Oil price uncertainty as a predictor of stock market volatility

In this paper we empirically examine the impact of oil price uncertainty shocks on US stock market volatility. We define the oil price uncertainty shock as the unanticipated component of oil price fluctuations. We find that our oil price uncertainty factor is the most significant predictor of stock market volatility when compared with various observable oil price and volatility measures commonly used in the literature. Moreover, we find that oil price uncertainty is a common volatility forecasting factor of S&P500 constituents, and it outperforms lagged stock market volatility and the VIX when forecasting volatility for medium and long-term forecasting horizons. Interestingly, when forecasting the volatility of S&P500 constituents, we find that the highest predictive power of oil price uncertainty is for the stocks which belong to the financial sector. Overall, our findings show that financial stability is significantly damaged when the degree of oil price unpredictability rises, while it is relatively immune to observable fluctuations in the oil market

Deterministic protocol for mapping a qubit to coherent state superpositions in a cavity

We introduce a new gate that transfers an arbitrary state of a qubit into a superposition of two quasi-orthogonal coherent states of a cavity mode, with opposite phases. This qcMAP gate is based on conditional qubit and cavity operations exploiting the energy level dispersive shifts, in the regime where they are much stronger than the cavity and qubit linewidths. The generation of multi-component superpositions of quasi-orthogonal coherent states, non-local entangled states of two resonators and multi-qubit GHZ states can be efficiently achieved by this gate

Measuring Oil Price Shocks

The role of oil price shocks in US economic activity and inflation is controversial but a key input to current economic policy. To clarify these relations, we employ a more refined measure of oil shocks based on decomposing highly accurate realized volatility estimated using intraday oil futures data. In reconciling prior results, we find that shocks driven by price increases (decreases) are associated with rising (falling) inflation while only a symmetric volatility channel affects economic activity

Hardware-efficient autonomous quantum error correction

We propose a new method to autonomously correct for errors of a logical qubit induced by energy relaxation. This scheme encodes the logical qubit as a multi-component superposition of coherent states in a harmonic oscillator, more specifically a cavity mode. The sequences of encoding, decoding and correction operations employ the non-linearity provided by a single physical qubit coupled to the cavity. We layout in detail how to implement these operations in a practical system. This proposal directly addresses the task of building a hardware-efficient and technically realizable quantum memory.Comment: 12 pages,6 figure

Modelling Enclosures for Large-Scale Superconducting Quantum Circuits

Superconducting quantum circuits are typically housed in conducting enclosures in order to control their electromagnetic environment. As devices grow in physical size, the electromagnetic modes of the enclosure come down in frequency and can introduce unwanted long-range cross-talk between distant elements of the enclosed circuit. Incorporating arrays of inductive shunts such as through-substrate vias or machined pillars can suppress these effects by raising these mode frequencies. Here, we derive simple, accurate models for the modes of enclosures that incorporate such inductive-shunt arrays. We use these models to predict that cavity-mediated inter-qubit couplings and drive-line cross-talk are exponentially suppressed with distance for arbitrarily large quantum circuits housed in such enclosures, indicating the promise of this approach for quantum computing. We find good agreement with a finite-element simulation of an example device containing more than 400 qubits.Comment: 6 pages + appendix, 6 figures in main text + 4 in appendi

Single-photon Resolved Cross-Kerr Interaction for Autonomous Stabilization of Photon-number States

Quantum states can be stabilized in the presence of intrinsic and environmental losses by either applying active feedback conditioned on an ancillary system or through reservoir engineering. Reservoir engineering maintains a desired quantum state through a combination of drives and designed entropy evacuation. We propose and implement a quantum reservoir engineering protocol that stabilizes Fock states in a microwave cavity. This protocol is realized with a circuit quantum electrodynamics platform where a Josephson junction provides direct, nonlinear coupling between two superconducting waveguide cavities. The nonlinear coupling results in a single photon resolved cross-Kerr effect between the two cavities enabling a photon number dependent coupling to a lossy environment. The quantum state of the microwave cavity is discussed in terms of a net polarization and is analyzed by a measurement of its steady state Wigner function.Comment: 8 pages, 6 figure

Oil Price Uncertainty and the Macroeconomy

This paper examines the impact of oil price uncertainty shocks on economic activity. To do so, we define the uncertainty shock as the unanticipated component of oil price fluctuations. We find that this unanticipated component has a significantly negative and long-lasting impact on economic activity, with its cumulative effect on the US macroeconomy being much larger compared to that of popular uncertainty proxies such as stock market volatility and Economic Policy Uncertainty. Unlike our preferred measure of oil price uncertainty, volatility and the price spikes in oil futures prices present only a small and transitory effect on the real economy. Overall, our findings show that the US economy is significantly impaired when the degree of oil price unpredictability rises, while it is relatively immune to predictable fluctuations in the oil market