Sustainable External Debt Levels: Estimates for Selected Asian Countries

High ratios of external debt to GDP in selected Asian countries have contributed to the initiation, propagation, and severity of the financial and economic crises in recent years, reflecting runaway fiscal deficits and excessive foreign borrowing by the private sector. Applying the formal framework proposed by Villanueva (2003) to a selected group of Asian countries, the research estimates the external debt thresholds beyond which further debt accumulation will have negative effects on growth and will become unsustainable. The framework is an extension of the standard neoclassical growth model that incorporates global capital markets. ‘Sustainability’ is measured in terms of the steady-state ratio of the stock of external debt to GDP, as functions of real world interest rates, risk spreads and their responsiveness to external debt burdens and market perceptions of country risk, marginal propensities to save out of national disposable income and foreign borrowing, rates of technical change, and parameters of the production function. The major policy implications are that in the long run, fiscal consolidation and the promotion of private saving are critical, and that reliance on foreign saving in a globalized financial world has limits, particularly when the risk spreads are positively correlated with rising external debt levels.

External Debt, Adjustment, and Growth

High ratios of external debt to GDP in selected Asian countries have contributed to the initiation, propagation, and severity of the financial and economic crises in recent years, reflecting runaway fiscal deficits and excessive foreign borrowing by the private sector. More importantly, the servicing of large debt stocks has diverted scarce resources from investment and long-term growth. Applying and calibrating the formal framework proposed by Villanueva (2003) to Philippine data, we explore the joint dynamics of external debt, capital accumulation, and growth. The relative simplicity of the model makes it convenient to analyze the links between domestic adjustment policies, foreign borrowing, and growth. We estimate the optimal domestic saving rate that is consistent with maximum real consumption per unit of effective labor in the long run. As a by-product, we estimate the steady-state ratio of net external debt to GDP that is associated with this optimal outcome. The framework is an extension of the standard neoclassical growth model that incorporates endogenous technical change and global capital markets. The major policy implications are that in the long run, fiscal adjustment and the promotion of private saving are critical; reliance on foreign saving in a globalized financial world has limits; and when risk spreads are highly and positively correlated with rising external debt levels, unabated foreign borrowing depresses long run welfare.

Lagoon water-level oscillations driven by rainfall and wave climate

Barrier breaching and subsequent inlet formation represent critical processes that ensure the temporary or permanent connection and transference of water, nutrients, or living organisms between a lagoon and the open sea. Here, we investigate the conditions inducing natural barrier breaching through a 34 months monitoring program of water-level oscillations within a shallow lagoon and the adjacent nearshore, at the Northern coast of the Iberian Peninsula, Louro lagoon. Seven natural openings were identified to have occurred during the three monitored wet seasons, from the 2009 to 2012, (Wet1, Wet2 and Wet3); four in the Wetl, two in the Wet2 and one in. the Wet3. The openings were grouped in three types depending on the observed relation between the lagoon water-level (L-wl), the estimated berm height (B-h) and the water-level at the beach (B-wl): (i) openings by lagoon outflow, which include those characterized by L-wl higher than B-h and lower B-wl; (ii) openings by wave inundation, including those induced by B-wl higher than B-h, and (iii) mixed openings, which result from a combination of the two previous conditions. We observed that L-wl is modulated by the rainfall regime (R-f) and can be explained by the accumulated precipitation. We estimated applying runup equations to obtain B-h and B-wl which depend on the wave climate and tidal level. The inlet lifespan was found to be regulated by the wave climate and rainfall regime; in particular barrier sealing was associated with a sudden increase in wave period and a reduction in precipitation. This work proves that the natural openings could be predicted successfully with support to medium term water-level monitoring programs, which in turn may significantly contribute to strategic decision making for management and conservation purposes.Xunta de Galicia [08MDS036000PR, PlanI2C-ED481B 2014/132-0]MICINN [CTM2012-39599-C03-01]Portuguese Science Foundation [IF/01047/2014]info:eu-repo/semantics/publishedVersio

Geodesic Structure of the Schwarzschild Black Hole in Rainbow Gravity

In this paper we study the geodesic structure of the Schwarzschild black hole in rainbow gravity analyzing the behavior of null and time-like geodesic. We find that the structure of the geodesics essentially does not change when the semi-classical effects are included. However, we can distinguish different scenarios if we take into account the effects of rainbow gravity. Depending on the type of rainbow functions under consideration, inertial and external observers see very different situations in radial and non radial motion of a test particles.Comment: Version to match the accepted one in MPL

Can the Philippines' Human Resource Base Meet the Challenge of a Liberalized Financial Sector?

Is the Philippines ready to face foreign competition in the financial sector? Does it have enough supply of professionals who are capable of meeting the human resource requirements of domestic and foreign financial corporations in this kind of liberalized environment? Professor Tullao seeks to provide the answers in this Policy Notes.financial sector, financial liberalization, human resource development

A Novel Generic Framework for Track Fitting in Complex Detector Systems

This paper presents a novel framework for track fitting which is usable in a wide range of experiments, independent of the specific event topology, detector setup, or magnetic field arrangement. This goal is achieved through a completely modular design. Fitting algorithms are implemented as interchangeable modules. At present, the framework contains a validated Kalman filter. Track parameterizations and the routines required to extrapolate the track parameters and their covariance matrices through the experiment are also implemented as interchangeable modules. Different track parameterizations and extrapolation routines can be used simultaneously for fitting of the same physical track. Representations of detector hits are the third modular ingredient to the framework. The hit dimensionality and orientation of planar tracking detectors are not restricted. Tracking information from detectors which do not measure the passage of particles in a fixed physical detector plane, e.g. drift chambers or TPCs, is used without any simplifications. The concept is implemented in a light-weight C++ library called GENFIT, which is available as free software