A propos Brexit: on the breaking up of integration areas – an NEG analysis

Inspired by Brexit, the paper explores the effects of splitting an integration area or "Union" on trade Patterns and the spatial distribution of industry. A linear three-region New Economic Geography (NEG) model is developed and two possible situations before separation are considered: agglomeration and dispersion. By analogy with the Brexit options, soft and hard separation scenarios are considered. Firms in the leaving region may move to the larger Union market, even on the periphery, relocation substituting trade; or firms in the Union may move in the more isolated leaving region, escaping from competition. The paper also analyses deeper Union integration following separation. Instances of multistability and complex Dynamics are found

Effective dielectric response of dispersions of graded particles

Based upon our compact group approach and the Hashin-Shtrikman variational theorem, we propose a new solution, which effectively incorporates many-particle effects in concentrated systems, to the problem of the effective quasistatic permittivity of dispersions of graded dielectric particles. After the theory is shown to recover existing analytical results and simulation data for dispersions of hard dielectric spheres with power-law permittivity profiles, we use it to describe the effective dielectric response of nonconducting polymer-ceramic composites modeled as dispersions of dielectric core-shell particles. Possible generalizations of the results are specified.Comment: 8 pages, 4 figures, extended versio

Financial sector ups and downs and the real sector : big hindrance, little help

This paper examines how financial expansion and contraction cycles affect the broader economy through their impact on eight real economic sectors in a panel of 28 countries over 1960-2005, paying particular attention to large, or sharp, contractions and magnifying and mitigating factors. Overall, the construction sector is the most responsive to financial sector growth, with a number of others -- such as government, public utilities, and transportation -- also exhibiting significant sensitivity to lagged financial sector growth. Sharp fluctuations in the financial sector have asymmetric effects, with the majority of real sectors adversely affected by contractions but not helped by expansions. The adverse effects of financial contractions are transmitted almost exclusively by the financial openness channel with foreign reserves mitigating these effects with a sizeable (10 to 15 times greater) impact during sharp financial contractions. Both effects are magnified during particularly large financial contractions (with coefficients on interaction terms two to three times greater than when all contractions are considered). Consequent upon a financial contraction, the most severe real sector contractions occur in countries with high financial openness; relative predominance of construction, manufacturing, and wholesale and retail sectors; and low international reserves. Finally, the analysis finds that abrupt financial contractions are more likely to follow periods of accelerated growth, indicative of"up by the stairs, down by the elevator dynamics."Economic Theory&Research,Achieving Shared Growth,Emerging Markets,Currencies and Exchange Rates,Debt Markets

Electron trapping at point defects on hydroxylated silica surfaces

The origin of electron trapping and negative charging of hydroxylated silica surfaces is predicted based on accurate quantum-mechanical calculations. The calculated electron affinities of the two dominant neutral paramagnetic defects, the nonbridging oxygen center, equivalent to Si-O-center dot, and the silicon dangling bond, equivalent to Si-center dot, demonstrate that both defects are deep electron traps and can form the corresponding negatively charged defects. We predict the structure and optical absorption energies of these diamagnetic defects

Economic integration and agglomeration in a customs union in the presence of an outside region

New Economic Geography (NEG) models do not typically account for the presence of regions other than the ones involved in the integration process. We explore such a possibility in a Footloose Entrepreneur (FE) model aiming at studying the stability properties of long-run industrial location equilibria. We consider a world economy composed by a customs union of two regions (regions 1 and 2) and an "outside region" which can be regarded as the rest of the world (region 3). The effects of economic integration on industrial agglomeration within the customs union are studied under the assumption of a constant distance between the customs union itself and the third region. The results show that higher economic integration does not always implies the standard result of full agglomeration of FE models. This incomplete agglomeration outcome is due to the fact that the periphery region keeps a share of industrial activities in order to satisfy a share of "external demand". That is, the deindustrialization process brought about by economic integration in the periphery of the union is mitigated by the demand of consumers living in the rest of the world. In general, the market size of the third region affects the number of the long-run equilibria, as well as their stability properties. In addition to the standard outcomes of FE models, we describe the existence of two asymmetric equilibria characterised by unequal distribution of firms between regions 1 and 2, with no full agglomeration though. Interestingly, these equilibria are stable and therefore can be regarded as a likely long-run equilibrium state of the economy. (author's abstract)Series: Department of Economics Working Paper Serie

Simulation of population’s reproductive behaviour patterns within an agent-oriented regional model

The study focuses on the research on how the unevenness of demographic transition affects the social and demographic characteristics and their dynamics of a region’s population. The research was conducted by means of computerized experiments (simulations) set within an original agent-oriented model. The study features the structure of the model represented by an artificial society, with its members (agents) being attributed their personal characteristics in such a way that they would imitate the gender and age of the region’s population. The agents are divided into two groups which differ in their reproductive strategy. Agents from Group 1 adhere to the traditional strategy characterized by a high birth rate, while the agents from Group 2 follow the modern strategy resulting in a markedly low birth rate. With the application of probabilistic mechanisms, the natural birth-death processes are imitated within the model. The extinction of agents occurs in accordance with the death rates adjusted for age and gender but remaining the same for the whole population. In the model, the appearance of new agents (birth of children) results from the choice made by reproductive-aged female agents, and their choice is influenced by the subjective traits determined by their group. The age and social structure of the regional population are generally formed as a result of the aggregation of particular agents’ activity. The model has been applied in a range of experiments on forecasting the number and structure of the population in an assumed region. The results showed that despite the apparent simplification of the reality, the developed agent-oriented model correctly represents both the initial condition of the regional population including the gender, age and social structure and the dynamics of the population’s basic characteristics.The research has been supported by the Russian Science Foundation (Project № 14-18-01968)