The British foreign exchange reserves puzzle

The British foreign exchange reserves decreased by 40 percent during the period August 1996-December 1999 although the Pound Sterling is considered a floating exchange rate since it left the EMS in 1992. Since changes in the level of foreign exchange reserves are usually taken as indicators for foreign exchange interventions in the economic literature we investigate the case of the British reserves in detail. While the Pound Sterling has appreciated strongly against the Deutsch mark in this period its exchange rate versus the US dollar has remained comparatively stable. However, the Bank of England has denied any interventions in the foreign exchange markets. We find that transactions for the government, such as repayments of Treasury bonds, account for a large part of the decrease in reserves. Valuation changes due to exchange rate fluctuations can explain only a small fraction of the decrease. This result shows that variability in official reserves is not necessarily associated with foreign exchange intervention. However, even after estimating the effects of exchange rate fluctuations and interest earnings and correcting for government transactions we still find a considerable decrease in the UK reserves that is not explained by either the Bank of England or HM Treasury. --Pound Sterling,foreign exchange reserves,foreign exchange intervention

Charmonium Cross Sections and the QGP

In this short review we summarize experimental information and theoretical results for the low-energy dissociation cross sections of charmonia by light hadrons. These cross sections are required for the simulation of charmonium absorption through collisions with comovers in heavy ion collisions, which competes with quark-gluon plasma production as a charmonium-suppression mechanism. If the cross sections are sufficiently large these dissociation reactions may be misinterpreted as an effect of quark-gluon plasma production. Theoretical predictions for these RHIC-related processes have used various methods, including a color-dipole scattering model, meson exchange models, constituent interchange models and QCD sum rules. As the results have been largely unconstrained by experiment, some of the predictions differ by orders of magnitude, notably in the near-threshold regime that is most relevant to QGP searches.Comment: 7 pages, 11 figures. Expanded and updated version of a presentation to QNP-2002 (Juelich, 9-14 June 2002

J/Psi and Psi' total cross sections and formation times from data for charmonium suppression in pApA collisions

The recent data for E866 experiment on the x_F dependence for charmonium suppression in pA collisions at 800 GeV are analyzed using a time- and energy-dependent preformed charmonium absorption cross section \sigma_{abs}^\psi(\tau,\sqrt{s}). For \sqrt{s}=10 GeV the initially (\tau=0) produced premeson has an absorption cross section of \sigma_{pr}~3mb. At the same energy but for \tau -> \infty one deduces for the total cross sections \sigma_{tot}^{J/Psi N}=(2.8\pm 0.3)mb, \sigma_{tot}^{J/Psi N}= (10.5\pm 3.6)mb. The date are compatible with a formation time \tau_{1/2}=0.6 fm/c.Comment: 13 pages of Latex including 2 figures; typos in the abstract are correcte

Transverse Momentum Dependence of Anomalous J/\psi Suppression in Pb-Pb Collisions

The recently published data for $$ for $J/\psi$ production in Pb-Pb collisions at 158 A GeV are analyzed. For low values of transverse energy $E_t$, where normal suppression dominates, $(E_t)$ scales with the path length of the gluons which fuse to make the $J/\psi$. In the $E_t$ domain of anomalous suppression $(E_t)$ is found to rise linearly with the relative amount of anomalous suppression. This empirical law is reproduced within an analytically solvable transport model which allows high $p_t$ $J/\psi$'s to escape anomalous suppression. Interpreted in this way, the data for $(E_t)$ lead to an estimate of $t_A \sim 4$ fm/$c$ for the duration of anomalous suppression.Comment: 10 pages and 3 figure

Forecasting economic activity in Germany: how useful are sentiment indicators?

We analyze four economic sentiment indicators for the German economy regarding their ability to forecast economic activity. Using cross correlations and Granger causality tests we find that the ifo business expectations (ifo), the Purchasing Managers Index (PMI) and the ZEW Indicator of Economic Sentiment (ZEW) lead the yearon-year growth rate of German industrial production by five months. Taking into account the publication lag of industrial production this lead is even larger. On the contrary, the European Commission?s Economic Sentiment Indicator (ESIN) does not exhibit a lead but rather seems to coincide or even lag economic activity. Analyzing lead/lag structures among the indicators we find that the ZEW indicator leads the ifo business expectations significantly by one month and that the latter has a onemonth lead over the PMI. Out-of-sample forecast evaluations suggest that both ifo and ZEW provide the best forecasts for industrial production among the three indicators ifo, PMI and ZEW. It is found that the ZEW indicator performs better than the ifo and PMI over the whole sample (Jan. 1994 – Mar. 2002) and especially over horizons from six to twelve months. The ifo expectations predict better at shorter horizons (up to three months) and is superior to the ZEW and PMI indicator when a shorter sample (Jan. 1998 – Mar. 2002) is regarded. --leading indicators,Germany,ifo,zew,PMI,ESIN

What Determines the ZEW Indicator?

This paper analyzes which factors are driving the ZEW Indicator of Economic Sentiment. Using the results of a poll among survey participants as well as Granger causality tests we identify three groups of influence factors: other sentiment indicators, financial variables and real economy data. In a second step these factors are used to estimate out-of-sample forecasts for the ZEW Indicator. We find that a simple model that includes German manufacturing order data, the German yield structure and the US Consumer Confidence indicator as explanatory variables is able to outperform a naive univariate benchmark model as well as the consensus forecast for the ZEW Indicator as published by news agencies. --leading indicators,Germany,zew,forecasting

Excitation of Color Degrees of Freedom of Nuclear Matter and J/ψJ/\psi Suppression

In high energy nuclear collisions, the conventional Glauber model is commonly used to evaluate the contribution to $J/\psi$ suppression originating from the inelastic interaction with colorless bound nucleons. This requires an effective value for the $J/\psi$-nucleon absorption cross section which is larger than theoretically expected. On the other hand, multiple nucleon-nucleon collisions mediated by color exchange interactions, excite their color degrees of freedom. We investigate the importance of this effect and find that these excited states provide a larger cross section for $J/\psi$ absorption. We conclude that the related corrections are important to explain the effective value extrapolated from experiment.Comment: 21 pages Latex, 8 postscript figure

Coherence Phenomena in Charmonium Production off Nuclei at the Energies of RHIC and LHC

In the energy range of RHIC and LHC the mechanisms of nuclear suppression of charmonia are expected to be strikingly different from what is known for the energy of the SPS. One cannot think any more of charmonium produced on a bound nucleon which then attenuates as it passes through the rest of the nucleus. The coherence length of charmonium production substantially exceeds the nuclear radius in the new energy range. Therefore the production amplitudes on different nucleons, rather than the cross sections, add up and interfere, i.e. shadowing is at work. So far no theoretical tool has been available to calculate nuclear effects for charmonium production in this energy regime. We develop a light-cone Green function formalism which incorporates the effects of the coherence of the production amplitudes and of charmonium wave function formation, and is the central result of this paper. We found a substantial deviation from QCD factorization, namely, gluon shadowing is much stronger for charmonium production than it is in DIS. We predict for nuclear effects $x_2$ scaling which is violated at lower energies by initial state energy loss which must be also included in order to compare with available data. In this paper only the indirect J/Psi originating from decay of P-wave charmonia are considered. The calculated x_F-dependence of J/Psi nuclear suppression is in a good accord with data. We predict a dramatic variation of nuclear suppression with x_F in pA and a peculiar peak at x_F=0 in AA collisions at RHIC.Comment: 51 pages including 12 figures. Two references and comments are added at the en