Macroeconomic and financial stability challenges for acceding and candidate countries

This paper – based on a report by a Task Force established by the International Relations Committee (IRC) of the European System of Central Banks (ESCB) – reviews macroeconomic and financial stability challenges for acceding (Bulgaria and Romania) and candidate countries (Croatia and Turkey). In an environment characterised by strong growth and capital inflows, the main macroeconomic challenges relate to the recent pick-up of inflation and the large and widening current account deficits. Moreover, rapid credit growth has been a recent feature of financial development in all countries and thus constitutes the main financial stability challenge. In general, monetary authorities have responded to these challenges by tightening monetary conditions and prudential standards, with concrete measures also reflecting the different monetary and exchange rate regimes in the region. The paper also highlights four specific features of financial development in the countries under review, namely the dominance of banks in financial intermediation, the strong participation of foreign-owned banks, the widespread use of foreign currencies and the strengthening of supervisory frameworks. JEL Classification: E65, G21, G38, O16, P27.South-East Europe, macroeconomic performance, credit growth, financial stability.

Exit strategies

We study alternative scenarios for exiting the post-crisis fiscal and monetary accommodation using the model of Angeloni and Faia (2010), that combines a standard DSGE framework with a fragile banking sector, suitably modified and calibrated for the euro area. Credibly announced and fast fiscal consolidations dominate – based on simple criteria – alternative strategies incorporating various degrees of gradualism and surprise. The fiscal adjustment should be based on spending cuts or else be relatively skewed towards consumption taxes. The phasing out of monetary accommodation should be simultaneous or slightly delayed. We also find that, contrary to widespread belief, Basel III may well have an expansionary macroeconomic effect. Keywords: Exit Strategies , Debt Consolidation , Fiscal Policy , Monetary Policy , Capital Requirements , Bank Runs JEL Classification: G01, E63, H1

Migration of semiflexible polymers in microcapillary flow

The non-equilibrium structural and dynamical properties of a semiflexible polymer confined in a cylindrical microchannel and exposed to a Poiseuille flow is studied by mesoscale hydrodynamic simulations. For a polymer with a length half of its persistence length, large variations in orientation and conformations are found as a function of radial distance and flow strength. In particular, the polymer exhibits U-shaped conformations near the channel center. Hydrodynamic interactions lead to strong cross-streamline migration. Outward migration is governed by the polymer orientation and the corresponding anisotropy in its diffusivity. Strong tumbling motion is observed, with a tumbling time which exhibits the same dependence on Peclet number as a polymer in shear flow.Comment: 6 pages, 7 figures, accepted by EP

Flow-Induced Helical Coiling of Semiflexible Polymers in Structured Microchannels

The conformations of semiflexible (bio)polymers are studied in flow through geometrically structured microchannels. Using mesoscale hydrodynamics simulations, we show that the polymer undergoes a rod-to-helix transition as it moves from the narrow high-velocity region into the wide low-velocity region of the channel. The transient helix formation is the result of a non-equilibrium and non-stationary buckling transition of the semiflexible polymer, which is subjected to a compressive force originating from the fluid-velocity variation in the channel. The helix properties depend on the diameter ratio of the channel, the polymer bending rigidity, and the flow strength.Comment: Accepted in Phys. Rev. Let

Physics of Microswimmers - Single Particle Motion and Collective Behavior

Locomotion and transport of microorganisms in fluids is an essential aspect of life. Search for food, orientation toward light, spreading of off-spring, and the formation of colonies are only possible due to locomotion. Swimming at the microscale occurs at low Reynolds numbers, where fluid friction and viscosity dominates over inertia. Here, evolution achieved propulsion mechanisms, which overcome and even exploit drag. Prominent propulsion mechanisms are rotating helical flagella, exploited by many bacteria, and snake-like or whip-like motion of eukaryotic flagella, utilized by sperm and algae. For artificial microswimmers, alternative concepts to convert chemical energy or heat into directed motion can be employed, which are potentially more efficient. The dynamics of microswimmers comprises many facets, which are all required to achieve locomotion. In this article, we review the physics of locomotion of biological and synthetic microswimmers, and the collective behavior of their assemblies. Starting from individual microswimmers, we describe the various propulsion mechanism of biological and synthetic systems and address the hydrodynamic aspects of swimming. This comprises synchronization and the concerted beating of flagella and cilia. In addition, the swimming behavior next to surfaces is examined. Finally, collective and cooperate phenomena of various types of isotropic and anisotropic swimmers with and without hydrodynamic interactions are discussed.Comment: 54 pages, 59 figures, review article, Reports of Progress in Physics (to appear

Bacterial swarmer cells in confinement: A mesoscale hydrodynamic simulation study

A wide spectrum of Peritrichous bacteria undergo considerable physiological changes when they are inoculated onto nutrition-rich surfaces and exhibit a rapid and collective migration denoted as swarming. Thereby, the length of such swarmer cells and their number of flagella increases substantially. In this article, we investigated the properties of individual E. coli-type swarmer cells confined between two parallel walls via mesoscale hydrodynamic simulations, combining molecular dynamics simulations of the swarmer cell with the multiparticle particle collision dynamics approach for the embedding fluid. E. coli-type swarmer cells are three-times longer than their planktonic counter parts, but their flagella density is comparable. By varying the wall separation, we analyze the confinement effect on the flagella arrangement, on the distribution of cells in the gap between the walls, and on the cell dynamics. We find only a weak dependence of confinement on the bundle structure and dynamics. The distribution of cells in the gap changes from a geometry-dominated behavior for very narrow to fluid-dominated behavior for wider gaps, where cells are preferentially located in the gap center for narrower gaps and stay preferentially next to one of the walls for wider gaps. Dynamically, the cells exhibit a wide spectrum of migration behaviors, depending on their flagella bundle arrangement, and ranges from straight swimming to wall rolling

Cooperative Motion of Active Brownian Spheres in Three-Dimensional Dense Suspensions

The structural and dynamical properties of suspensions of self-propelled Brownian particles of spherical shape are investigated in three spatial dimensions. Our simulations reveal a phase separation into a dilute and a dense phase, above a certain density and strength of self-propulsion. The packing fraction of the dense phase approaches random close packing at high activity, yet the system remains fluid. Although no alignment mechanism exists in this model, we find long-lived cooperative motion of the particles in the dense regime. This behavior is probably due to an interface-induced sorting process. Spatial displacement correlation functions are nearly scale-free for systems with densities close to or above the glass transition density of passive systems.Comment: 6 pages, 7 figure

Oil Price Shocks and Currency Denomination (A revised version of EWP 2005-01)

The paper analyzes the dynamic effects of anticipated price increases of imported raw materials upon two large open economies. It is assumed that the economies have an asymmetric macroeconomic structure on the supply side and are dependent upon a small third country for oil or raw materials imports. The dynamic behavior of several macroeconomic variables is discussed both under US dollar and Euro-currency denomination. It is shown that with Euro-currency denominated oil the stagnationary effects of oil price increases upon both the domestic and foreign economy are reduced. The paper also discusses several monetary policy responses to oil price shocks. --oil price shocks,international policy coordination,currency denomination