Real exchange rate volatility, financial crises and nominal exchange regimes

This paper examines the sources of real exchange rate (RER) volatility in eighty countries around the world, during the period 1970 to 2011. Our main goal is to explore the role of nominal exchange rate regimes and financial crises in explaining the RER volatility. To that end, we employ two complementary procedures that consist in detecting structural breaks in the RER series and decomposing volatility into its permanent and transitory components. The results confirm that exchange rate volatility does increase with the global financial crises and detect the existence of an inverse relationship between the degree of flexibility in the exchange rate regime and RER volatility using a de facto exchange rate classification.

Exceptional river gorge formation from unexceptional floods

An understanding of rates and mechanisms of incision and knickpoint retreat in bedrock rivers is fundamental to perceptions of landscape response to external drivers, yet only sparse field data are available. Here we present eye witness accounts and quantitative surveys of rapid, amphitheatre-headed gorge formation in unweathered granite from the overtopping of a rock-cut dam spillway by small-moderate floods (B100–1,500m3 s�1). The amount of erosion demonstrates no relationship with flood magnitude or bedload availability. Instead, structural pattern of the bedrock through faults and joints appears to be the primary control on landscape change. These discontinuities facilitate rapid erosion (4270m headward retreat; B100m incision; and B160m widening over 6 years) principally through fluvial plucking and block topple. The example demonstrates the potential for extremely rapid transient bedrock erosion even when rocks are mechanically strong and flood discharges are moderate. These observations are relevant to perceived models of gorge formation and knickpoint retreat.