Do Households Have Rational Expectations on Future Consumption? Evidence from the Finnish Consumer Survey

Ever since its initial introduction some fifty years ago, the rational expectations paradigm has dominated the way economic theory handles uncertainty. The main assertion made by John F. Muth (1961), seen by many as the father of the paradigm, is that expectations of rational economic agents should essentially be equal to the predictions of relevant economic theory, since rational agents should use information available to them in an optimal way. This assumption often has important consequences on the results and interpretations of the models where it is applied. Although the rational expectations assumption can be applied to virtually any economic theory, the focus in this thesis is on macroeconomic theories of consumption, especially the Rational Expectations–Permanent Income Hypothesis proposed by Robert E. Hall in 1978. The much-debated theory suggests that, assuming that agents have rational expectations on their future income, consumption decisions should follow a random walk, and the best forecast of future consumption level is the current consumption level. Then, changes in consumption are unforecastable. This thesis constructs an empirical test for the Rational Expectations–Permanent Income Hypothesis using Finnish Consumer Survey data as well as various Finnish macroeconomic data. The data sample covers the years 1995–2010. Consumer survey data may be interpreted to directly represent household expectations, which makes it an interesting tool for this particular test. The variable to be predicted is the growth of total household consumption expenditure. The main empirical result is that the Consumer Confidence Index (CCI), a balance figure computed from the most important consumer survey responses, does have statistically significant predictive power over the change in total consumption expenditure. The history of consumption expenditure growth itself, however, fails to predict its own future values. This indicates that the CCI contains some information that the history of consumption decisions does not, and that the consumption decisions are not optimal in the theoretical context. However, when conditioned on various macroeconomic variables, the CCI loses its predictive ability. This finding suggests that the index is merely a (partial) summary of macroeconomic information, and does not contain any significant private information on consumption intentions of households not directly deductible from the objective economic variables. In conclusion, the Rational Expectations–Permanent Income Hypothesis is strongly rejected by the empirical results in this thesis. This result is in accordance with most earlier studies conducted on the topic.

An Axiom of Military Law : Applicability of National Criminal Law to Military Personnel and Associated Civilians Abroad

States regularly deploy elements of their armed forces abroad. When that happens, the military personnel concerned largely remain governed by the penal law of the State that they serve. This extraterritorial extension of national criminal law, which has been treated as axiomatic in domestic law and ignored by international law scholarship, is the subject of this dissertation. The first part of the study considers the ambit of national criminal law without any special regard to the armed forces. It explores the historical development of the currently prevailing system of territorial law and looks at the ambit that national legal systems claim today. Turning then to international law, the study debunks the oddly persistent belief that States enjoy a freedom to extend their laws to extraterritorial conduct as they please, and that they are in this respect constrained only by some specific prohibitions in international law. Six arguments historical, empirical, ideological, functional, doctrinal and systemic are advanced to support a contrary view: that States are prohibited from extending the reach of their legal systems abroad, unless they can rely on a permissive principle of international law for doing so. The second part of the study deals specifically with State jurisdiction in a military context, that is to say, as applied to military personnel in the strict sense (service members) and various civilians serving with or accompanying the forces (associated civilians). While the status of armed forces on foreign soil has transformed from one encapsulated in the customary concept of extraterritoriality to a modern regulation of immunities granted by treaties, elements of armed forces located abroad usually do enjoy some degree of insulation from the legal system of the host State. As a corollary, they should generally remain covered by the law of their own State. The extent of this extraterritorial extension of national law is revealed in a comparative review of national legislation, paying particular attention to recent legal reforms in the United States and the United Kingdom two states that have sought to extend the scope of their national law to cover the conduct of military contractor personnel. The principal argument of the dissertation is that applying national criminal law to service members and associated civilians abroad is distinct from other extraterritorial claims of jurisdiction (in particular, the nationality principle or the protective principle of jurisdiction). The service jurisdiction over the armed forces has a distinct aim: ensuring the coherence and indivisibility of the forces and maintaining discipline. Furthermore, the exercise of service jurisdiction seeks to reduce the chances of the State itself becoming internationally liable for the conduct of its service members and associated civilians. Critically, the legal system of the troop-deploying State, by extending its reach abroad, seeks to avoid accountability gaps that might result from immunities from host State law.

An online-implementable differential evolution tuned all-aspect guidance law

This paper proposes a differential evolution based method of improving the performance of conventional guidance laws at high heading errors, without resorting to techniques from optimal control theory, which are complicated and suffer from several limitations. The basic guidance law is augmented with a term that is a polynomial function of the heading error. The values of the coefficients of the polynomial are found by applying the differential evolution algorithm. The results are compared with the basic guidance law, and the all-aspect proportional navigation laws in the literature. A scheme for online implementation of the proposed law for application in practice is also given. (c) 2010 Elsevier Ltd. All rights reserved.

Deformation dynamics of SS-316 Between 1023-K TO 1223-K In The Framework of Cottrell-Stokes Law

Kocks' formalism for analysing steady state deformation data for the case where Cottrell-Stokes law is valid is extended to incorporate possible back stresses from solution and/or precipitation hardening, and dependence of pre-exponential factor on the applied stress. A simple graphical procedure for exploiting these equations is demonstrated by analyzing tensile steady state data for a type 316 austentic stainless steel for the temperature range 1023 to 1223 K. In this instance, the computed back stress values turned out to be negative, a physically meaningless result. This shows that for SS 316, deformation in this temperature regime can not be interpreted in terms of a mechanism that obeys Cottrell-Stokes law.

The Role of Electronic Word of Mouth in Shaping Consumer Attitudes

The purpose of this research was to investigate the role of electronic word of mouth (eWOM) in shaping consumer attitudes towards various products and services with concentration on the consumer attitude change. eWOM has long been proven to play an important role in influencing consumer attitudes and has been researched from a variety of perspectives. This study attempts to look deeper into the process of consumer attitude change by applying as the central theory of the study the Elaboration Likelihood Model of Persuasion by Petty and Cacioppo. In the processes of examining the background academic and empirical research the Internet and Web 2.0 are closely depicted in order to understand how throughout the past centuries technology allowed the rise of various mediums where consumers can not only share their opinions online about products and services but also communicate with other consumers. Manuel Castel’s Internet Galaxy, Gildin’s, Carl and Noland’s, Hennig-Thurau, Gwinner, Walsh and Gremler’s researches on eWOM are the central works that helped to shape both the theoretical and empirical parts of this study. The mixed method approach was chosen as a research method for this study. An online survey was conducted via the Surveymonkey.com platform and eight qualitative in-depth interviews were conducted. The results of the study show that central route queues as text quality and text argumentativeness are more prominent among the research subjects and the peripheral route queues: source credibility and source expertise did not show considerable significance. Also more experience and participation consumers have with user-rating websites and applications more inclined they are to elaborate on the central route cues and are more likely to search for opinions that they consider rational and credible. Also these respondents are less inclined to search for ratings that confirm their existing beliefs about products or services. Less experience/participation they have about eWOM more likely they are to search for reviews confirmatory to their own.

Combined convection in power-law fluids along a nonisothermal vertical plate in a porous medium

The problem of combined convection from vertical surfaces in a porous medium saturated with a power-law type non-Newtonian fluid is investigated. The transformed conservation laws are solved numerically for the case of variable surface heat flux conditions. Results for the details of the velocity and temperature fields as well as the Nusselt number have been presented. The viscosity index ranged from 0.5 to 2.0.

Generalization of Abrams' law

Considering cement based composites as chemically bonded ceramics (CBC) the consequent strength development with age is essentially a constant volume solidification process, such that the hydrated gel particles fill the space resulting in the compatible gel space ratios. Analysis has been done of the extensively used graphical method of mix design (British method of mix design) i.e., the relation between the compressive strength and the free water - cement ratio. By considering the strength (S) at w/c 0.5 (S-0.5) as the reference state to reflect the synergetic effects between constituents of concrete a generalized relationship obtained is of the form {S/S-0.5} = a + b {1/(w/c)}.

Free convection in power-law fluids near a three-dimensional stagnation point

Numerical results are presented for the free-convection boundary-layer equations of the Ostwald de-Waele non-Newtonian power-law type fluids near a three-dimensional (3-D) stagnation point of attachment on an isothermal surface. The existence of dual solutions that are three-dimensional in nature have been verified by means of a numerical procedure. An asymptotic solution for very large Prandtl numbers has also been derived. Solutions are presented for a range of values of the geometric curvature parameter c, the power-law index n, and the Prandtl number Pr.

Recommendations for driver licensing and traffic law enforcement in India aiming to improve road safety

During the last decade, developing countries such as India have been exhibiting rapid increase in human population and vehicles, and increase in road accidents. Inappropriate driving behaviour is considered one of the major causes of road accidents in India as compared to defective geometric design of pavement or mechanical defects in vehicles. It can result in conditions such as lack of lane discipline, disregard to traffic laws, frequent traffic violations, increase in crashes due to self-centred driving, etc. It also demotivates educated drivers from following good driving practices. Hence, improved driver behaviour can be an effective countermeasure to reduce the vulnerability of road users and inhibit crash risks. This article highlights improved driver behaviour through better driver education, driver training and licensing procedures along with good on-road enforcement; as an effective countermeasure to ensure road safety in India. Based on the review and analysis, the article also recommends certain measures pertaining to driver licensing and traffic law enforcement in India aimed at improving road safety.