Do investors react negatively to democratic elections in emerging markets? [abstract]

Abstract only availableIn 2002, Brazil's bond market fell dramatically at the same time that Brazilian citizens prepared to vote for the left-leaning President Lula. This event prompted political scientists to question why investors reacted so strongly to the Brazilian democratic election. Since then, the common agreement among the discipline has reported that the Brazilian case is not an anomaly, and that investors in emerging market countries do react negatively during election cycles. However, this research suggests that there is no empirical evidence to defend that hypothesis. When comparing the bond spreads of 12 different emerging market countries from 1994 to 2004 during non-election cycles to the countries' bond spreads during a sample of 26 election cycles, there is only a slightly significant effect. Moreover, that effect becomes even less significant when various effects are controlled for. However, this research does find a significant effect in 4 out of the 26 elections. One of these elections is the 2002 Brazilian election of President Lula. Thus, although investors may react negatively to elections in some emerging market countries, there does not seem to be significant evidence to suggest that elections have an effect on bond markets.MU Undergraduate Research Scholars Progra

Corruption, democracy, and economic growth

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Super-heavy fermion material as metallic refrigerant for adiabatic demagnetization cooling

Low-temperature refrigeration is of crucial importance in fundamental research of condensed matter physics, as the investigations of fascinating quantum phenomena, such as superconductivity, superfluidity and quantum criticality, often require refrigeration down to very low temperatures. Currently, cryogenic refrigerators with $^3$He gas are widely used for cooling below 1 Kelvin. However, usage of the gas is being increasingly difficult due to the current world-wide shortage. Therefore, it is important to consider alternative methods of refrigeration. Here, we show that a new type of refrigerant, super-heavy electron metal, YbCo$_2$Zn$_{20}$, can be used for adiabatic demagnetization refrigeration, which does not require 3He gas. A number of advantages includes much better metallic thermal conductivity compared to the conventional insulating refrigerants. We also demonstrate that the cooling performance is optimized in Yb$_{1-x}$Sc$_x$Co$_2$Zn$_{20}$ by partial Sc substitution with $x\sim$0.19. The substitution induces chemical pressure which drives the materials close to a zero-field quantum critical point. This leads to an additional enhancement of the magnetocaloric effect in low fields and low temperatures enabling final temperatures well below 100 mK. Such performance has up to now been restricted to insulators. Since nearly a century the same principle of using local magnetic moments has been applied for adiabatic demagnetization cooling. This study opens new possibilities of using itinerant magnetic moments for the cryogen-free refrigeration

The Dynamics of Democracy, Development and Cultural Values

Over the past decades many countries have experienced rapid changes in their economies, their democratic institutions and the values of their citizens. Comprehensive data measuring these changes across very different countries has recently become openly available. Between country similarities suggest common underlying dynamics in how countries develop in terms of economy, democracy and cultural values. We apply a novel Bayesian dynamical systems approach to identify the model which best captures the complex, mainly non-linear dynamics that underlie these changes. We show that the level of Human Development Index (HDI) in a country drives first democracy and then higher emancipation of citizens. This change occurs once the countries pass a certain threshold in HDI. The data also suggests that there is a limit to the growth of wealth, set by higher emancipation. Having reached a high level of democracy and emancipation, societies tend towards equilibrium that does not support further economic growth. Our findings give strong empirical evidence against a popular political science theory, known as the Human Development Sequence. Contrary to this theory, we find that implementation of human-rights and democratisation precede increases in emancipative values

Bayesian Dynamical Systems Modelling in the Social Sciences

Data arising from social systems is often highly complex, involving non-linear relationships between the macro-level variables that characterize these systems. We present a method for analyzing this type of longitudinal or panel data using differential equations. We identify the best non-linear functions that capture interactions between variables, employing Bayes factor to decide how many interaction terms should be included in the model. This method punishes overly complicated models and identifies models with the most explanatory power. We illustrate our approach on the classic example of relating democracy and economic growth, identifying non-linear relationships between these two variables. We show how multiple variables and variable lags can be accounted for and provide a toolbox in R to implement our approach

From prediction error to incentive salience: mesolimbic computation of reward motivation

Reward contains separable psychological components of learning, incentive motivation and pleasure. Most computational models have focused only on the learning component of reward, but the motivational component is equally important in reward circuitry, and even more directly controls behavior. Modeling the motivational component requires recognition of additional control factors besides learning. Here I discuss how mesocorticolimbic mechanisms generate the motivation component of incentive salience. Incentive salience takes Pavlovian learning and memory as one input and as an equally important input takes neurobiological state factors (e.g. drug states, appetite states, satiety states) that can vary independently of learning. Neurobiological state changes can produce unlearned fluctuations or even reversals in the ability of a previously learned reward cue to trigger motivation. Such fluctuations in cue‐triggered motivation can dramatically depart from all previously learned values about the associated reward outcome. Thus, one consequence of the difference between incentive salience and learning can be to decouple cue‐triggered motivation of the moment from previously learned values of how good the associated reward has been in the past. Another consequence can be to produce irrationally strong motivation urges that are not justified by any memories of previous reward values (and without distorting associative predictions of future reward value). Such irrationally strong motivation may be especially problematic in addiction. To understand these phenomena, future models of mesocorticolimbic reward function should address the neurobiological state factors that participate to control generation of incentive salience. Reward contains separable psychological components of learning, incentive motivation and pleasure. Most computational models have focused only on the learning component of reward, but the motivational component is equally important in reward circuitry, and even more directly controls behavior.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/90564/1/j.1460-9568.2012.07990.x.pd