Symmetry of External Shock responses within the Andean Community of Nations : A SVAR Approach

This article studies the symmetry in reactions of the Andean Community of Nations (CAN) economies to external shocks in order to analyze the group's evolution towards economic integration. The undertaking of a Monetary Union project in South America enhances the usefulness of evaluating shocks within this region according to the Optimal Currency Area Theory. A Structural VAR model with non-recursive contemporaneous restrictions is built for each economy and a correlation analysis is performed. The results evidence that the CAN has evolved positively towards structural convergence.Latin American countries; Monetary Union; OCA Theory; Structural VAR

The Fundamental Theorems of Welfare Economics, DSGE and the Theory of Policy - Computable & Constructive Foundations

The genesis and the path towards what has come to be called the DSGE model is traced, from its origins in the Arrow-Debreu General Equilibrium model (ADGE), via Scarf's Computable General Equilibrium model (CGE) and its applied version as Applied Computable General Equilibrium model (ACGE), to its ostensible dynamization as a Recursive Competitive Equilibrium (RCE). It is shown that these transformations of the ADGE - including the fountainhead - are computably and constructively untenable. The policy implications of these (negative) results, via the Fundamental Theorems of Welfare Economics in particular, and against the backdrop of the mathematical theory of economic policy in general, are also discussed (again from computable and constructive points of view). Suggestions for going 'beyond DSGE' are, then, outlined on the basis of a framework that is underpinned - from the outset - by computability and constructivity considerationsComputable General Equilibrium, Dynamic Stochastic General Equilibrium, Computability, Constructivity, Fundamental Theorems of Welfare Economics, Theory of Policy, Coupled Nonlinear Dynamic

Symmetry of External Shock responses within the Andean Community of Nations : A SVAR Approach

This article studies the symmetry in reactions of the Andean Community of Nations (CAN) economies to external shocks in order to analyze the group's evolution towards economic integration. The undertaking of a Monetary Union project in South America enhances the usefulness of evaluating shocks within this region according to the Optimal Currency Area Theory. A Structural VAR model with non-recursive contemporaneous restrictions is built for each economy and a correlation analysis is performed. The results evidence that the CAN has evolved positively towards structural convergence

Supergravity, AdS/CFT Correspondence and Matrix Models

The recent developments towards the possible non-perturbative formulation of string/M theory using supersymmetric Yang-Mills matrix models (SYMs) are discussed. In the first part, we give a critical review on the status of our present understanding, focusing on the connection of the D0-brane matrix models to supergravity and its relevance to the so-called Matrix-theory conjecture. We also discuss some problems concerning the conjectured relation between supergravity in AdS background and SYM from the viewpoint of D-brane interactions. We present a qualitative argument showing how the boundary condition at AdS boundary dictates the correlators on the large N system of source D-branes. Then, in the final part, we turn to the question how to formulate the condensation of graviton in matrix models, taking the simplest example of type IIB matrix model. We argue the emergence of a hidden symmetry GL(10, R), beyond the manifest Lorentz symmetry SO(9,1), by embedding U(N) model into models with higher N and by treating the whole recursive series of models simultaneously. This suggests a possible approach toward background independent formulations of matrix models.Comment: Expanded and combined version of two talks given at Nishinomiya-Yukawa Symposium, Nov., 1998 and YITP workshop, Nov., 1998, 23 pages, no figures (revision: sentences and references are added to clarify the relation between the space-time uncertainty relation and holography

Investment under ambiguity with the best and worst in mind

Recent literature on optimal investment has stressed the difference between the impact of risk and the impact of ambiguity - also called Knightian uncertainty - on investors' decisions. In this paper, we show that a decision maker's attitude towards ambiguity is similarly crucial for investment decisions. We capture the investor's individual ambiguity attitude by applying alpha-MEU preferences to a standard investment problem. We show that the presence of ambiguity often leads to an increase in the subjective project value, and entrepreneurs are more eager to invest. Thereby, our investment model helps to explain differences in investment behavior in situations which are objectively identical

Spectrum Leasing as an Incentive towards Uplink Macrocell and Femtocell Cooperation

The concept of femtocell access points underlaying existing communication infrastructure has recently emerged as a key technology that can significantly improve the coverage and performance of next-generation wireless networks. In this paper, we propose a framework for macrocell-femtocell cooperation under a closed access policy, in which a femtocell user may act as a relay for macrocell users. In return, each cooperative macrocell user grants the femtocell user a fraction of its superframe. We formulate a coalitional game with macrocell and femtocell users being the players, which can take individual and distributed decisions on whether to cooperate or not, while maximizing a utility function that captures the cooperative gains, in terms of throughput and delay.We show that the network can selforganize into a partition composed of disjoint coalitions which constitutes the recursive core of the game representing a key solution concept for coalition formation games in partition form. Simulation results show that the proposed coalition formation algorithm yields significant gains in terms of average rate per macrocell user, reaching up to 239%, relative to the non-cooperative case. Moreover, the proposed approach shows an improvement in terms of femtocell users' rate of up to 21% when compared to the traditional closed access policy.Comment: 29 pages, 11 figures, accepted at the IEEE JSAC on Femtocell Network