Endogenous Technological Change under Uncertainty

How does risk or uncertainty in the productivity of research affect the growth rate of the economy? To answer this question, a model of endogenous technological change is used where sustained growth stems from intentional investments in R&D from profit-maximizing firms. The uncertainty arises from the productivity of these investments in R&D. The main result of this analysis is that the relationship between long-run growth and uncertainty (on the productivity of knowledge creation) depends on two main factors - the returns to scale in knowledge creation (increasing or non-increasing) and the value of the elasticity of intertemporal substitution (higher or lower than some critical value). Based on empirical studies on the returns to scale in knowledge creation (”non-increasing”) and the value of the elasticity of intertemporal substitution (”higher than the critical value”), we expect a negative relationship between long-run growth and uncertainty regarding the productivity of knowledge creation.Long-run growth, Technological change, Uncertainty

On Growth and Fluctuations: The Option to Adobt New Technology

PRELIMINARY VERSION - PLEASE DO NOT QUOTE

On Taxation in a Two-Sector Endogenous Growth Model with Endogenous Labor Supply

This paper studies the effects of taxation on long-run growth in a two-sector endogenous growth model with (i) physical capital as an input in the education sector and (ii) leisure as an additional argument in the utility function. Due to the flexibility of labor supply, taxation of income may induce agents to spend more or less time on leisure activities. Income taxation - the same rate applies for capital and labor income - reduces the growth rate. The contribution of endogenous leisure in this case is confined to reducing or increasing the size of the effect on the growth rate. The same is true if only labor income is taxed. However, if only capital income is taxed, the sign of the effect may reverse. In that case, the positive effect of the increase in total non-leisure time dominates the direct negative effect, implying that capital taxation increases the long-run growth rate.

M4-18: The planetary nebula and its WC10 central star

We present a detailed analysis of the planetary nebula M4-18 (G146.7+07.6) and its WC10-type Wolf-Rayet central star, based on high quality optical spectroscopy (WHT/UES, INT/IDS, WIYN/DensPak) and imaging (HST/WFPC2). From a non-LTE model atmosphere analysis of the stellar spectrum, we derive Teff=31kK, log(Mdot/(Msun yr))=-6.05, v_inf=160 km/s and abundance number ratios of H/He<0.5, C/He=0.60 and O/He=0.10. These parameters are remarkably similar to He2-113 ([WC10]). Assuming an identical stellar mass to that determined by De Marco et al. for He2-113, we obtain a distance of 6.8kpc to M4-18 (E(B-V)=0.55mag from nebular and stellar techniques). This implies that the planetary nebula of M4-18 has a dynamical age of 3100 years, in contrast to >270 years for He2-113. This is supported by the much higher electron density of the latter. These observations may only be reconciled with evolutionary predictions if [WC]-type stars exhibit a range in stellar masses. Photo-ionization modelling of M4-18 is carried out using our stellar WR flux distribution, together with blackbody and Kurucz energy distributions obtained from Zanstra analyses. We conclude that the ionizing energy distribution from the Wolf-Rayet model provides the best consistency with the observed nebular properties, although discrepancies remain.Comment: 12 pages, 9 figures, accepted for MNRAS (latex uses mn.sty

The 2-point angular correlation function of 20,000 galaxies to V<23.5 and I<22

The UH8K wide field camera of the CFHT was used to image 0.68 deg^2 of sky. From these images, ~20,000 galaxies were detected to completeness magnitudes V<23.5 and I<22.5. The angular correlation function of these galaxies is well represented by the parameterization omega(theta) = A_W*theta^-delta. The slope delta=-0.8 shows no significant variation over the range of magnitude. The amplitude A_W decreases with increasing magnitude in a way that is most compatible with a Lambda-CDM model (Omega_0 = 0.2, Lambda=0.8) with a hierarchical clustering evolution parameter epsilon>0. We infer a best-fit spatial correlation length of r_00= 5.85+/-0.5 h^-1 Mpc at z=0. The peak redshift of the survey (I<22.5) is estimated to be z_peak~0.58, using the blue-evolving luminosity function from the CFRS and the flat Lambda cosmology, and r_0(z_peak)=3.5+/-0.5 h^-1 Mpc. We also detect a significant difference in clustering amplitude for the red and blue galaxies, quantitatively measured by correlation lengths of r_00=5.3+/-0.5 h^-1 Mpc and r_00=1.9+/-0.9 h^-1 Mpc respectively, at z=0.Comment: 21 pages, 21 figures,accepted in Astronomy and Astrophysic

Do international portfolio investors follow firms’ foreign investment decisions?

We analyze the interlinkages between foreign direct investment (FDI) and foreign portfolio investment (FPI) between Germany and the major economies. First, we show that Tobin’s q helps explaining the variation of the growth rate of the stock of FDI. Second, we show that foreign and the home stock market returns explain the ariation of the growth rate of the stock of FPI. Most importantly, we find that information about foreign fundamentals is revealed via direct investment. In other words, FDI transactions measured by fitted growth rates of the stock of FDI help explaining current growth rates of the stock of FPI. To our knowledge this observation is the first unambiguous evidence that international portfolio investors follow firms’ expected foreign investment decisions. JEL Classification: F21, F23, G11, G15and Information Spillovers, Foreign Direct Investment, Foreign Portfolio Investment, Investor Heterogeneity, Tobin’s q

Simple and inexpensive perturbative correction schemes for antisymmetric products of nonorthogonal geminals

A new multireference perturbation approach has been developed for the recently proposed AP1roG scheme, a computationally facile parametrization of an antisymmetric product of nonorthogonal geminals. This perturbation theory of second-order closely follows the biorthogonal treatment from multiconfiguration perturbation theory as introduced by Surjan et al., but makes use of the additional feature of AP1roG that the expansion coefficients within the space of closed-shell determinants are essentially correct already, which further increases the predictive power of the method. Building upon the ability of AP1roG to model static correlation, the perturbation correction accounts for dynamical electron correlation, leading to absolute energies close to full configuration interaction results. Potential surfaces for multiple bond dissociation in H2O and N-2 are predicted with high accuracy up to bond breaking. The computational cost of the method is the same as that of conventional single-reference MP2