Existence and Uniqueness of Equilibrium in Nonoptimal Unbounded Infinite Horizon Economies

In applied work in macroeconomics and finance, nonoptimal infinite horizon economies are often studied in the the state space is unbounded. Important examples of such economies are single vector growth models with production externalities, valued fiat money, monopolistic competition, and/or distortionary government taxation. Although sufficient conditions for existence and uniqueness of Markovian equilibrium are well known for the compact state space case, no similar sufficient conditions exist for unbounded growth. This paper provides such a set of sufficient conditions, and also present a computational algorithm that will prove asymptotically consistent when computing Markovian equilibrium.

Role of Ashwangandha (Withania Somnifera) in Immune Modulation: Proposed Influence in Immune-Regulation

The immune system evolved to protect organisms from an infinite variety of disease-causing agents but to avoid harmful responses to self. However, such a powerf~dl efense mechanism requires regulation. Immune regulation includes homeostatic and cellmediated targeted mechanisms to the activation, differentiation and function of antigen-triggered immuno-competent cells and irnmunoregulatory cells. The regulation of the immune system has been a major challenge for the management of autoimmune disorders, tumor immunity, infectious diseases and organ transplants. However, irnmuno-modulatory procedures used by modern medicine to induce immunoregulatory function have deleterious side effects. Ashwangandha (Withania somnifera), an herb used in Ayurvedic medicine is being tested and used in experimental and clinical cases with potential immuno-modulatory functions without any side effects. Here we propose future usages of Ashwangandha for immuno-regulatory function in translational research.

Time-Limited Property Rights and Investment Incentives

Although it is axiomatic that property rights of infinite duration are necessary for owners to make efficient long term investments in their property, time limits on property rights are pervasive in the law. This paper provides an economic justification for such limits by arguing that they actually enhance property values in the presence of various sorts of market failure. The analysis offers a coherent approach for understanding what otherwise appear to be unrelated doctrines in the law.

The Effects of Credit Risk on Dynamic Portfolio Management: A New Computational Approach

The study investigates the role of credit risk in a continuous time stochastic asset allocation model, since the traditional dynamic framework does not provide credit risk flexibility. The general model of the study extends the traditional dynamic efficiency framework by explicitly deriving the optimal value function for the infinite horizon stochastic control problem via a weighted volatility measure of market and credit risk. The model's optimal strategy was then compared to that obtained from a benchmark Markowitz-type dynamic optimization framework to determine which specification adequately reflects the optimal terminal investment returns and strategy under credit and market risks. The paper shows that an investor's optimal terminal return is lower than typically indicated under the traditional mean-variance framework during periods of elevated credit risk. Hence I conclude that, while the traditional dynamic mean-variance approach may indicate the ideal, in the presence of credit-risk it does not accurately reflect the observed optimal returns, terminal wealth and portfolio selection strategies.

Optimal Test for Parameter Instability When the Unstable Process and the Error Distribution are Unknown

This paper proposes asymptotically optimal tests for unstable parameter process under the feasible circumstance that the researcher has little information about the unstable parameter process and the error distribution, and suggests conditions under which the knowledge of those processes does not provide asymptotic power gains. I first derive a test under known error distribution, which is asymptotically equivalent to LR tests for correctly identified unstable parameter processes under suitable conditions. The conditions are weak enough to cover a wide range of unstable processes such as various types of structural breaks and time varying parameter processes. The test is then extended to semiparametric models in which the underlying distribution in unknown but treated as unknown infinite dimensional nuisance parameter. The semiparametric test is adaptive in the sense that its asymptotic power function is equivalent to the power envelope under known error distribution.