Gibson's Paradox and the Gold Standard

This paper provides a new explanation for Gibson's Paradox -- the observation that the price level and the nominal interest rate were positively correlated over long periods of economic history. We explain this phenomenon interms of the fundamental workings of a gold standard. Under a gold standard, the price level is the reciprocal of the real price of gold. Because gold is adurable asset, its relative price is systematically affected by fluctuations inthe real productivity of capital, which also determine real interest rates. Our resolution of the Gibson Paradox seems more satisfactory than previous hypotheses. It explains why the paradox applied to real as well as nominal rates of return, its coincidence with the gold standard period, and the co-movement of interest rates, prices, and the stock of monetary gold during the gold standard period. Empirical evidence using contemporary data on gold prices and real interest rates supports our theory.

The Economic Consequences of Noise Traders

The claim that financial markets are efficient is backed by an implicit argument that misinformed "noise traders" can have little influence on asset prices in equilibrium. If noise traders' beliefs are sufficiently different from those of rational agents to significantly affect prices, then noise traders will buy high and sell low. They will then lose money relative to rational investors and eventually be eliminated from the market. We present a simple overlapping-generations model of the stock market in which noise traders with erroneous and stochastic beliefs (a) significantly affect prices and (b) earn higher returns than do rational investors. Noise traders earn high returns because they bear a large amount of the market risk which the presence of noise traders creates in the assets that they hold: their presence raises expected returns because sophisticated investors dislike bearing the risk that noise traders may be irrationally pessimistic and push asset prices down in the future. The model we present has many properties that correspond to the "Keynesian" view of financial markets. (i) Stock prices are more volatile than can be justified on the basis of news about underlying fundamentals. (ii) A rational investor concerned about the short run may be better off guessing the guesses of others than choosing an appropriate P portfolio. (iii) Asset prices diverge frequently but not permanently from average values, giving rise to patterns of mean reversion in stock and bond prices similar to those found directly by Fama and French (1987) for the stock market and to the failures of the expectations hypothesis of the term structure. (iv) Since investors in assets bear not only fundamental but also noise trader risk, the average prices of assets will be below fundamental values; one striking example of substantial divergence between market and fundamental values is the persistent discount on closed-end mutual funds, and a second example is Mehra and Prescott's (1986) finding that American equities sell for much less than the consumption capital asset pricing model would predict. (v) The more the market is dominated by short-term traders as opposed to long-term investors, the poorer is its performance as a social capital allocation mechanism. (vi) Dividend policy and capital structure can matter for the value of the firm even abstracting from tax considerations. And (vii) making assets illiquid and thus no longer subject to the whims of the market -- as is done when a firm goes private -- may enhance their value.

Area summation of first- and second-order modulations of luminance

To extend our understanding of the early visual hierarchy, we investigated the long-range integration of first- and second-order signals in spatial vision. In our first experiment we performed a conventional area summation experiment where we varied the diameter of (a) luminance-modulated (LM) noise and (b) contrastmodulated (CM) noise. Results from the LM condition replicated previous findings with sine-wave gratings in the absence of noise, consistent with long-range integration of signal contrast over space. For CM, the summation function was much shallower than for LM suggesting, at first glance, that the signal integration process was spatially less extensive than for LM. However, an alternative possibility was that the high spatial frequency noise carrier for the CM signal was attenuated by peripheral retina (or cortex), thereby impeding our ability to observe area summation of CM in the conventional way. To test this, we developed the ''Swiss cheese'' stimulus of Meese and Summers (2007) in which signal area can be varied without changing the stimulus diameter, providing some protection against inhomogeneity of the retinal field. Using this technique and a two-component subthreshold summation paradigm we found that (a) CM is spatially integrated over at least five stimulus cycles (possibly more), (b) spatial integration follows square-law signal transduction for both LM and CM and (c) the summing device integrates over spatially-interdigitated LM and CM signals when they are co-oriented, but not when crossoriented. The spatial pooling mechanism that we have identified would be a good candidate component for amodule involved in representing visual textures, including their spatial extent

Japan's High Saving Rate Reaffirmed

Compared to the U.S. national accounts, the Japanese accounts understate consumption and government spending, and therefore overstate the national saving rate. Recently, Hayashi has recalculated Japan's national saving according to the American Department of Commerce definition and found that from the mid-1970s until today, Japan's national saving rate is nearly halved. In this paper, we argue that Hayashi's adjustments to the Japanese income accounts are exaggerated, and present measures of Japanese and U.S. private saving that are immune from national income accounting biases. Our saving measures are constructed from the balance sheets of the household sectors in the United States and Japan. Far from being equal, we find that the two country gap in saving rates in the early 1980s has averaged between 15 and 30 percentage points, depending on the measure.

Passive States for Essential Observers

The aim of this note is to present a unified approach to the results given in \cite{bb99} and \cite{bs04} which also covers examples of models not presented in these two papers (e.g. $d$-dimensional Minkowski space-time for $d\geq 3$). Assuming that a state is passive for an observer travelling along certain (essential) worldlines, we show that this state is invariant under the isometry group, is a KMS-state for the observer at a temperature uniquely determined by the structure constants of the Lie algebra involved and fulfills (a variant of) the Reeh-Schlieder property. Also the modular objects associated to such a state and the observable algebra of an observer are computed and a version of weak locality is examined.Comment: 27 page

Electron-irradiated two-terminal, monolithic InP/Ga0.47In0.53As tandem solar cells and annealing of radiation damage

Radiation damage results from two-terminal monolithic InP/Ga(0.47)In(0.53)As tandem solar cells subject to 1 MeV electron irradiation are presented. Efficiencies greater than 22 percent have been measured by the National Renewable Energy Laboratory from 2x2 sq cm cells at 1 sun, AMO (25 C). The short circuit current density, open circuit voltage and fill factor are found to tolerate the same amount of radiation at low fluences. At high fluence levels, slight differences are observed. Decreasing the base amount of radiation at the Ga(0.47)In(0.53)As bottomcell improved the radiation resistance of J(sub sc) dramatically. This is turn, extended the series current flow through the subcell substantially up to a fluence of 3x10(exp 15) cm(exp -2) compared to 3x10(exp 14) cm(exp -2), as observed previously. The degradation of the maximum power output form tandem device is comparable to that from shallow homojunction (SHJ) InP solar cells, and the mechanism responsible for such degradation is explained in terms of the radiation response of the component cells. Annealing studies revealed that the recovery of the tandem cell response is dictated by the annealing characteristics exhibited by SHJ InP solar cells

Optimal Estimation Inversion of Ionospheric Electron Density from GNSS-POD Limb Measurements: Part I-Algorithm and Morphology

GNSS-LEO radio links from Precise Orbital Determination (POD) and Radio Occultation (RO) antennas have been used increasingly in characterizing the global 3D distribution and variability of ionospheric electron density (Ne). In this study, we developed an optimal estimation (OE) method to retrieve Ne profiles from the slant total electron content (hTEC) measurements acquired by the GNSS-POD links at negative elevation angles (ε \u3c 0°). Although both OE and onion-peeling (OP) methods use the Abel weighting function in the Ne inversion, they are significantly different in terms of performance in the lower ionosphere. The new OE results can overcome the large Ne oscillations, sometimes negative values, seen in the OP retrievals in the E-region ionosphere. In the companion paper in this Special Issue, the HmF2 and NmF2 from the OE retrieval are validated against ground-based ionosondes and radar observations, showing generally good agreements in NmF2 from all sites. Nighttime hmF2 measurements tend to agree better than the daytime when the ionosonde heights tend to be slightly lower. The OE algorithm has been applied to all GNSS-POD data acquired from the COSMIC-1 (2006–2019), COSMIC-2 (2019–present), and Spire (2019–present) constellations, showing a consistent ionospheric Ne morphology. The unprecedented spatiotemporal sampling of the ionosphere from these constellations now allows a detailed analysis of the frequency–wavenumber spectra for the Ne variability at different heights. In the lower ionosphere (~150 km), we found significant spectral power in DE1, DW6, DW4, SW5, and SE4 wave components, in addition to well-known DW1, SW2, and DE3 waves. In the upper ionosphere (~450 km), additional wave components are still present, including DE4, DW4, DW6, SE4, and SW4. The co-existence of eastward- and westward-propagating wave4 components implies the presence of a stationary wave4 (SPW4), as suggested by other earlier studies. Further improvements to the OE method are proposed, including a tomographic inversion technique that leverages the asymmetric sampling about the tangent point associated with GNSS-LEO links

Verapamil-Sensitive Transport of Quinacrine and Methylene Blue via the Plasmodium falciparum Chloroquine Resistance Transporter Reduces the Parasite's Susceptibility to these Tricyclic Drugs.

BACKGROUND: It is becoming increasingly apparent that certain mutations in the Plasmodium falciparum chloroquine resistance transporter (PfCRT) alter the parasite's susceptibility to diverse compounds. Here we investigated the interaction of PfCRT with 3 tricyclic compounds that have been used to treat malaria (quinacrine [QC] and methylene blue [MB]) or to study P. falciparum (acridine orange [AO]). METHODS: We measured the antiplasmodial activities of QC, MB, and AO against chloroquine-resistant and chloroquine-sensitive P. falciparum and determined whether QC and AO affect the accumulation and activity of chloroquine in these parasites. We also assessed the ability of mutant (PfCRT(Dd2)) and wild-type (PfCRT(D10)) variants of the protein to transport QC, MB, and AO when expressed at the surface of Xenopus laevis oocytes. RESULTS: Chloroquine resistance-conferring isoforms of PfCRT reduced the susceptibility of the parasite to QC, MB, and AO. In chloroquine-resistant (but not chloroquine-sensitive) parasites, AO and QC increased the parasite's accumulation of, and susceptibility to, chloroquine. All 3 compounds were shown to bind to PfCRT(Dd2), and the transport of QC and MB via this protein was saturable and inhibited by the chloroquine resistance-reverser verapamil. CONCLUSIONS: Our findings reveal that the PfCRT(Dd2)-mediated transport of tricyclic antimalarials reduces the parasite's susceptibility to these drugs

A psychophysical performance-based approach to the quality assessment of image processing algorithms

Image processing algorithms are used to improve digital image representations in either their appearance or storage efficiency. The merit of these algorithms depends, in part, on visual perception by human observers. However, in practice, most are assessed numerically, and the perceptual metrics that do exist are criterion sensitive with several shortcomings. Here we propose an objective performance-based perceptual measure of image quality and demonstrate this by comparing the efficacy of a denoising algorithm for a variety of filters. For baseline, we measured detection thresholds for a white noise signal added to one of a pair of natural images in a two-alternative forced-choice (2AFC) paradigm where each image was selected randomly from a set of n = 308 on each trial. In a series of experimental conditions, the stimulus image pairs were passed through various configurations of a denoising algorithm. The differences in noise detection thresholds with and without denoising are objective perceptual measures of the ability of the algorithm to render noise invisible. This was a factor of two (6dB) in our experiment and consistent across a range of filter bandwidths and types. We also found that thresholds in all conditions converged on a common value of PSNR, offering support for this metric. We discuss how the 2AFC approach might be used for other algorithms including compression, deblurring and edge-detection. Finally, we provide a derivation for our Cartesian-separable log-Gabor filters, with polar parameters. For the biological vision community this has some advantages over the more typical (i) polar-separable variety and (ii) Cartesian-separable variety with Cartesian parameters