Monetary–fiscal interactions with endogenous liquidity frictions

I develop a tractable macro model with endogenous asset liquidity to understand monetary–fiscal interactions with liquidity frictions. Agents face idiosyncratic investment risks and meet financial intermediaries in competitive search markets. Asset liquidity is determined by the search friction and the cost of operating the financial intermediaries, and it drives the financing constraints of entrepreneurs (those who have investment projects) and their ability to invest. In contrast to private assets, government bonds are fully liquid and can be accumulated in anticipation of future opportunities to invest. A higher level of real government debt enhances the liquidity of entrepreneurs׳ portfolios and raises investment. However, the issuance of debt also raises the cost of financing government expenditures: a higher level of distortionary taxation and/or a higher real interest rate. A long-run optimal supply of government debt emerges. I also show that a proper mix of monetary and fiscal policies can avoid a deep financial recession

Dynamical stability of entanglement between spin ensembles

We study the dynamical stability of the entanglement between the two spin ensembles in the presence of an environment. For a comparative study, we consider the two cases: a single spin ensemble, and two ensembles linearly coupled to a bath, respectively. In both circumstances, we assume the validity of the Markovian approximation for the bath. We examine the robustness of the state by means of the growth of the linear entropy which gives a measure of the purity of the system. We find out macroscopic entangled states of two spin ensembles can stably exist in a common bath. This result may be very useful to generate and detect macroscopic entanglement in a common noisy environment and even a stable macroscopic memory.Comment: 4 pages, 1 figur

Macroeconomics of Delayed Capital Liquidation

This paper studies the macroeconomic effects of capital reallocation with financial shocks. I develop a model in which firms face borrowing constraints, idiosyncratic productivity shocks, and idiosyncratic liquidation costs. The idiosyncratic risks of productivity and liquidation costs generate an option value of staying in business and a liquidation delay for unproductive firms. A new feature arises from the delay. Unproductive firms that are not liquidated increase their leverage over time, pushing them to hit the borrowing limit. I show that adverse financial shocks that tighten borrowing constraints can raise the option value, and equilibrium effects can further delay capital liquidation and reallocation. Capital is thus persistently misallocated, leading to long-lasting economic contractions

Opaque Service Virtualisation: A Practical Tool for Emulating Endpoint Systems

Large enterprise software systems make many complex interactions with other services in their environment. Developing and testing for production-like conditions is therefore a very challenging task. Current approaches include emulation of dependent services using either explicit modelling or record-and-replay approaches. Models require deep knowledge of the target services while record-and-replay is limited in accuracy. Both face developmental and scaling issues. We present a new technique that improves the accuracy of record-and-replay approaches, without requiring prior knowledge of the service protocols. The approach uses Multiple Sequence Alignment to derive message prototypes from recorded system interactions and a scheme to match incoming request messages against prototypes to generate response messages. We use a modified Needleman-Wunsch algorithm for distance calculation during message matching. Our approach has shown greater than 99% accuracy for four evaluated enterprise system messaging protocols. The approach has been successfully integrated into the CA Service Virtualization commercial product to complement its existing techniques.Comment: In Proceedings of the 38th International Conference on Software Engineering Companion (pp. 202-211). arXiv admin note: text overlap with arXiv:1510.0142

Estimation of NAIRU with In ation Expectation Data

Estimating natural rate of unemployment (NAIRU) is important for understanding the joint dynamics of unemployment, inflation, and inflation expectation. However, existing literature falls short of endogenizing inflation expectation together with NAIRU in a model consistent way. We estimate a structural model with forward and backward looking Phillips curve. Inflation expectation is treated as a function of state variables and we use survey data as its noisy observations. Surprisingly, we find that the estimated NAIRU tracks unemployment rate closely, except for the high inflation period (late 1970s). Compared to the estimation without using the survey data, the estimated Bayesian credible sets are narrower and our model leads to better inflation and unemployment forecasts. These results suggest that monetary policy was very effective and there was not much room for policy improvement

Possible discovery of the r-process characteristics in the abundances of metal-rich barium stars

We study the abundance distributions of a sample of metal-rich barium stars provided by Pereira et al. (2011) to investigate the s- and r-process nucleosynthesis in the metal-rich environment. We compared the theoretical results predicted by a parametric model with the observed abundances of the metal-rich barium stars. We found that six barium stars have a significant r-process characteristic, and we divided the barium stars into two groups: the r-rich barium stars ($C_r>5.0$, [La/Nd]\,$<0$) and normal barium stars. The behavior of the r-rich barium stars seems more like that of the metal-poor r-rich and CEMP-r/s stars. We suggest that the most possible formation mechanism for these stars is the s-process pollution, although their abundance patterns can be fitted very well when the pre-enrichment hypothesis is included. The fact that we can not explain them well using the s-process nucleosynthesis alone may be due to our incomplete knowledge on the production of Nd, Eu, and other relevant elements by the s-process in metal-rich and super metal-rich environments (see details in Pereira et al. 2011).Comment: 5 pages, 5 figures, accepted for publication in A&

The X-ray transient XTE J1118+480: Multiwavelength observations of a low-state mini-outburst

We present multiwavelength observations of the newly discovered X-ray transient XTE J1118+480 obtained in the rising phase of the 2000 April outburst. This source is located at unusually high Galactic latitude and in a very low absorption line of sight. This made the first EUVE spectroscopy of an X-ray transient outburst possible. Together with our HST, RXTE, and UKIRT data this gives unprecedented spectral coverage. We find the source in the low hard state. The flat IR-UV spectrum appears to be a combination of optically thick disk emission and flat spectrum emission, possibly synchrotron, while at higher energies, including EUV, a typical low hard state power-law is seen. EUVE observations reveal no periodic modulation, suggesting an inclination low enough that no obscuration by the disk rim occurs. We discuss the nature of the source and this outburst and conclude that it may be more akin to mini-outbursts seen in GRO J0422+32 than to a normal X-ray transient outburst.Comment: 4 pages, 3 figures, replaced with accepted version. Uses emulateapj5.st