Two monetary models with alternating markets : [Version 28 October 2013]

We present a thought-provoking study of two monetary models: the cash-in-advance and the Lagos and Wright (2005) models. We report that the different approach to modeling money — reduced-form vs. explicit role — neither induces theoretical nor quantitative differences in results. Given conformity of preferences, technologies and shocks, both models reduce to one difference equation. The equations do not coincide only if price distortions are differentially imposed across models. To illustrate, when cash prices are equally distorted in both models equally large welfare costs of inflation are obtained in each model. Our insight is that if results differ, then this is due to differential assumptions about the pricing mechanism that governs cash transactions, not the explicit microfoundation of money

The Risk Premium and Long-Run Global Imbalances

Our paper investigates whether the valuation effect caused by a large risk premium and a low risk-free rate can help to explain the enormous US current account and trade deficit observed in the past decade. To answer this question, we set up an endowment growth model in which investors are endowed with heterogeneous trading technologies. In our model, the average US investors load up more aggregate risk by investing in a risky asset abroad and issuing a risk-free asset. Thanks to the large risk premium as well as the low risk-free rate, the US can sustain a long-run trade deficit even as a debtor country. Quantitatively, we find that the valuation effect caused solely by the high risk premium and the low risk-free rate in our model, which is calibrated to match the external assets and liabilities of US economy, can account for more than half of the observed trade deficit and current account deficit. Our results suggest that the current US trade deficit might not necessarily lead to net export increases or dollar depreciation in the future.Global Imbalances; External Account; Risk Premium; Asset Pricing; Limited Participation

New Signatures For Top In Hadron Collider

We study the signatures for new TeV resonances that couple to top or bottom quarks both at the Tevatron Run II and at the LHC. We find that it is possible to study these resonances when they are produced in association with a pair of heavy quarks or in association with a single top at the LHC. In particular, with an integrated luminosity of 300 fb$^{-1}$ at the LHC, it is possible to probe resonance masses up to around 2 TeV.Comment: 4 pages, 2 figures. Presented at the 2004 Meeting of the APS Division of Particles and Fields, University of California, Riverside, CA, Aug 26-31, 200

Upsilon Transverse Momentum at Hadron Colliders

We predict the shape of the transverse momentum p_T spectrum of Upsilon production. The distribution at low p_T is dominated by the region of small impact parameter b and may be computed reliably in perturbation theory. We resum to all orders in the strong coupling alpha_s the process-independent large logarithmic contributions that arise from initial-state gluon showers in the small p_T (< M_Upsilon) region. The cross section at large p_T is represented by the alpha_s^3 lowest-order non-vanishing perturbative contribution.Comment: 4 pages, 5 figures. Presented at the 2004 Meeting of the APS Division of Particles and Fields, University of California, Riverside, CA, Aug 26-31, 200

Study shows that on-demand ride sharing mitigates traffic congestion

It raises average vehicle occupancy, decreases the number of cars on the road and reduces car ownership, writes Yili Hon

Prediction of remaining life of power transformers based on left truncated and right censored lifetime data

Prediction of the remaining life of high-voltage power transformers is an important issue for energy companies because of the need for planning maintenance and capital expenditures. Lifetime data for such transformers are complicated because transformer lifetimes can extend over many decades and transformer designs and manufacturing practices have evolved. We were asked to develop statistically-based predictions for the lifetimes of an energy company's fleet of high-voltage transmission and distribution transformers. The company's data records begin in 1980, providing information on installation and failure dates of transformers. Although the dataset contains many units that were installed before 1980, there is no information about units that were installed and failed before 1980. Thus, the data are left truncated and right censored. We use a parametric lifetime model to describe the lifetime distribution of individual transformers. We develop a statistical procedure, based on age-adjusted life distributions, for computing a prediction interval for remaining life for individual transformers now in service. We then extend these ideas to provide predictions and prediction intervals for the cumulative number of failures, over a range of time, for the overall fleet of transformers.Comment: Published in at http://dx.doi.org/10.1214/00-AOAS231 the Annals of Applied Statistics (http://www.imstat.org/aoas/) by the Institute of Mathematical Statistics (http://www.imstat.org

Product Uncertainty in Online Marketplaces in China: An Econometric Model

Most studies on online marketplaces focus on seller uncertainty and rely on data from online marketplaces in the U.S. This paper extends this literature by focusing on product uncertainty and defining its two dimensions - description uncertainty (identifying the product‘s characteristics) and fit uncertainty (matching product characteristics with the buyer’s needs). It also examines the distinction, relationship, and relative effects of the two dimensions of product uncertainty on actual product returns, and how online marketplaces can use IT-enabled mechanisms to mitigate product uncertainty. The proposed hypotheses are tested with data from 144 buyers in Taobao’s online marketplace in China using an econometric model. The results stress the role of product presentations in reducing description uncertainty and of online communication, both between the buyer and the seller and also among buyers, in reducing fit uncertainty. The paper draws implications for reducing product uncertainty in online marketplaces with the aid of IT