Target Zones in History and Theory: Lessons from an Austro-Hungarian Experiment (1896-1914)

The first known experiment with an exchange rate band took place in Austria- Hungary between 1896 and 1914. The rationale for introducing this policy rested on precisely those intuitions that the modern literature has emphasized: the band was designed to secure both exchange rate stability and monetary policy autonomy. However, unlike more recent experiences, such as the ERM, this policy was not undermined by credibility problems. The episode provides an ideal testing ground for some important ideas in modern macroeconomics: specifically, can formal rules, when faithfully adhered to, provide policy makers with some advantages such as short term autonomy? First, we find that a credible band has a "microeconomic" influence on exchange rate stability. By reducing uncertainty, a credible fluctuation band improves the quality of expectations, a channel that has been neglected in the modern literature. Second, we show that the standard test of the basic target zone model is flawed and develop an alternative methodology. We believe that these findings shed a new light on the economics of exchange rate bands

Macroscopic superposition states of ultracold bosons in a double-well potential

We present a thorough description of the physical regimes for ultracold bosons in double wells, with special attention paid to macroscopic superpositions (MSs). We use a generalization of the Lipkin-Meshkov-Glick Hamiltonian of up to eight single particle modes to study these MSs, solving the Hamiltonian with a combination of numerical exact diagonalization and high-order perturbation theory. The MS is between left and right potential wells; the extreme case with all atoms simultaneously located in both wells and in only two modes is the famous NOON state, but our approach encompasses much more general MSs. Use of more single particle modes brings dimensionality into the problem, allows us to set hard limits on the use of the original two-mode LMG model commonly treated in the literature, and also introduces a new mixed Josephson-Fock regime. Higher modes introduce angular degrees of freedom and MS states with different angular properties.Comment: 15 pages, 8 figures, 1 table. Mini-review prepared for the special issue of Frontiers of Physics "Recent Progresses on Quantum Dynamics of Ultracold Atoms and Future Quantum Technologies", edited by Profs. Lee, Ueda, and Drummon

‘Sub-Prime’ Water, Low-Security Entitlements and Policy Challenges in Over-Allocated River Basins: the Case of the Murray–Darling Basin

Environmental policy is often implemented using market instruments. In some cases, including carbon taxing, the links between financial products and the environmental objectives, are transparent. In other cases, including water markets, the links are less transparent. In Australia’s Murray–Darling Basin (MDB), financial water products are known as ‘entitlements’, and are similar to traditional financial products, such as shares. The Australian water market includes ‘Low Security’ entitlements, which are similar to ‘sub-prime’ mortgage bonds because they are unlikely to yield an amount equal to their financial worth. Nearly half the water purchased under the Murray–Darling Basin Plan for environmental purposes is ‘Low Security’. We suggest that the current portfolio of water held by the Australian Government for environmental purposes reflects the mortgage market in the lead-up to the global financial crisis. Banks assumed that the future value of the mortgage market would reflect past trends. Similarly, it is assumed that the future value of water products will reflect past trends, without considering climate change. Historic records of allocations to ‘Low Security’ entitlements in the MDB suggest that, in the context of climate change, the Basin Plan water portfolio may fall short of the target annual average yield of 2075 GL by 511 GL. We recommend adopting finance sector methods including ‘hedging’ ‘Low Security’ entitlements by purchasing an additional 322–2755 GL of ‘Low Security’, or 160–511 GL of ‘High Security’ entitlements. Securing reliable environmental water is a global problem. Finance economics present opportunities for increasing the reliability of environmental flows

Changing relationships between multinational companies and their host regions? A case study of Aberdeen and the international oil industry

There has been a revival of interest in recent years in the relationships between multinational corporations (hereafter MNCs) and the host regions in which they operate. The branch plant thesis which generally views inward investment by MNCs in a negative light - as reinforcing power relations between core and peripheral regions - has been challenged, with the suggestion that such developments can play a key role in linking up local economies to important flows of knowledge and information in a global economy. It has also been suggested that MNC branch plant activities are in practice often upgraded over time, leading to the development of important competitive advantage's for host regions. In this paper, such claims are investigated through a case study of the Aberdeen oil region in the north east of Scotland. The changing position of Aberdeen within the oil industry's corporate division of labour is evaluated in terms of the wider theoretical debate