Do tax distortions lead to more indeterminacy? A New Keynesian perspective

Following the recent developments of the literature on stabilization policies, this paper investigates the effect of tax distortions on equilibrium determinacy in a New Keynesian economy with rule-of-thumb consumers and capital accumulation. In particular, we focus on the inter-action between monetary policy and tax distortions in supporting the saddle-path equilibrium under the assumptions of balanced budget and monetary policy satisfying a Taylor rule.rule-of-thumb consumers, equilibrium determinacy, fiscal and monetary policy inter-actions, and tax distortions

Fiscal Policy under Balanced Budget and Indeterminacy: A New Keynesian Perspective

We investigate the effect of fiscal policy on equilibrium determinacy in a New Keynesian economy with rule-of-thumb (liquidity constrained) consumers and capital accumulation by focusing on the inter-action between monetary policy and taxation under the assumption of balanced budget. Our main finding is that taxation of firms� monopoly rents reduces the parameter range within which the Taylor principle is insufficient to guarantee equilibrium determinacy; hence it supports the determinacy of the rational expectation equilibrium.Rule-of-thumb consumers, equilibrium determinacy, fiscal and monetary policy inter-actions, tax distortions, balanced government budget.

Policy Uncertainty, Symbiosis, and the Optimal Fiscal and Monetary Conservativeness

This paper extends a well-known macroeconomic stabilization game between monetary and fiscal authorities introduced by Dixit and Lambertini (American Economic Review, 93: 1522-1542) to multiplicative (policy) uncertainty. We find that even if fiscal and monetary authorities share a common output and inflation target (i.e. the symbiosis assumption), the achievement of the common targets is no longer guaranteed; under multiplicative uncertainty, in fact, a time consistency problem arises unless policymakers� output target is equal to the natural level.Monetary-fiscal policy interactions, uncertainty, symbiosis.

Policy Uncertainty, Symbiosis, and the Optimal Fiscal and Monetary Conservativeness

This paper extends the stabilization game between monetary and fiscal authorities to the case of multiplicative (model) uncertainty. In this context, the “symbiosis assumption”, i.e. fiscal and monetary policy share the same ideal targets, no longer guarantees the achievement of ideal output and inflation, unless the ideal output is equal to its natural level. A time consistency problem arises.Monetary-fiscal policy interactions, uncertainty, symbiosis.

Mining Network Events using Traceroute Empathy

In the never-ending quest for tools that enable an ISP to smooth troubleshooting and improve awareness of network behavior, very much effort has been devoted in the collection of data by active and passive measurement at the data plane and at the control plane level. Exploitation of collected data has been mostly focused on anomaly detection and on root-cause analysis. Our objective is somewhat in the middle. We consider traceroutes collected by a network of probes and aim at introducing a practically applicable methodology to quickly spot measurements that are related to high-impact events happened in the network. Such filtering process eases further in- depth human-based analysis, for example with visual tools which are effective only when handling a limited amount of data. We introduce the empathy relation between traceroutes as the cornerstone of our formal characterization of the traceroutes related to a network event. Based on this model, we describe an algorithm that finds traceroutes related to high-impact events in an arbitrary set of measurements. Evidence of the effectiveness of our approach is given by experimental results produced on real-world data.Comment: 8 pages, 7 figures, extended version of Discovering High-Impact Routing Events using Traceroutes, in Proc. 20th International Symposium on Computers and Communications (ISCC 2015

Experimental and numerical characterization of a positive displacement vane expander with an auxiliary injection port for an ORC-based power unit

Abstract In the present work a novel technology based on a dual injection vane expander has been introduced. The component works on a power unit fed by the exhaust gases of 3L turbocharged diesel engine. The new device was tested in a wide range of operating conditions and its numerical model was validated on the experimental data. The performances of the new machine were compared to those of the original one. The results showed that the dual injection expander provided an increase of the indicated and mechanical power up to 50% and 30%. Mass flow rate can be increased by 30% and this widens the performances of the power unit; this aspect is particularly suitable for a recovery unit fed by the widely changing exhaust gases flow rates in ICEs

Resilience, crisis contagion, and vulnerability in Central Europe and the Baltics

The recent financial crisis had serious worldwide impacts. Initial resilience and good past performances led to the illusion that the Central and Eastern European (CEE) region was able to decouple from developments in advanced economies. This initial illusion was however immediately denied since the crisis spread to that region just with a lag. The CEE region was, in fact, suddenly placed at the epicenter of the emerging market crisis. Further, the consequences of the crisis were not uniform among countries of the CEE region. Strong cross-country disparities in the resistance and recovery capacities have been observed. Focusing on a CEE sub-region, the Central Europe and the Baltics (CEB), our research project aims to analyze and disentangle the resilience performance to the 2008 financial crisis within countries of this region according to their shock isolation and absorptive capacities. We develop a new methodology to investigate two important dimensions of resilience, namely recovery and resistance. The latter can be defined as the relative vulnerability or sensitivity of economies within CEB region to disturbances and disruptions, whereas the former is the speed and extent of recovery from such a disruption or recession. Our methodology is based on Bayesian estimation techniques for general equilibrium models. We build and estimate a DSGE model for a small-open economy, which features nominal wage and price rigidities, as well as financial frictions in the form of liquidity-constrained households and limited access to deposits for the bank system. Then we group our parameter estimates in two sets: structural parameters and stochastic structure. The former individuates the deep parameters affecting the economic recovery capacities after stochastic disturbances (innovations) occur; the latter governs the innovation distributions and their intrinsic persistence. Accordingly, we study the relative differences across CEB economies using Principal Component Analysis (PCA), obtaining synthetic orthogonal indexes of these differences in a parsimonious way. Finally, we use the two sets to compare the relative recovery (resistance) country performances of a single country to those of a hypothetical economy characterized by a CEB average structural (stochastic) set of estimated parameters. Precisely, considering estimated parameters as variables of a cross-sectional dataset organized by country, we first look at national differences considering as reference a hypothetical country, where there are no distortions and/or unaffected by disturbances; second we use, as reference, a hypothetical average country, built on the estimated parameter means.JRC.B.3-Territorial Developmen

A stochastic estimated version of the Italian dynamic General Equilibrium Model (IGEM)

We estimate with Bayesian techniques the Italian dynamic General Equilibrium Model (IGEM), which has been developed at the Italian Treasury Department, Ministry of Economy and Finance, to assess the effects of alter-native policy interventions. We analyze and discuss the estimated effects of various shocks on the Italian economy. Compared to the calibrated version used for policy analysis, we find a lower wage rigidity and higher adjustment costs. The degree of prices and wages indexation to past inflation is much smaller than the indexation level assumed in the calibrated model. No substantial difference is found in the estimated monetary parameters. Estimated fiscal multipliers are slightly smaller than those obtained from the calibrated version of the model

charge air subcooling in a diesel engine via refrigeration unit effects on the turbocharger equilibrium

Abstract The stringent regulations on fuel saving and emissions reduction in the transportation sector have become game-raisers in the development of present internal combustion engines for road applications, even if under-the-hood space constraints, downsizing and down-weighting prevent from adopting radical changes in the engine layout. Charge air cooling is the standard in present turbocharged diesel engines, to the point that a dedicated heat exchanger, fed by environmental air, is located downstream the compressor. The paper proves the option of an additional cooling through the cabin-heating unit - usually over-sized with respect to normal operation - very effective to increase charge air density and improve cylinder filling. The intercooler downstream the compressor would be provided with a lower thermal load, hence calling for smaller heat exchange surfaces, leading to reduced weight, space saving and no increased layout complexity. By pushing this idea forward, a properly sized cabin-heating unit could even supply enough air cooling to replace the intercooler instead of just assisting it, further raising the weight/space/layout advantages. In presence of an additional heat exchanger, the cooling efficiency would be no longer related to the vehicle speed and the benefit in terms of cylinder filling could be kept to the desired value on a wider operating range for the engine. Plus, the lower combustion temperatures associated with both a colder air and a more diluted charge approaching the chamber would also result in a more regular combustion process, in spite of a moderate penalty on the thermodynamic efficiency. The additional fuel consumption to compress the cooling fluid is always offset by the fuel saving with respect to normal operation and a beneficial effect is appreciated on emissions. Nonetheless, major variables to account for when evaluating the feasibility of such a layout are (i) the impact it has on the equilibrium of the turbocharger, i.e. on the efficiency at each operating point, (ii) to what extent the presence of a colder air affects the turbine/compressor matching and (iii) the rack position the ECU fixes at the VGT, to face both pressure losses at the additional evaporator and the different enthalpy content for both the air at the compressor outlet and the exhaust gases at the turbine inlet. A comprehensive experimental activity supported by a detailed 1D model of the engine unit, aimed at assessing the benefits of the air under-cooling, allowed to select the most appropriate cooling layout and, once validated based on the experimental evidence, to investigate the equilibrium at the turbocharger

Do tax distortions lead to more indeterminacy? A New Keynesian perspective

Following the recent developments of the literature on stabilization policies, this paper investigates the effect of tax distortions on equilibrium determinacy in a New Keynesian economy with rule-of-thumb consumers and capital accumulation. In particular, we focus on the inter-action between monetary policy and tax distortions in supporting the saddle-path equilibrium under the assumptions of balanced budget and monetary policy satisfying a Taylor rule