CURRENT ACCOUNT IMBALANCES, THRIFTINESS AND THE REAL EXCHANGE RATE IN A GROWING ECONOMY

This paper analyses the theoretical relevance of the dynamical aspects of growth on the discussion about the observed positive correlation between per capita real income and real exchange rates. With this purpose, we develop a simple exogenous growth model where the internal, external and intertemporal equilibrium conditions of a typical macroeconomic model are imposed; this last one through the inclusion of a balanced growth path for the foreign assets accumulation. The main result under this consideration is that the relationship defended by the Balassa-Samuelson hypothesis is no more so straightforward. In our particular approach, the mentioned bilateral relationship depends on a parameter measuring thriftiness in the economy. Therefore, the probability of ending up with a positive relationship between growth and real exchange rates -as the classical economic theory predicts- will be higher when the economy is able to maintain a minimum saving ratio. Moreover, given that our model considers a simple Keynesian consumption function, some explosive paths can also be possible.Balassa-Samuelson hypothesis, foreign debt, growth, macroeconomic approach, per capita income, real exchange rate, thriftiness

Aging, Gender and Neighbourhood Determinants of Distance Traveled: A Multilevel Analysis in the Hamilton CMA

The objective of this study is to investigate the determinants of mean trip distance traveled by different mode types. The study uses data from the Hamilton CMA in Canada, and multilevel models to investigate demographic aging factors, gender differentials, and neighbourhood attributes on distance traveled. The results of the study validate previous findings regarding the decline in distance traveled as age advances. In addition, it is found that: 1) While this effect of age is present for all modes analyzed (car-driving, car-passenger, and bus) it is considerably more marked for car-driving; 2) There are significant gender effects compounded by the interrelated factors of employment constraints, household dynamics, and greater reliance on travel modes other than car driving; and 3) Neighbourhoods with high commercial and residential mix showed a negative relation with distance traveled only in the case of car-driver.distance traveled, aging, elderly, gender, neighbourhood influence, multilevel analysis

Continuous time models of interest rate: testing peso-dollar exchange rate.

As an extension of the article by Núñez, De la Cruz and Ortega (2007), different parametric models with jumps are tested with the methodology developed by Ait-Sahalia and Peng (2006), based on the transition function. Data analyzed are the peso-dollar exchange rate. The idea is to implement continuous-time parametric models for the peso-dollar exchange rate. The results confirm that the proposed continuous time models are not good enough to explain the behavior that describes the peso-dollar exchange rate. However, considering some continuous time models with Poisson jumps is possible to describe such behavior.

Nonlinearities in price convergence among Mercosur countries

The aim of this paper is to analyse the existence of price convergence in Mercosur. Two variables are considered, Consumer Price Indices to assess convergence in the goods and services markets and real interest rates, to analyse convergence in the money markets. For this purpose we have applied Kapetanios, Shin and Snell (2003) nonlinear unit root test, in order to take into account asymmetric speed of mean reversion, and Bierens (2000) co-trending analysis. The univariate analysis points only to convergence in real interest rates, whilst the multivariate analysis provides evidence of common trends in both markets.

Option-Pricing in Incomplete Markets: The Hedging Portfolio plus a Risk Premium-Based Recursive Approach

Consider a non-spanned security C_{T} in an incomplete market. We study the risk/return trade-offs generated if this security is sold for an arbitrage-free price C₀ and then hedged. We consider recursive "one-period optimal" self-financing hedging strategies, a simple but tractable criterion. For continuous trading, diffusion processes, the one-period minimum variance portfolio is optimal. Let C₀(0) be its price. Self-financing implies that the residual risk is equal to the sum of the one-period orthogonal hedging errors, ∑_{t≤T}Y_{t}(0)e^{r(T-t)}. To compensate the residual risk, a risk premium y_{t}Δt is associated with every Y_{t}. Now let C₀(y) be the price of the hedging portfolio, and ∑_{t≤T}(Y_{t}(y)+y_{t}Δt)e^{r(T-t)} is the total residual risk. Although not the same, the one-period hedging errors Y_{t}(0) and Y_{t}(y) are orthogonal to the trading assets, and are perfectly correlated. This implies that the spanned option payoff does not depend on y. Let C₀=C₀(y). A main result follows. Any arbitrage-free price, C₀, is just the price of a hedging portfolio (such as in a complete market), C₀(0), plus a premium, C₀-C₀(0). That is, C₀(0) is the price of the option's payoff which can be spanned, and C₀-C₀(0) is the premium associated with the option's payoff which cannot be spanned (and yields a contingent risk premium of ∑y_{t}Δte^{r(T-t)} at maturity). We study other applications of option-pricing theory as wellOption Pricing; Incomplete Markets

Energy-Momentum Complex in M\o ller's Tetrad Theory of Gravitation

M\o ller's Tetrad Theory of Gravitation is examined with regard to the energy-momentum complex. The energy-momentum complex as well as the superpotential associated with M\o ller's theory are derived. M\o ller's field equations are solved in the case of spherical symmetry. Two different solutions, giving rise to the same metric, are obtained. The energy associated with one solution is found to be twice the energy associated with the other. Some suggestions to get out of this inconsistency are discussed at the end of the paper.Comment: LaTeX2e with AMS-LaTeX 1.2, 13 page

Quantum Key Distribution With several intercept-resend attacks Via A Depolarizing Channel

The disturbance effect of a depolarizing channel on the security of the quantum key distribution of the four state BB84 protocol with multiple sequentiel intercept and resend attacks of many eavesdroppers, has been studied. The quantum bit error rate and the mutual information are computed for arbitray number of attacks