Living in an Irrational Society: Wealth Distribution with Correlations between Risk and Expected Profits

Different models to study the wealth distribution in an artificial society have considered a transactional dynamics as the driving force. Those models include a risk aversion factor, but also a finite probability of favoring the poorer agent in a transaction. Here we study the case where the partners in the transaction have a previous knowledge of the winning probability and adjust their risk aversion taking this information into consideration. The results indicate that a relatively equalitarian society is obtained when the agents risk in direct proportion to their winning probabilities. However, it is the opposite case that delivers wealth distribution curves and Gini indices closer to empirical data. This indicates that, at least for this very simple model, either agents have no knowledge of their winning probabilities, either they exhibit an ``irrational'' behavior risking more than reasonable.Comment: 7 pages, 8 figure

The Euro vs Dollar Debate: A Review

This Working Paper provides a comprehensive and multidisciplinary literature review on the euro vs dollar debate. In the first part it presents the euro-optimist and the euro-sceptical hypotheses on the euro’s challenge to the dollar within Economic literature and how current data show how the euro has underperformed vis-à-vis euro-optimistic expectations. In the second part, drawing on the International Economics and International Political Economy (IPE) literature, the paper explains the euro’s political flaws. It shows that a currency can only become the top international currency if there is an active political commitment by the issuing authorities to make it the leading currency. The paper shows how existing IPE literature offers a very accurate picture of the structural conditions of the international monetary system. Where it lacks nuance is in identifying the social impact of the euro. The last part of the paper focuses on these social dimensions. Following a constructivist approach, it shows how the euro has become a truly global currency in the social sense and how key financial agents are gradually seeing an evolution from a unipolar system dominated by the dollar to a bipolar system where a mildly descending senior pole (the dollar) and a mildly ascending junior pole (the euro) compete against each other

La crisis del euro vista desde fuera: pesimismo unipolar estadounidense frente a optimismo multipolar de los emergentes

Razones históricas y geopolíticas explican por qué las elites estadounidenses son escépticas en relación al futuro del euro, mientras que las elites de los países emergentes prefieren ser cautelosamente optimistas. Tanto EEUU como los países emergentes están interesados en un euro fuerte. Sin embargo, mientras los americanos, desde su posición privilegiada de mando, dudan del éxito de la moneda europea, los BRIC desean que ésta se consolide como un primer paso hacia la consolidación de un mundo más multipolar. Esta crisis ha enseñado con claridad las limitaciones institucionales del euro, pero también ha demostrado su importancia en el sistema monetario internacional. Ni los estadounidenses ni los emergentes se pueden permitir el lujo de dejar caer el euro. Los primeros lo han demostrado con palabras de apoyo, los segundos, sobre todo las autoridades chinas, con palabras y con inversiones

Intentionally or otherwise, Schäuble has killed off the prospect of a Grexit

One of the more controversial ideas put forward during the Greek debt crisis has been the suggestion by the German Finance Minister, Wolfgang Schäuble, that Greece could temporarily leave the Eurozone for a period of five years. Miguel Otero-Iglesias writes that while the idea itself has been widely criticised, the hard-line taken by Schäuble, and the subsequent U-turn by the Greek Prime Minister Alexis Tsipras, has paradoxically reduced any real potential for a Grexit to take place

Germany and Political Union in Europe: Nothing moves without France

This paper attempts to understand why after two decades proposing the creation of a political union to make European monetary union (EMU) sustainable, Germany has not utilised the ‘window’ offered by the Eurozone crisis to pursue more vigorously this goal. Using the conceptual devices of the Chartalist understanding of money and hegemony, three possible explanations are explored. 1) Germany is slowly becoming a ‘normal’ European power and has started to favour the intergovernmental to the community method. 2) The German public has lost its enthusiasm for European integration, especially after realising how the proposed banking union has brought the spectrum of a ‘transfer union’ closer. 3) Germany remains a reluctant hegemon and once it has seen that France is still not ready for political union it has refrained from actively promoting this ideal. The conclusion of the paper is that the first two explanations have some merits, but that the third one continues to be the most convincing. The zeal by which the German political elites, supported by their public opinion, have pushed through the Spitzenkandidaten logic in the 2014 European elections confirms that Berlin is still determined to build a more federal Europe. The question is rather whether Paris is ready to participate in this endeavour

Channel equalization in radio-over-fiber transmission links

This project is about the channel equalization in radio over ber transmission links. In particular, we focus on minimizing the effect of additive white Gaussian noise and the dispersion caused by transmission. To solve the problem of channel equalization, filters such as Finite Impulse Response (FIR) or Infinite Impulse Response (IIR), have already been investigated deep enough, thus, our project will be taken from another point of view. The goal of this project is to achieve signal equalzation in the receiver decision module, increasing the performance of the Bit Error Rate curves in digital formats. In order to do that, we will use artificial intelligence algorithms. This document is divided into four chapters. First of all, an introduction to the theoretical background used in this project will be described. Then, we will define the problem, and possible solutions. Once a solution is chosen, we will start discussing the implementation, in order to justify the results obtained in the computer simulations. Our systems under study uses digital modulations theory. In concrete, we will be focusing on Phase-shift keying modulations, since it is going to be the base for our project. The channel is one of the most important bulding blocks on our scheme, because it generates the signal distorsions that we want to mitigate. Thus, ber channels model will be reviewed in order to extract the features that will produce the noise and how it influences the transmitted signal. This noise can be classified as additive white Gaussian noise (AWGN) and the dispersion. Our proposed and studied solution is based on artificial intelligence (AI) algorithms in the decider module of the receiver: Expectation Maximization (EM) and Hidden Markov Models (HMM). These two algortihms learn from the channel behaviour in the system and adapt the decision boundaries to make more correct decisons. We performed computer simulations of our proposed solution, and the results proved an important improvement over the current systems. Our proposed approach is not only capable of signi cantly reducing the BER of the system, but it is also able of correcting other phenomena's such constellation phase rotation or changes in the distribution of the received symbols in the constellation.Ingeniería Técnica en Sistemas de Telecomunicació

Italy’s struggle with the euro straitjacket

Paolo Gentiloni took over from Matteo Renzi as Italian Prime Minister in December, but the country’s politics remain volatile amid infighting within Renzi’s Democratic Party and calls from the Five Star Movement for a referendum on Italy leaving the euro. Miguel Otero-Iglesias highlights the widespread anger some voters feel toward the EU and Germany, but suggests that even if Grillo were to win the next election an ‘Italexit’ would be unlikely

The Internationalisation of the Renminbi: Prospects and Risks

By looking at how far China has gone in internationalising its currency, the Renminbi (RMB), it is possible to identify the main strategic goals that China wants to achieve through this process, along with the main risks that such an objective embodies. It can be said that so far the gradual internationalisation process of the Chinese Renminbi (RMB) has been successful. The Chinese approach of crossing the river by feeling for the stones underwater has proved to be adequate. While it is commonly believed that a currency can only become international when it is fully convertible, Hong Kong and the RMB might prove the contrary. Nonetheless, there are several risks lying ahead. So far the internationalisation process has developed smoothly because the waters of the river have been relatively shallow, but once they deepen proportionally to the amount of RMBs that are in circulation overseas, the journey might not be so easy

We should be wary of removing the ECB from the troika to facilitate the use of outright monetary transactions

A key legal debate in the context of the Eurozone crisis is whether so called ‘Outright Monetary Transactions’(OMT), which would allow the European Central Bank (ECB) to buy unlimited numbers of government bonds in secondary markets, are compatible with European law. The latest development in this debate came last week when one of the Advocates General of the European Court of Justice (ECJ), Pedro Cruz Villalón, stated that in principle OMT would be legal under the correct conditions, which include removing the ECB from the ‘troika’ which oversees financial support to Eurozone countries. Miguel Otero Iglesias writes that while the ECJ is not expected to give a full ruling until the autumn, political leaders should be cautious about removing the ECB from the troika without creating a new institution capable of filling its role

A new Eurotreasury could help the Eurozone’s periphery to regain its economic sovereignty

The establishment of the euro meant that for the first time in history, the national monetary policy of many European countries became pooled at a transnational level. Miguel Otero-Iglesias writes that a consequence of this is the movement of economic sovereignty towards Berlin and Brussels, and away from the Eurozone’s periphery. He argues that greater economic union combined with a new Eurotreasury, focused on growth and stability, would give more voice to debtor countries and also might help to stem the tide of Euroscepticism that is currently creeping across Europe