Measuring output gap uncertainty

We propose a methodology for producing density forecasts for the output gap in real time using a large number of vector autoregessions in inflation and output gap measures. Density combination utilizes a linear mixture of experts framework to produce potentially non-Gaussian ensemble densities for the unobserved output gap. In our application, we show that data revisions alter substantially our probabilistic assessments of the output gap using a variety of output gap measures derived from univariate detrending filters. The resulting ensemble produces well-calibrated forecast densities for US inflation in real time, in contrast to those from simple univariate autoregressions which ignore the contribution of the output gap. Combining evidence from both linear trends and more flexible univariate detrending filters induces strong multi-modality in the predictive densities for the unobserved output gap. The peaks associated with these two detrending methodologies indicate output gaps of opposite sign for some observations, reflecting the pervasive nature of model uncertainty in our US data

Bank equity stakes in borrowing firms and financial distress

The authors derive optimal financial claim for a bank when the borrowing firm's uninformed stakeholders depend on the bank to establish whether the firm is distressed and whether concessions by stakeholders are necessary. The bank's financial claim is designed to ensure that it cannot collude with a healthy firm's owners to seek unnecessary concessions or to collude with a distressed firm's owners to claim that the firm is healthy. To prove that a request for concessions has not come from a healthy firm/bank coalition, the bank must hold either a very small or a very large equity stake when the firm enters distress. To prove that a distressed firm and the bank have not colluded to claim that the firm is healthy, the bank may need to hold equity under routine financial conditions.Bank loans ; Bank investments ; Investments

Active Object Localization in Visual Situations

We describe a method for performing active localization of objects in instances of visual situations. A visual situation is an abstract concept---e.g., "a boxing match", "a birthday party", "walking the dog", "waiting for a bus"---whose image instantiations are linked more by their common spatial and semantic structure than by low-level visual similarity. Our system combines given and learned knowledge of the structure of a particular situation, and adapts that knowledge to a new situation instance as it actively searches for objects. More specifically, the system learns a set of probability distributions describing spatial and other relationships among relevant objects. The system uses those distributions to iteratively sample object proposals on a test image, but also continually uses information from those object proposals to adaptively modify the distributions based on what the system has detected. We test our approach's ability to efficiently localize objects, using a situation-specific image dataset created by our group. We compare the results with several baselines and variations on our method, and demonstrate the strong benefit of using situation knowledge and active context-driven localization. Finally, we contrast our method with several other approaches that use context as well as active search for object localization in images.Comment: 14 page

Real-time inflation forecast densities from ensemble phillips curves

A popular macroeconomic forecasting strategy takes combinations across many models to hedge against model instabilities of unknown timing; see (among others) Stock andWatson (2004) and Clark and McCracken (2009). In this paper, we examine the effectiveness of recursive-weight and equal-weight combination strategies for density forecasting using a time-varying Phillips curve relationship between inflation and the output gap. The densities reflect the uncertainty across a large number of models using many statistical measures of the output gap, allowing for a single structural break of unknown timing. We use real-time data for the US, Australia, New Zealand and Norway. Our main finding is that the recursive-weight strategy performs well across the real-time data sets, consistently giving well-calibrated forecast densities. The equal-weight strategy generates poorly-calibrated forecast densities for the US and Australian samples. There is little difference between the two strategies for our New Zealand and Norwegian data. We also find that the ensemble modeling approach performs more consistently with real-time data than with revised data in all four countries

International management: A conceptual framework for comparison of offshoring and outsourcing strategies by UK and German multinational corporations

This paper outlines research by a doctoral candidate exploring differences in approach to outsourcing and offshoring by multinational corporations. In particular, a comparison is drawn between German and UK headquartered organizations in the airline / transport and also the engineering sectors. A novel conceptual framework is developed that uses differing varieties of capitalism (VoC) to compare and contrast a series of criteria. Underlying theory that is drawn from the resource based view (RBV) of the firm and global production networks (GPNs) are also considered. The initial findings from two case studies are that German organizations are less inclined to outsource (in both sectors) preferring to retain control as a wholly owned business offshore. The UK businesses were less risk adverse and seemed to be more flexible and agile in their sourcing policies being prepared to outsource, offshore and partner or acquire as appropriate, even using competitors when there is a sound business case. The relationships’ with trade unions / works council was also found to be very different, with reluctance by management in Germany to progress radical initiatives. A favorable economy in Germany has also created an environment in which overseas expansion could take place without a significant loss of jobs at home. Further research is required to better understand when the driving force to restructure and grow is to lower labour or total costs, seek market entry to support customer needs or a combinatio

Globalization: Managing Multinationals - a comparison of offshoring and outsourcing strategies in UK and German multinational corporations

This paper outlines research exploring differences in approach to outsourcing and offshoring by multinational corporations. In particular, a comparison is drawn between German and UK headquartered organizations in the airline and engineering sectors. A novel conceptual framework is developed; and the initial findings from two case studies are that German organizations are less inclined to outsource (in both sectors) preferring to retain control as a wholly owned business offshore. The UK businesses were less risk adverse and seemed to be more flexible and agile in their sourcing policies – using competitors when there is a sound business case. The relationships’ with trade unions / works council was also found to be very different, with reluctance by management in Germany to progress radical initiatives. A favorable economy in Germany has also created an environment in which overseas expansion could take place without a loss of jobs at hom

Re-shoring & Offshoring Trends: Managing Engineering Multinationals - A comparison of offshoring and outsourcing strategies in UK and German multinational corporations

UK and German headquartered engineering multinational corporations (MNCs) are compared with a focus on their outsourcing and offshoring initiatives. A novel conceptual framework is developed that uses differing varieties of capitalism (VoC) to compare and contrast a series of criteria. Underlying theory is taken from the resource based view (RBV) of the firm and global production networks (GPNs). The findings from a comparative case study were that in the UK, lower labour costs and reorganising the value chain were key reasons to outsource and offshore. The UK business was less risk adverse and seemed more flexible and agile in its sourcing policies. The German organisation was less inclined to outsource preferring to retain control of a wholly owned offshore business unit. A further difference was that management in Germany were reluctant to progress radical initiatives with the works council. There was little evidence of re-shorin

Visualizing The Permanent Lie: An Examination of Dystopian Literature Using Aleksandr Solzhenitsyn’s Model

This thesis argues for the formation of an evolving canon of literature critical to continued resistance to totalitarianism, focusing primarily on the works of George Orwell, Aldous Huxley and Ji Xianlin. In crafting the theoretical basis of my study, I rely primarily on Aleksandr Solzhenitsyn’s concept of the “permanent lie” and its related concepts, “survive at any price” and “only material results matter” as formulated in his magnum opus, The Gulag Archipelago. In Solzhenitsyn’s view, the “permanent lie” is rooted in the creation of a virtual reality among individuals trapped in a totalitarian society, in which they must hold two opposing viewpoints in their mind simultaneously, one for the private arena in which they are relatively free to share their true thoughts regarding the regime and one for the public sphere in which they must obey the rhetoric espoused by the ruling regime. Solzhenitsyn used “survive at any price” in terms of the mental fracture present by the continued adherence to the “permanent lie” to prolong survival, an idea to survive at the expense of others. Solzhenitsyn uses “only material results matter” to explain the unspoken agreement between the totalitarian regime and the oppressed individuals under the regime, that every act of a sinister nature or otherwise serves some greater good in the advancement of an equal and just society. An application of these theories together allows for the possibility of sustained resistance. The crux of my argument is that through Solzhenitsyn’s theoretical framework related to totalitarianism and a study of reader-response theory that examines the ways in which the literature is received internally, a canon emerges from the theoretical and literary works that allows for a crucial study of resistance movements applicable to present-day and as society becomes evermore digitized in the 21st century. I have chosen George Orwell, Aldous Huxley and Ji Xianlin for their shared belief in the necessity of resistance to totalitarianism through varying degrees of cultural influence and life experience with the evolving notion of the “totalitarian regime”. Orwell used his personal experience fighting against totalitarian ideologies in the Spanish Civil War as well as observations on the ostracization of the Soviet intelligentsia in the 1930s and 1940s to formulate his theories of the necessity of totalitarian resistance, encapsulated by his idea of “doublethink” and the replacement deity, Big Brother, in his novel, Nineteen-Eighty Four. Ji relies solely on his own experience, offering a first-hand account of the dangers of totalitarianism and continued adherence to the “permanent lie”, detailing the raw terror of forced labor camps during the Chinese Cultural Revolution in his memoir, The Cowshed: Memories of the Chinese Cultural Revolution. Finally, Huxley formulates what some have termed “soft totalitarianism” in Brave New World, creating a society under the ever-watchful eye of the government yet unaware of the regime’s malicious intent, distracted by base comforts and the illusion of a utopian society. Together, the three authors along with the theoretical basis primarily from Solzhenitsyn, offer a historical lens to examine totalitarianism’s past and its implications on future society to allow for a planned resistance before it can continue to take hold

A Comparison of the Offshoring and Outsourcing Strategies of German and UK Multinational Companies: A Critical Engagement With the 'Varieties of Capitalism' Perspective

The aim of this research is to examine the extent to which the offshoring and outsourcing practices in Multinational Corporations, when the headquarters are registered and located in either the UK or Germany; are embedded in the institutional contexts of their respective home countries. There are six research questions relating to differences in approach and choice of location, ownership and coordination, employment practice, cultural proximity, trade union influence and finally the extent of re-shoring. These are primarily assessed through the ‘varieties of capitalism’ perspective. A comparative case study approach has been adopted with a focus on two sectors; airlines and engineering; in each case a major UK and German organisation are compared. Fourteen in-depth, semi-structured interviews took place in both the home countries and overseas locations in Europe, India and Asia. The sample size is small, however, each was with a senior executive and the transcripts revealed ‘rich data’ for compiling the case studies and answering the research questions. The contribution to original thinking is a conceptual framework posited by proposing a taxonomy to analyse the relationship between coordinated and liberal market economies and the components of the offshoring and / or outsourcing process. Reference is made to theory drawn from the resource based view, global production networks, dynamic capabilities, embeddedness as well as varieties of capitalism to focus on competences, spatial dimensions and power. It is this collective approach that is considered to be novel. Qualitative analysis is deployed to re-construct the actual framework for each industry sector. Constructs (Reichertz, 2004) combining abduction, deduction and induction are used to develop propositions that lead to conclusions. The similarities between the two UK companies and the two German companies confirms the usefulness of the taxonomy and allows for its extension to other firms and sectors. Key findings and conclusions from the two case studies are that German organizations are less inclined to outsource (in both sectors) preferring to reduce costs and retain control through captive offshoring. The UK businesses were less risk adverse and more flexible and agile in their sourcing policies. There was evidence that the UK companies regarded outsourcing and offshoring as options for closer co-operation that may lead to strategic alliances and mergers or acquisition. The relationships’ with trade unions / works council was also found to be very different, with a reluctance by management in Germany to progress radical initiatives. Other differences in terms of autonomy and division of labour were found. From an institutional perspective the German CME’s cases were less able to deploy outsourcing and offshoring strategies with the degrees of freedom that the UK LMEs typically enjoyed. CMEs are constrained by their policies, interconnectedness and style of working. A number of ambiguities are highlighted. The thesis argues that the outsourcing and offshoring practices are embedded to a high degree in the institutional practices of the home countries. Finally, the empirical novelty lies in the ‘rich data’ generated by valuable insights from the senior executive interviewees to which the researcher was privileged to have access

Gaussian Processes with Context-Supported Priors for Active Object Localization

We devise an algorithm using a Bayesian optimization framework in conjunction with contextual visual data for the efficient localization of objects in still images. Recent research has demonstrated substantial progress in object localization and related tasks for computer vision. However, many current state-of-the-art object localization procedures still suffer from inaccuracy and inefficiency, in addition to failing to provide a principled and interpretable system amenable to high-level vision tasks. We address these issues with the current research. Our method encompasses an active search procedure that uses contextual data to generate initial bounding-box proposals for a target object. We train a convolutional neural network to approximate an offset distance from the target object. Next, we use a Gaussian Process to model this offset response signal over the search space of the target. We then employ a Bayesian active search for accurate localization of the target. In experiments, we compare our approach to a state-of-theart bounding-box regression method for a challenging pedestrian localization task. Our method exhibits a substantial improvement over this baseline regression method.Comment: 10 pages, 4 figure