Opportunist to risk manager: reverse engineering the Taylor rule

Taylor (1993) advocated that the short term policy rate should respond linearly to the inflation rate and to the output gap. The Taylor Rule also seemed to track the federal funds rate over the formative years of the Greenspan regime, then considered to have experienced a number of early successes. While acknowledged as being simple and robust, the Taylor Rule does not, however, capture the nonlinearity of monetary policy as expressed by a number of Federal Reserve 'insiders'. In this thesis, the argument is made that as monetary aggregates were being de-emphasised from the early 1980s, some policy makers felt it was necessary to preserve latitude for economic shocks. From the late 1980s opportunistic monetary policy, devised by FOMC members, has been used to expound policy judgements that reflected a more discretionary posture. Chairman Greenspan also used risk management rhetoric to explain deviations from a conventional linear framework. Within this framework, discretion can be achieved by crafting the inflation forecast and the zone targeting bounds. The opportunistic reaction function as set out by Aksoy, Orphanides, Small, Wieland and Wilcox (2006) is augmented to take into account risk management perspectives using portfolio option theory. This reaction function is estimated and found to offer some improvement in describing rate decisions over a linear Taylor reaction function for the Greenspan tenure. Risk management implies policy makers pre-emptively target the expectation of inflation. Portfolio option theory is used to extend the opportunistic model as set out by Aksoy et al. (2006) and from this a number of parameter sensitivities, better known as 'the Greeks', are developed. The Greeks are used innovatively to consider how rate adjustment is likely to be affected by altering varying measures of uncertainty. In particular, delta is developed to provide a dynamic measure of interest rate inertia. Portfolio option theory and committee dynamics are also used to describe under what circumstances a linear Taylor type rule can also constitute the de facto policy rule, even for rate setting with a very defined zone target. As a consequence, the nonlinearity described by the portfolio option model is found to be highly nuanced. The impact of increasing uncertainty when policy is pre-emptive largely serves to reduce the effect of nonlinearity

Lost In a Maze of Character Evidence: How the Federal Courts Lack a Cohesive Approach to Applying Federal Rule of Evidence 404(b) in Drug Distribution Cases

The admission of a criminal defendant’s prior bad acts can be a powerful tool for attaining a conviction. The federal courts are currently divided as to whether the defendant’s prior drug use is admissible under Rule 404(b) of the Federal Rules of Evidence when the defendant is charged with distributing a controlled dangerous substance. Part I of this Comment will briefly explore the historical roots of Rule 404(b). Part II will examine the permissible purposes for admitting prior bad acts under Rule 404(b). Part III will discuss the circuit split that has developed as to whether the defendant’s prior drug use can be admissible under one of the exceptions to Rule 404(b) in a prosecution for possession with intent to distribute. Part IV examines a new standard for analyzing prior drug offenses under Rule 404(b) and argues that courts should move away from a mechanical framework of applying Rule 404(b). Part V will briefly summarize this Comment

Performance of the Child Maintenance and Enforcement Commission: memorandum for the House of Commons Work and Pensions Committee

"This memorandum has been prepared for the House of Commons Work and Pensions Committee to provide an update on the performance of the current statutory child maintenance schemes, following completion of a three year improvement plan. This memorandum also sets out the progress made by the Child Maintenance and Enforcement Commission towards redesigning the child maintenance system in Great Britain, as set out in the Child Maintenance and Other Payments Act 2008" - clause 1.

American Option Pricing: An Accelerated Lattice Model with Intelligent Lattice Search

The authors introduce to the literature an intelligent lattice search algorithm to efficiently locate the optimal exercise boundary for American options. Lattice models can be accelerated by incorporating intelligent lattice search, truncation, and dynamic memory. We reduce computational runtime from over 18 minutes down to less than 3 seconds to estimate a 15,000-step binomial tree where the results obtained are consistent with a widely acclaimed literature. Delta and implied volatility can also be accelerated relative to standard models. Lattice estimation, in general, is considered to be slow and not practical for valuing large books of options or for promptly rebalancing a riskneutral portfolio. Our technique transforms standard binomial trees and renders them to be at least on par with commonly used analytical formulae. More importantly, intelligent lattice search can be tweaked to reach varying levels of accuracy with different step size, while conventional analytical formulae are less flexible

American Option Pricing: Optimal Lattice Models and Multidimensional Efficiency tests

We introduce a set of lattice techniques to the Leisen‐Reimer and Tian binomial models with a view to accelerating computation time and improving accuracy of American Option valuation. A level of accuracy and efficiency combined can be achieved that surpass commonly used analytical analogues. We compare these efficient lattice models with analytical formulae for pricing different groups of options according to the deepness of American quality and moneyness. Our results reveal that counter to received wisdom, lattices constructs produce greater speed and accuracy for all option categories relative to the best performing closed form American analogues

Practical skills and techniques for the transition to a sustainable future, a case study for engineering education

This paper seeks to assess the gap between the visions of sustainable engineering practice with its current reality. A case study involving Energetics Pty. Ltd., a leading Australian multi-disciplinary consultancy specialized in engaging public and private organizations in the development of their responses to climate change and sustainability was conducted based on a staff questionnaire developed following a review of current literature and initiatives on sustainability globally. The results of the survey indicate that sustainability in engineering practice is still focused on the technical and financial impacts of perceived sustainable solutions. The broader aspects that have been identified as necessary have yet to be achieved in education or practice. The principle reason for this appears to lie in the perception engineers have of their practice and the ability of engineers to communicate effectively with their clients. These have combined to make regulation one of the principal drivers in environmental and sustainability engineering. A sustainability informed ethics paradigm needs to be brought more to the fore to allow engineers to engage with their clients in a more effective manner. Engineers do have the opportunity to be agents of change, but only when they envisage a broader societal role and context for engineering and can communicate effectively with the decision makers within their client organisations

Microfoundations of dynamic capabilities for innovation: a review and research agenda

This paper provides a conceptual overview of the microfoundations of dynamic capabilities for innovation. A critical evaluation of dynamic capabilities theory highlights its contested nature and significant limitations in its application. Notably, there is little understanding of the mechanisms determining the origin and evolution of dynamic capabilities, while the role of employees has been neglected. In an effort to address this deficiency, the paper draws on literature from HRM and innovation management to trace the microfoundations of dynamic capabilities for innovation. This highlights the importance of incorporating the perspectives and motivation of employees as a central part of analysis and as a basis for more direct managerial interventions in building capabilities

Editorial: Selected Papers from IFIP Working Group 9.4, Social Implications of Computers in Developing Countries, Assessing the Contribution of ICT to Development Goals

The guest editors of this issue are the organizers of the 10th International Conference of the International Federation for Information Processing (IFIP) 9.4 working group on Social Implications of Computers in Developing Countries. This special issue of Information Technologies \u26 International Development presents selected papers from the conference

University Students from Four Ethnopolitical Conflict Zones: An Exploratory Study of Perceptions of Self and Country

This exploratory comparative case study examines hopes and fears for self and country of 300 students attending university in Bosnia-Herzegovina, Northern Ireland, South Africa, and Sri Lanka. Students report living in stressful societies where ethno political and state violence were the norm. The results of this qualitative study indicate that while the young people are optimistic about their life changes, they are concerned that the conflicts could re-ignite and spiral out of control. In particular, the students’ images indicate the importance of the self-society relationship and that these young adults relish the challenge of being productive citizens in their post-conflict societies

First Steps in Developing Cement-Based Batteries to Power Cathodic Protection of Embedded Steel in Concrete

This paper presents the first steps in developing innovative cement-based batteries to power cathodic protection in reinforced concrete structures. Initial electrical outputs of 1.55V and 23mA have been found to be sufficient to polarise prescribed corrosion currents of 20mA per m2 of embedded steel. Cathodic protection is a well-developed and powerful technique to limit the effects of steel reinforcement corrosion. However, as it requires an electrical supply day and night, it is often powered by non-environmentally friendly diesel generators or connected to the electrical grid. This paper focuses on increasing the ionic conductivity of the solution in the cement pores, increasing the porosity of the cement, examining ways of sealing moisture into the cement and comparing different electrode materials and treatments. The batteries presented consist of different combinations of Portland cement, water, carbon black and salt solutions with embedded copper acting as the cathode and magnesium, aluminium or zinc cast as the anode. The preliminary findings demonstrate that cementbased batteries can produce sufficient sustainable electrical outputs with the correct materials and arrangement of cast-in anodes. Work is ongoing to determine how these batteries can be recharged using photovoltaics which will further enhance their sustainability properties