External Effects of Currency Unions

Argument: The paper argues that the introduction of the Euro has considerably reduced de facto monetary policy autonomy in non-ECU members. We start from a simple Mundellian model, in which currency unions raise economic efficiency but reduce monetary policy autonomy. Our main argument holds that governments in countries that did not join the currency union lose monetary policy autonomy if the establishment of a currency union increases the size of the key currency area. The increase in the size of the key currency area has two external effects on countries remaining outside the currency union: Firstly, it renders stable exchange-rates to the currency union slightly more important, because the value of goods imported from countries within the currency union increases and because the countries inside the union have more synchronized business cycles. Secondly and more importantly, we claim that any given change in the real interest-rate differential leads to an exchange-rate effect, which is larger the smaller the domestic currency area is relative to the key currency area. Consequently, governments in non-member countries have to pay a higher price if they seek to stimulate the domestic economy. Hypotheses: a) Exchange-rate effects on changes in the real interest rate differential are larger, if currency areas are less equal in size. b) Outsider countries more closely follow the interest-rate policy of the currency union than they had previously followed the monetary policy of the anchor currency. Empirics: We employ a panel-GARCH model to estimate the impact of changes in the key currency real interest rate on the real interest rate of other countries. Specifically, we analyze the influence of Germany’s and the Eurozone’s monetary policy on the monetary policy of Great Britain, Denmark, Norway, Sweden, and Switzerland. Results: Our results support the assumptions underlying our model as well as our main argument. De facto monetary autonomy of countries remaining outside a currency union declines with the establishment of the union. ZUSAMMENFASSUNG - (Externe Auswirkungen von Währungsunionen) Der Artikel argumentiert, dass die Einführung des Euro die faktische geldpolitische Autonomie auch in Staaten reduziert hat, die der Europäischen Währungsunion nicht beigetreten sind. Das Argument basiert auf einem einfachen Mudellianischen Modell, in dem Währungsunionen die wirtschaftliche Effizienz steigern aber zugleich die geldpolitische Autonomie reduzieren. Wir zeigen über das Standardmodell hinaus, dass Länder, die der Währungsunion nicht beitreten, geldpolitische Autonomie einbüßen, wenn sich durch die Währungsunion die Größe des Leitwährungsraumes erhöht. Diese Vergrößerung des Leitwährungsraumes hat zwei Auswirkungen auf Länder außerhalb der Union: Erstens steigt die Bedeutung stabiler Wechselkurse leicht an, weil der Wert importierter Güter aus dem Währungsgebiet zunimmt und weil die Länder der Union stärker synchronisierte Konjunkturzyklen aufweisen als vor der Gründung der Währungsunion. Zweitens steigt durch die Vergrößerung der Leitwährung aber der Einfluss von Veränderungen der Zinsdifferenz auf die Wechselkurse zwischen Währungen außerhalb der Währungsunion und der Unionswährung an. Folglich müssen Länder eine stärkere Abwertung ihrer Währung hinnehmen, wenn sie die Zinsen senken, um die Konjunktur anzukurbeln. Wir testen dieses Argument anhand der zwei Kernhypothesen: a) Wechselkurse reagieren umso stärker auf Veränderungen der Zinsdifferenz, je größer der Leitwährungsraum ist. b) Länder außerhalb der Währungsunion folgen der Geldpolitik der Union stärker, als sie der Geldpolitik der Leitwährung vor Gründung der Union folgten. Wir greifen auf Panel-GARCH Modelle zurück, um den Einfluss der Geldpolitik der EZB relativ zum Einfluss der Bundesbank auf die Geldpolitik in Großbritannien, der Schweiz, Norwegen, Dänemark und Schweden zu testen. Die empirische Analyse bestätigt die aus dem formalen Modell abgeleiteten Hypothesen. Die faktische geldpolitische Autonomie der Länder außerhalb der Währungsunion sinkt mit deren Etablierung.Interest Rates, Monetary Policy Autonomy, Currency Unions, Bundesbank, European Central Bank

What would you do? An investigation of stated-response data

When analysing choices or policy impacts, economists generally rely on what people actually do, rather than what they say they would do. The "stated response" approach is treated with scepticism due, for example, to concerns regarding the effect of strategic or social considerations on what people say, and a belief that people may not adequately consider such a hypothetical question. This paper evaluates an example of this approach; the direct questioning of parents as to whether they would withdraw their children from school if the Familias en Accion education subsidies were withdrawn. Our results suggest that these concerns are not entirely invalid but that the stated responses do provide important information and correlate in the expected manner with child and household characteristics. We conclude by emphasising the importance of good question design, which may allow researchers to use the "stated response" method as a complement to more typical quantitative methodologies

Direct and indirect exciton mixing in a slightly asymmetric double quantum well

We studied, theoretically, the optical absorption spectra for a slightly asymmetric double quantum well (DQW), in the presence of electric and magnetic fields. Recent experimental results for a 10.18/3.82/9.61 nm GaAs Al(_{.33} )Ga(_{.67})As DQW show clearly the different behavior in the luminescence peaks for the indirect exciton (IX) and left direct exciton (DX) as a function of the external electric field. We show that the presence of a peak near the (DX) peak, attributed to an impurity bound left (DX) in the experimental results, could be a consequence of the non-trivial mixing between excitonic states.Comment: 8 pages and 8 figure

Natural Selection of Paths in Networks

We present a novel algorithm that exhibits natural selection of paths in a network. If each node and weighted directed edge has a unique identifier, a path in the network is defined as an ordered list of these unique identifiers. We take a population perspective and view each path as a genotype. If each node has a node phenotype then a path phenotype is defined as the list of node phenotypes in order of traversal. We show that given appropriate path traversal, weight change and structural plasticity rules, a path is a unit of evolution because it can exhibit multiplicative growth (i.e. change it’s probability of being traversed), and have variation and heredity. Thus, a unit of evolution need not be a spatially distinct physical individual. The total set of paths in a network consists of all possible paths from the start node to a finish node. Each path phenotype is associated with a reward that determines whether the edges of that path will be multiplicatively strengthened (or weakened). A pair-wise tournament selection algorithm is implemented which compares the reward obtained by two paths. The directed edges of the winning path are strengthened, whilst the directed edges of the losing path are weakened. Edges shared by both paths are not changed (or weakened if diversity is desired). Each time a node is activated there is a probability that the path will mutate, i.e. find an alternative route that bypasses that node. This generates the potential for a novel but correlated path with a novel but correlated phenotype. By this process the more frequently traversed paths are responsible for most of the exploration. Nodes that are inactive for some period of time are lost (which is equivalent to connections to and from them being broken). This network-based natural selection compares favourably with a standard pair-wise tournament-selection based genetic algorithm on a range of combinatorial optimization problems and continuous parametric optimization problems. The network also exhibits memory of past selective environments and can store previously discovered characters for reuse in later optimization tasks. The pathway evolution algorithm has several possible implementations and permits natural selection with unlimited heredity without template replication

How effective are conditional cash transfers? Evidence from Colombia

Conditional cash transfer (CCT) programmes are becoming an extremely popular tool for improving the education and health outcomes of poor children in developing countries. An incomplete list of countries in which they are being implemented under the support of the World Bank and other international financial institutions includes Mexico, Honduras, Nicaragua, Brazil, Turkey and Mozambique. While the implementation details vary from country to country, many are modelled on the Mexican PROGRESA. In a typical CCT, mothers from poor backgrounds receive cash conditional on their promoting certain activities on behalf of their children. For their youngest children - usually those below the age of 6 - the conditionality involves visits to preventive healthcare centres in which their growth is monitored. School attendance is the most common stipulation for receipt of cash transfers for older children - usually those between 7 and 17 years old. This targeting of health and education of children is at the essence of the long-term poverty alleviation objective of CCT programmes. Such transfer programmes are also aimed at the short-term reduction of poverty, through the provision of immediate funds to indigent households. In this Briefing Note, we will focus on the programme Familias en Acción (FA), the CCT implemented by the Colombian government from 2001/02. In particular, we will provide estimates of how the programme has influenced key welfare indicators such as school attendance, child nutrition and health status, as well as household consumption. In this respect, we will update the preliminary results that were reported in Attanasio et al. (2003 and 2004)

The effect of heart rate variability biofeedback training on stress and anxiety: a meta-analysis

BACKGROUND: Some evidence suggests that heart rate variability (HRV) biofeedback might be an effective way to treat anxiety and stress symptoms. To examine the effect of HRV biofeedback on symptoms of anxiety and stress, we conducted a meta-analysis of studies extracted from PubMed, PsycINFO and the Cochrane Library. METHODS: The search identified 24 studies totaling 484 participants who received HRV biofeedback training for stress and anxiety. We conducted a random-effects meta-analysis. RESULTS: The pre-post within-group effect size (Hedges' g) was 0.81. The between-groups analysis comparing biofeedback to a control condition yielded Hedges' g = 0.83. Moderator analyses revealed that treatment efficacy was not moderated by study year, risk of study bias, percentage of females, number of sessions, or presence of an anxiety disorder. CONCLUSIONS: HRV biofeedback training is associated with a large reduction in self-reported stress and anxiety. Although more well-controlled studies are needed, this intervention offers a promising approach for treating stress and anxiety with wearable devices

Nonleptonic two-body B-decays including axial-vector mesons in the final state

We present a systematic study of exclusive charmless nonleptonic two-body B decays including axial-vector mesons in the final state. We calculate branching ratios of B\to PA, VA and AA decays, where A, V and P denote an axial-vector, a vector and a pseudoscalar meson, respectively. We assume naive factorization hypothesis and use the improved version of the nonrelativistic ISGW quark model for form factors in B\to A transitions. We include contributions that arise from the effective \Delta B=1 weak Hamiltonian H_{eff}. The respective factorized amplitude of these decays are explicitly showed and their penguin contributions are classified. We find that decays B^-to a_1^0\pi^-,\barB^0\to a_1^{\pm}\pi^{\mp}, B^-\to a_1^-\bar K^0, \bar B^0\to a_1^+K^-, \bar B^0\to f_1\bar K^0, B^-\to f_1K^-, B^-\to K_1^-(1400)\etap, B^-\to b_1^-\bar K^{0}, and \bar B^0\to b_1^+\pi^-(K^-) have branching ratios of the order of 10^{-5}. We also study the dependence of branching ratios for B \to K_1P(V,A) decays (K_1=K_1(1270),K_1(1400)) with respect to the mixing angle between K_A and K_B.Comment: 28 pages, 2 tables and one reference added, notation changed in appendices, some numerical results and abstract correcte