Prices and Exchange Rates: A Theory of Disconnect

I present a sticky-wage model of exchange rate pass-through with heterogeneous producers and endogenous markups. The model shows that low levels of exchange rate pass-through to firm- and aggregate-level import prices coexist with large in trade flows. After an exchange rate shock, aggregate import prices are subject to a composition bias due to changes in the extensive margin of trade (the number of goods traded between countries). At the firm level, each producer adjusts its markups depending on its own productivity and the change in the competitive environment generated by the exchange rate movement. Firm-level price responses are asymmetric---different for appreciations and depreciations---and adjustments in the intensive margin of trade (firm-level exports) are substantial. In general equilibrium, the model shows that firm reallocations increase the persistence exogenous shocks.Exchange rate pass-through; Expenditure switching regime; Heterogenous firms; Endogenous markups

Nonlinear Exchange Rate Predictability

We study whether the nonlinear behavior of the real exchange rate can help us account for the lack of predictability of the nominal exchange rate. We construct a smooth nonlinear error-correction model that allows us to test the hypotheses of nonlinear predictability of the nominal exchange rate and nonlinear behavior on the real exchange rate in the context of a fully specified cointegrated system. Using a panel of 19 countries and three numeraires, we find evidence of nonlinear predictability of the nominal exchange rate and of nonlinear mean reversion of the real exchange rate. Out-of-sample Theil's U-statistics show a higher forecast precision of the nonlinear model than the one obtained with a random walk specification. Although the robustness of the out-of-sample results over different forecast windows is somewhat limited, we are able to obtain significant predictability gains--from a parsimonious structural model with PPP fundamentals--even at short-run horizons.Exchange rates; Predictability; Nonlinearities; Purchasing power parity

Trade Costs and Job Flows: Evidence from Establishment-Level Data

We present evidence of the impact of input and output trade liberalization on establishment-level job flows. Using a longitudinal database containing the universe of manufacturing establishments in California from 1992 to 2004, we find that a decline in input or output trade costs causes job destruction in the least productive establishments, job creation in the most productive establishments, and an increase in the death likelihood of the least productive establishments. The evidence is consistent with predictions of models of trade with heterogeneous firms. We also show that input trade liberalization has larger effects on establishment-level job flows than output trade liberalization.Heterogeneous firms; Job flows; Trade costs

Computation of conformal representations of compact Riemann surfaces

We find a system of two polynomial equations in two unknowns, whose solution allows to give an explicit expression of the conformal representation of a simply connected three sheeted compact Riemann surface onto the extended complex plane. This function appears in the description of the ratio asymptotic of multiple orthogonal polynomials with respect to so called Nikishin systems of two measures.Comment: To appear in Mathematics of Computatio

New Economic Geography And Educational Attainment Levels In The European Union

In this paper a New Economic Geography model is used to analyse the distribution of educational attainment levels in the European Union. The results show that educational attainment levels decrease with distance to large consumer markets, proving that the theoretical predictions of the model are verified empirically

Open innovation : organizational challenges of a new paradigm of innovation management

The goal of this paper is to analyze the main problems that emerge from the open innovation model. Adopting as analytical framework an organizational perspective we divide the main challenges that arise from the management of open innovation in two main categories: coordination problems as a result of open the innovation system to ideas and knowledge that may lie outside the boundaries of the firm and, incentive problems related with the creation and value capture of ideas an knowledge by the innovator. We describe and analyze several problems related with coordination and incentives.peer-reviewe

Critical behavior of su(1|1) supersymmetric spin chains with long-range interactions

We introduce a general class of su$(1|1)$ supersymmetric spin chains with long-range interactions which includes as particular cases the su$(1|1)$ Inozemtsev (elliptic) and Haldane-Shastry chains, as well as the XX model. We show that this class of models can be fermionized with the help of the algebraic properties of the su$(1|1)$ permutation operator, and take advantage of this fact to analyze their quantum criticality when a chemical potential term is present in the Hamiltonian. We first study the low energy excitations and the low temperature behavior of the free energy, which coincides with that of a $(1+1)$-dimensional conformal field theory (CFT) with central charge $c=1$ when the chemical potential lies in the critical interval $(0,\mathcal E(\pi))$, $\mathcal E(p)$ being the dispersion relation. We also analyze the von Neumann and R\'enyi ground state entanglement entropies, showing that they exhibit the logarithmic scaling with the size of the block of spins characteristic of a one-boson $(1+1)$-dimensional CFT. Our results thus show that the models under study are quantum critical when the chemical potential belongs to the critical interval, with central charge $c=1$. From the analysis of the fermion density at zero temperature, we also conclude that there is a quantum phase transition at both ends of the critical interval. This is further confirmed by the behavior of the fermion density at finite temperature, which is studied analytically (at low temperature), as well as numerically for the su$(1|1)$ elliptic chain.Comment: 13 pages, 6 figures, typeset in REVTe

Generalized isotropic Lipkin-Meshkov-Glick models: ground state entanglement and quantum entropies

We introduce a new class of generalized isotropic Lipkin-Meshkov-Glick models with su$(m+1)$ spin and long-range non-constant interactions, whose non-degenerate ground state is a Dicke state of su$(m+1)$ type. We evaluate in closed form the reduced density matrix of a block of $L$ spins when the whole system is in its ground state, and study the corresponding von Neumann and R\'enyi entanglement entropies in the thermodynamic limit. We show that both of these entropies scale as $a\log L$ when $L$ tends to infinity, where the coefficient $a$ is equal to $(m-k)/2$ in the ground state phase with $k$ vanishing su$(m+1)$ magnon densities. In particular, our results show that none of these generalized Lipkin-Meshkov-Glick models are critical, since when $L\to\infty$ their R\'enyi entropy $R_q$ becomes independent of the parameter $q$. We have also computed the Tsallis entanglement entropy of the ground state of these generalized su$(m+1)$ Lipkin-Meshkov-Glick models, finding that it can be made extensive by an appropriate choice of its parameter only when $m-k\ge3$. Finally, in the su$(3)$ case we construct in detail the phase diagram of the ground state in parameter space, showing that it is determined in a simple way by the weights of the fundamental representation of su$(3)$. This is also true in the su$(m+1)$ case; for instance, we prove that the region for which all the magnon densities are non-vanishing is an $(m+1)$-simplex in $\mathbf R^m$ whose vertices are the weights of the fundamental representation of su$(m+1)$.Comment: Typeset with LaTeX, 32 pages, 3 figures. Final version with corrections and additional reference