AN ENCOMPASSING FRAMEWORK FOR EVALUATING SIMPLE MONETARY POLICY RULES

In this paper we build an encompassing framework to analyse the stability conditions associated with various policy rules. Taylor and others have argued that model stability requires interest rate policy rules to have an inflation feedback parameter greater than one. In a world where there are nominal rigidities in the short-term evolution of demand this may not be the case. We show that with a combined nominal GDP and inflation targeting rule, this stability condition is overly restrictive. We use stochastic simulations to evaluate various monetary policy rules, and parameterisations, that are nested within a general framework. We do this using the National Institutes Global Econometric Model, NiGEM, which combines a neo-classical structure and rational expectations with institutional detail. Our results show that while one rule may be the most effective at stabilising the EMU aggregates, another may be more effective for individual economies, implying a change in the covariance structure of output and inflation within EMU. We discuss the resulting covariance structure and their implications for decision making within the ECB.

Sustainable Adjustment of Global Imbalances

This paper uses NIESR’s global econometric model, NiGEM, to analyse possible adjustment paths for the US current account, if its current level of 6 per cent of GDP proves unsustainable. Nominal exchange rate shifts have only a transitory impact on current account balances, so any long-term improvement of the US current account balance would require a real and sustained reduction in domestic absorption, or a rise in foreign absorption. This could be effected through a sequence of exchange rate movements driven by a gradual rise in the risk premium on US assets. This would induce a permanent change in the real exchange rate, and would also reduce domestic absorption in the US due to a rise in real interest rates. Global policy coordination, which involved raising domestic demand in countries such as China and Japan, could speed the process of adjustment and ease the negative impact on the US economy.global imbalances, real exchange rate realignment, risk premia, US current account

Choosing the Regime in an Uncertain World, the UK and Monetary Union

The UK has to take a decision on EMU membership at some point, and the costs and benefits have to be evaluated. Different policy frameworks result in differing outcomes for the means and variances of economic variables such as inflation, output, and nominal and real exchange rates and interest rates. Changing the level of uncertainty in the economy may change the equilibrium level of output and investment. Hence membership of EMU has to be evaluated in the light of its impact on the volatility of target variables and on the impact of volatility on the level of output and welfare. We discuss a theoretical framework within which we can discuss these issues, and we undertake stochastic simulation on a large, New Keynesian model including all the European economies in order to evaluate the effects of membership on the level and volatility of output. Our experiments suggest that membership of EMU would reduce volatility and as a result raise the sustainable level of output and employment in the UK.EMU, exchange rate regimes, uncertainty and investment, UK membership

Semantic Completeness of Intuitionistic Predicate Logic in a Fully Constructive Meta-Theory

A constructive proof of the semantic completeness of intuitionistic predicate logic is explored using set-generated complete Heyting Algebra. We work in a constructive set theory that avoids impredicative axioms; for this reason the result is not only intuitionistic but fully constructive. We provide background that makes the thesis accessible to the uninitiated

Radio Observations of Super Star Clusters in Dwarf Starburst Galaxies

We present new radio continuum observations of two dwarf starburst galaxies, NGC3125 and NGC5408, with observations at 4.80GHz (6cm) and 8.64GHz (3cm), taken with the Australia Telescope Compact Array (ATCA). Both galaxies show a complex radio morphology with several emission regions, mostly coincident with massive young star clusters. The radio spectral indices of these regions are negative (with alpha ~ -0.5 - -0.7), indicating that the radio emission is dominated by synchrotron emission associated with supernova activity from the starburst. One emission region in NGC5408 has a flatter index (alpha ~ -0.1) indicative of optically thin free-free emission, which could indicate it is a younger cluster. Consequently, in these galaxies we do not see regions with the characteristic positive spectral index indicative of optically obscured star-formation regions, as seen in other dwarf starbursts such as Hen 2-10.Comment: Accepted for publication in MNRA

A Refinement Calculus for Logic Programs

Existing refinement calculi provide frameworks for the stepwise development of imperative programs from specifications. This paper presents a refinement calculus for deriving logic programs. The calculus contains a wide-spectrum logic programming language, including executable constructs such as sequential conjunction, disjunction, and existential quantification, as well as specification constructs such as general predicates, assumptions and universal quantification. A declarative semantics is defined for this wide-spectrum language based on executions. Executions are partial functions from states to states, where a state is represented as a set of bindings. The semantics is used to define the meaning of programs and specifications, including parameters and recursion. To complete the calculus, a notion of correctness-preserving refinement over programs in the wide-spectrum language is defined and refinement laws for developing programs are introduced. The refinement calculus is illustrated using example derivations and prototype tool support is discussed.Comment: 36 pages, 3 figures. To be published in Theory and Practice of Logic Programming (TPLP