Path-Dependency, Stocks, Switching Points, Flows: Reflections on Long-term Global Change and Local Opportunities

This paper examines the possibilities for peripheral localities to achieve upward mobility in the world-system by “hooking on” to larger processes of world-system accumulation. In particular, is it possible for economies that are dependent on foreign investment to receive a flow of investments that is high enough to overcome the negative impacts of a high stock of foreign investment, thus enabling them to cross a threshold and achieve upward mobility in the world-system? An analysis of therecent experience of the southern Irish “Celtic Tiger” economy during 1990-2000 indicates that such an upward movement is possible on the basis of massive foreign investment inflows. On closer examination, however, the Irish-type model appears to be highly deficient, because a high proportion of growth is illusionary and also on grounds of social desirability and lack of generalizability.

Efficient computation algorithm for calculating load contributions to line flows and losses

In a deregulated power system, it is usually required to determine the shares of each load and generation in line flows, to permit fair allocation of transmission costs between the interested parties. The paper presents a new method of determining the contributions of each load to line flows and losses. The method is based on power-flow topology and has the advantage of being the least computationally demanding of similar methods.

A method for determining generators’ shares in loads, line flows and losses

This paper presents a new method for calculating the individual generators’ shares in line flows, line losses and loads. The method is described and illustrated on active power flows, but it can be applied in the same way to reactive power flows. Starting from a power flow solution, the line flow matrix is formed. This matrix is used for identifying node types, tracing the power flow from generators downstream to loads, and to determine generators’ participation factors to lines and loads. Neither exhaustive search nor matrix inversion is required. Hence, the method is claimed to be the least computationally demanding amongst all of the similar methods.

International order flows: Explaining equity and exchange rate returns

Macroeconomic models of equity and exchange rate returns perform poorly at high frequencies. The proportion of daily returns that these models explain is essentially zero. Instead of relying on macroeconomic determinants, we model equity price and exchange rate behavior based on a concept from microstructure – order flow. The international order flows are derived from belief changes of different investor groups in a two-country setting. We obtain a structural relationship between equity returns, exchange rate returns and their relationship to home and foreign equity market order flow. To test the model we construct daily aggregate order flow data from 800 million equity trades in the U.S. and France from 1999 to 2003. Almost 60% of the daily returns in the S&P100 index are explained jointly by exchange rate returns and aggregate order flows in both markets. As predicted by the model, daily exchange rate returns and order flow into the French market have significant incremental explanatory power for the daily S&P returns. The model implications are also validated for intraday returns.