Essays on Vietnam’s Financial Reforms: Foreign Exchange Statistics and Evidence of Long-Run Equilibrium

In this paper, we examine exchange rates in Vietnam’s transitional economy. Evidence of long-run equilibrium are established in most cases through a single co-integrating vector among endogenous variables that determine the real exchange rates. This supports relative PPP in which ECT of the system can be combined linearly into a stationary process, reducing deviation from PPP in the long run. Restricted coefficient vectors ß’ = (1, 1, -1) for real exchange rates of currencies in question are not rejected. This empirics of relative PPP adds to found evidences by many researchers, including Flre et al. (1999), Lee (1999), Johnson (1990), Culver and Papell (1999), Cuddington and Liang (2001). Instead of testing for different time series on a common base currency, we use different base currencies (USD, GBP, JPY and EUR). By doing so we want to know the whether theory may posit significant differences against one currency? We have found consensus, given inevitable technical differences, even with smallerdata sample for EUR. Speeds of convergence to PPP and adjustment are faster compared to results from other researches for developed economies, using both observed and bootstrapped HL measures. Perhaps, a better explanation is the adjustment from hyperinflation period, after which the theory indicates that adjusting process actually accelerates. We observe that deviation appears to have been large in early stages of the reform, mostly overvaluation. Over time, its correction took place leading significant deviations to gradually disappear.

Consistent couplings between fields with a gauge freedom and deformations of the master equation

The antibracket in the antifield-BRST formalism is known to define a map Hp × Hq → Hp + q + 1 associating with two equivalence classes of BRST invariant observables of respective ghost number p and q an equivalence class of BRST invariant observables of ghost number p + q + 1. It is shown that this map is trivial in the space of all functionals, i.e. that its image contains only the zeroth class. However, it is generically non-trivial in the space of local functionals. Implications of this result for the problem of consistent interactions among fields with a gauge freedom are then drawn. It is shown that the obstructions to constructing non-trivial such interactions lie precisely in the image of the antibracket map and are accordingly non-existent if one does not insist on locality. However consistent local interactions are severely constrained. The example of the Chern-Simons theory is considered. It is proved that the only consistent, local, Lorentz covariant interactions for the abelian models are exhausted by the non-abelian Chern-Simons extensions. © 1993.