar to the proposed KORUS FTA in many respects. Both agreements are comprehensive and both would eliminate tariffs on most trade in goods soon after they enter into force. However, they differ in other respects. Phase-out periods for tariffs on some manufactured goods differ. In addition, the KOREU FTA does not cover foreign direct investment. Unlike the KORUS FTA, the KOREU FTA would not allow trade sanctions to be applied where violations of the workers\u27 rights, and environment provisions have been deemed to occur. In addition, the KORUS FTA would cover a broader range of trade in services than would the KOREU FTA. It is not clear whether these differences in the structures of the FTAs would result in appreciable differences in outcomes in terms of economic gains and losses. U.S. and European firms are close competitors in a number of sectors and industries, particularly autos. Some business representatives argue that enactment of the KOREU FTA before enactment of the KORUS FTA would give European competitors commercial first mover advantages, since EU firms, such as those in the auto industry or the services sector, could gain greater market opportunities in South Korea not afforded to US. firms. On the other hand, other factors could also mitigate such advantages. For example, U.S. multinational firms operating in the EU could benefit from the KOREU FTA. Nevertheless, the content and fate of the KOREU FTA could influence the pace and tone of any debate in the United States on the KORUS FTA in the 112th Congress

Exact and approximate dynamics of the quantum mechanical O(N) model

We study a quantum dynamical system of N, O(N) symmetric, nonlinear oscillators as a toy model to investigate the systematics of a 1/N expansion. The closed time path (CTP) formalism melded with an expansion in 1/N is used to derive time evolution equations valid to order 1/N (next-to-leading order). The effective potential is also obtained to this order and its properties areelucidated. In order to compare theoretical predictions against numerical solutions of the time-dependent Schrodinger equation, we consider two initial conditions consistent with O(N) symmetry, one of them a quantum roll, the other a wave packet initially to one side of the potential minimum, whose center has all coordinates equal. For the case of the quantum roll we map out the domain of validity of the large-N expansion. We discuss unitarity violation in the 1/N expansion; a well-known problem faced by moment truncation techniques. The 1/N results, both static and dynamic, are also compared to those given by the Hartree variational ansatz at given values of N. We conclude that late-time behavior, where nonlinear effects are significant, is not well-described by either approximation.Comment: 16 pages, 12 figrures, revte