A Structural Approach to Identifying the Sources of Local-Currency Price Stability

The inertia of the local-currency prices of traded goods in the face of exchange-rate changes is a well-documented phenomenon in International Economics. This paper develops a structural model to identify the sources of this local-currency price stability and applies it to micro data from the beer market. The empirical procedure exploits manufacturers’ and retailers’ first-order conditions in conjunction with detailed information on the frequency of price adjustments following exchange-rate changes to quantify the relative importance of local non-traded cost components, markup adjustment by manufacturers and retailers, and nominal price rigidities in the incomplete transmission of such changes to prices. We find that, on average, approximately 60% of the incomplete exchange rate pass-through is due to local non-traded costs; 8% to markup adjustment; 30% to the existence of own-brand price adjustment costs, and 1% to the indirect/strategic effect of such costs, though these results vary considerably across individual brands according to their market shares.

Nonparametric Estimation of Multi-View Latent Variable Models

Spectral methods have greatly advanced the estimation of latent variable models, generating a sequence of novel and efficient algorithms with strong theoretical guarantees. However, current spectral algorithms are largely restricted to mixtures of discrete or Gaussian distributions. In this paper, we propose a kernel method for learning multi-view latent variable models, allowing each mixture component to be nonparametric. The key idea of the method is to embed the joint distribution of a multi-view latent variable into a reproducing kernel Hilbert space, and then the latent parameters are recovered using a robust tensor power method. We establish that the sample complexity for the proposed method is quadratic in the number of latent components and is a low order polynomial in the other relevant parameters. Thus, our non-parametric tensor approach to learning latent variable models enjoys good sample and computational efficiencies. Moreover, the non-parametric tensor power method compares favorably to EM algorithm and other existing spectral algorithms in our experiments

Scaling-up Empirical Risk Minimization: Optimization of Incomplete U-statistics

In a wide range of statistical learning problems such as ranking, clustering or metric learning among others, the risk is accurately estimated by $U$-statistics of degree $d\geq 1$, i.e. functionals of the training data with low variance that take the form of averages over $k$-tuples. From a computational perspective, the calculation of such statistics is highly expensive even for a moderate sample size $n$, as it requires averaging $O(n^d)$ terms. This makes learning procedures relying on the optimization of such data functionals hardly feasible in practice. It is the major goal of this paper to show that, strikingly, such empirical risks can be replaced by drastically computationally simpler Monte-Carlo estimates based on $O(n)$ terms only, usually referred to as incomplete $U$-statistics, without damaging the $O_{\mathbb{P}}(1/\sqrt{n})$ learning rate of Empirical Risk Minimization (ERM) procedures. For this purpose, we establish uniform deviation results describing the error made when approximating a $U$-process by its incomplete version under appropriate complexity assumptions. Extensions to model selection, fast rate situations and various sampling techniques are also considered, as well as an application to stochastic gradient descent for ERM. Finally, numerical examples are displayed in order to provide strong empirical evidence that the approach we promote largely surpasses more naive subsampling techniques.Comment: To appear in Journal of Machine Learning Research. 34 pages. v2: minor correction to Theorem 4 and its proof, added 1 reference. v3: typo corrected in Proposition 3. v4: improved presentation, added experiments on model selection for clustering, fixed minor typo

Complexity, BioComplexity, the Connectionist Conjecture and Ontology of Complexity\ud

This paper develops and integrates major ideas and concepts on complexity and biocomplexity - the connectionist conjecture, universal ontology of complexity, irreducible complexity of totality & inherent randomness, perpetual evolution of information, emergence of criticality and equivalence of symmetry & complexity. This paper introduces the Connectionist Conjecture which states that the one and only representation of Totality is the connectionist one i.e. in terms of nodes and edges. This paper also introduces an idea of Universal Ontology of Complexity and develops concepts in that direction. The paper also develops ideas and concepts on the perpetual evolution of information, irreducibility and computability of totality, all in the context of the Connectionist Conjecture. The paper indicates that the control and communication are the prime functionals that are responsible for the symmetry and complexity of complex phenomenon. The paper takes the stand that the phenomenon of life (including its evolution) is probably the nearest to what we can describe with the term “complexity”. The paper also assumes that signaling and communication within the living world and of the living world with the environment creates the connectionist structure of the biocomplexity. With life and its evolution as the substrate, the paper develops ideas towards the ontology of complexity. The paper introduces new complexity theoretic interpretations of fundamental biomolecular parameters. The paper also develops ideas on the methodology to determine the complexity of “true” complex phenomena.\u