The Intertemporal Approach to the Current Account: Evidence from Argentina.

In this paper, an intertemporal model is used to analyze the current account and test whether it accounts for the evolution of the Argentinean current account over the period extending from 1855 to 2002. The intertemporal model presented here takes into account several sources of external shocks for small economies such as a change of the real interest rate and the real exchange rate. Evidence shows that the intertemporal model does not pass the statistical tests and does not explain the Argentinean experience. More specifically, if the Argentinean current account was to behave as the model predicts, one would observe the opposite movement to that observed for the actual current account. Our main conjecture about the weak performance of the model is related to i) the fact that one of its most important assumption is violated for some part of the period under consideration (1931 - 1989); and ii) that the balance of payments’ crises and stop and go cycles may have altered the relation between the variables suggested by the model. To cope with this problem, we have estimated a model for the period 1885-1930 (a period with relatively high capital mobility and with neither currency crises nor stop and go cycles) and found some evidence in favour of this result. A general conclusion to be drawn is that, in contrast to other Latin American countries, an intertemporal current account model can not appropriately account for the dynamics of the current account of Argentina, even thought there is some evidence in favour of the model for the period 1885-1930.

Financial choice in a non-Ricardian model of trade

We join the new trade theory with a model of choice between bank and bond financing to show the differential effects of financial policy on the distribution of firm size, welfare, aggregate output, gains from trade, and the real exchange rate in a small open economy. Increasing bank efficiency and reducing bond transaction costs both increase welfare but have opposite effects on the extensive margin of trade, aggregate exports, and the real exchange rate. Increasing the degree of trade openness increases firms' relative demand for bond versus bank financing. We identify a financial switching channel for gains from trade where increasing access to export markets allows firms to overcome high fixed costs of bond issuance to secure a lower marginal cost of capital.Trade ; Bank loans ; Bond market

A Theory of Banks, Bonds, and the Distribution of Firm Size

Does targeted financial development favor small firms or large ones? And how do resulting changes in the distribution of firm size affect aggregate outcomes? We assess the macroeconomic implications of known stylized facts from the finance literature regarding firm size and financial frictions for the real economy. In an era of intense policy debate over the role of market-based finance in the macroeconomy, we find that considering the entire distribution of firm size is key to accurately assess the effects of targeted financial policies on macroeconomic outcomes and firm behavior.heterogeneity, bank, bond, distribution of firm size

Quaternionic (super)twistors extensions and general superspaces

In a attempt to treat a supergravity as a tensor representation, the 4-dimensional N-extended quaternionic superspaces are constructed from the (diffeomorphyc)graded extension of the ordinary Penrose-twistor formulation, performed in a previous work of the authors[14], with N = p + k: These quaternionic superspaces have 4 + k (N - k) even-quaternionic coordinates and 4N odd- quaternionic coordinates where each coordinate is a quaternion composed by four C-felds (bosons and fermions respectively). The fields content as the dimensionality (even and odd sectors) of these superspaces are given and exemplified by selected physical cases. In this case the number of felds of the supergravity is determined by the number of components of the tensor representation of the 4-dimensional N-extended quaternionic superspaces. The role of tensorial central charges for any N even USp (N) = Sp (N;HC) \ U (N;HC) is elucidated from this theoretical context.Comment: To be published in the IJGMMP 2016, corrected version, 16 pages without figure

Quaternionic structures, supertwistors and fundamental superspaces

Superspace is considered as space of parameters of the supercoherent states defining the basis for oscillator-like unitary irreducible representations of the generalized superconformal group SU(2m,2n/2N) in the field of quaternions H. The specific construction contains naturally the supertwistor one of the previous work by Litov and Pervushin [1] and it is shown that in the case of extended supersymmetry such an approach leads to the separation of a class of superspaces and and its groups of motion. We briefly discuss this particular extension to the domain of quaternionic superspaces as nonlinear realization of some kind of the affine and the superconformal groups with the final end to include also the gravitational field[6] (this last possibility to include gravitation, can be realized on the basis of the reference[12] where the coset ((Sp(8))/(SL(4R)))~((SU(2,2))/(SL(2C)))was used in the non supersymmetric case). It is shown that this quaternionic construction avoid some unconsistencies appearing at the level of the generators of the superalgebras (for specific values of p and q; p+q=N) in the twistor one.Comment: Improved version. Accepted in the International Journal of Geometrical Methods in Modern Physics (IJGMMP)12 pages, no figures. In memoriam of Professor Boris Moyseevich Zupnik, pioneer of the development of supersymmetry, group theory and modern mathematical methods in theoretical physic

A theory of banks, bonds, and the distribution of firm size

We draw on stylized facts from the finance literature to build a model where altering the relative costs of bank and bond financing changes the entire distribution of firm size, with implications for the aggregate capital stock, output, and welfare. Reducing transactions costs in the bond market increases the output and profits of mid-sized firms at the expense of both the largest and smallest firms. In contrast, reducing the frictions involved in bank lending promotes the expansion of the smallest firms while all other firms shrink, even as it increases the profitability of both small and mid-size firms. Although both policies increase aggregate output and welfare, they have opposite effects on the extensive margin of production-promoting bond issuance causes exit while cheaper bank credit induces entry. When reducing transactions costs in one market, the resulting increase in output and welfare are largest when transactions costs in the other market are very high.Bond market ; Bank loans