COMPUTER MODELING THE U.S. ECONOMY

FROM:  NATIONAL SCIENCE FOUNDATION

Foreseeing US economic trends
Tim Kehoe's computer models gather international market data, predict impact of policy changes

Although economist Tim Kehoe's computer models are complex--analyzing numerous data sets related to the buying and selling of goods and services, trade and investment, saving and lending--the underlying premise of his research is simple.

He studies how people make economic decisions over time. Producers, for example, must look ahead and try to forecast prices, taking into account how consumer demand is going to change. At the same time, consumers making future buying choices must think about what might happen to their income during the same period.

Kehoe is developing computer models to try to accurately predict the likely outcomes.

"There is uncertainty about productivity and government policies, so many people uncertain about what's going to happen in the future make their plans contingent," says Kehoe, a professor of economics at the University of Minnesota and an adviser to the Federal Reserve Bank of Minneapolis. "If I am a firm and I want to sell my product in a foreign market, and I'm worried about what's going to happen to prices in that foreign market, I'll want to know how the price for those goods will translate into income in my home country."

Kehoe's research and teaching focus on the theory and application of general equilibrium models, which, in economics, attempt to explain the behavior of supply, demand and prices with several or many interacting markets with the assumptions that a set of prices exists that will generate an equilibrium.

These insights could prove especially valuable to policy makers and business leaders looking to foresee future U.S. economic trends.

Kehoe's work involves, among other things, creating models that predict the effects of trade liberalization on the allocation of resources across various sectors of the economy, in particular how this leads to a boom in foreign investment that could leave a country and its financial system vulnerable to a financial crisis.

He also develops models that analyze the impact of trade policies on the structure of industries, for example, the effects of the North American Free Trade Agreement, or NAFTA.

Among other things, Kehoe consulted with the Spanish government in 1986 on the wisdom of joining the European Community; the Mexican government in 1994 on the impact of joining NAFTA; and the government of Panama in 1998 on the effects of unilateral foreign trade and investment reforms.

He has been the recipient of nine National Science Foundation (NSF) grants starting in 1982--totaling about $1.5 million. More recently, he received a prestigious fellowship from the John Simon Guggenheim Memorial Foundation, which annually supports a diverse group of scholars, artists and scientists chosen on the basis of prior achievement and exceptional promise.

Since the early 1990s, the United States has borrowed heavily from its trading partners, and "we wanted to look at what would happen if the foreigners save less and, therefore, lend less to the United States, "he says. "Will it happen in an orderly way, or end in a crisis?"

He and his collaborators modeled U.S. borrowing resulting from a global savings glut--where foreigners sell goods and services to the United States, but prefer purchasing U.S. assets to purchasing U.S. goods and services--using four key data sets of the United States and its position in the world economy during a 20-year period beginning in 1992.

In the model, as in the data, the U.S. trade deficit first increases, then decreases; the U.S. real exchange rate first appreciates, then depreciates; a deficit in goods trade fuels the U.S. trade deficit, with a steady U.S. surplus in the service trade; and the fraction of U.S labor dedicated to producing goods--agriculture, mining and manufacturing--falls throughout the period.

Using their models, he and his colleagues analyzed two possible ends to the saving glut: an orderly, gradual rebalancing and a disorderly, sudden stop in foreign lending as occurred in Mexico in 1995–96.

"We found that a sudden stop would be very disruptive for the U.S. economy in the short term, particularly for the construction industry, "he says. "In the long term, however, a sudden stop would have a surprisingly small impact."

"As the U.S. trade deficit becomes a surplus, gradually or suddenly, employment in goods production will not return to its level in the early 1990s because much of this surplus will be exports of services and because much of the decline in employment in goods production has been, and will be, due to faster productivity growth in goods than in services," he adds. "We will probably produce more services, such as managerial or design services," to make up for the trade deficit decline.

"The United States is the biggest service exporter in the world, and, as services become more and more expensive, the U.S. can sell services at a higher price and buy goods from other countries more cheaply," he says.

Models are not perfect, and have been wrong in the past. His ongoing goal is to change that.

"When economists built models of the impact of trade and investment liberalization in North America 20 years ago...some of our predictions were right, but some predictions were wrong," he says. "We want to understand why, and what we still need to learn about building models, and especially think about what we got wrong and what we need to do in the future."

-- Marlene Cimons, National Science Foundation
-- Maria C. Zacharias
Investigators
Timothy Kehoe
David Levine
Brig 'Chip' Elliott

OCEAN PHOSPHORUS CYCLE AND THE ROLE OF MICROBES

FROM:  NATIONAL SCIENCE FOUNDATION
Revealing the ocean's hidden fertilizer
Tiny marine plants play major role in phosphorus cycle
Phosphorus is one of the most common substances on Earth.

An essential nutrient for every living organism--humans require approximately 700 milligrams per day--we're rarely concerned about consuming enough because it is in most of the foods we eat.

Despite its ubiquity and living organisms' dependence on it, we know surprisingly little about how it moves, or cycles, through the ocean environment.

Scientists studying the marine phosphorous cycle have known that phosphorus was absorbed by plants and animals and released back to seawater in the form of phosphate as these plants and animals decay and die.

But a growing body of research hints that microbes in the ocean transform phosphorus in ways that remain a mystery.

Hidden role of ocean's microbes

A new study by a research team from the Woods Hole Oceanographic Institution (WHOI) and Columbia University reveals for the first time a marine phosphorus cycle that is much more complex than previously thought.

The work also highlights the important but previously hidden role that some microbial communities play in using and breaking down forms of this essential element.

A paper reporting the findings is published this week in the journal Science.

"A reason to be excited about this elegant study is in the paper's last sentence: 'the environmental, ecological and evolutionary controls ...remain completely unknown,'" says Don Rice, program director in the National Science Foundation's (NSF) Division of Ocean Sciences, which funded the research through its Chemical Oceanography Program. "There's still a lot we don't know about the sea."

The work is also supported by an NSF Dimensions of Biodiversity grant.

"This is an exciting new discovery that closes a fundamental knowledge gap in our understanding of the marine phosphorus cycle," says the paper's lead author Ben Van Mooy, a biochemist at WHOI.

Much like phosphorus-based fertilizers boost the growth of plants on land, phosphorus in the ocean promotes the production of microbes and tiny marine plants called phytoplankton, which compose the base of the marine food chain.

Phosphonate mystery

It's been unclear exactly how phytoplankton are using the most abundant forms of phosphorus found in the ocean--phosphates and a strange form of phosphorus called phosphonates.

"Phosphonates have always been a huge mystery," Van Mooy says.

"No one's been able to figure out exactly what they are, and more importantly, if they're made and consumed quickly by microbes, or if they're just lying around in the ocean."

To find out more about phosphonates and how microbes metabolize them, the researchers took samples of seawater at a series of stations during a research cruise from Bermuda to Barbados.

They added phosphate to the samples so they could see the microbes in action.

The research team used ion chromatography onboard ship for water chemistry analyses, which allowed the scientists to observe how quickly microbes reacted to the added phosphate in the seawater.

"The ion chromatograph [IC] separates out the different families of molecules," explains Van Mooy.

"We added radioactive phosphate, then isolated the phosphonate to see if the samples became radioactive, too. It's the radioactive technique that let us see how fast phosphate was transformed to phosphonate."

Enter the microbes

The researchers found that about 5 percent of the phosphate in the shallow water samples was taken up by the microbes and changed to phosphonates.

In deeper water samples, which were taken at depths of 40 and 150 meters (131 feet and 492 feet), about 15 to 20 percent of the phosphates became phosphonates.

"Although evidence of the cycling of phosphonates has been mounting for nearly a decade, these results show for the first time that microbes are producing phosphonates in the ocean, and that it is happening very quickly," says paper co-author Sonya Dyhrman of Columbia University.

"An exciting aspect of this study was the application of the IC method at sea. In near-real-time, we could tell that the phosphate we added was being transformed to phosphonate."

Better understanding of phosphorus cycle

A better understanding of phosphorus cycling in the oceans is important, as it affects the marine food web and, therefore, the ability of the oceans to absorb atmospheric carbon dioxide.

The researchers say that solving the mystery of phosphonates also reinforces the need to identify the full suite of phosphorus biochemicals being produced and metabolized by marine microbes, and what physiological roles they serve for these cells.

"Such work will help us further resolve the complexities of how this critical element is cycled in the ocean," Dyhrman adds.

Grants from the Simons Foundation also supported the work.

-NSF-
Media Contacts
Cheryl Dybas, NSF

STAMPEDE SUPERCOMPUTER AND DRIVING DNA THROUGH THE NANOPORE

FROM:  NATIONAL SCIENCE FOUNDATION 

Blueprint for the affordable genome

Stampede supercomputer powers innovations in DNA sequencing technologies
Aleksei Aksimentiev, a professor of physics at the University of Illinois-Urbana Champaign, used the National Science Foundation-supported Stampede supercomputer to explore a cutting-edge method of DNA sequencing. The method uses an electric field to drive a strand of DNA through a small hole, or "nanopore," either in silicon or a biological membrane.

By controlling this process precisely and measuring the change in ionic current as the DNA strands move through the pore of the membrane, the sequencer can read each base pair in order.

"Stampede is by far the best computer system my group has used over the past 10 years," Aksimentiev said. "Being able to routinely obtain 40-80 nanoseconds of molecular dynamic simulations in 24 hours, regardless of the systems' size, has been essential for us to make progress with rapidly evolving projects."

Aksimentiev and his group showed that localized heating can be used to stretch DNA, which significantly increases the accuracy of nanopore DNA sequencing. In addition, he and his team used an all-atom molecular dynamics method to accurately describe DNA origami objects, making it possible to engineer materials for future applications in biosensing, drug delivery and nano-electronics. These results were published in ACS Nano and the Proceedings of the National Academy of Sciences.

-- Aaron Dubrow, NSF
Investigators
Aleksei Aksimentiev
Related Institutions/Organizations
University of Texas at Austin
University of Illinois at Urbana-Champaign

NASA VIEWS VOLCANOES FROM RESEARCH PLANE

FROM:  NASA 
Right:  The conical Guatemalan volcano in the center is "Volcan de Agua." The two volcanoes behind it are, right to left, "Volcan de Fuego" and "Acatenango." "Volcan de Pacaya" is in the foreground.  Image Credit-NASA-Stu Broce.

A four-week NASA Earth science radar imaging mission deployment to Central and South America got underway in early April when the agency's C-20A departed it's base in Palmdale, Calif., to collect data over targets in the Gulf Coast area of the southeastern United States.

The aircraft, a modified Gulfstream III, is carrying NASA's Uninhabited Aerial Vehicle Synthetic Aperture Radar (UAVSAR) instrument in a specialized pod under the belly of the aircraft. Developed by NASA's Jet Propulsion Laboratory in Pasadena, Calif., UAVSAR measures ground deformation over large areas to a precision of 0.04 to 0.2 inches (0.1 to 0.5 centimeters).

The mission schedule calls for the aircraft to make stops in 10 international and U.S. locations, including the Gulf Coast. Research during the deployment is covering a variety of topics, including the volcanoes, glaciers, forest structure, levees, and subsidence. It is also providing vegetation data sets for satellite algorithm development.

The volcanoes of Central and South America are of interest because of the hazard they pose to nearby population centers. A majority of the research will focus on gathering volcano deformation measurements, with many flight lines being repeats from previous deployments. Surface deformation often precedes other signs of renewed volcanic activity.

The aircraft and its support team flew from New Orleans April 10, flying five science lines over Guatemala and El Salvador prior to arriving at Tocumen International Airport in Panama City, Panama. Several data collection flights over Columbia are planned before the aircraft moves on to South America.
The mission is scheduled to end May 6 when the aircraft returns to its base at the NASA Armstrong Flight Research Center's Palmdale facility in Southern California.