A Survey of Empirical Research on Nominal Exchange Rates

We survey the empirical literature on floating nominal exchange rates over the past decade. Exchange rates are difficult to forecast at short- to medium-term horizons. There is a bit of explanatory power to monetary models such as the Dornbusch 'overshooting' theory, in the form of reaction to 'news' and in forecasts at long-run horizons. Nevertheless, at short horizons, a driftless random walk characterizes exchange rates better than standard models based on observable macroeconomic fundamentals. Unexplained large shocks to floating rates must then, logically, be due either to innovations in unobservable fundamentals, or to non-fundamental factors such as speculative bubbles. The observed difference in exchange rate and macroeconomic volatility under different nominal exchange rate regimes makes us skeptical of the first view. The theory and evidence on speculative bubbles, however, is not conclusive. We conclude with the hope that promising new studies of the microstructure of the foreign exchange market might eventually rise to insights into these phenomena.

The Endogeneity of the Optimum Currency Area Criteria

A country's suitability for entry into a currency union depends on a number of economic conditions. These include, inter alia, the intensity of trade with other potential members of the currency union, and the extent to which domestic business cycles are correlated with those of the other countries. But international trade patterns and international business cycle correlations are endogenous. This paper develops and investigates the relationship between the two phenomena. Using thirty years of data for twenty industrialized countries, we uncover a strong and striking empirical finding: countries with closer trade links tend to have more tightly correlated business cycles. It follows that countries are more likely to satisfy the criteria for entry into a currency union after taking steps toward economic integration than before.

A Panel Project on Purchasing Power Parity: Mean Reversion Within and Between Countries

Previous time-series studies have shown evidence of mean- reversion in real exchange rates. Deviations from purchasing power parity (PPP) appear to have half-lives of approximately four years. However, the long samples required for statistical significance are unavailable for most currencies, and may be inappropriate because of regime changes. In this study, we re-examine deviations from PPP using a panel of 150 countries and 45 annual observations. Our panel shows strong evidence of mean-reversion that is similar to that from long time-series. PPP deviations are eroded at a rate of approximately 15% annually, i.e., their half-life is around four years. Such findings can be masked in time-series data, but are relatively easy to find in cross-sections.

Struggling readers? Using theory to complicate understandings of what it means to be literate in school

Theories guide many aspects of literacy research. In this article we describe four theoretical approaches that we have used in qualitative research with students who are perceived to struggle with reading in school, including: New Literacy Studies, Disability Studies in Education, Bioecological Systems Theory, and Cultural Historical Activity Theory. We provide a brief overview of each of the theories and then explain how we have used them to gain insights about students with whom we have worked in the context of our research. Although grounded in distinct perspectives, we argue that each of the theories are lenses through which we were better able to understand the complexities of students’ struggles with reading. We further argue that the theories are united in their ability to broaden the perspectives of researchers and teachers to better account for the social, cultural, and institutional factors that shape literacy teaching and learning in schools. We conclude by questioning the use of the term “struggling reader” and highlighting the implications of our individual theoretical frames and analyses for both research and practice.Accepted manuscrip

Currency Crashes in Emerging Markets: Empirical Indicators

We use a panel of annual data for over one hundred developing countries from 1971 through 1992 to characterize currency crashes. We define a currency crash as a large change of the nominal exchange rate that is also a substantial increase in the rate of change of nominal depreciation. We examine the composition of the debt as well as its level, and a variety of other macroeconomic factors, external and foreign. Crashes tend to occur when: output growth is low; the growth of domestic credit is high; and the level of foreign interest rates is high. A low ratio of FDI to debt is consistently associated with a high likelihood of a crash.

"Marginal pinching" in soap films

We discuss the behaviour of a thin soap film facing a frame element: the pressure in the Plateau border around the frame is lower than the film pressure, and the film thins out over a certain distance lambda(t), due to the formation of a well-localized pinched region of thickness h(t) and extension w(t). We construct a hydrodynamic theory for this thinning process, assuming a constant surface tension: Marangoni effects are probably important only at late stages, where instabilitites set in. We find lambda(t) ~ t^{1/4}, and for the pinch dimensions h(t) ~ t^{-1/2}$ and w(t) ~ t^{-1/4}. These results may play a useful role for the discussion of later instabilitites leading to a global film thinning and drainage, as first discussed by K. Mysels under the name ``marginal regeneration''.Comment: 7 pages, 2 figure

Identification of oxidized amino acid residues in the vicinity of the Mn \u3csub\u3e4\u3c/sub\u3eCaO \u3csub\u3e5\u3c/sub\u3e cluster of photosystem II: Implications for the identification of oxygen channels within the photosystem

As a light-driven water-plastoquinone oxidoreductase, Photosystem II produces molecular oxygen as an enzymatic product. Additionally, under a variety of stress conditions, reactive oxygen species are produced at or near the active site for oxygen evolution. In this study, Fourier-transform ion cyclotron resonance mass spectrometry was used to identify oxidized amino acid residues located in several core Photosystem II proteins (D1, D2, CP43, and CP47) isolated from spinach Photosystem II membranes. While the majority of these oxidized residues (81%) are located on the oxygenated solvent-exposed surface of the complex, several residues on the CP43 protein ( 354E, 355T, 356M, and 357R) which are in close proximity (\u3c15 \u3eÅ) to the Mn 4CaO 5 active site are also modified. These residues appear to be associated with putative oxygen/reactive oxygen species exit channel(s) in the photosystem. These results are discussed within the context of a number of computational studies which have identified putative oxygen channels within the photosystem. © 2012 American Chemical Society

Microaerobic Conditions Are Required for Magnetite Formation Within \u3ci\u3eAquaspirillum magnetotacticum\u3c/i\u3e

The amount of magnetite (Fe3O4) within magnetosomes of the microaerophilic bacterium Aquaspirillum magnetotacticum varies with oxygen and nitrogen supply. The development of optical methods for directly measuring cell magnetism in culture samples has enabled us to quantitate bacterial Fe3O4 yields. We measured final cell yields, average cell magnetic moments, and magnetosome yields of growing cells. Cultures were grown with NO3-, NH4+, or both, in sealed, unshaken vials with initial headspace Po2 values ranging from 0 (trace) to 21 kPa. More than 50% of cells had detectable magnetosomes only when grown in the range of 0.5-5.0 kPa O2. Optimum cell magnetism (and Fe3O4 formation) occurred under microaerobic conditions (initial headspace Po2 of 0.5-1 kPa) regardless of the N source. At optimal conditions for Fe3O4 formation, denitrifying cultures produced more of this mineral than those growing with O2 as the sole terminal electron acceptor. This suggests that competition for O2 exists between processes involving respiratory electron disposal and Fe3O4 formation. Oxygen may also be required for Fe3O4 formation by other species of magnetotactic bacteria. Bacterial Fe3O4 appears to persist in sediments after death and lysis of cells. The presence of bacterial Fe3O4 in the fossil and paleomagnetic records may be of use as a retrospective indicator of sedimentation that has occurred in microaerobic waters