The Economics of Content Protection

In a model that allows smooth substitution between domestic and imported inputs, content protection distorts inout choice but does not force a divergence between price and unit production cost. Content protection biases gains intechnical efficiency away from those saving domestic input and toward those saving imported input. By increasing derived demand for the domestic input,a marginally effective content requirement benefits suppliers of this input. Increases in the content requirement above the marginally effective level increase such benefits to suppliers of the domestic input provided that the price elasticity of demand for the final product is less than a critical value. The consequences of content protection are not materially affected by monopoly in the domestic final product market or monopsony in the domestic input market unless such monopoly or monopsony are created by content protection. The situation of a monopolistic supplier of the domestic input is enhanced by content protection.

Economically Sensible Solutions for Linear Rational Expectations Models with Forward and Backward Looking Dynamic Processes

Using variants of a modified version of Dornbusch's model of price level and exchange rate dynamics, it is demonstrated that satisfaction of the formal condition for existence of a unigue non-explosive solution of a linear rational expectations model with forward and backward looking dynamic processes (equality of the number of stable roots with the number of independent backward looking processes) does not guarantee the economic sensibility of this solution, even if one accepts the usual arguments for excluding "speculative babbles" from the solutions of such models. Moreover, satisfaction of the formal condition for existence of an infinity of non-explosive solutions for such rational expectations models (more stable roots than independent backward looking processes) does not assure that any of these solutions is economically sensible.

Monetary and Fiscal Policies in an Open Economy

The central theme of this paper is that international linkages between national economies influence, in fundamentally important ways, the effectiveness and proper conduct of national macroeconomic policies. Specifically, our purpose is to summarize the implications for the conduct of macroeconomic policies in open economies of both the traditional approach to open economy macroeconomics (as developed largely by James Meade, Robert Mundell, and J. Marcus Fleming) and of more recent developments. Our discussion is organized around three key linkages between national economies: through commodity trade; through capital mobility; and through exchange of national monies. These linkages have important implications concerning the effects of macroeconomic policies in open economies that differ from the effects of such policies in closed economies. Recent developments in the theory of macroeconomic policy have established conditions for the effectiveness of policies in influencing output and employment which emphasize the distinction between anticipated and unanticipated policy actions, the importance of incomplete information, and the consequences of contracts that fix nominal wages and prices over finite intervals. In this paper, we shall not analyze how these conditions are modified in an open economy. However, since our concern is with macro-economic policy, a principal objective of which is to influence output and employment, we shall assume that requisite conditions for such influence are satisfied.

Efficiency of Foreign Exchange Markets and Measures of Turbulence

Since the move to generalized floating in1973, exchange rates between major currencies have displayed large fluctuations. This turbulence of foreign exchange rates is an important concern of government policy and its explanation is a challenge for theories of foreign exchange market behavior. In Section I of this paper, we document the extent of turbulence in foreign exchange markets by examining (i) the magnitude of short-run variations in exchange rates relative to other measures of economic variability; (ii) the degree of divergence between actual and expected changes in exchange rates; and (iii) the extent to which exchange-rate movements have diverged from movements of relative national price levels. In Section II, we provide a general explanation of this turbulence in terms of the modern "asset market theory" to exchange-rate determination. This theory emphasizes that exchange rates, like the prices of other assets determined in organized markets, are strongly influenced by the market's expectation of future events. In this context, we also discuss the narrower technical question of "foreign exchange market efficiency." Finally, in Section III, we address the question of whether turbulence in the foreign exchange markets has been "excessive" and what policy measures can (or should) be taken to reduce it.

Evidence of Υ(1S)→J/ψ+χc1\Upsilon(1S) \to J/\psi+\chi_{c1} and search for double-charmonium production in Υ(1S)\Upsilon(1S) and Υ(2S)\Upsilon(2S) decays

Using data samples of $102\times10^6$ $\Upsilon(1S)$ and $158\times10^6$ $\Upsilon(2S)$ events collected with the Belle detector, a first experimental search has been made for double-charmonium production in the exclusive decays $\Upsilon(1S,2S)\rightarrow J/\psi(\psi')+X$, where $X=\eta_c$, $\chi_{cJ} (J=~0,~1,~2)$, $\eta_c(2S)$, $X(3940)$, and $X(4160)$. No significant signal is observed in the spectra of the mass recoiling against the reconstructed $J/\psi$ or $\psi'$ except for the evidence of $\chi_{c1}$ production with a significance of $4.6\sigma$ for $\Upsilon(1S)\rightarrow J/\psi+\chi_{c1}$. The measured branching fraction \BR(\Upsilon(1S)\rightarrow J/\psi+\chi_{c1}) is $(3.90\pm1.21(\rm stat.)\pm0.23 (\rm syst.))\times10^{-6}$. The $90\%$ confidence level upper limits on the branching fractions of the other modes having a significance of less than $3\sigma$ are determined. These results are consistent with theoretical calculations using the nonrelativistic QCD factorization approach.Comment: 12 pages, 4 figures, 1 table. The fit range was extended to include X(4160) signal according to referee's suggestions. Other results unchanged. Paper was accepted for publication as a regular article in Physical Review

Observation of an alternative χc0(2P)\chi_{c0}(2P) candidate in e+e−→J/ψDDˉe^+ e^- \rightarrow J/\psi D \bar{D}

We perform a full amplitude analysis of the process $e^+ e^- \rightarrow J/\psi D \bar{D}$, where $D$ refers to either $D^0$ or $D^+$. A new charmoniumlike state $X^*(3860)$ that decays to $D \bar{D}$ is observed with a significance of $6.5\sigma$. Its mass is ($3862^{+26}_{-32}{}^{+40}_{-13}$) MeV/$c^2$ and width is ($201^{+154}_{-67}{}^{+88}_{-82}$) MeV. The $J^{PC}=0^{++}$ hypothesis is favored over the $2^{++}$ hypothesis at the level of $2.5\sigma$. The analysis is based on the 980 $\mathrm{fb}^{-1}$ data sample collected by the Belle detector at the asymmetric-energy $e^+ e^-$ collider KEKB.Comment: 17 pages, 11 figure

The Liquidity Trap, the Real Balance Effect, and the Friedman Rule

This paper studies the behavior of the economy and the efficacy of monetary policy under zero nominal interest rates, using a model with population growth that nests, as a special case, a more conventional specification in which there is a single infinitely lived representative agent. The paper shows that with a growing population, monetary policy has distributional effects that give rise to a real balance effect, thereby eliminating the liquidity trap. These same distributional effects, however, can also work to make many agents much worse off under zero nominal interest rates than they are when the nominal interest rate is positive