time variation in the inflation passthrough of energy prices from bayesian estimates of a vector autoregression var which allows for both coefficient drift and stochastic volatility we obtain the following three results first beginning in approximately 1975 the responsiveness of core inflation to changes in energy prices in the united states fell rapidly and remains muted second this decline in the passthrough of energy inflation to core prices has been sustained through a recent period of markedly higher volatility of shocks to energy inflation finally reduced energy inflation passthrough has persisted in the face of monetary policy which quickly became less responsive to energy inflation starting around 1985

multiple round timber auction design and simulation this paper presents a multiple round timber auction simulation developed in order to study various configurations of auction design in this study simultaneous sequential timber auctions are modelled and analysed using agent based simulation technology as there are many individual items in the auction to be sold the auction designer defines several rounds that are sequential at pre defined intervals at each round the auction designer announces several simultaneous auctions since bidders are offered different items at each round a mathematical linear programing model for selecting the best set of items to bid for is presented different bidding patterns are simulated and compared in various setup configurations the most advanced of these strategies are adaptive and use agent learning capability the comparisons include the success rate of winning the auction and the winning price per m3 this study suggests an efficient bidding pattern for bidders to bid in order to achieve to their goal and increase their profit similarly in order to increase profit the auctioneer i e the government needs to control several auction parameters including the number of auctions per year the lot size the auction periodicity and the number of bidders this study also suggests parameters configurations that to maximise revenue for the auctioneer

the allocation and effectiveness of china s r d subsidies evidence from listed firms abstract in this study we investigate the allocation of china s r d subsidies and their effectiveness in stimulating business r d investments for the population of chinese listed firms between 2001 and 2006 with respect to subsidy allocation we find that firm selection is mainly determined by prior grants high quality inventions and minority state ownership market oriented provincial governments distribute grants less frequently and firms located in developed provinces receive grants more often considering effectiveness r d subsidies instantaneously crowd out business r d investment but are neutral in later periods in 2006 one public rmb reduces business r d investments by half an rmb however crowding out is not prevalent for repeated recipients of r d subsidies high tech firms and minority state owned firms

learning to bid the design of auctions under uncertainty and adaptation we examine auction design in a context where symmetrically informed adaptive agents with common valuations learn to bid for a good despite the absence of private valuations asymmetric information or risk aversion bidder strategies do not converge to the bertrand nash equilibrium strategies even in the long run deviations from equilibrium strategies depend on uncertainty regarding the value of the good auction structure the agents learning model and the number of bidders although individual agents learn nash bidding strategies in isolation the learning of each agent by flattening the best reply correspondence of other agents blocks common learning these negative externalities are more severe in second price auctions auctions with many bidders and auctions where the good has an uncertain value ex post

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

oil and the euro area economy we examine the macroeconomic effects of different types of oil shocks and the oil transmission mechanism in the euro area a comparison is made with the us and across individual member countries first we find that the underlying source of the oil price shift is crucial to determine the repercussions on the economy and the appropriate monetary policy reaction second the transmission mechanism is considerably different compared to the us in particular inflationary effects in the us are mainly driven by a strong direct pass through of rising energy prices and indirect effects of higher production costs in contrast euro area inflation reacts sluggishly and is much more driven by second round effects of increasing wages the monetary policy reaction of the ecb to oil shocks is also strikingly different compared to the fed the inflation objective relative to the output stabilization objective appears more important for euro area monetary authorities than for the fed third there are substantial asymmetries across member countries these differences are due to different labour market dynamics which are further aggravated by a common monetary policy stance which does not fit all gert peersman and ine van robays

the influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market in this paper we test some hypotheses about the formation of prices through sequential bilateral bargaining on a perishable goods market under the assumption of behavioural learning by buyers and sellers we constructed a multi agent simulation model based on a survey concerning the fruit and vegetables market in marseille france in our model the agents bargain the price of a perishable good the representation of agents rationality is inspired by a literature relative to markets of perishable goods kirman 6 7 and rouchier 18 19 20 as well as on artificial bargaining brenner 2 weisbuch 22 we study the influence of three parameters the sellers initial beliefs concerning the buyers willingness to pay the time spent by buyers on the market and the heterogeneity in the sellers limit value on the evolution of prices and of agents representations of others agents we compare our results with empirical observations and some existing literature on bargaining we find that our assumptions concerning the learning process give consistent results and lead the transactions prices to converge toward the sellers limit value

oil price pass through into inflation abstract this paper uses data from 19 industrialized countries to investigate oil price pass through into inflation across countries and over time a time varying pass through coefficient is estimated and the determinants of the recent declining effects of oil shocks on inflation are investigated the appreciation of the domestic currency a more active monetary policy in response to inflation and a higher degree of trade openness are found to explain the decline in oil price pass through

are oil shocks inflationary asymmetric and nonlinear specifications versus changes in regime this paper identifies a structural break in core u s inflation phillips curves such that oil prices contributed substantially before 1981 but since that time pass through has been negligible this characterization is robust to a variety of re specifications and fits the data better than asymmetric and nonlinear oil price alternatives evidence does not support the hypotheses that declining energy intensity or deregulation of energy producing and consuming industries played an important role monetary policy did not itself become less accommodative of oil shocks but may have helped create a regime where inflation is less sensitive to price shocks more generally

auctions with artificial adaptive agents abstract experiments on auctions find that subjects make systematic bidding errors that cannot be explained within the context of nash equilibrium bidding models experimenters and others have conjectured that learning by subjects could lead to errors consistent with those observed here we create and analyze a model of adaptive learning and demonstrate that such a model can capture the bidding patterns evident among human subjects in experimental auctions moreover our model provides a variety of insights into the nature of learning across different auction institutions journal of economic literature classification numbers c7 c9

federalism as a commitment to reserving market incentives the authors advance a new perspective in the study of federalism their approach views federalism as a governance solution of the state to credibly preserving market incentives market incentives are preserved if the state is credibly prevented from compromising on future economic success and from bailing out future failures the salient features of federalism decentralization of information and authority and interjurisdictional competition help provide credible commitment or these purposes in addition the authors suggest that some federalism are self sustaining

mating competition and entrepreneurship abstract we used a natural experiment in taiwan to test whether mating competition is a major motive for entrepreneurship after being defeated in mainland china more than half million solders retreated to taiwan in 1949 the soldiers were not allowed to get married until the military marriage ban was lifted in 1959 the policy change created a severe marriage squeeze for local men triggering their animal spirits to engage in entrepreneurial activities empirical results show that local men exposed to high sex ratios as a result of the removal of the marriage ban were more likely to become entrepreneurs later on

on the convergence of genetic learning in a double auction market abstract we study the learning behavior of a population of buyers and a population of sellers whose members are repeatedly randomly matched to engage in a sealed bid double auction the agents are assumed to be boundedly rational and choose their strategies by imitating successful behavior and adding innovations triggered by random errors or communication with other agents this process is modelled by a two population genetic algorithm a general characterization of the equilibria in mixed population distributions is given and it is shown analytically that only one price equilibria are attractive for the ga dynamics simulation results confirm these findings and imply that in cases with random initialization with high probability the gain of trade is equally split between buyers and sellers

a model of learning and emulation with artificial adaptive agents we study adaptive learning in a sequence of overlapping generations economies in which agents live for n periods agents initially have heterogeneous beliefs and form multi step ahead forecasts using a forecast rule chosen from a vast set of candidate rules agents learn in every period by creating new forecast rules and by emulating the forecast rules of other agents computational experiments show that systems so defined can yield three qualitatively different types of long run outcomes 1 coordination on a low inflation stationary perfect foresight equilibrium 2 persistent currency collapse and 3 coordination failure within the allotted time frame

what happened to the oil price macroeconomy relationship abstract strong evidence is found that oil prices no longer granger cause many u s macroeconomic indicator variables in data after 1973 a number of potential explanations are explored that sample stability issues are responsible that oil prices are now endogenous and that linear and symmetric specifications misrepresent the form of the oil price interaction none of these hypotheses are supported by the data the opec price increases do appear to have had significant impacts while the effects of the price declines of the 1980s are smaller and harder to characterize these results have potentially important implications for the large body of research which utilizes oil prices as an instrumental or explanatory variable

the great moderation in the united kingdom we use a bayesian time varying parameters structural var with stochastic volatility for gdp deflator inflation real gdp growth a 3 month nominal rate and the rate of growth of m4 to investigate the underlying causes of the great moderation in the united kingdom our evidence points toward a dominant role played by good luck in fostering the more stable macroeconomic environment of the last two decades results from counterfactual simulations in particular show that i bringing the monetary policy committee back in time would only have had a limited impact on the great inflation episode at the cost of lower output growth ii imposing the 1970s monetary rule over the entire sample period would have made almost no difference in terms of inflation and output growth outcomes and iii the great inflation was due to a dominant extent to large demand non policy shocks and to a lesser extent especially in 1973 and 1979 to supply shocks

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

changes in beef packers market power after the livestock mandatory price reporting act an agent based auction controversy remains about the effectiveness of the 1999 livestock mandatory price reporting act mpra we determine the likely changes in beef packers market power after the mpra by using an agent based first price common value auction past research has employed cournot models but we use an auction model which more closely resembles the actual cattle procurement process we find that feeders benefit from the mpra regardless of whether price uncertainty decreases for packers and or feeders if the packers price uncertainty is reduced the feeder benefits from an increase in competition between the packers if the feeder s price uncertainty is reduced the feeder benefits from imposing more accurate reserve prices copyright 2013 oxford university press

how sensitive are consumer expenditures to retail energy prices abstract there is growing evidence that the primary effect of energy price shocks on the u s economy involves a reduction in consumer spending we quantify the direct effect on real consumption of unanticipated changes in discretionary income shifts in precautionary savings and changes in the operating cost of energy using durables the possibility of asymmetries in the response of real consumption to energy price shocks is also considered we demonstrate that linear models are consistent with the symmetric behavior of real consumption in 1979 when energy prices increased sharply and in 1986 when they fell sharply it is shown that historically energy price shocks have been an important factor in explaining u s real consumption growth but by no means the dominant factor

shifting endpoints in the term structure of interest rates abstract this paper links the term structure to perceptions of monetary policy long horizon forecasts of short rates required by no arbitrage term structure models are heavily influenced by the endpoints or limiting conditional forecasts of the short rate process common assumptions that the short rate is mean reverting or contains a unit root are shown to generate unrealistic yield predictions failures occur because these assumptions inadequately account for historical shifts in market perceptions of the policy target for inflation this paper links endpoint shifts to agent learning about shifts in long term policy goals shifting endpoints in short rate processes significantly improve yield predictions

from made in china to innovated in china necessity prospect and challenges after more than three decades of high growth based on its low wage advantage and relatively favorable demographics in combination with market oriented reforms and openness to the world economy china is at a crossroads with a much higher wage and a shrinking workforce future growth will depend by necessity more on the generation of increased productivity and domestic innovation will play an important part in this in this paper we assess the likelihood that china can make the necessary transition using data on expenditure on research and development and patent applications receipts and citations we show that the chinese economy has become increasingly innovative we will argue that rising wages and expanding markets are among the important drivers of china s growth in innovation on the other hand we find evidence of resource misallocation in the innovation area while state owned firms receive more subsidies private firms exhibit more innovation results innovation can presumably progress even faster if resource misallocation can be tackled

learning with misspecification in an artificial currency market abstract agents evolve their forecast rules over time via a modified genetic algorithm in a simple artificial currency market these forecast rules can be nonlinearly misspecified when the misspecification is suppressed learning tends to be complete when it is not suppressed learning can generate persistent exchange rate dynamics

learning about learning in games through experimental control of strategic interdependence we report experiments in which humans repeatedly play one of two games against a computer program that follows either a reinforcement learning or an experience weighted attraction algorithm our experiments show these learning algorithms detect exploitable opportunities more sensitively than humans also learning algorithms respond to detected payo increasing opportunities systematically however the responses are too weak to improve the algorithms payos human play against various decision maker types doesn t vary signicantly these factors lead to a strong linear relationship between the humans and algorithms action choice proportions that is suggestive of the algorithm s best response correspondence these properties are revealed only by our human versus computer experiments and not by our standard human versus human experiments nor our model simulations jel classication c72 c92 c81

the evolution of type communication in a sender receiver game of common interest with cheap talk abstract we use a genetic algorithm to simulate play of a sender receiver game of common interest in which players engage in anonymous pairwise interactions the order of an equilibrium is the number of player types that are communicated there are many equilibria of each order equilibria of the same order are pareto equivalent and equilibria of different orders are pareto ranked by their order we discover a dynamic process in which the population climbs an equilibrium payoff ladder successively moving from an equilibrium of one order to an equilibrium of the next highest order eventually converging on an equilibrium of the highest order