On Quantum Field Theory with Nonzero Minimal Uncertainties in Positions and Momenta

We continue studies on quantum field theories on noncommutative geometric spaces, focusing on classes of noncommutative geometries which imply ultraviolet and infrared modifications in the form of nonzero minimal uncertainties in positions and momenta. The case of the ultraviolet modified uncertainty relation which has appeared from string theory and quantum gravity is covered. The example of euclidean $\phi^4$-theory is studied in detail and in this example we can now show ultraviolet and infrared regularisation of all graphs.Comment: LaTex, 32 page

Maximal Localisation in the Presence of Minimal Uncertainties in Positions and Momenta

Small corrections to the uncertainty relations, with effects in the ultraviolet and/or infrared, have been discussed in the context of string theory and quantum gravity. Such corrections lead to small but finite minimal uncertainties in position and/or momentum measurements. It has been shown that these effects could indeed provide natural cutoffs in quantum field theory. The corresponding underlying quantum theoretical framework includes small `noncommutative geometric' corrections to the canonical commutation relations. In order to study the full implications on the concept of locality it is crucial to find the physical states of then maximal localisation. These states and their properties have been calculated for the case with minimal uncertainties in positions only. Here we extend this treatment, though still in one dimension, to the general situation with minimal uncertainties both in positions and in momenta.Comment: Latex, 21 pages, 2 postscript figure

Does Inflation Targeting decrease Exchange Rate Pass-through in Emerging Countries?

In this paper, we empirically examine the effect of inflation targeting on the exchange rate pass-through to prices in emerging countries. We use a panel VAR that allows us to use a large dataset on twenty-seven emerging countries (fifteen inflation targeters and twelve inflation nontargeters). Our evidence suggests that inflation targeting in emerging countries contributed to a reduction in the pass-through to various price indexes (import prices, producer prices and consumer prices) from a higher level to a new level that is significantly different from zero. The variance decomposition shows that the contribution of exchange rate shocks to price fluctuations is more important in emerging targeters compared to nontargeters, and the contribution of exchange rate shocks to price fluctuations in emerging targeters declines after adopting inflation targeting.Inflation Targeting, Exchange Rate Pass-Through, panel VAR.

Endogenizing leadership in tax competition: a timing game perspective

In this paper we extend the standard approach of horizontal tax competition by endogenizing the timing of decisions made by the competing jurisdictions. Following the literature on the endogenous timing in duopoly games, we consider a pre-play stage, where jurisdictions commit themselves to more early or late, i.e. to fix their tax rate at a first or second stage. We highlight that at least one jurisdiction experiments a second-mover advantage. We show that the Subgame Perfect Equilibria (SPEs) correspond to the two Stackelberg situations yielding to a coordination problem. In order to solve this issue, we consider a quadratic specification of the production function, and we use two criteria of selection: Pareto-dominance and risk-dominance. We emphasize that at the safer equilibrium the less productive or smaller jurisdiction leads and hence loses the second-mover advantage. If asymmetry among jurisdictions is sufficient, Pareto-dominance reinforces risk-domination in selecting the same SPE. Three results may be deduced from our analysis: (i) the downward pressure on tax rates is less severe than predicted; (ii) the smaller jurisdiction leads; (iii) the 'big-country-higher-tax-rate' rule does not always hold. Classification-JEL: H30, H87, C72.Endogenous timing; tax competition; first/second-mover advantage; strategic complements; stackelberg ; risk dominance.

On policy interactions among nations: when do cooperation and commitment matter ?

This paper offers a framework to study commitment and cooperation issues in games with multiple policymakers. To reconcile some puzzles in the recent literature on the nature of policy interactions among nations, we prove that games characterized by different commitment and cooperation schemes can admit the same equilibrium outcome if certain spillover effects vanish at the common solution of these games. We provide a detailed discussion of these spillovers, showing that, in general, commitment and cooperation are non-trivial issues. Yet, in linear-quadratic models with multiple policymakers commitment and cooperation schemes are shown to become irrelevant under certain assumptions. The framework is sufficiently general to cover a broad range of results from the recent literature on policy interactions as special cases, both within monetary unions and among fully sovereign nations.Monetary policy ; Fiscal regimes ; International cooperation ; Credibility ; Time-inconsistency.

Nonpointlike Particles in Harmonic Oscillators

Quantum mechanics ordinarily describes particles as being pointlike, in the sense that the uncertainty $\Delta x$ can, in principle, be made arbitrarily small. It has been shown that suitable correction terms to the canonical commutation relations induce a finite lower bound to spatial localisation. Here, we perturbatively calculate the corrections to the energy levels of an in this sense nonpointlike particle in isotropic harmonic oscillators. Apart from a special case the degeneracy of the energy levels is removed.Comment: LaTeX, 9 pages, 1 figure included via epsf optio

Comment on "Quantum mechanics of smeared particles"

In a recent article, Sastry has proposed a quantum mechanics of smeared particles. We show that the effects induced by the modification of the Heisenberg algebra, proposed to take into account the delocalization of a particle defined via its Compton wavelength, are important enough to be excluded experimentally.Comment: 2 page

Regional Debt in Monetary Unions: Is it Inflationary?

This paper studies the inflationary implications of interest bearing regional debt in a monetary union. Is this debt simply backed by future taxation with no inflationary consequences? Or will the circulation of region debt induce monetization by a central bank? We argue here that both outcomes can arise in equilibrium. In the model economy, there are multiple equilibria which reflect the perceptions of agents regarding the manner in which the debt obligations will be met. In one equilibrium, termed Ricardian, the future obligations are met with taxation by a regional government while in the other, termed Monetization, the central bank is induced to print money to finance the region's obligations. The multiplicity of equilibria reflects a commitment problem of the central bank. A key indicator of the selected equilibrium is the distribution of the holdings of the regional debt. We show that regional governments, anticipating central bank financing of their debt obligations, have an incentive to create excessively large deficits. We use the model to assess the impact of policy measures within a monetary union.Monetary Union ; Inflation tax ; Seigniorage ; Public debt.

Insulation impossible: monetary policy and regional fiscal spillovers in a federation

This paper studies the effects of monetary policy rules in a fiscal federation, such as the European Union. The focus of the analysis is the interaction between the fiscal policy of member countries (regions) and the monetary authority. Each of the countries structures its fiscal policy (spending and taxes) with the interests of its citizens in mind. Ricardian equivalence does not hold due to the presence of monetary frictions, modeled here as reserve requirements. When capital markets are integrated, the fiscal policy of one country influences equilibrium wages and interest rates. Under certain rules, monetary policy may respond to the price variations induced by regional fiscal policies. Depending on the type of rule it adopts, interventions by the monetary authority affect the magnitude and nature of the spillover from regional fiscal policy.Monetary Union, Inflation tax, Seigniorage, monetary rules, public debt.