What explains high unemployment? The aggregate demand channel

A drop in aggregate demand driven by shocks to household balance sheets is responsible for a large fraction of the decline in U.S. employment from 2007 to 2009. The aggregate demand channel for unemployment predicts that employment losses in the non-tradable sector are higher in high leverage U.S. counties that were most severely impacted by the balance sheet shock, while losses in the tradable sector are distributed uniformly across all counties. We find exactly this pattern from 2007 to 2009. Alternative hypotheses for job losses based on uncertainty shocks or structural unemployment related to construction do not explain our results. Using the relation between non-tradable sector job losses and demand shocks and assuming Cobb-Douglas preferences over tradable and non-tradable goods, we quantify the effect of aggregate demand channel on total employment. Our estimates suggest that the decline in aggregate demand driven by household balance sheet shocks accounts for almost 4 million of the lost jobs from 2007 to 2009, or 65% of the lost jobs in our data.

Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises

Debtors bear the brunt of a decline in asset prices associated with financial crises and policies aimed at partial debt relief may be warranted to boost growth in the midst of crises. Drawing on the US experience during the Great Recession of 2008-09 and historical evidence in a large panel of countries, we explore why the political system may fail to deliver such policies. We find that during the Great Recession creditors were able to use the political system more effectively to protect their interests through bailouts. More generally we show that politically countries become more polarized and fractionalized following financial crises. This results in legislative stalemate, making it less likely that crises lead to meaningful macroeconomic reforms.

Extreme events and event size fluctuations in biased random walks on networks

Random walk on discrete lattice models is important to understand various types of transport processes. The extreme events, defined as exceedences of the flux of walkers above a prescribed threshold, have been studied recently in the context of complex networks. This was motivated by the occurrence of rare events such as traffic jams, floods, and power black-outs which take place on networks. In this work, we study extreme events in a generalized random walk model in which the walk is preferentially biased by the network topology. The walkers preferentially choose to hop toward the hubs or small degree nodes. In this setting, we show that extremely large fluctuations in event-sizes are possible on small degree nodes when the walkers are biased toward the hubs. In particular, we obtain the distribution of event-sizes on the network. Further, the probability for the occurrence of extreme events on any node in the network depends on its 'generalized strength', a measure of the ability of a node to attract walkers. The 'generalized strength' is a function of the degree of the node and that of its nearest neighbors. We obtain analytical and simulation results for the probability of occurrence of extreme events on the nodes of a network using a generalized random walk model. The result reveals that the nodes with a larger value of 'generalized strength', on average, display lower probability for the occurrence of extreme events compared to the nodes with lower values of 'generalized strength'

House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis

Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the sharp rise in U.S. household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Employing land topology-based housing supply elasticity as an instrument for house price growth, we estimate that the average homeowner extracts 25 to 30 cents for every dollar increase in home equity. Money extracted from increased home equity is not used to purchase new real estate or pay down high credit card balances, which suggests that borrowed funds may be used for real outlays (i.e., consumption or home improvement). Home equity-based borrowing is stronger for younger households, households with low credit scores, and households with high initial credit card utilization rates. Homeowners in high house price appreciation areas experience a relative decline in default rates from 2002 to 2006 as they borrow heavily against their home equity, but experience very high default rates from 2006 to 2008. Our estimates suggest that home equity-based borrowing is equal to 2.8% of GDP every year from 2002 to 2006, and accounts for at least 34% of new defaults from 2006 to 2008.

Household Leverage and the Recession of 2007 to 2009

We show that household leverage as of 2006 is a powerful statistical predictor of the severity of the 2007 to 2009 recession across U.S. counties. Counties in the U.S. that experienced a large increase in household leverage from 2002 to 2006 showed a sharp relative decline in durable consumption starting in the third quarter of 2006 – a full year before the official beginning of the recession in the fourth quarter of 2007. Similarly, counties with the highest reliance on credit card borrowing reduced durable consumption by significantly more following the financial crisis of the fall of 2008. Overall, our statistical model shows that household leverage growth and dependence on credit card borrowing as of 2006 explain a large fraction of the overall consumer default, house price, unemployment, residential investment, and durable consumption patterns during the recession. Our findings suggest that a focus on household finance may help elucidate the sources macroeconomic fluctuations.

Dichromacy: Color Vision Impairment and Consanguinity in Heterogenous Population of Pakistan

Background and Objectives: Dichromacy, an X-linked recessive disorder is identified worldwide, more in males than females. In European Caucasians, its incidence is 8% in males and 0.5% in females. In India, it is 8.73% in males and 1.69% in females, and in Iran, it is 8.18% in males and 0.43% in females. Population based epidemiological data about dichromacy in different ethnic groups in Pakistan is not available. The aim of this study was to find out the population prevalence of inherited red-green dichromacy in a heterogenous population of the district of Chiniot, Punjab, Pakistan, and to determine the impact of consanguinity and ethnicity. Methods: In this cross-sectional study, boys and girls of the higher secondary schools were examined in the three tehsils of district Chiniot. Pseudoisochromatic Ishihara Test has been employed for detection of dichromacy in the study population. The sample size was calculated statistically as 260, which was expanded to 705 and divided by population density of the three tehsils. Results: Screening of 359 males and 346 females revealed 19 (5.29%) dichromat males and only 2 (0.58%) females. The study population belonged to 23 castes / isonym groups. The consanguinity found in the district of Chiniot is 84.82% and in the dichromat families, it is 85.71%, of which 52.37% are first cousin. Interpretation & Conclusion: The study has shown that the incidence of dichromacy could be reduced through genetic counselin

Ultrabroadband Nonlinear Optics in Nanophotonic Periodically Poled Lithium Niobate Waveguides

Quasi-phasematched interactions in waveguides with quadratic nonlinearities enable highly efficient nonlinear frequency conversion. In this article, we demonstrate the first generation of devices that combine the dispersion-engineering available in nanophotonic waveguides with quasi-phasematched nonlinear interactions available in periodically poled lithium niobate (PPLN). This combination enables quasi-static interactions of femtosecond pulses, reducing the pulse energy requirements by several orders of magnitude, from picojoules to femtojoules. We experimentally demonstrate two effects associated with second harmonic generation. First, we observe efficient quasi-phasematched second harmonic generation with <100 fJ of pulse energy. Second, in the limit of strong phase-mismatch, we observe spectral broadening of both harmonics with as little as 2-pJ of pulse energy. These results lay a foundation for a new class of nonlinear devices, in which co-engineering of dispersion with quasi-phasematching enables efficient nonlinear optics at the femtojoule level

Case Study On The Assessment Of Sinkhole Risk For The Development Of Infrastructure Over Karstic Ground

Practical Applications and Case Studie