Economic growth with bubbles

We develop a stylized model of economic growth with bubbles. In this model, changes in investorsentiment lead to the appearance and collapse of macroeconomic bubbles or pyramid schemes.We show how these bubbles mitigate the effects of financial frictions. During bubbly episodes,unproductive investors demand bubbles while productive investors supply them. These transfersof resources improve the efficiency at which the economy operates, expanding consumption, thecapital stock and output. When bubbly episodes end, these transfers stop and consumption, thecapital stock and output contract. We characterize the stochastic equilibria of the model and arguethat they provide a natural way of introducing bubble shocks into business cycle models.

Theoretical notes on bubbles and the current crisis

We explore a view of the crisis as a shock to investor sentiment that led to the collapse of abubble or pyramid scheme in financial markets. We embed this view in a standard model of thefinancial accelerator and explore its empirical and policy implications. In particular, we show howthe model can account for: (i) a gradual and protracted expansionary phase followed by a suddenand sharp recession; (ii) the connection (or lack of connection!) between financial and real economicactivity and; (iii) a fast and strong transmission of shocks across countries. We also use the modelto explore the role of fiscal policy.

Valuation bubbles and sequential bubbles

Price bubbles in an Arrow-Debreu valuation equilibrium in infinite-timeeconomy are a manifestation of lack of countable additivity of valuationof assets. In contrast, known examples of price bubbles in sequentialequilibrium in infinite time cannot be attributed to the lack of countableadditivity of valuation. In this paper we develop a theory of valuation ofassets in sequential markets (with no uncertainty) and study the nature ofprice bubbles in light of this theory. We consider an operator, calledpayoff pricing functional, that maps a sequence of payoffs to the minimumcost of an asset holding strategy that generates it. We show that thepayoff pricing functional is linear and countably additive on the set ofpositive payoffs if and only if there is no Ponzi scheme, and providedthat there is no restriction on long positions in the assets. In the knownexamples of equilibrium price bubbles in sequential markets valuation islinear and countably additive. The presence of a price bubble indicatesthat the asset's dividends can be purchased in sequential markers at acost lower than the asset's price. We also present examples of equilibriumprice bubbles in which valuation is nonlinear but not countably additive.

Bubbles and capital flows

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries. This view of asset price bubbles could eventually provide a simple account of some real world phenomenae that have been difficult to model before, such as the recurrence and depth of financial crises or their puzzling tendency to propagate across countries.

Monetary policy and rational asset price bubbles

I examine the impact of alternative monetary policy rules on arational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interestrates in response to a growing bubble is shown to enhance the fluctuations in the latter, through its positive effect on bubble growth. Theoptimal monetary policy seeks to strike a balance between stabilization of the bubble and stabilization of aggregate demand. The paper'smain findings call into question the theoretical foundations of the casefor "leaning against the wind" monetary policies.

Quantum fluctuations on domain walls, strings, and vacuum bubbles

We develop a covariant quantum theory of fluctuations on vacuum domain walls and strings. The fluctuations are described by a scalar field defined on the classical world sheet of the defects. We consider the following cases: straight strings and planar walls in flat space, true vacuum bubbles nucleating in false vacuum, and strings and walls nucleating during inflation. The quantum state for the perturbations is constructed so that it respects the original symmetries of the classical solution. In particular, for the case of vacuum bubbles and nucleating strings and walls, the geometry of the world sheet is that of a lower-dimensional de Sitter space, and the problem reduces to the quantization of a scalar field of tachyonic mass in de Sitter space. In all cases, the root-mean-squared fluctuation is evaluated in detail, and the physical implications are briefly discussed.

Bubbles in Kaluza-Klein theories with spacelike or timelike internal dimensions

region to the other. We also present a C-type solution that describes neutral bubbles in uniform acceleration, and we use it to construct an instanton that mediates the breaking of a cosmic string by forming bubbles at its ends. The rate for this process is also calculated. Finally, we argue that a similar solution can be constructed for magnetic bubbles, and that it can be used to describe a semiclassical instability of the two-timing vacuum against production of massless monopole pairs.

Media, investors and bubbles

We analysed the specific case of how information in the financial press influences economic bubbles. We found considerable flaws in the information market due to several factors: demand, the predominance of what are termed “irrational investors” (herding), and supply, which has the problem that the sources of information are biasedand feeds. A financial bubble is a deviation between real value of a financial asset and its persistent market price in time, which also has a speculative origin fed back by the illusion of the owners of these financial values, who will take benefits because of the future prices, which must be higher than the previous ones. The economical information in the media is submitting three problems. First of all, it is information generated by companies. In second place, the information circuit is fed back. A problem of informative independence becomes created, particularly serious in the case of the banks, which are very were as creditors. And in a third place, some informative biases are manifested for the companies of regulated sectors which are starring the economical information in the media.

The effects of monetary policy on stock market bubbles: Some evidence

We estimate the response of stock prices to exogenous monetary policy shocks usinga vector-autoregressive model with time-varying parameters. Our evidence points toprotracted episodes in which, after a a short-run decline, stock prices increase persistently in response to an exogenous tightening of monetary policy. That responseis clearly at odds with the "conventional" view on the effects of monetary policy onbubbles, as well as with the predictions of bubbleless models. We also argue that it isunlikely that such evidence be accounted for by an endogenous response of the equitypremium to the monetary policy shocks.

Thermodynamic stability of nanosized multicomponent bubbles/droplets: The square gradient theory and the capillary approach

Formation of nanosized droplets/bubbles from a metastable bulk phase is connected to many unresolved scientific questions. We analyze the properties and stability of multicomponent droplets and bubbles in the canonical ensemble, and compare with single-component systems. The bubbles/droplets are described on the mesoscopic level by square gradient theory. Furthermore, we compare the results to a capillary model which gives a macroscopic description. Remarkably, the solutions of the square gradient model, representing bubbles and droplets, are accurately reproduced by the capillary model except in the vicinity of the spinodals. The solutions of the square gradient model form closed loops, which shows the inherent symmetry and connected nature of bubbles and droplets. A thermodynamic stability analysis is carried out, where the second variation of the square gradient description is compared to the eigenvalues of the Hessian matrix in the capillary description. The analysis shows that it is impossible to stabilize arbitrarily small bubbles or droplets in closed systems and gives insight into metastable regions close to the minimum bubble/droplet radii. Despite the large difference in complexity, the square gradient and the capillary model predict the same finite threshold sizes and very similar stability limits for bubbles and droplets, both for single-component and two-component systems.

Deinking flotation of recycled linerboard for food packaging applications

Brown packaging linerboard, made entirely from recovered pulp, was subjected to deinking flotation for evaluating the possible improvements in its chemical, optical and mechanical properties. The increase in the rate of recovered paper utilisation, along with the tendency towards lower basis weights, in the packaging paper production, has created a growing need for the utilisation of secondary fibers of improved quality. To attain better quality fibers, flotation deinking of brown grades is being considered, along with the addition of primary fibers to recovered paper furnish. Numerous conducted studies, in which the flotation technology was used in the treatment of brown grades, support this idea. Most of them show that the quality of fibers is improved after flotation deinking, resulting in higher mechanical properties of the deinked handsheets and in lower amounts of chemical contaminants. As to food and human health safety, packaging paper has to meet specific requirements, to be classified as suitable for its direct contact with foods. Recycled paper and board may contain many potential contaminants, which, especially in the case of direct food contact, may migrate from packaging materials into foodstuffs. In this work, the linerboard sample selected for deinking was made from recycled fibers not submitted previously to chemical deinking flotation. Therefore, the original sample contained many noncellulosic components, as well as the residues of printing inks. The studied linerboardsample was a type of packaging paper used for contact with food products that are usually peeled before use, e.g. fruits and vegetables. The decrease in the amount of chemical contaminants, after conducting deinking flotation, was evaluated, along with the changes in the mechanical and optical properties of the deinked handsheets. Food contact analysis was done on both the original paper samples and the filter pads and handsheets made before and after deinking flotation. Food contact analysis consisted of migration tests of brightening agents, colorants, PCPs, formaldehydes and metals. Microbiological tests were also performed to determine the possible transfer of antimicrobial constituents

Effects of pulp electrochemistry on PGE flotation in sulphide poor ores

This work gives a reader basic knowledge about mineralogy and mineral processing. Main focus of this work was on flotation process and pulp electrochemistry on flotation. Three different sulphide poor ores are examined on experimental part. Platinum and palladium were the noble metals, which were contained into studied ores. Electrochemistry of flotation of PGE minerals on sulphide poor ores has been examined only slightly. Bench scale flotation test was used in this study. Chalcopyrite, nickel-pentlandite, pyrite, platinum and pH electrodes were used to investigation of pulp electrochemistry during flotation tests. Effects of grinding media, carbon dioxide atmosphere in grinding and mixture of carbon dioxide and air as flotation gas to PGE flotation and electrochemistry of flotation were studied. Stainless steel grinding media created more oxidising pulp environment to flotation than mild steel grinding media. Concentrate quality improved also with stainless steel grinding media, but the recovery was remarkably poorer, than with mild steel grinding media. Carbon dioxide atmosphere in grinding created very reducing pulp environment, which caused very good concentrate quality. But the recovery was again poorer than with normal mild steel grinding media. Mixture of carbon dioxide and air as flotation gas improved PGE recovery with some ores, but not always. Effect of carbon dioxide to pulp electrochemistry was detected mainly via pH-value.

Development of a flotation method for preconcentration-separation of trace amounts of some metal ions in plant tissues prior to their FAAS determinations

An efficient flotation method based on the combination of flame atomic absorption spectrometry (FAAS) and separation and preconcentration step for determination of Cr3+, Cu 2+, Co2+, Ni2+, Zn2+, Cd 2+, Fe3+ and Pb2+ ions in various real samples by the possibility of applying bis(2-hydroxyacetophenone)-1,4-butanediimine (BHABDI) as a new collector was studied. The influence of pH, amount of BHABDI as collector, sample matrix, type and amount of eluting agent, type and amount of surfactant as floating agent, ionic strength and air flow rates i.e. variables affecting the efficiency of the extraction system was evaluated. It is ascertained that metal ions such as iron can be separated simultaneously from matrix in the presence of 0.012 mM ligand, 0.025% (w/v) of CTAB to a test sample of 750 mL at pH 6.5. These ions can be eluted quantitatively with 6 mL of 1.0 mol L-1 HNO3 in methanol which lead to the enrichment factor of 125. The detection limits for analyte ions were in the range of 1.3-2.4 ng mL-1. The method has been successfully applied for determination of trace amounts of ions in various real samples.