Forecasting the UK/US exchange rate with divisia monetary models and neural networks

This paper compares the UK/US exchange rate forecasting performance of linear and nonlinear models based on monetary fundamentals, to a random walk (RW) model. Structural breaks are identified and taken into account. The exchange rate forecasting framework is also used for assessing the relative merits of the official Simple Sum and the weighted Divisia measures of money. Overall, there are four main findings. First, the majority of the models with fundamentals are able to beat the RW model in forecasting the UK/US exchange rate. Second, the most accurate forecasts of the UK/US exchange rate are obtained with a nonlinear model. Third, taking into account structural breaks reveals that the Divisia aggregate performs better than its Simple Sum counterpart. Finally, Divisia-based models provide more accurate forecasts than Simple Sum-based models provided they are constructed within a nonlinear framework.

Reductions of peak-to-average power ratio and optical beat interference in cost-effective OFDMA-PONs

The peak-to-average power ratio (PAPR) and optical beat interference (OBI) effects are examined thoroughly in orthogonal frequency-division multiplexing access (OFDMA)-passive optical networks (PONs) at a signal bit rate up to ∼ 20 Gb/s per channel using cost-effective intensity-modulation and direct-detection (IM/DD). Single-channel OOFDM and upstream multichannel OFDM-PONs are investigated for up to six users. A number of techniques for mitigating the PAPR and OBI effects are presented and evaluated including adaptive-loading algorithms such as bit/power-loading, clipping for PAPR reduction, and thermal detuning (TD) for the OBI suppression. It is shown that the bit-loading algorithm is a very efficient PAPR reduction technique by reducing it at about 1.2 dB over 100 Km of transmission. It is also revealed that the optimum method for suppressing the OBI is the TD + bit-loading. For a targeted BER of 1 × 10-3, the minimum allowed channel spacing is 11 GHz when employing six users. © 2013 Springer Science+Business Media New York.