The perils of credit booms

We present a dynamic general equilibrium model of production economies with adverse selection in the financial market to study the interaction between funding liquidity and market liquidity and its impact on business cycles. Entrepreneurs can take on short-term collateralized debt and trade long-term assets to finance investment. Funding liquidity can erode market liquidity. High funding liquidity discourages firms from selling their good long-term assets since these good assets have to subsidize lemons when there is information asymmetry. This can cause a liquidity dry-up in the market for long-term assets and even a market breakdown, resulting in a financial crisis. Multiple equilibria can coexist. Credit booms combined with changes in beliefs can cause equilibrium regime shifts, leading to an economic crisis or expansion.Published versio

Exact solution of the two-axis countertwisting Hamiltonian

It is shown that the two-axis countertwisting Hamiltonian is exactly solvable when the quantum number of the total angular momentum of the system is an integer after the Jordan-Schwinger (differential) boson realization of the SU(2) algebra. Algebraic Bethe ansatz is used to get the exact solution with the help of the SU(1,1) algebraic structure, from which a set of Bethe ansatz equations of the problem is derived. It is shown that solutions of the Bethe ansatz equations can be obtained as zeros of the Heine-Stieltjes polynomials. The total number of the four sets of the zeros equals exactly to $2J+1$ for a given integer angular momentum quantum number $J$, which proves the completeness of the solutions. It is also shown that double degeneracy in level energies may also occur in the $J\rightarrow\infty$ limit for integer $J$ case except a unique non-degenerate level with zero excitation energy.Comment: LaTex 10 pages. Version to appear in Annals of Physic

Anisotropic microwave conductivity of cuprate superconductors in the presence of CuO chain induced impurities

The anisotropy in the microwave conductivity of the ortho-II YBa$_2$Cu$_3$O$_{6.50}$ is studied within the kinetic energy driven superconducting mechanism. The ortho-II YBa$_2$Cu$_3$O$_{6.50}$ is characterized by a periodic alternative of filled and empty $\hat{b}$-axis CuO chains. By considering the CuO chain induced extended anisotropy impurity scattering, the main features of the anisotropy in the microwave conductivity of the ortho-II YBa$_2$Cu$_3$O$_{6.50}$ are reproduced based on the nodal approximation of the quasiparticle excitations and scattering processes, including the intensity and lineshape of the energy and temperature dependence of the $\hat{a}$-axis and $\hat{b}$-axis microwave conductivities. Our results also confirm that the $\hat{b}$-axis CuO chain induced impurity is the main source of the anisotropy.Comment: 6 pages, 3 figure