Monetary Policy and Multiple Equilibria

In this paper, we characterize conditions under which interest rate feedback rules wherby the nominal interest rate is set as an increasing function of the inflation rate generate multiple equilibria. We show that these conditions depend not only on the fiscal regime (as emphasized in the fiscal theory of the price level) but also on the way in which money is assumed to enter preferences and technology. We analyze this issue in flexible and sticky price environments.MONETARY POLICY ; PRICES ; INTEREST RATE

Avoiding Liquidity Traps

Once the zero bound on nominal interest rates is taken into account, Taylor-type interest-rate feedback rules give rise to unintended self-fulfilling decelerating inflation paths and aggregate fluctuations driven by arbitrary revisions in expectations. These undesirable equilibria exhibit the essential features of liquidity traps, as monetary policy is ineffective in bringing about the government's goals regarding the stability of output and prices. This paper proposes several fiscal and monetary policies that preserve the appealing features of Taylor rules, such as local uniqueness of equilibrium near the inflation target, and at the same time rule out the deflationary expectations that can lead an economy into a liquidity trap.TAYLOR RULES; LIQUIDITY TRAPS; ZERO BOUND ON NOMINAL INTEREST RATES.

Deciding first-order properties of nowhere dense graphs

Nowhere dense graph classes, introduced by Nesetril and Ossona de Mendez, form a large variety of classes of "sparse graphs" including the class of planar graphs, actually all classes with excluded minors, and also bounded degree graphs and graph classes of bounded expansion. We show that deciding properties of graphs definable in first-order logic is fixed-parameter tractable on nowhere dense graph classes. At least for graph classes closed under taking subgraphs, this result is optimal: it was known before that for all classes C of graphs closed under taking subgraphs, if deciding first-order properties of graphs in C is fixed-parameter tractable, then C must be nowhere dense (under a reasonable complexity theoretic assumption). As a by-product, we give an algorithmic construction of sparse neighbourhood covers for nowhere dense graphs. This extends and improves previous constructions of neighbourhood covers for graph classes with excluded minors. At the same time, our construction is considerably simpler than those. Our proofs are based on a new game-theoretic characterisation of nowhere dense graphs that allows for a recursive version of locality-based algorithms on these classes. On the logical side, we prove a "rank-preserving" version of Gaifman's locality theorem.Comment: 30 page

Structure Theorem and Isomorphism Test for Graphs with Excluded Topological Subgraphs

We generalize the structure theorem of Robertson and Seymour for graphs excluding a fixed graph $H$ as a minor to graphs excluding $H$ as a topological subgraph. We prove that for a fixed $H$, every graph excluding $H$ as a topological subgraph has a tree decomposition where each part is either "almost embeddable" to a fixed surface or has bounded degree with the exception of a bounded number of vertices. Furthermore, we prove that such a decomposition is computable by an algorithm that is fixed-parameter tractable with parameter $|H|$. We present two algorithmic applications of our structure theorem. To illustrate the mechanics of a "typical" application of the structure theorem, we show that on graphs excluding $H$ as a topological subgraph, Partial Dominating Set (find $k$ vertices whose closed neighborhood has maximum size) can be solved in time $f(H,k)\cdot n^{O(1)}$ time. More significantly, we show that on graphs excluding $H$ as a topological subgraph, Graph Isomorphism can be solved in time $n^{f(H)}$. This result unifies and generalizes two previously known important polynomial-time solvable cases of Graph Isomorphism: bounded-degree graphs and $H$-minor free graphs. The proof of this result needs a generalization of our structure theorem to the context of invariant treelike decomposition

On the Parameterized Intractability of Monadic Second-Order Logic

One of Courcelle's celebrated results states that if C is a class of graphs of bounded tree-width, then model-checking for monadic second order logic (MSO_2) is fixed-parameter tractable (fpt) on C by linear time parameterized algorithms, where the parameter is the tree-width plus the size of the formula. An immediate question is whether this is best possible or whether the result can be extended to classes of unbounded tree-width. In this paper we show that in terms of tree-width, the theorem cannot be extended much further. More specifically, we show that if C is a class of graphs which is closed under colourings and satisfies certain constructibility conditions and is such that the tree-width of C is not bounded by \log^{84} n then MSO_2-model checking is not fpt unless SAT can be solved in sub-exponential time. If the tree-width of C is not poly-logarithmically bounded, then MSO_2-model checking is not fpt unless all problems in the polynomial-time hierarchy can be solved in sub-exponential time

Isomorphism Testing for Graphs Excluding Small Minors

We prove that there is a graph isomorphism test running in time $n^{\operatorname{polylog}(h)}$ on $n$-vertex graphs excluding some $h$-vertex graph as a minor. Previously known bounds were $n^{\operatorname{poly}(h)}$ (Ponomarenko, 1988) and $n^{\operatorname{polylog}(n)}$ (Babai, STOC 2016). For the algorithm we combine recent advances in the group-theoretic graph isomorphism machinery with new graph-theoretic arguments

EPG-representations with small grid-size

In an EPG-representation of a graph $G$ each vertex is represented by a path in the rectangular grid, and $(v,w)$ is an edge in $G$ if and only if the paths representing $v$ an $w$ share a grid-edge. Requiring paths representing edges to be x-monotone or, even stronger, both x- and y-monotone gives rise to three natural variants of EPG-representations, one where edges have no monotonicity requirements and two with the aforementioned monotonicity requirements. The focus of this paper is understanding how small a grid can be achieved for such EPG-representations with respect to various graph parameters. We show that there are $m$-edge graphs that require a grid of area $\Omega(m)$ in any variant of EPG-representations. Similarly there are pathwidth-$k$ graphs that require height $\Omega(k)$ and area $\Omega(kn)$ in any variant of EPG-representations. We prove a matching upper bound of $O(kn)$ area for all pathwidth-$k$ graphs in the strongest model, the one where edges are required to be both x- and y-monotone. Thus in this strongest model, the result implies, for example, $O(n)$, $O(n \log n)$ and $O(n^{3/2})$ area bounds for bounded pathwidth graphs, bounded treewidth graphs and all classes of graphs that exclude a fixed minor, respectively. For the model with no restrictions on the monotonicity of the edges, stronger results can be achieved for some graph classes, for example an $O(n)$ area bound for bounded treewidth graphs and $O(n \log^2 n)$ bound for graphs of bounded genus.Comment: Appears in the Proceedings of the 25th International Symposium on Graph Drawing and Network Visualization (GD 2017

The Hardness of Embedding Grids and Walls

The dichotomy conjecture for the parameterized embedding problem states that the problem of deciding whether a given graph $G$ from some class $K$ of "pattern graphs" can be embedded into a given graph $H$ (that is, is isomorphic to a subgraph of $H$) is fixed-parameter tractable if $K$ is a class of graphs of bounded tree width and $W[1]$-complete otherwise. Towards this conjecture, we prove that the embedding problem is $W[1]$-complete if $K$ is the class of all grids or the class of all walls

Parameterized Directed kk-Chinese Postman Problem and kk Arc-Disjoint Cycles Problem on Euler Digraphs

In the Directed $k$-Chinese Postman Problem ($k$-DCPP), we are given a connected weighted digraph $G$ and asked to find $k$ non-empty closed directed walks covering all arcs of $G$ such that the total weight of the walks is minimum. Gutin, Muciaccia and Yeo (Theor. Comput. Sci. 513 (2013) 124--128) asked for the parameterized complexity of $k$-DCPP when $k$ is the parameter. We prove that the $k$-DCPP is fixed-parameter tractable. We also consider a related problem of finding $k$ arc-disjoint directed cycles in an Euler digraph, parameterized by $k$. Slivkins (ESA 2003) showed that this problem is W[1]-hard for general digraphs. Generalizing another result by Slivkins, we prove that the problem is fixed-parameter tractable for Euler digraphs. The corresponding problem on vertex-disjoint cycles in Euler digraphs remains W[1]-hard even for Euler digraphs

Graphs Identified by Logics with Counting

We classify graphs and, more generally, finite relational structures that are identified by C2, that is, two-variable first-order logic with counting. Using this classification, we show that it can be decided in almost linear time whether a structure is identified by C2. Our classification implies that for every graph identified by this logic, all vertex-colored versions of it are also identified. A similar statement is true for finite relational structures. We provide constructions that solve the inversion problem for finite structures in linear time. This problem has previously been shown to be polynomial time solvable by Martin Otto. For graphs, we conclude that every C2-equivalence class contains a graph whose orbits are exactly the classes of the C2-partition of its vertex set and which has a single automorphism witnessing this fact. For general k, we show that such statements are not true by providing examples of graphs of size linear in k which are identified by C3 but for which the orbit partition is strictly finer than the Ck-partition. We also provide identified graphs which have vertex-colored versions that are not identified by Ck.Comment: 33 pages, 8 Figure