The Specification and Influence of Asset Markets

This paper is a chapter in the forthcoming Handbook of International Economics. It surveys the literature on the specification of models of asset markets and the implications of differences in specification for the macroeconomic adjustment process. Builders of portfolio balance models have generally employed "postulated" asset demand functions, rather than deriving these directly from micro foundations. The first major sec-tion of the paper lays out a postulated general specification of asset markets and summarizes the fundamental short-run results of portfolio balance models using a very basic specification of asset markets. Then,rudimentary specifications of a balance of payments equation and goods market equilibrium conditions are supplied, so that the dynamic distribution effects of the trade account under static and rational expectations with both fixed goods prices and flexible goods prices can be analyzed.The second major section of the paper surveys and analyzes microfoundation models of asset demands using stochastic calculus. The microeconomic theory of asset demands implies some but not all of the properties of the basic specification of postulated asset demands at the macrolevel. Since the conclusions of macroeconomic analysis depend crucially on the form of asset demand functions, it is important to continue to explore the implications of micro foundations for macro specification.

CSM-397 - The Foundations of Specification II

In the Foundations of Specification I, we developed a Specification Theory (CST) to serve as a vehicle to explore the mathematical foundations of specification. A further aspect of this concerns type inference. In this paper we develop and explore a type inference system for CST and use it to illustrate the foundational issues which arise with such systems

CSM-396 - The Foundations of Specification I

We develop a Core Specification Theory (CST) as a basis for the mathematical investigation of specification and specification languages

Optimal Inflation Targeting Rules

This paper characterizes optimal monetary policy for a range of alternative economic models in terms of a flexible inflation targeting rule, with a target criterion that depends on the model specification. It shows which forecast horizons should matter, and which variables besides inflation should be taken into account, for each specification. The likely quantitative significance of the various factors considered in the general discussion is then assessed by estimating a small, structural model of the U.S. monetary transmission mechanism with explicit optimizing foundations. An optimal policy rule is computed for the estimated model, and shown to correspond to a multi-stage inflation-forecast targeting procedure. The degree to which actual U.S. policy over the past two decades has conformed to the optimal target criteria is then considered.

Theoretical foundations for information representation and constraint specification

Research accomplished at the Knowledge Based Systems Laboratory of the Department of Industrial Engineering at Texas A&M University is described. Outlined here are the theoretical foundations necessary to construct a Neutral Information Representation Scheme (NIRS), which will allow for automated data transfer and translation between model languages, procedural programming languages, database languages, transaction and process languages, and knowledge representation and reasoning control languages for information system specification

Formal Foundations for the Specification of Software Architecture

This investigation establishes a formal foundation for software architecture that allows for the specification of large, non-trivial software systems using well founded, consistency preserving construction techniques. Two fundamental problems were addressed: how to define and express architectures formally using the concept of theories, and how architecture theories can be practically applied in specification construction. The initial stages of this investigation sought to establish a formal, mathematical relationship between functional specifications of behavior and specifications defining system structure. Experimental results lead to the conclusion that architectures defining the structure of functional operations can be defined using functional logic, but more complex architectures require a separate process logic. A process logic based on Hoare\u27s Communicating Sequential Processes (CSP) was selected for representing and reasoning about system structure and was used in the definition of a process-based specification development system. Specifically, CSP was used to define a category of process-based specifications and specification morphisms. This allowed well-founded specification construction techniques such as specification morphisms, colimits, and interpretations to be applied to the construction of consistent software architecture. Architecture theories expressed in terms of functional and process-based specifications were defined, and translations between these architecture theories were investigated. A feasibility analysis on an image processing application demonstrated that architecture theories can be used to develop specifications for large, non-trivial applications. (KAR) P. 2

Bernoulli Regression Models: Re-examining Statistical Models with Binary Dependent Variables

The classical approach for specifying statistical models with binary dependent variables in econometrics using latent variables or threshold models can leave the model misspecified, resulting in biased and inconsistent estimates as well as erroneous inferences. Furthermore, methods for trying to alleviate such problems, such as univariate generalized linear models, have not provided an adequate alternative for ensuring the statistical adequacy of such models. The purpose of this paper is to re-examine the underlying probabilistic foundations of statistical models with binary dependent variables using the probabilistic reduction approach to provide an alternative approach for model specification. This re-examination leads to the development of the Bernoulli Regression Model. Simulated and empirical examples provide evidence that the Bernoulli Regression Model can provide a superior approach for specifying statistically adequate models for dichotomous choice processes.Bernoulli Regression Model, logistic regression, generalized linear models, discrete choice, probabilistic reduction approach, model specification, Research Methods/ Statistical Methods,

A performance approach to the design and specification of foundations for industrial ground bearing slabs and pavements

The foundations for industrial flooring and pavements are normally designed based on measurements, or prediction, of the California Bearing Ratio (CBR) of the subgrade, and from this the design thickness of the foundation is chosen utilising long established empirical relationships. The modulus of subgrade reaction (k) measured by static plate bearing tests may also be used, and is correlated to CBR. The thickness design charts are the same as those used for the design of highway foundations and are based primarily on observed performance. The foundations are then constructed to a recipe specification whereby specific (tightly graded) materials are placed and compacted upon the subgrade with specified plant. The soil CBR can only be regarded as an index property and does not directly or explicitly assess the primary functional performance parameters, of stiffness or strength. If CBR were replaced with direct measurement of these parameters, then the current empirical approach could be replaced with more powerful analytical design. Performance of the as-built foundation could then be better assured by compliance testing (end product) on site during construction. By moving to a performance-based specification approach, requiring some analytical foundation design, it is anticipated that more appropriate and efficient use of plant and materials can be made. This should enable better quality construction to be achieved, more efficient use of recycled materials or stabilisation of weak subgrades, hence leading to more sustainable construction. Recent research at Loughborough University has developed such a performance-based specification approach for the design of (major) highway foundations, and has assessed those devices suitable to measure the performance parameters for both design and compliance testing. In this paper the transfer of this technology to industrial flooring and paving is suggested. The benefits of a performance-based approach to foundation design and specification are explained. The loading and function of a foundation is described and the performance parameters required to perform these functions are detailed. Suitable methods currently available to measure these performance parameters are described in brief. Finally, the implications and benefits of a move to a performance-based specification approach are discussed