The Export Base Model with a Supply-Side Stimulus to the Export Sector

Paper delivered at the Western Regional Science Association Annual Conference, Sedona, Arizona, February, 2010.

Measuring the Euro-Dollar Permanent Equilibrium Exchange Rate using the Unobserved Components Model

This paper employs an unobserved component model that incorporates a set of economic fundamentals to obtain the Euro-Dollar permanent equilibrium exchange rates (PEER) for the period 1975Q1 to 2008Q4. The results show that for most of the sample period, the Euro-Dollar exchange rate closely followed the values implied by the PEER. The only significant deviations from the PEER occurred in the years immediately before and after the introduction of the single European currency. The forecasting exercise shows that incorporating economic fundamentals provides a better long-run exchange rate forecasting performance than a random walk process.

The evolution of inbred social systems in spiders and other organisms: from short-term gains to long-term evolutionary dead-ends?

The question of why some social systems have evolved close inbreeding is particularly intriguing given expected short- and long-term negative effects of this breeding system. Using social spiders as a case study, we quantitatively show that the potential costs of avoiding inbreeding through dispersal and solitary living could have outweighed the costs of inbreeding depression in the origin of inbred spider sociality. We further review the evidence that despite being favored in the short term, inbred spider sociality may constitute in the long run an evolutionary dead end. We also review other cases, such as the naked mole rats and some bark and ambrosia beetles, mites, psocids, thrips, parasitic ants, and termites, in which inbreeding and sociality are associated and the evidence for and against this breeding system being, in general, an evolutionary dead end.

Behavioral aspects of investment fund's markets: are good managers lucky or skilled?

It is generally accepted that financial markets are efficient in the long run a lthough there may be some deviations in the short run. It is also accepted that a good portfolio manager is the one who beats the market persistently along time, this type of manager could not exist if markets were perfectly efficient According to this in a pure efficient market we should find that managers know that they can not beat the market so they would undertake only pure passive management strategies. Assuming a certain degree of inefficiency in the short run, a market may show some managers who tr y to beat the market by undertaking active strategies. From Fama’s efficient markets theory we can state that these active managers may beat the market occasionally although they will not be able to enhance significantly their performance in the long run. On the other hand, in an inefficient market it would be expected to find a higher level of activity related with the higher probability of beating the market. In this paper we follow two objectives: first, we set a basis to analyse the level of efficiency in an asset invest- ment funds market by measuring performance, strategies activity and it’s persistence for a certain group of funds during the period of study. Second, we analyse individual performance persistence in order to determine the existence of skilled managers. The CAPM model is taken as theoretical background and the use of the Sharpe’s ratio as a suitable performance measure in a limited information environment leads to a group performance measurement proposal. The empiri- cal study takes quarterly data from 1999-2007 period, for the whole population of the Spanish asset investment funds market, provided by the CNMV (Comisión Nacional del Mercado de Valores). This period of study has been chosen to ensure a wide enough range of efficient market observation so it would allow us to set a proper basis to compare with the following period. As a result we develop a model that allows us to measure efficiency in a given asset mutual funds market, based on the level of strategy’s activity undertaken by managers. We also observe persistence in individual performance for a certain group of funds

Field Evaluation of Elliptical Fiber Reinforced Polymer Dowel Performance, June 2005

Fiber reinforced polymer (FRP) composite materials are making an entry into the construction market in both buildings and pavements. The application to pavements so far has come in the form of joint reinforcement (dowels and tie bars). FRP resistance to salt corrosion in dowels has made it an alternative to standard epoxy-coated steel dowels for pavements. Iowa State University has completed a large amount of laboratory research to determine the diameter, spacing, and durability of FRP dowels. This report documents the performance of elliptical FRP dowels installed in a field situation. Ten joints were monitored in three consecutive test sections, for each of three dowel spacings (10, 12, and 15 inches) including one instrumented dowel in each test section. The modulus of dowel bar support was determined using falling weight deflectometer (FWD) testing and a loaded crawl truck. FWD testing was also used to determine load transfer efficiency across the joint. The long-term performance and durability of the concrete was also evaluated by monitoring faulting and joint opening measurements and performing visual distress surveys at each joint. This report also contains similar information for standard round, medium elliptical, and heavy elliptical steel dowels in a portion of the same highway. In addition, this report provides a summary of theoretical analysis used to evaluate joint differential deflection for the dowels.

Civil conflict and human capital accumulation: The long-term effects of political violence in Perú

This paper provides empirical evidence of the persistent effect of exposure to political violence on humancapital accumulation. I exploit the variation in conflict location and birth cohorts to identify the longandshort-term effects of the civil war on educational attainment. Conditional on being exposed toviolence, the average person accumulates 0.31 less years of education as an adult. In the short-term,the effects are stronger than in the long-run; these results hold when comparing children within thesame household. Further, exposure to violence during early childhood leads to permanent losses. I alsoexplore the potential causal mechanisms.

Money doctors

We present a new model of money management, in which investors delegate portfolio management to professionals based not only on performance, but also on trust. Trust in the manager reduces an investor's perception of the riskiness of a given investment, and allows managers to charge higher fees to investors who trust them more. Money managers compete for investor funds by setting their fees, but because of trust the fees do not fall to costs. In the model, 1) managers consistently underperform the market net of fees but investors still prefer to delegate money management to taking risk on their own, 2) fees involve sharing of expected returns between managers and investors, with higher fees in riskier products, 3) managers pander to investors when investors exhibit biases in their beliefs, and do not correct misperceptions, and 4) despite long run benefits from better performance, the profits from pandering to trusting investors discourage managers from pursuing contrarian strategies relative to the case with no trust. We show how trust-mediated money management renders arbitrage less effective, and may help destabilize financial markets.

Addressing the natural resource curse: An illustration from Nigeria

Some natural resources oil and minerals in particular exert a negative andnonlinear impact on growth via their deleterious impact on institutionalquality. We show this result to be very robust. The Nigerian experienceprovides telling confirmation of this aspect of natural resources. Wasteand corruption from oil rather than Dutch disease has been responsible forits poor long run economic performance. We propose a solution for addressingthis resource curse which involves directly distributing the oil revenuesto the public. Even with all the difficulties of corruption and inefficiencythat will no doubt plague its actual implementation, our proposal will, atthe least, be vastly superior to the status quo. At best, however, it couldfundamentally improve the quality of public institutions and, as a result,transform economics and politics in Nigeria.

Tax reforms and inequality: theoretical and empirical implications

In this paper we examine the effect of tax policy on the relationship between inequality and growth in a two-sector non-scale model. With non-scale models, the longrun equilibrium growth rate is determined by technological parameters and it is independent of macroeconomic policy instruments. However, this fact does not imply that fiscal policy is unimportant for long-run economic performance. It indeed has important effects on the different levels of key economic variables such as per capita stock of capital and output. Hence, although the economy grows at the same rate across steady states, the bases for economic growth may be different.The model has three essential features. First, we explicitly model skill accumulation, second, we introduce government finance into the production function, and we introduce an income tax to mirror the fiscal events of the 1980¿s and 1990¿s in the US. The fact that the non-scale model is associated with higher order dynamics enables it to replicate the distinctly non-linear nature of inequality in the US with relative ease. The results derived in this paper attract attention to the fact that the non-scale growth model does not only fit the US data well for the long-run (Jones, 1995b) but also that it possesses unique abilities in explaining short term fluctuations of the economy. It is shown that during transition the response of the relative simulated wage to changes in the tax code is rather non-monotonic, quite in accordance to the US inequality pattern in the 1980¿s and early 1990¿s.More specifically, we have analyzed in detail the dynamics following the simulation of an isolated tax decrease and an isolated tax increase. So, after a tax decrease the skill premium follows a lower trajectory than the one it would follow without a tax decrease. Hence we are able to reduce inequality for several periods after the fiscal shock. On the contrary, following a tax increase, the evolution of the skill premium remains above the trajectory carried on by the skill premium under a situation with no tax increase. Consequently, a tax increase would imply a higher level of inequality in the economy

Tax reforms and inequality: theoretical and empirical implications

In this paper we examine the effect of tax policy on the relationship between inequality and growth in a two-sector non-scale model. With non-scale models, the longrun equilibrium growth rate is determined by technological parameters and it is independent of macroeconomic policy instruments. However, this fact does not imply that fiscal policy is unimportant for long-run economic performance. It indeed has important effects on the different levels of key economic variables such as per capita stock of capital and output. Hence, although the economy grows at the same rate across steady states, the bases for economic growth may be different.The model has three essential features. First, we explicitly model skill accumulation, second, we introduce government finance into the production function, and we introduce an income tax to mirror the fiscal events of the 1980¿s and 1990¿s in the US. The fact that the non-scale model is associated with higher order dynamics enables it to replicate the distinctly non-linear nature of inequality in the US with relative ease. The results derived in this paper attract attention to the fact that the non-scale growth model does not only fit the US data well for the long-run (Jones, 1995b) but also that it possesses unique abilities in explaining short term fluctuations of the economy. It is shown that during transition the response of the relative simulated wage to changes in the tax code is rather non-monotonic, quite in accordance to the US inequality pattern in the 1980¿s and early 1990¿s.More specifically, we have analyzed in detail the dynamics following the simulation of an isolated tax decrease and an isolated tax increase. So, after a tax decrease the skill premium follows a lower trajectory than the one it would follow without a tax decrease. Hence we are able to reduce inequality for several periods after the fiscal shock. On the contrary, following a tax increase, the evolution of the skill premium remains above the trajectory carried on by the skill premium under a situation with no tax increase. Consequently, a tax increase would imply a higher level of inequality in the economy

Laboratory Performance Evaluation of CIR-Emulsion and it Comparison Against CIR-Form Test Result from Phase II, Final Report TR-578 Phase III, December 2009

Currently, no standard mix design procedure is available for CIR-emulsion in Iowa. The CIR-foam mix design process developed during the previous phase is applied for CIR-emulsion mixtures with varying emulsified asphalt contents. Dynamic modulus test, dynamic creep test, static creep test and raveling test were conducted to evaluate the short- and long-term performance of CIR-emulsion mixtures at various testing temperatures and loading conditions. A potential benefit of this research is a better understanding of CIR-emulsion material properties in comparison with those of CIR-foam material that would allow for the selection of the most appropriate CIR technology and the type and amount of the optimum stabilization material. Dynamic modulus, flow number and flow time of CIR-emulsion mixtures using CSS-h were generally higher than those of HFMS-2p. Flow number and flow time of CIR-emulsion using RAP materials from Story County was higher than those from Clayton County. Flow number and flow time of CIR-emulsion with 0.5% emulsified asphalt was higher than CIR-emulsion with 1.0% or 1.5%. Raveling loss of CIR-emulsion with 1.5% emulsified was significantly less than those with 0.5% and 1.0%. Test results in terms of dynamic modulus, flow number, flow time and raveling loss of CIR-foam mixtures are generally better than those of CIR-emulsion mixtures. Given the limited RAP sources used for this study, it is recommended that the CIR-emulsion mix design procedure should be validated against several RAP sources and emulsion types.

Performance Evaluation Of Iowa Bridge Decks Constructed With Epoxy-Coated Reinforcing Bars, RB06-011, 2011

Epoxy coatings have been used on the embedded reinforcing bars of bridge decks since the mid-1970s to mitigate deterioration caused by chloride-induced corrosion. The use of chloride-based deicers became common in the early 1960s and caused corrosion of conventional uncoated bars in bridge decks within 5 to 10 years of commencement of deicer applications. In response to this rapid deterioration, the National Bureau of Standards researched coatings to protect the reinforcement (National Bureau of Standards, 1975), resulting in the development of epoxy-coated reinforcing bars, which were used in bridge decks beginning in 1973. While corrosion-related deterioration has been prevalent on bridge decks with uncoated reinforcing bars in northern climates where the use of deicing salts is common, bridge decks constructed after 1973 with epoxy-coated reinforcing have shown good corrosion resistance with only limited exceptions. On the whole, previous laboratory and field studies regarding the performance of epoxy-coated reinforcing bars are very promising; however, some laboratory and field studies have yielded differing results. In recent years, maintenance personnel for the Iowa Department of Transportation (Iowa DOT) have reportedly performed patch repairs to some bridge decks reinforced with epoxy-coated bars. At one such bridge, the southbound US 65 bridge (Bridge No. 7788.5L065) over the Union Pacific Railroad near Bondurant in Polk County, Iowa, deck repairs were performed by Iowa DOT maintenance personnel in the Spring of 2010, based on our communications regarding this topic with Mr. Gordon Port of the Iowa DOT. These repairs were observed by engineers from the Iowa DOT Office of Bridges and Structures, who reported that significant corrosion was found at a number of epoxy-coated reinforcing bars uncovered during this patch work. These repairs were reportedly performed at spalls and delaminated areas corresponding to cracks over transverse reinforcing bars, and involved careful removal of the concrete from over the bars. Figures 1 through 4 contain photographs provided by Iowa DOT personnel showing the removal process (Figure 1), the conditions encountered (Figures 2 and 3), and close-up views of the corroded reinforcing (Figure 4). As a result of these observations, the Iowa Department of Transportation has requested this study to gain further understanding of the long-term performance of bridge decks reinforced with epoxy-coated bars. The two main objectives of this study are to determine the long-term effectiveness of the epoxy coatings and to determine the potential causes for the deterioration at locations where corrosion has occurred. Wiss, Janney, Elstner Associates, Inc. (WJE) and the Iowa DOT identified eight different bridge decks across Iowa for this study that were constructed using epoxy-coated reinforcing bars. A field investigation consisting of visual inspections, a delamination survey, a concrete cover survey, electrical testing for susceptibility to corrosion, and concrete sampling was conducted within a survey area deemed to be representative of the condition of each bridge deck. Laboratory testing, including chloride ion content testing, characterization of the extracted bars, petrographic examination of the concrete, and carbonation testing, was conducted on the core samples taken from each bridge deck.

Optimizing Pavement Base, Subbase, and Subgrade Layers for Cost and Performance of Local Roads, TR-640

This report is one of two products for this project with the other being a design guide. This report describes test results and comparative analysis from 16 different portland cement concrete (PCC) pavement sites on local city and county roads in Iowa. At each site the surface conditions of the pavement (i.e., crack survey) and foundation layer strength, stiffness, and hydraulic conductivity properties were documented. The field test results were used to calculate in situ parameters used in pavement design per SUDAS and AASHTO (1993) design methodologies. Overall, the results of this study demonstrate how in situ and lab testing can be used to assess the support conditions and design values for pavement foundation layers and how the measurements compare to the assumed design values. The measurements show that in Iowa, a wide range of pavement conditions and foundation layer support values exist. The calculated design input values for the test sites (modulus of subgrade reaction, coefficient of drainage, and loss of support) were found to be different than typically assumed. This finding was true for the full range of materials tested. The findings of this study support the recommendation to incorporate field testing as part of the process to field verify pavement design values and to consider the foundation as a design element in the pavement system. Recommendations are provided in the form of a simple matrix for alternative foundation treatment options if the existing foundation materials do not meet the design intent. The PCI prediction model developed from multi-variate analysis in this study demonstrated a link between pavement foundation conditions and PCI. The model analysis shows that by measuring properties of the pavement foundation, the engineer will be able to predict long term performance with higher reliability than by considering age alone. This prediction can be used as motivation to then control the engineering properties of the pavement foundation for new or re-constructed PCC pavements to achieve some desired level of performance (i.e., PCI) with time.

Investigation of High Performance Concrete Pavement, MLR-05-01, 2006

The Iowa DOT has been using blended cements in ternary mixes since 1999. Use of these supplementary cementitious materials gives concrete with higher strengths and much lower permeability. Use of these materials has been incorporated for use in High Performance Concrete (HPC) decks to achieve lower permeability and thus long term performance. Since we have been using these materials in paving, it would be informative to determine what concrete pavement properties are enhanced as related to high performance concrete. The air void system was excellent at a spacing factor of 0.0047 in (0.120 mm). AVA spacing factor results are much higher than the hardened air void analysis. Although only 3 samples were tested between the image analysis air content and the RapidAir457, there is pretty good agreement between those test methods. Air void analysis indicates that excessive vibration was not required to place the concrete. Vibration was well within the specification limits with an average of 6683 vpm’s with a standard deviation of 461. Overall ride of the project was very good. The average smoothness for the project was 2.1 in/mile (33.8 mm/km). The International Roughness Index (IRI) was 81 in/mi (1.29 m/km). The compressive strength was 6260 psi (43.2 MPa) at 28 days and 6830 (47.1 MPa) at 56 days. The modulus of rupture by third point loading (MOR-TPL) tested at 28 days was 660 psi (4.55 MPa). The AASHTO T277 rapid chloride permeability results at 28 days using the Virginia cure method correlate fairly well with the 56 and 90 day results with standard curing. The Virginia cure method 28 day results were 2475 coulombs and the standard cure 56 and 90 day test results were 2180 and 2118, respectively.

Air Content and Permeability of PCC Pavements: 1909 to 2006, MLR-05-02, 2007

Portland cement concrete pavements have given excellent service history for Iowa. Many of these pavements placed during the 1920’s and 1930’s are still in service today. Many factors go in to achieve a long term durable concrete pavement. Probably the most important is the durability of the aggregate. Until the 1930’s, pit run gravel was the most predominant aggregate used. Many of these gravels provided long term performance and their durability is dependent upon the carbonate fraction of the gravel. Later, limestone (calcium carbonate) and dolomite (calcium, magnesium carbonate) sources were mined across Iowa. The durability of these carbonate aggregates is largely dependent upon the pore system which can cause freeze thaw problems known as D-cracking, which was a problem with some sources during the 1960’s. Also, some of these carbonate aggregates are also susceptible to deterioration from deicing salts. Geologists have identified the major components that affect the durability of these carbonate aggregates and sources are tested to ensure long term performance in Portland cement concrete. Air entrainment was originally put in concrete to improve scaling resistance. It is well known that air entrainment is required to provide freeze thaw protection in concrete pavements today. In Iowa, air entrainment was not introduced in concrete pavements until 1952. This research investigates properties that made older concrete pavements durable without air entrainment.