Europeanization vs. Globalization? A deeper look into income and employment embodied in intra-European trade

Production processes are nowadays increasingly global, implying interdependent structures linking goods, processes and countries. Traditional economic blocks and sectoral intra-country linkages coexist with increasing worldwide dependencies. Recent literature supports the hypothesis of a new globalization process taking place in the late 1990s and the 21st century, centred on the consolidation of increasingly competitive macro-regions at a global level, with a growing specialization of countries within them. We propose a multiregional input-output (MRIO) model of the European Union (EU) to analyse whether the generation of employment and income in Europe in recent decades can be defined as a process that is mainly regional or global (involving countries within the region versus countries outside Europe). Our results show that intra-EU trade is an important factor contributing to income and employment growth, more oriented to intermediate inputs, in the same way as extra-EU trade, despite the fact that some European countries are more specialized in final goods, mainly driven by high-income EU countries. Los procesos de producción son hoy en día cada vez más globales, lo que implica estructuras interdependientes que vinculan bienes, procesos y países. Los bloques económicos tradicionales y los vínculos sectoriales dentro del país coexisten con dependencias mundiales crecientes. La literatura reciente respalda la hipótesis de un nuevo proceso de globalización que tuvo lugar a fines de los años 90 y el siglo XXI, centrado en la consolidación de macro-regiones cada vez más competitivas a nivel global, con una creciente especialización de los países dentro de ellas. Proponemos un modelo multirregional input-output (MRIO) de la Unión Europea (UE) para analizar si la generación de empleo e ingresos en Europa en las últimas décadas se puede definir como un proceso que es principalmente regional o global. Nuestros resultados muestran que el comercio intracomunitario es un factor importante que contribuye al crecimiento de los ingresos y el empleo, más orientado a los inputs intermedios, de la misma manera que el comercio extracomunitario, a pesar del hecho de que algunos países europeos están más especializados en productos finales, principalmente demandados por países de altos ingresos de la UE

Encoding temporal regularities and information copying in hippocampal circuits

Discriminating, extracting and encoding temporal regularities is a critical requirement in the brain, relevant to sensory-motor processing and learning. However, the cellular mechanisms responsible remain enigmatic; for example, whether such abilities require specific, elaborately organized neural networks or arise from more fundamental, inherent properties of neurons. Here, using multi-electrode array technology, and focusing on interval learning, we demonstrate that sparse reconstituted rat hippocampal neural circuits are intrinsically capable of encoding and storing sub-second-order time intervals for over an hour timescale, represented in changes in the spatial-temporal architecture of firing relationships among populations of neurons. This learning is accompanied by increases in mutual information and transfer entropy, formal measures related to information storage and flow. Moreover, temporal relationships derived from previously trained circuits can act as templates for copying intervals into untrained networks, suggesting the possibility of circuit-to-circuit information transfer. Our findings illustrate that dynamic encoding and stable copying of temporal relationships are fundamental properties of simple in vitro networks, with general significance for understanding elemental principles of information processing, storage and replication

Emerging interdependence between stock values during financial crashes

To identify emerging interdependencies between traded stocks we investigate the behavior of the stocks of FTSE 100 companies in the period 2000-2015, by looking at daily stock values. Exploiting the power of information theoretical measures to extract direct influences between multiple time series, we compute the information flow across stock values to identify several different regimes. While small information flows is detected in most of the period, a dramatically different situation occurs in the proximity of global financial crises, where stock values exhibit strong and substantial interdependence for a prolonged period. This behavior is consistent with what one would generally expect from a complex system near criticality in physical systems, showing the long lasting effects of crashes on stock markets

Analysing the information flow between financial time series - An improved estimator for transfer entropy

Following the recently introduced concept of transfer entropy, we attempt to measure the information flow between two financial time series, the Dow-Jones and DAX stock index. Being based on Shannon entropies, this model-free approach in principle allows us to detect statistical dependencies of all types, i.e. linear and nonlinear temporal correlations. However, when available data is limited and the expected effect is rather small, a straightforward implementation suffers' badly from misestimation due to finite sample effects, making it basically impossible to assess the significance of the obtained values. We therefore introduce a modified estimator, called effective transfer entropy, which leads to improved results in such conditions. In the application, we then manage to confirm an information transfer on a time scale of one minute between the two financial time series. The different economic impact of the two indices is also recovered from the data. Numerical results are then interpreted on one hand as capability of one index to explain future observations of the other, and on the other hand within terms of coupling strengths in the framework of a bivariate autoregressive stochastic model. Evidence is given for a nonlinear character of the coupling between Dow Jones and DAX

Analysing the information flow between financial time series

Following the recently introduced concept of transfer entropy, we attempt to measure the information flow between two financial time series, the Dow Jones and DAX stock index. Being based on Shannon entropies, this model-free approach in principle allows us to detect statistical dependencies of all types, i.e. linear and nonlinear temporal correlations. However, when available data is limited and the expected effect is rather small, a straightforward implementation suffers badly from misestimation due to finite sample effects, making it basically impossible to assess the significance of the obtained values. We therefore introduce a modified estimator, called effective transfer entropy, which leads to improved results in such conditions. In the application, we then manage to confirm an information transfer on a time scale of one minute between the two financial time series. The different economic impact of the two indices is also recovered from the data. Numerical results are then interpreted on one hand as capability of one index to explain future observations of the other, and on the other hand within terms of coupling strengths in the framework of a bivariate autoregressive stochastic model. Evidence is given for a nonlinear character of the coupling between Dow Jones and DAX

The effects of tariffs on coalition formation in a dynamic global warming game

The prospects for cooperation on climate protection beyond 2012 are currently uncertain. Thus policy instruments which foster participation in International Environmental Agreements (IEA) are in demand. Among the instruments under discussion are trade sanctions. Multi-region optimal growth models are a state of the art tool for integrated assessment, but introducing trade sanctions distorts the competitive equilibrium, making it difficult to compute numerically. We introduce trade and trade sanctions into a model of coalition stability to assess the potential of trade sanctions to support an IEA. Trade is modeled by having all countries produce a generic output good, but adopting national product differentiation (Armington assumption). Coalitions are free to impose tariffs on imports from non-cooperating countries. We solve the model numerically using a refined version of Negishi's [Negishi,T., 1960. Welfare economics and existence of an equilibrium fora competitive economy. Metroeconomica 12, 92-97] basic algorithm. We then apply the model to analyze the influence of tariffs on international cooperation. The model suggests that there is indeed a significant potential to raise participation through trade sanctions, even when goods from different countries are nearly perfect substitutes. Furthermore we investigate the effect of trade sanctions on global welfare, environmental effectiveness, and the credibility of the tariff mechanism. (C) 2009 Elsevier B.V. All rights reserved