Aggregate consumption and the stock market: should we worry about non-linear wealth effects?

The linkage between stock market and aggregate consumption has been extensively studied in the context of linear econometric models. This paper proposes a less restrictive approach: short-run dynamics in US consumption are analysed applying semi-parametric techniques to a large sample of monthly data (1967-2002). This allows a rigorous assessment of the claim that consumers react differently to negative and positive changes in the value of their portfolios, or that they are only sensitive to “large” equity price corrections. The data display indeed nonlinearities of this type, but their significance is modest; the results corroborate the traditional view that, overall, Wall Street is not a major concern for American households

Optimal propagating fronts using Hamilton-Jacobi equations

The optimal handling of level sets associated to the solution of Hamilton-Jacobi equations such as the normal flow equation is investigated. The goal is to find the normal velocity minimizing a suitable cost functional that accounts for a desired behavior of level sets over time. Sufficient conditions of optimality are derived that require the solution of a system of nonlinear Hamilton-Jacobi equations. Since finding analytic solutions is difficult in general, the use of numerical methods to obtain approximate solutions is addressed by dealing with some case studies in two and three dimensions

Reverse Engineering of a Racing Motorbike Connecting Rod

The following scientific paper aims to analyze in detail the methodology for reverse engineering of a racing motorcycle connecting rod. The objective is to start with a product available on the market as a spare part, reconstruct its CAD model with a high standard of accuracy, then proceed with lightening modifications to arrive at a new, improved design. The innovative aspect of the procedure lies in the fact that in order to ensure accuracy on the order of a tenth of a millimeter during reconstruction, it was decided to use a FARO articulated arm laser to scan the component’s outer surface. By taking advantage of appropriate redesign CAD software (Geomagic Design X), a reconstruction can proceed within the high standard of accuracy imposed. In conclusion, the modifications made through material removal allow an improvement in product efficiency, ensuring high performance

Strengthening of the hydrological cycle in future scenarios: atmospheric energy and water balance perspective

Abstract. Future climate scenarios experiencing global warming are expected to strengthen the hydrological cycle during the 21st century (21C). We analyze the strengthening of the global-scale increase in precipitation from the perspective of changes in whole atmospheric water and energy balances. By combining energy and water equations for the whole atmosphere, we obtain constraints for the changes in surface fluxes and partitioning at the surface between sensible and latent components. We investigate the differences in the strengthening of the hydrological cycle in two centennial simulations performed with an Earth system model forced with specified atmospheric concentration pathways. Alongside the Special Report on Emissions Scenario (SRES) A1B, which is a medium-high non-mitigation scenario, we consider a new aggressive-mitigation scenario (E1) with reduced fossil fuel use for energy production aimed at stabilizing global warming below 2 K. Our results show that the mitigation scenario effectively constrains the global warming with a stabilization below 2 K with respect to the 1950–2000 historical period. On the other hand, the E1 precipitation does not follow the temperature field toward a stabilization path but continues to increase over the mitigation period. Quite unexpectedly, the mitigation scenario is shown to strengthen the hydrological cycle even more than SRES A1B till around 2070. We show that this is mostly a consequence of the larger increase in the negative radiative imbalance of atmosphere in E1 compared to A1B. This appears to be primarily related to decreased sulfate aerosol concentration in E1, which considerably reduces atmospheric absorption of solar radiation compared to A1B. The last decades of the 21C show a marked increase in global precipitation in A1B compared to E1, despite the fact that the two scenarios display almost the same overall increase of radiative imbalance with respect to the 20th century. Our results show that radiative cooling is weakly effective in A1B throughout the 21C. Two distinct mechanisms characterize the diverse strengthening of the hydrological cycle in the middle and end- 21C. It is only through a very large perturbation of surface fluxes that A1B achieves a larger increase in global precipitation in the last decades of the 21C. Our energy/water budget analysis shows that this behavior is ultimately due to a bifurcation in the Bowen ratio change between the two scenarios. This work warns that mitigation policies that promote aerosol abatement, may lead to an unexpected stronger intensification of the hydrological cycle and associated changes that may last for decades after global warming is effectively mitigated. On the other hand, it is also suggested that predictable components of the radiative forcing by aerosols may have the potential to effectively contribute to the decadal-scale predictability of changes in the hydrological strength

Enumerating Abelian Returns to Prefixes of Sturmian Words

We follow the works of Puzynina and Zamboni, and Rigo et al. on abelian returns in Sturmian words. We determine the cardinality of the set $\mathcal{APR}_u$ of abelian returns of all prefixes of a Sturmian word $u$ in terms of the coefficients of the continued fraction of the slope, dependingly on the intercept. We provide a simple algorithm for finding the set $\mathcal{APR}_u$ and we determine it for the characteristic Sturmian words.Comment: 19page

Moving Horizon Trend Identification Based on Switching Models for Data Driven Decomposition of Fluid Flows

Modal decomposition is pretty popular in fluid mechanics, especially for data-driven analysis. Dynamic mode decomposition (DMD) allows to identify the modes that describe complex phenomenona such as those physically modelled by the Navier-Stokes equation. The identified modes are associated with residuals, which can be used to detect a meaningful change of regime, e.g., the formation of a vortex. Toward this end, moving horizon estimation (MHE) is applied to identify the trend of the norm of the residuals that result from the application of DMD for the purpose to automatically classify the time evolution of fluid flows. The trend dynamics is modelled as a switching nonlinear system and hence an MHE problem is solved in such a way to monitor the time behavior of the fluid and quickly identify changes of regime. The stability of the estimation error given by MHE is proved. The combination of DMD and MHE provide successful results as shown by processing experimental datasets of the velocity field of fluid flows obtained by a particle image velocimetry

Financial regimes and uncertainty shocks

Financial markets are central to the transmission of uncertainty shocks. This paper documents a new aspect of the interaction between the two by showing that uncertainty shocks have radically di¤erent macroeconomic implications depending on the state finan- cial markets are in when they occur. Using monthly US data, we estimate a nonlinear VAR where economic uncertainty is proxied by the (unobserved) volatility of the struc- tural shocks, and a regime change occurs whenever credit conditions cross a critical threshold. An exogenous increase in uncertainty has recessionary e¤ects in both good and bad credit regimes, but its impact on output is estimated to be five times larger when the economy is experiencing financial distress. Accounting for this nonlinearity, uncertainty accounts for about 1% of the peak fall in industrial production observed in the 2007-2009 recession

Strengthening of the hydrological cycle in future scenarios: atmospheric energy and water balance perspective

Future climate scenarios experiencing global warming are expected to strengthen the hydrological cycle during the 21st century (21C). We analyze the strengthening of the global-scale increase in precipitation from the perspective of changes in whole atmospheric water and energy balances. By combining energy and water equations for the whole atmosphere, we obtain constraints for the changes in surface fluxes and partitioning at the surface between sensible and latent components. We investigate the differences in the strengthening of the hydrological cycle in two centennial simulations performed with an Earth system model forced with specified atmospheric concentration pathways. Alongside the Special Report on Emissions Scenario (SRES) A1B, which is a medium-high non-mitigation scenario, we consider a new aggressive-mitigation scenario (E1) with reduced fossil fuel use for energy production aimed at stabilizing global warming below 2 K. Our results show that the mitigation scenario effectively constrains the global warming with a stabilization below 2 K with respect to the 1950–2000 historical period. On the other hand, the E1 precipitation does not follow the temperature field toward a stabilization path but continues to increase over the mitigation period. Quite unexpectedly, the mitigation scenario is shown to strengthen the hydrological cycle even more than SRES A1B till around 2070. We show that this is mostly a consequence of the larger increase in the negative radiative imbalance of atmosphere in E1 compared to A1B. This appears to be primarily related to decreased sulfate aerosol concentration in E1, which considerably reduces atmospheric absorption of solar radiation compared to A1B. The last decades of the 21C show a marked increase in global precipitation in A1B compared to E1, despite the fact that the two scenarios display almost the same overall increase of radiative imbalance with respect to the 20th century. Our results show that radiative cooling is weakly effective in A1B throughout the 21C. Two distinct mechanisms characterize the diverse strengthening of the hydrological cycle in the middle and end- 21C. It is only through a very large perturbation of surface fluxes that A1B achieves a larger increase in global precipitation in the last decades of the 21C. Our energy/water budget analysis shows that this behavior is ultimately due to a bifurcation in the Bowen ratio change between the two scenarios. This work warns that mitigation policies that promote aerosol abatement, may lead to an unexpected stronger intensification of the hydrological cycle and associated changes that may last for decades after global warming is effectively mitigated. On the other hand, it is also suggested that predictable components of the radiative forcing by aerosols may have the potential to effectively contribute to the decadal-scale predictability of changes in the hydrological strength

Bank lending in uncertain times

We study the impact of economic uncertainty on the supply of bank credit using a monthly dataset that includes all loan applications submitted by a sample of 650,000 Italian firms between 2003 and 2012. We find that an increase in aggregate uncertainty has three effects. First, it reduces banks' likelihood to accept new credit applications. Second, it lengthens the time firms have to wait for their loans to be released. Third, it makes banks less responsive to fluctuations in short-term interest rates, weakening the bank lending channel of monetary policy. The influence of uncertainty is relatively stronger for poorly capitalized lenders and geographically distant borrowers