Essays on Macroeconomics and Finance

This dissertation consists of three chapters. In Chapter 1, I study an asset pricing implication of a New Keynesian model. Quantitative New Keynesian models have strong implications for the joint variation of total wealth, nominal bond yields, and real bond yields. I use stock market betas of nominal and real bonds as summaries of this joint variation, and ask whether model-implied betas can be parameterized to be consistent with observed betas. Using UK data, I document that the observed beta of a ten-year nominal bond dropped to zero when the UK government gave operational independence to the Bank of England. The observed beta of a ten-year inflation-indexed bond is close to zero both before and after independence. I show that a broad range of plausible model parameterizations cannot reproduce any of these observed betas. In Chapter 2, I study the effects of positive trend inflation on the term structure of interest rates. I examine the effects on a number of aspects of the yield curve: the steady state, the mean, the variance, impulse responses to economic shocks, and risk compensation. I find that higher rate of trend inflation leads to more volatile inflation, which in turn increases the volatility of bond prices and the quantity of risk compensation. The quantitative effects of these findings are quite small when we assume the standard log utility of the representative household. However, the quantitative effects become significant when we assume the household with Epstein-Zin preferences. For example, the average slope of the yield curve is 1.02 percent for 2 percent inflation, while it is 1.35 percent for 6 percent trend inflation. Excess returns to 10-year bond are 5.6 percent for 2 percent trend inflation and 6.7 percent for 6 percent trend inflation. In Chapter 3, I study the welfare effects of financial globalization. Debt and foreign direct investment (FDI) flows account for the vast majority of foreign capital going into developing countries. Gourinchas and Jeanne (2006) study the welfare consequences from liberalizing debt flows using the Ramsey growth model and find that the welfare gains is quite limited. This paper studies the welfare gains from liberalizing FDI flows and find much larger gains (four percent increase in permanent consumption in the baseline specifications). The key assumption is that FDI flows bring a superior technology into host countries. Additional gains from liberalizing debt flows besides FDI flows are limited. This paper conducts a number of sensitivity analysis. For example, it examines the consequences of a decrease in the world real interest rate, the phenomena observed in recent decades

Development of Novel Synthetic Amine Absorbents for CO2 Capture

AbstractIn the present paper, we investigated five synthetic amine based absorbents, including three formulated solvents. Aqueous solutions of the amines (mass fraction; 30% for single amine and >30% for blended solvents) were used to evaluate the performance for CO2 capture. Gas scrubbing, vapor-liquid equilibrium (VLE), and reaction calorimetry experiments were conducted in the laboratory to obtain the absorption rate, the amount of CO2 absorbed, cyclic CO2 capacity, and heat of reaction for each absorbent. The results of these absorbents were compared with the conventional absorbent monoethanolamine (MEA). Three high performing synthetic absorbents (IPAE, IPAP and IBAE) were found, and these had lower heats of reaction, higher cyclic capacities, and comparable absorption rates compared with MEA. All formulated absorbents showed excellent cyclic CO2 capacity and keeping moderately good absorption rate and lower heats of absorption. Some blended solvents were already demonstrated with real blast furnace gas at pilot test plants with capacities of 1 ton-CO2/day and 30 ton-CO2/day and showed promising results in terms of reducing absorbent regeneration energy

Magnetic-Field-Independent Ultrasonic Dispersions in the Magnetically Robust Heavy Fermion System SmOs4Sb12

Elastic properties of the filled skutterudite compound SmOs$_4$Sb$_{12}$ have been investigated by ultrasonic measurements. The elastic constant $C_{11}(\omega)$ shows two ultrasonic dispersions at $\sim$15 K and $\sim$53 K for frequencies $\omega$ between 33 and 316 MHz, which follow a Debye-type formula with Arrhenius-type temperature-dependent relaxation times, and remain unchanged even with applied magnetic fields up to 10 T. The corresponding activation energies were estimated to be $E_2$ = 105 K and $E_1$ = 409 K, respectively. The latter, $E_1$, is the highest value reported so far in the Sb-based filled skutterudites. The presence of magnetically robust ultrasonic dispersions in SmOs$_4$Sb$_{12}$ implies a possibility that an emergence of a magnetically insensitive heavy fermion state in this system is associated with a novel local charge degree of freedom which causes the ultrasonic dispersion.Comment: 5 pages, 4 figure