Inventories in developing countries : levels and determinants - a red flag for competitiveness and growth

Raw materials inventories in the manufacturing sector in the 1970s, 1980s, and 1990s were two to five times as high in developing countries as in the United States, despite the fact that in most developing countries real interest rates are at least twice as high. Given the high cost of capital in most developing countries, these high inventory levels have an enormous impact on the cost of doing business and on productivity and competitiveness. Poor infrastructure and ineffective regulation as well as deficiencies in market development - rather than the interest rates and uncertainty - are the main determinants of these differences. Cross-country estimates show that a one-standard-deviation improvement in infrastructure reduces raw materials inventories by 27-47 percent. Poorly functioning markets, as measured by the ratio of transfers and subsidies to GDP, are also an important factor, with a one-standard-deviation improvement leading to a 19-30 percent reduction in raw materials inventories. The authors show that these reductions in raw materials inventories are not offset by a reduction in finished goods inventories upstream. The policy implications are clear and strong. Improvements in infrastructure (roads, ports, and telecommunications) can help to significantly reduce inventory levels (and thus the cost of doing business), especially when accompanied by effective regulation and the development and deregulation of associated markets.Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,Transport and Trade Logistics,Common Carriers Industry

Just-in-case inventories - a cross-country analysis

The authors find that raw materials inventories in the manufacturing sector in the 1970s and 1980s were two to three times higher in developing countries than in the United States, despite the fact that in most developing countries real interest rates were at least twice as high. Those significantly high levels of inventories are a burden and an obstacle to country competitiveness and need to be addressed. Poor infrastructure and ineffective regulation, as well as deficiencies in market development, rather than the traditional factors used in inventory models (such as interest rates and uncertainty), are the main determinants and explain these differences. Cross-country estimations show that a one standard deviation worsening of infrastructure increases raw materials inventories by 11 percent to 37 percent, and a one standard deviation worsening of markets increases raw materials inventories by 18 percent to 37 percent. These findings are robust across a number of different proxies and specifications, including an industry-level specification that controls for fixed country effects.Banks&Banking Reform,Environmental Economics&Policies,Markets and Market Access,Economic Theory&Research,Labor Policies,Economic Theory&Research,Banks&Banking Reform,Environmental Economics&Policies,Access to Markets,Markets and Market Access

Thermal Duality and Hagedorn Transition from p-adic Strings

We develop the finite temperature theory of p-adic string models. We find that the thermal properties of these non-local field theories can be interpreted either as contributions of standard thermal modes with energies proportional to the temperature, or inverse thermal modes with energies proportional to the inverse of the temperature, leading to a "thermal duality" at leading order (genus one) analogous to the well known T-duality of string theory. The p-adic strings also recover the asymptotic limits (high and low temperature) for arbitrary genus that purely stringy calculations have yielded. We also discuss our findings surrounding the nature of the Hagedorn transition.Comment: 4 pages and 4 figure

An aggregate Laffer curve – a multi-peak case

In the current paper we propose to distinguish between micro and aggregate Laffer functions. We prove that in spite of the fact that a Laffer curve of any representative individual may have one peak point where tax revenue is at its maximum, the aggregate Laffer curve is more likely to have multiple peaks. We show this for the case where there is a high degree of wage distribution inequality along with a backward bending supply curve of labor, which appears to be the case for many Western countries. Since this scenario is typical of many countries, the welfare implications of the multi-peak Laffer curve should be considered by the policy maker

Self Gravitating Fundamental Strings

We study the configuration of a typical highly excited string as one slowly increases the string coupling. The dominant interactions are the long range dilaton and gravitational attraction. In four spacetime dimensions, the string slowly contracts from its initial (large) size until it approaches the string scale where it forms a black hole. In higher dimensions, the string stays large until the coupling reaches a critical value, and then it rapidly collapses to a black hole. The implications for the recently proposed correspondence principle are discussed.Comment: 20 pages, LaTe

Does the risk of cerebral palsy increase or decrease with increasing gestational age?

BACKGROUND: It is generally accepted that the risk of cerebral palsy decreases with increasing gestational age of live born infants. However, recent studies have shown that cerebral palsy often has prenatal antecedents including congenital malformations, vascular insults and maternal infection. Cerebral palsy is therefore better viewed as occurring among fetuses, rather than among infants. We explored the epidemiologic implications of this change in perspective. METHODS: We used recently published data from Shiga Prefecture, Japan and from North-East England to examine the pattern of gestational age-specific rates of cerebral palsy under these alternative perspectives. We first calculated gestational age-specific rates of cerebral palsy as per convention, by dividing the number of cases of cerebral palsy identified among live births within any gestational age category by the number of live births in that gestational age category. Under the alternative formulation, we calculated gestational age-specific rates of cerebral palsy by dividing the number of cases of cerebral palsy identified among live births within any gestational age category by the number of fetuses who were at risk of being born at that gestation and being afflicted with cerebral palsy. RESULTS: Under the conventional formulation, cerebral palsy rates decreased with increasing gestational age from 63.9 per 1,000 live births at <28 weeks gestation to 0.9 per 1,000 live births at 37 or more weeks gestation. When fetuses were viewed as potential candidates for cerebral palsy, cerebral palsy rates increased with increasing gestational age from 0.08 per 1,000 fetuses at risk at <28 weeks gestation to 0.9 per 1,000 fetuses at risk at 37 or more weeks gestation. CONCLUSIONS: The fetuses-at-risk approach is the appropriate epidemiologic formulation for calculating the gestational age-specific rate of cerebral palsy from a causal perspective. It shows that the risk of cerebral palsy increases as gestational duration increases. This compelling view of cerebral palsy risk may help refocus research aimed at understanding and preventing cerebral palsy

Positivity Constraints on Anomalies in Supersymmetric Gauge Theories

The relation between the trace and R-current anomalies in supersymmetric theories implies that the U$(1)_RF^2$, U$(1)_R$ and U$(1)_R^3$ anomalies which are matched in studies of N=1 Seiberg duality satisfy positivity constraints. Some constraints are rigorous and others conjectured as four-dimensional generalizations of the Zamolodchikov $c$-theorem. These constraints are tested in a large number of N=1 supersymmetric gauge theories in the non-Abelian Coulomb phase, and they are satisfied in all renormalizable models with unique anomaly-free R-current, including those with accidental symmetry. Most striking is the fact that the flow of the Euler anomaly coefficient, $a_{UV}-a_{IR}$, is always positive, as conjectured by Cardy.Comment: latex, 36 page