Prior parameter uncertainty: Some implications for forecasting and policy analysis with VAR models

Models used for policy analysis should generate reliable unconditional forecasts as well as policy simulations (conditional forecasts) that are based on a structural model of the economy. Vector autoregression (VAR) models have been criticized for having inaccurate forecasts as well as being difficult to interpret in the context of an underlying economic model. In this paper, we examine how the treatment of prior uncertainty about parameter values can affect forecasting accuracy and the interpretation of identified structural VAR models. ; Typically, VAR models are specified with long lag orders and a diffuse prior about the unrestricted coefficients. We find evidence that alternatives that emphasize nonstationary aspects of the data as well as parsimony in parameterization have better out-of-sample forecast performance and smoother and more persistent responses to a given exogenous monetary policy change than do unrestricted VARs.Forecasting ; Vector autoregression ; Econometric models

Evaluation of the metabolic cost of locomotion in an Apollo space suit

Evaluation of metabolic cost of locomotion in Apollo space sui

Improving forecasts of the federal funds rate in a policy model

Vector autoregression (VAR) models are widely used for policy analysis. Some authors caution, however, that the forecast errors of the federal funds rate from such a VAR are large compared to those from the federal funds futures market. From these findings, it is argued that the inaccurate federal funds rate forecasts from VARs limit their usefulness as a tool for guiding policy decisions. In this paper, we demonstrate that the poor forecast performance is largely eliminated if a Bayesian estimation technique is used instead of OLS. In particular, using two different data sets we show that the forecasts from the Bayesian VAR dominate the forecasts from OLS VAR models—even after imposing various exact exclusion restrictions on lags and levels of the data.Forecasting ; Federal funds rate ; Vector autoregression

Observations on lunar gravity simulation

Physiological factors in astronaut performance in simulated lunar gravit

High field CdS detector for infrared radiation

New and highly sensitive method of detecting infrared irradiation makes possible solid state infrared detector which is more sensitive near room temperature than usual photoconductive low band gap semiconductor devices. Reconfiguration of high field domains in cadmium sulphide crystals provides basis for discovery

Applicability of 100kWe-class of space reactor power systems to NASA manned space station missions

An assessment is made of a manned space station operating with sufficiently high power demands to require a multihundred kilowatt range electrical power system. The nuclear reactor is a competitor for supplying this power level. Load levels were selected at 150kWe and 300kWe. Interactions among the reactor electrical power system, the manned space station, the space transportation system, and the mission were evaluated. The reactor shield and the conversion equipment were assumed to be in different positions with respect to the station; on board, tethered, and on a free flyer platform. Mission analyses showed that the free flyer concept resulted in unacceptable costs and technical problems. The tethered reactor providing power to an electrolyzer for regenerative fuel cells on the space station, results in a minimum weight shield and can be designed to release the reactor power section so that it moves to a high altitude orbit where the decay period is at least 300 years. Placing the reactor on the station, on a structural boom is an attractive design, but heavier than the long tethered reactor design because of the shield weight for manned activity near the reactor

High field CdS detector for infrared radiation

An infrared radiation detector including a cadmium sulfide platelet having a cathode formed on one of its ends and an anode formed on its other end is presented. The platelet is suitably doped such that stationary high-field domains are formed adjacent the cathode when based in the negative differential conductivity region. A negative potential is applied to the cathode such that a high-field domain is formed adjacent to the cathode. A potential measuring probe is located between the cathode and the anode at the edge of the high-field domain and means are provided for measuring the potential at the probe whereby this measurement is indicative of the infrared radiation striking the platelet

Rapid deconvolution of low-resolution time-of-flight data using Bayesian inference

The deconvolution of low-resolution time-of-flight data has numerous advantages, including the ability to extract additional information from the experimental data. We augment the well-known Lucy-Richardson deconvolution algorithm using various Bayesian prior distributions and show that a prior of second-differences of the signal outperforms the standard Lucy-Richardson algorithm, accelerating the rate of convergence by more than a factor of four, while preserving the peak amplitude ratios of a similar fraction of the total peaks. A novel stopping criterion and boosting mechanism are implemented to ensure that these methods converge to a similar final entropy and local minima are avoided. Improvement by a factor of two in mass resolution allows more accurate quantification of the spectra. The general method is demonstrated in this paper through the deconvolution of fragmentation peaks of the 2,5-dihydroxybenzoic acid matrix and the benzyltriphenylphosphonium thermometer ion, following femtosecond ultraviolet laser desorption

Energy, Obsolescence, and the Productivity Slowdown

The growth rate of output per worker in the U.S. declined sharply during the 1970's. A leading explanation of this phenomenon holds that the dramatic rise in energy prices during the 1970's caused a significant portion of the U.S. capital stock to become obsolete. This led to a decline in effective capital input which, in turn, caused a reduction in the reduction in the growth rate of output per worker. This paper examines a key prediction of this hypothesis. If there is a significant link between energy and capital obsolescence, it should be revealed in the market price of used capital: if rising energy costs did in fact render older, energy-inefficient capital obsolete, prospective buyers should have reduced the price that they were willing to pay for that capital. An examination of the market for used capital before and after the energy price shocks should thus reveal the presence and magnitude of the obsolescence effect. We have carried out this examination for four types of used machine tools and five types of construction equipment. We did not find a general reduction in the price of used equipment after the energy price shocks. Indeed, the price of used construction equipment - the more energy intensive of our two types of capital - tended to increase after 1973. We thus conclude that our data do not support the obsolescence explanation of the productivity of slowdown.

Forecasting using relative entropy

The paper describes a relative entropy procedure for imposing moment restrictions on simulated forecast distributions from a variety of models. Starting from an empirical forecast distribution for some variables of interest, the technique generates a new empirical distribution that satisfies a set of moment restrictions. The new distribution is chosen to be as close as possible to the original in the sense of minimizing the associated Kullback-Leibler Information Criterion, or relative entropy. The authors illustrate the technique by using several examples that show how restrictions from other forecasts and from economic theory may be introduced into a model's forecasts.Forecasting