Computation of solutions to dynamic models with occasionally binding constraints

We construct the first algorithm for the perfect foresight solution of otherwise linear models with occasionally binding constraints, with fixed terminal conditions, that is guaranteed to return a solution in finite time, if one exists. We also provide a proof of the inescapability of the “curse of dimensionality” for this problem when nothing is known a priori about the model. We go on to extend our algorithm to deal with stochastic simulation, other non-linearities, and future uncertainty. We show that the resulting algorithm produces fast and accurate simulations of a range of models with occasionally binding constraints

Rational macroeconomic learning in linear expectational models

Abstract: The partial information rational expectations solution to a general linear multivariate expectational macro-model is found when agents are uncertain about the true values of the model’s parameters. Necessary and sufficient conditions for convergence to the full information rational expectations solution are given, and the core of an algorithm for the Bayesian updating of beliefs is provided. In the course of this a new class of full information rational expectations equilibria is described and some of its desirable properties proven.Rational Expectations; Partial information; Bayesian learning; Generalized Schur decomposition; Sunspots; Indeterminacy; Feasible Rational Expectations Equilibria

A Hawkes model of the transmission of European sovereign default risk

The run-up to the Greek default featured marked increases in the cost of insuring sovereign debt from almost all European countries. One explanation is that market participants believed a default in one country might increase the risk of a future default in another, and so news about one country could impact all others. To test for such dynamic contagion between credit related events in different countries, we develop a procedure for tractably estimating high-dimensional Hawkes models using credit default swap prices. Unlike the prior literature, we are able to perform this estimation via maximum likelihood, even without observing events. We escape the curse of dimensionality by modelling a market portfolio of risk across countries. We find significant spillovers in credit risk between countries, with Spain, Portugal and Greece driving events in the other countries considered

Rational macroeconomic learning in linear expectational models

Abstract: The partial information rational expectations solution to a general linear multivariate expectational macro-model is found when agents are uncertain about the true values of the model’s parameters. Necessary and sufficient conditions for convergence to the full information rational expectations solution are given, and the core of an algorithm for the Bayesian updating of beliefs is provided. In the course of this a new class of full information rational expectations equilibria is described and some of its desirable properties proven

Credit crunches from occasionally binding bank borrowing constraints

We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints, and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large shocks cause their borrowing constraints to bind, leading to contractions in credit offered to firms, and requiring the intermediaries to raise further funds by paying the cost to issue equity. This leads to the occasional sharp increases in interest spreads and the counter-cyclical, positively skewed equity issuance that are characteristic of the credit crunches observed in the data

Multi-faceted approach for CCR pond dewatering and depressurization – A Case Study

Multi-faceted approach for CCR Pond dewatering and depressurization-A Case Study Authors Mr. Cleveland Tarp - United States - Haley & Aldrich Inc. Mr. Christopher Jones - United States - Haley & Aldrich Inc. Mr. Shawn Coughlin - United States - Keller Mr. Tom Holden - United States - Haley & Aldrich, Inc. Abstract CCR Pond closure by removal can present a wide range of challenges, with CCR dewatering and depressurization sometimes being the greatest. CCR ponds built over pre-existing stream beds and located in close proximity to water bodies can be particularly difficult to dewater and present stability and safety hazards. Due to the hydrogeologic conditions at this particular project site, a multi-faceted approach was needed to facilitate not only CCR dewatering but also depressurization of underlying materials. Previous construction work experienced significant and sustained groundwater inflows from beneath the ponded ash. In this case study, the system currently in progress, is comprised of shallow vacuum well-points, deeper gravity wells, surface dewatering features (ditches, sumps, etc.) and a perimeter of a groundwater cut-off (TRD) wall and surface liners to reduce infiltration. Dewatering system performance is monitored using a system of near real-time vibrating wire piezometers and field observations. The construction sequencing, dewatering system, and instrumentation system have been developed to proceed in concert with excavation activities at the site. An automated dewatering status reporting system was also developed to help inform the construction teams on progress and to support planning construction activities. This presentation will discuss the state of the current active dewatering system, our basis for design and original groundwater flow model. We will compare the original groundwater flow model results coupled with observed conditions to show how the data are used to help the project team excavate the ash efficiently and safely

Existence, uniqueness and computation of solutions to dynamic models with occasionally binding constraints

We present the first necessary and sufficient conditions for the existence of a unique perfect-foresight solution, returning to a given steady-state, in an otherwise linear model with occasionally binding constraints. We derive further conditions on the existence of a solution in such models, and provide a proof of the inescapability of the “curse of dimensionality” for them. We also construct the first solution algorithm for these models that is guaranteed to return a solution in finite time, if one exists. When extended to allow for other non-linearities and future uncertainty, our solution algorithm is shown to produce fast and accurate simulations. In an application, we show that widely used New Keynesian models with endogenous states possess multiple perfect foresight equilibrium paths when there is a zero lower bound on nominal interest rates. However, we show that price level targeting is sufficient to restore determinacy in these situations.The latest version of this paper is available from: https://github.com/tholden/dynareOBC/raw/master/paper.pd

Quality improvement training for burn care in low-and middle-income countries: A pilot course for nurses

BackgroundThere is an urgent need to empower practitioners to undertake quality improvement (QI) projects in burn services in low-middle income countries (LMICs). We piloted a course aimed to equip nurses working in these environments with the knowledge and skills to undertake such projects.MethodsEight nurses from five burns services across Malawi and Ethiopia took part in this pilot course, which was evaluated using a range of methods, including interviews and focus group discussions.ResultsCourse evaluations reported that interactive activities were successful in supporting participants to devise QI projects. Appropriate online platforms were integral to creating a community of practice and maintaining engagement. Facilitators to a successful QI project were active individuals, supportive leadership, collaboration, effective knowledge sharing and demonstrable advantages of any proposed change. Barriers included: staff attitudes, poor leadership, negative culture towards training, resource limitations, staff rotation and poor access to information to guide practice.ConclusionsThe course demonstrated that by bringing nurses together, through interactive teaching and online forums, a supportive community of practice can be created. Future work will include investigating ways to scale up access to the course so staff can be supported to initiate and lead quality improvement in LMIC burn services

Comparison of Grain Sources (Barley, White Corn, and Yellow Corn) for Swine Diets and Their Effect on Production and Carcass Traits

Energy sources differ in content, quality, and availability of nutrients. The objective of this study was to identify and compare differences in production and carcass traits in pigs fed different energy sources. While pigs fed a barley-based diet had a smaller loin muscle area, there was no difference among diets when comparing fat depth or percent fat-free lean. Barley based-diets and a diet containing one-third yellow corn and two-thirds white corn had a lower lean gain per day on test. There was no significant difference in average daily gain or feed-to-gain ratios