A finite set of equilibria for the indeterminacy of linear rational expectations models

This paper demonstrates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational expectations models. The number of equilibria corresponds to the number of ways to select n eigenvectors among a larger set of eigenvectors related to stable eigenvalues. A finite set of equilibria is a substitute to continuous (uncountable) sets of sunspots equilibria, when the number of independent eigenvectors for each stable eigenvalue is equal to one

Stability and Identification with Optimal Macroprudential Policy Rules

This paper investigates the identification, the determinacy and the stability of ad hoc, "quasi-optimal" and optimal policy rules augmented with financial stability indicators (such as asset prices deviations from their fundamental values) and minimizing the volatility of the policy interest rates, when the central bank precommits to financial stability. Firstly, ad hoc and quasi-optimal rules parameters of financial stability indicators cannot be identified. For those rules, non zero policy rule parameters of financial stability indicators are observationally equivalent to rule parameters set to zero in another rule, so that they are unable to inform monetary policy. Secondly, under controllability conditions, optimal policy rules parameters of financial stability indicators can all be identified, along with a bounded solution stabilizing an unstable economy as in Woodford (2003), with determinacy of the initial conditions of non- predetermined variables.Comment: 18 page

Inference on Time-Invariant Variables using Panel Data: A Pre-Test Estimator with an Application to the Returns to Schooling

This paper proposes a new pre-test estimator of panel data models including time invariant variables based upon the Mundlak-Krishnakumar estimator and an "unrestricted” Hausman-Taylor estimator. The paper evaluates the biases of currently used restricted estimators, omitting the average-over-time of at least one endogenous time-varying explanatory variable. Repeated Between, Ordinary Least Squares, Two stage restricted Between and Oaxaca-Geisler estimator, Fixed Effect Vector Decomposition, Generalized least squares may lead to wrong conclusions regarding the statistical significance of the estimated parameter values of time-invariant variables.Time-Invariant Variables, Panel data, Time-Series Cross-Sections, Pre-Test Estimator, Mundlak Estimator, Fixed Effects Vector Decomposition

Marangoni flow in freely suspended liquid films

We demonstrate controlled material transport driven by temperature gradients in thin freely suspended smectic films. The films with submicrometer thicknesses and lateral extensions of several millimeters were studied in microgravity during suborbital rocket flights. In-plane temperature gradients cause two specific Marangoni effects, directed flow and convection patterns. At low gradients, practically thresholdless, flow transports material with a normal (negative) temperature coefficient of the surface tension, $d\sigma/dT<0$, from the hot to the cold film edge. That material accumulates at the cold film border. In materials with positive temperature coefficient, $d\sigma/dT>0$, the reverse transport from the cold to the hot edge is observed. We present a model that describes the effect quantitatively.Comment: 5 pages, 5 figure

"Deep Pockets'', Collateral Assignments of Patents, and the Growth of Innovations

This paper studies how the imperfect collateral assignments of patents contribute to "deep pockets'' savings of innovative firms facing random investment opportunities in research and development (R&D) and determine the growth of their innovations, using a version of the Kiyotaki and Moore [1997] model of credit cycles. Results are: patents as collateral leverage R&D finance and magnify the effect of innovative rents on investment; the composition of current versus future financial constraints implies that firms savings decrease the steady state aggregate debt/patent ratio; the interaction between households and firms savings determines a leveraged growth of innovations which increasing when legal reforms reduce the imperfection of patents as collateral.Collateral, Patents, Research and Development, Credit rationing, Growth

Les revues d'excellence en économie et en gestion: discordances entre la classification de l'AERES et les facteurs d'impact par les citations

In 2008, the French universities evaluation agency (AERES) gave its best grade (A+) to 90 reviews in Economics and Management among 684 academic journals. This paper shows that 109 journals among 594 (18%) remaining journals with lower AERES ranking (A, B or C), have larger Social Science Citation Index Impact Factors in 2008 than the journal ranked A+ with the lowest impact factor in their field. According to the impact factors, around a quarter of AERES top journals could be replaced by journals with lower AERES ranking. These discordances are concentrated in half of the 20 fields in economics and management defined by the French CNRS.En 2008, l'agence d'évaluation de la recherche et de l'enseignement supérieur (AERES) a attribué sa meilleure note (A+) à 90 revues en économie et gestion parmi 684 revues. Cet article montre que 109 revues parmi les 594 (18%) revues classées A, B ou C par l'AERES ont des facteurs d'impact par leurs citations en 2008 issus du Social Science Citation Index supérieurs au facteur d'impact de la revue d'excellence classée A+ à plus faible facteur d'impact dans le même domaine. Environ un quart des revues classées A+ de l'AERES pourraient être remplacé par d'autres revues classées A, B ou C si on prend en compte les facteurs d'impact. Ces discordances sont concentrées sur la moitié des vingt domaines en économie et gestion définis par la liste de revues de la section 37 du CNRS

Inference on Time-Invariant Variables using Panel Data: A Pre-Test Estimator with an Application to the Returns to Schooling

This paper proposes a new pre-test estimator of panel data models including time invariant variables based upon the Mundlak-Krishnakumar estimator and an "unrestricted” Hausman-Taylor estimator. The paper evaluates the biases of currently used restricted estimators, omitting the average-over-time of at least one endogenous time-varying explanatory variable. Repeated Between, Ordinary Least Squares, Two stage restricted Between and Oaxaca-Geisler estimator, Fixed Effect Vector Decomposition, Generalized least squares may lead to wrong conclusions regarding the statistical significance of the estimated parameter values of time-invariant variables

A Simple Algorithm for Solving Ramsey Optimal Policy with Exogenous Forcing Variables

This article presents an algorithm that extends Ljungqvist and Sargent's (2012) dynamic Stackelberg game to the case of dynamic stochastic general equilibrium models including forcing variables. Its first step is the solution of the discounted augmented linear quadratic regulator as in Hansen and Sargent (2007). It then computes the optimal initial anchor of "jump" variables such as inflation. We demonstrate that it is of no use to compute non-observable Lagrange multipliers for all periods in order to obtain impulse response functions and welfare. The algorithm presented, however, enables the computation of a history-dependent representation of a Ramsey policy rule that can be implemented by policy makers and estimated within a vector auto-regressive model. The policy instruments depend on the lagged values of the policy instruments and of the private sector's predetermined and "jump" variables. The algorithm is applied on the new-Keynesian Phillips curve as a monetary policy transmission mechanism