Clustering and hot spot detection in socio-economic spatio-temporal data

Distribution of socio-economic features in urban space is an important source of information for land and transportation planning. The metropolization phenomenon has changed the distribution of types of professions in space and has given birth to different spatial patterns that the urban planner must know in order to plan a sustainable city. Such distributions can be discovered by statistical and learning algorithms through different methods. In this paper, an unsupervised classification method and a cluster detection method are discussed and applied to analyze the socio-economic structure of Switzerland. The unsupervised classification method, based on Ward's classification and self-organized maps, is used to classify the municipalities of the country and allows to reduce a highly-dimensional input information to interpret the socio-economic landscape. The cluster detection method, the spatial scan statistics, is used in a more specific manner in order to detect hot spots of certain types of service activities. The method is applied to the distribution services in the agglomeration of Lausanne. Results show the emergence of new centralities and can be analyzed in both transportation and social terms.

Capital Controls with International Reserve Accumulation: Can this Be Optimal ?

Motivated by the Chinese experience, we analyze a semi-open economy where the central bank has access to international capital markets, but the private sector has not. This enables the central bank to choose an interest rate different from the international rate. We examine the optimal policy of the central bank by modelling it as a Ramsey planner who can choose the level of domestic public debt and of international reserves. The central bank can improve savings opportunities of credit-constrained consumers modelled as in Woodford (1990). We find that in a steady state it is optimal for the central bank to replicate the open economy, i.e., to issue debt financed by the accumulation of reserves so that the domestic interest rate equals the foreign rate. When the economy is in transition, however, a rapidly growing economy has a higher welfare without capital mobility and the optimal interest rate differs from the international rate. We argue that the domestic interest rate should be temporarily above the international rate. We also find that capital controls can still help reach the first best when the planner has more fiscal instruments.

Optimal Exchange Rate Policy in a Growing Semi-Open Economy

This paper considers an alternative perspective to China's exchange rate policy. It studies a semi-open economy where the private sector has no access to international capital markets but the central bank has full access. Moreover, it assumes limited financial development generating a large demand for saving instruments by the private sector. The paper analyzes the optimal exchange rate policy by modeling the central bank as a Ramsey planner. Its main result is that in a growth acceleration episode it is optimal to have an initial real depreciation of the currency combined with an accumulation of reserves, which is consistent with the Chinese experience. This depreciation is followed by an appreciation in the long run. The paper also shows that the optimal exchange rate path is close to the one that would result in an economy with full capital mobility and no central bank intervention.