The Center and the Periphery: The Globalization of Financial Turmoil

This paper studies how financial turbulence in emerging market countries can spread across borders. We construct indices of financial globalization' and evaluate the repercussions of turmoil in three emerging markets, which experienced financial crises in the late 1990s: Brazil, Russia, and Thailand. Our findings indicate that financial turbulence in these countries only spreads globally when they affect asset markets in one or more of the world's financial centers. Otherwise, spillovers are confined to countries in the same region. We also find that fragility in institutions in the financial centers is at the core of global spillovers while economic and monetary policy news contributes to regional spillovers.

Continuation-conjugate gradient methods for the least squares solution of nonlinear boundary value problems

We discuss in this paper a new combination of methods for solving nonlinear boundary value problems containing a parameter. Methods of the continuation type are combined with least squares formulations, preconditioned conjugate gradient algorithms and finite element approximations. We can compute branches of solutions with limit points, bifurcation points, etc. Several numerical tests illustrate the possibilities of the methods discussed in the present paper; these include the Bratu problem in one and two dimensions, one-dimensional bifurcation and perturbed bifurcation problems, the driven cavity problem for the Navier–Stokes equations

Financial Markets in Times of Stress

In this paper, we examine which markets are most synchronized internationally and exhibit the greater extent of comovement. We focus on daily data for four asset markets: bonds, equities, foreign exchange, and domestic money market. Our sample covers thirty-five developed and emerging market countries during 1997-1999. The extent of comovement and responsiveness to external shocks is examined in different ways. To measure the response of these markets to adverse external shocks, we date the peaks in domestic interest rates and bond spreads and the largest daily declines in equity prices and assess the extent of clustering around the same period. We also analyze which markets show evidence of greatest comovement in general, irrespective of whether there are adverse shocks or not.

Parametric Manifolds I: Extrinsic Approach

A parametric manifold can be viewed as the manifold of orbits of a (regular) foliation of a manifold by means of a family of curves. If the foliation is hypersurface orthogonal, the parametric manifold is equivalent to the 1-parameter family of hypersurfaces orthogonal to the curves, each of which inherits a metric and connection from the original manifold via orthogonal projections; this is the well-known Gauss-Codazzi formalism. We generalize this formalism to the case where the foliation is not hypersurface orthogonal. Crucial to this generalization is the notion of deficiency, which measures the failure of the orthogonal tangent spaces to be surface-forming, and which behaves very much like torsion. Some applications to initial value problems in general relativity will be briefly discussed.Comment: Plain TeX, 21 pages, no figure

The Unholy Trinity of Financial Contagion

Over the last 20 years, some financial events, such as devaluations or defaults, have triggered an immediate adverse chain reaction in other countries -- which we call fast and furious contagion. Yet, on other occasions, similar events have failed to trigger any immediate international reaction. We argue that fast and furious contagion episodes are characterized by "the unholy trinity": (i) they follow a large surge in capital flows; (ii) they come as a surprise; and (iii) they involve a leveraged common creditor. In contrast, when similar events have elicited little international reaction, they were widely anticipated and took place at a time when capital flows had already subsided.

POSTMAN: Point of Sail Tacking for Maritime Autonomous Navigation

Waves apply significant forces to small boats, in particular when such vessels are moving at a high speed in severe sea conditions. In addition, small high-speed boats run the risk of diving with the bow into the next wave crest during operations in the wavelengths and wave speeds that are typical for shallow water. In order to mitigate the issues of autonomous navigation in rough water, a hybrid controller called POSTMAN combines the concept of POS (point of sail) tack planning from the sailing domain with a standard PID (proportional-integral-derivative) controller that implements reliable target reaching for the motorized small boat control task. This is an embedded, adaptive software controller that uses look-ahead sensing in a closed loop method to perform path planning for safer navigation in rough waters. State-of-the-art controllers for small boats are based on complex models of the vessel's kinematics and dynamics. They enable the vessel to follow preplanned paths accurately and can theoretically control all of the small boat s six degrees of freedom. However, the problems of bow diving and other undesirable incidents are not addressed, and it is questionable if a six-DOF controller with basically a single actuator is possible at all. POSTMAN builds an adaptive capability into the controller based on sensed wave characteristics. This software will bring a muchneeded capability to unmanned small boats moving at high speeds. Previously, this class of boat was limited to wave heights of less than one meter in the sea states in which it could operate. POSTMAN is a major advance in autonomous safety for small maritime craft