The role of trade costs in global production networks : evidence from China's processing trade regime

In a seminal contribution, Yi (2003) has shown that vertically specialized trade should be more sensitive to changes in trade costs than regular trade. Yet empirical evidenceof this remains remarkably scant. This paper uses data from China's processing trade regime to analyze the role of trade costs on trade within global production networks (GPNs). Under this regime, firms are granted duty exemptions on imported inputs as long as they are used solely for export purposes. As a result, the data provide information on trade between three sequential nodes of a global supply chain: the location of input production, the location of processing (in China) and the location of further consumption. This makes it possible to examine the role of both trade costs related to the import of inputs (upstream trade costs) and trade costs related to the export of final goods (downstream trade costs) on intra-GPN trade. The authors show that intra-GPN trade differs from regular trade in that it not only depends on downstream trade costs, but also on upstream trade costs and the interaction of both. Moreover, intra-GPN trade is more sensitive to oil price movements and business cycle movements than regular trade. Finally, the paper analyzes three channels through which intra-GPN trade have amplified the trade collapse during the recent Global Recession.Economic Theory&Research,Free Trade,Trade Policy,Emerging Markets,Currencies and Exchange Rates

When China Sneezes, Asia Catches a Cold: the Effects of China’s Export Decline in the Realm of the Global Economic Crisis

In this discussion report, we dispel the widely held misconception that China’s economy is excessively export-dependent and therefore particularly vulnerable to a drop in export demand. In the past two decades, China’s dramatic exports rise has largely been driven by the fact that many foreign firms have offshored a slice of their value chain – labor-intensive final assembly – to China for export purposes. Many of these assembly plants heavily rely on imported inputs from East Asian economies to produce their export products. Because of this feature, China passes on a large portion of its negative export demand shocks to the East Asian economies by reducing demand for their imported inputs. Using recent trade data, we provide evidence of this business cycle pass-through during the current economic crisis.

Sexual and marital trajectories and HIV infection among ever-married women in rural Malawi.

OBJECTIVE: To explore how sexual and marital trajectories are associated with HIV infection among ever-married women in rural Malawi. METHODS: Retrospective survey data and HIV biomarker data for 926 ever-married women interviewed in the Malawi Diffusion and Ideational Change Project were used. The associations between HIV infection and four key life course transitions considered individually (age at sexual debut, premarital sexual activity, entry into marriage and marital disruption by divorce or death) were examined. These transitions were then sequenced to construct trajectories that represent the variety of patterns in the data. The association between different trajectories and HIV prevalence was examined, controlling for potentially confounding factors such as age and region. RESULTS: Although each life course transition taken in isolation may be associated with HIV infection, their combined effect appeared to be conditional on the sequence in which they occurred. Although early sexual debut, not marrying one's first sexual partner and having a disrupted marriage each increased the likelihood of HIV infection, their risk was not additive. Women who both delayed sexual debut and did not marry their first partner are, once married, more likely to experience marital disruption and to be HIV-positive. Women who marry their first partner but who have sex at a young age, however, are also at considerable risk. CONCLUSIONS: These findings identify the potential of a life course perspective for understanding why some women become infected with HIV and others do not, as well as the differentials in HIV prevalence that originate from the sequence of sexual and marital transitions in one's life. The analysis suggests, however, the need for further data collection to permit a better examination of the mechanisms that account for variations in life course trajectories and thus in lifetime probabilities of HIV infection

Secure Coherent-state Quantum Key Distribution Protocols with Efficient Reconciliation

We study the equivalence between a realistic quantum key distribution protocol using coherent states and homodyne detection and a formal entanglement purification protocol. Maximally-entangled qubit pairs that one can extract in the formal protocol correspond to secret key bits in the realistic protocol. More specifically, we define a qubit encoding scheme that allows the formal protocol to produce more than one entangled qubit pair per coherent state, or equivalently for the realistic protocol, more than one secret key bit. The entanglement parameters are estimated using quantum tomography. We analyze the properties of the encoding scheme and investigate its application to the important case of the attenuation channel.Comment: REVTeX, 11 pages, 2 figure

Strong asymptotics for Cauchy biorthogonal polynomials with application to the Cauchy two--matrix model

We apply the nonlinear steepest descent method to a class of 3x3 Riemann-Hilbert problems introduced in connection with the Cauchy two-matrix random model. The general case of two equilibrium measures supported on an arbitrary number of intervals is considered. In this case, we solve the Riemann-Hilbert problem for the outer parametrix in terms of sections of a spinorial line bundle on a three-sheeted Riemann surface of arbitrary genus and establish strong asymptotic results for the Cauchy biorthogonal polynomials.Comment: 31 pages, 12 figures. V2; typos corrected, added reference

Quantum Distribution of Gaussian Keys with Squeezed States

A continuous key distribution scheme is proposed that relies on a pair of canonically conjugate quantum variables. It allows two remote parties to share a secret Gaussian key by encoding it into one of the two quadrature components of a single-mode electromagnetic field. The resulting quantum cryptographic information vs disturbance tradeoff is investigated for an individual attack based on the optimal continuous cloning machine. It is shown that the information gained by the eavesdropper then simply equals the information lost by the receiver.Comment: 5 pages, RevTe

Continuous variable private quantum channel

In this paper we introduce the concept of quantum private channel within the continuous variables framework (CVPQC) and investigate its properties. In terms of CVPQC we naturally define a "maximally" mixed state in phase space together with its explicit construction and show that for increasing number of encryption operations (which sets the length of a shared key between Alice and Bob) the encrypted state is arbitrarily close to the maximally mixed state in the sense of the Hilbert-Schmidt distance. We bring the exact solution for the distance dependence and give also a rough estimate of the necessary number of bits of the shared secret key (i.e. how much classical resources are needed for an approximate encryption of a generally unknown continuous-variable state). The definition of the CVPQC is analyzed from the Holevo bound point of view which determines an upper bound of information about an incoming state an eavesdropper is able to get from his optimal measurement.Comment: upper bound on information Eve can get was revised and substantially lowered (chapter IV), part of chapter III rewritten, several typos correcte

Gaussian Quantum Information

The science of quantum information has arisen over the last two decades centered on the manipulation of individual quanta of information, known as quantum bits or qubits. Quantum computers, quantum cryptography and quantum teleportation are among the most celebrated ideas that have emerged from this new field. It was realized later on that using continuous-variable quantum information carriers, instead of qubits, constitutes an extremely powerful alternative approach to quantum information processing. This review focuses on continuous-variable quantum information processes that rely on any combination of Gaussian states, Gaussian operations, and Gaussian measurements. Interestingly, such a restriction to the Gaussian realm comes with various benefits, since on the theoretical side, simple analytical tools are available and, on the experimental side, optical components effecting Gaussian processes are readily available in the laboratory. Yet, Gaussian quantum information processing opens the way to a wide variety of tasks and applications, including quantum communication, quantum cryptography, quantum computation, quantum teleportation, and quantum state and channel discrimination. This review reports on the state of the art in this field, ranging from the basic theoretical tools and landmark experimental realizations to the most recent successful developments.Comment: 51 pages, 7 figures, submitted to Reviews of Modern Physic

Large n limit of Gaussian random matrices with external source, Part III: Double scaling limit

We consider the double scaling limit in the random matrix ensemble with an external source \frac{1}{Z_n} e^{-n \Tr({1/2}M^2 -AM)} dM defined on $n\times n$ Hermitian matrices, where $A$ is a diagonal matrix with two eigenvalues $\pm a$ of equal multiplicities. The value $a=1$ is critical since the eigenvalues of $M$ accumulate as $n \to \infty$ on two intervals for $a > 1$ and on one interval for $0 < a < 1$. These two cases were treated in Parts I and II, where we showed that the local eigenvalue correlations have the universal limiting behavior known from unitary random matrix ensembles. For the critical case $a=1$ new limiting behavior occurs which is described in terms of Pearcey integrals, as shown by Br\'ezin and Hikami, and Tracy and Widom. We establish this result by applying the Deift/Zhou steepest descent method to a $3 \times 3$-matrix valued Riemann-Hilbert problem which involves the construction of a local parametrix out of Pearcey integrals. We resolve the main technical issue of matching the local Pearcey parametrix with a global outside parametrix by modifying an underlying Riemann surface.Comment: 36 pages, 9 figure

Quantum key distribution using gaussian-modulated coherent states

Quantum continuous variables are being explored as an alternative means to implement quantum key distribution, which is usually based on single photon counting. The former approach is potentially advantageous because it should enable higher key distribution rates. Here we propose and experimentally demonstrate a quantum key distribution protocol based on the transmission of gaussian-modulated coherent states (consisting of laser pulses containing a few hundred photons) and shot-noise-limited homodyne detection; squeezed or entangled beams are not required. Complete secret key extraction is achieved using a reverse reconciliation technique followed by privacy amplification. The reverse reconciliation technique is in principle secure for any value of the line transmission, against gaussian individual attacks based on entanglement and quantum memories. Our table-top experiment yields a net key transmission rate of about 1.7 megabits per second for a loss-free line, and 75 kilobits per second for a line with losses of 3.1 dB. We anticipate that the scheme should remain effective for lines with higher losses, particularly because the present limitations are essentially technical, so that significant margin for improvement is available on both the hardware and software.Comment: 8 pages, 4 figure