Hong Kong's Currency Board and Changing Monetary Regimes

The paper discusses the historical background and institutional details of Hong Kong's currency board. We argue that its experience provides a good opportunity to test the macroeconomic implications of the currency board regime. Using the method of Blanchard and Quah (1989), we show that the parameters of the structural equations and the characteristics of supply and demand shocks have significantly changed since adopting the regime. Variance decomposition and impulse response analyses indicate Hong Kong's currency board is less susceptible to supply shocks, but demand shocks can cause greater short-term volatility under the system. The decent performance of Hong Kong's currency board is due mainly to the stable fiscal policy of its government. Counter-factual exercises also show that three-fourths of the reduction in observed output volatility and two-thirds of that in observed inflation volatility are explained by the adoption of the currency board, while the remainder is explained by changes in the external environment. The improvement in stability does not rule out the possibility of monetary collapse, however.

Evaluation on the analogy between the dynamic magnetosphere and a forced and/or self-organized critical system

International audienceThe dissipation power and size of auroral blobs are investigated in detail to examine the possible analogy between the dynamic magnetosphere and a forced and/or self-organized critical system. The distributions of these auroral parameters are sorted in terms of different levels of activity, namely substorms, pseudo-breakups, and quiet conditions. A power law (scale-free) component is seen in all these distributions. In addition, a peak distribution is found for substorm intervals and a hump for pseudo-breakup intervals. The peak distribution is present prominently during magnetic storms, i.e. when the magnetosphere is strongly driven by the solar wind. It is interpreted that the scale-free component is associated with the activity of the diffuse aurora, corresponding to disturbances at all permissible scales within the plasma sheet. Ionospheric feedback appears to be essential for the presence of two components in the distribution for auroral dissipation power. These results are consistent with the concept that the magnetosphere is in a forced and/or self-organized critical state, although they do not constitute conclusive evidence for the analogy

Testing the hypothesis of the Earth's magnetosphere behaving like an avalanching system

International audienceThe global auroral dissipation power as observed by the imager on the Polar spacecraft is used as a proxy for the power dissipation of the Earth's magnetosphere to examine whether or not the magnetosphere is an avalanching system. It is found that the probability density distributions for the area and power of auroral activity sites have a power law component within a finite scale range, suggestive of a scale-free nature in this finite-size system. This property is robust, prevailing with variations in the threshold used to define auroral activity sites and in the strength of the external driver, namely, the solar wind. The statistical characteristics on the temporal evolution of auroral sites are then examined, which leads to a criterion that can be used to predict about 42min in advance the total energy dissipation during the lifetime of an auroral activity site. The scale-free characteristics of auroral activity appears to be an intrinsic feature of the magnetosphere based on a comparison of the probability density distribution in the total auroral brightness power with that of the solar wind power input parameters in the same period as the auroral observations. These results are consistent with the hypothesis of the magnetosphere behaving like an avalanching system

Time development of electric fields and currents in space plasmas

International audienceTwo different approaches, referred to as Bu and Ej, can be used to examine the time development of electric fields and currents in space plasmas based on the fundamental laws of physics. From the Bu approach, the required equation involves the generalized Ohm's law with some simplifying assumptions. From the Ej approach, the required equation can be derived from the equation of particle motion, coupled self-consistently with Maxwell's equation, and the definition of electric current density. Recently, some strong statements against the Ej approach have been made. In this paper, we evaluate these statements by discussing (1) some limitations of the Bu approach in solving the time development of electric fields and currents, (2) the procedure in calculating self-consistently the time development of the electric current in space plasmas without taking the curl of the magnetic field in some cases, and (3) the dependency of the time development of magnetic field on electric current. It is concluded that the Ej approach can be useful to understand some magnetospheric problems. In particular, statements about the change of electric current are valid theoretical explanations of change in magnetic field during substorms

Homotopy Method for the Large, Sparse, Real Nonsymmetric Eigenvalue Problem

A homotopy method to compute the eigenpairs, i.e., the eigenvectors and eigenvalues, of a given real matrix A1 is presented. From the eigenpairs of some real matrix A0, the eigenpairs of A(t) ≡ (1 − t)A0 + tA1 are followed at successive "times" from t = 0 to t = 1 using continuation. At t = 1, the eigenpairs of the desired matrix A1 are found. The following phenomena are present when following the eigenpairs of a general nonsymmetric matrix: • bifurcation, • ill conditioning due to nonorthogonal eigenvectors, • jumping of eigenpaths. These can present considerable computational difficulties. Since each eigenpair can be followed independently, this algorithm is ideal for concurrent computers. The homotopy method has the potential to compete with other algorithms for computing a few eigenvalues of large, sparse matrices. It may be a useful tool for determining the stability of a solution of a PDE. Some numerical results will be presented