Financial crisis: theory and practice

In the last 50 years, we have had approximately 40 events with characteristics related to financial crisis. The most severe crisis was in 1929, when the financial markets plummet and the US gross domestic product decline in more than 30 percent. Recently some years ago, a new crisis developed in the United States, but instantly caused consequences and effects in the rest of the world. This new economic and financial crisis has increased the interest and motivation for the academic community, professors and researchers, to understand the causes and effects of the crisis, to learn from it. This is the one of the main reasons for the compilation of this book, which begins with a meeting of a group of IAFI researchers from the University of Barcelona, where researchers form Mexico and Spain, explain causes and consequences of the crisis of 2007. For that reason, we believed this set of chapters related to methodologies, applications and theories, would conveniently explained the characteristics and events of the past and future financial crisis This book consists in 3 main sections, the first one called "State of the Art and current situation", the second named "Econometric applications to estimate crisis time periods" , and the third one "Solutions to diminish the effects of the crisis". The first section explains the current point of view of many research papers related to financial crisis, it has 2 chapters. In the first one, it describe and analyzes the models that historically have been used to explain financial crisis, furthermore, it proposes to used alternative methodologies such as Fuzzy Cognitive Maps. On the other hand , Chapter 2 , explains the characteristics and details of the 2007 crisis from the US perspective and its comparison to 1929 crisis, presenting some effects in Mexico and Latin America. The second section presents two econometric applications to estimate possible crisis periods. For this matter, Chapter 3, studies 3 Latin-American countries: Argentina, Brazil and Peru in the 1994 crisis and estimates the multifractal characteristics to identify financial and economic distress. Chapter 4 explains the crisis situations in Argentina (2001), Mexico (1994) and the recent one in the United States (2007) and its effects in other countries through a financial series methodology related to the stock market. The last section shows an alternative to prevent the effects of the crisis. The first chapter explains the financial stability effects through the financial system regulation and some globalization standards. Chapter 6, study the benefits of the Investor activism and a way to protect personal and national wealth to face the financial crisis risks.

Hysteresis in a system driven by either generalized force or displacement variables: martensitic phase transition in single-crystalline Cu-Zn-Al

We report on experiments aimed at comparing the hysteretic response of a Cu-Zn-Al single crystal undergoing a martensitic transition under strain-driven and stress-driven conditions. Strain-driven experiments were performed using a conventional tensile machine while a special device was designed to perform stress-driven experiments. Significant differences in the hysteresis loops were found. The strain-driven curves show reentrant behavior yield point which is not observed in the stress-driven case. The dissipated energy in the stress-driven curves is larger than in the strain-driven ones. Results from recently proposed models qualitatively agree with experiments.

Neutral atoms in ionic lattices: Excited states of KCl:Ag(0)

The optical-absorption spectrum of a cationic Ag0 atom in a KCl crystal has been studied theoretically by means of a series of cluster models of increasing size. Excitation energies have been determined by means of a multiconfigurational self-consistent field procedure followed by a second-order perturbation correlation treatment. Moreover results obtained within the density-functional framework are also reported. The calculations confirm the assignment of bands I and IV to transitions of the Ag-5s electron into delocalized states with mainly K-4s,4p character. Bands II and III have been assigned to internal transitions on the Ag atom, which correspond to the atomic Ag-4d to Ag-5s transition. We also determine the lowest charge transfer (CT) excitation energy and confirm the assignment of band VI to such a transition. The study of the variation of the CT excitation energy with the Ag-Cl distance R gives additional support to a large displacement of the Cl ions due to the presence of the Ag0 impurity. Moreover, from the present results, it is predicted that on passing to NaCl:Ag0 the CT onset would be out of the optical range while the 5s-5p transition would undergo a redshift of 0.3 eV. These conclusions, which underline the different character of involved orbitals, are consistent with experimental findings. The existence of a CT transition in the optical range for an atom inside an ionic host is explained by a simple model, which also accounts for the differences with the more common 3d systems. The present study sheds also some light on the R dependence of the s2-sp transitions due to s2 ions like Tl+.

Rigorous characterization of oxygen vacancies in ionic oxides

Charged and neutral oxygen vacancies in the bulk and on perfect and defective surfaces of MgO are characterized as quantum-mechanical subsystems chemically bonded to the host lattice and containing most of the charge left by the removed oxygens. Attractors of the electron density appear inside the vacancy, a necessary condition for the existence of a subsystem according to the atoms in molecules theory. The analysis of the electron localization function also shows attractors at the vacancy sites, which are associated to a localization basin shared with the valence domain of the nearest oxygens. This polyatomic superanion exhibits chemical trends guided by the formal charge and the coordination of the vacancy. The topological approach is shown to be essential to understand and predict the nature and chemical reactivity of these objects. There is not a vacancy but a coreless pseudoanion that behaves as an activated host oxygen.

Ground- and excited-state properties of M-center oxygen vacancy aggregates in the bulk and the surface of MgO

Aggregates of oxygen vacancies (F centers) represent a particular form of point defects in ionic crystals. In this study we have considered the combination of two oxygen vacancies, the M center, in the bulk and on the surface of MgO by means of cluster model calculations. Both neutral and charged forms of the defect M and M+ have been taken into account. The ground state of the M center is characterized by the presence of two doubly occupied impurity levels in the gap of the material; in M+ centers the highest level is singly occupied. For the ground-state properties we used a gradient corrected density functional theory approach. The dipole-allowed singlet-to-singlet and doublet-to-doublet electronic transitions have been determined by means of explicitly correlated multireference second-order perturbation theory calculations. These have been compared with optical transitions determined with the time-dependent density functional theory formalism. The results show that bulk M and M+ centers give rise to intense absorptions at about 4.4 and 4.0 eV, respectively. Another less intense transition at 1.3 eV has also been found for the M+ center. On the surface the transitions occur at 1.6 eV (M+) and 2 eV (M). The results are compared with recently reported electron energy loss spectroscopy spectra on MgO thin films.

Ab initio study of the charge order and Zener polaron formation in half-doped manganites

The character of the electronic ground state of La0.5Ca0.5MnO3 has been addressed with quantum chemical calculations on large embedded clusters. We find a charge ordered state for the crystal structure reported by Radaelli et al. [Phys. Rev. B 55, 3015 (1997)] and Zener polaron formation in the crystal structure with equivalent Mn sites proposed by Daoud-Aladine et al. [Phys. Rev. Lett. 89, 097205 (2002)]. Important O to Mn charge transfer effects are observed for the Zener polaron.

Coherent tunnelling in Cu2+- and Ag2+-doped MgO and CaO: Cu2+ explored through ab initio calculations

The observation of coherent tunnelling in Cu2+ - and Ag2+ -doped MgO and CaO:Cu2+ was a crucial discovery in the realm of the Jahn-Teller (JT) effect. The main reasons favoring this dynamic behavior are now clarified through ab initio calculations on Cu2+ - and Ag2+ -doped cubic oxides. Small JT distortions and an unexpected low anharmonicity of the eg JT mode are behind energy barriers smaller than 25 cm-1 derived through CASPT2 calculations for Cu2+ - and Ag2+ -doped MgO and CaO:Cu2+ . The low anharmonicity is shown to come from a strong vibrational coupling of MO610- units (M=Cu,Ag) to the host lattice. The average distance between the d9 impurity and ligands is found to vary significantly on passing from MgO to SrO following to a good extent the lattice parameter.

Ionic-covalent transition in titanium oxides

The nature of the chemical bond in three titanium oxides of different crystal structure and different formal oxidation state has been studied by means of the ab initio cluster-model approach. The covalent and ionic contributions to the bond have been measured from different theoretical techniques. All the analysis is consistent with an increasing of covalence in the TiO, Ti2O3, and TiO2 series as expected from chemical intuition. Moreover, the use of the ab initio cluster-model approach combined with different theoretical techniques has permitted us to quantify the degree of ionic character, showing that while TiO can approximately be described as an ionic compound, TiO2 is better viewed as a rather covalent oxide.