The admission of accession countries to an enlarged monetary union: a tentative assessment

The enlargement of the European monetary union to include the accession countries (ACs) will not lead to higher average inflation in the enlarged euro area, but only to inflation redistribution across countries if continuity of the monetary policy framework is preserved. In the short term, unanticipated shocks to the real exchange rate may instead affect aggregate inflation if member countries' economic structure differs. When comparing welfare, inflation and output stabilisation, we find that the size, differences in economic structure and the variance-covariance matrix of supply and real exchange rate shocks play a key role. The numerical results indicate that the implications for the euro area are significant only if we assume a strong real exchange rate appreciation and if ACs are weighted in terms of purchasing power parity standards. In the event of real exchange rate or country-specific supply shocks in ACs, the consequences would be limited for both the current and the enlarged euro area, but sizeable for ACs themselves. JEL Classification: E52, E58, F33, F40Accession Countries, Balassa-Samuelson Effect, European Monetary Union, Exchange Rate Regimes, monetary policy

The Eastward Enlargement of the European Monetary Union

The enlargement of the European monetary union to include new EU Member States (NMs) will not lead to higher expected inflation in the enlarged euro area, but only to some redistribution of inflation at the country level, if the policy framework of the monetary authority remains invariant. Shocks to the real exchange rate may affect instead aggregate inflation, if member countries' economic structure differs. The numerical results indicate that the impact on steady state inflation of the current euro area is limited if participating countries are weighted on the basis of nominal GDP and if the upward pressure on the real exchange rate is postulated to be in line with most estimates of the Balassa-Samuelson effect. In the event of real exchange rate or country-specific supply shocks in NMs, the consequences are found to be limited for the current and the enlarged euro area, but sizeable for the NMs themselves.EMU; enlargement; East-Central Europe

Welfare implications of joining a common currency

This paper examines the welfare implications of a country joining a currency union as opposed to operating in a flexible exchange rate regime. At the country level, the suboptimal response to domestic and foreign shocks and the inability of setting inflation at the desired level may be offset by a positive impact on potential output. We show that for entry to be welfare enhancing, the potential output gain must be the larger, the smaller the country, the larger the difference between the standard deviation of supply shocks across the participating countries, the smaller the correlation of countries’ supply shocks and the larger the variance of real exchange rate shocks. JEL Classification: E52, E58, F33, F40Balassa-Samuelson Effect, Currency union, monetary policy, Welfare

The admission of accession countries to an enlarged monetary union: a tentative assessment

The enlargement of the European monetary union to include the accession countries (ACs) will not lead to higher average inflation in the enlarged euro area, but only to inflation redistribution across countries if continuity of the monetary policy framework is preserved. In the short term, unanticipated shocks to the real exchange rate may instead affect aggregate inflation if member countries' economic structure differs. When comparing welfare, inflation and output stabilisation, we find that the size, differences in economic structure and the variance-covariance matrix of supply and real exchange rate shocks play a key role. The numerical results indicate that the implications for the euro area are significant only if we assume a strong real exchange rate appreciation and if ACs are weighted in terms of purchasing power parity standards. In the event of real exchange rate or country-specific supply shocks in ACs, the consequences would be limited for both the current and the enlarged euro area, but sizeable for ACs themselves

Teaching to extract spectral densities from lattice correlators to a broad audience of learning-machines

We present a new supervised deep-learning approach to the problem of the extraction of smeared spectral densities from Euclidean lattice correlators. A distinctive feature of our method is a model-independent training strategy that we implement by parametrizing the training sets over a functional space spanned by Chebyshev polynomials. The other distinctive feature is a reliable estimate of the systematic uncertainties that we achieve by introducing several ensembles of machines, the broad audience of the title. By training an ensemble of machines with the same number of neurons over training sets of fixed dimensions and complexity, we manage to provide a reliable estimate of the systematic errors by studying numerically the asymptotic limits of infinitely large networks and training sets. The method has been validated on a very large set of random mock data and also in the case of lattice QCD data. We extracted the strange-strange connected contribution to the smeared $R$-ratio from a lattice QCD correlator produced by the ETM Collaboration and compared the results of the new method with the ones previously obtained with the HLT method by finding a remarkably good agreement between the two totally unrelated approaches.Comment: Added minor comments to main text and further expanded the appendix with an analysis about the different sources of statistical erro

Extraction of lattice QCD spectral densities from an ensemble of trained machines

In this talk we discuss a novel method, that we have presented in Ref. [1], to extract hadronic spectral densities from lattice correlators by using deep learning techniques. Hadronic spectral densities play a crucial role in the study of the phenomenology of strong-interacting particles and the problem of their extraction from Euclidean lattice correlators has already been approached in the literature by using machine learning techniques. A distinctive feature of our method is a model-independent training strategy that we implement by parametrizing the training sets over a functional space spanned by Chebyshev polynomials. The other distinctive feature is a reliable estimate of the systematic uncertainties that we obtain by introducing an ensemble of machines in order to study numerically the asymptotic limits of infinitely large networks and training sets. The method is validated on a very large set of random mock data and also in the case of lattice QCD data.Comment: Contribution to the 40th International Symposium on Lattice Field Theory, Lattice 2023, Fermilab, Batavia, Illinois, US

Scanning integer points with lex-inequalities: A finite cutting plane algorithm for integer programming with linear objective

We consider the integer points in a unimodular cone K ordered by a lexicographic rule defined by a lattice basis. To each integer point x in K we associate a family of inequalities (lex-cuts) that defines the convex hull of the integer points in K that are not lexicographically smaller than x. The family of lex-cuts contains the Chvatal-Gomory cuts, but does not contain and is not contained in the family of split cuts. This provides a finite cutting plane method to solve the integer program min{cx : x \in S \cap Z^n }, where S \subset R^n is a compact set and c \in Z^n . We analyze the number of iterations of our algorithm.Comment: 16 pages, 1 figur