Oil price shocks and their short- and long-term effects on the Chinese economy

A considerable body of economic literature shows the adverse economic impacts of oil-price shocks for the developed economies. However, there has been a lack of empirical study of this kind on China and other developing countries. This paper attempts to fill this gap by answering how and to what extent oil-price shocks impact China’s economy, emphasizing on the price transmission mechanisms. To that end, we develop a structural vector auto-regressive model. Our results show that an oil-price increase negatively affects output and investment, but positively affects inflation rate and interest rate. However, with the differentiated price control policies for materials and intermediates on the one hand and final products on the other hand in China, the impact on real economy, represented by real output and real investment, lasts much longer than that to price/monetary variables. Our decomposition results also show that the short-term impact, namely output decrease induced by the cut of capacity-utilization rate, is greater in the first one to two years, but the portion of the long-term impact, defined as the impact realized through an investment change, increases steadily and exceeds that of short-term impact at the end of the second year. Afterwards, the long-term impact dominates, and maintains for quite some time.Structural vector auto-regressive model; Unit root test; Error-correction model; Oil-price shocks; Price transmission mechanisms; Investment; Output; Producer/consumer price index; Census X-12 approach; China

Inflationary Effect of Oil-Price Shocks in an Imperfect Market: A Partial Transmission Input-output Analysis

This paper aims to examine the impacts of oil-price shocks on China’s price levels. To that end, we develop a partial transmission input-output model that captures the uniqueness of the Chinese market. We hypothesize and simulate price control, market factors and technology substitution - the three main factors that restrict the functioning of a price pass-through mechanism during oil-price shocks. Using the models of both China and the U.S., we separate the impact of price control from those of other factors leading to China’s price stickiness under oil-price shocks. The results show a sharp contrast between China and the U.S., with price control in China significantly preventing oil-price shocks from spreading into its domestic inflation, especially in the short term. However, in order to strengthen the economy’s resilience to oil-price shocks, the paper suggests a gradual relaxing of price control in China.Oil-price Shocks, Price Transmission, Price Control, Input-output Analysis, Inflation, Industrial Structure, China, the United States

The Russian Option with A Random Time Horizon

This paper is intended to provide a unique valuation formula for the Russian option with a random time horizon; in particular, such option restricts its holders to make their stopping rules before the last exit time of the price of the underlying asset at its running maximum. By the theory of enlargement of filtrations associated with random times, this pricing problem can be transformed into an equivalent optimal stopping problem with a semi-continuous, time-dependent gain function whose partial derivative is singular at certain point. Despite these unpleasant features of the gain function, with our choice of the parameters, we establish the monotonicity of the free boundary and the regularity of the value function, which in turn lead us to the desired free-boundary problem. After this, the nonlinear integral equations that characterise the free boundary and the value function are derived. We also examine the solutions to these equations in details

Task complexity and foreign language writing emotions as predictors of EFL writing performance

Emotions and task complexity have gained scant attention in EFL writing. This study, based on control-value theory and a positive psychology perspective, explores the relationship between task complexity, writing anxiety, writing boredom, writing enjoyment, and task complexity and writing emotions interaction on EFL writing performance among English major students in China’s educational context (N = 84). It has been found that difficult writing tasks can result in higher writing anxiety and lower writing boredom. By 6 × 2 between-subject ANOVA, there is a significant interaction of task complexity and different levels of writing anxiety, writing boredom, and writing enjoyment for the dimensions of language fluency, complexity, and accuracy among English major students in China’s educational context. This study is an initial step in extending the writing emotions and task complexity in the production of EFL writing, which promotes the mutual integration of emotion and cognition in EFL writing research and thus supplies suggestions for task-based EFL writing instruction

Liquid Crystal Shuttered Passive Infrared Sensors for True Presence Detection

PIR sensors, known as motion detectors, are widely used for moving occupancy detection. Made of pyroelectric materials, such as LiTaO₃, generating pyroelectric current when the received infrared radiation changes, PIR sensors only respond to the motion of occupants. This results in frequent false negative detections when stationary occupancy detection is also desired, such as occupancy-based building lighting control. To enable stationary occupancy detection, in this dissertation, we develop optical shutters to actively modulate the radiation received by the PIR sensors in the long-wave infrared (LWIR) region (8-12 µm) where human skin radiates the most. The optical shutter is made of polymer dispersed liquid crystal (PDLC) sandwiched by two germanium substrates. Each germanium substrate has an anti-reflected film on one side (the nonconductive side) to reduce the reflection. The PDLC infrared shutter, a PIR sensor, and a driving circuit forms a synchronized low-energy electronically chopped PIR (SLEEPIR) sensor module. To better improve its performance, we devised SLEEPIR sensor nodes, and formed a SLEEPIR sensor network system with advanced machine learning algorithms. The main contributions of this dissertation include: (i) modeling the SLEEPIR output as a function of the effective modulation, the response time of the PDLC shutter, and the time constants of the PIR sensor; (ii) quantifying the impact of the driving voltage, the mass ratio, the cell gap, and the cooling rate on the effective modulation and the response time of the PDLC shutter to obtain the optimal driving voltage and fabrication conditions that maximize SLEEPIR module’s output; and (iii) experimental validation of the SLEEPIR sensor nodes for presence detection in the lab and uncontrolled environment settings