Studies on the international effects of real shocks

This doctoral thesis addresses the macroeconomic effects of real shocks in open economies in flexible exchange rate regimes. The first study of this thesis analyses the welfare effects of fiscal policy in a small open economy, where private and government consumption are substitutes in terms of private utility. The main findings are as follows: fiscal policy raises output, bringing it closer to its efficient level, but is not welfare-improving even though government spending directly affects private utility. The main reason for this is that the introduction of useful government spending implies a larger crowding-out effect on private consumption, when compared with the `pure waste' case. Utility decreases since one unit of government consumption yields less utility than one unit of private consumption. The second study of this thesis analyses the question of how the macroeconomic effects of fiscal policy in a small open economy depend on optimal intertemporal behaviour. The key result is that the effects of fiscal policy depend on the size of the elasticity of substitution between traded and nontraded goods. In particular, the sign of the current account response to fiscal policy depends on the interplay between the intertemporal elasticity of aggregate consumption and the elasticity of substitution between traded and nontraded goods. The third study analyses the consequences of productive government spending on the international transmission of fiscal policy. A standard result in the New Open Economy Macroeconomics literature is that a fiscal shock depreciates the exchange rate. I demonstrate that the response of the exchange rate depends on the productivity of government spending. If productivity is sufficiently high, a fiscal shock appreciates the exchange rate. It is also shown that the introduction of productive government spending increases both domestic and foreign welfare, when compared with the case where government spending is wasted. The fourth study analyses the question of how the international transmission of technology shocks depends on the specification of nominal rigidities. A growing body of empirical evidence suggests that a positive technology shock leads to a temporary decline in employment. In this study, I demonstrate that the open economy dimension can enhance the ability of sticky price models to account for the evidence. The reasoning is as follows. An improvement in technology appreciates the nominal exchange rate. Under producer-currency pricing, the exchange rate appreciation shifts global demand toward foreign goods away from domestic goods. This causes a temporary decline in domestic employment.

Essays on Economic Integration and Labour Demand

This dissertation consists of an introductory section and three essays investigating the effects of economic integration on labour demand by using theoretical models and by empirical analysis. The essays adopt an intra-industry trade approach to specify a theoretical framework of estimation for determining the effects of economic integration on employment. In all the essays the empirical aim is to explore the labour demand consequences of European integration. The first essay analyzes how labour-demand elasticities with own price have changed during the process of economic integration. As a theoretical result, intensified trade competition increases labour-demand elasticity, whereas better advantage of economies of scale decreases labour-demand elasticity by decreasing the elasticity of substitution between differentiated products. Furthermore, if integration gives rise to an increase in input-substitutability and/or outsourcing activities, labour demand will become more elastic. Using data from the manufacturing sector from 1975 to 2002, the empirical results provide support for the hypothesis that European integration has contributed to increased elasticities of total labour demand in Finland. The second essay analyzes how economic integration affects the impact of welfare poli-cies on employment. The essay considers the viability of financing the public sector, i.e. public consumption and social security expenses, by general labour taxation in an economy which has become more integrated into international product markets. The theoretical results of the second essay indicate that, as increased trade competition crowds out better economies of scale, it becomes more costly to maintain welfare systems financed by labour taxation. Using data from European countries for the years 1975 to 2004, the empirical results provide inconsistent evidence for the hypothesis that economic integration has contributed to the distortion effects of welfare policies on employment. The third essay analyzes the impact of profit sharing on employment as a way to introduce wage flexibility into the process of economic integration. The results of the essay suggest that, in theory, the effects of economic integration on the impact of profit sharing on employment clearly depend on a trade-off between intensified competition and better advantage of economies of scale. If product market competition increases, the ability of profit sharing to improve employment through economic integration increases with moderated wages. While, the economic integration associating with market power in turn decrease the possibilities of profit sharing with higher wages to improve employment. Using data from the manufacturing sector for the years 1996 to 2004, the empirical results show that profit-sharing has a positive impact on employment during the process of European integration, but can have ambiguous effects on the stability of employment in Finland.

Energy use in Indian household sector - An actor-oriented approach

Over the years, significant changes have taken place with regard to the type as well the quantity of energy used in Indian households. Many factors have contributed in bringing these changes. These include availability of energy, security of supplies, efficiency of use, cost of device, price of energy carriers, ease of use, and external factors like technological development, introduction of subsidies, and environmental considerations. The present paper presents the pattern of energy consumption in the household sector and analyses the causalities underlying the present usage patterns. It identifies specific (groups of) actors, study their specific situations, analyse the constraints and discusses opportunities for improvement. This can be referred to ``actor-oriented'' analysis in which we understand how various actors of the energy system are making the system work, and what incentives and constraints each of these actors is experiencing. It analyses actor linkages and their impact on the fuel choice mechanism. The study shows that the role of actors in household fuel choice is significant and depends on the level of factors - micro, meso and macro. It is recommended that the development interventions should include actor-oriented tools in energy planning, implementation, monitoring and evaluation. The analysis is based on the data from the national sample survey (NSS), India. This approach provides a spatial viewpoint which permits a clear assessment of the energy carrier choice by the households and the influence of various actors. The scope of the paper is motivated and limited by suggesting and formulating a powerful analytical technique to analyse the problem involving the role of actors in the Indian household sector.

Essays on macroeconomic effects of fiscal policy rules

Economic and Monetary Union can be characterised as a complicated set of legislation and institutions governing monetary and fiscal responsibilities. The measures of fiscal responsibility are to be guided by the Stability and Growth Pact, which sets rules for fiscal policy and makes a discretionary fiscal policy virtually impossible. To analyse the effects of the fiscal and monetary policy mix, we modified the New Keynesian framework to allow for supply effects of fiscal policy. We show that defining a supply-side channel for fiscal policy using an endogenous output gap changes the stabilising properties of monetary policy rules. The stability conditions are affected by fiscal policy, so that the dichotomy between active (passive) monetary policy and passive (active) fiscal policy as stabilising regimes does not hold, and it is possible to have an active monetary - active fiscal policy regime consistent with dynamical stability of the economy. We show that, if we take supply-side effects into ac-count, we get more persistent inflation and output reactions. We also show that the dichotomy does not hold for a variety of different fiscal policy rules based on government debt and budget deficit, using the tax smoothing hypothesis and formulating the tax rules as difference equations. The debt rule with active monetary policy results in indeterminacy, while the deficit rule produces a determinate solution with active monetary policy, even with active fiscal policy. The combination of fiscal requirements in a rule results in cyclical responses to shocks. The amplitude of the cycle is larger with more weight on debt than on deficit. Combining optimised monetary policy with fiscal policy rules means that, under a discretionary monetary policy, the fiscal policy regime affects the size of the inflation bias. We also show that commitment to an optimal monetary policy not only corrects the inflation bias but also increases the persistence of output reactions. With fiscal policy rules based on the deficit we can retain the tax smoothing hypothesis also in a sticky price model.

The Macroeconomic Effects of Fiscal Policy in a Small Open Economy under a Flexible Exchange Rate Regime

This licentiate's thesis analyzes the macroeconomic effects of fiscal policy in a small open economy under a flexible exchange rate regime, assuming that the government spends exclusively on domestically produced goods. The motivation for this research comes from the observation that the literature on the new open economy macroeconomics (NOEM) has focused almost exclusively on two-country global models and the analyses of the effects of fiscal policy on small economies are almost completely ignored. This thesis aims at filling in the gap in the NOEM literature and illustrates how the macroeconomic effects of fiscal policy in a small open economy depend on the specification of preferences. The research method is to present two theoretical model that are extensions to the model contained in the Appendix to Obstfeld and Rogoff (1995). The first model analyzes the macroeconomic effects of fiscal policy, making use of a model that exploits the idea of modelling private and government consumption as substitutes in private utility. The model offers intuitive predictions on how the effects of fiscal policy depend on the marginal rate of substitution between private and government consumption. The findings illustrate that the higher the substitutability between private and government consumption, (i) the bigger is the crowding out effect on private consumption (ii) and the smaller is the positive effect on output. The welfare analysis shows that the less fiscal policy decreases welfare the higher is the marginal rate of substitution between private and government consumption. The second model of this thesis studies how the macroeconomic effects of fiscal policy depend on the elasticity of substitution between traded and nontraded goods. This model reveals that this elasticity a key variable to explain the exchange rate, current account and output response to a permanent rise in government spending. Finally, the model demonstrates that temporary changes in government spending are an effective stabilization tool when used wisely and timely in response to undesired fluctuations in output. Undesired fluctuations in output can be perfectly offset by an opposite change in government spending without causing any side-effects.

Storage stability of solid rocket fuel. 1. Effect of temperature

Ageing behaviour of polystyrene (PS)/ammonium perchlorate (AP) propellent leading to ballistic changes has been studied. It follows a zero-order kinetic law. Ageing behaviour leading to change in burning rate ( ) in the temperature range of 60–200 ° C was found to remain the same. The dependence of the change of the average thermal decomposition (TD) rate at 230 and 260°C on the change in burning rate for the propellant aged at 100 ° C in air suggests that the slow TD of the propellant is the cause of ageing. The safe-life (for a pre-assigned burning-rate change limit) at 25 ° C in air has been calculated as a function of the rate of change.

Correcting trade distortions in a small open economy

This paper considers the second-best strategy of correcting a wide variety of trade distortions in a small open economy with perfect competition in all markets. Using the tools of duality, we obtain some general properties of the structure and the levels of the optimal taxlsubsidy rates. The paper also analyzes the welfare effects of unilateral piecemeal trade policy reforms when some of the quota distortions—imposed by the foreign countries—are unalterable. It is shown that the merits of unilateral trade policy reforms that are emphasized in the literature crucially depend on the absence of unalterable foreign imposed quotas.

Poly (vinyl alcohol) hydrogel membrane as electrolyte for direct borohydride fuel cells

A direct borohydride fuel cell (DBFC) employing a poly (vinyl alcohol)hydrogel membrane electrolyte (PHME) is reported. The DBFC employs an AB(5) Misch metal alloy as anode and a goldplated stainless steel mesh as cathode in conjunction with aqueous alkaline solution of sodium borohydride as fuel and aqueous acidified solution of hydrogen peroxide as oxidant. Room temperature performances of the PHME-based DBFC in respect of peak power outputs; ex-situ cross-over of oxidant, fuel,anolyte and catholyte across the membrane electrolytes; utilization efficiencies of fuel and oxidant, as also cell performance durability are compared with a similar DBFC employing a NafionA (R)-117 membrane electrolyte (NME). Peak power densities of similar to 30 and similar to 40 mW cm(-2) are observed for the DBFCs with PHME and NME, respectively. The crossover of NaBH4 across both the membranes has been found to be very low. The utilization efficiencies of NaBH4 and H2O2 are found to be similar to 24 and similar to 59%, respectively for the PHME-based DBFC; similar to 18 and similar to 62%, respectively for the NME-based DBFC. The PHME and NME-based DBFCs exhibit operational cell potentials of similar to 1 center dot 2 and similar to 1 center dot 4 V, respectively at a load current density of 10 mA cm(-2) for similar to 100 h.

A Methanol-Tolerant Carbon-Supported Pt-Au Alloy Cathode Catalyst for Direct Methanol Fuel Cells and Its Evaluation by DFT

A Pt-Au alloy catalyst of varying compositions is prepared by codeposition of Pt and Au nanoparticles onto a carbon support to evaluate its electrocatalytic activity toward an oxygen reduction reaction (ORR) with methanol tolerance in direct methanol fuel cells. The optimum atomic weight ratio of Pt to Au in the carbon-supported Pt-Au alloy (Pt-Au/C) as established by cell polarization, linear-sweep voltammetry (LSV), and cyclic voltammetry (CV) studies is determined to be 2:1. A direct methanol fuel cell (DMFC) comprising a carbon-supported Pt-Au (2:1) alloy as the cathode catalyst delivers a peak power density of 120 mW/cm2 at 70 °C in contrast to the peak power density value of 80 mW/cm2 delivered by the DMFC with carbon-supported Pt catalyst operating under identical conditions. Density functional theory (DFT) calculations on a small model cluster reflect electron transfer from Pt to Au within the alloy to be responsible for the synergistic promotion of the oxygen-reduction reaction on a Pt-Au electrode.

A direct borohydride fuel cell employing Prussian Blue as mediated electron-transfer hydrogen peroxide reduction catalyst

A direct borohydride-hydrogen peroxide fuel cell employing carbon-supported Prussian Blue (PB) as mediated electron-transfer cathode catalyst is reported. While operating at 30 °C, the direct borohydride-hydrogen peroxide fuel cell employing carbon-supported PB cathode catalyst shows superior performance with the maximum output power density of 68 mW cm−2 at an operating voltage of 1.1 V compared to direct borohydride-hydrogen peroxide fuel cell employing the conventional gold-based cathode with the maximum output power density of 47 mW cm−2 at an operating voltage of 0.7 V. X-ray diffraction (XRD), Scanning Electron Microscopy (SEM), and Energy Dispersive X-ray Analysis (EDAX) suggest that anchoring of Cetyl-Trimethyl Ammonium Bromide (CTAB) as a surfactant moiety on carbon-supported PB affects the catalyst morphology. Polarization studies on direct borohydride-hydrogen peroxide fuel cell with carbon-supported CTAB-anchored PB cathode exhibit better performance with the maximum output power density of 50 mW cm−2 at an operating voltage of 1 V than the direct borohydride-hydrogen peroxide fuel cell with carbon-supported Prussian Blue without CTAB with the maximum output power density of 29 mW cm−2 at an operating voltage of 1 V.

Electrochemical properties and intermediate-temperature fuel cell performance of dense yttrium-doped barium zirconate with calcium addition

Although BaZr 0.8Y 0.2O 3-δ(BZY) possesses large bulk proton conductivity and excellent chemical stability, its poor sinterability and grain boundaries block proton conduction. In this work, the effect of Ca as a co-dopant and as a sintering aid (as CaO), on the sinterability, proton conductivity, and fuel cell performance of BZY was investigated. The addition of 4 mol% CaO significantly improved the BZY sinterability: BZY pellets with densities of 92.7% and 97.5% with respect to the theoretical density were obtained after sintering at 1500°C and 1600°C, respectively. The improved BZY sinterability by CaO addition resulted also in a large proton conductivity; at 600°C, the total conductivity of BZY-CaO was 2.14 × 10 -3 S/cm, in wet Ar. Anode-supported fuel cells with 25 μm-thick BZY-CaO electrolyte membranes were fabricated by a dual-layer co-firing technique. The peak power density of the fuel cell with a BZY-Ni/BZY-4CaO/BZY-LSCF (La 0.6Sr 0.4Fe 0.8Co 0.2O 3-δ) configuration was 141 mW/cm 2 at 700°C, several times larger than the reported values of BZY electrolyte membrane fuel cells sintered with the addition of CuO or ZnO, demonstrating promising features for practical fuel cell applications.

Lowering grain boundary resistance of BaZr0.8Y0.2O3−δ with LiNO3 sintering-aid improves proton conductivity for fuel cell operation

A novel sintering additive based on LiNO3 was used to overcome the drawbacks of poor sinterability and low grain boundary conductivity in BaZr0.8Y0.2O3-δ (BZY20) protonic conductors. The Li-additive totally evaporated during the sintering process at 1600°C for 6 h, which led to highly dense BZY20 pellets (96.5% of the theoretical value). The proton conductivity values of BZY20 with Li sintering-aid were significantly larger than the values reported for BZY sintered with other metal oxides, due to the fast proton transport in the "clean" grain boundaries and grain interior. The total conductivity of BZY20-Li in wet Ar was 4.45 × 10-3 S cm-1 at 600°C. Based on the improved sinterability, anode-supported fuel cells with 25 μm-thick BZY20-Li electrolyte membranes were fabricated by a co-firing technique. The peak power density obtained at 700°C for a BZY-Ni/BZY20-Li/La0.6Sr0.4Co0.2Fe 0.8O3-δ (LSCF)-BZY cell was 53 mW cm-2, which is significantly larger than the values reported for fuel cells using electrolytes made of BZY sintered with the addition of ZnO and CuO, confirming the advantage of using Li as a sintering aid.