International Business Cycles with Mutliple Input Investment Technologies

Backus, Kehoe, and Kydland (International Real Business Cycles, JPE, 100 (4), 1992) documented several discrepancies between the observed post-war business cycles of developed countries and the predictions of a two-country, complete-market model. The main discrepancy dubbed as the quantity anomaly, that cross-country consumption correlations are higher than that of output in the model as opposed to the data, has remained a central puzzle in international economics. The main thesis of this paper is that when the standard two-country model with traded and non-traded goods and complete ¯nancial markets, as in Stockman and Tesar (Tastes and Technology in a Two Country Model of the Business Cycles: Explaining International Comovements, 85 (1), AER, 1995) is extended to include capital goods sectors that utilize both traded and non-traded goods as intermediates, and when the non-traded aggregate is reclassi¯ed to include distribution and transportation services, the model produces the correct ordering of the cross-country correlations of consumption and output.International business cycles; Quantity anomaly; Distribution costs; Cross-country correlations.

Distribution Costs and International Business Cycles

Backus, Kehoe, and Kydland (International Real Business Cycles, JPE, 100(4),1992) documented several discrepancies between the observed post-war business cycles of developed countries and the predictions of a two-country, complete-market model. The main discrepancy termed as the “quantity anomaly†that cross-country consumption correlations are higher than that of output in the model as opposed to data, has remained a central puzzle in international economics. In order to resolve this puzzle mainly two strategies: restrictions on asset trade, and introducing non-traded goods in the model, have been employed by researchers. While these extensions have been successful in closing the gap to some extent, the ordering of correlations has stayed unchanged: consumption correlations still exceed that of output. This paper attempts to resolve the quantity puzzle by introducing non-traded distribution costs in the retailing of traded goods. In a standard two-good model traded output and traded consumption, by definition, are identical goods. With distribution costs, traded output and consumption are two distinct entities as each unit of final traded consumption good incorporates a unit of traded good and a fixed amount of non-traded goods. Thus, effectively, the model with distribution costs can be viewed as a model without distribution costs but with a modified utility function that has a substantially stronger complementarity between traded and non-traded goods. In a simple two-good extension of the Backus, Kehoe, and Kydland model, it is shown that the cross-country consumption and output correlations are 0.55 and 0.30, respectively, whereas with distribution costs consumption correlation reduces to 0.09, output correlation to 0.23. Incorporating distribution costs, in addition, improves the model’s performance in matching the volatility of real exchange rates and the correlation of net exports with output. These improvements are achieved without sacrificing the model's performance in any other dimension.open economy business cycles; quantity puzzle; distribution costs

Investment composition and international business cycles

This paper studies a two country model with economies disaggregated into traded and nontraded sectors and in which investment goods as in practice are produced by combining inputs from all sectors. The model also accounts for nontraded distribution services employed in retailing traded goods to consumers. The results show that the model with multiple input investments outperforms the standard model in which sectoral output also serves as its capital. In particular, it substantially improves (a) the movements of trade balance and relative prices, (b) within country comovements of sectoral and aggregate quantities, and (c) cross-country comovements of output vis-à-vis consumption

Marcus inverted region in the photoinduced electron transfer reactions of ruthenium(ii)-polypyridine complexes with phenolate ions.

Ruthenium (II)- polypyridy1 complexes of similar size but with variable reduction potential undergo efficient photoinduced electron- transfer reactions with phenolate ions in aqueous medium. All these reactions are exergonic and are in accordance with the Marcus theory of electron transfer. At high negative G° Marcus inverted region is observed in this bimolecular photoinduced charge separation reaction

Dynamical Characteristics of Atmospheric Aerosols over IG Region

The dynamical characteristics of atmospheric aerosols over the Indo-Gangetic (IG) region are primarily dependent on the geographical settings and meteorological conditions. Detailed analysis of multi satellite data and ground observations have been carried out over three different cities i.e. Kanpur, Greater Noida and Amritsar during 2010-2013. Level-3 Moderate Resolution Imaging Spectroradiometer (MODIS) terra daily global grid product with spatial resolution of 1° × 1° shows the mean AOD at 500 nm wavelength value of 0.73, 0.70 and 0.67 with the standard deviation of 0.43, 0.39 and 0.36 respectively over Amritsar, Greater Noida and Kanpur. Our detailed analysis shows characteristic behavior of aerosols from west to east in the IG region depending upon the proximity of desert regions of Arabia. We have observed large influx of dusts from the Thar desert and Arabia peninsula during pre-monsoon season (April–June), highly affecting Amritsar which is close to the desert region