Quoted spreads and trade imbalance dynamics in the European treasury bond market

Using high-frequency transaction data for the three largest European markets (France, Germany and Italy), this paper documents the existence of an asymmetric relationship between market liquidity and trading imbalances: when quoted spreads rise (fall) and liquidity falls (increases) buy (sell) rders tend to prevail. Risk-averse market-makers, with inventory-depletion risk being their main concern, tend to quote wider narrower) spreads when they think bond appreciation is more (less) likely to occur. It is also found that the probability of being in a specific regime is related to observable bond market characteristics, tock market volatility, macroeconomic releases and liquidity management operations of the monetary authorities

Inflation and inflation uncertainty in the Euro area

This paper estimates a time-varying AR-GARCH model of inflation producing measures of inflation uncertainty for the euro area, and investigates the linkages between them in a VAR framework, also allowing for the possible impact of the policy regime change associated with the start of EMU in 1999. The main findings are as follows. Steady-state inflation and inflation uncertainty have declined steadily since the inception of EMU, whilst short-run uncertainty has increased, mainly owing to exogenous shocks. A sequential dummy procedure provides further evidence of a structural break coinciding with the introduction of the euro and resulting in lower long-run uncertainty. It also appears that the direction of causality has been reversed, and that in the euro period the Friedman-Ball link is empirically supported, implying that the ECB can achieve lower inflation uncertainty by lowering the inflation rate

Fiscal shocks, public debt, and long-term interest rate dynamics

Public finances worldwide have been severely hit by the 2008-2009 Great Recession, stimulating the debate on the consequences of growing fiscal imbalances. Building on Paesani et al. (2006), this paper focuses on the USA, Germany and Italy over the 1983-2009 period and studies the effects of fiscal shocks and government debt accumulation on long-term interest rates, both nationally and across borders. Based on a a theoretical framework, the empirical analysis disentangles permanent and transitory components of interest rates dynamics .nding that sustained debt accumulation leads, at least temporarily, to higher long-term interest rates. The is particularly true for the Italian case. There is also evidence of signi.cant cross-country linkages, mainly between Italy and the USA.

Electron affinity of liquid water.

Understanding redox and photochemical reactions in aqueous environments requires a precise knowledge of the ionization potential and electron affinity of liquid water. The former has been measured, but not the latter. We predict the electron affinity of liquid water and of its surface from first principles, coupling path-integral molecular dynamics with ab initio potentials, and many-body perturbation theory. Our results for the surface (0.8 eV) agree well with recent pump-probe spectroscopy measurements on amorphous ice. Those for the bulk (0.1-0.3 eV) differ from several estimates adopted in the literature, which we critically revisit. We show that the ionization potential of the bulk and surface are almost identical; instead their electron affinities differ substantially, with the conduction band edge of the surface much deeper in energy than that of the bulk. We also discuss the significant impact of nuclear quantum effects on the fundamental gap and band edges of the liquid

Experimental Bayesian Quantum Phase Estimation on a Silicon Photonic Chip

Quantum phase estimation is a fundamental subroutine in many quantum algorithms, including Shor's factorization algorithm and quantum simulation. However, so far results have cast doubt on its practicability for near-term, non-fault tolerant, quantum devices. Here we report experimental results demonstrating that this intuition need not be true. We implement a recently proposed adaptive Bayesian approach to quantum phase estimation and use it to simulate molecular energies on a Silicon quantum photonic device. The approach is verified to be well suited for pre-threshold quantum processors by investigating its superior robustness to noise and decoherence compared to the iterative phase estimation algorithm. This shows a promising route to unlock the power of quantum phase estimation much sooner than previously believed

Classifying Subset Feedback Vertex Set for H-free graphs

In the FEEDBACK VERTEX SET problem, we aim to find a small set S of vertices in a graph intersecting every cycle. The SUBSET FEEDBACK VERTEX SET problem requires S to intersect only those cycles that include a vertex of some specified set T. We also consider the WEIGHTED SUBSET FEEDBACK VERTEX SET problem, where each vertex u has weight w(u)>0 and we ask that S has small weight. By combining known NP-hardness results with new polynomial-time results we prove full complexity dichotomies for SUBSET FEEDBACK VERTEX SET and WEIGHTED SUBSET FEEDBACK VERTEX SET for H-free graphs, that is, graphs that do not contain a graph H as an induced subgraph

Transition from molecular complex to quantum solvation in OCS(He)_N

We present quantum calculations of the rotational energy levels and spectroscopic rotational constants of the linear OCS molecule in variable size clusters of 4He, using spectral evolution quantum Monte Carlo methods that allow excited states to be accessed without nodal constraints. The rotational constants of OCS are found to decrease monotonically from the gas phase value as the number of helium atoms increases to N=6, after which the average constant increases to saturation at a value in excellent agreement with experimental measurements made on significantly larger clusters (N>1000). The minimum is shown to indicate a transition from a molecular complex to a quantum solvated molecule, with the former characterized by floppy but near rigid behavior, while the latter is characterized by non-zero permutation exchanges and a smaller extent of rigid coupling.Comment: 4 pages, 1 figure, submitted to Phys. Rev. Lett. on July 18,200