Dry Dilution Refrigerator with He-4 Precool Loop

He-3/He-4 dilution refrigerators (DR) are very common in sub-Kelvin temperature research. We describe a pulse tube precooled DR where a separate He-4 circuit condenses the He-3 of the dilution loop. Whereas in our previous work the dilution circuit and the He-4 circuit were separate, we show how the two circuits can be combined. Originally, the He-4 loop with a base temperature of ~ 1 K was installed to make an additional cooling power of up to 100 mW available to cool cold amplifiers and electrical lines. In the new design, the dilution circuit is run through a heat exchanger in the vessel of the He-4 circuit so that the condensation of the He-3 stream of the DR is done by the He-4 stage. A much reduced condensation time (factor of 2) of the He-3/He-4 gas mixture at the beginning of an experiment is achieved. A compressor is no longer needed with the DR as the condensation pressure remains below atmospheric pressure at all times; thus the risk of losing expensive He-3 gas is small. The performance of the DR has been improved compared to previous work: The base temperature of the mixing chamber at a small He-3 flow rate is now 4.1 mK; at the highest He-3 flow rate of 1.2 mmol/s this temperature increases to 13 mK. Mixing chamber temperatures were measured with a cerium magnesium nitrate (CMN) thermometer which was calibrated with a superconducting fixed point device.Comment: Cryogenic Engineering Conference 201

Capital Income Taxation and the Sustainability of Permanent Primary Deficits

If a government imposes a tax on capital income, it may, as a result, lower the private rate of return on capital below the growth rate of an economy, thereby giving rise to the possibility of running a permanent deficit. Since, however, the before-tax rate of return and not the after-tax rate of return is relevant for judging the dynamical efficiency of the economy, the possibility of a permanent deficit does not by itself imply a possibility for a Pareto-improving redistribution of income. To examine this issue "step by step", we examine in general whether a government can run a deficit forever by rolling over its debt. Assuming the government to run a deficit in each period equal to a constant fraction of total output, we study several overlapping generations models, proceeding from endowment economies to neoclassical growth with a variable capital stock. We then introduce capital income taxation and show, for example, that permanent defcits are feasible in the case of a variable capital stock, provided the capital income tax is sufficiently high. We examine the welfare effects and discuss policy consequences.income tax;deficit spending

Discussion of "The Source of Historical Economic Fluctuations: An Analysis using Long-Run Restrictions" by Neville Francis and Valerie A. Ramey

This paper discusses the paper "The Source of Historical Economic Fluctuations: An Analysis using Long-Run Restrictions" by Neville Francis and Valerie A. Ramey. It argues that these authors have made great progress both in the precise measurement of labor input as well as determining the effect of productivity shocks on labor, but a number of questions remain. As for measurement, the issue of schooling needs further work. As for calculating the long-run impact of labor productivity shocks, unreasonable results emerge for the response of the capital stock, if included in the VAR. Using medium-term identification delivers more reasonable results.technological progress, business cycles, hours worked, labor productivity, vector autoregressions, identification, long-run restrictions, medium-run restrictions

Did the FED Surprise the Markets in 2001? A Case Study for Vars with Sign Restrictions

In 2001, the Fed has lowered interest rates in a series of cuts, starting from 6.5 % at the end of 2000 to 2.0 % by early November.This paper asks, whether the Federal Reserve Bank has been surprising the markets, taking as given the conventional view about the effect of monetary policy shocks.New econometric techniques turn out to be particularly suitable for answering this question: this paper can be viewed as a showcase and case study for their application.In order to concentrate on the Greenspan period, a vector autoregression is fitted to US data, starting in 1986 and ending in September 2001.Monetary policy shocks are identified, using the new sign restriction methodology of Uhlig (1999), imposing the "conventional view" that contractionary policy shocks lead to a rise in interest rates and declines in nonborrowed reserves, prices and output.We find that neither the Fed policy choices in 2001 nor those of 2000 were surprising.We provide a method to "explain" these interest rate movements by decomposing them into their sources. Finally, we argue that constant-interest-rate projections like those popular at many central banks are of limited informational value, can be highly misleading, and should instead be replaced by on-the-equilibrium-path projections.monetary policy;vector autoregressive models

Transition and Financial Collapse

One of the many problems facing the countries in transition from socialism to capitalism after the initial phase of privatization and restructuring is the lack of proven entrepreneurial talent in addition to a low initial level of capital. New entrepreneurs might find it hard to finance their start-up enterprises. This paper therefore argues that a financial collapse and thus a collapse of the new entrepreneurial sector might occur. First, the lack of financial intermediation in transition economies is examined empirically before proceeding to a theoretical model. Using IMF data on claims to the private sector, we find that the extent of financial intermediation in these countries is comparable to developing rather than industrialized countries. The theoretical part analyzes an overlapping generations model with heterogenous entrepreneurial qualities and private information. A financial collapse can result, if young agents are too poor to provide enough collateral for financing a small project to prove their qualities as entrepreneur and no proven middle-aged entrepreneurs are available who can be entrusted with enough funds to run big projects. In that case, the economy contracts to an agricultural steady state. Possible remedies are discussed. In particular, large inequality or a large-scale, long-lasting government program of subsidizing investment help to overcome the danger of a financial collapse.

Competitive Risk Sharing Contracts with One-Sided Commitment

This paper analyzes dynamic equilibrium risk sharing contracts between profit-maximizing intermediaries and a large pool of ex-ante identical agents that face idiosyncratic income uncertainty that makes them heterogeneous ex-post. In any given period, after having observed her income, the agent can walk away from the contract, while the intermediary cannot, i.e. there is one-sided commitment. We consider the extreme scenario that the agents face no costs to walking away, and can sign up with any competing intermediary without any reputational losses. Contrary to intuition, we demonstrate that not only autarky, but also partial and full insurance can obtain, depending on the relative patience of agents and financial intermediaries. Insurance can be provided because in an equilibrium contract an up-front payment effectively locks in the agent with an intermediary. We then show that our contract economy is equivalent to a consumption-savings economy with one-period Arrow securities and a short-sale constraint, similar to Bulow and Rogoff (1989). From this equivalence and our characterization of dynamic contracts it immediately follows that without cost of switching financial intermediaries debt contracts are not sustainable, even though a risk allocation superior to autarky can be achieved.