Financial frictions and the role of investment-specific technology shocks in the business cycle

Shocks affecting the rate at which investment goods are transformed into capital stock have been identified as a major driver of the business cycle. Such shocks have been linked to frictions in financial markets, because financial markets are instrumental in transforming consumption goods into installed capital. Yet we show that the importance of these investment shocks is greatly diminished when collateral constraints on firms are introduced into an estimated dynamic stochastic general equilibrium model. In the presence of binding collateral constraints, risk premium shocks take on a more prominent role as drivers of the business cycle. Modellers of business cycle fluctuations need to be mindful of the incompatibility of investment shocks and collateral constraints and of the difficulty in specifying `structural' shocks that are robust to modest amendments to the frictions present in a model

Commodity prices and labour market dynamics in small open economies

We investigate the connection between commodity price shocks and unemployment in advanced resource-rich small open economies from an empirical and theoretical perspective. Shocks to commodity prices are shown to influence labour market conditions primarily through the real exchange rate contrasting sharply with the transmission of technology shocks which are typically argued to affect the economy by changing labour productivity. The empirical impact of commodity price shocks is obtained from estimating a panel vector autoregression; a positive price shock is found to be expansionary for the components of GDP, causes the real exchange rate to appreciate, and improves labour market conditions. For every one percent increase in commodity prices, our estimates suggest a one basis point decline in the unemployment rate and at its peak a 0.3% increase in unfilled vacancies. We then match the impulse responses to a commodity price shock from a small open economy model with net commodity exports and search and matching frictions in the labour market to these empirical responses. As in the data, an increase in commodity prices raises consumption demand in the small open economy and induces a real appreciation. Facing higher relative prices for their goods, non-commodity producing firms post additional job vacancies, causing the number of matches between firms and workers to rise. As a result, unemployment falls, even if employment in the commodity-producing sector is negligible. For commodity price shocks, there is little difference between the standard Diamond (1982), Mortensen (1982), and Pissarides (1985) approach of modelling search and matching frictions and the alternating offer bargaining model suggested by Hall and Milgrom (2008)

News-driven business cycles in small open economies

The focus of this paper is on news-driven business cycles in small open economies. We make two significant contributions. First, we develop a small open economy model where the presence of financial frictions permits the replication of business cycle co-movements in response to news shocks. Second, we use VAR analysis to identify news shocks using data on four advanced small open economies. We find that expected shocks about the future Total Factor Productivity generate business cycle co-movements in output, hours, consumption and investment. We also find that news shocks are associated with countercyclical current account dynamics. Our findings are robust across a number of alternative identification schemes

A combined Y/Ho, high field strength element (HFSE) and Nd isotope perspective on basalt weathering, Deccan Traps, India

High-precision high field strength element (HFSE: Zr, Hf, Nb, Ta, Th, U, W, Mo), Y/Ho, and Nd isotope chemostratigraphy of two contrasting Deccan Traps weathering profiles - an ancient, deeply weathered laterite, and a younger (Quaternary), more moderately weathered saprolite - are used to reconstruct different aspects of basalt weathering. Precision of the HFSE analyses is demonstrated through a report of the long-term concentrations and ratios determined in United States Geological Survey (USGS) and Geological Survey of Japan (GSJ) basalt rock standards (BHVO-1, BHVO-2, BIR-1, BCR-2, JB-2).The oxyanion-forming members (U, Mo, W) are the most mobile of the considered HFSE group. Extreme loss of W, far exceeding those of U and Mo during certain stages of basalt alteration, is first reported here. The ability to strongly fractionate Mo and W during weathering may contribute to solving the unresolved mass imbalance between the crustal and marine inventories of W. By contrast, Zr, Hf, Nb, and Ta preserve the ratios of the parent basalt in the profiles due to their limited mobility; these are therefore of great potential value in reconstructing basalt flow stratigraphy and correlating lava flows in weathered flood basalt provinces. Of the HFSE, Th is not a good choice as a conservative element because it is strongly susceptible to addition of aeolian dust; this is evidenced by strong excursions in Th/Nb that are correlatable with alkali element enrichment and less radiogenic 143 Nd/ 144 Nd ratios.The chemical fingerprints of dust were identified in a paleo-flow top of the saprolite profile, suggesting that dust accumulation occurred during periods of quiescence between basaltic eruptions. During protracted exposure and laterite development, the magnitude to which dust overprints the basalt chemistry increases substantially as evident from much less radiogenic Nd isotope ratios and higher Th/Nb ratios in the Bidar profile relative to the protolith basalt. Attempts at quantifying the magnitude of dust accumulation in the laterite based on Th enrichment indicate a mass fraction of greater than 0.5 when the dust is assumed to have the chemistry of average upper continental crust. Although mixing models between the basalt and assumed dust composition cannot unambiguously constrain the dust source, the Nd isotope mixture preserved in the laterite points to a relatively young crustal dust source (e.g., similar to loess in composition) rather than the Precambrian shield rocks in the vicinity of the Deccan Traps. The contrasting topologies of dust-derived Nd and dust-derived Th in the laterite appears to record both physical transport of dust (Th) through permeable laterite horizons as well as transport by chemical dissolution and precipitation (Nd) at an inferred paleo-water table and in deep saprolite zones.Yttrium and Ho fractionate substantially during all observed stages of weathering, with Y/Ho ratios ranging from 26.5 to 21.9 in the moderately weathered saprolite profile and from 30.2 to 14.7 in the laterite profile. The single strongly superchondritic Y/Ho ratio of 30.2 in the laterite is restricted to a sample at depth, and appears to fingerprint the deposition of REE derived from dissolution higher in the profile. Decrease in the Y/Ho ratio relative to the protolith basalt (24.4-24.7) in both profiles inversely correlates with chemical weathering indices, and suggests that Y/Ho ratios have significant potential as a silicate weathering proxy. Consequently, suspended vs. dissolved river loads may record the differing behaviour of these elements during weathering

Isomeric triazines exhibit unique profiles of bioorthogonal reactivity.

Expanding the scope of bioorthogonal reactivity requires access to new and mutually compatible reagents. We report here that 1,2,4-triazines can be tuned to exhibit unique reaction profiles with biocompatible strained alkenes and alkynes. Computational analyses were used to identify candidate orthogonal reactions, and the predictions were experimentally verified. Notably, 5-substituted triazines, unlike their 6-substituted counterparts, undergo rapid [4 + 2] cycloadditions with a sterically encumbered strained alkyne. This unique, sterically controlled reactivity was exploited for dual bioorthogonal labeling. Mutually orthogonal triazines and cycloaddition chemistries will enable new multi-component imaging applications

News-driven business cycles in small open economies

The focus of this paper is on news-driven business cycles in small open economies. We make two significant contributions. First, we develop a small open economy model where the presence of financial frictions permits the replication of business cycle co-movements in response to news shocks. Second, we use VAR analysis to identify news shocks using data on four advanced small open economies. We find that expected shocks about the future Total Factor Productivity generate business cycle co-movements in output, hours, consumption and investment. We also find that news shocks are associated with countercyclical current account dynamics. Our findings are robust across a number of alternative identification schemes

Tautness for riemannian foliations on non-compact manifolds

For a riemannian foliation $\mathcal{F}$ on a closed manifold $M$, it is known that $\mathcal{F}$ is taut (i.e. the leaves are minimal submanifolds) if and only if the (tautness) class defined by the mean curvature form $\kappa_\mu$ (relatively to a suitable riemannian metric $\mu$) is zero. In the transversally orientable case, tautness is equivalent to the non-vanishing of the top basic cohomology group $H^{^{n}}(M/\mathcal{F})$, where n = \codim \mathcal{F}. By the Poincar\'e Duality, this last condition is equivalent to the non-vanishing of the basic twisted cohomology group $H^{^{0}}_{_{\kappa_\mu}}(M/\mathcal{F})$, when $M$ is oriented. When $M$ is not compact, the tautness class is not even defined in general. In this work, we recover the previous study and results for a particular case of riemannian foliations on non compact manifolds: the regular part of a singular riemannian foliation on a compact manifold (CERF).Comment: 18 page

Commodity prices and labour market dynamics in small open economies

We show that a model of an advanced small open economy with exports in commodities and search and matching frictions in the labour market can match the impulse responses from a panel vector autoregression to an identified commodity price shock. Using a minimum distance strategy, we find that international financial risk sharing is low even for advanced small open economies. Moreover, a strong real exchange rate appreciation is key for an unexpected commodity price increase to induce a tightening of labour market conditions in the model that is in line with the empirical evidence. As in the case of technology shocks discussed by Shimer (2005), proper amplification of the commodity price shock requires a high value of the outside option for unemployed agents. However, vacancies and unemployment hardly respond whenever the real exchange rate channel is mute. These findings suggest the relevance of the open economy dimension for the transmission of demand-type shocks to the labour market more generally

Modified differentials and basic cohomology for Riemannian foliations

We define a new version of the exterior derivative on the basic forms of a Riemannian foliation to obtain a new form of basic cohomology that satisfies Poincar\'e duality in the transversally orientable case. We use this twisted basic cohomology to show relationships between curvature, tautness, and vanishing of the basic Euler characteristic and basic signature.Comment: 20 pages, references added, minor corrections mad

Chemical abrasion applied to LA-ICP-MS U-Pb zircon geochronology

Zircon (ZrSiO4) is the most commonly used mineral in U-Pb geochronology. Although it has proven to be a robust chronometer, it can suffer from Pb-loss or elevated common Pb, both of which impede precision and accuracy of age determinations. Chemical abrasion of zircon involves thermal annealing followed by relatively low temperature partial dissolution in HF acid. It was specifically developed to minimize or eliminate the effects of Pb-loss prior to analysis using Thermal Ionization Mass Spectrometry (TIMS). Here we test the application of chemical abrasion to Laser Ablation Inductively Coupled Plasma Mass Spectrometry (LA-ICP-MS) by analyzing zircons from both untreated and chemically abraded samples. Rates of ablation for high alpha-dose non-treated zircons are up to 25% faster than chemically abraded equivalents. Ablation of 91500 zircon reference material demonstrates a ca. 3% greater down-hole fractionation of Pb-206/U-238 for non-treated zircons. These disparities necessitate using chemical abrasion for both primary reference material and unknowns to avoid applying an incorrect laser induced fractionation correction. All treated samples display a marked increase in the degree of concordance and/or lowering of common Pb, thereby illustrating the effectiveness of chemical abrasion to LA-ICP-MS U-Pb zircon geochronology