Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices

In this paper, we estimate ERPT into imported input prices and export prices using disaggregated quarterly trade data for Switzerland over 2004–2011. We find evidence for high pass-through rates into imported input prices. This demonstrates the effectiveness of natural hedging. On the export side, ERPT exhibits substantial sectoral heterogeneity and changes in imported input costs are not transmitted to foreign consumers in most cases. This suggests the use of cheaper imported inputs to offset adverse effects of currency appreciation on export profit margins.

Bilateral exchange rates and jobs

We study the labor market effects of realignment in fixed bilateral exchange rates, such as China's peg to the US dollar. We employ the open economy model by de Melo and Robinson to identify the core parameters of the real, trade side of the economy driving the unemployment effects of bilateral exchange rate realignment. A small open economy version of the model is explored analytically and a large multicountry version numerically. Analytics in the small open economy model show that unemployment effects of adjusting of a bilateral peg hinge on the fraction exported to and imported from the trading partner. A larger fraction exported to and a smaller fraction imported from the trading partner make it more likely that revaluation of a trading partner's currency has beneficial effects. Numerics in the large economy model show that Chinese revaluation can generate both positive and negative unemployment effects depending upon underlying parameter values. Adverse unemployment effects can go along with an improving trade balance.

Disparate Wages in a Globalized World

This study uses wage data from the UBS Prices and Earnings survey to highlight Disparate Wages in a Globalized World from di↵erent perspectives. This wage data is characterised by remarkable consistency over the last 40 years, as well as unusual global comparability. In the first chapter we analyse the convergence hypothesis for purchasing power adjusted wages across the world for 1970 to 2009. The results provide solid evidence for the hypotheses of absolute and conditional convergence in real wages, with the key driver being faster overall growing wage levels in lower wage countries compared to higher wage countries. At the same time, the highest skilled professions have experienced the highest wage growth, while low skilled workers’ wages have lagged, thus no convergence in this sense is found between skill groups. In the second chapter we examine deviations in international wages from Factor Price Equalisation theory (FPE). Following an approach analogous to Engel (1993) we find that deviations from FPE are more likely driven by the higher variability of wages between countries than by the variability of di↵erent wages within countries. With regard to the traditional analysis of the real exchange rate and the Balassa-Samuelson assumptions our analysis points to a larger impact on the real exchange rate likely stemming from the movements in the real exchange rate of tradables, and only to a lesser extent from the lack of equalisation of wages within countries. In the third chapter our results show that India’s economic and trade liberalisation, starting in the early 1990s, had very di↵erential impacts on skill premia, both over time and over skill levels. The most striking result is the large increase in wage inequality of high-skilled versus low-skilled professions. Both the synthetic control group method and the di↵erence-in-di↵erences (DID) approach suggest that a significant part of this increase in wage inequality can be attributed to India’s liberalisation.

Spatial and functional relationships between air conduits and blood capillaries in the pulmonary gas exchange tissue of adult and developing chickens

The documented data regarding the three-dimensional structure of the air capillaries (ACs), the ultimate sites of gas exchange in the avian lung is contradictory. Further, the mode of gas exchange, described as cross-current has not been clearly elucidated. We studied the temporal and spatial arrangement of the terminal air conduits of the chicken lung and their relationship with the blood capillaries (BCs) in embryos as well as the definitive architecture in adults. Several visualization techniques that included corrosion casting, light microscopy as well as scanning and transmission electron microscopy were used. Two to six infundibulae extend from each atrium and give rise to numerous ACs that spread centrifugally. Majority of the ACs are tubular structures that give off branches, which anastomose with their neighboring cognates. Some ACs have globular shapes and a few are blind-ending tapering tubes. During inauguration, the luminal aspects of the ACs are characterized by numerous microvillus-like microplicae, which are formed during the complex processes of cell attenuation and canalization of the ACs. The parabronchial exchange BCs, initially inaugurated as disorganized meshworks, are reoriented via pillar formation to lie predominantly orthogonal to the long axes of the ACs. The remodeling of the retiform meshworks by intussusceptive angiogenesis essentially accomplishes a cross-current system at the gas exchange interface in the adults, where BCs form ring-like patterns around the ACs, thus establishing a cross-current system. Our findings clarify the mode of gas exchange in the parabronchial mantle and illuminate the basis for the functional efficiency of the avian lung.

Three-Dimensional Structure and Disposition of the Air Conducting and Gas Exchange Conduits of the Avian Lung: The Domestic Duck (Cairina moschata)

The anatomy of the domestic duck lung was studied macroscopically, by casting and by light, transmission, and scanning electron microscopy. The lung had four categories of secondary bronchi (SB), namely, the medioventral (MV, 4-5), laterodorsal (LD, 6-10), lateroventral (LV, 2-4), and posterior secondary bronchi (PO, 36-44). The neopulmonic parabronchi formed an intricate feltwork on the ventral third of the lung and inosculated those from the other SB. The lung parenchyma was organized into cylindrical parabronchi separated by thin septa containing blood vessels. Atria were shallow and well-fortified by epithelial ridges reinforced by smooth muscle bundles and gave rise to 2-6 elongate infundibulae. Air capillaries arose either directly from the atria or from infundibulae and were tubular or globular in shape with thin interconnecting branches. The newly described spatial disposition of the conducting air conduits closely resembles that of the chicken. This remarkable similarity between the categories, numbers, and 3D arrangement of the SB in the duck and chicken points to a convergence in function-oriented design. To illuminate airflow dynamics in the avian lung, precise directions of airflow in the various categories of SB and parabronchi need to be characterized.