A Dynamic Approach to Interest Rate Convergence in Selected Euro-candidate Countries

We advocate a dynamic approach to monetary convergence to a common currency that is based on the analysis of financial system stability. Accordingly, we empirically test volatility dynamics of the ten-year sovereign bond yields of the 2004 EU accession countries in relation to the eurozone yields during the January 2, 2001 untill January 22, 2009 sample period. Our results show a varied degree of bond yield co-movements, the most pronounced for the Czech Republic, Slovenia and Poland, and weaker for Hungary and Slovakia. However, since the EU accession, we find some divergence of relative bond yields. We argue that a ‘static’ specification of the Maastricht criterion for long-term bond yields is not fully conducive for advancing stability of financial systems in the euro-candidate countries.interest rate convergence, common currency area, new EU Member States, interest rate risk, GARCH

The Extreme Risk Problem for Monetary Policies of the Euro-Candidates

We argue that monetary policies in euro-candidate countries should also aim at mitigating excessive instability of the key target and instrument variables of monetary policy during turbulent market periods. Our empirical tests show a significant degree of leptokurtosis, thus prevalence of tail-risks, in the conditional volatility series of such variables in the euro-candidate countries. Their central banks will be well-advised to use both standard and unorthodox (discretionary) tools of monetary policy to mitigate such extreme risks while steering their economies out of the crisis and through the euroconvergence process. Such policies provide flexibility that is not embedded in the Taylor-type instrument rules, or in the Maastricht convergence criteria.monetary policy rules, tail-risks, convergence to the Euro, global financial crisis, equity market risk, interest rate risk, exchange rate risk

Incubators vs Zombies: Fault-Tolerant, Short, Thin and Lanky Spanners for Doubling Metrics

Recently Elkin and Solomon gave a construction of spanners for doubling metrics that has constant maximum degree, hop-diameter O(log n) and lightness O(log n) (i.e., weight O(log n)w(MST). This resolves a long standing conjecture proposed by Arya et al. in a seminal STOC 1995 paper. However, Elkin and Solomon's spanner construction is extremely complicated; we offer a simple alternative construction that is very intuitive and is based on the standard technique of net tree with cross edges. Indeed, our approach can be readily applied to our previous construction of k-fault tolerant spanners (ICALP 2012) to achieve k-fault tolerance, maximum degree O(k^2), hop-diameter O(log n) and lightness O(k^3 log n)

Magnetic domain formation in itinerant metamagnets

We examine the effects of long-range dipolar forces on metamagnetic transitions and generalize the theory of Condon domains to the case of an itinerant electron system undergoing a first-order metamagnetic transition. We demonstrate that within a finite range of the applied field, dipolar interactions induce a spatial modulation of the magnetization in the form of stripes or bubbles. Our findings are consistent with recent observations in the bilayer ruthenate Sr$_3$Ru$_2$O$_7$.Comment: 4 pages, 3 figures, minor changes, references adde

Raman transitions between hyperfine clock states in a magnetic trap

We present our experimental investigation of an optical Raman transition between the magnetic clock states of $^{87}$Rb in an atom chip magnetic trap. The transfer of atomic population is induced by a pair of diode lasers which couple the two clock states off-resonantly to an intermediate state manifold. This transition is subject to destructive interference of two excitation paths, which leads to a reduction of the effective two-photon Rabi-frequency. Furthermore, we find that the transition frequency is highly sensitive to the intensity ratio of the diode lasers. Our results are well described in terms of light shifts in the multi-level structure of $^{87}$Rb. The differential light shifts vanish at an optimal intensity ratio, which we observe as a narrowing of the transition linewidth. We also observe the temporal dynamics of the population transfer and find good agreement with a model based on the system's master equation and a Gaussian laser beam profile. Finally, we identify several sources of decoherence in our system, and discuss possible improvements.Comment: 10 pages, 7 figure