Asset-price bubbles challenge the explanatory and predictive power of standard economic theory, suggesting that neuroeconomic measures should be explored as potential tools for improving the predictive power of standard theory. We begin this exploration by reviewing results from functional magnetic resonance imaging (fMRI) studies of lab asset-price bubbles and herding behavior (i.e., following...

In this paper the authors develop and investigate the dynamic behavior of a non-linear macro-dynamic model. In particular, the authors take the ongoing financial crisis as the motivation to study stabilization policy options, since the current financial crisis has underscored once again the importance of the financial sector in the business cycle. The theoretical framework is a Keynesian busine...

A recent strategy carried out by the aircraft industry to reduce the total cost of the new generation fighters has consisted in the development of a single airframe with different technical and operational specifications. This strategy has been designed to reduce costs in the Research, Design and Development phase with the ultimate objective of reducing the final unit price per aircraft. This i...

In estimating the cost-effectiveness of diagnostic procedures, it is helpful to treat diagnostic information as a commodity with a unit price. The amount of useful information provided by a test result can be measured in binary units (bits), and the unit price of the information produced by the test result can be expressed in dollars per bit in much the same way that the price of gold is given ...

A widespread and successful approach to tackle unit-commitment problems is constraint decomposition: by dualizing the linking constraints, the large-scale nonconvex problem decomposes into smaller independent subproblems. The dual problem consists then in finding the best Lagrangian multiplier (the optimal“price”); it is solved by a convex nonsmooth optimization method. Realistic modeling of te...

Using time series data over the past four decades, 1960s-1990s, this paper examines rice pricing policies in Thailand, Indonesia, and the Philippines. It analyzes the determinants of the paths along which these policies have moved. While this analysis confirms the findings of previous analyses, that price stabilization has been a major policy achievement, it also reveals that stabilization was ...

A modification of Chung and Fuchs’ (Mem. Amer. Math. Soc., 6 (1951), pp. 1-12) recurrence theorem for random walks leads to an analogous result for a different discrete parameter Markov process. This latter process is applicable to an analysis of price stabilization programs involving purchases and sales from a buffer stock. 1. The stochastic model. By means of the following stochastic model, S...

a r t i c l e i n f o According to empirical studies, speculators place significant orders in commodity markets and may cause bubbles and crashes. This paper develops a cobweb-like commodity market model that takes into account the behavior of technical and fundamental speculators. We show that interactions between consumers, producers and heterogeneous speculators may produce price dynamics wh...

Blanchard (2005) suggested that active interest rate policy might induce unstable dynamics in highly-indebted economies. We examine this in a dynamic general equilibrium model where Calvo-type price rigidities provide a rationale for inflation stabilization. Unstable dynamics can occur when the CB is aggressively raising the interest rate in response to higher expected inflation. The constraint...