Discounting Nordhaus

This paper evaluates Nordhaus’s neoclassical complaints about the Stern Review from the vantage point of classical growth theory. Nordhaus argues that the Stern Review exaggerates the effects of global warming because it uses a discount rate that is well below the market rate of return on capital. From the perspective of classical growth theory, Nordhaus’s belief in choosing preference parameters for the social planner based on observed market rates of return filtered through the Ramsey equation is equivalent to assigning the preferences of the capitalist agents to the social planner. This equivalence is an implication of the Cambridge Theorem, which interprets the Ramsey equation as the saving function of the capitalist agents. The classical theory of growth interprets the market return to capital as a reflection of the property relations of capitalist society that does not offer the social planner any information that would be useful in resolving the problem of global warming. Contrary to the viewpoint of neoclassical economic theory, the market return to capital offers no information about preferences for the social welfare function or about the putative “marginal product” of conventional capital.Global warming, Stern Review, Discounting, Ramsey equation, Cambridge equation, Cambridge Theorem

Falling into the Liquidity Trap: Notes on the Global Economic Crisis

This paper examines the underlying structural imbalances leading up to the Great Recession of 2007-2009 from the vantage point of Hyman Minsky’s theory of the liquidity trap. The traditional approach to the liquidity trap focuses on the zero interest rate boundary, while Minsky’s theory focuses on three conditions that make investment spending unresponsive to monetary policy: low underlying ex post profitability of capital, weak expectations about future profitability, and uncertainty about prospective yields. The paper structures an empirical investigation of profitability and accumulation around these three factors. The Great Recession was preceded by an unbalanced recovery in which residential investment led demand while business fixed investment was structurally weak, given the strong ex post profitability of capital and the low interest rate environment. It is hypothesized that increased import penetration and concerns about the sustainability of profitability eroded both expectations and confidence about prospective yields. The Great Recession appears in this and several other dimensions to be a crisis of disproportionality.

Can Rescheduling Explain the New Jersey Minimum Wage Studies?

This paper interprets the New Jersey minimum wage studies of Card and Krueger and their critics, Neumark and Wascher, through a scheduling model. The former found an increase in the number of workers in New Jersey fast-food restaurants after the state minimum wage was increased, while the latter found a decline in the total payroll hours of New Jersey restaurants. The scheduling model predicts that firms will substitute workers for hours per worker after a wage increase, which is consistent with both studies. Evidence from a subset of restaurants that reported both workers and hours data to Neumark and Wascher supports this interpretation. The New Jersey minimum wage appears to have redistributed income effectively to the targeted population by raising wages and reducing weekly hours per worker by just over one hour without causing any job loss.

"Tinbergen Rules the Taylor Rule"

This paper elaborates a simple model of growth with a Taylor-like monetary policy rule that includes inflation targeting as a special case. When the inflation process originates in the product market, inflation targeting locks in the unemployment rate prevailing at the time the policy matures. Even though there is an apparent NAIRU and Phillips curve, this long-run position depends on initial conditions; in the presence of stochastic shocks, it would be path dependent. Even with an employment target in the Taylor Rule, the monetary authority will generally achieve a steady state that misses both its targets since there are multiple equilibria. With only one policy instrument, Tinbergen's Rule dictates that policy can only achieve one goal, which can take the form of a linear combination of the two targets.

Cooperativity and Heterogeneity in Plastic Crystals Studied by Nonlinear Dielectric Spectroscopy

The glassy dynamics of plastic-crystalline cyclo-octanol and ortho-carborane, where only the molecular reorientational degrees of freedom freeze without long-range order, is investigated by nonlinear dielectric spectroscopy. Marked differences to canonical glass formers show up: While molecular cooperativity governs the glassy freezing, it leads to a much weaker slowing down of molecular dynamics than in supercooled liquids. Moreover, the observed nonlinear effects cannot be explained with the same heterogeneity scenario recently applied to canonical glass formers. This supports ideas that molecular relaxation in plastic crystals may be intrinsically non-exponential. Finally, no nonlinear effects were detected for the secondary processes in cyclo-octanol.Comment: Final version as accepted for publication in Phys. Rev. Lett. 6 pages, 5 figures (including 1 page and figure in Supplemental Material

Cognitive and affective determinants of entrepreneurial decisions experimentally examined

Objectives. Our study investigates the role of emotions and cognitions in the pre-entrepreneurial decision-making process, i.e., the process prior to the decision to exploit an entrepreneurial opportunity, which has only looked at by few researchers so far. Methods. An online questionnaire experiment with three different samples, i.e., employees, students, and entrepreneurs (N = 578) using 16 different experimentally manipulated entrepreneurial scenarios was conducted. Results. Findings indicate that the relationship between the characteristics of an entrepreneurial opportunity and the evaluation of it is mediated by cognitive appraisals. Moreover, negative and positive affects moderate the relationship between the evaluation of an entrepreneurial opportunity and the decision to exploit it. Conclusion. This study confirms the central assumption of cognitive appraisal theories of emotion which state that the subjective representation of objective entrepreneurial opportunities better predicts the decision to exploit an entrepreneurial opportunity than the objective characteristics of the entrepreneurial situation

Nonlinear dielectric response of Debye, alpha, and beta relaxation in 1-propanol

We present nonlinear dielectric measurements of glass-forming 1-propanol, a prototypical example for the monohydroxy alcohols that are known to exhibit unusual relaxation dynamics, namely an additional Debye relaxation, slower than the structural alpha relaxation. Applying high ac fields of 468 kV/cm allows for a detailed investigation of the nonlinear properties of all three relaxation processes occurring in 1-propanol, namely the Debye, alpha, and beta relaxation. Both the field-induced variations of dielectric constant and loss are reported. Polarization saturation and the absorption of field energy govern the findings in the Debye-relaxation regime, well consistent with the suggested cluster-like nature of the relaxing entities. The behavior of the alpha relaxation is in good accord with the expectations for a heterogeneous relaxation scenario. Finally, the Johari-Goldstein beta-relaxation in 1-propanol seems to exhibit no or only weak field dependence, in agreement with recent findings for the excess wing of canonical glass formers.Comment: 8 pages, 4 figure

Surface-hopping dynamics and decoherence with quantum equilibrium structure

In open quantum systems decoherence occurs through interaction of a quantum subsystem with its environment. The computation of expectation values requires a knowledge of the quantum dynamics of operators and sampling from initial states of the density matrix describing the subsystem and bath. We consider situations where the quantum evolution can be approximated by quantum-classical Liouville dynamics and examine the circumstances under which the evolution can be reduced to surface-hopping dynamics, where the evolution consists of trajectory segments evolving exclusively on single adiabatic surfaces, with probabilistic hops between these surfaces. The justification for the reduction depends on the validity of a Markovian approximation on a bath averaged memory kernel that accounts for quantum coherence in the system. We show that such a reduction is often possible when initial sampling is from either the quantum or classical bath initial distributions. If the average is taken only over the quantum dispersion that broadens the classical distribution, then such a reduction is not always possible.Comment: 11, pages, 8 figure

MTP: A Movie Transmission Protocol for Multimedia Applications

Typical color video adapters of today's PCs and workstationsuse 8 bits per pixel as an index into the color lookup table (CLUT). Full color pictures and movies have to be reduced to 256 colors. In order to avoid false colors between two frames of a digital movie, a novel technique for computing the CLUT's is proposed: A subset of the CLUT entries is reserved for new colors of the next frame. The paper presents an algorithm for the gradual adaption of the color lookup table during the transmission of a movie. First experience is reported in the framework of the XMovie project