FORWARD RISK PREMIA AND THE MATURITY OF CONTRACTS: A NOTE

This paper examines the behavior of the risk premium component of currency forward rates. Analyzing forward rates of one, two and three-month maturity, we find that the power of forward rate as a predictor of future spot rate decreases with the length of contract maturity. Further, we find that the proportion of the variance of the forward premium which is due to the variation of the risk premium is larger than the proportion due to the expected spot rate change for all currencies except for the Canadian dollar. This proportion also increases with the length of maturity.     

Optimal Development of Agricultural Sectors in the Basin Based on Economic Efficiency and Social Equality

The limitation of freshwater resources and the growing demand for water, make the issue of water resource development planning and water allocation among stakeholders even more important. Ideally, water allocation should be economically efficient and socially equitable. In this study, a water allocation model is presented in an integrated framework that considers the interaction of water supply and demand according to economic and social factors. To achieve this, a reliability-based multi-objective optimization - simulation approach has been employed. The objective functions of the problem are: 1) maximizing GDP from agricultural sectors and 2) maximizing social equality in different provinces of the basin (measured using the Williamson coefficient). The fair development and allocation among the shared provinces in the basin can reduce conflicts in the region. Karkheh basin has been considered as a case study and decision variables of the problem are area under cultivation of agricultural development sectors in different provinces. The results show that, without harming the income of the agricultural sector, the spatial distribution of development projects can be done in such a way that equality (according to income level and the number of people working in each province) is achieved. One of the solutions of Pareto front compared to previous studies shows that, in addition to an increase of about 12% of the objective function 1 (GDP), the value of the objective function 2 (Williamson coefficient) decreased from 1.19 to 0.98. This indicates a decrease in income inequality among the provinces of the basin.

     

Modeling River Mixing Mechanism Using Data Driven Model

Modeling river mixing mechanism in terms of pollution transmission in rivers is an important subject in environmental studies. Dispersion coefficient is an important parameter in river mixing problem. In this study, to model and predict the longitudinal dispersion coefficient (D _L ) in natural streams, two soft computing techniques including multivariate adaptive regression splines (MARS) as a new approach to study hydrologic phenomena and multi-layer perceptron neural network as a common type of neural network model were prepared. To this end, related dataset were collected from literature and used for developing them. Performance of MARS model was compared with MLP and the empirical formula was proposed to calculate D _L . To define the most effective parameters on D _L structure of obtained formula from MARS model and more accurate formula was evaluated. Calculation of error indices including coefficient of determination (R²) and root mean square error (RMSE) for the results of MARS model showed that MARS model with R²?=?0.98 and RMSE?=?0.89 in testing stage has suitable performance for modeling D _L . Comparing the performance of empirical formulas, ANN and MARS showed that MARS model is more accurate compared to others. Attention to the structure of developed MARS and the most accurate empirical formulas model showed that flow velocity, depth of flow (H) and shear velocity are the most influential parameters on D _L .     

Continuous Stochastic Games of Capital Accumulation with Convex Transitions

We consider a discounted stochastic game of common-property capital accumulation with nonsymmetric players, bounded one-period extraction capacities, and a transition law satisfying a general strong convexity condition. We show that the infinite-horizon problem has a Markov-stationary (subgame-perfect) equilibrium and that every finite-horizon truncation has auniqueMarkovian equilibrium, both in consumption functions which arecontinuous and nondecreasingand have all slopes bounded above by 1. Unlike previous results in strategic dynamic models, these properties are reminiscent of the corresponding optimal growth model.Journal of Economic LiteratureClassification Codes: C73, O41, Q20.     

On strategic complementarity conditions in Bertrand oligopoly

Summary. For Bertrand duopoly with linear costs, we establish via a single (counter-)example that: (i) A new monotone transformation of the firms' profit functions may lead to the supermodularity of transformed profits when the standard log and identity transformations both fail to do so, and (ii) Topkis's notion of critical sufficient condition for monotonicity of a Bertrand firm's best-reply correspondence cannot be extended to rely only on positive unit costs. Received: January 16, 2001; revised version: March 20, 2002 RID="*" ID="*" This work was completed while the first author was visiting the Institute for Industrial Economics at the University of Copenhagen during Spring 2000. Their financial support and stimulating research environment are gratefully acknowledged. The views expressed here are those of the authors and should not be attributed to the European Commission. Correspondence to: R. Amir     

Numerical Simulation of Submarine Groundwater Flow in the Coastal Aquifer at the Palmahim Area, the Mediterranean Coast of Israel

The lower sub-aquifers of the Mediterranean coastal aquifer of Israel, at the Palmahim area, are hypothesized to be laterally blocked to connection with the sea, and thus to seawater intrusion. This is mostly due to the detection of fresh water bodies at these sub-aquifers. This study examine this hypothesis by using two dimensional numerical model simulations of the groundwater flow system at this area, which conducted in order to reveal which hydrogeological setting enables the existence of these fresh water bodies in the lower sub-aquifers and to assess the on-land pumping rates that will prevent their salinization. The hydrogeological settings were examined by steady state simulations followed by simulations of the last 15,000 years sea level changes. These simulations imply that the presence of fresh water in the lower sub-aquifer, whether blocked or connected to the sea, requires offshore separation between the upper and lower sub-aquifers. On-land pumping simulations, with a well located inside the lower sub-aquifers at the shoreline, show a maximum pumping rate of 250 m³/m strip width/year, hereafter m²/year, to prevent the salinization of the lower sub-aquifers. The various pumping scenarios revealed differences in salinization trends between the scenarios with impermeable separating layers and those with semi permeable layers. Scenarios with extreme pumping rates emphasize these differences, and together with field test, can allow assessing the amount of separation between the sub-aquifers.     

Evaluation of suspended load transport rate using transport formulas and artificial neural network models （Case study： Chelchay Catchment）＊

Accurate estimation of sediment load or transport rate is very important to a wide range of water resources projects. This study was undertaken to determine the most appropriate model to predict suspended load in the Chelchay Watershed, northeast of Iran. In total, 59 data series were collected from four gravel bed-rivers and a sand bed river and two depth integrating suspended load samplers to evaluate nine suspended load formulas and feed forward backpropagation Artificial Neural Network (ANN) structures. Although the Chang formula with higher correlation coefficient (r = 0.69) and lower Root Mean Square Error (RMSE = 0.013) is the best suspended load predictor among the nine studied formulas, the ANN models significantly outperform traditional suspended load formulas and show their superior performance for all statistical parameters. Among different ANN structures two models including 4 inputs, 4 hidden and one output neurons, and 4 inputs, 4 and one hidden and one output neurons provide the best simulation with the RMSE values of 0.0009 and 0.001, respectively.     

Efficient biodegradation of naphthalene by a newly characterized indigenous Achromobacter sp. FBHYA2 isolated from Tehran Oil Refinery Complex

A bacterial strain, FBHYA2, capable of degrading naphthalene, was isolated from the American Petroleum Institute (API) separator of the Tehran Oil Refinery Complex (TORC). Strain FBHYA2 was identified as Achromobacter sp. based on physiological and biochemical characteristics and also phylogenetic similarity of 16S rRNA gene sequence. The optimal growth conditions for strain FBHYA2 were pH 6.0, 30 °C and 1.0% NaCl. Strain FBHYA2 can utilize naphthalene as the sole source of carbon and energy and was able to degrade naphthalene aerobically very fast, 48 h for 96% removal at 500 mg/L concentration. The physiological response of Achromobacter sp., FBHYA2 to several hydrophobic chemicals (aliphatic and aromatic hydrocarbons) was also investigated. No biosurfactant was detected during bacterial growth on any aliphatic/aromatic hydrocarbons. The results of hydrophobicity measurements showed no significant difference between naphthalene- and LB-grown cells. The capability of the strain FBHYA2 to degrade naphthalene completely and rapidly without the need to secrete biosurfactant may make it an ideal candidate to remediate polycyclic aromatic hydrocarbon (PAH)-contaminated sites.     

Human capital and earnings distribution dynamics

Earnings heterogeneity plays a crucial role in modern macroeconomics. We document that mean earnings and measures of earnings dispersion and skewness all increase in US data over most of the working life-cycle for a typical cohort as the cohort ages. We show that (i) a human capital model can replicate these properties from the right distribution of initial human capital and learning ability, (ii) differences in learning ability are essential to produce an increase in earnings dispersion over the life cycle and (iii) differences in learning ability account for the bulk of the variation in the present value of earnings across agents. These findings emphasize the need to further understand the role and origins of initial conditions.     

Destination image,on-site experience and behavioural intentions: path analytic validation of a marketing model on domestic tourists

Despite its contribution to the national economy, domestic tourism is one of the most neglected and under-researched forms of tourism in the literature. This study tested an integrated path model examining the interrelationships between destination image, perceived quality, satisfaction and behavioural intentions, using domestic tourists who visited Eilat, Israel. The findings support the hierarchical relationships between image, quality, satisfaction and behavioural intentions. In addition, the affective image component was found to exert a far greater impact on the overall destination image than the cognitive component. The study establishes a better understanding of domestic tourists’ destination image and behavioural intention formulation. It also provides a number of implications for destination managers targeting the voluminous domestic segment.