Thesis advisor: Fabio Ghironi / Chapter 1: Foreign Direct Investment and Contract Enforcement Many developing countries are financially constrained and therefore have to rely on international capital flows to finance economic activity. Empirical evidence shows that Foreign Direct Investment (FDI) as a percentage of total capital flows is higher for less developed countries compared to more developed countries. This chapteruses a dynamic contracting model with human capital to explain why less developed countries receive a greater percentage of capital flows as FDI. I analytically show that countries that are financially constrained have a higher share of FDI in total capital flows, and that the share of FDI in total capital flows is increasing in human capital flows. In addition, the positive association between the share of FDI in total capital flows and human capital flows is decreasing in the degree of financial constraints. I construct a measure of intangible assets of FDI and find empirical support for the analytical results. Chapter 2: Trade Liberalization, Firm Heterogeneity, and Unemployment: An Empirical Investigation This chapter is a joint work with Yoto V. Yotov. We provide empirical evidence for the interaction between firm-level total factor productivity and trade liberalization as key determinants of firm-level job destruction caused by trade. Employing US firm-level data, we find strong empirical support for the following: a) All else equal, a one percent increase in total factor firm productivity decreases trade-induced layoffs by 32%; b) An additional percent of trade liberalization increases the number of firm-level trade-induced layoffs by 2%; c) Trade liberalization results in an increase in the minimum level of productivity required for domestic production; d) Trade liberalization lowers the minimum productivity threshold required for exporting; e) The increase due to trade liberalization in the minimum productivity threshold for domestic production is larger than the absolute decrease in the export productivity threshold. Chapter 3: Do Audit Fees Influence Credit Risk and Asymmetric Information Problems? Evidence from the Syndicated Loan Market This chapter is a joint work with Lewis W. Gaul. We examine whether an increase in the demand for auditing services is associated with a decrease in borrowers' credit risk and asymmetric information problems in the syndicated loan market. In the syndicated loan market, potential accounting errors exacerbate credit risk and asymmetric information problems. The purpose of financial statement audits is to provide reasonable assurance that accounting records are free from material errors. We hypothesize that if audit fees face an upward sloping supply curve for auditing services, an increase in the demand for auditing services increases both the equilibrium price and quantity of auditing services purchased. We interpret the equilibrium quantity of auditing services as the number of auditing hours billed and the price of auditing services as the hourly fee. We assert that an increase in the quantity of auditing services purchased reduces the likelihood of an accounting error because auditors exert more effort verifying the accuracy of accounting records. We present empirical evidence that a demand-induced increase in audit fees is associated with syndicated loans with lower interest rate spreads and shorter maturity lengths, which we interpret as evidence consistent with the assertion that these audit fee increases reduce credit-risk and asymmetric information problems. We empirically identify an increase in the demand for auditing services with instrumental variables that are intended to capture shifts in the demand curve for auditing services, rather than shifts in the supply curve for auditing services. In addition, we find that audit fees are positively associated with the number of lenders in loan syndicates, but are unable to attribute this association to an increase in the demand for auditing services. / Thesis (PhD) — Boston College, 2009. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

A mathematical study has been undertaken to model various kinds of granular flows including the perfect plasticity flow and the viscous elasto-plasticity flow. The work is mainly based on the double-shearing theory originated by Spencer and developed by many others. The focus of the project is on the formulation of the theory, the construction of mathematical models and the development of robust simulation techniques.Based on a general formulation of the double-shearing theory, the perfect plasticity flow is shown to be governed by a set of highly nonlinear first order hyperbolic partial differential equations with two distinct characteristics. A sophisticated numerical algorithm is then developed based on the method of characteristics to determine the stress discontinuity and the velocity and stress fields. With the method developed, a numerical study is then undertaken to model the flow of granular materials in a hopper in the presence of stress discontinuity and to investigate the influence of various parameters on the distribution of hopper wall pressures.Utilising the double shearing theory, a set of stress-strain constitutive equations in explicit form has been derived, which makes it possible to formulate the double-shearing theory within the framework of the finite element method. Thus, consequently, a sophisticated finite element technique has been developed to solve the general boundary value problem governing the viscous elasto-plasticity flows obeying the double-shearing theory. Numerical implementation of the frictional boundary condition is also presented. The model is then illustrated with a numerical example demonstrating the influence of wall friction on the distribution of pressures on silo walls throughout the dynamic process of material discharge from silos.

Mt. Ruapehu is one of the most lahar prone volcanoes in the world, having both a crater lake and six small glaciers upon its 2797 m summit. The major outlet for the crater lake, the Whangaehu Gorge, has hosted over 46 historic lahars. However, the low preservation of debris flow deposits, as a result of frequent remobilisation on steep slopes, allows for the detailed description of only 9 lahar events over the last 150 years. Field investigation, historic aerial photos, two airborne LiDAR surveys and direct measurements have been utilised to describe the sedimentology, geomorphology and distribution of historic lahar deposits in the first 11 km of the Whangaehu Gorge. Inundation maps have been created for 1945, 1953, 1975, September 1995, October 1995, March 2007 and September 2007. Grain size distribution, componentry and geomorphology of the 1861, 1975, September 1995, October 1995, 1999 and 2007 lahar deposits have been compared. The lahar deposits are massive, very poorly sorted, silty gravels that form a series of unconsolidated terraces. The limited sediment sources in the steep sided Whangaehu Gorge, including minor historic eruption products, results in significant recycling of lahar deposits. However, the deposits can be differentiated by proportions of lithological components and in some cases anthropogenic debris. The abundance of hydrothermally altered material reflects the role of Crater Lake in lahar formation, although, some of these materials (gypsum, sulphur and snow) are only temporary. Non-cohesive debris flows and occasional snow slurry lahars have been formed by a range of triggering mechanisms associated with and independent of eruptions. Lahars have been formed in the Whangaehu Valley as the result of ejected crater lake water and associated snow melt (1975, September 1995 and September 2007), as well as the progressive displacement of lake water as a result of lava dome growth (1945) and uplift of the lake floor (1968). Inter-eruption lahars occur as a result of Crater Lake outburst floods (1861, 1953 and March 2007) and remobilisation by precipitation and the collapse of tephra laden snow (October 1995 and 1999). The comparison of historic lahars also reflects the range of lahar magnitudes experienced historically on Ruapehu. The most recent Crater Lake outburst of March 2007, with a peak discharge of 1700-2500 m3/s is the second largest recorded lahar, behind only the eruption-generated lahar of April 1975 with a peak discharge of 5000-7500 m3/s. Lahar mitigation can subsequently be based on lahar generation and incorporation of the vast amounts of data collected before and after the 2007 outburst flood. Recent remobilisation and phreatic activity suggest the significant under-representation of small volume events like rain-generated and snow slurry lahars in the geologic record.

This thesis concerns the numerical simulation and the remote sensing of aircraft wake vortex flows. Due to its lift force, an aircraft releases large scale swirling flows (vortices) in its wake. As these vortices can impact significantly the trajectory of a following aircraft, their study is of great importance for practical applications concerning safety of air traffic management. The investigation carried here is twofold: it concerns, on one hand, the physics and the numerical simulation of aircraft wake vortices and, on the other hand, the technique to detect those vortices and measure their properties.The numerical simulation of aircraft wake vortices requires high order and energy conserving codes. Moreover, as aircraft wake vortex flows are turbulent, subgrid scale (SGS) models are required to perform Large Eddy Simulation (LES) of these flows. In the first part of this work, the numerical codes used (here spectral and high order finite differences) are presented and validated. Several SGS models are presented and their ability to perform LES of vortical flows, also in presence of a ground is assessed. In particular a new “multiscale” model with a natural wall damping behaviour has been developed and investigated: its performance is very good. In the second part, two flows relevant to the wake vortex problem are analyzed. The LES of a wake vortex system in a weakly turbulent atmosphere allowed highlighting the turbulent equilibrium state of such a flow. LES of wake vortices in ground effect, with and without wind, were also carried out. These simulations help to better understand the physics of wake vortices. In the last part, we simulate the remote sensing of aircraft wake vortices using a ground based LIDAR (Light Detection And Ranging) system. The aim of this LIDAR is to sense aircraft wake vortices and turbulent winds. As the LIDAR signals are simulated using realistic parameters and realistic turbulent flows, this work serves as support in the design of an airport based LIDAR system.

We present a faster implementation of the polynomial time primal simplex algorithm due to Orlin [23]. His algorithm requires O(nm min{log(nC), m log n}) pivots and O(n2 m ??n{log nC, m log n}) time. The bottleneck operations in his algorithm are performing the relabeling operations on nodes, selecting entering arcs for pivots, and performing the pivots. We show how to speed up these operations so as to yield an algorithm whose running time is O(nm. log n) per scaling phase. We show how to extend the dynamic-tree data-structure in order to implement these algorithms. The extension may possibly have other applications as well.

The objective of this research is to assess the performance of two popularReynolds-averaged Navier-Stokes (RANS) models, standard k-E and k-w, andto suggest modifications to improve model predictions for high-speed flows. Numerical simulations of turbulent ow past a at plate are performed at M1 = 2:25; 7:2.The results from these two Mach number cases are compared with Direct NumericalSimulation (DNS) results from Pirozzoli et al. (2004) and experimental results fromHorstman & Owen (1975). The effect of the Boussinesq coefficient (Cu) and turbulenttransport coefficients (sigmak; sigmaE; sigma; sigma*) on the boundary layer ow is examined. Further,the performance of a new model with realizability-based correction to Cu and corresponding modifications to sigma; sigma* is examined. The modification to Cu is based oncontrolling the ratio of production to dissipation of kinetic energy (P/E=1). The firstchoice of P/E = 1 ensures that there is no accumulation of kinetic energy in stagnation or free-stream regions of the ow. The second choice of P/E= 1:6 holds underthe assumption of a homogeneous shear ow. It is observed that the new model'sperformance is similar to that of the existing RANS models, which is expected for asimple ow over a at plate. Finally, the role of turbulent Prandtl number (Prt) intemperature and density predictions is established. The results indicate that the k-wmodel's performance is better compared to that of the standard k-E model for highMach number flows. A modification to Cu must be accompanied with correspondingchanges to sigmak; sigmaE; sigma; sigma* for an accurate log-layer prediction. The results also indicate that a Prt variation is required across the boundary layer for improved temperatureand density predictions in high-speed flows.

An extensive review was made to study the wake characteristics of a backward-facing step. Experimental and numerical studies of the backward-facing step suggest that the wake of a separated shear layer to be dependent on parameters such as: expansion ratio, aspect ratio, free stream turbulence intensity, boundary layer state and thickness at separation. The individual and combined effects of these parameters on the reattachment length are investigated and discussed in detail in this thesis. A new scaling parameter, sum of step height and boundary layer thickness at separation is proposed, which yields significant collapse of the available data. Based on the literature review, an axisymmetric model is designed for further investigating the dynamics of the flow independent of aforementioned parameters. Additionally, porous suction strips are incorporated to study the step wake characteristics independent of Reynolds number. This model has been built and will be tested extensively at UTIAS.

An extensive review was made to study the wake characteristics of a backward-facing step. Experimental and numerical studies of the backward-facing step suggest that the wake of a separated shear layer to be dependent on parameters such as: expansion ratio, aspect ratio, free stream turbulence intensity, boundary layer state and thickness at separation. The individual and combined effects of these parameters on the reattachment length are investigated and discussed in detail in this thesis. A new scaling parameter, sum of step height and boundary layer thickness at separation is proposed, which yields significant collapse of the available data. Based on the literature review, an axisymmetric model is designed for further investigating the dynamics of the flow independent of aforementioned parameters. Additionally, porous suction strips are incorporated to study the step wake characteristics independent of Reynolds number. This model has been built and will be tested extensively at UTIAS.

Esta tesis doctoral consiste en tres ensayos independientes sobre Macroeconomía y Crecimiento Económico.Ensayo 1. "Technological Transfers, Limited Commitment and Growth"Las evidencias muestran que hay sustanciales flujos de capital de países ricos hacia países pobres, aunque no son tan abundantes como sugieren las diferencias en tasas de rendimiento. Esos flujos son pro-cíclicos: abundantes en tiempos de bonanza y escasos en los malos tiempos. Los modelos de crecimiento convencional afrontan ciertas dificultades para explicar estos hechos. En este estudio, proponemos un modelo dinámico de flujos de capital hacia países en desarrollo que es cualitativamente consistente con regularidades empíricas. El modelo está basado en tres premisas principales: i) los contratos de préstamo internacional son imperfectamente ejecutables; ii) el acceso a los mercados financieros internacionales está relacionado con transferencias tecnológicas a un país en desarrollo del resto del mundo; iii) algunos de los beneficios tecnológicos asociados al acceso a la financiación externa son perecederos. Nuestras conclusiones sugieren que las transferencias tecnológicas pueden desempeñar el papel de mecanismo que hace cumplir las obligaciones contractuales.Essay 2. "A Note on Computing Partial Derivatives of the Value Function by Simulation"Los problemas que contienen restricciones de compatibilidad de incentivos han recibido una amplia atención en la literatura debido a los recientes avances en optimización dinámica. Frecuentemente las condiciones de optimalidad para este tipo de problemas contienen derivadas parciales de la función de valor (value function) con respecto a algunas variables de estado endógenas. En este trabajo proponemos un algoritmo para calcular estas derivadas parciales por simulación. Essay 3. "Institutions and Growth: Some Evidence from Estimation Methods Partially Robust to Weak Instruments"Este estudio se centra en la estrategia empírica propuesto por Hall y Jones (1999) para estimar el efecto de lo que ellos denominan "infraestructura social" sobre la productividad de los países. Nosotros intentamos responder la crítica de Acemoglu et al (2001) a esta metodología por basarse en instrumentos geográficos. Para ello consideramos el problema de identificación débil en los modelos de variables instrumentales de Hall y Jones (1999). La evidencia obtenida de los estimadores parcialmente robustos como k-class y jackknife está interpretada en base a los estudios de Monte Carlo. Podemos concluir que el uso de algunos estimadores k-class permite utilizar variables lingüísticas para instrumentar la calidad institucional a pesar de su baja correlación con el regresor endógeno en cuestión. / This doctoral thesis consists of three self-contained essays in Macroeconomics and Economic Growth.Essay 1. "Technological Transfers, Limited Commitment and Growth"Evidence shows that there are substantial rich-to-poor international capital flows although not as abundant as differences in rates of return would suggest. These flows are procylcical: abundant in good times and scarce in bad times. They have been reported to promote growth and stability in some countries, but merely to augment instability in the others. Conventional growth models face certain difficulties in accounting for this pattern. In this paper, we propose a dynamic model of capital flows to developing countries which is qualitatively consistent with these empirical regularities. The model is based on three main premises: i) international lending contracts are imperfectly enforceable; ii) access to the international financial markets results in technological transfers to a developing country from the rest of the world; iii) some of the productivity gains associated with the access to external financing are perishable. We solve for transitional dynamics of the model economy with endogenously incomplete markets and compare the results with the solutions obtained from the perfect risk-sharing and autarkic environments. In addition, we examine the implications of alternative assumptions about the severity of the repudiation punishment for growth, welfare and borrowing patterns. Our findings suggest that technological transfers may play a role of an important enforcement mechanism. In our framework, existence of substantial rich-to-poor capital flows is not inconsistent with the presence of default risk.Essay 2. "A Note on Computing Partial Derivatives of the Value Function by Simulation"The problems involving incentive compatibility constraints in the form of dynamic participation constrains have received wide attention in the literature due to the recent advances in dynamic optimization techniques. Often the optimality conditions for this class of problems involve partial derivatives of the value function with respect to some of the endogenous state variables. In this paper we suggest an algorithm for computing these partial derivatives by simulation. The attractive features of the algorithm include its rather wide scope of applicability and simplicity of implementation. Furthermore, the suggested method does not suffer from the curse of dimensionality and therefore it is particularly convenient for the models involving many state variables.Essay 3. "Institutions and Growth: Some Evidence from Estimation Methods Partially Robust to Weak Instruments"This paper focuses on the empirical approach proposed by Hall and Jones (1999) to estimate the effect of what they call "social infrastructure" on productivity across countries. We attempt to address the criticism of Acemoglu et al (2001) directed towards this methodology for relying on the geographical instruments. To do so we consider the issue of weak identification in the linear instrumental variables model of Hall and Jones (1999). The evidence obtained from the partially robust estimators like the k-class and jackknife estimators is interpreted on the basis of the Monte Carlo studies. Our findings suggest that using some of the k-class estimators allows exclusive reliance on the linguistic variables to instrument for institutional quality despite their low correlation with the endogenous regressor in question.

El objetivo principal de esta tesis es la mejora y la aplicación de la técnica PIV para analizar diferentes flujos de fluidos complejos en los sistemas que contienen partes sólidos móviles o estacionarias. Las partículas de alginato con/sin compuesto de fluoresceína incrustada se han desarrollado como una serie de elementos alternativos de siembra de nuevas aplicaciones de flujo para el PIV. Se ha encontrado que las micro-partículas de alginato tienen muchas ventajas sobre los tradicionales utilizados en sistemas de PIV. Un estudio amplio sobre el análisis del flujo en tres dimensiones de la bomba de engranajes externa se ha hecho por la técnica tiempo-resuelva PIV para investigar la dinámica y las estadísticas de flujo turbulento. Vorticidad y zonas turbulentas de alta energía cinética se han identificado dentro de la bomba de engranajes externa. La técnica PIV se ha aplicado de manera eficiente para analizar un intercambiador de calor de motor de flujo de bypass en un túnel del viento de bajo velocidad. Las partículas de alginato que contienen fluoresceína se han utilizado eficientemente en los experimentos que conducen a mejorar la calidad de la imagen PIV y analizar las estructuras de pequeña escala de los flujos. / The main objective of the thesis is the improvement and application of the PIV technique to analyse different complex fluid flows in systems that contain solid moving or stationary parts. The alginate particles with/without fluorescein compound imbedded have been developed as a new alternative flow seeding elements for PIV applications. It has been found that the alginate micro particles have many advantages over traditional ones used in PIV systems. A comprehensive study on the three-dimensional flow analysis of the external gear pump has been done by time-resolved PIV technique to investigate its turbulent flow dynamics and statistics. Vorticity and high turbulent kinetic energy areas have been identified inside the external gear pump. The PIV technique has been efficiently applied to analyse an engine bypass flow heat exchanger in a low speed wind tunnel. The alginate particles containing fluorescein have been efficiently used in the experiments that lead to improve the PIV image quality and analyse the small-scale structures of the flows.