Time to Gird for Rough Times: Forecast Commentary, part 2

U.S. economic forecast, economy, forecast, U.S., indicators, employment, housing, retail, consumer confidence, auto sales, personal income, spending, business investment, trade, interest rates

Monitor Sustainable Municipalities Report 2019 Key topic Circular Economy. Bertelsmann Stiftung Study 4 November 2019

At first sight, the concept for a recycling economy appears to be just the latest trend in the field of urban development, but in fact conversion to circular value creation also contains numerous oppor-tunities for the creation of long-term sustainable economic, social and environmental benefits for local communities. We have therefore chosen to look at this topic in this, our fourth, Monitor Report. Recycling Economy, Circular Value Creation and Cradle To Cradle are three concepts which – alt-hough each has a different main focus – basically all describe the same paradigm shift: away from a classic linear economy (“Take, Make, Use, Dispose”) towards a model based on restoration and regeneration. The recycling economy principle is actually anchored in the United Nations’ 17 Sustainable Devel-opment Goals, or SDGs. Goal 12 calls for sustainable consumption and sustainable production patterns. The recycling economy is also associated with a number of other sustainability goals, as it makes a significant contribution to their achievement. We are convinced that it is worth considering the applicability of the concept to local communities in Germany. What does transferring the recycling economy principle to local communities entail? How can towns be converted into “Recycling Cities”? Where are the obstacles and what potential is there? This Monitor Report is a first – it is the first bilingual version. With the kind permission of the Collab-orating Centre for Sustainable Consumption and Production (CSCP) in Wuppertal, we have issued their “Circular Economy Guidebook for Cities” in the original English with a German translation. We hope that, by looking at the bigger picture, we will also generate the impulse to consider how the topic can be adopted in (European) towns and cities, and what the resulting benefits could be. We are fully aware that a one-to-one transfer will not work. “One size fits all” does not apply to local communities. Although something that makes sense in Amsterdam, Copenhagen or Oslo may not necessarily work in towns, districts and local communities in Germany, it is definitely worth looking at how things are done in other countries. I would sincerely like to thank everyone who contributed to the creation of this Report, and especially the CSCP for its trust and invaluable cooperation. We hope you enjoy reading the Report, and look forward as always to your feedback and suggestions

Complexity of Interlocking Polyominoes

Polyominoes are a subset of polygons which can be constructed from integer-length squares fused at their edges. A system of polygons P is interlocked if no subset of the polygons in P can be removed arbitrarily far away from the rest. It is already known that polyominoes with four or fewer squares cannot interlock. It is also known that determining the interlockedness of polyominoes with an arbitrary number of squares is PSPACE hard. Here, we prove that a system of polyominoes with five or fewer squares cannot interlock, and that determining interlockedness of a system of polyominoes including hexominoes (polyominoes with six squares) or larger polyominoes is PSPACE hard.Comment: 18 pages, 15 figure

Spatiotemporal Orthogonal Polynomial Approximation for Partial Differential Equations

Starting with some fundamental concepts, in this article we present the essential aspects of spectral methods and their applications to the numerical solution of Partial Differential Equations (PDEs). We start by using Lagrange and Techbychef orthogonal polynomials for spatiotemporal approximation of PDEs as a weighted sum of polynomials. We use collocation at some clustered grid points to generate a system of equations to approximate the weights for the polynomials. We finish the study by demonstrating approximate solutions of some PDEs in one space dimension.Comment: 9 pages, 9 figure

Taylor rules with headline inflation: a bad idea

Should a central bank accommodate energy price shocks? Should the central bank use core inflation or headline inflation with the volatile energy component in its Taylor rule? To answer these questions, we build a dynamic stochastic general equilibrium model with energy use, durable goods, and nominal rigidities to study the effects of an energy price shock and its impact on the macroeconomy when the central bank follows a Taylor rule. We then study how the economy performs under alternative parameterizations of the rule with different weights on headline and core inflation after an increase in the energy price. Our simulation results indicate that a central bank using core inflation in its Taylor rule does better than one using headline inflation because the output drop is less severe. In general, we show that the lower the weight on energy price inflation in the Taylor rule, the impact of an energy price increase on gross domestic product and inflation is also lower.

Energy price shocks and the macroeconomy: the role of consumer durables

So far, the literature on dynamic stochastic general equilibrium models with energy price shocks uses energy on the production side only. In these models, energy shocks are responsible for only a negligible share of output fluctuations. We study the robustness of this finding by explicitly modeling private consumption of energy at the household level in addition to energy use at the firm level to account for total energy use in the economy. Additionally, we distinguish between investment in consumer durables and investment in capital goods. The model economy is calibrated to match total energy use and durable goods consumption as observed in the U.S. data. Simulation results indicate that, despite higher total energy use, this economy has an even smaller proportion of output fluctuations attributable to energy price shocks. Productivity shocks continue to be the primary force behind business cycle fluctuations. The driving force behind our results is that the household now has the flexibility to rebalance its investment portfolio. Specifically, the energy price hike is absorbed by reducing durable goods investment more than investment in capital goods, thereby cushioning the hit to future production at the expense of current consumption. Hence, our model better matches the consumption volatility observed in the data.