The purchasing power parity fallacy: time to reconsider the PPP hypothesis

This is a post-peer-review, pre-copyedit version of an article published in Open Economic Reviews. The final authenticated version is available online at: http://dx.doi.org/10.1007/s11079-017-9473-9Traded good prices affect the real exchange rate first through their effect on the overall price level and second through their effect on the nominal exchange rate. Whereas the price level effect, which is positive in sign, is universally recognized, the nominal exchange rate effect, which is negative in sign, is routinely ignored. We calculate to which extent real exchange rate changes are accounted for by traded good prices and other components of the real exchange rate. We find that the nominal exchange rate effect neutralizes the price level effect entirely, suggesting that, contrary to popular belief, good market arbitrage is not conducive to purchasing power parity (the purchasing power parity fallacy). Rather than traded or non-traded good prices, the main driving force behind the real exchange rate is currency market pressure, a variable that, as we argue, is largely determined by the cumulative trade and capital flows of a countr

The time-dependent von Kármán plate equation as a limit of 3D nonlinear elasticity

The asymptotic behaviour of the solutions of three-dimensional nonlinear elastodynamics in a thin plate is studied, as the thickness h of the plate tends to zero. Under appropriate scalings of the applied force and of the initial values in terms of h, it is shown that three-dimensional solutions of the nonlinear elastodynamic equation converge to solutions of the time-dependent von Kármán plate equation

Environmental Impacts and Economic Differences in grassland based Organic Dairy Farms in Germany – Modelling the Extremes

Differences in environmental impact and economic returns between intensive and low-input organic dairy production are investigated using two simplified model farms with different amounts of concentrates being fed. In four scenarios, ecological and economic effects of restricting the more intensive farm management practice beyond the existing regulations of organic farming are analysed. In the initial situation, the intensive farm has a financial advantage of about 600.00 € per ha compared with the low-input farm, while the environmental risks caused by its production system are higher in several Life Cycle Assessment (LCA) categories. We showed for the model case that limiting livestock density and using regional grown concentrates bring about considerable improvements in LCA results, while restricting the amount of concentrates used does not. These three scenarios result in economic deterioration for the intensive farm. A fourth scenario increasing the share of pasture in daily dry matter intake (DMI) to a minimum of 50% during the grazing season has positive effects environmentally as well as economically

SO(3) invariance and covariance in mixtures of simple bodies

We adapt to mixtures the procedure of invariance of external power under the action of SO(3) to deduce balance equations. The two classical axioms about the growths of momentum and moment of momentum are derived with the help of a rule on the structure of the total power. We discuss also the covariance of the balance equations of each constituent and the nature of the constituent stress.Comment: 12 page