Currency Baskets and Real Effective Exchange Rates

With the major currencies continuously moving (if not floating freely) against each other, a country that does not choose to float must decide what to peg to. If it pegs to the SDR it floats against all currencies. Thus in the system begun in the early 1970s the very concept of a fixed exchange rate is unclear. In this situation many countries have chosen to peg their currencies to a basket, or a weighted average of other currencies. The analysis of this paper is focused on fluctuations in real exchange rates. We first show that pegging to a currency basket is the same as holding constant a real effective exchange rate that uses a specific set of weights depending on a chosen policy target. We also show the weights that correspond to particular targets for stabilization policy. Next we discuss several problems involved in choosing and computing optimal weights or the equivalent real effective rate. It is shown that the index formula itself aggregates countries that are in a currency area, so that monetary authorities should use weights based on trade with countries rather than on currency denomination of trade. Finally, we report on an initial empirical investigation of pegging practices in Greece, Portugal, and Spain. These are all countries that have moved to basket pegs, with geographically diversified trade. We present initial estimates of the implicit weights in their baskets, and find that all three countries experienced real appreciation relative to the basket during the l970s.

Quantum Effective Action in Spacetimes with Branes and Boundaries

We construct quantum effective action in spacetime with branes/boundaries. This construction is based on the reduction of the underlying Neumann type boundary value problem for the propagator of the theory to that of the much more manageable Dirichlet problem. In its turn, this reduction follows from the recently suggested Neumann-Dirichlet duality which we extend beyond the tree level approximation. In the one-loop approximation this duality suggests that the functional determinant of the differential operator subject to Neumann boundary conditions in the bulk factorizes into the product of its Dirichlet counterpart and the functional determinant of a special operator on the brane -- the inverse of the brane-to-brane propagator. As a byproduct of this relation we suggest a new method for surface terms of the heat kernel expansion. This method allows one to circumvent well-known difficulties in heat kernel theory on manifolds with boundaries for a wide class of generalized Neumann boundary conditions. In particular, we easily recover several lowest order surface terms in the case of Robin and oblique boundary conditions. We briefly discuss multi-loop applications of the suggested Dirichlet reduction and the prospects of constructing the universal background field method for systems with branes/boundaries, analogous to the Schwinger-DeWitt technique.Comment: LaTeX, 25 pages, final version, to appear in Phys. Rev.

Higher Spin Gravitational Couplings and the Yang--Mills Detour Complex

Gravitational interactions of higher spin fields are generically plagued by inconsistencies. We present a simple framework that couples higher spins to a broad class of gravitational backgrounds (including Ricci flat and Einstein) consistently at the classical level. The model is the simplest example of a Yang--Mills detour complex, which recently has been applied in the mathematical setting of conformal geometry. An analysis of asymptotic scattering states about the trivial field theory vacuum in the simplest version of the theory yields a rich spectrum marred by negative norm excitations. The result is a theory of a physical massless graviton, scalar field, and massive vector along with a degenerate pair of zero norm photon excitations. Coherent states of the unstable sector of the model do have positive norms, but their evolution is no longer unitary and their amplitudes grow with time. The model is of considerable interest for braneworld scenarios and ghost condensation models, and invariant theory.Comment: 19 pages LaTe

Spectral Action for Robertson-Walker metrics

We use the Euler-Maclaurin formula and the Feynman-Kac formula to extend our previous method of computation of the spectral action based on the Poisson summation formula. We show how to compute directly the spectral action for the general case of Robertson-Walker metrics. We check the terms of the expansion up to a_6 against the known universal formulas of Gilkey and compute the expansion up to a_{10} using our direct method

Magnetic Braking and Viscous Damping of Differential Rotation in Cylindrical Stars

Differential rotation in stars generates toroidal magnetic fields whenever an initial seed poloidal field is present. The resulting magnetic stresses, along with viscosity, drive the star toward uniform rotation. This magnetic braking has important dynamical consequences in many astrophysical contexts. For example, merging binary neutron stars can form "hypermassive" remnants supported against collapse by differential rotation. The removal of this support by magnetic braking induces radial fluid motion, which can lead to delayed collapse of the remnant to a black hole. We explore the effects of magnetic braking and viscosity on the structure of a differentially rotating, compressible star, generalizing our earlier calculations for incompressible configurations. The star is idealized as a differentially rotating, infinite cylinder supported initially by a polytropic equation of state. The gas is assumed to be infinitely conducting and our calculations are performed in Newtonian gravitation. Though highly idealized, our model allows for the incorporation of magnetic fields, viscosity, compressibility, and shocks with minimal computational resources in a 1+1 dimensional Lagrangian MHD code. Our evolution calculations show that magnetic braking can lead to significant structural changes in a star, including quasistatic contraction of the core and ejection of matter in the outermost regions to form a wind or an ambient disk. These calculations serve as a prelude and a guide to more realistic MHD simulations in full 3+1 general relativity.Comment: 20 pages, 19 figures, 3 tables, AASTeX, accepted by Ap

Further functional determinants

Functional determinants for the scalar Laplacian on spherical caps and slices, flat balls, shells and generalised cylinders are evaluated in two, three and four dimensions using conformal techniques. Both Dirichlet and Robin boundary conditions are allowed for. Some effects of non-smooth boundaries are discussed; in particular the 3-hemiball and the 3-hemishell are considered. The edge and vertex contributions to the $C_{3/2}$ coefficient are examined.Comment: 25 p,JyTex,5 figs. on request

Effective action and heat kernel in a toy model of brane-induced gravity

We apply a recently suggested technique of the Neumann-Dirichlet reduction to a toy model of brane-induced gravity for the calculation of its quantum one-loop effective action. This model is represented by a massive scalar field in the $(d+1)$-dimensional flat bulk supplied with the $d$-dimensional kinetic term localized on a flat brane and mimicking the brane Einstein term of the Dvali-Gabadadze-Porrati (DGP) model. We obtain the inverse mass expansion of the effective action and its ultraviolet divergences which turn out to be non-vanishing for both even and odd spacetime dimensionality $d$. For the massless case, which corresponds to a limit of the toy DGP model, we obtain the Coleman-Weinberg type effective potential of the system. We also obtain the proper time expansion of the heat kernel in this model associated with the generalized Neumann boundary conditions containing second order tangential derivatives. We show that in addition to the usual integer and half-integer powers of the proper time this expansion exhibits, depending on the dimension $d$, either logarithmic terms or powers multiple of one quarter. This property is considered in the context of strong ellipticity of the boundary value problem, which can be violated when the Euclidean action of the theory is not positive definite.Comment: LaTeX, 20 pages, new references added, typos correcte

Phase transition in a static granular system

We find that a column of glass beads exhibits a well-defined transition between two phases that differ in their resistance to shear. Pulses of fluidization are used to prepare static states with well-defined particle volume fractions $\phi$ in the range 0.57-0.63. The resistance to shear is determined by slowly inserting a rod into the column of beads. The transition occurs at $\phi=0.60$ for a range of speeds of the rod.Comment: 4 pages, 4 figures. The paper is significantly extended, including new dat