Exchange rate appreciations, labor market rigidities, and informality

This paper works at the interface of the literature exploring the raison d'etre of the informal labor market and that explaining the real exchange rate appreciations occurring in many Latin American countries during periods of reform. The authors first build a small country-Australian style model where the informal sector is seen as an unregulated non-tradables sector, augmented by heterogeneity in entrepreneurial ability and capital adjustment costs. They then examine the behavior of the model with and without a formal sector rigidity. It shows that the co-movements of relative formal/informal incomes, formal/informal sector size, and the real exchange rate can offer insight into the level of distortion in the labor market and the source of exchange rate fluctuations. The paper then explores time series data from Brazil, Colombia and Mexico using multivariate co-integration techniques to establish what"regime"each country is in at various periods of time. Mexico appears to be relatively undistorted and the 1987-92 appreciation appears to be largely a function of a boom in the non-tradables sector rather than wage inertia. In spite of a secular expansion of the informal sector there is little evidence of dualism or of a rigidity driven appreciation of the Real, from 1993-1996. Post 1995 Colombia corresponds to a classic segmented labor market and an appreciation partly driven by labor market rigidities. Graphical analysis suggests that neither the Argentine appreciation (1988-1992) or the celebrated Chilean appreciation (1975-1982) were driven by inertial forcesLabor Policies,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Fiscal&Monetary Policy,Environmental Economics&Policies,Economic Theory&Research,Economic Stabilization,Macroeconomic Management,Banks&Banking Reform

Informal Labor Markets and Macroeconomic Fluctuations

This paper examines the adjustment of developing country labor markets to macroeconomic shocks. It models a two sector labor market: a formal salaried (tradable) sector that may or may not be affected by union or legislation induced wage rigidities, and an unregulated (nontradable) self-employment sector facing liquidity constraints to entry. This is embedded in a standard small economy macro model that permits the derivation of patterns of comovement among relative salaried/self-employed incomes, salaried/self-employed sector sizes and the real exchange rate with respect to different types of shocks in contexts with and without wage rigidities. The paper then explores time series data from Argentina, Brazil, Colombia and Mexico to test for cointegrating relationships corresponding to the patterns predicted by theory. We identify two types of regime. The first corresponds to periods where demand shocks to the nontradable sector offer new opportunities to (informal) entrepreneurs, the informal sector expands ?procyclically,? and the exchange rate overshoots toward appreciation in the short run, or remains at its productivity determined levels. The second corresponds to periods of negative shocks to the formal salaried sector in the presence of wage rigidities where the sector plays a more traditional ?buffer? role during downturns. --Informality,Labor market dynamics,Self-employment,Real exchange rates

Informality and Macroeconomic Fluctuations

This paper examines the adjustment of developing country labor markets to macroeconomic shocks. It models as having two sectors: a formal salaried (tradable) sector that may or may not be affected by union or legislation induced wage rigidities, and an informal (nontradable) self-employment sector facing liquidity constraints to entry. This is embedded in a standard small economy macro model that permits the derivation of patterns of comovement among relative salaried/self-employed incomes, salaried/self-employed sector sizes and the real exchange rate with respect to different types of shocks in contexts with and without wage rigidities. The paper then explores time series data from Argentina, Brazil, Colombia and Mexico to test for cointegrating relationships corresponding to the patterns predicted by theory. We confirm episodes of expansion of informal self-employment consistent with the traditional segmentation views. However, we also identify episodes consistent with the sectoral expansion being driven by relative demand or productivity shocks to the nontradables sector that lead to “procyclical” behavior of the informal self-employed sector.informality, labor market dynamics, self-employment, real exchange rates

Spectrophotometric Redshifts. A New Approach to the Reduction of Noisy Spectra and its Application to GRB090423

We have developed a new method, close in philosophy to the photometric redshift technique, which can be applied to spectral data of very low signal-to-noise ratio. Using it we intend to measure redshifts while minimising the dangers posed by the usual extraction techniques. GRB afterglows have generally very simple optical spectra over which the separate effects of absorption and reddening in the GRB host, the intergalactic medium, and our own Galaxy are superimposed. We model all these effects over a series of template afterglow spectra to produce a set of clean spectra that reproduce what would reach our telescope. We also model carefully the effects of the telescope-spectrograph combination and the properties of noise in the data, which are then applied on the template spectra. The final templates are compared to the two-dimensional spectral data, and the basic parameters (redshift, spectral index, Hydrogen absorption column) are estimated using statistical tools. We show how our method works by applying it to our data of the NIR afterglow of GRB090423. At z ~ 8.2, this was the most distant object ever observed. We use the spectrum taken by our team with the Telescopio Nazionale Galileo to derive the GRB redshift and its intrinsic neutral Hydrogen column density. Our best fit yields z=8.4^+0.05/-0.03 and N(HI)<5x10^20 cm^-2, but with a highly non-Gaussian uncertainty including the redshift range z [6.7, 8.5] at the 2-sigma confidence level. Our method will be useful to maximise the recovered information from low-quality spectra, particularly when the set of possible spectra is limited or easily parameterisable while at the same time ensuring an adequate confidence analysis.Comment: 6 pages, 6 figures. Accepted for publication in Astronomy and Astrophysic

Testing the gamma-ray burst variability/peak luminosity correlation on a Swift homogeneous sample

We test the gamma-ray burst correlation between temporal variability and peak luminosity of the $\gamma$-ray profile on a homogeneous sample of 36 Swift/BAT GRBs with firm redshift determination. This is the first time that this correlation can be tested on a homogeneous data sample. The correlation is confirmed, as long as the 6 GRBs with low luminosity (<5x10^{50} erg s^{-1} in the rest-frame 100-1000 keV energy band) are ignored. We confirm that the considerable scatter of the correlation already known is not due to the combination of data from different instruments with different energy bands, but it is intrinsic to the correlation itself. Thanks to the unprecedented sensitivity of Swift/BAT, the variability/peak luminosity correlation is tested on low-luminosity GRBs. Our results show that these GRBs are definite outliers.Comment: Accepted for Publication in MNRAS. 10 pages, 5 figures, 3 table

Optical and X-ray Rest-frame Light Curves of the BAT6 sample

We present the rest-frame light curves in the optical and X-ray bands of an unbiased and complete sample of Swift long Gamma-Ray Bursts (GRBs), namely the BAT6 sample. The unbiased BAT6 sample (consisting of 58 events) has the highest level of completeness in redshift ($\sim$ 95%), allowing us to compute the rest-frame X-ray and optical light curves for 55 and 47 objects, respectively. We compute the X-ray and optical luminosities accounting for any possible source of absorption (Galactic and intrinsic) that could affect the observed fluxes in these two bands. We compare the behaviour observed in the X-ray and in the optical bands to assess the relative contribution of the emission during the prompt and afterglow phases. We unarguably demonstrate that the GRBs rest-frame optical luminosity distribution is not bimodal, being rather clustered around the mean value Log(L$_{R}$) = 29.9 $\pm$ 0.8 when estimated at a rest frame time of 12 hr. This is in contrast with what found in previous works and confirms that the GRB population has an intrinsic unimodal luminosity distribution. For more than 70% of the events the rest-frame light curves in the X-ray and optical bands have a different evolution, indicating distinct emitting regions and/or mechanisms. The X-ray light curves normalised to the GRB isotropic energy (E$_{\rm iso}$), provide evidence for X-ray emission still powered by the prompt emission until late times ($\sim$ hours after the burst event). On the other hand, the same test performed for the E$_{\rm iso}$-normalised optical light curves shows that the optical emission is a better proxy of the afterglow emission from early to late times.Comment: Accepted for publication in A&A: 10 pages, 5 figures, 2 table

Recent structural evolution of forni glacier tongue (Ortles-Cevedale Group, Central Italian Alps)

Structural glaciology yields important details about the evolution of glacier dynamics in response to climate change. The maps provided here document the occurrence and evolution of brittle and ductile structures on the tongue of Forni Glacier, Ortles-Cevedale Group, Central Italian Alps, between 2003 and 2014. Through the remote sensing-based analysis of structures, we found evidence of brittle fractures such as crevasses, faults and ring faults, and ductile structures such as ogives at the base of the icefall in the eastern glacier tongue. Although each of the three glacier tongues have evolved differently, a reduction in flow-related dynamics and an increase in the number of collapse structures occurred over the study period. Analysis of the glacier structural evolution based on the numbers and the locations of different structures, suggest a slowdown of glacier flow on the eastern tongue. The recent evolution of the glacier also suggests that the occurrence of a disintegration scenario is likely to worsen over the next decades