Optimal non-linear monetary policy rules

We propose a simply yet flexible framework for the analysis of optimal monetary policy rules that produces the type of non-linear responses derived in the literature as special cases. Perhaps more importantly, our framework suggests a richer set of nonlinear responses than have been considered yet and thus may prompt further work in this area

The Perverse Response of Interest Rates

We argue that an increase in aggregate demand can lead to a reduction in the interest rate. This apparently perverse optimal response of interest rates can occur when the Phillips curve is non-linear. In that case, an increase in aggregate demand tends to increase inflation and output but also to change the weight on inflation in the optimal monetary policy rule. Although the first two effects tend to increase interest rates, the latter effect can imply lower interest rates. If this effect dominates, interest rates can fall

Targets, Zones and Asymmetries: A Flexible Nonlinear model of Recent UK Monetary Policy

We estimate a flexible model of the behaviour of UK monetary policymakers in the era of inflation targeting based on a new representation of policymaker’s preferences. This enables us to address a range of issues that are beyond the scope of the existing literature. We find a complex relationship between interest rates and inflation: interest rates are passive when inflation is close to the target but there is an increasingly vigorous response as inflation deviates further from the target. We also find that the response to the output gap is linear and find no evidence of a nonlinear Phillips curve

Non-linear and non-symmetric exchange-rate adjustment: new evidence from medium and high inflation countries

This paper analyses a model of non-linear exchange rate adjustment that extends the literature by allowing asymmetric responses to over- and under-valuations. Applying the model to Greece and Turkey, we find that adjustment is asymmetric and that exchange rates depend on the sign as well as the magnitude of deviations, being more responsive to over-valuations than under-valuations. Our findings support and extend the argument that non-linear models of exchange rate adjustment can help to overcome anomalies in exchange rate behaviour. They also suggest that exchange rate adjustment is non-linear in economies where fundamentals models work well

Classification of irreducible quasifinite modules over map Virasoro algebras

We give a complete classification of the irreducible quasifinite modules for algebras of the form Vir \otimes A, where Vir is the Virasoro algebra and A is a Noetherian commutative associative unital algebra over the complex numbers. It is shown that all such modules are tensor products of generalized evaluation modules. We also give an explicit sufficient condition for a Verma module of Vir \otimes A to be reducible. In the case that A is an infinite-dimensional integral domain, this condition is also necessary.Comment: 25 pages. v2: Minor changes, published versio

Adaptive networks of trading agents

Multi-agent models have been used in many contexts to study generic collective behavior. Similarly, complex networks have become very popular because of the diversity of growth rules giving rise to scale-free behavior. Here we study adaptive networks where the agents trade ``wealth'' when they are linked together while links can appear and disappear according to the wealth of the corresponding agents; thus the agents influence the network dynamics and vice-versa. Our framework generalizes a multi-agent model of Bouchand and Mezard, and leads to a steady state with fluctuating connectivities. The system spontaneously self-organizes into a critical state where the wealth distribution has a fat tail and the network is scale-free; in addition, network heterogeneities lead to enhanced wealth condensation.Comment: 7 figure

Multivectorial strategy to interpret a resistive behaviour of loads in smart buildings

In Smart buildings, electric loads are affected by an important distortion in the current and voltage waveforms, caused by the increasing proliferation of non linear electronic devices. This paper presents an approach on non sinusoidal power theory based on Geometric Algebra that clearly improves traditional methods in the optimization of apparent power and power factor compensation. An example is included that demonstrates the superiority of this approach compared with traditional methods.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech