SMUGGLING AS ANOTHER CAUSE OF FAILURE OF THE PPP

In theoretical literature, smuggling is considered as a factor contributing to the deviation of the PPP-based exchange rates from the equilibrium exchange rates with little empirical support. In this paper, we used panel data for 33 developing countries over the period 1982-1995 and used panel unit root and panel cointegration technique along with pooled OLS, fixed effects, random effects, and Parks estimator in an augmented Balassa-Samuelson framework. Using two different proxies for smuggling it is found that smuggling into a country leads to an appreciation of domestic currency that can be considered as another cause of loosing competitiveness by many developing countries.Smuggling, PPP, Real Exchange Rate, Panel Data, Panel Unit Root, Panel Cointegration, LDCs

Communicating via ignorance: Increasing communication capacity via superposition of order

Classically, no information can be transmitted through a depolarising, that is a completely noisy, channel. We show that by combining a depolarising channel with another channel in an indefinite causal order---that is, when there is superposition of the order that these two channels were applied---it becomes possible to transmit significant information. We consider two limiting cases. When both channels are fully-depolarising, the ideal limit is communication of 0.049 bits; experimentally we achieve $(3.4{\pm}0.2){\times}10^{-2}$ bits. When one channel is fully-depolarising, and the other is a known unitary, the ideal limit is communication of 1 bit. We experimentally achieve 0.64${\pm}$0.02 bits. Our results offer intriguing possibilities for future communication strategies beyond conventional quantum Shannon theory