Admissible monetary aggregates for the Euro area

We use the Fleissig and Whitney (2003) weak separability test to determine admissible levels of monetary aggregation for the Euro area. We find that the Euro area monetary assets in M2 and M3 are weakly separable and construct admissible Divisia monetary aggregates for these assets. We evaluate the Divisia aggregates as indicator variables, building on Nelson (2002), Reimers (2002), and Stracca (2004). Specifically, we show that real growth of the admissible Divisia aggregates enter the Euro area IS curve positively and significantly for the period from 1980 to 2005. Out of sample, we show that Divisia M2 and M3 appear to contain useful information for forecasting Euro area inflation.

Admissible monetary aggregates for the euro area

We use the Fleissig and Whitney [Fleissig, A.R., Whitney, G.A., 2003. A new PC-based test for Varian's weak separability conditions. Journal of Business and Economics Statistics 21 (1), 133–144] weak separability test to determine admissible levels of monetary aggregation for the Euro area. We find that the Euro area monetary assets in M2 and M3 are weakly separable and construct admissible Divisia monetary aggregates for these assets. We show that real growth of the admissible Divisia aggregates enters the Euro area IS curve positively and significantly for the period from 1980 to 2005. Out of sample, we show that Divisia M2 and M3 appear to contain useful information for forecasting Euro area inflation.

Manifold learning and the quantum Jensen-Shannon divergence kernel

The quantum Jensen-Shannon divergence kernel [1] was recently introduced in the context of unattributed graphs where it was shown to outperform several commonly used alternatives. In this paper, we study the separability properties of this kernel and we propose a way to compute a low-dimensional kernel embedding where the separation of the different classes is enhanced. The idea stems from the observation that the multidimensional scaling embeddings on this kernel show a strong horseshoe shape distribution, a pattern which is known to arise when long range distances are not estimated accurately. Here we propose to use Isomap to embed the graphs using only local distance information onto a new vectorial space with a higher class separability. The experimental evaluation shows the effectiveness of the proposed approach. © 2013 Springer-Verlag.