Essays on Exchange Rate Economics

Exchange rate economics has achieved substantial development in the past few decades. Despite extensive research, a large number of unresolved problems remain in the exchange rate debate. This dissertation studied three puzzling issues aiming to improve our understanding of exchange rate behavior. Chapter Two used advanced econometric techniques to model and forecast exchange rate dynamics. Chapter Three and Chapter Four studied issues related to exchange rates using the theory of New Open Economy Macroeconomics. Chapter Two empirically examined the short-run forecastability of nominal exchange rates. It analyzed important empirical regularities in daily exchange rates. Through a series of hypothesis tests, a best-fitting fractionally integrated GARCH model with skewed student-t error distribution was identified. The forecasting performance of the model was compared with that of a random walk model. Results supported the contention that nominal exchange rates seem to be unpredictable over the short run in the sense that the best-fitting model cannot beat the random walk model in forecasting exchange rate movements. Chapter Three assessed the ability of dynamic general-equilibrium sticky-price monetary models to generate volatile foreign exchange risk premia. It developed a tractable two-country model where agents face a cash-in-advance constraint and set prices to the local market; the exogenous money supply process exhibits time-varying volatility. The model yielded approximate closed form solutions for risk premia and real exchange rates. Numerical results provided quantitative evidence that volatile risk premia can endogenously arise in a new open economy macroeconomic model. Thus, the model had potential to rationalize the Uncovered Interest Parity Puzzle. Chapter Four sought to resolve the consumption-real exchange rate anomaly, which refers to the inability of most international macro models to generate negative cross-correlations between real exchange rates and relative consumption across two countries as observed in the data. While maintaining the assumption of complete asset markets, this chapter introduced endogenously segmented asset markets into a dynamic sticky-price monetary model. Simulation results showed that such a model could replicate the stylized fact that real exchange rates tend to move in an opposite direction with respect to relative consumption.

Three Essays on the Interrelationships Among Financial Restatements, Corporate Governance, Market Microstructure and the Firm's Rate of Return

The increase in the number of financial restatements in recent years has resulted in a significant decrease in the amount of market capitalization for restated companies. Prior literature does not differentiate between single and multiple restatements announcements. This research investigates the inter-relationships among multiple financial restatements, corporate governance, market microstructure and the firm's rate of return in the form of three essays by differentiating between single and multiple restatement announcement companies. First essay examines the stock performance of companies announcing the financial restatement multiple times. The postulation is that prior research overestimates the abnormal return by not separating single restatement companies from multiple restatement companies. This study investigates how market penalizes the companies that announce restatement more than once. Differentiating the restatement announcement data based on number of restatement announcements, the results support for non persistence hypothesis that the market has no memory and negative abnormal returns obtained after each of the restatement announcements are completely random. Second essay examines the multiple restatement announcements and its perceived resultant information asymmetry around the announcement day. This study examines the pattern of information asymmetry for these announcements in terms of whether the bid-ask spread widens around the announcement day. The empirical analysis supports the hypotheses that the spread does widen not only around the first restatement announcement day but around every subsequent announcement days as well. The third essay empirically examines the financial and corporate governance characteristics of single and multiple restatement announcements companies. The analysis shows that corporate governance variables influence the occurrence of multiple restatement announcements and can distinguish multiple restatements announcement companies from single restatement announcement companies.

Seawater carbonate chemistry and calcification rate of the corals Oculina patagonica and Cladocora caespitosa in a laboratory experiment

In recent years, some of the ramifications of the ocean acidification problematic derived from the anthropogenic rising of atmospheric CO2 have been widely studied. In particular, the potential effects of a lowering pH on tropical coral reefs have received special attention. However, only a few studies have focused on testing the effects of ocean acidification in corals from the Mediterranean Sea, despite the fact that this basin is especially sensitive to increasing atmospheric CO2. In this context, we investigated the response to ocean acidification of the two zooxanthellate coral species capable of constituting the main framework of the community, the endemic Cladocora caespitosa and the non-native Oculina patagonica. To this end, we examined the response of both species to pCO2 concentrations expected by the end of the century, 800 ppm, vs the present levels. Calcification rate measurements after 92 days of exposure to low pH conditions showed the same negative response in both species, a decrease of 32-35% compared to corals reared under control conditions. In addition, we detected in both species a correlation between the calcification rate of colonies in control conditions and the degree of impairment of the same colonies at low pH. Independent of species, faster growing colonies were more affected by decreased pH. After this period of decreased pH, we conducted a recovery experiment, in which corals reared in the acidic treatment were brought back to control conditions. In this case, normal calcification rates were reached in both species. Overall, our results suggest that O. patagonica and C. caespitosa will both be affected detrimentally by progressive ocean acidification in the near future. They do not display differences in response between native and non-native species but do manifest differential responses depending on calcification rate, pointing to a role of the coral genetics in determining the response of corals to ocean acidification.

Seawater carbonate chemistry, photosynthesis and calcification rate during experiments with coral Acropora muricata, 2011

The effect of decreasing aragonite saturation state (Omega Arag) of seawater (elevated pCO2) on calcification rates of Acropora muricata was studied using nubbins prepared from parent colonies located at two sites of La Saline reef (La Réunion Island, western Indian Ocean): a back-reef site (BR) affected by nutrient-enriched groundwater discharge (mainly nitrate), and a reef flat site (RF) with low terrigenous inputs. Protein and chlorophyll a content of the nubbins, as well as zooxanthellae abundance, were lower at RF than BR. Nubbins were incubated at ~27°C over 2 h under sunlight, in filtered seawater manipulated to get differing initial pCO2 (1,440-340 µatm), Omega Arag (1.4-4.0), and dissolved inorganic carbon (DIC) concentrations (2,100-1,850 µmol kg-1). Increasing DIC concentrations at constant total alkalinity (AT) resulted in a decrease in Omega Arag and an increase in pCO2. AT at the beginning of the incubations was kept at a natural level of 2,193 +- 6 µmol kg-1 (mean +- SD). Net photosynthesis (NP) and calcification were calculated from changes in pH and AT during the incubations. Calcification decrease in response to doubling pCO2 relative to preindustrial level was 22% for RF nubbins. When normalized to surface area of the nubbins, (1) NP and calcification were higher at BR than RF, (2) NP increased in high pCO2 treatments at BR compared to low pCO2 treatments, and (3) calcification was not related to Omega Arag at BR. When normalized to NP, calcification was linearly related to Omega Arag at both sites, and the slopes of the relationships were not significantly different. The increase in NP at BR in the high pCO2 treatments may have increased calcification and thus masked the negative effect of low Omega Arag on calcification. Removing the effect of NP variations at BR showed that calcification declined in a similar manner with decreased Omega Arag (increased pCO2) whatever the nutrient loading.

Experiment: The effect of temperature, salinity and growth rate on the stable hydrogen isotopic composition of long chain alkenones produced by Emiliania huxleyi and Gephyrocapsa oceanica

Two haptophyte algae, Emiliania huxleyi and Gephyrocapsa oceanica, were cultured at different temperatures and salinities to investigate the impact of these factors on the hydrogen isotopic composition of long chain alkenones synthesized by these algae. Results showed that alkenones synthesized by G. oceanica were on average depleted in D by 30 compared to those of E. huxleyi when grown under similar temperature and salinity conditions. The fractionation factor, alpha alkenones-H2O, ranged from 0.760 to 0.815 for E. huxleyi and from 0.741 to 0.788 for G. oceanica. There was no significant correlation of alpha alkenones-H2O with temperature but a positive linear correlation was observed between alpha alkenones-H2O and salinity with ~3 change in fractionation per salinity unit and a negative correlation between alpha alkenones-H2O and growth rate. This suggests that both salinity and growth rate can have a substantial impact on the stable hydrogen isotopic composition of long chain alkenones in natural environments.

Seawater carbonate chemistry, growth rate and hatching processes of Symsagittifera roscoffensis during experiments, 2012

As a consequence of anthropogenic CO2 emissions, oceans are becoming more acidic, a phenomenon known as ocean acidification. Many marine species predicted to be sensitive to this stressor are photosymbiotic, including corals and foraminifera. However, the direct impact of ocean acidification on the relationship between the photosynthetic and nonphotosynthetic organism remains unclear and is complicated by other physiological processes known to be sensitive to ocean acidification (e.g. calcification and feeding). We have studied the impact of extreme pH decrease/pCO2 increase on the complete life cycle of the photosymbiotic, non-calcifying and pure autotrophic acoel worm, Symsagittifera roscoffensis. Our results show that this species is resistant to high pCO2 with no negative or even positive effects on fitness (survival, growth, fertility) and/or photosymbiotic relationship till pCO2 up to 54 K µatm. Some sub-lethal bleaching is only observed at pCO2 up to 270 K µatm when seawater is saturated by CO2. This indicates that photosymbiosis can be resistant to high pCO2. If such a finding would be confirmed in other photosymbiotic species, we could then hypothesize that negative impact of high pCO2 observed on other photosymbiotic species such as corals and foraminifera could occur through indirect impacts at other levels (calcification, feeding).

Aerobic endurance in HIV-positive young adults and HIV-negative controls in Malawi

Background Aerobic endurance is an important aspect of physical fitness that enables individuals living with HIV to endure in the work place as well as in agricultural operations in order to earn a living and improve their quality of life. However, despite high HIV prevalence rates, the aerobic endurance status of young Malawians living with HIV remains unknown. The objective of this study was to determine the difference in VO2max between HIV-negative and HIV-positive individuals in Blantyre, Malawi. Methods Fifty five participants (17 males and 38 females) who have HIV and were not taking antiretroviral medication and 78 HIV-negative participants (45 males and 33 females) performed the Rockport submaximal treadmill exercise test. Measures of body weight, post-exercise heart rate and time to walk one mile were obtained and used to predict VO2max. Comparisons between groups were adjusted for age differences using analysis of covariance (ANCOVA). Results VO2max was significantly lower in HIV-positive subjects [31.1, 28.7 - 33.5mL.kg-1.min-1(mean, 95% CI)] compared with HIV-negative subjects [56.2, 54.3 - 58.1mL.kg-1.min-1]. Conclusion Aerobic endurance was markedly reduced in HIV-positive participants compared with HIV-negative participants. Findings of the current study implicate factors associated with the HIV infection as contributors to a decreased aerobic endurance in people living with HIV.

Interest rate (in)sensitivity of emerging market corporate debt : economic analysis based on 2002-2015 empirical evidence

Interest rate sensitivity assessment framework based on fixed income yield indexes is developed and applied to two types of emerging market corporate debt: investment grade and high yield exposures. Our research advances beyond the correlation analyses focused on co- movements in yields and/or spreads of risky and risk-free assets. We show that correlation- based analyses of interest rate sensitivity could appear rather inconclusive and, hence, we investigate the bottom line profit and loss of a hypothetical model portfolio of corporates. We consider historical data covering the period 2002 – 2015, which enable us to assess interest rate sensitivity of assets during the development, the apogee, and the aftermath of the global financial crisis. Based on empirical evidence, both for investment and speculative grades securities, we find that the emerging market corporates exhibit two different regimes of sensitivity to interest rate changes. We observe switching from a positive sensitivity under the normal market conditions to a negative one during distressed phases of business cycles. This research sheds light on how financial institutions may approach interest rate risk management, evidencing that even plain vanilla portfolios of emerging market corporates, which on average could appear rather insensitive to the interest rate risk in fact present a binary behavior of their interest rate sensitivities. Our findings allow banks and financial institutions for optimizing economic capital under Basel III regulatory capital rules.

Governed by the cycle : direct and inverted interest-rate sensitivity of emerging market corporate debt

An innovative approach to quantify interest rate sensitivities of emerging market corporates is proposed. Our focus is centered at price sensitivity of modeled investment grade and high yield portfolios to changes in the present value of modeled portfolios composed of safe-haven assets, which define risk-free interest rates. Our methodology is based on blended yield indexes. Modeled investment horizons are always kept above one year thus allowing to derive empirical implications for practical strategies of interest rate risk management in the banking book. As our study spans over the period 2002 – 2015, it covers interest rate sensitivity of assets under the pre-crisis, crisis, and post-crisis phases of the economic cycles. We demonstrate that the emerging market corporate bonds both, investment grade and high yield types, depending on the phase of a business cycle exhibit diverse regimes of sensitivity to interest rate changes. We observe switching from a direct positive sensitivity under the normal pre-crisis market conditions to an inverted negative sensitivity during distressed turmoil of the recent financial crisis, and than back to direct positive but weaker sensitivity under new normal post-crisis conjuncture. Our unusual blended yield-based approach allows us to present theoretical explanations of such phenomena from economics point of view and helps us to solve an old controversy regarding positive or negative responses of credit spreads to interest rates. We present numerical quantification of sensitivities, which corroborate with our conclusion that hedging of interest rate risk ought to be a dynamic process linked to the phases of business cycles as we evidence a binary-like behavior of interest rate sensitivities along the economic time. Our findings allow banks and financial institutions for approaching downside risk management and optimizing economic capital under Basel III regulatory capital rules.

How does nest box temperature affect nestling growth rate and breeding success in a parrot?

Climate change is predicted to affect many species by reducing range, habitat suitability and breeding success. Cavity-nesting species, already threatened by deforestation and declining natural hollows, may be particularly at risk because they are limited in nest-site location, and climatic alterations may further reduce usability of natural cavities. It is therefore essential to determine how cavity-users may be affected. We recorded internal nest box temperatures and modelled the relationships of four temperature parameters (relating to mean temperature, variability in temperature, low temperature extremes and high temperature extremes) with breeding success and nestling growth in an Australian cavity-nesting parrot, the Crimson Rosella (Platycercus elegans). We found that less extreme low temperatures resulted in heavier nestlings; however, higher mean temperatures tended to result in lighter nestlings. Greater temperature variability tended to reduce fledging success; however, no temperature variables had a clear effect on clutch size or hatching success. Our findings indicate that there may be a complex relationship between nestling growth and temperature, and although less extreme cold temperatures may benefit nestlings, continued increases in mean temperature and variability may have negative consequences.

Weak negative associations between avian influenza virus infection and movement behaviour in a key host species, the mallard Anas platyrhynchos

Animal movements may contribute to the spread of pathogens. In the case of avian influenza virus, [migratory] birds have been suggested to play a role in the spread of some highly pathogenic strains (e.g. H5N1, H5N8), as well as their low pathogenic precursors which circulate naturally in wild birds. For a better understanding of the emergence and spread of both highly pathogenic (HPAIV) and low pathogenic avian influenza virus (LPAIV), the potential effects of LPAIVs on bird movement need to be evaluated. In a key host species, the mallard Anas platyrhynchos, we tested whether LPAIV infection status affected daily local (< 100 m) and regional (> 100 m) movements by comparing movement behaviour 1) within individuals (captured and sampled at two time points) and 2) between individuals (captured and sampled at one time point). We fitted free-living adult males with GPS loggers throughout the autumn LPAIV infection peak, and sampled them for LPAIV infection at logger deployment and at logger removal on recapture. Within individuals, we found no association between LPAIV infection and daily local and regional movements. Among individuals, daily regional movements of LPAIV infected mallards in the last days of tracking were lower than those of non-infected birds. Moreover, these regional movements of LPAIV infected birds were additionally reduced by poor weather conditions (i.e. increased wind and/or precipitation and lower temperatures). Local movements of LPAIV infected birds in the first days of tracking were higher when temperature decreased. Our study thus demonstrates that bird-assisted dispersal rate of LPAIV may be lower on a regional scale than expected on the basis of the movement behaviour of non-infected birds. Our study underlines the importance of understanding the impact of pathogen infection on host movement in order to assess its potential role in the emergence and spread of infectious diseases.

Investigation of Escape and Negative Student Behaviors Related to Florida State High Stakes Test Preparation in Miami-Dade County Public High Schools, having been approved in respect to style and intellectual content, is referred to you for judgment

The purpose of this study was to determine whether there was a relationship between pressure to perform on state mandated, high-stakes tests and the rate of student escape behavior defined as the number of school suspensions and absences. The state assigned grade of a school was used as a surrogate measure of pressure with the assumption that pressure increased as the school grade decreased. Student attendance and suspension data were gathered from all 33 of the regular public high schools in Miami-Dade County Public Schools. The research questions were: Is the number of suspensions highest in the third quarter, when most FCAT preparation takes place for each of the 3 school years 2007-08 through 2009-10? How accurately does the high school’s grade predict the number of suspensions and number of absences during each of the 4 school years 2005-06 through 2008-09? The research questions were answered using repeated measures analysis of variance for research question #1 and non-linear multiple regression for research question #2. No significant difference could be found between the numbers of suspensions in each of the grading periods nor was there a relationship between the number of suspensions and school grade. A statistically significant relationship was found between student attendance and school grade. When plotted, this relationship was found to be quadratic in nature and formed a loose inverted U for each of the four years during which data were collected. This indicated that students in very high and very low performing schools had low levels of absences while those in the midlevel of the distribution of school performance (C schools) had the greatest rates of absence. Identifying a relationship between the pressures associated with high stakes testing and student escape behavior suggests that it might be useful for building administrators to reevaluate test preparation activities and procedures being used in their building and to include anxiety reducing strategies. As a relationship was found, it sets the foundation for future studies to identify whether testing related activities are impacting some students emotionally and are causing unintended consequences of testing mandates.

Raman microscopy of formamide-intercalated kaolinites treated by controlled-rate thermal analysis technology

Raman spectroscopy of formamide-intercalated kaolinites treated using controlled-rate thermal analysis technology (CRTA), allowing the separation of adsorbed formamide from intercalated formamide in formamide-intercalated kaolinites, is reported. The Raman spectra of the CRTA-treated formamide-intercalated kaolinites are significantly different from those of the intercalated kaolinites, which display a combination of both intercalated and adsorbed formamide. An intense band is observed at 3629 cm-1, attributed to the inner surface hydroxyls hydrogen bonded to the formamide. Broad bands are observed at 3600 and 3639 cm-1, assigned to the inner surface hydroxyls, which are hydrogen bonded to the adsorbed water molecules. The hydroxyl-stretching band of the inner hydroxyl is observed at 3621 cm-1 in the Raman spectra of the CRTA-treated formamide-intercalated kaolinites. The results of thermal analysis show that the amount of intercalated formamide between the kaolinite layers is independent of the presence of water. Significant differences are observed in the CO stretching region between the adsorbed and intercalated formamide.

Hydrazine-hydrate intercalated halloysite under controlled-rate thermal analysis conditions

The thermal behaviour of halloysite fully expanded with hydrazine-hydrate has been investigated in nitrogen atmosphere under dynamic heating and at a constant, pre-set decomposition rate of 0.15 mg min-1. Under controlled-rate thermal analysis (CRTA) conditions it was possible to resolve the closely overlapping decomposition stages and to distinguish between adsorbed and bonded reagent. Three types of bonded reagent could be identified. The loosely bonded reagent amounting to 0.20 mol hydrazine-hydrate per mol inner surface hydroxyl is connected to the internal and external surfaces of the expanded mineral and is present as a space filler between the sheets of the delaminated mineral. The strongly bonded (intercalated) hydrazine-hydrate is connected to the kaolinite inner surface OH groups by the formation of hydrogen bonds. Based on the thermoanalytical results two different types of bonded reagent could be distinguished in the complex. Type 1 reagent (approx. 0.06 mol hydrazine-hydrate/mol inner surface OH) is liberated between 77 and 103°C. Type 2 reagent is lost between 103 and 227°C, corresponding to a quantity of 0.36 mol hydrazine/mol inner surface OH. When heating the complex to 77°C under CRTA conditions a new reflection appears in the XRD pattern with a d-value of 9.6 Å, in addition to the 10.2 Ĺ reflection. This new reflection disappears in contact with moist air and the complex re-expands to the original d-value of 10.2 Å in a few h. The appearance of the 9.6 Å reflection is interpreted as the expansion of kaolinite with hydrazine alone, while the 10.2 Å one is due to expansion with hydrazine-hydrate. FTIR (DRIFT) spectroscopic results showed that the treated mineral after intercalation/deintercalation and heat treatment to 300°C is slightly more ordered than the original (untreated) clay.