A New Approach to Forecasting Exchange Rates

Building on purchasing power parity theory, this paper proposes a new approach to forecasting exchange rates using the Big Mac data from The Economist magazine. Our approach is attractive in three aspects. Firstly, it uses easily-available Big Mac prices as input. These prices avoid several serious problems associated with broad price indexes, such as the CPI, that are used in conventional PPP studies. Secondly, this approach provides real-time exchange-rate forecasts at any forecast horizon. Such real-time forecasts can be made on a day-to-day basis if required, so that the forecasts are based on the most up-to-date information set. These high-frequency forecasts could be particularly appealing to decision makers who want up-to-date forecasts of exchange rates. Finally, as our forecasts are obtained through Monte Carlo simulation, estimation uncertainty is made explicit in our framework which provides the entire distribution of exchange rates, not just a single point estimate. A comparison of our forecasts with the random walk model shows that although the random walk is superior for very short horizons, our approach tends to dominate over the medium to longer term.Exchange-rate forecasting, Bic Mac prices, purchasing power parity, Monte Carlo simulation

Search for Higgs Bosons Decay H→γγH\to \gamma\gamma Using Vector Boson Fusion

The sensitivity of the ATLAS experiment to low mass SM Higgs produced via Vector Boson Fusion mechanism with $H\to \gamma\gamma$ is invest igated. A cut based event selection has been chosen to optimize the expected signal significance with this decay mode. A signal significance of 2. 2$\sigma$ may be achieved for M_H=130 \gev with 30 fb$^{-1}$ of accumulated luminosity

The Demand for Vice: Inter-Commodity Interactions with Uncertainty

This paper introduces a simulation procedure in the context of a demand system for vice -- marijuana, tobacco and alcohol -- to formally account for the inherent uncertainty in marijuanarelated data and parameters. This entails using existing econometric estimates pertaining to the consumption of alcohol and tobacco, and the much more limited information on marijuana. As an illustrative application of the framework, we simulate the impact on the consumption of vice of a reduction in the price of marijuana; changes in pre-existing taxes on tobacco and alcohol; legalisation of marijuana, which is then subject to taxation; and a tax tradeoff involving the introduction of a revenue-neutral tax on marijuana that is offset by reduced alcohol taxation. The revenue-maximising tax rate of about 50 percent is estimated to yield additional revenue of about 15 percent of the pre-existing proceeds from vice taxation. The role of uncertainty surrounding preference interactions within vice, as well as the uncertainties regarding marijuana data, is highlighted by providing the whole distribution of each endogenous variable.

Spatial and temporal cellular responses to single-strand breaks in human cells

DNA single-strand breaks (SSB) are one of the most frequent DNA lesions produced by reactive oxygen species and during DNA metabolism, but the analysis of cellular responses to SSB remains difficult due to the lack of an experimental method to produce SSB alone in cells. By using human cells expressing a foreign UV damage endonuclease (UVDE) and irradiating the cells with UV through tiny pores in membrane filters, we created SSB in restricted areas in the nucleus by the immediate action of UVDE on UV-induced DNA lesions. Cellular responses to the SSB were characterized by using antibodies and fluorescence microscopy. Upon UV irradiation, poly(ADP-ribose) synthesis occurred immediately in the irradiated area. Simultaneously, but dependent on poly(ADP-ribosyl)ation, XRCC1 was translocated from throughout the nucleus, including nucleoli, to the SSB. The BRCT1 domain of XRCC1 protein was indispensable for its poly(ADP-ribose)-dependent recruitment to the SSB. Proliferating cell nuclear antigen and the p150 subunit of chromatin assembly factor 1 also accumulated at the SSB in a detergent-resistant form, which was significantly reduced by inhibition of poly(ADP-ribose) synthesis. Our results show the importance of poly(ADP-ribosyl)ation in sequential cellular responses to SSB

How Long is the Long Run? Evidence from the Foreign Exchange Market

The aim of this paper is to estimate the length of the long run in the foreign exchange market. We do this by examining the link between exchange rates and relative prices, based on the implications of purchasing power parity (PPP) theory. Using a new approach, we test if the ratios of variances of exchange rates to prices are unity over all horizons, as implied by PPP. Through Monte Carlo simulations, we derive the variance ratios under the null of equal variances and examine the power and size of the test. We find evidence that PPP holds in the long run. While the long run based on the consumer prices appears to be “long”, about five years, the estimate of the long run based on the single good, Big Macs, is shorter (two years).

The Big Mac Index 21 Years On: An Evaluation of Burgereconomics

The Big Mac Index, introduced by The Economist magazine 21 years ago, claims to provide the “true value” of a large number of currencies. This paper assesses the economic value of this index. We show that (i) the index suffers from a substantial bias; (ii) once the bias is allowed for, the index tracks exchange rates reasonably well over the medium to longer term in accordance with relative purchasing power parity theory; (iii) the index is at least as good as the industry standard, the random walk model, in predicting future currency values for all but short-term horizons; (iv) future nominal exchange rates are more responsive than prices to currency mispricing, but this split is difficult to determine precisely. While not perfect, at a cost of less than $US10 per year, the index seems to provide good value for money.

Strong Analytic Controllability for Hydrogen Control Systems

The realization and representation of so(4,2) associated with the hydrogen atom Hamiltonian are derived. By choosing operators from the realization of so(4,2) as interacting Hamiltonians, a hydrogen atom control system is constructed, and it is proved that this control system is strongly analytically controllable based on a time-dependent strong analytic controllability theorem.Comment: 6 pages; corrected typo; added equations in section III for representation states of so(4,2). accepted by CDC 200

Collinear antiferromagnetic state in a two-dimensional Hubbard model at half filling

In a half-filled Hubbard model on a square lattice, the next-nearest-neighbor hopping causes spin frustration, and the collinear antiferromagnetic (CAF) state appears as the ground state with suitable parameters. We find that there is a metal-insulator transition in the CAF state at a critical on-site repulsion. When the repulsion is small, the CAF state is metallic, and a van Hove singularity can be close to the Fermi surface, resulting in either a kink or a discontinuity in the magnetic moment. When the on-site repulsion is large, the CAF state is a Mott insulator. A first-order transition from the CAF phase to the antiferromagnetic phase and a second-order phase transition from the CAF phase to the paramagnetic phase are obtained in the phase diagram at zero temperature.Comment: 5 pages, 5 figures, two column