Dealing with unexpected shocks to the budget

In this paper we assess the impact of unexpected shocks to real interest rates and GDP on government budgets for nine European Union countries. Shocks are estimated as onestep-ahead forecast errors arising from a recursive bivariate VAR model. To assess the impact on the budgets we use available information on budgetary sensitivities with respect to the business cycle and estimate the sensitivities to changes in interest rates on the basis of the maturity structure of public debts. Our analysis is relevant, in particular, to define what safety margins are needed to avoid the deficit exceeding the 3 per cent Maastricht threshold. The approach followed in this paper differs in two respects from standard analyses aiming at defining budgetary positions that satisfy the Stability and Growth Pact. First, whereas the latter examine only fluctuations in economic activity, we also consider fluctuations in interest rates. Second, whereas standard analyses focus on deviations from trends and define margins for the medium-term cyclically adjusted balance, we examine unexpected shocks and define margins for nominal balances. The results point to significant differences in the required margins across countries, depending on the amplitude of past shocks, the magnitude of automatic stabilizers and the size and maturity structure of the debt. In the case of Italy, the country with the highest debt/GDP ratio and the largest fraction of short-term debt, the impact of unexpected shocks to interest rates may be quite substantial. However, when shocks to interest rates and GDP are considered jointly, other countries (Belgium and Finland) seem to require larger margins.budgeting, Stability and Growth Pact, forecast errors

Integration of control, communication, computation, com- plexity and energy considerations in a coherent design strategy

This report is an overview of the research activities regarding WP06 (C4E co-design) of the FeedNetBack project. The objective of WP6 of Feed- NetBack is to propose a co-design framework, which allows the integration of control-estimation, communication, computation, complexity, and energy considerations in networked control systems. In this report we outline gen- eral guidelines for co-design and illustrate their applicability to the following case studies: (i) surveillance systems using a network of smart cameras and (ii) eets of Autonomous Underwater Vehicles (AUVs).

AMBER : a near infrared focal instrument for the VLTI

10 pagesInternational audienceAMBER is the General User near-infrared focal instrument of the Very Large Telescope interferometer. Its specifications are based on three key programs on Young Stellar Objects, Active Galactic Nuclei central regions, masses and spectra of hot Extra Solar Planets. It has an imaging capacity because it combines up to three beams and very high accuracy measurement are expected from the spatial filtering of beams by single mode fibers and the comparison of measurements made simultaneously in different spectral channels