The rectified n-harmonic map flow with applications to homotopy classes

We introduce a rectified $n$-harmonic map flow from an n-dimensional closed Riemannian manifold to another closed Riemannian manifold. We prove existence of a global solution, which is regular except for a finite number of points, of the rectified n-harmonic map flow and establish an energy identity for the flow at each singular time. Finally, we present two applications of the rectified n-harmonic map flow to minimizing the n-energy functional and the Dirichlet energy functional in a homotopy class.Comment: 29 pages. A revised versio

Inequality, the price of nontradables, and the real exchange rate : theory and cross-country evidence

The author provides theoretical and empirical evidence of a negative association between income inequality and real exchange rates. First, he builds a theoretical model showing the transmission mechanism from inequality to real exchange rates. Second, using cross-country data, he demonstrates that the theoretical argument has empirical support. The association is large, significant, and robust to alternative specifications of the reduced form model and estimation methodologies. These findings provide empirical support for Poverty Reduction Strategy Papers, government strategies agreed on with the World Bank that hinge on four major objectives:accelerating equity-based growth, guaranteeing access to basic social services for the poor, expanding opportunities for employment and income-generating activities for the poor, and promoting good governance. The author's analysis indicates that"equity-based growth"and"export-driven growth"are compatible policy goals. But the negative relationship between inequality and real exchange rates does not imply that policies aimed at dramatic redistribution will automatically lead to real depreciation of the domestic currency, improve the external balance, and accelerate economic growth.Payment Systems&Infrastructure,Economic Theory&Research,Fiscal&Monetary Policy,Environmental Economics&Policies,Poverty Impact Evaluation,Macroeconomic Management,Economic Stabilization,Economic Theory&Research,Inequality,Achieving Shared Growth

Determinants of emerging market bond spread : do economic fundamentals matter?

In the 1990s international bond issues from developing countries surged dramatically, becoming one of the fastest-growing devices for financing external development. Their terms have improved as institutional investors have become more interested in emerging market securities and better economic prospects in a number of developing countries. But little is known about what determines the pricing and thus the yield spreads of new emerging market bond issues. The author investigates what determines bond spreads in emerging markets in the 1990s. He finds that strong macroeconomic fundamentals in a country -- such as low domestic inflation rates, improved terms of trade, and increased foreign assets -- are associated with lower yield spreads. By contrast, higher yield spreads are associated with weak liquidity variables in a country, such as a high debt-to-GDP (Gross Domestic Product) ratio, a low ratio of foreign reserves to GDP, a low (high) export (import) growth rate, and a high debt-service ratio. At the same time, external shocks -- as measured by the international interest rate -- matter little in the determination of bond spreads. In the aggregate, Latin America countries have a negative yield curve.Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Payment Systems&Infrastructure,International Terrorism&Counterterrorism,International Terrorism&Counterterrorism,Economic Theory&Research,Macroeconomic Management,Environmental Economics&Policies,Banks&Banking Reform