Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic

Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely. That is, fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to GDP) is systematically associated with more synchronized business cycles. We also find evidence that reduced fiscal deficits increase business cycle synchronization. The Maastricht "convergence criteria," used to determine eligibility for EMU, encouraged fiscal convergence and deficit reduction. They may thus have indirectly moved Europe closer to an optimum currency area, by reducing countries’ abilities to create idiosyncratic fiscal shocks. Our empirical results are economically and statistically significant, and robust

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic

Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely. That is, fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to GDP) is systematically associated with more synchronized business cycles. We also find evidence that reduced fiscal deficits increase business cycle synchronization. The Maastricht “convergence criteria,” used to determine eligibility for EMU, encouraged fiscal convergence and deficit reduction. They may thus have indirectly moved Europe closer to an optimum currency area, by reducing countries’ abilities to create idiosyncratic fiscal shocks. Our empirical results are economically and statistically significant, and robust.European; monetary; union; policy; Maastricht; criteria; optimum; Mundell.

Fiscal Divergence and Business Cycle Synchronization: Irresponsibility is Idiosyncratic

Using a panel of 21 OECD countries and 40 years of annual data, we find that countries with similar government budget positions tend to have business cycles that fluctuate more closely. That is, fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to GDP) is systematically associated with more synchronized business cycles. We also find evidence that reduced fiscal deficits increase business cycle synchronization. The Maastricht %u201Cconvergence criteria,%u201D used to determine eligibility for EMU, encouraged fiscal convergence and deficit reduction. They may thus have indirectly moved Europe closer to an optimum currency area, by reducing countries%u2019 abilities to create idiosyncratic fiscal shocks. Our empirical results are economically and statistically significant, and robust.

HyPLC: Hybrid Programmable Logic Controller Program Translation for Verification

Programmable Logic Controllers (PLCs) provide a prominent choice of implementation platform for safety-critical industrial control systems. Formal verification provides ways of establishing correctness guarantees, which can be quite important for such safety-critical applications. But since PLC code does not include an analytic model of the system plant, their verification is limited to discrete properties. In this paper, we, thus, start the other way around with hybrid programs that include continuous plant models in addition to discrete control algorithms. Even deep correctness properties of hybrid programs can be formally verified in the theorem prover KeYmaera X that implements differential dynamic logic, dL, for hybrid programs. After verifying the hybrid program, we now present an approach for translating hybrid programs into PLC code. The new tool, HyPLC, implements this translation of discrete control code of verified hybrid program models to PLC controller code and, vice versa, the translation of existing PLC code into the discrete control actions for a hybrid program given an additional input of the continuous dynamics of the system to be verified. This approach allows for the generation of real controller code while preserving, by compilation, the correctness of a valid and verified hybrid program. PLCs are common cyber-physical interfaces for safety-critical industrial control applications, and HyPLC serves as a pragmatic tool for bridging formal verification of complex cyber-physical systems at the algorithmic level of hybrid programs with the execution layer of concrete PLC implementations.Comment: 13 pages, 9 figures. ICCPS 201

Financial Transaction Tax: Small is Beautiful

The case for taxing financial transactions merely to raise more revenues from the financial sector is not particularly strong. Better alternatives to tax the financial sector are likely to be available. However, a tax on financial transactions could be justified in order to limit socially undesirable transactions when more direct means of doing so are unavailable for political or practical reasons. Some financial transactions are indeed likely to do more harm than good, especially when they contribute to the systemic risk of the financial system. However, such a financial transaction tax should be very small, much smaller than the negative externalities in question, because it is a blunt instrument that also drives out socially useful transactions. There is a case for taxing over-the-counter derivative transactions at a somewhat higher rate than exchange-based derivative transactions. More targeted remedies to drive out socially undesirable transactions should be sought in parallel, which would allow, after their implementation, to reduce or even phase out financialtransaction taxes

The Effects of Government Spending on Real Exchange Rates: Evidence from Military Spending Panel Data

Using panel data on military spending for 125 countries, we document new facts about the effects of changes in government purchases on the real exchange rate, consumption, and current accounts in both advanced and developing countries. While an increase in government purchases causes real exchange rates to appreciate and increases consumption significantly in developing countries, it causes real exchange rates to depreciate and decreases consumption in advanced countries. The current account deteriorates in both groups of countries. These findings are not consistent with standard international business-cycle models. We investigate whether the difference between advanced economies and developing countries in the responses of real exchange rates to spending shocks can be explained by alternative hypotheses

From Labyrinth to Piano Key Weirs – A historical review

Free crest spillways are hydraulically efficient and safe in operation. Since their discharge capacity is directly proportional to the crest length several types have been developed with the purpose to increase the length of the latter. Among these types traditional labyrinth weir spillways have been studied and used for a long time. Their hydraulic performance and the effect of the involved geometrical parameters are well known. Nevertheless, their design still has to be based on experimentally derived and generalized performance curves. The recently introduced Piano Key weirs present clear advantages regarding hydraulic performance and construction costs compared to classical labyrinth weirs. Especially its small footprint makes the PK weir an efficient and cost effective solution for the increase of the flood releasing capacity at existing concrete gravity dams. Until today only preliminary design procedures are available which cannot yet be generalized. The still ongoing research on this complex hydraulic structure is a challenge for many scientists all over the world. Despite of this, several prototypes have been installed successfully over the last years on existing dams which enhance efficiently the flood release capacity

Floating Patches of HCN at the Surface of Their Aqueous Solutions - Can They Make "HCN World" Plausible?

The liquid/vapor interface of the aqueous solutions of HCN of different concentrations has been investigated using molecular dynamics simulation and intrinsic surface analysis. Although HCN is fully miscible with water, strong interfacial adsorption of HCN is observed at the surface of its aqueous solutions, and, at the liquid surface, the HCN molecules tend to be located even at the outer edge of the surface layer. It turns out that in dilute systems the HCN concentration can be about an order of magnitude larger in the surface layer than in the bulk liquid phase. Furthermore, HCN molecules show a strong lateral self-association behavior at the liquid surface, forming thus floating HCN patches at the surface of their aqueous solutions. Moreover, HCN molecules are staying, on average, an order of magnitude longer at the liquid surface than water molecules, and this behavior is more pronounced at smaller HCN concentrations. Because of this enhanced dynamical stability, the floating HCN patches can provide excellent spots for polymerization of HCN, which can be the key step in the prebiotic synthesis of partially water-soluble adenine. All of these findings make the hypothesis of "HCN world" more plausible