Current Account imbalances, thriftiness and the real exchange rate in a growing economy

This paper analyses the theoretical relevance of the dynamical aspects of growth on the discussion about the observed positive correlation between per capita real income and real exchange rates. With this purpose, we develop a simple exogenous growth model where the internal, external and intertemporal equilibrium conditions of a typical macroeconomic model are imposed; this last one through the inclusion of a balanced growth path for the foreign assets accumulation. The main result under this consideration is that the relationship defended by the Balassa-Samuelson hypothesis is no more so straightforward. In our particular approach, the mentioned bilateral relationship depends on a parameter measuring thriftiness in the economy. Therefore, the probability of ending up with a positive relationship between growth and real exchange rates -as the classical economic theory predicts- will be higher when the economy is able to maintain a minimum saving ratio. Moreover, given that our model considers a simple Keynesian consumption function, some explosive paths can also be possible.

The structural approach of a natrex model on equilibrium exchange rates

Following a general macroeconomic approach, this paper sets a closed micro-founded structural model to determine the long run real exchange rate of a developed economy. In particular, the analysis follows the structure of a Natrex model. The main contribution of this research paper is the development of a solid theoretical framework that analyse in depth the basis of the real exchange rate and the details of the equilibrium dynamics after any shock influencing the steady state. In our case, the intertemporal factors derived from the stock-flow relationship will be particularly determinant. The main results of the paper can be summarised as follows. In first place, a complete well-integrated structural model for long-run real exchange rate determination is developed from first principles. Moreover, within the concrete dynamics of the model, it is found that some convergence restrictions will be necessary. On one hand, for the medium run convergence the sensitivity of the trade balance to changes in real exchange rate should be higher that the correspondent one to the investment decisions. On the other hand, and regarding long-run convergence, it is also necessary both that there exists a negative relationship between investment and capital stock accumulation and that the global saving of the economy depends positively on net foreign debt accumulation. In addition, there are also interesting conclusions about the effects that certain shocks over the exogenous variables of the model have on real exchange rates.

Do market conditions affect gift exchange? Evidence from experimental markets with excess supply and excess demand

We study whether people's behavior in unbalanced gift exchange markets with repeated interaction are affected by whether they are on the excess supply side or the excess demand side of the market. Our analysis is based on the comparison of behavior between two types of experimental gift exchange markets, which vary only with respect to whether first or second movers are on the long side of the market. The direction of market imbalance could influence subjects' behavior, as second movers (workers) might react differently to favorable actions by first movers (firms) in the two cases. While our data show strong deviations from the standard game-theoretic prediction, we find mainly secondary treatment effects. Wage offers are not higher when there is an excess supply of firms, and workers do not respond more favorably to a given wage when there is an excess supply of labor. The state of competition does not appear to have strong effects in our data. We also present data from single-period sessions that show substantial gift exchange even without repeated interactions.

On the choice of an exchange rate regime: target zones revisited

From the classical gold standard up to the current ERM2 arrangement of the European Union, target zones have been a widely used exchange regime in contemporary history. This paper presents a benchmark model that rationalizes the choice of target zones over the rest of regimes: the fixed rate, the free float and the managed float. It is shown that the monetary authority may gain efficiency by reducing volatility of both the exchange rate and the interest rate at the same time. Furthermore, the model is consistent with some known stylized facts in the empirical literature that previous models were not able to produce, namely, the positive relation between the exchange rate and the interest rate differential, the degree of non-linearity of the function linking the exchage rate to fundamentals and the shape of the exchange rate stochastic distribution.

A proposal for a new specification for a conditionally heteroskedastic variance model: the Quadratic Moving-Average Conditional Heteroskedasticity and an application to the D. Mark-U.S. dollar Exchange Rate

Ever since the appearance of the ARCH model [Engle(1982a)], an impressive array of variance specifications belonging to the same class of models has emerged [i.e. Bollerslev's (1986) GARCH; Nelson's (1990) EGARCH]. This recent domain has achieved very successful developments. Nevertheless, several empirical studies seem to show that the performance of such models is not always appropriate [Boulier(1992)]. In this paper we propose a new specification: the Quadratic Moving Average Conditional heteroskedasticity model. Its statistical properties, such as the kurtosis and the symmetry, as well as two estimators (Method of Moments and Maximum Likelihood) are studied. Two statistical tests are presented, the first one tests for homoskedasticity and the second one, discriminates between ARCH and QMACH specification. A Monte Carlo study is presented in order to illustrate some of the theoretical results. An empirical study is undertaken for the DM-US exchange rate.

Real equilibrium exchange rates. A panel data approach for advanced and emerging economies.

Based on an behavioral equilibrium exchange rate model, this paper examines the determinants of the real effective exchange rate and evaluates the degree of misalignment of a group of currencies since 1980. Within a panel cointegration setting, we estimate the relationship between exchange rate and a set of economic fundamentals, such as traded-nontraded productivity differentials and the stock of foreign assets. Having ascertained the variables are integrated and cointegrated, the long-run equilibrium value of the fundamentals are estimated and used to derive equilibrium exchange rates and misalignments. Although there is statistical homogeneity, some structural differences were found to exist between advanced and emerging economies.

The short and long-run determinants of the real exchange rate in Mexico

This paper explores the real exchange rate behavior in Mexico from 1960 until 2005. Since the empirical analysis reveals that the real exchange rate is not mean reverting, we propose that economic fundamental variables affect its evolution in the long-run. Therefore, based on equilibrium exchange rate paradigms, we propose a simple model of real exchange rate determination which includes the relative labor productivity, the real interest rates and the net foreign assets over a long period of time. Our analysis also considers the dynamic adjustment in response to shocks through impulse response functions derived from the multivariate VAR model.

Catalytic tuning of phosphinoethane ligand. An improved catalyst for hydrocarbon

Report for the scientific sojourn carried out at the Department of Chemistry University of North Texas (USA) from September until November 2006. It includes the performance of two computational chemistry studies: an experimental and computational study toward the intra- and intermolecular hydroarylation of isonitriles and the development of an improved catalyst for hydrocarbon functionalization.

Market effects of foreign exchange coordinated intervention

In this article we develop a theoretical microstructure model of coordinated central bank intervention based on asymmetric information. We study the economic implications of coordination on some measures of market quality and show that the model predicts higher volatility and more significant exchange rate changes when central banks coordinate compared to when they intervene unilaterally. Both these predictions are in line with empirical evidence. Keywords: coordinated foreign exchange intervention, market microstructure. JEL Classification: D82, E58, F31, G14

CD8 kinetically promotes ligand binding to the T-cell antigen receptor.

The mechanism of CD8 cooperation with the TCR in antigen recognition was studied on live T cells. Fluorescence correlation measurements yielded evidence of the presence of two TCR and CD8 subpopulations with different lateral diffusion rate constants. Independently, evidence for two subpopulations was derived from the experimentally observed two distinct association phases of cognate peptide bound to class I MHC (pMHC) tetramers and the T cells. The fast phase rate constant ((1.7 +/- 0.2) x 10(5) M(-1) s(-1)) was independent of examined cell type or MHC-bound peptides' structure. Its value was much faster than that of the association of soluble pMHC and TCR ((7.0 +/- 0.3) x 10(3) M(-1) s(-1)), and close to that of the association of soluble pMHC with CD8 ((1-2) x 10(5) M(-1) s(-1)). The fast binding phase disappeared when CD8-pMHC interaction was blocked by a CD8-specific mAb. The latter rate constant was slowed down approximately 10-fold after cells treatment with methyl-beta-cyclodextrin. These results suggest that the most efficient pMHC-cell association route corresponds to a fast tetramer binding to a colocalized CD8-TCR subpopulation, which apparently resides within membrane rafts: the reaction starts by pMHC association with the CD8. This markedly faster step significantly increases the probability of pMHC-TCR encounters and thereby promotes pMHC association with CD8-proximal TCR. The slow binding phase is assigned to pMHC association with a noncolocalized CD8-TCR subpopulation. Taken together with results of cytotoxicity assays, our data suggest that the colocalized, raft-associated CD8-TCR subpopulation is the one capable of inducing T-cell activation.

Altered NKG2D function in NK cells induced by chronic exposure to NKG2D ligand-expressing tumor cells.

NKG2D is an activation receptor that allows natural killer (NK) cells to detect diseased host cells. The engagement of NKG2D with corresponding ligand results in surface modulation of the receptor and reduced function upon subsequent receptor engagement. However, it is not clear whether in addition to modulation the NKG2D receptor complex and/or its signaling capacity is preserved. We show here that the prolonged encounter with tumor cell-bound, but not soluble, ligand can completely uncouple the NKG2D receptor from the intracellular mobilization of calcium and the exertion of cell-mediated cytolysis. However, cytolytic effector function is intact since NKG2D ligand-exposed NK cells can be activated via the Ly49D receptor. While NKG2D-dependent cytotoxicity is impaired, prolonged ligand exposure results in constitutive interferon gamma (IFNgamma) production, suggesting sustained signaling. The functional changes are associated with a reduced presence of the relevant signal transducing adaptors DNAX-activating protein of 10 kDa (DAP-10) and killer cell activating receptor-associated protein/DNAX-activating protein of 12 kDa (KARAP/DAP-12). That is likely the consequence of constitutive NKG2D engagement and signaling, since NKG2D function and adaptor expression is restored to normal when the stimulating tumor cells are removed. Thus, the chronic exposure to tumor cells expressing NKG2D ligand alters NKG2D signaling and may facilitate the evasion of tumor cells from NK cell reactions.

Peroxisome proliferator-activated receptor structures: ligand specificity, molecular switch and interactions with regulators.

Peroxisome proliferator-activated receptors (PPARs) compose a family of nuclear receptors that mediate the effects of lipidic ligands at the transcriptional level. In this review, we highlight advances in the understanding of the PPAR ligand binding domain (LBD) structure at the atomic level. The overall structure of PPARs LBD is described, and important protein ligand interactions are presented. Structure-activity relationships between isotypes structures and ligand specificity are addressed. It is shown that the numerous experimental three-dimensional structures available, together with in silico simulations, help understanding the role played by the activating function-2 (AF-2) in PPARs activation and its underlying molecular mechanism. The relation between the PPARs constitutive activity and the intrinsic stability of the active conformation is discussed. Finally, the interactions of PPARs LBD with co-activators or co-repressors, as well as with the retinoid X receptor (RXR) are described and considered in relation to PPARs activation.

Deconstructing Shocks and Persistence in OECD Real Exchange Rates

This paper analyzes the persistence of shocks that affect the real exchange rates for a panel of seventeen OECD developed countries during the post-Bretton Woods era. The adoption of a panel data framework allows us to distinguish two different sources of shocks, i.e. the idiosyncratic and the common shocks, each of which may have di¤erent persistence patterns on the real exchange rates. We first investigate the stochastic properties of the panel data set using panel stationarity tests that simultaneously consider both the presence of cross-section dependence and multiple structural breaks that have not received much attention in previous persistence analyses. Empirical results indicate that real exchange rates are non-stationary when the analysis does not account for structural breaks, although this conclusion is reversed when they are modeled. Consequently, misspecification errors due to the non-consideration of structural breaks leads to upward biased shocks' persistence measures. The persistence measures for the idiosyncratic and common shocks have been estimated in this paper always turn out to be less than one year.

Can a Lucas model with habit generate realistic conditional volatility in exchange rate returns?

In this paper, we attempt to give a theoretical underpinning to the well established empirical stylized fact that asset returns in general and the spot FOREX returns in particular display predictable volatility characteristics. Adopting Moore and Roche s habit persistence version of Lucas model we nd that both the innovation in the spot FOREX return and the FOREX return itself follow "ARCH" style processes. Using the impulse response functions (IRFs) we show that the baseline simulated FOREX series has "ARCH" properties in the quarterly frequency that match well the "ARCH" properties of the empirical monthly estimations in that when we scale the x-axis to synchronize the monthly and quarterly responses we find similar impulse responses to one unit shock in variance. The IRFs for the ARCH processes we estimate "look the same" with an approximately monotonic decreasing fashion. The Lucas two-country monetary model with habit can generate realistic conditional volatility in spot FOREX return.