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Showing posts from April, 2013

Why Biological Systems Suddenly Change State: An Intuitive Guide to Freidlin–Wentzell Theory

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  Stochasticity is ubiquitous in biology and neuroscience, manifesting in various forms, including ion channel noise, synaptic variability, gene regulatory fluctuations, noisy population dynamics, and more. Many biological systems spend long periods in a stable “state” and only rarely transition to another state due to noise. For instance, a neuron typically remains inactive but may occasionally trigger a spontaneous spike. Similarly, a gene can switch from the OFF state to the ON state due to rare bursts of transcription factors. Cells can also transition out of metabolic or epigenetic states, populations might shift between different ecological equilibria, and a viral infection can fluctuate between phases of control and uncontrollability. Freidlin–Wentzell theory provides a mathematically rigorous framework to study these phenomena when noise is small but nonzero . It tells you, firstly, h ow likely rare transitions are,    secondly,   h ow fast they occ...

ECONOMICS' DIARY IN THE EURO AREA BETWEEN EVIDENCE AND MYTHS

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1. THE SYLLOGISM ( Aristoteles, 384 BC - 322 BC ) Major premise: All humans are mortal. Minor premise: All Greeks are humans.         Conclusion: All Greeks are mortal . For years citizens in the Euro area have been informed that only by pursuing policies of rigour the economies of the countries with large public debts would have  increased.   Although their crushing effects,  on the base of this reasoning  still now the austerity policies are  widely implemented in the euro area (EA) .  We can see in Figures 1-4 the ratio of public debt to GDP and the GDP growth rate for some countries compared to the averaged series of the EA countries in the period 2000-2013.   Figure 1. Ratio public debt to GDP: EA vs. rest of the world (2000-2013) . Figure 2.  Ratio public debt to GDP within EA (2000-2013) . Figure 3. GDP growth rate:   EA vs. rest of the world (2000-2013) . Figure 4.  ...

ANALYSIS OF THE CURRENT ACCOUNT BALANCES: GREECE, SPAIN AND ITALY

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We have already seen [ here ] that the difference between national savings and investment  corresponds to the  current account balance . A country   gets into debt with foreign countries if it saves too little (i.e., if it consumes too much) or if it makes too many capital expenditures.  Let's see now the time course of the current account under its possible different perspecitives for some euro area (EA) countries whose financial status and outlook are suffering (Greece, Spain,  Italy ). Data have been collected from the IMF :  World Economic Outlook  October 2012  [ here ] . The synthetic matrix of the elaborated data for all the countries of the EA is downloadable here . 1. GREECE The first country that we consider is Greece, which has been the earliest to be exposed to the financial crisis within the EA. Greece, often is represented as the bad model. Figure1-3. The c urrent account and its components (1991-2013): Greece ....

EURO CURRENCY DOES NOT CIRCULATE IN AN OPTIMAL CURRENCY AREA

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1. PRIVATE VICE, PUBLIC VICE In the " Fable of the Bees " (1705)  Bernard Mandeville represented the paradox " private vices, public benefits " [1] . He showed that actions which may be considered vicious from the individual perspective, give benefits for the collectivity. By rewording this sentence,  one would say that prosperity relies on expenditure (vice) rather than on saving (virtue). And going a step further, if that  assessment were applied in terms of the whole private and public sectors, then one would expect that deficits of the private sector yields benefits to the public sector.    Instead, this is not always the case. Especially when the imbalance in the private sector becomes too large.  In a previous post [ here ] we introduced the fundamental identity of macroeconomics which allows  to assess the contribution of both the private sector and the public sector to the formation of the current account balance :  10)...

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