The New Keynesian Phillips Curve with Myopic Agents

Empirical estimations of the New Keynesian Phillips curve support hybrid versions with a positive weight on lagged infl ation and a weight less than one on expected infl ation. We argue that myopic price setting of some agents explains the low weight on expected infl ation. The lagged term can be explained by trend extrapolation if information about the future is costly. In a laboratory experiment we implement the Calvo (1983) microfoundations of the Phillips curve. Both of our hypotheses are supported by the experimental data. About half of the subjects set optimal Calvo prices while about a third is myopic.Hybrid Phillips curve; experimental economics; myopia; behavioral macroeconomics

Are Expectations Formed by the Anchoring-and-adjustment Heuristic? – An Experimental Investigation

Previous experimental investigations have shown that expectations are not perfectly rational due to bias. Traditional adaptive models, however, in many cases do not perfectly describe the formation of expectations either. This paper makes two contributions to the experimental literature on the formation of expectations: First, we investigate whether subjects who have more information about the economic model than in previous studies also form biased expectations. Second, we argue that in some cases macroeconomic expectations might be formed by the anchoring-and-adjustment heuristic, which is well known in psychology. We find that subjects’ expectations are biased although the design might be more favorable to rational expectations.The anchoring- and-adjustment model of expectations gets some support by our data, but the best model encompasses both the anchoring-and-adjustment model and the traditional adaptive model.Expectations, heuristics, beliefs, mental models, macroeconomic experiment

Regional price levels in Germany

Cross-sectional evidence on price levels is scarce in all countries. However, several studies suggest that considerable differences in price levels within countries exist, which has obvious welfare implications. I use a sample of price levels in 50 German cities in 1993 to analyze the determinants of inter-city price level differentials. The most important factors driving price level differentials are population size and the average wage level. Using this information, I predict the price levels in all 440 German districts and aggregate them to the state level. On the state level I find convergence of the price levels to a common mean, but at a very low speed. The estimated half-life is about 15 years.

Regional price levels in Germany

Cross-sectional evidence on price levels is scarce in all countries. However, several studies suggest that considerable differences in price levels within countries exist, which has obvious welfare implications. I use a sample of price levels in 50 German cities in 1993 to analyze the determinants of inter-city price level differentials. The most important factors driving price level differentials are population size and the average wage level. Using this information, I predict the price levels in all 440 German districts and aggregate them to the state level. On the state level I find convergence of the price levels to a common mean, but at a very low speed. The estimated half-life is about 15 years

As if or What? – Expectations and Optimization in a Simple Macroeconomic Environment

In this paper we report the results of a laboratory experiment, in which we observed the behavior of agents in a simple macroeconomic setting. The structure of the economy was only partially known to the players which is a realistic feature of our experiment. We investigate whether subjects manage to approach optimal behavior even if they lack important information. Furthermore, we analyze subjects’ perceptions of the model and whether their behavior is consistent with their perceptions. The full information model predicts changes of employment correctly, but not the level of employment. In the aggregate, subjects have correct perceptions, although individual perceptions are biased.We finally show that deviations from the full information solution are due to optimization failures than than misperceptions.Methodology, macroeconomic experiment, perceptions, optimization, expectations

Theory of Electron-Phonon Dynamics in Insulating Nanoparticles

We discuss the rich vibrational dynamics of nanometer-scale semiconducting and insulating crystals as probed by localized electronic impurity states, with an emphasis on nanoparticles that are only weakly coupled to their environment. Two principal regimes of electron-phonon dynamics are distinguished, and a brief survey of vibrational-mode broadening mechanisms is presented. Recent work on the effects of mechanical interaction with the environment is discussed.Comment: Revte

Tidal torques. A critical review of some techniques

We point out that the MacDonald formula for body-tide torques is valid only in the zeroth order of e/Q, while its time-average is valid in the first order. So the formula cannot be used for analysis in higher orders of e/Q. This necessitates corrections in the theory of tidal despinning and libration damping. We prove that when the inclination is low and phase lags are linear in frequency, the Kaula series is equivalent to a corrected version of the MacDonald method. The correction to MacDonald's approach would be to set the phase lag of the integral bulge proportional to the instantaneous frequency. The equivalence of descriptions gets violated by a nonlinear frequency-dependence of the lag. We explain that both the MacDonald- and Darwin-torque-based derivations of the popular formula for the tidal despinning rate are limited to low inclinations and to the phase lags being linear in frequency. The Darwin-torque-based derivation, though, is general enough to accommodate both a finite inclination and the actual rheology. Although rheologies with Q scaling as the frequency to a positive power make the torque diverge at a zero frequency, this reveals not the impossible nature of the rheology, but a flaw in mathematics, i.e., a common misassumption that damping merely provides lags to the terms of the Fourier series for the tidal potential. A hydrodynamical treatment (Darwin 1879) had demonstrated that the magnitudes of the terms, too, get changed. Reinstating of this detail tames the infinities and rehabilitates the "impossible" scaling law (which happens to be the actual law the terrestrial planets obey at low frequencies).Comment: arXiv admin note: sections 4 and 9 of this paper contain substantial text overlap with arXiv:0712.105

Block-Transitive Designs in Affine Spaces

This paper deals with block-transitive $t$-$(v,k,\lambda)$ designs in affine spaces for large $t$, with a focus on the important index $\lambda=1$ case. We prove that there are no non-trivial 5-$(v,k,1)$ designs admitting a block-transitive group of automorphisms that is of affine type. Moreover, we show that the corresponding non-existence result holds for 4-$(v,k,1)$ designs, except possibly when the group is one-dimensional affine. Our approach involves a consideration of the finite 2-homogeneous affine permutation groups.Comment: 10 pages; to appear in: "Designs, Codes and Cryptography

Deep Brain Stimulation for Parkinson's Disease with Early Motor Complications:A UK Cost-Effectiveness Analysis

International audienceBackground: Parkinson’s disease (PD) is a debilitating illness associated with considerable impairment of quality of life and substantial costs to health care systems. Deep brain stimulation (DBS) is an established surgical treatment option for some patients with advanced PD. The EARLYSTIM trial has recently demonstrated its clinical benefit also in patients with early motor complications. We sought to evaluate the cost-effectiveness of DBS, compared to best medical therapy (BMT), among PD patients with early onset of motor complications, from a United Kingdom (UK) payer perspective.Methods: We developed a Markov model to represent the progression of PD as rated using the Unified Parkinson's Disease Rating Scale (UPDRS) over time in patients with early PD. Evidence sources were a systematic review of clinical evidence; data from the EARLYSTIM study; and a UK Clinical Practice Research Datalink (CPRD) dataset including DBS patients. A mapping algorithm was developed to generate utility values based on UPDRS data for each intervention. The cost-effectiveness was expressed as the incremental cost per quality-adjusted life-year (QALY). One-way and probabilistic sensitivity analyses were undertaken to explore the effect of parameter uncertainty.Results: Over a 15-year time horizon, DBS was predicted to lead to additional mean cost per patient of £26,799 compared with BMT (£73,077/patient versus £46,278/patient) and an additional mean 1.35 QALYs (6.69 QALYs versus 5.35 QALYs), resulting in an incremental cost-effectiveness ratio of £19,887 per QALY gained with a 99% probability of DBS being cost-effective at a threshold of £30,000/QALY. One-way sensitivity analyses suggested that the results were not significantly impacted by plausible changes in the input parameter values.Conclusion: These results indicate that DBS is a cost-effective intervention in PD patients with early motor complications when compared with existing interventions, offering additional health benefits at acceptable incremental cost. This supports the extended use of DBS among patients with early onset of motor complications

Modified Hagedorn formula including temperature fluctuation - Estimation of temperatures at RHIC experiments -

We have systematically estimated the possible temperatures obtained from an analysis of recent data on $p_t$ distributions observed at RHIC experiments. Using the fact that observed $p_t$ distributions cannot be described by the original Hagedorn formula in the whole range of transverse momenta (in particular above 6 GeV/c), we propose a modified Hagedorn formula including temperature fluctuation. We show that by using it we can fit $p_t$ distributions in the whole range and can estimate consistently the relevant temperatures, including their fluctuations.Comment: Some misprints corrected, references updated. To be published in Eur. Phys. J. C (2006