Heterogeneous Expectations and Bond Markets

This paper presents a dynamic equilibrium model of bond markets, in which two groups of agents hold heterogeneous expectations about future economic conditions. Our model shows that heterogeneous expectations can not only lead to speculative trading, but can also help resolve several challenges to standard representative-agent models of the yield curve. First, the relative wealth fluctuation between the two groups of agents caused by their speculative positions amplifies bond yield volatility, thus providing an explanation for the "excessive volatility puzzle" of bond yields. In addition, the fluctuation in the two groups' expectations and relative wealth also generates time-varying risk premia, which in turn can help explain the failure of the expectation hypothesis. These implications, essentially induced by trading between agents, highlight the importance of incorporating heterogeneous expectations into economic analysis of bond markets.

Symbol-Based Successive Cancellation List Decoder for Polar Codes

Polar codes is promising because they can provably achieve the channel capacity while having an explicit construction method. Lots of work have been done for the bit-based decoding algorithm for polar codes. In this paper, generalized symbol-based successive cancellation (SC) and SC list decoding algorithms are discussed. A symbol-based recursive channel combination relationship is proposed to calculate the symbol-based channel transition probability. This proposed method needs less additions than the maximum-likelihood decoder used by the existing symbol-based polar decoding algorithm. In addition, a two-stage list pruning network is proposed to simplify the list pruning network for the symbol-based SC list decoding algorithm.Comment: Accepted by 2014 IEEE Workshop on Signal Processing Systems (SiPS