Euroland: Upswing postponed

The recovery in Euroland has started at the beginning of this year but it has remained rather moderate. Real GDP increased at an annual rate of less than 1½ percent during the first half of 2002. Capacity utilization has declined further and unemployment continued to go up. While exports have gained some strength, domestic demand has just about stabilized. Against the background of weak economic activity the increase in consumer prices has calmed down considerably. Several factors can be made responsible for the sluggish economic performance. Consumer sentiment was affected by the price increases at the beginning of this year and obviously also by the introduction of the new currency. Profit expectations of firms have not improved sufficiently as it is also reflected in the collapse of stock prices. In addition, export expectations have deteriorated recently because of the uncertainty about the US economy and the appreciation of the euro. In the light of the recent turbulences on stock markets and the increased uncertainty about the economic outlook in the euro area, the ECB will probably not raise interest rates this year as was expected a few months ago. In fact, there is a discussion whether the ECB would — or even should — lower interest rates. According to both pillars of its monetary policy strategy, an easing of monetary policy cannot be justified. Money growth still exceeds the reference value by a wide margin. Although our analysis indicates that money demand has become unstable recently, there is a risk that there is some excess liquidity in the euro area and that the high money growth cannot be explained by special factors alone. The perspectives for price level stability have also not improved considerably. The budget deficit in Portugal and also in Germany will probably exceed 3 percent of GDP this year; in Italy and France it is approaching this level. The European Commission has started the excessive deficit procedure for Portugal and may do the same for Germany soon. However, it is not certain there will be the necessary majority in the ECOFIN Council for the decision whether an excessive deficit exists. One cannot exclude that Italy and France have an interest to block such a decision because they also have problems of meeting the obligations of the Stability and Growth Pact. So it is possible that the finance ministers of these four countries which together have 35 votes in the Council will prevent the decision about the excessive deficit procedure. The coming months will show whether the Pact really has teeth. We are strongly in favor of a strict application of the Stability and Growth Pact. The recent deterioration of consumer and business sentiment does not, in our view, imply that a renewed downturn is imminent. After a relatively sluggish growth in the rest of this year, economic activity will pick up considerably in the course of 2003 and real GDP will rise faster than potential output. For the year as a whole, real GDP will increase by 2.3 percent, after 0.8 percent in 2002. The labor market situation will improve slowly in the course of next year. Inflation will remain moderate also because the ECB will tighten monetary policy gradually; in addition we expect that wages will rise only moderately. The consumer price index will increase by 1.6 in 2003, after 2.1 this year. --

Gradual recovery in Euroland

The economic situation in the euro area continues to be weak. In the course of 2003, real GDP has only stagnated. Several factors prevented the expected recovery to materialize. Last year’s collapse of stock prices dampened activity, so did the high oil price. In addition, the uncertainty in the wake of the conflict with Iraq had a negative impact on the business sentiment and on consumer confidence. Finally, exports were hit by the strong appreciation of the euro. Since the spring of 2003, leading indicators have improved somewhat, but they do not suggest that economic activity will pick up strongly in the second half of this year. All in all, real GDP growth will amount to just 0.5 percent in 2003 and, thus, remain below the trend rate for the third year in a row. In the course of next year, economic activity will accelerate gradually; beginning in the spring, overall capacity utilization will increase again for the first time in three years. One factor supporting the recovery will be exports as growth in the world economy will gain momentum and the dampening factors of the euro appreciation will phase out. Internal demand will be stimulated by low interest rates; investment of firms will pick up, and also consumers will become more optimistic as the labor market situation will slowly improve. For the year as a whole, we expect real GDP to rise by 1.9 percent. Consumer price inflation will remain moderate and be in line with the target of the ECB. The European Central Bank (ECB) will leave key interest rates at their low levels for the time being. If the economy starts to recover in the fourth quarter of this year, as we expect, there will be no reason to loosen the policy stance further. The ECB will most likely start to tighten policy when the upswing has gained momentum and capacity utilization has increased considerably. Therefore, it is not likely that interest rates will already be raised next year. The budget deficits in most countries will again be higher than anticipated in the national Stability Programs. For the year as a whole, the aggregated deficit in the euro area will rise to 2.6 percent in relation to GDP, compared to 2.2 percent last year. Next year, the stance of fiscal policy will be roughly neutral with differences among the member states. The budget situation in Germany is a major cause for concern. Already last year, the deficit exceeded the 3 percent limit of the Stability and Growth Pact (SGP). The same will be true for this year. The current plans for 2004 make it very likely that the deficit will exceed the 3 percent margin once again. A similar scenario can be expected for France, where the announced measures will not prevent the deficit to reach more than 3 percent for the third year in a row. Several governments are acting against their own announcements by allowing excessive deficits to persist. That is in clear contradiction to the Broad Economic Policy Guidelines (BEPG), which call for a continuous reduction of structural deficits. By violating these rules and also the commitments made in the context of the Stability Programs, fiscal policy is losing credibility. Should the Stability Pact fail, it would not be because of its “tight rules” but because governments fail to comply with the rules which they have established themselves --

Pores in n-Type InP: A Model System for Electrochemical Pore Etching

The growth mechanism of currentline-oriented pores in n-type InP has been studied by Fast-Fourier-Transform Impedance Spectroscopy (FFT IS) applied in situ during pore etching and by theoretical calculations. Several pore growth parameters could thus be extracted in situ that are otherwise not obtainable. These include the space-charge-region (SCR) width, the SCR potential, the capacitance at the pore tips, and the avalanche breakdown field strength. It could be demonstrated that the system adjusts itself in such a way that the potential across the space-charge-region at the pore tips is kept constant within a certain bandwidth of the applied potential. This provides for a constant field strength at the pore tips, ensuring that avalanche breakdown occurs, generating the necessary holes for the electrochemical dissolution of InP

Euroland: Recovery will slow down

The economic recovery in the euro area has accelerated in the course of 2004. During the first two quarters, real GDP rose at an annual rate of slightly over 2 percent, after about 1½ percent in the second half of 2003. For the first time since 2001, overall capacity utilization increased. Exports were driven by the boom in the world economy so that the dampening effects of the previous appreciation of the euro were more than compensated. Internal demand picked up somewhat; especially private consumption recovered whereas investment of firms was rather sluggish. As a consequence of the upswing, the situation on the labor market stopped deteriorating. Inflation also picked up because of the surge in oil prices. During the summer, the HICP rose by more than 2 percent. The sharp increase in oil prices will dampen domestic demand in the near future. In addition, the boom in the world economy has probably already passed its peak. Consequently, the economic expansion in the euro area is likely to slow down somewhat in the rest of this year. This forecast is supported by various leading indicators. For 2004 as a whole, we expect real GDP to increase by 1.9 percent. The unemployment rate will average 9 percent and will thus be slightly higher than last year. Also because of higher oil prices, inflation will be higher than the target rate of the ECB. In 2005, the expansion of domestic demand will slow down further. Especially consumers will be cautious given the weak prospects for income in the medium term. External demand will also lose momentum so that real GDP growth will be moderate in the course of next year. The rate will average 1.9 percent. Inflation is expected to be slightly below 2 percent. All in all, the recovery will be very modest when compared to previous cycles. One reason is that the growth of potential output is lower than before. Our estimate for the current year amounts to 1 percent. The slowdown in recent years is mainly due to the slower growth of productivity. In contrast, the number of total hours worked has increased. Apparently gains of employment can only be achieved at the expense of productivity growth. This is a pessimistic diagnosis given the goal of the EU to become the most dynamic economic region of the world. In spite of the economic recovery, the situation of public finances has deteriorated further. The aggregated budget deficit will probably increase to 2.8 percent of GDP, compared to 2.7 percent last year. The deficits will also be higher than reported in most national Stability Programmes. In addition to Germany, France, the Netherlands, and Greece, the deficit ratio will also exceed the 3 percent margin in Italy and Portugal. The current proposals for a reform of the Pact are mainly concerned with a more generous interpretation of the 3 percent ceiling. However, the main target of the Stability and Growth Pact (SGP) is that government budgets should be balanced or in surplus over the medium term. This target has not been achieved in many countries in recent years; it is not even planned in the Stability Programmes for France and Germany until 2007. This failure cannot be attributed at all to the weakness of the economy in recent years. In fact, the cyclically adjusted deficits of these two countries are higher today than at the end of the 1990s. In other words, there has not been a consolidation of the budget at all. If the SGP loses its strength or if there were no binding rules for fiscal policy, the consequences would be severe for various reasons. First of all, it would be a disadvantage for the countries themselves. Given the likely demographic changes, it would be wise to start saving now; the fact is, however, that the debt burden continues to increase making fiscal policy less sustainable. Second, those countries which intend to join the monetary union in the near future hardly have any incentive to stick to the targets of the Pact if other members ignore or stretch the rules. The criteria for entry would therefore be softened which would be in stark contrast to the fundamentals of the European Monetary Union. The ECB has left key interest rates at a very low level for more than a year. Meanwhile, the euro area economy has recovered as expected by the central bank. The high oil prices are a risk factor for the future path of economic activity. However, this will probably not lead to a cut of interest rates especially because inflation has remained stubbornly high. The next step is likely to be a tightening of monetary policy. Given our forecast of a moderate upturn, we expect that monetary policy will be tightened only moderately; a raise of 25 basis points is likely around the turn of the year. Such a move is also in line with the reactions of the ECB in the past, which can be described by an empirical Taylor rule. --

Genetic variability of Chilean and Peruvian surfclams (Donax marincovichi and Donax obesulus)

Exposed intertidal sandy beaches are commonly dominated by surf clams of the genus Donax. In Peru and Chile these bivalves play an important role for artisanal fisheries. Beside that, little is known about the taxonomy, biology, and the clams susceptibility to climatically induced changes. The taxonomic status of the two Donax species Donax marincovichi and Donax obesulus, distributed along the Peruvian coastline, is controversially discussed. As morphometric comparisons reveal no significant differences we possibly deal with a single rather than with two species. Furthermore, our knowledge on larval dispersal allowing gene flow among populations is scarce. Therefore, both putative Donax species were sampled at ten beaches along the coastline from northern Chile to northern Peru. Partial cytochrome oxidase I sequences were analysed in order to estimate the genetic distances between both putative species and to estimate the intraspecific gene flow along the coastline. Region specific patterns and the dependence on recruitment of local stocks are discussed

Self-organized pore formation and open-loop-control in semiconductor etching

Electrochemical etching of semiconductors, apart from many technical applications, provides an interesting experimental setup for self-organized structure formation capable e.g. of regular, diameter-modulated, and branching pores. The underlying dynamical processes governing current transfer and structure formation are described by the Current-Burst-Model: all dissolution processes are assumed to occur inhomogeneously in time and space as a Current Burst (CB); the properties and interactions between CB's are described by a number of material- and chemistry- dependent ingredients, like passivation and aging of surfaces in different crystallographic orientations, giving a qualitative understanding of resulting pore morphologies. These morphologies cannot be influenced only by the current, by chemical, material and other etching conditions, but also by an open-loop control, triggering the time scale given by the oxide dissolution time. With this method, under conditions where only branching pores occur, the additional signal hinders side pore formation resulting in regular pores with modulated diameter

Linear-response Description of the Series Resistance of Large-area Silicon Solar Cells: Resolving the Difference between Dark and Illuminated Behavior

AbstractDirectly from luminescence images it can be shown that, for constant average injection (lumped dark current) and for not-too-large lateral voltage differences, besides the sign, the current flow direction doesn’t play any role for the voltages present, so the series resistances in the dark and under illumination are the same. This fits to the results of a linear-response based series resistance description, treating lateral voltage differences on large-area silicon solar cells in linear order in the series resistance as deviation from the case of zero resistance. In this approach it is found that for constant lumped dark current, emitter and grid of a large-area solar cell can be described as a passive network. Therefore, no difference occurs in the voltage distribution caused by inward and outward currents except for the sign. This contradicts several literature works reporting a smaller lumped series resistance of silicon solar cells in the dark than under illumination. However, we show that this contradiction is just a result of the series resistance definition applied in the respective works or that it can be the result of unsuitable measurement conditions. In a numerical modeling of a large-area silicon solar cell as a 1D distributed structure, using exactly the same parameters as Araújo et al. [IEEE-TED 33 (3), 391–401 (1986)] but calculating the lumped series resistance from the integrated Joule losses, we obtain completely different results than Araújo et al.: Under short-circuit condition, the series resistance stays constant, and there is no difference between the open-circuit and dark series resistance; the latter show the same dependence on the diode current density