On periodic boundary value problem for the Sturm-Liouville operator

We consider the Sturm-Liouville operator Lu=u''-q(x)u with periodic or antiperiodic boundary conditions. It is shown that depending of Fourier coefficients of the potential q(x) the system of root functions may have or may not have the basis property.Comment: Published in Proceedings of the International Conference "Function Spaces, Approximation Theory, Nonlinear Analysis", Moscow, Russia, May 23-29, 2005, p. 14

Flexible exchange rates, multinational corporations, and accounting standards

Foreign exchange rates ; International business enterprises ; Financial Accounting Standards Board ; Accounting

Money Surprises and Short-Term Interest Rates: Reconciling ContradictoryFindings

This note attempts to reconcile contradictory findings regarding the impact of money surprises on short term interest rates. Expectations effects regarding anticipated monetary policy and anticipated inflation suggest a positive relationship. Liquidity and output effects of monetary surprises suggest a negative relationship. It is shown that intra-day data and end-of-period data will capture expectations effects while period average data will capture liquidity/output effects. Seemingly contradictory results are reconciled by differences in dependent variables employed by various authors.

Exchange Rates and Taxes

This paper demonstrates that different rates of taxation on interest income and exchange gains may bias results of hypothesis testing regarding critical aspects of exchange rate behavior. Two problems are discussed specifically. First, it is shown that omission of tax considerations may bias tests of the uncovered interest parity condition toward acceptance of a "risk premium" hypothesis, conditional on exchange market efficiency. Second it is shown that a rational solution for the exchange rate conditions the relationship between an exchange rate and its determinants on two regimes: (1) tax rates on interest income and foreign exchange gains and losses at home and abroad and (2) the degree of foreign exchange market intervention and sterilization of its effects on the monetary base practiced by central banks.

A Fiscal Framework for Analysis of Interest Rate Behavior in Open Economies

This paper derives a reduced-form expression for an interestrate in an open economy by incorporating after tax covered interest parity conditions into a simple neo-classical macro model. The result clearly demonstrates that the relationship between an interest rate and variables used to explain it is conditional on income tax rates at home and abroad and presence or absence of capital gains tax treatment of foreign exchange gains or losses. Effects of non-indexation of tax treatment of depreciation and inventories may also play a role. Any change in effective tax rates over a sample period employed to estimate interest rate (or exchange rate) equations may cause deterioration in the fit of a fixed coefficient model. Efforts are underway to employ a random coefficients approach to address this problem.