Global imbalances, saving glut and investment strike.

The present state of the global economy is characterised by persistent and increasingly polarised current account imbalances, in a context of historically low long-term interest rates, which stand below the equilibrium levels proxied by potential growth and trend inflation. A comprehensive analysis by Ben Bernanke1 attributes those two phenomena to one common cause: a global saving glut outside the United States. The approach below is more pessimistic than the global saving glut theory as far as the diagnosis is concerned, as the most striking feature of the present state of the global economy is not so much a saving glut as an investment strike, in spite of low long-term interest rates. This also affects the US economy where corporate investment remains subdued relative to profi ts, adding to the gradual loss in its tradable productive capacity, possibly to the benefi t of large foreign direct investment outflows. So far, such a model could be seen as sustainable. Indeed, in spite of an increasingly large deterioration in the US net international investment position, the balance of income has remained positive owing to a favourable yield spread between assets and liabilities. However, the tipping point, beyond which net investment income turns negative and therefore becomes a levy on domestic resources, seems to be near. This may lead to serious foreign debt sustainability issues and reinforces the “steep exchange rate adjustment” exit scenario with all its potentially harmful side effects. Recently, some optimistic assessments of exchange-rate-led adjustment have focused on valuation effects, through which a large amount of the US net foreign debt could be wiped out by a US dollar depreciation. We suggest that such an exchange rate shock would be likely to trigger an increase in US interest rates, which makes an exchange rate shock not as painless as it seems for the US economy. Besides, such a shock could be potentially more harmful than previous episodes of sharp US dollar adjustment from the perspective of the global economy, as the ratio of foreign-owned assets in the United States to the world GDP has tripled since the mid-1980s. However, as far as the other exit strategies are concerned, the approach below is more optimistic: since economic policies had a significant influence on the run-up to the current situation of low interest rates/global imbalances, reorienting economic policies may successfully address the issues at stake, leading to a gradual policy-driven resolution process which could be less disruptive than a market-led adjustment. The note is organised as follows: section 1 provides a brief summary of the mechanisms and implications of the “saving glut hypothesis”; section 2 discusses the accuracy of the saving glut hypothesis by looking at savings and investment behaviour in various economic regions; section 3 focuses on the saving/investment balance in the corporate sector, particularly in the United States, and the shift to the rent economy hypothesis and finally section 4 outlines various possible adjustment mechanisms of the global imbalances/low interest rates combination.

Fundamental and harmonic emission in interplanetary type 2 radio bursts

Three interplanetary type II radio bursts which show two prominent and long duration bands in their dynamic spectra were analyzed in detail and compared to similar bands in meter wavelength type II events. These bands, which differ by a factor of about two in frequency, were interpreted in terms of fundamental and harmonic emission. The fundamental component has a greater average intensity than the harmonic, due largely to short intense brightenings. The fundamental spectral profile is more narrow than that of the harmonic, with harmonic band typically exhibiting a larger bandwidth to frequency ratio than the fundamental by a factor of two. The fundamental has a larger source size than the harmonic, 160 degrees versus 110 degrees, on average, as viewed from the Sun. Two of the events have source positions which correlate well with the associated flare positions

Vers une intensification des tensions inflationnistes globales ?

La mondialisation a contribué au ralentissement de l’inflation via une intensification de la concurrence. Mais la convergence des cycles économiques et la pression des émergents sur les marchés de matières premières peuvent créer de nouveaux risques pour la stabilité des prix.mondialisation, intégration commerciale, pays émergents, synchronisation des cycles, inflation, anticipations d’inflation.

Scientific and technical data sharing: a trading perspective

It is arguably a precept that the open sharing of data maximises the scientific utility of the research that generated that data. Indeed, progress depends on individual scientists being able to build on the results produced by others. The means to facilitate sharing undoubtedly exist, but various studies have identified reluctance among researchers to share information with their peers, at least until the professional priorities of the original researchers have been accommodated. With a view to encouraging less inhibited collaboration, we appraise the processes of data exchange from the perspective of a trading environment and consider how data exchanges might promote (or perhaps hinder) collaboration in data-rich scientific research disciplines and how such an exchange might be set up. We suggest an exchange with trusted brokers (akin to the commodity markets) as a way to overcome the challenges of the current environment. We conclude by encouraging the scientific and technical community to debate the merits of a trading perspective on data sharing and exchange

Exciting dark matter in the galactic center

We reconsider the proposal of excited dark matter (DM) as an explanation for excess 511 keV gamma rays from positrons in the galactic center. We quantitatively compute the cross section for DM annihilation to nearby excited states, mediated by exchange of a new light gauge boson with off-diagonal couplings to the DM states. In models where both excited states must be heavy enough to decay into e^+ e^- and the ground state, the predicted rate of positron production is never large enough to agree with observations, unless one makes extreme assumptions about the local circular velocity in the Milky Way, or alternatively if there exists a metastable population of DM states which can be excited through a mass gap of less than 650 keV, before decaying into electrons and positrons.Comment: Dedicated to the memory of Lev Kofman; 16 pages, 9 figures; v3 added refs, minor changes, accepted to PR

Conformations of confined biopolymers

Nanoscale and microscale confinement of biopolymers naturally occurs in cells and has been recently achieved in artificial structures designed for nanotechnological applications. Here, we present an extensive theoretical investigation of the conformations and shape of a biopolymer with varying stiffness confined to a narrow channel. Combining scaling arguments, analytical calculations, and Monte Carlo simulations, we identify various scaling regimes where master curves quantify the functional dependence of the polymer conformations on the chain stiffness and strength of confinement.Comment: 5 pages, 4 figures, minor correction

Fluctuation-Dissipation Theorem for the Microcanonical Ensemble

A derivation of the Fluctuation-Dissipation Theorem for the microcanonical ensemble is presented using linear response theory. The theorem is stated as a relation between the frequency spectra of the symmetric correlation and response functions. When the system is not in the thermodinamic limit, this result can be viewed as an extension of the fluctuation-dissipation relations to a situation where dynamical fluctuations determine the response. Therefore, the relation presented here between equilibrium fluctuations and response can have a very different physical nature from the usual one in the canonical ensemble. These considerations imply that the Fluctuation-Dissipation Theorem is not restricted to the context of thermal equilibrium, where it is usually derived. Dispersion relations and sum rules are also obtained and discussed in the present case. Although analogous to the Kramers-Kronig relations, they are not related to the frequency spectrum but to the energy dependence of the response function.Comment: 15 pages, v3: final version, new text added, new reference

Morphing Ensemble Kalman Filters

A new type of ensemble filter is proposed, which combines an ensemble Kalman filter (EnKF) with the ideas of morphing and registration from image processing. This results in filters suitable for nonlinear problems whose solutions exhibit moving coherent features, such as thin interfaces in wildfire modeling. The ensemble members are represented as the composition of one common state with a spatial transformation, called registration mapping, plus a residual. A fully automatic registration method is used that requires only gridded data, so the features in the model state do not need to be identified by the user. The morphing EnKF operates on a transformed state consisting of the registration mapping and the residual. Essentially, the morphing EnKF uses intermediate states obtained by morphing instead of linear combinations of the states.Comment: 17 pages, 7 figures. Added DDDAS references to the introductio