Determinants of Inflation in Poland: A Structural Cointegration Approach

Using cointegration and error-correction models, this paper analyses the relative impacts of the monetary, labour and foreign sectors on Polish inflation from 1990 to 1999. Following the development of a theoretical framework, we use a structural system approach in which cointegration relationships are used to derive deviations from steady-state levels. The deviations are interpreted as excess demand pressure on inflation in a given sector and subsequently incorporated in order to determine the short-run dynamics of Polish inflation. The results suggest that the labour and external sectors dominated the determination of Polish inflation during the above period, but their effects have been opposite since 1994. The appreciation of the domestic currency contributed to reducing inflation, while excessive wage increases prevented inflation from decreasing to a lower level. The monetary sector appears not to have exerted influence on inflation, suggesting monetary policy has been passive.inflation; cointegration; error correction mechanism; Poland

Informal Economy Activities and Entrepreneurship in Russia

This paper uses the Russian Longitudinal Monitoring Survey (RLMS) from 1998 to 2004 to analyze the effect of previous informal economy activities on the creation of official entrepreneurship. We find that previous participation in the informal economy is positively associated with the probability to become registered entrepreneurs in the present. We also find that that self-employment is used as a transition mechanism to entrepreneurship and moonlighters in the past are more active in actual job changes. Furthermore, a survival function analysis suggests that previous experience as self-employed moonlighters enhances the probability of success as official entrepreneur. Workers who moonlighted as selfemployed in the past represent 16-22% of the new entrepreneurs. --Informal economy,entrepreneurs,Russia

Plan, siphoning and corruption in the Soviet command economy

This paper reconsiders Andrei Shleifer and Robert Vishny’s suggestion that a socialist industry will always prefer to cut both price and output relative to a market–clearing equilibrium in order to maximise bribe income. The evidence from recent archival studies of the Soviet economy does not support this conjecture. To understand the evidence we present an analytical framework within which a plan–setter and an effort–setter interact, subject to a hard resource constraint, to determine real output and hidden inflation simultaneously. We find that managers who use resources gained corruptly were enabled to produce more real output with less hidden inflation and fulfil the plan more honestly as a result. We find clear rationales for plan–setters to have tolerated corruption and siphoning while maintaining plan tension, and we associate reduced plan tension in the 1970s with the spread of disloyal behaviours

Dynamically Adjusting the Mining Capacity in Cryptocurrency with Binary Blockchain

Many cryptocurrencies rely on Blockchain for its operation. Blockchain serves as a public ledger where all the completed transactions can be looked up. To place transactions in the Blockchain, a mining operation must be performed. However, due to a limited mining capacity, the transaction confirmation time is increasing. To mitigate this problem many ideas have been proposed, but they all come with own challenges. We propose a novel parallel mining method that can adjust the mining capacity dynamically depending on the congestion level. It does not require an increase in the block size or a reduction of the block confirmation time. The proposed scheme can increase the number of parallel blockchains when the mining congestion is experienced, which is especially effective under DDoS attack situation. We describe how and when the Blockchain is split or merged, how to solve the imbalanced mining problem, and how to adjust the difficulty levels and rewards. We then show the simulation results comparing the performance of binary blockchain and the traditional single blockchain

Institutions, Information, and Trade Policy in Times of Crisis

The paper examines the role of international institutions in preventing the rise of protectionism in times of times of crisis. Economic crisis exacerbates uncertainty in the conduct of commercial relations and thus makes it more likely for countries to resort to "beggar-thy-neighbor" trade policies. The historical record of the Great Depression supports this argument, where global trade suffered a downward spiral as governments pursued protectionist trade policies as a response to domestic pressures. This paper argues that the current era of globalization is distinguishable from its earlier counterparts by the presence of an extensive network of international institutions, which serve as conveyors of information that help to mitigate the information problem that prevails in prisoner‘s dilemma settings. Specifically, international institutions such as the WTO, preferential trade agreements (PTAs) and other international economic organizations increase the flow of information among countries. In doing so, they alleviate coordination problems as well as facilitate the detection of violations in commitments to maintaining a liberal trade regime. We suggest that this mechanism may explain why the current crisis is not replicating the pattern of the Great Depression. Moreover, we explore the combined effect of membership in international organization and political variables, the latter including democracy, veto players, partisanship of government, and government effectiveness. We test this argument using a newly-compiled dataset of trade policies during the current economic crisis and membership in international organizations. The paper finds strong support for the informational role of international institutions as a key factor preventing the rise of protectionism in times of crisis. Conversely, there is mixed evidence that the combining effect of international organizations and domestic political variables matters in explaining protectionism during this crisis

Yang-Lee zeros of the Q-state Potts model in the complex magnetic-field plane

The microcanonical transfer matrix is used to study the distribution of Yang-Lee zeros of the $Q$-state Potts model in the complex magnetic-field ($x=e^{\beta h}$) plane for the first time. Finite size scaling suggests that at (and below) the critical temperature the zeros lie close to, but not on, the unit circle with the two exceptions of the critical point $x=1$ ($h=0$) itself and the zeros in the limit T=0.Comment: REVTeX, 12 pages, 5 figures, to appear in Phys. Rev. Let