A Jewel in Our Midst: a photo essay of the Connecticut River

Its unique tidal marshes, ecology, geology, scenic areas, and fascinating history make the Connecticut River a treasure to residents and visitors alike. It is one of the 1,713 “Wetlands of International Importance” designated throughout the world by the International Ramsar Convention. This photo essay also describes the education efforts underway by Connecticut Sea Grant and its partners to assist educators with resource materials.

Line Integrals and Work in Thermodynamics

This paper considers line integration in the context of elementary thermodynamics, ending with irreversible to reversible work integrations (employing, in part, L'Hopital's rule).

Asset Pricing with Heterogeneous Agents, Incomplete Markets and Trading Constraints

The consumption capital asset pricing model is the standard economic model used to capture stock market behavior. However, empirical tests have pointed out to its inability to account quantitatively for the high average rate of return and volatility of stocks over time for plausible parameter values. Recent research has suggested that the consumption of stockholders is more strongly correlated with the performance of the stock market than the consumption of non-stockholders. We model two types of agents, non-stockholders with standard preferences and stock holders with preferences that incorporate elements of the prospect theory developed by Kahneman and Tversky (1979). In addition to consumption, stockholders consider fluctuations in their financial wealth explicitly when making decisions. Data from the Panel Study of Income Dynamics are used to calibrate the labor income processes of the two types of agents. Each agent faces idiosyncratic shocks to his labor income as well as aggregate shocks to the per-share dividend but markets are incomplete and agents cannot hedge consumption risks completely. In addition, consumers face both borrowing and short-sale constraints. Our results show that in equilibrium, agents hold different portfolios. Our model is able to generate a time-varying risk premium of about 5.5% while maintaining a low risk free rate, thus suggesting a plausible explanation for the equity premium puzzle reported by Mehra and Prescott (1985).