Robustifying Learnability

In recent years, the learnability of rational expectations equilibria (REE) and determinacy of economic structures have rightfully joined the usual performance criteria among the sought after goals of policy design. And while some contributions to the literature (for example Bullard and Mitra (2001) and Evans and Honkapohja (2002)) have made significant headway in establishing certain features of monetary policy rules that facilitate learning, a comprehensive treatment of policy design for learnability has yet to surface, especially for cases in which agents have potentially misspecified their learning models. This paper provides such a treatment. We argue that since even among professional economists a generally acceptable workhorse model of the economy has not been agreed upon, it is unreasonable to expect private agents to have collective rational expectations. We assume instead that agents have an approximate understanding of the workings of the economy and that their task of learning true reduced forms of the economy is subject to potentially destabilizing errors. We then ask: can a central bank set policy that accounts for learning errors but also succeeds in bounding them in a way that allows eventual learnability of the model, given policy. For different parameterizations of a given policy rule applied to a New Keynesian model, we use structured singular value analysis (from robust control) to find the largest ranges of misspecifications that can be tolerated in a learning model without compromising convergence to an REE. A parallel set of experiments seeks to determine the optimal stance (strong inflation as opposed to strong output stabilization) that allows for the greatest scope of errors in learning without leading to expectational instabilty in cases when the central bank designs both optimal and robust policy rules with commitment. We compare the features of all the rules contemplated in the paper with those that maximize economic performance in the true model, and we measure the performance cost of maximizing learnability under the various conditions mentioned here.monetary policy, learning, E-stability, model uncertainty, robustness

Robustifying learnability

In recent years, the learnability of rational expectations equilibria (REE) and determinacy of economic structures have rightfully joined the usual performance criteria among the sought-after goals of policy design. Some contributions to the literature, including Bullard and Mitra (2001) and Evans and Honkapohja (2002), have made significant headway in establishing certain features of monetary policy rules that facilitate learning. However a treatment of policy design for learnability in worlds where agents have potentially misspecified their learning models has yet to surface. This paper provides such a treatment. We begin with the notion that because the profession has yet to settle on a consensus model of the economy, it is unreasonable to expect private agents to have collective rational expectations. We assume that agents have only an approximate understanding of the workings of the economy and that their learning the reduced forms of the economy is subject to potentially destabilizing perturbations. The issue is then whether a central bank can design policy to account for perturbations and still assure the learnability of the model. Our test case is the standard New Keynesian business cycle model. For different parameterizations of a given policy rule, we use structured singular value analysis (from robust control theory) to find the largest ranges of misspecifications that can be tolerated in a learning model without compromising convergence to an REE.Robust control ; Monetary policy

Robustifying learnability

In recent years, the learnability of rational expectations equilibria (REE) and determinacy of economic structures have rightfully joined the usual performance criteria among the sought-after goals of policy design. Some contributions to the literature, including Bullard and Mitra (2001) and Evans and Honkapohja (2002), have made significant headway in establishing certain features of monetary policy rules that facilitate learning. However a treatment of policy design for learnability in worlds where agents have potentially misspecified their learning models has yet to surface. This paper provides such a treatment. We begin with the notion that because the profession has yet to settle on a consensus model of the economy, it is unreasonable to expect private agents to have collective rational expectations. We assume that agents have only an approximate understanding of the workings of the economy and that their learning the reduced forms of the economy is subject to potentially destabilizing perturbations. The issue is then whether a central bank can design policy to account for perturbations and still assure the learnability of the model. Our test case is the standard New Keynesian business cycle model. For different parameterizations of a given policy rule, we use structured singular value analysis (from robust control theory) to find the largest ranges of misspecifications that can be tolerated in a learning model without compromising convergence to an REE. In addition, we study the cost, in terms of performance in the steady state of a central bank that acts to robustify learnability on the transition path to REE. (Note: This paper contains full-color graphics) JEL Classification: C6, E5E-stability, learnability, Learning, monetary policy, robust control

A Framework for XML-Based Workflow Interoperability - The AFRICA Project

With the advance of electronic business relationships over the internet, the linking of cross-organizational business processes in virtual supply chains and other scenarios is rapidly increasing. Existing standards for the interoperability of information systems on the business process level are being adapted to suit the needs of the Internet economy. Especially the use of XML as a domain-independent encoding standard for business documents has led to the development of business frameworks such as BizTalk or open/EDI, and interoperability mechanisms that support these standards are being developed. In this paper we describe an architecture for the support of cross-organizational workflows through XML messages. This architecture has been implemented and tested within the AFRICA project at the University of Muenster, Germany. While our work is based upon the emerging Wf-XML standard of the Workflow Management Coalition, it contains a number of significant enhancements that provide a secure, reliable management of global workflow processes

The Changing Profile of Full-Time Faculty at Canadian Universities

Canadian universities underwent a remarkable expansion from the late sixties until the mid-seventies. However, they are entering the eighties on an uncertain note, due to financial restraints imposed by governments, the sudden growth in university enrolment and the shift to professionally oriented programs. These developments have had an impact on the socio-economic characteristics of the 33,000 full-time university teachers: their age, sex, academic rank, salary, citizenship, and qualifications. Especially uncertain is the demand for new faculty in this decade and the implications for the health of Canadian universities. This statistical series documents the changes which are occurring in the demand and supply patterns of doctoral recipients from Canadian universities with the purpose of providing a statistical base from which policy analyses could be developed.Les universités canadiennes ont subi au cours des années 1960/mi-1970 un épanouissement remarquable. Cependant, elles se voient entrer dans une période d'incertitude au début des années 1980 due aux contraintes financières imposées par les gouvernements, l'accroissement soudain de l'inscription au niveau univer-sitaire, et au déplacement vers les programmes de métier. Ces développements ont eu un impact sur les caractéristiques socio-économiques des quelques 33,000 professeurs engagés à plein temps soit l'âge, le sexe, le rang académique, le salaire, la citoyenneté et les qualifications. Comme la demande de professeurs est res-treinte dans cette décade, le fonctionnement des universités canadiennes en est affecté. Les différentes statistiques présentent les changements qui surviennent face aux modèles d'offre et de demande chez les détenteurs de doctorats d'univer-sités canadiennes. Cette documentation a pour but de fournir une ligne de con-duite qui servira au développement de nouvelles politiques