Parameterized expectations approach; Some practical issues

We discuss some practical issues related to the use of the Parameterized Expectations Approach (PEA) for solving non-linear stochastic dynamic models with rational expectations. This approach has been applied in models of macroeconomics, financial economics, economic growth, contracttheory, etc. It turns out to be a convenient algorithm, especially when there is a large number of state variables and stochastic shocks in the conditional expectations. We discuss some practical issues having to do with the application of the algorithm, and we discuss a Fortran program for implementing the algorithm that is available through the internet.We discuss these issues in a battery of six examples.

Iowa Commission on Volunteer Service, Fiscal Year 2006 Annual Report

Annual Report

La "guerre des talents" est-elle perdue d'avance? Attirer et fidéliser les salariés par les valeurs du service public

L'idée selon laquelle les organisations productives se trouvent en concurrence pour attirer à elles les meilleurs salariés est aujourd'hui très largement répandue, que ce soit parmi les dirigeants, dans la presse, ou même dans les manuels de management. Dès lors, la guerre des talents paraît inéluctable. C'est oublier toutefois que les salariés, qu'ils travaillent dans le secteur public ou privé par ailleurs, ne sont pas uniquement mus par des considérations utilitaristes, rationnelles et matérielles. Ils ne visent pas avant tout à vendre leurs talents, pour autant qu'ils soient conscients qu'ils en possèdent, mais plutôt à travailler dans un environnement organisationnel en accord avec les valeurs auxquelles ils croient et auxquelles ils sont attachés. Les aspects matériels du travail ont de l'importance, à n'en pas douter, mais les dimensions idéelles et valorielles ont souvent été sous-estimées dans la littérature scientifique contemporaine. Cet article a pour ambition de montrer que les valeurs doivent être réintroduites dans l'analyse des processus motivationnels des salariés. Grâce à la notion de « motivation à l'égard du service public » (MSP) nous montrons que les agents publics sont attachés à des missions, objectifs et valeurs qui définissent en partie leurs activités professionnelles. L'étude empirique se base sur un important échantillon d'agents publics municipaux et cantonaux suisses et analyse les antécédents et les résultats de la MSP. Les enseignements qui en découlent suggèrent que, si guerre des talents il doit y avoir, alors les valeurs compteront elles aussi.

Catholic Loyalism, Service and Careerism: Lewes Lewkenor's Quest for Favour

This article discusses one of Lewkenor's more obscure works, The Resolved Gentleman (1594 - STC 15139), in the context of Elizabethan court politics in the 1590s, with a particular emphasis on the author's own experience of dissent, exile to Catholic Spain in the 1580s and return to England in the early 1590s. A translation of Hernando de Acuña's El Caballero Determinado, itself a reworking of Olivier de la Marche's Chevalier Délibéré (1483), the Resolved Gentleman bends the conventions of medieval chivalric allegory to articulate Lewkenor's own experience of alienation and dissent in the specific context of the factionalism of the 1590s. Beneath Lewkenor's seemingly self-effacing, 'humanist' translation it is in fact possible to discern a complex set of criticisms of Elizabeth's court. The knight's 'wandering' and 'errance' thus becomes a complex, multivalent figure that reverberates with a number of autobiographical meanings: the knight's exile becomes in Lewkenor's hands a figure of his own forced exile to Catholic Spain, and the account of the knight's quest functions as an oblique allusion to his own efforts to make his way back to Elizabeth's court. More importantly, however, these 'personal' meanings acquire a wider, political valence in the context of the allegory, and the narrative as a whole thus becomes a subtle, perceptive but scathing criticism of the Elizabethan court in the 1590's and the 'contraction' of royal favour that resulted in particular in the exclusion of capable, experienced but Catholic counsellors like Lewkenor himself. Articulating the frustration of this younger generation of alienated but fundamentally loyalist Catholics, Lewkenor paints a picture of a failed quest for favour, where the questing knight is finally forced to retire from the active life and withdraw to a rustic hermitage that is not only incompatible with his own ideal of the vita activa, but also dangerously smacks of unregenerate, and potentially seditious Catholicism.

Speculation, risk premia and expectations in the yield curve

An affine asset pricing model in which traders have rational but heterogeneous expectations aboutfuture asset prices is developed. We use the framework to analyze the term structure of interestrates and to perform a novel three-way decomposition of bond yields into (i) average expectationsabout short rates (ii) common risk premia and (iii) a speculative component due to heterogeneousexpectations about the resale value of a bond. The speculative term is orthogonal to public informationin real time and therefore statistically distinct from common risk premia. Empirically wefind that the speculative component is quantitatively important accounting for up to a percentagepoint of yields, even in the low yield environment of the last decade. Furthermore, allowing for aspeculative component in bond yields results in estimates of historical risk premia that are morevolatile than suggested by standard Affine Gaussian term structure models which our frameworknests.

Solving non-linear stochastic models by parameterizing expectations: An application to asset pricing with production

A new algorithm called the parameterized expectations approach(PEA) for solving dynamic stochastic models under rational expectationsis developed and its advantages and disadvantages are discussed. Thisalgorithm can, in principle, approximate the true equilibrium arbitrarilywell. Also, this algorithm works from the Euler equations, so that theequilibrium does not have to be cast in the form of a planner's problem.Monte--Carlo integration and the absence of grids on the state variables,cause the computation costs not to go up exponentially when the numberof state variables or the exogenous shocks in the economy increase. \\As an application we analyze an asset pricing model with endogenousproduction. We analyze its implications for time dependence of volatilityof stock returns and the term structure of interest rates. We argue thatthis model can generate hump--shaped term structures.

Improving Transition Outcomes: Resource Mapping Workshop: Service Matrix

Resource Mapping tool from the Improving Transition Outcomes Resource Mapping Workshops

Improving Transition Outcomes: Resource Mapping Workshop: Service Provider Survey

Service provider survey tool from the Improving Transition Outcomes Resource Mapping Workshops

The Effect of Teacher Expectations on Student Achievement: Does The Pygmalion Effect Hold True for Cape Verde?

The present study is about the relationship between teacher expectations and student achievement. Do teachers have the power to influence student achievement? This is the question at hand. Are students under the influence of their teachers in regards to how they perceive themselves as achievers and ultimately how well they perform? What are the other factors that come into play when assessing student’s academic achievement? In light of the literature written on this topic, the two most prevalent theories are (1) Pygmalion in the Class and (2) The Sustaining Effect. These theories show a direct and determinant relationship between teacher expectations and student achievement. The main objective of this study was to investigate if in Cape Verde, teachers follow the same trend. Responses to teacher and student surveys carried out at Domingos Ramos High School gave revealing insights into how Capeverdean teachers view their students and the role the teachers themselves play in supporting the studen’s academic performance. Is the teacher’s expectation of their students the last word? In general, teachers do have a powerful influence on their students for good or for bad, but the key questions are: (1) are they aware of this power and (2) how well do they manage it? This paper includes an in-depth discussion on the different factors that influence student achievement and research carried out at an urban secondary school which characterizes how teachers and students view their roles in the student’s academic success. Recommendations are also provided to assist teachers in managing their expectations to maximize their role as a positive contributor to the success of their students.