Firm-Specific Investment, Sticky Prices, and the Taylor Principle

According to the Taylor principle a central bank should adjust the nominal interest rate by more than one-for-one in response to changes in current inflation. Most of the existing literature supports the view that by following this simple recommendation a central bank can avoid being a source of unnecessary fluctuations in economic activity. The present paper shows that this conclusion is not robust with respect to the modelling of capital accumulation. We use our insights to discuss the desirability of alternative interest rate rules. Our results suggest a reinterpretation of monetary policy under Volcker and Greenspan: The empirically plausible characterization of monetary policy can explain the stabilization of macroeconomic outcomes observed in the early eighties for the US economy. The Taylor principle in itself cannot.

The pattern of health care use of older prisoners in Switzerland.

Introduction: Population ageing is a worldwide phenomenon that forces us to make radical changes on multiple levels of society. So far, studies have concluded that the health, both physical and mental, of prisoners in general and older prisoners in particular is worse than that of the general population. Prisoners are reported to age faster as compared to adults in the community. However, to date, very little is known about the actual healthcare conditions of older prisoners and almost no substantial knowledge is available concerning their patterns of healthcare use. Method: A quantitative study was conducted in four prisons for male prisoners in Switzerland, including two open and two closed prisons situated in different cantons. In this study, medical records of older prisoners (50+) were obtained from the respective authority upon consent and total anonymity was ensured. Data gathered from all available medical records included basic demographic information, education and prison sentencing. Healthcare data obtained were extensive in nature encompassing data related to illness types, number of visits to different health care providers and hospitals. The corresponding reasons for visits and outcomes of these visits were extracted. All data are analysed using statistical software SPSS 20.0. Results: Data were extracted for a total of 50 older prisoners living in Switzerland. The chosen prisons are located in German-speaking cantons. Preliminary results show that the age average was 56 years. For more than half, this was their first imprisonment. Nevertheless, a third of them were sentenced to measures (Art. 64 Swiss Criminal Code) which means that the length of the detention is indefinite and while release is possible it is in most cases not very likely. This entails that these prisoners will grow old in prison and some will even spend their remaining years there. Concerning their health, a third of the sample reported respiratory and cardiovascular illnesses and half reported suffering from some form of musculoskeletal related pain. Older prisoners were prescribed on average only 3.5 medications, which is significantly fewer than the number of medication prescribed to younger prisoners, whose data were also sampled. Conclusion: Access to healthcare is a right given to all prisoners through the principle of equivalence which is generally exercised in Switzerland. Prisoners growing old in prison will represent a challenge for prison health care services.

Hemoglobin enhances the biological activity of synthetic and natural bacterial (endotoxic) virulence factors: a general principle.

Although hemoglobin (Hb) is mainly present in the cytoplasm of erythrocytes (red blood cells), lower concentrations of pure, cell-free Hb are released permanently into the circulation due to an inherent intravascular hemolytic disruption of erythrocytes. Previously it was shown that the interaction of Hb with bacterial endotoxins (lipopolysaccharides, LPS) results in a significant increase of the biological activity of LPS. There is clear evidence that the enhancement of the biological activity of LPS by Hb is connected with a disaggregation of LPS. From these findings one questions whether the property to enhance the biological activity of endotoxin, in most cases proven by the ability to increase the cytokine (tumor-necrosis-factor-alpha, interleukins) production in human mononuclear cells, is restricted to bacterial endotoxin or is a more general principle in nature. To elucidate this question, we investigated the interaction of various synthetic and natural virulence (pathogenicity) factors with hemoglobin of human or sheep origin. In addition to enterobacterial R-type LPS a synthetic bacterial lipopeptide and synthetic phospholipid-like structures mimicking the lipid A portion of LPS were analysed. Furthermore, we also tested endotoxically inactive LPS and lipid A compounds such as those from Chlamydia trachomatis. We found that the observations made for endotoxically active form of LPS can be generalized for the other synthetic and natural virulence factors: In every case, the cytokine-production induced by them is increased by the addition of Hb. This biological property of Hb is connected with its physical property to convert the aggregate structures of the virulence factors into one with cubic symmetry, accompanied with a considerable reduction of the size and number of the original aggregates.

Ratio maps and correspondence analysis

We compare two methods for visualising contingency tables and developa method called the ratio map which combines the good properties of both.The first is a biplot based on the logratio approach to compositional dataanalysis. This approach is founded on the principle of subcompositionalcoherence, which assures that results are invariant to considering subsetsof the composition. The second approach, correspondence analysis, isbased on the chi-square approach to contingency table analysis. Acornerstone of correspondence analysis is the principle of distributionalequivalence, which assures invariance in the results when rows or columnswith identical conditional proportions are merged. Both methods may bedescribed as singular value decompositions of appropriately transformedmatrices. Correspondence analysis includes a weighting of the rows andcolumns proportional to the margins of the table. If this idea of row andcolumn weights is introduced into the logratio biplot, we obtain a methodwhich obeys both principles of subcompositional coherence and distributionalequivalence.

Equivalence of piecewise-linear approximation and Lagrangian relaxation for network revenue management

The network revenue management (RM) problem arises in airline, hotel, media,and other industries where the sale products use multiple resources. It can be formulatedas a stochastic dynamic program but the dynamic program is computationallyintractable because of an exponentially large state space, and a number of heuristicshave been proposed to approximate it. Notable amongst these -both for their revenueperformance, as well as their theoretically sound basis- are approximate dynamic programmingmethods that approximate the value function by basis functions (both affinefunctions as well as piecewise-linear functions have been proposed for network RM)and decomposition methods that relax the constraints of the dynamic program to solvesimpler dynamic programs (such as the Lagrangian relaxation methods). In this paperwe show that these two seemingly distinct approaches coincide for the network RMdynamic program, i.e., the piecewise-linear approximation method and the Lagrangianrelaxation method are one and the same.

On some geometry and equivalence classes of normal form games

Equivalence classes of normal form games are defined using the geometryof correspondences of standard equilibiurm concepts like correlated, Nash,and robust equilibrium or risk dominance and rationalizability. Resultingequivalence classes are fully characterized and compared across differentequilibrium concepts for 2 x 2 games. It is argued that the procedure canlead to broad and game-theoretically meaningful distinctions of games aswell as to alternative ways of viewing and testing equilibrium concepts.Larger games are also briefly considered.

Firm-specific investment, sticky prices and the Taylor principle

According to the Taylor principle a central bank should adjust the nominal interest rate by more than one-for-one in response to changes in current inflation. Most of the existing literature supports the view that by following this simple recommendation a central bank can avoid being a source of unnecessary fluctuations in economic activity. The present paper shows that this conclusion is not robust with respect to the modelling of capital accumulation. We use our insights to discuss the desirability of alternative interest raterules. Our results suggest a reinterpretation of monetary policy under Volcker and Greenspan: The empirically plausible characterization of monetary policy can explain the stabilization of macroeconomic outcomes observed in the early eighties for the US economy. The Taylor principle in itself cannot.

On the receiver pays principle

This paper extends the theory of network competition betweentelecommunications operators by allowing receivers to derive a surplusfrom receiving calls (call externality) and to affect the volume ofcommunications by hanging up (receiver sovereignty). We investigate theextent to which receiver charges can lead to an internalization of thecalling externality. When the receiver charge and the termination(access) charge are both regulated, there exists an e±cient equilibrium.Effciency requires a termination discount. When reception charges aremarket determined, it is optimal for each operator to set the prices foremission and reception at their off-net costs. For an appropriately chosentermination charge, the symmetric equilibrium is again effcient. Lastly,we show that network-based price discrimination creates strong incentivesfor connectivity breakdowns, even between equal networks.

The second law of thermodynamics and the global climate system : A review of the maximum entropy production principle

The long-term mean properties of the global climate system and those of turbulent fluid systems are reviewed from a thermodynamic viewpoint. Two general expressions are derived for a rate of entropy production due to thermal and viscous dissipation (turbulent dissipation) in a fluid system. It is shown with these expressions that maximum entropy production in the Earth s climate system suggested by Paltridge, as well as maximum transport properties of heat or momentum in a turbulent system suggested by Malkus and Busse, correspond to a state in which the rate of entropy production due to the turbulent dissipation is at a maximum. Entropy production due to absorption of solar radiation in the climate system is found to be irrelevant to the maximized properties associated with turbulence. The hypothesis of maximum entropy production also seems to be applicable to the planetary atmospheres of Mars and Titan and perhaps to mantle convection. Lorenz s conjecture on maximum generation of available potential energy is shown to be akin to this hypothesis with a few minor approximations. A possible mechanism by which turbulent fluid systems adjust themselves to the states of maximum entropy production is presented as a selffeedback mechanism for the generation of available potential energy. These results tend to support the hypothesis of maximum entropy production that underlies a wide variety of nonlinear fluid systems, including our planet as well as other planets and stars

Dimensional reduction and gauge group reduction in Bianchi-type cosmology

In this paper we examine in detail the implementation, with its associated difficulties, of the Killing conditions and gauge fixing into the variational principle formulation of Bianchi-type cosmologies. We address problems raised in the literature concerning the Lagrangian and the Hamiltonian formulations: We prove their equivalence, make clear the role of the homogeneity preserving diffeomorphisms in the phase space approach, and show that the number of physical degrees of freedom is the same in the Hamiltonian and Lagrangian formulations. Residual gauge transformations play an important role in our approach, and we suggest that Poincaré transformations for special relativistic systems can be understood as residual gauge transformations. In the Appendixes, we give the general computation of the equations of motion and the Lagrangian for any Bianchi-type vacuum metric and for spatially homogeneous Maxwell fields in a nondynamical background (with zero currents). We also illustrate our counting of degrees of freedom in an appendix.

Equivalence of reduced, Polyakov, Faddeev-Popov, and Faddeev path-integral quantization of gauge theories

A geometrical treatment of the path integral for gauge theories with first-class constraints linear in the momenta is performed. The equivalence of reduced, Polyakov, Faddeev-Popov, and Faddeev path-integral quantization of gauge theories is established. In the process of carrying this out we find a modified version of the original Faddeev-Popov formula which is derived under much more general conditions than the usual one. Throughout this paper we emphasize the fact that we only make use of the information contained in the action for the system, and of the natural geometrical structures derived from it.