Fiscal Adjustment and the Costs of Public Debt Service: Evidence from OECD Countries

We use a panel of 21 OECD countries from 1970 to 2009 to investigate the effects of different fiscal adjustment strategies on long-term interest rates – a key fiscal indicator reflecting the costs of government debt service. A government confronted with high deficits and rising debt will sooner or later need to enact fiscal adjustments in order to avoid solvency problems. Over the last four decades, such measures taken by governments in OECD countries have varied in duration, size, composition and in their success to re-establish fiscal sustainability. Controlling for various economic, fiscal and political factors, we find that the size and the composition of a fiscal adjustment significantly affect interest rates as well as yield spreads. Adjustments that are relatively large and those that primarily depend on expenditure cuts lead to substantially lower long-term interest rates. However, periods of fiscal adjustments do not generally have an influence on interest rates, even if they were successful and led to lower deficits and debt levels. Instead, financial markets only seem to value strict and decisive measures – a clear sign that the government’s pledge to cut the deficit is credible.fiscal adjustment, consolidation policy, government debt, deficit, interest rates

Fiskalpolitik als antizyklisches Instrument? Eine Betrachtung der Schweiz

This paper examines the stabilizing effects of Swiss fiscal policy. First, we find that the federation adopted a countercyclical fiscal policy in approximately 60% of all periods observed. During recessions, fiscal policy was always countercyclical and therefore helped to stabilize the economy. In case of the cantons, fiscal policy was countercyclical in 55% of all recessions. In recent years, there has been a trend for both the federation and the cantons toward stronger stabilization. Second, the two stabilizing instruments of fiscal policy, automatic stabilizers and discretionary fiscal policy are compared with each other. Over the last 50 years, automatic stabilizers have been expanded continuously, particularly on the federal level. We find that the impulse of automatic stabilizers is about twice as large as the one of discretionary fiscal policy. Third, macroeconomic effects of Switzerland's fiscal policy during recessions are examined. Automatic stabilizers have been particularly effective in the cantons whereas the effects of discretionary fiscal policy on economic growth have tended to be weake

A rigorous analysis of high order electromagnetic invisibility cloaks

There is currently a great deal of interest in the invisibility cloaks recently proposed by Pendry et al. that are based in the transformation approach. They obtained their results using first order transformations. In recent papers Hendi et al. and Cai et al. considered invisibility cloaks with high order transformations. In this paper we study high order electromagnetic invisibility cloaks in transformation media obtained by high order transformations from general anisotropic media. We consider the case where there is a finite number of spherical cloaks located in different points in space. We prove that for any incident plane wave, at any frequency, the scattered wave is identically zero. We also consider the scattering of finite energy wave packets. We prove that the scattering matrix is the identity, i.e., that for any incoming wave packet the outgoing wave packet is the same as the incoming one. This proves that the invisibility cloaks can not be detected in any scattering experiment with electromagnetic waves in high order transformation media, and in particular in the first order transformation media of Pendry et al. We also prove that the high order invisibility cloaks, as well as the first order ones, cloak passive and active devices. The cloaked objects completely decouple from the exterior. Actually, the cloaking outside is independent of what is inside the cloaked objects. The electromagnetic waves inside the cloaked objects can not leave the concealed regions and viceversa, the electromagnetic waves outside the cloaked objects can not go inside the concealed regions. As we prove our results for media that are obtained by transformation from general anisotropic materials, we prove that it is possible to cloak objects inside general crystals.Comment: The final version is now published in Journal of Physics A: Mathematical and Theoretical, vol 41 (2008) 065207 (21 pp). Included in IOP-Selec

Fiscal adjustment and the costs of public debt service: Evidence from OECD countries

We use a panel of 21 OECD countries from 1970 to 2009 to investigate the effects of different fiscal adjustment strategies on long-term interest rates - a key fiscal indicator reflecting the costs of government debt service. A government confronted with high deficits and rising debt will sooner or later need to enact fiscal adjustments in order to avoid solvency problems. Over the last four decades, such measures taken by governments in OECD countries have varied in duration, size, composition and in their success to re-establish fiscal sustainability. Controlling for various economic, fiscal and political factors, we find that the size and the composition of a fiscal adjustment significantly affect interest rates as well as yield spreads. Adjustments that are relatively large and those that primarily depend on expenditure cuts lead to substantially lower long-term interest rates. However, periods of fiscal adjustments do not generally have an influence on interest rates, even if they were successful and led to lower deficits and debt levels. Instead, financial markets only seem to value strict and decisive measures - a clear sign that the government's pledge to cut the deficit is credible

L^p boundedness of the wave operator for the one dimensional Schroedinger operator

Given a one dimensional perturbed Schroedinger operator H=-(d/dx)^2+V(x) we consider the associated wave operators W_+, W_- defined as the strong L^2 limits as s-> \pm\infty of the operators e^{isH} e^{-isH_0} We prove that the wave operators are bounded operators on L^p for all 1<p<\infty, provided (1+|x|)^2 V(x) is integrable, or else (1+|x|)V(x) is integrable and 0 is not a resonance. For p=\infty we obtain an estimate in terms of the Hilbert transform. Some applications to dispersive estimates for equations with variable rough coefficients are given.Comment: 26 page

A short review of the Casimir effect with emphasis on dynamical boundary conditions

We give a short review on the static and dynamical Casimir effects, recalling their historical prediction, as well as their more recent experimental verification. We emphasise on the central role played by so-called {\it dynamical boundary conditions} (for which the boundary condition depends on a second time derivative of the field) in the experimental verification of the dynamical Casimir effect by Wilson et al. We then go on to review our previous work on the static Casimir effect with dynamical boundary conditions, providing an overview on how to compute the so-called local Casimir energy, the total Casimir energy and the Casimir force. We give as a future perspective the direction in which this work should be generalised to put the theoretical predictions of the dynamical Casimir effect experiments on a rigorous footing.Comment: Contribution to the joint Proceedings of the XIX Mexican School of Particles and Fields and the XXXV Annual Meeting of the Division of Particles and Fields of the Mexican Society of Physics. 8 page