Monetary Policy in a Portfolio Balance Model with Endogenous Physical Capital

We develop a portfolio balance model with real capital accumulation. The introduction of real capital as an asset as well as a good produced and demanded by firms enriches extant portfolio balance models of exchange rate determination. We show that expansionary monetary policy causes exchange rate overshooting, not once, but twice; the secondary repercussion comes through the reaction of firms to changed asset prices and the firms' decisions to invest in real capital. The model sheds further light on the volatility of real and nominal exchange rates, and it suggests that changes in corporate sector profitability may affect exchange rates through portfolio diversification in corporate securities.

International Money and Finance

We discuss the effectiveness of pegged exchange rate regimes from an historical perspective, drawing conclusions for their effectiveness today. Starting with the classical gold standard period, we point out that a succession of pegged regimes have ended in failure; except for the first, which was ended by the outbreak of World War I, all of the others we discuss have been ended by adverse economic developments for which the regimes themselves were partly responsible. Prior to World War II the main problem was a shortage of monetary gold that we argue is implicated as a cause of the Great Depression. After World War II, more particularly from the late-1960s, the main problem has been a surfeit of the main international reserve asset, the US dollar. This has led to generalized inflation in the 1970s and into the 1980s. Today, excessive dollar international base money creation is again a problem that could have serious consequences for world economic stability.

Nitrogen dioxide exposures among a selected group of residents of substandard housing in Houston, Texas

Nitrogen dioxide (NO$\sb2)$ levels in sixteen substandard houses located in Houston, Texas were examined. The classification of the houses as substandard was based on an assessment of structural integrity which would affect air exchange rates. In these homes, unvented gas space heaters were operated as the primary source of heat.^ The Ogawa passive sampling device was used to measure NO$\sb2$ concentrations over 24 to 48-hour periods during generally cold weather. A sampler was placed in the kitchen and bedroom of each house. The female head of household was asked to wear a monitor during area monitoring to assess her personal exposure. Outdoor levels of NO$\sb2$ were also measured.^ Mean (standard deviation) levels of kitchen, bedroom and personal exposures were 280 (125) ppb, 256 (155) ppb and 164 (102) ppb, respectively. Additional short-term ($<$24 hours) samples were measured in three houses. The mean level of NO$\sb2$ measured outdoors was 51 ppb over the course of the study.^ The measurements obtained with the Ogawa sampler were compared to those levels obtained using a reference method (chemiluminescence). Outdoor levels measured with the diffusion samplers were 48% higher.^ These results suggest that wintertime NO$\sb2$ levels within substandard houses using gas appliances for heating and cooking are extremely elevated. Further work is needed to investigate the prevalence of possible health effects associated with these exposures. ^

Silicate content in sediment ofthe Santa Monica Basin, California

Seafloor recycling of organic materials in Santa Monica Basin, California was examined through in situ benthic chamber experiments, shipboard whole-core incubations and pore water studies. Mass balance calculations indicate that the data are internally consistent and that the estimated benthic exchange rates compare well with those derived from deep, moored conical sediment traps and hydrographic modeling. Pore water and benthic flux observations indicate that the metabolizable organic matter at the seafloor must be composed of at least two fractions of very different reactivities. While the majority of reactive organic compounds degrade quickly, with a half-life of <=6.5 years, 1/4 of the total metabolizable organic matter appears to react more slowly, with a half-life on the order of 1700 years. Down-core changes in pore water sulfate and titration alkalinity are not explained by stoichiometric models of organic matter diagenesis and suggest that reactions not considered previously must be influencing the pore water concentrations. Measured recycling and burial rates indicate that 43% of the organic carbon reaching the basin seafloor is permanently buried. The results for Santa Monica Basin are compared to those reported for other California Borderland Basins that differ in sedimentation rate and bottom water oxygen content. Organic carbon burial rates for the Borderland Basins are strongly correlated with total organic carbon deposition rate and bulk sedimentation rate. No significant correlation is observed between carbon burial and bottom water oxygen, extent of oxic mineralization and sediment mixing. Thus, for the California Borderlands, it appears that carbon burial rates are primarily controlled by input rates and not by variations in preservation.

Stable isotope composition of Holocene benthic foraminifers from the Eastern Mediterranean Sea

Temporal and regional changes in paleoproductivity and paleoceanography in the eastern Mediterranean Sea during the past 12 kyr were reconstructed on the basis of the stable oxygen and carbon isotope composition of the epibenthic Planulina ariminensis and the shallow endobenthic Uvigerina mediterranea from three sediment cores of the Aegean Sea and Levantine Basin. The Younger Dryas is characterized by high d18O values, indicating enhanced salinities and low temperatures of deep water masses at all investigated sites. With the onset of the Holocene, d18O records show a continuous decrease towards the onset of sapropel S1 formation, mainly caused by a freshening and warming of surface waters at deep water formation sites. In the middle and late Holocene, the similarity of d18O values from the southern Aegean Sea and Levantine Basin suggests the influence of isotopically identical deep water masses. By contrast, slightly higher d18O values are observed the northern Aegean Sea, which probably point to lower temperatures of North Aegean deep waters. The epifaunal d13C records reveal clear changes in sources and residence times of eastern Mediterranean deep waters associated with period of S1 formation. Available data for the early and late phase of sapropel S1 formation and for the interruption around 8.2 kyr display drops by 0.5 and 1.5 per mil, indicating the slow-down of deep water circulation and enhanced riverine input of isotopically light dissolved inorganic carbon from terrestrial sources into the eastern Mediterranean Sea. The decrease in epifaunal d13C signals is particularly expressed in the southern Aegean Sea and Levantine Basin, while it is less pronounced in the northern Aegean Sea. This points to a strong reduction in deep water exchange rates in the southern areas, but the persistence of local deep water formation in the northern Aegean Sea. The d13C values of U. mediterranea records reveal temporal and regional differences in paleoproductivity during the past 12 kyr, with rather eutrophic and mesotrophic conditions in the North Aegean Sea and southeast Levantine Basin, respectively, while the South Aegean Sea is characterized by rather oligotrophic conditions. After S1 formation, increasing d13C values reflect a progressive decrease in surface water productivity in the eastern Mediterranean Sea during the middle and late Holocene. In the northern Aegean Sea, this time interval is marked by repetitive changes in organic matter fluxes documented by significant fluctuations in the d13C signal of U. mediterranea on millennial- to multi-centennial time scales. These fluctuations can be linked to short-term changes in river runoff driven by northern hemisphere climatic variability.

International Competitiveness of Manufacturing Firms in sub-Saharan Africa

As the success of East Asian countries has shown, labor-intensive industry is recognized to lead economic growth in the early stages of development, utilizing relatively low labor costs. This same growth process has already started in South and South East Asian LDCs since the mid-1990s. However, the manufacturing sector in sub-Saharan Africa has been underdeveloped and manufacturing exports, in particular labour-intensive goods, have stagnated. This paper investigates the international competitiveness of the African manufacturing sector and its determinants through an analytical survey of empirical studies and a comparison with Asian low income countries. Empirical evidences indicate that primary factors of competitiveness, namely productivity, labour cost and exchange rate are unfavorable in sub-Saharan Africa. Representative arguments attribute the weak competitiveness to problems in the business environment, factor endowment, and the exchange rate. However, careful review shows that labour cost is beyond the range explained by endowment and misalignment of exchange rates have been reduced in Africa. Moreover, comparison with Asian low income countries which have competitiveness in labour-intensive goods shows no difference in the quality of business environment, while the labour cost is significantly lower than sub-Saharan African countries. Although results should be considered tentative, high labour cost beyond endowment and conservative investment behavior emerge as important factors for the weak competitiveness in sub-Saharan Africa when controlling income level.

Monetary Systems in Developing Countries: An Unorthodox View

This paper analyzes some recent theoretical and practical evidence in terms of economic results of different exchange rate systems. It begins with a historical review and a summary of fixed versus flexible exchange rate systems. Then it compares the experiences of recent currency unions, mostly unilateral, and their relative economic performance during the past currency crises in Latin America, East Asia and Eastern Europe. A set of issues is discussed in order to weigh the overall costs and benefits for several economies. These issues include exchange rates, GDP performance, inflation rates and foreign reserves. The case of Argentina is also considered separately, comparing mostly seigniorage costs and interest-rate savings. The benefits and costs of the producers (central banks/governments) and the consumers (citizens) of money are discussed separately. Free banking is also considered in a fast-changing world where there will probably be fewer but better currencies. Not just the euro is a reality now, but maybe the "amero" and the "worldo" or the "mondo" very soon.

Financial Policies and Dynamic Game Simulation in Poland and Hungary

Recently, steady economic growth rates have been kept in Poland and Hungary. Money supplies are growing rather rapidly in these economies. In large, exchange rates have trends of depreciation. Then, exports and prices show the steady growth rates. It can be thought that per capita GDPs are in the same level and development stages are similar in these two countries. It is assumed that these two economies have the same export market and export goods are competing in it. If one country has an expansion of monetary policy, price increase and interest rate decrease. Then, exchange rate decrease. Exports and GDP will increase through this phenomenon. At the same time, this expanded monetary policy affects another country through the trade. This mutual relationship between two countries can be expressed by the Nash-equilibrium in the Game theory. In this paper, macro-econometric models of Polish and Hungarian economies are built and the Nash- equilibrium is introduced into them.

Real Options: A Tool for Managing Technical Risk in a Mine Plan

NPV is a static measure of project value which does not discriminate between levels of internal and external risk in project valuation. Due to current investment project?s characteristics, a much more complex model is needed: one that includes the value of flexibility and the different risk levels associated with variables subject to uncertainty (price, costs, exchange rates, grade and tonnage of the deposits, cut off grade, among many others). Few of these variables present any correlation or can be treated uniformly. In this context, Real Option Valuation (ROV) arose more than a decade ago, as a mainly theoretical model with the potential for simultaneous calculation of the risk associated with such variables. This paper reviews the literature regarding the application of Real Options Valuation in mining, noting the prior focus on external risks, and presents a case study where ROV is applied to quantify risk associated to mine planning.

UMA ANÁLISE DA RELAÇÃO ENTRE VARIÁVEIS MACROECONÔMICAS E O COMPORTAMENTO DAS AÇÕES DE MAIOR LIQUIDEZ DO ÍNDICE IBOVESPA

As ações de maior liquidez do índice IBOVESPA, refletem o comportamento das ações de um modo geral, bem como a relação das variáveis macroeconômicas em seu comportamento e estão entre as mais negociadas no mercado de capitais brasileiro. Desta forma, pode-se entender que há reflexos de fatores que impactam as empresas de maior liquidez que definem o comportamento das variáveis macroeconômicas e que o inverso também é uma verdade, oscilações nos fatores macroeconômicos também afetam as ações de maior liquidez, como IPCA, PIB, SELIC e Taxa de Câmbio. O estudo propõe uma análise da relação existente entre variáveis macroeconômicas e o comportamento das ações de maior liquidez do índice IBOVESPA, corroborando com estudos que buscam entender a influência de fatores macroeconômicos sobre o preço de ações e contribuindo empiricamente com a formação de portfólios de investimento. O trabalho abrangeu o período de 2008 a 2014. Os resultados concluíram que a formação de carteiras, visando a proteção do capital investido, deve conter ativos com correlação negativa em relação às variáveis estudadas, o que torna possível a composição de uma carteira com risco reduzido.

ANALISANDO A RELAÇÃO DOS VOLUMES DE EXPORTAÇÃO E DE IMPORTAÇÃO, PIB, TAXAS DE CÂMBIO E INFLAÇÃO NO PERÍODO DE 2004 A 2014.

Esta dissertação visa deslumbrar uma análise macroeconômica do Brasil, especialmente no que se refere à relação dos índices mensais dos volumes das exportações e das importações com os volumes mensais do PIB, da Taxa SELIC e as Taxas de Câmbio, conforme dados coletados no período de janeiro de 2004 a dezembro de 2014, através de pesquisa literária referente aos históricos sobre cada conceito envolvido no âmbito da macroeconomia das varáveis estudadas. Foi realizado um estudo de caso embasado em dados de sites governamentais, no período delimitado, empregando-se o método de regressão linear, com base na Teoria da correlação de Pearson, demonstrando os resultados obtidos no período do estudo para as varáveis estudadas. Desta maneira, conseguiu-se estudar e analisar como as variáveis dependentes (resposta): volume das exportações e volume das importações estão relacionadas com as varáveis independentes (explicativas): PIB, Taxa Selic e taxa de Câmbio. Os resultados apurados no presente estudo permitem identificar que existe correlação moderada e negativa, quando analisadas a Taxa Selic e a Taxa de Câmbio com os volumes das exportações e das importações, enquanto o PIB apresenta correlação forte e positiva na análise com os volumes das exportações e das importações

The effect of 4,4′-diisothiocyanato-stilbene-2,2′-disulfonate on CO2 permeability of the red blood cell membrane

It has long been assumed that the red cell membrane is highly permeable to gases because the molecules of gases are small, uncharged, and soluble in lipids, such as those of a bilayer. The disappearance of 12C18O16O from a red cell suspension as the 18O exchanges between labeled CO2 + HCO3− and unlabeled HOH provides a measure of the carbonic anhydrase (CA) activity (acceleration, or A) inside the cell and of the membrane self-exchange permeability to HCO3− (Pm,HCO−3). To test this technique, we added sufficient 4,4′-diisothiocyanato-stilbene-2,2′-disulfonate (DIDS) to inhibit all the HCO3−/Cl− transport protein (Band III or capnophorin) in a red cell suspension. We found that DIDS reduced Pm,HCO−3 as expected, but also appeared to reduce intracellular A, although separate experiments showed it has no effect on CA activity in homogenous solution. A decrease in Pm,CO2 would explain this finding. With a more advanced computational model, which solves for CA activity and membrane permeabilities to both CO2 and HCO3−, we found that DIDS inhibited both Pm,HCO−3 and Pm,CO2, whereas intracellular CA activity remained unchanged. The mechanism by which DIDS reduces CO2 permeability may not be through an action on the lipid bilayer itself, but rather on a membrane transport protein, implying that this is a normal route for at least part of red cell CO2 exchange.

A signature of the T → R transition in human hemoglobin

Allosteric effects in hemoglobin arise from the equilibrium between at least two energetic states of the molecule: a tense state, T, and a relaxed state, R. The two states differ from each other in the number and energy of the interactions between hemoglobin subunits. In the T state, constraints between subunits oppose the structural changes resulting from ligand binding. In the R state, these constraints are released, thus enhancing ligand-binding affinity. In the present work, we report the presence of four sites in hemoglobin that are structurally stabilized in the R relative to the T state. These sites are Hisα103(G10) and Hisα122(H5) in each α subunit of hemoglobin. They are located at the α1β1 and α2β2 interfaces of the hemoglobin tetramer, where the histidine side chains form hydrogen bonds with specific residues from the β chains. We have measured the solvent exchange rates of side chain protons of Hisα103(G10) and Hisα122(H5) in both deoxygenated and ligated hemoglobin by NMR spectroscopy. The exchange rates were found to be higher in the deoxygenated-T than in ligated-R state. Analysis of exchange rates in terms of the local unfolding model revealed that the structural stabilization free energy at each of these two histidines is larger by ≈1.5 kcal/(mol tetramer) in the R relative to the T state. The location of these histidines at the intradimeric α1β1 and α2β2 interfaces also suggests a role for these interfaces in the allosteric equilibrium of hemoglobin.

Role of hydrophobic interactions and desolvation in determining the structural properties of a model alpha beta peptide.

Model AB, a 20-amino acid peptide that was designed to adopt an alpha beta tertiary structure stabilized by hydrophobic interactions between residues in adjacent helical and extended segments, exhibited large pKa shifts of several ionizable groups and slow hydrogen/deuterium exchange rates of nearly all the peptide amide groups [Butcher, D. J., Bruch, M. D. & Moe, G. T. (1995) Biopolymers 36, 109-120]. These properties, which depend on structure and hydration, are commonly observed in larger proteins but are quite unusual for small peptides. To identify which of several possible features of the peptide design are most important in determining these properties, several closely related analogs of Model AB were characterized by CD and NMR spectroscopy. The results show that hydrophobic interactions between adjacent helical and extended segments are structure-determining and have the additional effect of altering water-peptide interactions over much of the peptide surface. These results may have important implications for understanding mechanisms of protein folding and for the design of independently folding peptides.