Implications of globalisation for financial stability.

Asia’s share of world trade has expanded constantly over the last two decades. This increase reflects, inter alia, the considerable strengthening of trade links between the countries of the region, fostered by the vertical specialisation of the Asian economies. In the 1980s, the most advanced economies in the region, e.g. Japan, relocated the most labour-intensive stages of their production processes to the newly-industrialised Asian economies like South Korea and Singapore and then, in the 1990s, to emerging Asia, i.e. Indonesia, Malaysia, the Philippines and Thailand. The emergence of China has also given signifi cant impetus to regional trade integration. Surging intra-regional direct investment fl ows have accompanied and shored up trade fl ows, however, portfolio investment fl ows and cross-border bank loans have remained limited. Given that production processes within the region are complementary and that the final destination for exports is outside the region, the lack of a regional exchange rate arrangement in Asia does not appear to be a concern in the short term. Indeed, the regional integration initiatives adopted in Asia in the aftermath of the 1997-1998 financial crisis aim to build further resilience to fi nancial market turbulence. Firstly, deeper and more liquid local bond markets should make it possible to reduce the double financial mismatch, i.e. the currency mismatch and maturity mismatch, which largely sustained the crisis. In this regard, the ASEAN+3 Asian Bond Market Initiative examines the supply-side issues while the Asian Bond Funds initiative of the Executives’ Meeting of East Asia-Pacifi c Central Banks (EMEAP) deals with demand-side issues via the pooling of resources to buy bonds issued by member countries. Secondly, the Chiang Mai Initiative, which consists in a network of currency swap arrangements between the central banks of the ASEAN+3 member states, provides these countries with a regional fi nancial assistance mechanism in the event of a liquidity crisis. The Asian vertical model of production appears to have reached its limit and is evolving towards a more “horizontal” model in terms of both production (substitutability of production processes as a result of the shift towards higher value-added activities) and consumption (expansion of the regional market linked to the growth potential of domestic Chinese demand). Regional monetary co-operation could therefore aim in the future at curbing intra-regional exchange rate fl uctuations in order to promote trade and investment within the region.

International Coordination of Economic Policies: Scope, Methods, and Effects

This paper discusses the scope, methods, the effects of international coordination of economic policies. In addressing the scope for and of coordination, the analysis covers the rationale for coordination, barriers to coordination, the range and specificity of policies to be coordinated, the frequency of coordination, and the size of the coordinating group. Turning to the methods of coordination, the emphasis is on the broad issues of rules versus discretion, single-indicator versus multi-indicator approaches, and hegemonic versus more symmetric systems. In an attempt to shed some light on the effects of alternative rule- based proposals for coordination, we present some simulations of a global macroeconomic model (MULTIMQD) developed in the International Monetary Fund. The simulations considered range from 'smoothing rules for monetary and fiscal policy that imply only minimal international coordination, to more activist "target-zone" proposals that place greater restrictions on national authorities in the conduct of monetary and/or fiscal policies. The simulation results are compared to the actual evolution of the world economy over the 1974-87 period. Our findings suggest that simple mechanistic rule-based proposals are unlikely to lead to improved performance.

Using bijective maps to improve free energy estimates

We derive a fluctuation theorem for generalized work distributions, related to bijective mappings of the phase spaces of two physical systems, and use it to derive a two-sided constraint maximum likelihood estimator of their free energy difference which uses samples from the equilibrium configurations of both systems. As an application, we evaluate the chemical potential of a dense Lennard-Jones fluid and study the construction and performance of suitable maps.Comment: 17 pages, 11 figure

Coarse-grained Interaction Potentials for Anisotropic Molecules

We have proposed an efficient parameterization method for a recent variant of the Gay-Berne potential for dissimilar and biaxial particles and demonstrated it for a set of small organic molecules. Compared to the previously proposed coarse-grained models, the new potential exhibits a superior performance in close contact and large distant interactions. The repercussions of thermal vibrations and elasticity has been studied through a statistical method. The study justifies that the potential of mean force is representable with the same functional form, extending the application of this coarse-grained description to a broader range of molecules. Moreover, the advantage of employing coarse-grained models over truncated atomistic summations with large distance cutoffs has been briefly studied.Comment: 8 pages, 4 tables and 6 figures. To appear in J. Chem. Phy

Four dimensional topological quantum field theory, Hopf categories, and the canonical bases

We propose a new mwthod of constructing 4D-TQFTs. The method uses a new type of algebraic structure called a Hopf Category. We also outline the construction of a family of Hopf categories related to the quantum groups, using the canonical bases.Comment: 38 page

Hamiltonian dynamics reveals the existence of quasi-stationary states for long-range systems in contact with a reservoir

We introduce a Hamiltonian dynamics for the description of long-range interacting systems in contact with a thermal bath (i.e., in the canonical ensemble). The dynamics confirms statistical mechanics equilibrium predictions for the Hamiltonian Mean Field model and the equilibrium ensemble equivalence. We find that long-lasting quasi-stationary states persist in presence of the interaction with the environment. Our results indicate that quasi-stationary states are indeed reproducible in real physical experiments.Comment: Title changed, throughout revision of the tex

Phase diagram of the penetrable square well-model

We study a system formed by soft colloidal spheres attracting each other via a square-well potential, using extensive Monte Carlo simulations of various nature. The softness is implemented through a reduction of the infinite part of the repulsive potential to a finite one. For sufficiently low values of the penetrability parameter we find the system to be Ruelle stable with square-well like behavior. For high values of the penetrability the system is thermodynamically unstable and collapses into an isolated blob formed by a few clusters each containing many overlapping particles. For intermediate values of the penetrability the system has a rich phase diagram with a partial lack of thermodynamic consistency.Comment: 6 pages and 5 figure

Calculating potentials of mean force and diffusion coefficients from nonequilibirum processes without Jarzynski's equality

In general, the direct application of the Jarzynski equality (JE) to reconstruct potentials of mean force (PMFs) from a small number of nonequilibrium unidirectional steered molecular dynamics (SMD) paths is hindered by the lack of sampling of extremely rare paths with negative dissipative work. Such trajectories, that transiently violate the second law, are crucial for the validity of JE. As a solution to this daunting problem, we propose a simple and efficient method, referred to as the FR method, for calculating simultaneously both the PMF U(z) and the corresponding diffusion coefficient D(z) along a reaction coordinate z for a classical many particle system by employing a small number of fast SMD pullings in both forward (F) and time reverse (R) directions, without invoking JE. By employing Crook's transient fluctuation theorem (that is more general than JE) and the stiff spring approximation, we show that: (i) the mean dissipative work W_d in the F and R pullings are equal, (ii) both U(z) and W_d can be expressed in terms of the easily calculable mean work of the F and R processes, and (iii) D(z) can be expressed in terms of the slope of W_d. To test its viability, the FR method is applied to determine U(z) and D(z) of single-file water molecules in single-walled carbon nanotubes (SWNTs). The obtained U(z) is found to be in very good agreement with the results from other PMF calculation methods, e.g., umbrella sampling. Finally, U(z) and D(z) are used as input in a stochastic model, based on the Fokker-Planck equation, for describing water transport through SWNTs on a mesoscopic time scale that in general is inaccessible to MD simulations.Comment: ReVTeX4, 13 pages, 6 EPS figures, Submitted to Journal of Chemical Physic

Predicting crystal structures: the Parrinello-Rahman method revisited

By suitably adapting a recent approach [A. Laio and M. Parrinello, PNAS, 99, 12562 (2002)] we develop a powerful molecular dynamics method for the study of pressure-induced structural transformations. We use the edges of the simulation cell as collective variables. In the space of these variables we define a metadynamics that drives the system away from the local minimum towards a new crystal structure. In contrast to the Parrinello-Rahman method our approach shows no hysteresis and crystal structure transformations can occur at the equilibrium pressure. We illustrate the power of the method by studying the pressure-induced diamond to simple hexagonal phase transition in a model of silicon.Comment: 5 pages, 2 Postscript figures, submitte

Symmetry relations in chemical kinetics arising from microscopic reversibility

It is shown that the kinetics of time-reversible chemical reactions having the same equilibrium constant but different initial conditions are closely related to one another by a directly measurable symmetry relation analogous to chemical detailed balance. In contrast to detailed balance, however, this relation does not require knowledge of the elementary steps that underlie the reaction, and remains valid in regimes where the concept of rate constants is ill-defined, such as at very short times and in the presence of low activation barriers. Numerical simulations of a model of isomerization in solution are provided to illustrate the symmetry under such conditions, and potential applications in protein folding-unfolding are pointed out.Comment: 4 pages, 1 figure, accepted to Phys Rev Let