Bank insolvency risk and aggregate Z-score measures: a caveat

We demonstrate that a popular approach to constructing (weighted) mean-based aggregate bank insolvency risk measures is inherently biased; we also suggest an alternative approach that avoids this problem.insolvency risk, aggregate Z-score, Jensen's inequality

Middle atmosphere modeling

Breaking gravity waves generate and maintain a background level of turbulence which is capable of producing substantial cooling and/or heating in the upper mesosphere and lower thermosphere. The net thermodynamic effect of breaking gravity waves is critically dependent on the eddy Prandt number (P sub t) applicable to mesospheric turbulence. When P sub t is approximately 1, the calculations of the heat budget for the mesopause region imply that the globally averaged eddy or turbulent diffusion coefficient cannot exceed .000001 sq cm/s. This upper limit on turbulant diffusion applies to both potential temperature transport and chemically inert tracer transport when radiative damping is neglible. For chemically active species larger diffusion coefficients are permitted, because the effective eddy diffusion coefficient is increased by an additive term L/2 gamma (sup 2), where L is the chemical loss rate and gamma is the vertical wavenumber. For P sub t is approximately 4 to 6, the turbulent diffusion of momentum (D sub M) is sufficiently greater than the turbulent diffusion of heat (D sub H) that the conversion of gravity wave energy to heat with high efficiency nearly balances the divergence of the downward eddy heat flux in the wave breaking zone. Therefore the heat budget of the mesopause region would no longer provide a powerful and useful constraint on D sub H. If P sub t exceeds 6 with high efficiency for energy conversion to heat, gravity waves would heat the mesosphere throughout the wave breaking region

Aeronomy of Saturn and Titan

The Saturn system presents exciting and unique objects for planetary aeronomy. The photochemistry of H2 and He leads to the formation of an ionosphere. Methane photolysis results in the formation of spectroscopically detectable amounts of C2H6 and C2H2 and in the case of Titan, C2H4. Density profiles of C2H6, C2H2, and PH3 should be indicative of the strength of atmospheric mixing processes

Bidding behavior in the bisection auction – an experimental investigation

We present a laboratory experiment in which we investigate bidding behavior with independent private values in the recently proposed bisection auction, and compare it with two classical auction formats - the Vickrey auction and the English auction. We test whether subjects behave strategically equivalent, following the dominant truth-telling strategy, as predicted by theory. Furthermore, we provide some insights concerning the learning process, the efficiency of allocation, and the revenue to the auctioneer. Data show that the bisection auction performs better than the Vickrey auction and only in some terms worse than the English auction.Economics ;

Unraveling the Origins of EU Countries Productivity Growth - Evidence on R&D and Competition from Cross-Country Industry Analysis

Over the last two decades EU countries experienced diverging productivity growthdevelopments. By examining the sources of EU countries growth drivers on the sectorallevel, the paper takes a new look on the influence of innovations. While standard neoclassicalNon-ICT capital deepening turns out the major contributor to EU productivitygrowth, detail industry analysis reveals that growth in innovation stocks via increasedR&D in specialized and science-based industries spurred productivity growth as well.But those effects are only found for Nordic and Western Continental EU countries,while others are lacking such effects. Moreover, these specialized and science-basedindustries experienced strong innovation and productivity growth by decreases in competition,thereby favoring Schumpeterian growth arguments for highly dynamic sectors.Productivity growth, market structure, competition, innovation, R&D, panel data, industry analysis

Germany’s Continued Productivity Slump: An Industry Analysis

US productivity growth surged twice post 1995 and post 2000. In contrast Germany registered two successive productivity reductions during that same period of time. Previous analysis of the post-2000 decline has been limited, however, by the short time series of the available data. In this paper we extend the Ifo Industry Growth Accounting Database that provides detailed industry-level investment information up to 2004. While much attention has focused on the reduction in German labor hours, our post-2000 data shows that a fledgling recovery in German non-ICT investment was offset by a widespread collapse in German total factor productivity. Almost half of German industries (accounting for over 45 percent of German output) did not experience positive TFP growth post 2000. Industries that constitute over a quarter of Germany’s value-added exhibited negative labor productivity growth during the same period. The negative German productivity trend is thus continuing, which accelerates the country’s departure from the productivity frontier.Growth accounting, industry productivity analysis, information and communication technology