Inventories and Optimal Monetary Policy

We introduce inventories into a standard New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to study the effect on the design of optimal monetary policy. The possibility of inventory investment changes the transmission mechanism in the model by decoupling production from final consumption. This allows for a higher degree of consumption smoothing since firms can add excess production to their inventory holdings. We consider both Ramsey optimal monetary policy and a monetary policy that maximizes consumer welfare over a set of simple interest rate feedback rules. We find that in contrast to a model without inventories, Ramsey-optimal monetary policy in a model with inventories deviates from complete inflation stabilization. In the standard model, nominal price rigidity is a deadweight loss on the economy, which an optimizing policymaker attempts to remove. With inventories, a planner can reduce consumption volatility and raise welfare by accumulating inventories and letting prices change as an equilibrating mechanism. We find also find that the application of simple rules comes very close to replicating Ramsey optimal outcomes.Ramsey policy, New Keynesian model

The Durham Statement Two Years Later: Open Access in the Law School Journal Environment

The Durham Statement on Open Access to Legal Scholarship, drafted by a group of academic law library directors, was promulgated in February 2009. It calls for two things: (1) open access publication of law school–published journals; and (2) an end to print publication of law journals, coupled with a commitment to keeping the electronic versions available in “stable, open, digital formats.” The two years since the Statement was issued have seen increased publication of law journals in openly available electronic formats, but little movement toward all-electronic publication. This article discusses the issues raised by the Durham Statement, the current state of law journal publishing, and directions forward

Deep Habits in the New Keynesian Phillips Curve

We derive and estimate a New Keynesian Phillips curve (NKPC) in a model where consumers are assumed to have deep habits. Habits are deep in the sense that they apply to individual consumption goods instead of aggregate consumption. This alters the NKPC in a fundamental manner as it introduces expected and contemporaneous consumption growth as well as the expected marginal value of future demand as additional driving forces for inflation dynamics. We construct the driving process in the deep habits NKPC by using the model’s optimality conditions to impute time series for unobservable variables. The resulting series is considerably more volatile than unit labor cost. General Methods of Moments (GMM) estimation of the NKPC shows an improved fit and a much lower degree of indexation than in the standard NKPC. Our analysis also reveals that the crucial parameters for the performance of the deep habit NKPC are the habit parameter and the substitution elasticity between differentiated products. The results are broadly robust to alternative specifications.

Deep Habits in the New Keynesian Phillips Curve

We derive and estimate a New Keynesian Phillips curve (NKPC) in a model where consumers are assumed to have deep habits. Habits are deep in the sense that they apply to individual consumption goods instead of aggregate consumption. This alters the NKPC in a fundamental manner as it introduces expected and contemporaneous consumption growth as well as the expected marginal value of future demand as additional driving forces for inflation dynamics. We construct the driving process in the deep habits NKPC by using the model's optimality conditions to impute time series for unobservable variables. The resulting series is considerably more volatile than unit labor cost. GMM estimation of the NKPC shows an improved fit and a much lower degree of indexation than in the standard NKPC. Our analysis also reveals that the crucial parameters for the performance of the deep habit NKPC are the habit parameter and the substitution elasticity between differentiated products. The results are broadly robust to alternative specfications.Phillips curve; GMM; marginal costs; deep habits.

Gravitational Binding, Virialization and the Peculiar Velocity Distribution of the Galaxies

We examine the peculiar velocity distribution function of galaxies in cosmological many-body gravitational clustering. Our statistical mechanical approach derives a previous basic assumption and generalizes earlier results to galaxies with haloes. Comparison with the observed peculiar velocity distributions indicates that individual massive galaxies are usually surrounded by their own haloes, rather than being embedded in common haloes. We then derive the density of energy states, giving the probability that a randomly chosen configuration of N galaxies in space is bound and virialized. Gravitational clustering is very efficient. The results agree well with the observed probabilities for finding nearby groups containing N galaxies. A consequence is that our local relatively low mass group is quite typical, and the observed small departures from the local Hubble flow beyond our group are highly probable.Comment: Paper in aastex 5.0 format and 9 figures. Replace a new version with figures and typos correcte

Long-distance entanglement generation with scalable and robust two-dimensional quantum network

We present a protocol for generating entanglement over long distances in a two-dimensional quantum network based on the surface error-correction code. This protocol requires a fixed number of quantum memories at each node of the network and tolerates error rates of up to 1.67% in the quantum channels.Comment: 5 pags, 4 figs. V2: text corrected, discussion on channel losses added. Accepted by PR

Coherent Eavesdropping Attacks in Quantum Cryptography: Nonequivalence of Quantum and Classical Key Distillation

The security of a cryptographic key that is generated by communication through a noisy quantum channel relies on the ability to distill a shorter secure key sequence from a longer insecure one. We show that -- for protocols that use quantum channels of any dimension and completely characterize them by state tomography -- the noise threshold for classical advantage distillation is substantially lower than the threshold for quantum entanglement distillation because the eavesdropper can perform powerful coherent attacks. The earlier claims that the two noise thresholds are identical, which were based on analyzing incoherent attacks only, are therefore invalid.Comment: 4 pages, 1 figure; this is the detailed account for the results Reported in quant-ph/031015

From zonal flow to convection rolls in Rayleigh-B\'enard convection with free-slip plates

Rayleigh-B\'enard (RB) convection with free-slip plates and horizontally periodic boundary conditions is investigated using direct numerical simulations. Two configurations are considered, one is two-dimension (2D) RB convection and the other one three-dimension (3D) RB convection with a rotating axis parallel to the plate. We explore the parameter range of Rayleigh numbers Ra from $10^7 to$10^9$and Prandtl numbers$Pr$from$1$to$100. We show that zonal flow, which was observed, for example, by Goluskin \emph{et al}. \emph{J. Fluid. Mech.} 759, 360-385 (2014) for \Gamma=2$, is only stable when$\Gamma$is smaller than a critical value, which depends on$Ra$and$Pr$. With increasing$\Gamma$, we find a second regime in which both zonal flow and different convection roll states can be statistically stable. For even larger$\Gamma$, in a third regime, only convection roll states are statistically stable and zonal flow is not sustained. For the 3D simulations, we fix$Ra=10^7$and$Pr=0.71$, and compare the flow for$\Gamma=8$and$\Gamma = 16$. We demonstrate that with increasing aspect ratio$\Gamma$, zonal flow, which was observed for small$\Gamma=2\pi by von Hardenberg \emph{et al}. \emph{Phys. Rev. Lett.} 15, 134501 (2015), completely disappears for \Gamma=16$. For such large$\Gamma$only convection roll states are statistically stable. In between, here for medium aspect ratio$\Gamma = 8$, the convection roll state and the zonal flow state are both statistically stable. What state is taken depends on the initial conditions, similarly as we found for the 2D case.Comment: 26 pages, 12 figure