Are Currency Crises Low-State Equilibria? An Empirical, Three-Interest-Rate Model

Suppose that the dynamics of the macroeconomy were given by (partly) random fluctuations between two equilibria: "good" and "bad." One would interpret currency crises (or recessions) as a shift from the good equilibrium to the bad. In this paper, the authors specify a dynamic investment-savings-aggregate-supply (IS-AS) model, determine its closed-form solution, and examine numerically its comparative statics. The authors estimate the model via maximum likelihood, using data for Argentina, Canada, and Turkey. Since the data show no support for the multiple-equilibrium explanation of fluctuations, the authors cast doubt on the third-generation models of currency crisis.Uncertainty and monetary policy

Relation between stress heterogeneity and aftershock rate in the rate-and-state model

We estimate the rate of aftershocks triggered by a heterogeneous stress change, using the rate-and-state model of Dieterich [1994].We show that an exponential stress distribution Pt(au) ~exp(-tautau_0) gives an Omori law decay of aftershocks with time ~1/t^p, with an exponent p=1-A sigma_n/tau_0, where A is a parameter of the rate-and-state friction law, and \sigma_n the normal stress. Omori exponent p thus decreases if the stress "heterogeneity" tau_0 decreases. We also invert the stress distribution P(tau) from the seismicity rate R(t), assuming that the stress does not change with time. We apply this method to a synthetic stress map, using the (modified) scale invariant "k^2" slip model [Herrero and Bernard, 1994]. We generate synthetic aftershock catalogs from this stress change.The seismicity rate on the rupture area shows a huge increase at short times, even if the stress decreases on average. Aftershocks are clustered in the regions of low slip, but the spatial distribution is more diffuse than for a simple slip dislocation. Because the stress field is very heterogeneous, there are many patches of positive stress changes everywhere on the fault.This stochastic slip model gives a Gaussian stress distribution, but nevertheless produces an aftershock rate which is very close to Omori's law, with an effective p<=1, which increases slowly with time. We obtain a good estimation of the stress distribution for realistic catalogs, when we constrain the shape of the distribution. However, there are probably other factors which also affect the temporal decay of aftershocks with time. In particular, heterogeneity of A\sigma_n can also modify the parameters p and c of Omori's law. Finally, we show that stress shadows are very difficult to observe in a heterogeneous stress context.Comment: In press in JG

Cooling-rate effects in a model of (ideal?) glass

Using Monte Carlo simulations we study cooling-rate effects in a three-dimensional Ising model with four-spin interaction. During coarsening, this model develops growing energy barriers which at low temperature lead to very slow dynamics. We show that the characteristic zero-temperature length increases very slowly with the inverse cooling rate, similarly to the behaviour of ordinary glasses. For computationally accessible cooling rates the model undergoes an ideal glassy transition, i.e., the glassy transition for very small cooling rate coincides a thermodynamic singularity. We also study cooling of this model with a certain fraction of spins fixed. Due to such heterogeneous crystalization seeds the final state strongly depends on the cooling rate.Only for sufficiently fast cooling rate does the system end up in a glassy state while slow cooling inevitably leads to a crystal phase.Comment: 11 pages, 6 figure

Conventions in the Foreign Exchange Market:Do they really explain Exchange Rate Dynamics?

The present paper provides a new explanation for the dynamics of exchange rates based on conventions that prevail among market participants. The model relies on a two states Markov switching framework: a bull state and a bear state. In the bull state, agents are optimistic and put more weight on positive news about the domestic economy inducing an appreciation of the domestic currency. In the bear state, agents are pessimistic and overweight negative news associated to the domestic economy leading to a depreciation of the domestic currency. Results show that market switches between a bull state and a bear state explain the dynamics of the euro/dollar exchange rate between January 1995 and December 2008. Besides, the model highlights the life-cycle of conventions in the foreign exchange market and provides lessons for public authorities to reduce exchange rate volatility. Eventually, the model offers a solution to the exchange rate disconnection puzzle.Exchange Rate Dynamics, Convention Theory, Imperfect

Reconstruction of interaction rate in Holographic dark energy model with Hubble horizon as the infrared cut-off

This work is the reconstruction of the interaction rate of holographic dark energy whose infrared cut-off scale is set by the Hubble length. We have reconstructed the interaction rate between dark matter and the holographic dark energy for a specific parameterization of the effective equation of state parameter. We have obtained observational constraints on the model parameters using the latest Type Ia Supernova (SNIa), Baryon Acoustic Oscillations (BAO) and Cosmic Microwave Background (CMB) radiation datasets. We have found that for the present model, the interaction rate increases with expansion and remains positive throughout the evolution. For a comprehensive analysis, we have also compared the reconstructed results of the interaction rate with other well-known holographic dark energy models. The nature of the deceleration parameter, the statefinder parameters and the dark energy equation of state parameter have also been studied for the present model. It has been found that the deceleration parameter favors the past decelerated and recent accelerated expansion phase of the universe. It has also been found that the dark energy equation of state parameter shows a phantom nature at the present epoch.Comment: 8 pages, 6 figures, Accepted for publication in IJMP

Rate dependent shear bands in a shear transformation zone model of amorphous solids

We use Shear Transformation Zone (STZ) theory to develop a deformation map for amorphous solids as a function of the imposed shear rate and initial material preparation. The STZ formulation incorporates recent simulation results [Haxton and Liu, PRL 99 195701 (2007)] showing that the steady state effective temperature is rate dependent. The resulting model predicts a wide range of deformation behavior as a function of the initial conditions, including homogeneous deformation, broad shear bands, extremely thin shear bands, and the onset of material failure. In particular, the STZ model predicts homogeneous deformation for shorter quench times and lower strain rates, and inhomogeneous deformation for longer quench times and higher strain rates. The location of the transition between homogeneous and inhomogeneous flow on the deformation map is determined in part by the steady state effective temperature, which is likely material dependent. This model also suggests that material failure occurs due to a runaway feedback between shear heating and the local disorder, and provides an explanation for the thickness of shear bands near the onset of material failure. We find that this model, which resolves dynamics within a sheared material interface, predicts that the stress weakens with strain much more rapidly than a similar model which uses a single state variable to specify internal dynamics on the interface.Comment: 10 pages, 13 figures, corrected typos, added section on rate strengthening vs. rate weakening material

Mathematical Model and Analysis of Transmission Dynamics of Hepatitis B Virus

Hepatitis B is a potentially life-threatening liver infection caused by the hepatitis B virus (HBV). In this paper, the transmission dynamics of hepatitis B is formulated with a mathematical model with considerations of different classes of individuals, namely immunized, susceptible, latent,infected and recovered class. The role of vaccination of new born babies against hepatitis B and the treatment of both latently and actively infected individuals in controlling the spread are factored into the model. The model in this study is based on the standard SEIR model. The disease-free equilibrium state of the model was established and its stability analyzed using the Routh-Hurwitz theorem. The result of the analysis of the stability of the disease-free equilibrium state shows that hepatitis B can totally be eradicated if effort is made to ensure that the sum of the rate of recovery of the latent class, the rate at which latently infected individuals become actively infected and the rate of natural death must have a lower bound.Comment: 9 pages, 1 figur

Jamming transitions in a schematic model of suspension rheology

We study the steady-state response to applied stress in a simple scalar model of sheared colloids. Our model is based on a schematic (F2) model of the glass transition, with a memory term that depends on both stress and shear rate. For suitable parameters, we find transitions from a fluid to a nonergodic, jammed state, showing zero flow rate in an interval of applied stress. Although the jammed state is a glass, we predict that jamming transitions have an analytical structure distinct from that of the conventional mode coupling glass transition. The static jamming transition we discuss is also distinct from hydrodynamic shear thickening.Comment: 7 pages; 3 figures; improved version with added references. Accepted for publication in Europhysics Letter