The endogenous formation of sustanaible trade agreements

This paper addresses the endogenous formation of trade agreements in a three - country model of imperfect competition. While the requirement of sustainability of preferential trade areas has often been ignored in the literature, I construct a framework for predicting which trade agreements form when sustainability is explicitly included as a constraint on the formation of the cooperative agreements. It is found that the introduction of a self-enforcement requirement reduces the overall scope for a cooperative trade agreements, and that preferential trade areas can be stepping stones or stumbling blocks depending on the size of relative demand between countries.trade agreements, customs unions, FTAs

Exchange Rate Targeting in a Small Open Economy

The paper develops a New Keynesian Small Open Economy Model charac- terized by external habit formation and Calvo price setting with dynamic inflation updating. The model is used to analyze the e¤ect of nominal ex- change rate targeting on optimal policy and impulse responses. It is found that even moderate exchange rate concerns are capable of changing both sign and magnitude of the optimal instrument response to variables, and that whether the concern is with respect to the level or first di¤erence has much impact on monetary policy. Also, the cost of exchange rate stabilization in terms of output and inflation is evident in the model, and impulse responses under moderate exchange rate targeting are not simple combinations of those under a float and a regime that cares almost only for meeting the exchange rate target.Flexible inflation targeting, exchange rates, fear of floating

Reduced Density-Matrix Approach to Strong Matter-Photon Interaction

We present a first-principles approach to electronic many-body systems strongly coupled to cavity modes in terms of matter-photon one-body reduced density matrices. The theory is fundamentally non-perturbative and thus captures not only the effects of correlated electronic systems but accounts also for strong interactions between matter and photon degrees of freedom. We do so by introducing a higher-dimensional auxiliary system that maps the coupled fermion-boson system to a dressed fermionic problem. This reformulation allows us to overcome many fundamental challenges of density-matrix theory in the context of coupled fermion-boson systems and we can employ conventional reduced density-matrix functional theory developed for purely fermionic systems. We provide results for one-dimensional model systems in real space and show that simple density-matrix approximations are accurate from the weak to the deep-strong coupling regime. This justifies the application of our method to systems that are too complex for exact calculations and we present first results, which show that the influence of the photon field depends sensitively on the details of the electronic structure.Comment: 52 pages, 26 figures, plus supporting information of 24 page

Indigenous Resources, Elite Division, and the Emergence of the 1989 Pro-Democracy Movement in China

For several years, social movement scholars have attempted to come to a greater understanding over the question of what forces bring about the emergence of a social\ud movement. An overwhelming majority of the literature has concerned movements that\ud have emerged in liberal democratic settings. Despite the Western mass media's fascination with pro-democratic movements in Eastern Europe and East Asia, and its general interest in covering oppressed peoples' struggles for human rights, social\ud movement scholars have curiously not given much attention to the question of why social\ud movements emerge in authoritarian settings. This paper seeks to shed further light into\ud this particular area through an analysis of the emergence of the 1989 Chinese pro-democracy movement. China is probably one of the main countries that comes to most people's minds when they are asked to identify a country with an authoritarian political environment. At\ud first glance, it does not appear to be a country in which freedom of expression, especially\ud concerning issues of political reform, is encouraged, even to the slightest degree.\ud However, during the period of April to early June 1989, the country witnessed its largest\ud mass demonstrations since the founding of the People's Republic in 1949. During this period, Beijing was the site of class boycotts by the city's university students, a mass\ud hunger strike in Tiananmen Square, and several marches and demonstrations made by students, factory workers, journalists, and government workers. On May 17th, at the\ud height of the movement, the Hong Kong press reported that two million people joined\ud together in one such march in the capital. Unlike a smaller\ud pro-democracy movement in late 1986, the one in 1989 managed to get the support of not only China's student population, but also a large section of China's urban workers. Why\ud did this movement emerge and what accounts for it being able to sustain such high levels of participation? Although the Chinese government violently crushed the movement during a\ud bloody crackdown on June 3rd - 4th, the fact that the movement was able to attract such a broad base of support suggests that there is the potential for another pro-democratic movement to emerge in China at some point in the future. What brought about the emergence of the movement in 1989 and how can we predict when the conditions will be\ud right for another such occurrence in the future?\ud In order to gain a greater understanding of why the 1989 Chinese pro-democracy\ud movement emerged, it will be helpful to review the relevant theoretical literature\ud developed by social movement scholars over the past few decades. I will then propose my own framework for understanding movement emergence in authoritarian settings,\ud which combines and alters some elements of Aldon Morris' (1984) version of resource\ud mobilization theory and Sidney Tarrow's (1989, 1998) political opportunity structure\ud theory. In this hybrid framework, social movements emerge when an aggrieved population has a strong base of indigenous resources which are in turn used to take advantage of divisions among the political elite. I will provide some historical\ud background on the movement to help those readers who may be unfamiliar with contemporary Chinese politics to better understand the context within which the 1989\ud pro-democracy movement emerged. After I have analyzed my research, I will propose some additional areas of study regarding the movement, not emphasized in my research, which deserve further attention by future scholars

The endogenous formation of sustainable trade agreements

This paper addresses the endogenous formation of trade agreementsin a three-country model of imperfect competition. While the requirement ofsustainability of preferential trade areas has often been ignored in the literature,I construct a framework for predicting which trade agreements form when sus-tainability is explicitly included as a constraint on the formation of cooperativeagreements. It is found that the introduction of a self-enforcement requirementreduces the overall scope for cooperative trade agreements, and that preferen-tial trade areas can be stepping stones or stumbling blocks depending on thesize of relative demand between countries.Este artículo se refiere a la formación de acuerdos endógenos de libre comercio en un modelo de competencia imperfecta entre tres  países. Teniendo en cuenta que la literatura ha ignorado en  ocasiones el requisito de sostenibilidad en las áreas de libre  comercio, el artículo propone una estructura para predecir qué acuerdos comerciales se forman cuando la sostenibilidad es explícitamente incluida como una restricción en la formación de acuerdos cooperativos. Se encuentra que la introducción de un requisito de auto-ejecución reduce el alcance general de los acuerdos comerciales y que las áreas comerciales preferenciales pueden ser puntos de apoyo o impedimentos, dependiendo de la demanda relativa entre los países

La formación endógena de acuerdos sostenibles de comercio

Este artículo se refiere a la formación de acuerdos endógenos de libre comercio en un modelo de competencia imperfecta entre tres  países. Teniendo en cuenta que la literatura ha ignorado en  ocasiones el requisito de sostenibilidad en las áreas de libre  comercio, el artículo propone una estructura para predecir qué acuerdos comerciales se forman cuando la sostenibilidad es explícitamente incluida como una restricción en la formación de acuerdos cooperativos. Se encuentra que la introducción de un requisito de auto-ejecución reduce el alcance general de los acuerdos comerciales y que las áreas comerciales preferenciales pueden ser puntos de apoyo o impedimentos, dependiendo de la demanda relativa entre los países

Exchange rate targeting in a small open economy

The paper develops a New Keynesian Small Open Economy Model characterized by external habit formation and Calvo price setting with dynamic inflation updating. The model is used to analyze the effect of nominal ex-change rate targeting on optimal policy a

La formación endógena de acuerdos sostenibles de comercio

Este artículo se refiere a la formación de acuerdos endógenos de libre comercio en un modelo de competencia imperfecta entre tres  países. Teniendo en cuenta que la literatura ha ignorado en  ocasiones el requisito de sostenibilidad en las áreas de libre  comercio, el artículo propone una estructura para predecir qué acuerdos comerciales se forman cuando la sostenibilidad es explícitamente incluida como una restricción en la formación de acuerdos cooperativos. Se encuentra que la introducción de un requisito de auto-ejecución reduce el alcance general de los acuerdos comerciales y que las áreas comerciales preferenciales pueden ser puntos de apoyo o impedimentos, dependiendo de la demanda relativa entre los países

Strictly-correlated-electron approach to excitation energies of dissociating molecules

In this work we consider a numerically solvable model of a two-electron diatomic molecule to study a recently proposed approximation based on the density functional theory of so-called strictly correlated electrons (SCE). We map out the full two-particle wave function for a wide range of bond distances and interaction strengths and obtain analytic results for the two-particle states and eigenenergies in various limits of strong and weak interactions, and in the limit of large bond distance. We then study the so-called Hartree-exchange-correlation (Hxc) kernel of time-dependent density functional theory which is a key ingredient in calculating excitation energies. We study an approximation based on adiabatic SCE (ASCE) theory which was shown to display a particular feature of the exact Hxc kernel, namely, a spatial divergence as function of the bond distance. This makes the ASCE kernel a candidate for correcting a notorious failure of the commonly used adiabatic local density approximation (ALDA) in the calculation of excitation energies of dissociating molecules. Unlike the ALDA, we obtain nonzero excitation energies from the ASCE kernel in the dissociation regime but they do not correspond to those of the true spectrum unless the interaction strength is taken to be very large such that the SCE theory has the right regime of validity, in which case the excitation energies become exact and represent the so-called zero-point oscillations of the strictly correlated electrons. The commonly studied physical dissociation regime, namely, large molecular separation at intermediate interaction strength, therefore remains a challenge for density functional approximations based on SCE theory.peerReviewe