Collateral Damage: Trade Disruption and the Economic Impact of War

Conventional wisdom in economic history suggests that conflict between countries can be enormously disruptive of economic activity, especially international trade. Yet nothing is known empirically about these effects in large samples. We study the effects of war on bilateral trade for almost all countries with available data extending back to 1870. Using the gravity model, we estimate the contemporaneous and lagged effects of wars on the trade of belligerent nations and neutrals, controlling for other determinants of trade. We find large and persistent impacts of wars on trade, and hence on national and global economic welfare. A rough accounting indicates that such costs might be of the same order of magnitude as the """"direct"""" costs of war, such as lost human capital, as illustrated by case studies of World War I and World War II.trade

Productivity, Tradability, and the Long-Run Price Puzzle

Long-run cross-country price data exhibit a puzzle. Today, richer countries exhibit higher price levels than poorer countries, a stylized fact usually attributed to the Balassa- Samuelson effect. But looking back fifty years, this effect virtually disappears from the data. What is often assumed to be a universal property is actually quite specific to recent times, emerging a half century ago and growing steadily over time. What might potentially explain this historical pattern? We develop an updated Balassa-Samuelson model inspired by recent developments in trade theory, where a continuum of goods are differentiated by productivity, and where tradability is endogenously determined. Firms experiencing productivity gains are more likely to become tradable and crowd out firms not experiencing productivity gains. As a result the usual Balassa-Samuelson assumption—that productivity gains be concentrated in the traded goods sector—emerges endogenously, and the Balassa-Samuelson effect on relative price levels likewise evolves gradually over time.Balassa-Samuelson theory,

Banking and Currency Crises: How Common Are Twins?

The coincidence of banking and currency crises associated with the Asian financial crisis has drawn renewed attention to causal and common factors linking the two phenomena. In this paper, we analyze the incidence and underlying causes of banking and currency crises in 90 industrial and developing countries over the 1975-97 period. We measure the individual and joint ("twin") occurrence of bank and currency crises and assess the extent to which each type of crisis provides information about the likelihood of the other. We find that the twin crisis phenomenon is most common in financially liberalized emerging markets. The strong contemporaneous correlation between currency and bank crises in emerging markets is robust, even after controlling for a host of macroeconomic and financial structure variables and possible simultaneity bias. We also find that the occurrence of banking crises provides a good leading indicator of currency crises in emerging markets. The converse does not hold, however, as currency crises are not a useful leading indicator of the onset of future banking crises. We conjecture that the openness of emerging markets to international capital flows, combined with a liberalized financial structure, make them particularly vulnerable to twin crises.

Collateral Damage: Trade Disruption and the Economic Impact of War

Conventional wisdom in economic history suggests that conflict between countries can be enormously disruptive of economic activity, especially international trade. We study the effects of war on bilateral trade with available data extending back to 1870. Using the gravity model, we estimate the contemporaneous and lagged effects of wars on the trade of belligerent nations and neutrals, controlling for other determinants of trade as well as the possible effects of reverse causality. We find large and persistent impacts of wars on trade, on national income, and on global economic welfare. We also conduct a general equilibrium comparative statics exercise that indicates costs associated with lost trade might be at least as large as the conventionally measured "direct" costs of war, such as lost human capital, as illustrated by case studies of World War I and World War II.

Formation of molecules from a Cs Bose-Einstein condensate

Conversion of an expanding Bose-Einstein condensate of Cs atoms to a molecular one with an efficiency of more than 30% was observed recently in experiments by M. Mark et al., Europhys. Lett. 69, 706 (2005). The theory presented here describes the experimental results. Values of resonance strength of 8 mG and rate coefficients for atom-molecule deactivation of $1\times 10^{-11}$ cm$^{3}/$s and molecule-molecule one of $1.5\times 10^{-9}$ cm$^{3}/$s are estimated by a fit of the theoretical results to the experimental data. Near the resonance, where the highest conversion efficiency was observed, the results demonstrate strong sensitivity to the magnetic field ripple and inhomogeneity. A conversion efficiency of about 60% is predicted by non-mean-field calculations for the densities and sweep rates lower than the ones used in the experiments.Comment: 9 pages, 10 figure

Combating Global Climate Change: Why a Carbon Tax is a Better Response to Global Warming than Cap and Trade

Global climate change is the most significant environmental issue facing our nation and the world. There no longer is any question that global warming is occurring. Nor is there any serious debate about whether human activity is the root cause. If we fail to make significant reductions in greenhouse gas emissions over the next ten to twenty years, we face the possibility of catastrophic environmental harm by the end of this century.http://deepblue.lib.umich.edu/bitstream/2027.42/107456/1/28StanEnvtlLJ3.pd

Efficient Immunization Strategies for Computer Networks and Populations

We present an effective immunization strategy for computer networks and populations with broad and, in particular, scale-free degree distributions. The proposed strategy, acquaintance immunization, calls for the immunization of random acquaintances of random nodes (individuals). The strategy requires no knowledge of the node degrees or any other global knowledge, as do targeted immunization strategies. We study analytically the critical threshold for complete immunization. We also study the strategy with respect to the susceptible-infected-removed epidemiological model. We show that the immunization threshold is dramatically reduced with the suggested strategy, for all studied cases.Comment: Revtex, 5 pages, 4 ps fig

One-dimensional Bose chemistry: effects of non-integrability

Three-body collisions of ultracold identical Bose atoms under tight cylindrical confinement are analyzed. A Feshbach resonance in two-body collisions is described by a two-channel zero-range interaction. Elimination of the closed channel in the three-body problem reduces the interaction to a one-channel zero-range one with an energy dependent strength. The related problem with an energy independent strength (the Lieb-Liniger-McGuire model) has an exact solution and forbids all chemical processes, such as three-atom association and diatom dissociation, as well as reflection in atom-diatom collisions. The resonant case is analyzed by a numerical solution of the Faddeev-Lovelace equations. The results demonstrate that as the internal symmetry of the Lieb-Liniger-McGuire model is lifted, the reflection and chemical reactions become allowed and may be observed in experiments.Comment: 5 pages, 4 figure

Distributed Approximation of Maximum Independent Set and Maximum Matching

We present a simple distributed $\Delta$-approximation algorithm for maximum weight independent set (MaxIS) in the $\mathsf{CONGEST}$ model which completes in $O(\texttt{MIS}(G)\cdot \log W)$ rounds, where $\Delta$ is the maximum degree, $\texttt{MIS}(G)$ is the number of rounds needed to compute a maximal independent set (MIS) on $G$, and $W$ is the maximum weight of a node. %Whether our algorithm is randomized or deterministic depends on the \texttt{MIS} algorithm used as a black-box. Plugging in the best known algorithm for MIS gives a randomized solution in $O(\log n \log W)$ rounds, where $n$ is the number of nodes. We also present a deterministic $O(\Delta +\log^* n)$-round algorithm based on coloring. We then show how to use our MaxIS approximation algorithms to compute a $2$-approximation for maximum weight matching without incurring any additional round penalty in the $\mathsf{CONGEST}$ model. We use a known reduction for simulating algorithms on the line graph while incurring congestion, but we show our algorithm is part of a broad family of \emph{local aggregation algorithms} for which we describe a mechanism that allows the simulation to run in the $\mathsf{CONGEST}$ model without an additional overhead. Next, we show that for maximum weight matching, relaxing the approximation factor to ($2+\varepsilon$) allows us to devise a distributed algorithm requiring $O(\frac{\log \Delta}{\log\log\Delta})$ rounds for any constant $\varepsilon>0$. For the unweighted case, we can even obtain a $(1+\varepsilon)$-approximation in this number of rounds. These algorithms are the first to achieve the provably optimal round complexity with respect to dependency on $\Delta$

Multiscaling in passive scalar advection as stochastic shape dynamics

The Kraichnan rapid advection model is recast as the stochastic dynamics of tracer trajectories. This framework replaces the random fields with a small set of stochastic ordinary differential equations. Multiscaling of correlation functions arises naturally as a consequence of the geometry described by the evolution of N trajectories. Scaling exponents and scaling structures are interpreted as excited states of the evolution operator. The trajectories become nearly deterministic in high dimensions allowing for perturbation theory in this limit. We calculate perturbatively the anomalous exponent of the third and fourth order correlation functions. The fourth order result agrees with previous calculations.Comment: 14 pages, LaTe