The real effects of financial stress in the Euro zone

Using two identification strategies based on a Bayesian Structural VAR and a Sign-Restriction VAR, we examine the real effects of financial stress in the Eurozone. In particular, we assess the macroeconomic impact of: (i) a monetary policy shock; and (ii ) a financial stress shock. We find that a monetary policy contraction strongly deteriorates financial stress conditions. In addition, unexpected variation in the Financial Stress Index (FSI) plays an important role in explaining output fluctuations, and also demands an aggressive response by the monetary authority to stabilise output indicating a preference shift from targeting inflation as it is currently happening in major economies. Therefore, our paper reveals the importance of adopting a vigilant posture towards financial stress conditions, as well as the urgency of macro-prudential risk management.monetary policy, financial stress, Bayesian Structural VAR, Sign-Restrictions, Euro-zone.

Fiscal Policy in the BRICs

This paper assesses the macroeconomic impact of fiscal policy shocks for four key emerging market economies - Brazil, Russia, India and China (BRICs) – using a Bayesian Structural Vector Auto-Regressive (BSVAR) approach, a Sign-Restrictions Vector Auto-Regressive framework and a Panel Vector Auto-Regressive (PVAR) model. To get a deeper understanding of the government’s behaviour, we also estimate fiscal policy rules using a Fully Simultaneous System of Equations and analyze the importance of nonlinearity using a smooth transition (STAR) model. Drawing on quarterly frequency data, we find that government spending shocks have strong Keynesian effects for this group of countries while, in the case of government revenue shocks, a tax hike is harmful for output. This suggests that there is no evidence in favour of ‘expansionary fiscal contraction’ in the context of emerging economies where spending policies are largely pro-cyclical. Our findings also show that considerations about growth (in the case of China), exchange rate and inflation (for Brazil and Russia) and commodity prices (in India) drive the nonlinear response of fiscal policy to the dynamics of the economy. All in all, our results are consistent with the idea that fiscal policy can be a powerful stabilization tool and can provide an important short-term economic boost for emerging markets, in particular, in the context of severe downturns as in most recent financial turmoil.fiscal policy, emerging markets, fully simultaneous system of equations, sign-restrictions VAR, smooth transition regression model

Monetary Policy Rules in the BRICS: How Important is Nonlinearity?

Given limited research on monetary policy rules in emerging markets, this paper estimates monetary policy rules for five key emerging market economies: Brazil, Russia, India, China and South Africa (BRICS) analysing whether the monetary authority reacts to changes in financial markets, in monetary conditions, in the foreign exchange sector and in the commodity price. To get a deeper understanding of the central bank’s behaviour, we assess the importance of nonlinearity using a smooth transition (STAR) model. Using quarterly data, we find strong evidence that the monetary policy followed by the Central Banks in the BRICS varies from one country to another and that it exhibits nonlinearity. In particular, considerations about economic growth (in the cases of Brazil and Russia), inflation (for India and China) and stability of financial markets (in South Africa) seem to be the major drivers of such nonlinear monetary policy behaviour. Moreover, the findings suggest that the monetary authorities pursue, with the exception of India, a target range for the threshold variable rather than a specific point target. In fact, the exponential smooth transition regression (ESTR) model seems to be the best description of the monetary policy rule in these countries.monetary policy, emerging markets, smooth transition.

A simple deterministic self-organized critical system

We introduce a new continuous cellular automaton that presents self-organized criticality. It is one-dimensional, totally deterministic, without any kind of embedded randomness, not even in the initial conditions. This system is in the same universality class as the Oslo rice pile system, boundary driven interface depinning and the train model for earthquakes. Although the system is chaotic, in the thermodynamic limit chaos occurs only in a microscopic level.Comment: System slightly modified. New results on Liapunov exponents. Submitted for publication (8 pages

Chaos and Synchronized Chaos in an Earthquake Model

We show that chaos is present in the symmetric two-block Burridge-Knopoff model for earthquakes. This is in contrast with previous numerical studies, but in agreement with experimental results. In this system, we have found a rich dynamical behavior with an unusual route to chaos. In the three-block system, we see the appearance of synchronized chaos, showing that this concept can have potential applications in the field of seismology.Comment: To appear in Physical Review Letters (13 pages, 6 figures

The real effects of financial stress in the Euro zone

Using two identification strategies based on a Bayesian Structural VAR and a Sign-Restriction VAR, we examine the real effects of financial stress in the Eurozone. In particular, we assess the macroeconomic impact of: (i) a monetary policy shock; and (ii ) a financial stress shock. We find that a monetary policy contraction strongly deteriorates financial stress conditions. In addition, unexpected variation in the Financial Stress Index (FSI) plays an important role in explaining output fluctuations, and also demands an aggressive response by the monetary authority to stabilise output indicating a preference shift from targeting inflation as it is currently happening in major economies. Therefore, our paper reveals the importance of adopting a vigilant posture towards financial stress conditions, as well as the urgency of macro-prudential risk management.Fundação para a Ciência e a Tecnologia (FCT

Qubit coherence control in a nuclear spin bath

Coherent dynamics of localized spins in semiconductors is limited by spectral diffusion arising from dipolar fluctuation of lattice nuclear spins. Here we extend the semiclassical theory of spectral diffusion for nuclear spins I=1/2 to the high nuclear spins relevant to the III-V materials and show that applying successive qubit pi-rotations at a rate approximately proportional to the nuclear spin quantum number squared (I^2) provides an efficient method for coherence enhancement. Hence robust coherent manipulation in the large spin environments characteristic of the III-V compounds is possible without resorting to nuclear spin polarization, provided that the pi-pulses can be generated at intervals scaling as I^{-2}

Is technology factor-neutral? Evidence from the US manufacturing sector

This paper analyses the neutrality of technology using data from the NBER-CES Manufacturing industry database. We show that technology has a positive effect on the skilled-to-unskilled labour and wage ratios, offering a skill-premium for these skilled workers. We also find that technology has become more favourable towards skilled labour since the eighties, thereby, explaining the rise in the relative abundance of skilled workers. Finally, differences in productivity among the two labour inputs are important when they are relatively poor substitutes, despite the increase in the elasticity of substitution between unskilled and skilled labour that occurred over the past decades.Fundação para a Ciência e a Tecnologia (FCT

Three dimensional model of a high temperature PEMFC using PBI doped phosphoric acid membranes. Study of the flow field effect on performance

A three-dimensional isothermal model of a high temperature polymer membrane fuel cell equipped with polybenzimidazole (PBI) membrane is described. All major transport phenomena were taken into account except the species cross-over thought the membrane. The cathode catalyst layer was treated as spherical catalyst agglomerates with porous inter-agglomerate spaces. The inter-agglomerate spaces were filled with a mixture of electrolyte (hot phosphoric acid) and polytetrafluoroethylene (PTFE). This approach proved to be an essential requirement for accurate simulation. In this particular paper the influence of different flow field designs and dimensions on performance was intensely study. Traditional configurations were tested (straight, serpentine, pin-in and interdigitated), and a new designs were proposed. With these new designs we tried to maximize performance by providing homogeneous reactants distribution over the active area keeping low pressure drop and relatively high velocity. The dimension and position of the inlet and outlet manifolds were also analysed. From the obtained results was observed a massive influence of the manifolds position and dimension on performance. This fact leaded to an optimization of the manifolds which can give important guidelines for future bipolar plates production

Produção de raízes finas em cultivos de palma de óleo (Elaeis guineensis) no Nordeste paraense.

O objetivo do trabalho foi avaliar a variabilidade espacial da produção de raízes finas (diâmetro ? 2 mm) em um cultivo convencional de palma de óleo (Elaeis guineensis). O estudo foi realizado no município de Tomé-Açu (PA), em área de agricultor familiar. As amostras foram coletadas entre 0 e 10 cm de profundidade por um cilindro telado (?ingrowth core?) de malha de abertura igual a 2 mm e diâmetro igual a 5 cm. Os locais de coleta avaliados foram: (a) entre plantas, (b) empilhamento e (c) carreador, e em diferentes distâncias a partir do estipe: 0,6; 1,2; 2; e 4 m. Os dados obtidos foram analisados e interpretados em relação à variação pluviométrica média regional. A produção mensal de raízes finas não diferiu nas diferentes distâncias da base da planta, exceto na camada foliar, em que a distância de 0,6 m apresentou uma maior produção de raízes com (média ± erro padrão = 54,20 ± 7,95 g m-2 ano-1, n = 5). A variação intranual da produção de raízes finas foi influenciada pela sazonalidade da precipitaçã