Non-binding relationship between visual features.

The answer as to how visual attributes processed in different brain loci at different speeds are bound together to give us our unitary experience of the visual world remains unknown. In this study we investigated whether bound representations arise, as commonly assumed, through physiological interactions between cells in the visual areas. In a focal attentional task in which correct responses from either bound or unbound representations were possible, participants discriminated the color or orientation of briefly presented single bars. On the assumption that representations of the two attributes are bound, the accuracy of reporting the color and orientation should co-vary. By contrast, if the attributes are not mandatorily bound, the accuracy of reporting the two attributes should be independent. The results of our psychophysical studies reported here supported the latter, non-binding, relationship between visual features, suggesting that binding does not necessarily occur even under focal attention. We propose a task-contingent binding mechanism, postulating that binding occurs at late, post-perceptual (PP), stages through the intervention of memory

Computing Markov-perfect optimal policies in business-cycle models

Time inconsistency is an essential feature of many policy problems. This paper presents and compares three methods for computing Markov-perfect optimal policies in stochastic nonlinear business cycle models. The methods considered include value function iteration, generalized Euler equations, and parameterized shadow prices. In the context of a business cycle model in which a fiscal authority chooses government spending and income taxation optimally, although lacking the ability to commit, we show that the solutions obtained using value function iteration and generalized Euler equations are somewhat more accurate than that obtained using parameterized shadow prices. Among these three methods, we show that value function iteration can be applied easily, even to environments that include a risk-sensitive fiscal authority and/or inequality constraints on government spending. We show that the risk-sensitive fiscal authority lowers government spending and income taxation, reducing the disincentive to accumulate wealth that households face