Woodford (1999) develops the notion of a “timelessly optimal” pre-commitment policy. This paper uses a simple business cycle model to illustrate this notion. We show that timelessly optimal policies are not unique and that they are not necessarily better than the time-consistent solution. Further, we describe a method for constructing optimal precommitment rules in an environment where the poli...

This paper presents techniques to solve for optimal simple monetary policy rules in rational expectations models. Both the pre-commitment and the discretionary solutions are considered. The techniques described are notable for the flexibility they provide over the structure of the policy rule being solved for. Specifically, not all state variables need enter the rule. This allows rules optimal,...

The integration of renewable energy sources in the electricity production mix has an important impact on the management of the electricity grid, due to their intermittency. In particular, there is a rising need for flexibility, both on the supply and demand sides. This paper assesses the amount of flexibility that could be reserved from a set of flexible residential heat pumps in a given geogra...

We examine an alternative and equivalent Black and Litterman [1992] formula using classical multivariate analysis which is easier to interpret and which allows more general view formulations than the original formula. Specifically, the equivalent formula provides more intuitive explanation under the limiting case of deterministic views, and it is also easier to show that the resulting optimal p...

in this paper, based on error correction model by using panel data, an empirical analysis of demand for international reserves for 16 islamic countries is investigated. besides addressing conventional issues, the model explicitly incorporates the impact of expected export revenues and the impact of the exchange rate system on reserve demand. the results reveal that, short run money market diseq...

Recent changes in the operation and planning of power systems have been motivated by the introduction of Distributed Generation (DG) and Demand Response (DR) in the competitive electricity markets’ environment, with deep concerns at the efficiency level. In this context, grid operators, market operators, utilities and consumers must adopt strategies and methods to take full advantage of demand ...

This paper solves reliability constrained unit commitment problem (UCP) for a composite power system network using network equivalent technique. Here, the integration of generation and transmission system reliability forms a composite power system model. The inclusion of load forecast uncertainty for the solution of unit commitment problem will give more accurate assessment of spinning reserve ...

Does capital-embodied technological change play an important role in shaping labor market outcomes? To address this question, we develop a model with vintage capital and search-matching frictions where irreversible investment in new vintages of capital creates heterogeneity in productivity among both vacant and matched firms. We demonstrate that capital-embodied technological change reduces lab...

Many of the lessons from foreign direct investment (FDI) research on manufacturing and extractive resource industries are applicable to FDI research on the financial sector. This paper summarizes the main findings and policy themes of FDI research, with a primary focus on the implications of FDI for host countries, especially emerging market economies. I review evidence of technology transfers,...

O n Tuesday, September 16, 2008, the day after Lehman Brothers …led for bankruptcy, the Reserve Primary Fund, a large prime money market fund, announced that it would not be able to redeem investors’funds one for one. The fund had “broken the buck”mainly due to losses on its holdings of Lehman’s debt instruments. In the days that followed, out‡ows from prime money funds spiked, with investors w...