Do steel prices move together? : a cointegration test

Lack of international comparability in crude steel prices presents a problem in constructing an econometric model of the global steel market. The commonly used measures of crude steel prices are the weighted average of the prices of steel products and the index of the weighted average of prices based on a certain year. But in the context of constructing an econometric model of the global steel market, these measures are not comparable internationally. If the various product prices are cointegrated, it is appropriate to use the price of the most widely produced and traded product in the model (uncoated steel sheet) as an indicator of the general movement of crude steel prices. This paper concludes that the price of uncoated steel sheet cointegrates with the prices of other steel products in France and Germany. The same is not true of the United States, which may point to quality problems with the price data. Use of the price data of uncoated steel sheet as the indicator of crude steel prices in the global steel model would thus seem appropriate for capturing long-term price movements of various steel products. Using cointegration tests, this paper also investigates the relationship between macroeconomic variables and steel product prices.Primary Metals,Environmental Economics&Policies,Markets and Market Access,Access to Markets,Economic Theory&Research

Application of flexible functional forms to substitutability among metals in U.S. industries

This report looks at the use of a new functional form - the Symmetric Generalized Mcfadden Cost Function (SGM) - to estimate substitutability among metals in five U.S. industries. The SGM specification has the advantage of imposing curvature conditions globally on the cost function, thus ensuring that the results satisfy basic, widely believed economic theory. For the first time, this study assumes separability in estimating an SGM system, and experiments with a"bootstrapping"technique to estimate the standard errors of parameters derived from flexible functional forms. The paper provides empirical evidence of structural change in U.S. industry. A jump in the own-price elasticities of energy during the sample period coincided with a sharp increase in oil prices. The SGM flexible functional form found aluminum and steel to be complementary in four out of five industries but suggests that they are substitutes in the technically compensated sense: when total metals use is constant, an increase in the price of one metal reduces consumption of that metal and increases consumption of the other. Use of the bootstrapping technique provided insights into the stability of the elasticity estimates. The results are promising at the aggregate level when the number of free parameters is not large compared to the sample size. Bootstrapping also clarifies the problem at the disaggregated level where most elasticities are not significantly different from zero.Primary Metals,Mining&Extractive Industry (Non-Energy),Montreal Protocol,Environmental Economics&Policies,Coastal and Marine Resources

Martingale representations for diffusion processes and backward stochastic differential equations

In this paper we explain that the natural filtration of a continuous Hunt process is continuous, and show that martingales over such a filtration are continuous. We further establish a martingale representation theorem for a class of continuous Hunt processes under certain technical conditions. In particular we establish the martingale representation theorem for the martingale parts of (reflecting) symmetric diffusions in a bounded domain with a continuous boundary. Together with an approach put forward in Lyons et al(2009), our martingale representation theorem is then applied to the study of initial and boundary problems for quasi-linear parabolic equations by using solutions to backward stochastic differential equations over the filtered probability space determined by reflecting diffusions in a bounded domain with only continuous boundary.Comment: 28 page

Does exchange rate volatility hinder export growth? Additional evidence

The authors examine the impact of exchange rate volatility on trade, using and ARCH-in-mean model. The advantages of this statistical approach over earlier approaches is that it provides more efficient coefficient estimates and it prevents the problem of spurious regressions. They applied the model to six countries, estimating both bilateral and aggregate exports. The results led to the hypothesis that the impact of exchange rate volatility may be influenced by the invoicing of exports. Also, one can argue that the effect of exchange rate volatility on trade is overstated, for the following reasons: exchange rate volatility does not measure the added riskiness of a firm's portfolio;exchange rates can provide a natural hedge in a firm's portfolio; exchange rates may be negatively correlated with each other or with the firm's other assets; and finally, the use of forward markets can provide a useful short-term hedge.Economic Stabilization,Environmental Economics&Policies,Macroeconomic Management,Fiscal&Monetary Policy,Economic Theory&Research

Risk management in sub-Saharan Africa

This paper investigates the vulnerability of countries in sub - Saharan Africa to uncertainty about commodity prices, exchange rates, and interest rates. It discusses some of the instruments these countries can use to manage financial risk and conclude that instruments linked to commodity prices would significantly reduce their risk. To account for possible interactions between external risks, the paper estimates the optimal portfolio of financial instruments for sub - Saharan Africa. It shows that the risk-minimizing portfolio for sub - Saharan Africa comprises only about 30 percent of general-obligation loans and about 70 percent of loans for which repayment obligations are indexed to the price of sub - Saharan Africa's most important exports: cocoa, coffee, cotton, copper, and oil. This portfolio reduces by about 90 percent the uncertainty of sub - Saharan Africa's resources available for imports. The risk-reduction benefit of the optimal portfolio is fairly stable for specific commodities included and for the specific period for which it is estimated.Insurance&Risk Mitigation,Financial Intermediation,Banks&Banking Reform,Economic Theory&Research,Environmental Economics&Policies

Mitigating Information security risks during the Transition to Integrated Operations: Models & Data

This research studies the change of information security risks during the transition toIntegrated Operations (an operation extensively utilize advanced information communicationtechnology to connect offshore facilities and onshore control centers and even vendors.) inNorsk Hydro, a Norwegian oil and gas company. The specific case for this study is a pilotplatform in transition to Integrated Operations, Brage: twenty traditional work processes areto be replaced by new work processes. The operators on the Brage platform have to build uprelevant new knowledge to work effectively with new work processes. The new workprocesses, new knowledge and their interrelationship all affect information security risks.The management of Norsk Hydro is concerned with the problem of the increasinginformation security risks, which might cause incidents with severe consequences. We lookfor policies that support a successful (smooth and fast) operation transition.System dynamics is adopted in this research to model the causal structure (mechanism) ofthe operation transition. We chose system dynamics because operation transition is a processrich in feedback, delays, nonlinearity and tradeoffs. All these features are captured by systemdynamics models. Moreover, system dynamics models can be used to simulate variousscenarios. The analyses of these scenarios can lead to insights on policy rules. Wespecifically investigate policies concerning transition speed, resource allocation during thetransition to Integrated Operations and investment rules in incident response capability.Since historical time series data about incidents and information security risks are scarce, weuse following model-based interventions to elicit structural information from our client andexperts:May 2005 First group model-building workshop Problem articulationSep 2005 Second group model-building workshop Model conceptualizationDec 2005 Model-based interview Model formulationYear 2006 Series of model-based meetings Model refinementNov 2008 Model-based interview Model validationThe Brage model was developed and validated through these model-based interventions. Theanalyses of various simulation results lead to the following policy insights: 1. Transition speed. The operation transition should be designed with a speed that allowsthe operators not only to get familiar with new work processes, but also to build up thedetailed knowledge supporting these work processes. The relevance of such knowledge,which is mostly tacit, is sometimes underrated. If the operators only know what to do,but not how to do it effectively, the benefit of the new technology (embedded in the newwork processes) will not be fully realized, and the platform will be more vulnerable toinformation security threats.2. Resource allocation. Resources (operators’ time) are needed to learn new work processesand to acquire related knowledge. Generally, the operators will first put their time intoachieving the production target. Investment on learning activities will not be prioritizedif these activities hinder reaching the production target, even if the operators know thisshort-term performance drop is the cost for obtaining long-term higher performance.Nevertheless strategic decision should never be influenced by operative goals and highlevel managements should be responsible to make decisions on whether focusing onlong-term profits and accept short-term performance drop as a trade-off.3. Investment in incident response capability. The management in Norsk Hydro is aware ofthe increasing information security risks changing from unconnected platforms tointegrated ones. However, investment in incident response capability to handleincreasing incidents is not made proactively. Only if the frequency of incidents hasincreased or severe incidents has occurred or the incident cost have been proved high,will the management decide to invest more on incident response capability. The Bragemodel simulations illustrate that these reactive decision rules will trap the managementinto ignoring the early signs of increasing information security risks, and causeunderinvestment, which results in inadequate incident response capability, andsubsequently leads to severe consequence. Proactive decision rules work effectively inreducing severity of incidents.This work helps our client in two ways. First, the model-based communication helps themanagement in Norsk Hydro clarify the problem it is facing and understand the underlyingmechanism causing the problem. There is an increased insight into the relevance of newknowledge acquisition. Second, the Brage model offers the management a tool to investigatethe long-term operation results under different policies, thus, helping improve themanagement decision process. This work contributes to the information security literature in three ways. First, previousresearch in information security is mostly on risk assessment methodology and informationsecurity management checklist. The dynamics of information security risks during theoperation transition period has not been well studied before. In this fast changing society,this aspect of changing information security risks is of importance. Second, we introduce adynamic view with the long-term perspective of information security. Although incidentshappen in random manner, the underlying mechanism that leads to such incidents oftenexists for a period. Understanding such mechanism is the key to prevent incidents. Last, butnot least, we demonstrate how formal modeling and simulation can facilitate the building oftheories on information security management. Information security management involvesnot only “hard” aspects, such as work processes and technology, but also “soft” aspects, suchas people’s awareness, people’s perception, and the cultural environment, - and all of whichchange over time. These soft aspects are sometimes the major factors affecting informationsecurity.This work also contributes to the system dynamics literature by adding examples of howmodel-based interventions are used to identify problems, conceptualize and validate models.The activities of group model-building workshops and model validation interviews arecarefully documented and reflected. It is an important step towards the accumulation ofknowledge in model-based intervention

The Shopfloor as Stage

In this paper, I read the play Red Flag Song (1948) as a window into a moment of missed opportunity in China’s revolution, when the Party’s re-engagement with the urban working class could have strengthened democratic tendencies within the Party, and when China’s critical realist literary tradition could have grounded Chinese socialism in the real-life experiences and aspirations of the grassroots. Written at a time when the Party’s control of both industrial and literary productions had begun to tighten, Red Flag Song registered compromise as well as defiance on the shopfloor, and foregrounded two issues as deeply related and fundamental to the making of a New China: work-place democracy as the basis for making China’s working class, and realist literature as a means of understanding complexities and pluralities in social upheavals, and of ensuring a humane and democratic socialism. Unfortunately, the visions Red Flag Song carried were never realised in the following years. They remain unfulfilled promises of the Chinese revolution

Master of Science

thesisHyperglycemia is an obvious candidate contributor in the development of endothelial dysfunction in association with insulin resistance. A great deal of evidence demonstrates that polyphenols and vitamin E can improve endothelial dysfunction, but little research has examined whether their metabolites exert protective effects on endothelial cells. In the current study, we determined the mechanisms by which metabolites can protect against high glucose-induced endothelial dysfunction in human aortic endothelial cells (HAECs). Confluent HAECs were treated with 5mM or 25mM glucose for 48h, or pretreated with 3-hydroxyphenylpropionic acid (3-HPP) at 1μM, Piceatannol (Picea) at 5μM, quercetin 3-glucuronide (Quer-3-glu) at 2μM, and 2,7,8-trimethyl-2-(beta-carboxyethyl)-6-hydroxychroman (ɤ-CEHC) at 3μM, respectively, for 24h, and then treated with high glucose (25mM) for 48h. Nitric oxide (NO) production, total and phosphorylation of endothelial NO synthase (eNOS), protein kinase B (Akt) and extracellular signal regulated kinase (ERK), and reactive oxygen species (ROS)/reactive nitrogen species (RNS) production were determined. In HAECs, insulin-stimulated NO production (59%), eNOSSer1177, and AktSer473 phosphorylation (1.3-fold and 1.5-fold, respectively) was increased (p < 0.05) in cells treated with 5mM glucose. Insulin had no stimulatory effect on NO or eNOS signaling in cells treated with 25mM glucose. However, cells pretreated for 24h with 3-HPP (1μM), Picea (5μM), Quer-3-glu (2μM), and ɤ-CEHC (3μM), respectively, and then treated with 25mM glucose for 48h, had normalized (p < 0.05) insulin-stimulated NO production, eNOSSer1177, and AktSer473 phosphorylation. There was no difference in basal NO production, eNOSSer117, AktSer473, ERKThr202/204 phosphorylation, or insulin-stimulated ERKThr202/204 phosphorylation at each treatment. ROS/RNS production was stimulated by treatment with 25mM glucose (65%, p < 0.05), and prevented when HAECs were pretreated with metabolites. In conclusion, metabolites of quercetin, resveratrol, catechin, and gamma tocopherol rescue high glucose-induced endothelial dysfunction as evidenced by increased NO production. We propose the mechanism occured through a reduction of ROS/RNS that normalized Akt-mediated eNOSSer1177 phosphorylation