Long-Term Effects of Adding Nutrients to an Oligotrophic Coastal Environment

Management of ecological disturbances requires an understanding of the time scale and dynamics of community responses to disturbance events. To characterize long-term seagrass bed responses to nutrient enrichment, we established six study sites in Florida Bay, USA. In 24 plots (0.25 m2) at each site, we regularly added nitrogen (N) and phosphorus (P) in a factorial design for 7 years. Five of the six sites exhibited strong P limitation. Over the first 2 years, P enrichment increased Thalassia testudinum cover in the three most P-limited sites. After 3 years, Halodule wrightii began to colonize many of the P-addition plots, but the degree of colonization was variable among sites, possibly due to differences in the supply of viable propagules. Thalassia increased its allocation to aboveground tissue in response to P enrichment; Halodule increased in total biomass but did not appear to change its aboveground: belowground tissue allocation. Nutrient enrichment did not cause macroalgal or epiphytic overgrowth of the seagrass. Nitrogen retention in the study plots was variable but relatively low, whereas phosphorus retention was very high, often exceeding 100% of the P added as fertilizer over the course of our experiments. Phosphorus retentions exceeding 100% may have been facilitated by increases in Thalassia aboveground biomass, which promoted the settlement of suspended particulate matter containing phosphorus. Our study demonstrated that lowintensity press disturbance events such as phosphorus enrichment can initiate a slow, ramped successional process that may alter community structure over many years.

Exchange rate overvaluation under hyperinflation: The case of Peru

This dissertation examines the behavior of the exchange rate under two different scenarios. The first one is characterized by, relatively, low inflation or a situation where prices adjust sluggishly. The second is a high inflation economy where prices respond very rapidly even to unanticipated shocks. In the first one, following a monetary expansion, the exchange rate overshoots, i.e. the nominal exchange rate depreciates at a faster pace than the price level. Under high levels of inflation, prices change faster than the exchange rate so the exchange rate undershoots its long run equilibrium value.^ The standard work in this area, Dornbusch (1976), explains the overshooting process in the context of perfect capital mobility and sluggish adjustment in the goods market. A monetary expansion will make the exchange rate increase beyond its long run equilibrium value. This dissertation expands on Dornbusch's model and provides an analysis of the exchange rate under conditions of currency substitution and price flexibility, characteristics of the Peruvian economy during the hyper inflation process that took place at the end of the 1980's. The results of the modified Dornbusch model reveal that, given a monetary expansion, the change in the price level will be larger than the change in the exchange rate if prices react more than proportionally to the monetary shock.^ We will expect this over-reaction in circumstances of high inflation when the velocity of money is increasing very rapidly. Increasing velocity of money, gives rise to a higher relative price variability which in turn contributes to the appearance of new financial (and also non-financial) instruments that report a higher return than the exchange rate, causing people to switch their demand for foreign exchange to this new assets. In the context of currency substitution, economic agents hoard and use foreign exchange as a store of value. The big decline in output originated by hyper inflation induces people to sell this hoarded money to finance current expenses, increasing the supply of foreign exchange in the market. Both, the decrease in demand and the increase in supply reduce the price of foreign exchange i.e. the real exchange rate. The findings mentioned above are tested using Peruvian data for the period January 1985-July 1990, the results of the econometric estimation confirm our findings in the theoretical model. ^