Regional growth and convergence via integration – the case of the large EU

The coming Eastern enlargement of the EU will be a fundamentally different step in the history of the European integration. It will create a new situation in which growth conditions and regional adjustment requirements of Europe are going to change, too. The theory of economic growth and regional structures has developed recently in an interesting way. Especially the endogenous growth theory and models of the new economic geography offer relevant approach for interpretations. There is a strong tendency towards factor price equalisation and towards income convergence. But regional differences in other respects may become even larger via this process. The enlargement of the EU is an interesting case from this point of view. There are very large income differences, which are assumed to diminish, but it seems impossible to happen without a fundamental regional restructuring. The target of the paper is to make a survey on the growth theory and regional restructuring literature from the point of view of European integration. The idea is to make an evaluation and prediction on the real convergence prospects of the large EU. Eastern enlargement is an opportunity to faster growth in Europe, but the regional specialization and restructuring is a crucial condition for materializing of this result.

Computational simulation of transition to turbulence through inverse modeling

The present investigation has focused on a computational methodology for the fundamental case of transition in channel flow, in which recently published experimental data are utilized both as a stimulus and as a measure of merit of the method. The research has proceeded along three avenues in parallel. The first task has consisted of the development and verification of a computer code which calculates the mean evolution of flow in a channel similar to the one employed experimentally by Blair and Anderson. An analytical test case was created for the dual purposes of code verification and of highlighting the interactions between the Reynolds stress and the mean velocity profile. This test case generated a Reynolds stress by the residue in the momentum equation which is produced by a typical analytical velocity profile. By a substitution of this Reynolds stress into the appropriate code module, the correctness of the code may be verified, along with the accuracy of the computational method. The second task pursued has involved the development of a triple layer model for the Reynolds stress profile, which was suggested and derived from experimental velocity profiles. It is demonstrated that the innermost length scale is based on the local friction velocity, the intermediate layer corresponds to the usual logarithmic law of the wall region in which the normalized Reynolds stress is approximately unity, and the outermost layer is represented by a closed mathematical form depending explicitly on the velocity profile in the wake region. The third task was comprised of scrutiny of the excellent databases developed by Blair and others, and the planning of its incorporation into the transition analysis. These extensive measurements indicate that turbulent statistics in the transition regime may be considered to alternate between laminar and fully turbulent types, the proportions of which are quantified by a measured intermittency function

Information acquisition during a Dutch auction

In this paper we consider equilibrium behavior in a Dutch (descending price) auction where the bidders are uninformed of their valuations with probability 1-q and can acquire information about their valuation at a positive cost during the auction. We assume that the information acquisition activity is covert. We characterize the equilibrium behavior in a setting where bidders are ex ante symmetric and have independent private values. We show that, if the number of bidders is large, the Dutch auction produces more revenue than would a first price auction.auctions; information acquisition

Information acquisition during a Dutch auction

In this paper we consider equilibrium behavior in a Dutch (descending price) auction where the bidders are uninformed of their valuations with probability q and can acquire information about their valuation at a positive cost during the auction. We assume that the information acquisition activity is covert. We characterize the equilibrium behavior in a setting where bidders are ex ante symmetric and have independent private values. We show that, if the number of bidders is large, the Dutch auction produces more revenue than would a first price auction.auctions; information acquisition

Effects of Energy Price Changes on Russian Economy

Energiewirtschaft, Preisniveau, Volkswirtschaft, Russland, Power industry, Price level, Economy, Russia

Irreversible Investment under L\'evy Uncertainty: an Equation for the Optimal Boundary

We derive a new equation for the optimal investment boundary of a general irreversible investment problem under exponential L\'evy uncertainty. The problem is set as an infinite time-horizon, two-dimensional degenerate singular stochastic control problem. In line with the results recently obtained in a diffusive setting, we show that the optimal boundary is intimately linked to the unique optional solution of an appropriate Bank-El Karoui representation problem. Such a relation and the Wiener Hopf factorization allow us to derive an integral equation for the optimal investment boundary. In case the underlying L\'evy process hits any real point with positive probability we show that the integral equation for the investment boundary is uniquely satisfied by the unique solution of another equation which is easier to handle. As a remarkable by-product we prove the continuity of the optimal investment boundary. The paper is concluded with explicit results for profit functions of (i) Cobb-Douglas type and (ii) CES type. In the first case the function is separable and in the second case non-separable.Comment: 19 page