Teaching Time-Inconsistency Consistently

This paper places Kydland and Prescott\u27s classic analysis of time inconsistency in a fuller context by examining their result in five different economic environments. Pedagogically, the paper uses a consistent mathematical treatment of the subject throughout. To understand the motivations of the central bank, the paper begins with the environment that Kydland-Prescott successfully criticized wherein the public has static inflationary expectations and the central bank assumes that they do. The main sections of the paper go on to analyze time inconsistency in four alternative environments defined by the belief structure of the central bank with respect to the nature of the economy and the mechanism by which the public forms its inflationary expectations. It is shown that the inconsistency result holds when the central bank does not understand the natural rate hypothesis and does not believe that the public forms their inflationary expectations rationally. The inconsistency result, however, does not hold in the other cases

The Complexity of Approximating complex-valued Ising and Tutte partition functions

We study the complexity of approximately evaluating the Ising and Tutte partition functions with complex parameters. Our results are partly motivated by the study of the quantum complexity classes BQP and IQP. Recent results show how to encode quantum computations as evaluations of classical partition functions. These results rely on interesting and deep results about quantum computation in order to obtain hardness results about the difficulty of (classically) evaluating the partition functions for certain fixed parameters. The motivation for this paper is to study more comprehensively the complexity of (classically) approximating the Ising and Tutte partition functions with complex parameters. Partition functions are combinatorial in nature and quantifying their approximation complexity does not require a detailed understanding of quantum computation. Using combinatorial arguments, we give the first full classification of the complexity of multiplicatively approximating the norm and additively approximating the argument of the Ising partition function for complex edge interactions (as well as of approximating the partition function according to a natural complex metric). We also study the norm approximation problem in the presence of external fields, for which we give a complete dichotomy when the parameters are roots of unity. Previous results were known just for a few such points, and we strengthen these results from BQP-hardness to #P-hardness. Moreover, we show that computing the sign of the Tutte polynomial is #P-hard at certain points related to the simulation of BQP. Using our classifications, we then revisit the connections to quantum computation, drawing conclusions that are a little different from (and incomparable to) ones in the quantum literature, but along similar lines