pricing and scheduling decisions with leadtime flexibility this paper studies a problem faced by a manufacturer who has the ability to set prices to influence demand reject orders and set leadtimes or due dates for accepted orders we present decision models that integrate pricing and production decisions for the cases where the manufacturer charges the same price or different prices to different customers through numerical analyses we present insights regarding the benefits of price customization leadtime and inventory flexibilities in various demand environments

coordination of pricing and multiple period production across multiple constant priced goods this paper addresses the problem of jointly determining prices and production schedules for a set of items that are produced on the same production equipment under the assumptions that the production setup costs are negligible and that demand is seasonal but price dependent we exploit the special structure of the problem to develop a solution procedure through a set of numerical examples we demonstrate how a product s contribution to aggregate seasonality can increase its optimal price our examples also demonstrate that among products that experience demand peaks during the firm s busy season those that peak early in the busy season should be priced more aggressively than those that peak later

coordination of pricing and multi period production for constant priced goods this paper addresses the problem of jointly determining a single price and production schedule for a product with seasonal demand under the assumption that the ratio of the demands in any two periods does not depend upon the price at which the product is offered we develop a procedure that guarantees an optimal solution perhaps more importantly however our model provides insight into the manner in which the firm s production cost increases with the intensity of total demand

the analysis of optimal control model in matching problem between manufacturing and marketing abstract a mathematical model is developed and presented to solve the optimal control problem in matching between manufacturing and marketing when the market demand possesses the property of linearity the main purpose of this paper is to investigate the optimal choice between production rate which may affect the inventory level and the optimal sales rate at each time through different pricing strategies so as to achieve the maximum profit for a given planning horizon the results demonstrated that the relative size of the output yielded by minimizing average cost and yielded by maximizing profit at constant zero inventory can determine the optimal production rate and sales rate furthermore the optimal inventory policy can be determined to be a constant zero inventory policy or constant positive inventory policy or mixed inventory policy according to the value of optimal production rate

optimal joint pricing and lot sizing with fixed and variable capacity this paper examines previously unexplored fixed and variable capacity problems of jointly determining an item s price and lot size for a profit maximizing firm facing constant but price dependent demands over a planning horizon we apply geometric programming to these constrained nonlinear maximization problems with nonconcave objective functions and obtain global optimal solutions using kuhn tucker condition marginal and sensitivity analyses we investigate model interactions provide managerial implications on the optimal capacity decisions and explore the postoptimal behavior of the price lot size and capacity expansion and reduction size some findings cast interesting insights different from previous just in time management studies without pricing consideration

real exchange rates and time varying trade costs this paper re examines the empirical modeling of purchasing power parity ppp deviations in the presence of commodity market frictions first we show that a specific type of smooth transition models can closely approximate the functional form of the theoretical adjustment mechanism derived by dumas 1992 dynamic equilibrium and the real exchange rate in a spatially separated world review of financial studies 5 2153 180 for the case of constant as well as changing trade costs second we develop for the first time an empirical model of the real exchange rate which allows for changes in the degree of market integration by employing a long span of data on the dollar sterling real exchange rate and a micro founded proxy for trade frictions we provide novel evidence of a significant relationship between the persistence of the real exchange rate and the level of trade costs this finding suggests that both the difficulty of detecting ppp and the extend of rogoff s puzzle vary over time with the degree of trade restrictiveness finally we highlight policy repercussions of our results

monetary policy and the sterling exchange rate this article introduces the three contributions to the feature which address issues raised by the sterling appreciation of 1996 97 and the subsequent prolonged overvaluation cobham discusses the mpc s understanding of exchange rate changes and examines policy makers responses to the proposal that policy should respond to exchange rate misalignments kirsanova leith and wren lewis construct a new open economy macroeconomics model with international risk sharing shocks in which the welfare function derived includes a term in the terms of trade gap allsopp kara and nelson investigate the exchange rate prices pass through and how imports should be modelled and draw out the policy implications

singular focus or multiple objectives what the data tell us about inflation targeting in latin america proquest denotes formulae omitted introductionin the last decade and a half several latin american countries have adopted inflation targeting as their monetary framework moving away from other intermediate targets such as monetary aggregates and allowing at least on paper more exchange rate flexibility while the literature so far has not delivered a clear verdict on the impact of inflation targeting on macro economic performance in general particularly in comparison to other mon etary frameworks that have faced the same global environment it is evident that countries that have adopted inflation targeting have generally succeeded both in stabilizing inflation at relatively low rates and in anchoring the public s expectations at levels near the target 1one recurring question that arises regarding the use of inflation targeting concerns the flexibility that policymakers need to implement it namely to what extent should exchange rate fluctuations or financial stability concerns also be incorporated into the policy of a central bank that aims at achiev ing a preannounced target for inflation this is particularly relevant given that such targeting relies critically on policy credibility and effective com munication with the public thus the perception that multiple and possibly conflicting objectives are being pursued might undermine such credibility thereby endangering the integrity of the policy regarding the exchange rate the question is whether inflation targeting can or should accommodate a certain degree of fear of floating calvo and reinhart 2002 that is a policy reaction directed at preventing or smooth ing out exchange rate fluctuations in the most narrow sense it is clear that central banks using inflation targeting should respond to these movements when via a pass through they are likely to be transmitted to inflation or inflationary expectations however beyond this pass through effect there is also a case for reacting to exchange rate movements as these could gen erate supply side effects through their impact on the prices of intermediate inputs they could also affect competitiveness and particularly in highly dollarized economies lead to balance sheet effects that feed into financial instability in fact there is evidence that countries using inflation targeting do react to exchange rate movements estimating a monetary reaction function for a panel of advanced and emerging economies during 1996 2011 munoz and schmidt hebbel 2012 find that the short term policy rate in countries both with and without inflation targeting known as it reacts to changes in the nominal exchange rate using a similar approach but focusing on emerging economies aizenman hutchinson and noy 2011 find that the policy rate reacts to changes in the real exchange rate particularly in commodity export ing countries note that it is not possible to determine from these studies whether there is a separate exchange rate objective at play as opposed to the exchange rate being treated as one more signal regarding future inflation ary pressures from a different perspective berganza and broto 2012 focus their attention directly on foreign exchange forex interventions by central banks consistent with the presumed greater exchange rate flexibility of it they find that exchange rates are indeed more volatile in inflation targeting countries than in countries that do not target inflation however forex inter vention is far from absent in the targeting countries and it is found to be effective in reducing exchange rate volatility on the second question whether financial stability concerns should be incorporated into an inflation targeting framework there is also a case for expanding the set of instruments at the disposal of policymakers making use of macroprudential tools such as dynamic provisioning countercyclical capital requirements and loan to value limits and even complementing these instruments with an explicit reaction of the policy rate to an appropriate financial stability indicator

money new keynesian macroeconomics and the business cycle abstract we show in this paper that the typical modern business cycle cannot be reduced to the real business cycles archetype a monopolistic competition model with price adjustment costs affected by technological and monetary shocks better mimics the economic fluctuations in two countries with very different cyclical properties namely france and the united states in our model monetary shocks are necessary to reproduce the standard deviation of output the money output correlation the labour productivity worked hours relative standard deviation the labour productivity worked hours correlation and the mark up output correlation with two independent shocks one real more specifically defined than the solow residual and one nominal the model gives an answer to some empirical puzzles which were left unexplained by traditional rbc models

on the international effects of inflation targeting abstract this study empirically examines the international effects of inflation targeting employing a variety of propensity score matching methods we find strong evidence that inflation targeting has significantly different impacts on exchange rate volatility and international reserves in different country groups it significantly increases real and nominal exchange rate stability and international reserves in developing countries but lowers them in industrial countries on average inflation targeting increases lowers reserves roughly by the size of 1 3 1 8 months of imports values in developing industrial countries the treatment effects on targeting countries current accounts are found to be insignificant in both country groups

do central banks respond to exchange rate movements a structural investigation abstract we estimate a small scale structural general equilibrium model of a small open economy using bayesian methods our main focus is the conduct of monetary policy in australia canada new zealand and the uk we consider generic taylor type rules where the monetary authority reacts in response to output inflation and exchange rate movements we perform posterior odds tests to investigate the hypothesis whether central banks do target exchange rates the main result of this paper is that the central banks of australia and new zealand do not whereas the bank of canada and the bank of england do include the nominal exchange rate in its policy rule this result is robust for various specification of the policy rule we also find that terms of trade movements do not contribute significantly to domestic business cycles

simple monetary policy rules and exchange rate uncertainty abstract we analyze the performance and robustness of some common simple rules for monetary policy in a new keynesian open economy model under different assumptions about the exchange rate model adding the exchange rate to an optimized taylor rule that responds to cpi inflation gives only small improvements in terms of economic stability in most model configurations the taylor rule is also slightly more robust to uncertainty about the exchange rate model than are rules that respond to the rate of exchange rate depreciation our results thus indicate that the taylor rule is sufficient to stabilize a small open economy also under exchange rate model uncertainty

financial market integration and macroeconomic volatility the process of financial market integration is modeled in an intertemporal general equilibrium framework as the elimination of trading frictions between financial markets in different countries goods markets are assumed to be imperfectly competitive and goods prices are subject to sluggish adjustment simulation experiments show that increasing financial market integration increases the volatility of a number of variables when shocks originate from the money market but decreases the volatility of most variables when shocks originate from real demand or supply copyright 1996 by the editors of the scandinavian journal of economics

the performance and robustness of simple monetary policy rules in models of the canadian economy in this report we evaluate several simple monetary policy rules in twelve private and public sector models of the canadian economy our results indicate that none of the simple policy rules we examined is robust to model uncertainty in that no single rule performs well in all models

the role of the exchange rate in monetary policy rules for a country that chooses not to permanently fix its exchange rate through a currency board or a common currency or some kind of dollarization the only alternative monetary policy that can work well in the long run is one based on the trinity of i a flexible exchange rate ii an inflation target and iii a monetary policy rule while not often put into this threepart format the desirability of such a monetary policy in an open economy is in my view the clear implication of three corresponding strands of recent monetary research i research on fixed exchange rates regimes including the influential 1995 article the mirage of fixed exchange rates by maurice obstfeld and kenneth rogoff and the many analyses of the breakdown of fixed exchange rate regimes in the late 1990 s ii research on the practical success with inflation targeting by ben bernanke et al 1999 and iii research on the benefits of simple monetary policy rules see e g taylor 1999a this clear policy implication however does not end the debate about how exchange rates should be taken into account in formulating monetary policy even if one excludes capital controls and sterilized exchange market intervention from consideration because they are not effective or attractive ways to de link exchangerate movements from the domestic interest rate a crucial question remains how should the instruments of monetary policy the interest rate or a monetary aggregate react to the exchange rate should policymakers avoid any reaction and focus instead on domestic indicators such as inflation and real gdp or is the rule of thumb that a substantial appreciation of the real exchange rate furnishes a prima facie case for relaxing monetary policy as characterized by obstfeld and rogoff 1995 p 93 a better monetary policy rule or perhaps policymakers should heed the obstfeld rogoff warning that substantial departures from ppp purchasing power parity in the short run and even over decades make such a policy reaction to the exchange rate undesirable more generally if one accepts the trinity concept of monetary policy in an open economy then what is the role of the exchange rate in the monetarypolicy rule

the role of exchange rate in inflation targeting the case of turkey the role of the exchange rates in emerging market economies that have adopted inflation targeting it is a critical and contentious issue in the relevant literature this article investigates whet

new directions for stochastic open economy models the paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages explicit solution of the wage setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare expected output and the expected terms of trade despite the potential interplay between imperfections due to sticky wages and monopoly the optimal monetary policy rule has a closed form solution to motivate our model we show that observed correlations between terms of trade and exchange rates are more consistent with our traditional assumptions about nominal rigidities than with a popular alternative based on local currency pricing 2000 elsevier science b v all rights reserved

how much should inflation targeters care about the exchange rate abstract a dsge model is used to examine whether including the exchange rate in the central bank s policy rule can improve economic performance smoothing the exchange rate helps both financially robust economies and financially vulnerable emerging economies in handling risk premium shocks and given a small weight placed on the exchange rate the effects on inflation and output volatility are minimal with demand and cost push shocks financially vulnerable economies are especially likely to benefit from exchange rate smoothing due to perverse movements of the exchange rate they experience when hit by demand shocks and being more prone to risk premium shocks

anticipated versus unanticipated terms of trade shocks and the j curve phenomenon abstract using a dynamic stochastic general equilibrium dsge model we examine the impact of anticipated and unanticipated terms of trade tot shocks on aggregate output inflation and the trade balance tb this allows us to offer an alternative explanation of the j curve phenomenon we find that an unanticipated tot shock increases real output as well as inflation but the j curve phenomenon may not exist under a certain condition however under the same condition an anticipated tot shock leads to the j curve effect we find that our main result concerning the j curve phenomenon continues to hold even if the assumption of rational expectations about the tot is relaxed further analysis reveals that the presence of a cost channel of monetary policy increases the intensity of the j curve effect assuming plausible parameter values while using a more general model calibration results support our theoretical predictions

home bias exchange rate disconnect and optimal exchange rate policy abstract this paper examines how much the central bank should adjust the interest rate in response to real exchange rate fluctuations the paper first demonstrates in a two country dynamic stochastic general equilibrium dsge model that home bias in consumption is important to replicate the exchange rate volatility and exchange rate disconnect documented in the data when home bias is high the shock to uncovered interest rate parity uip can substantially drive up exchange rate volatility while leaving the volatility of real macroeconomic variables such as gdp almost untouched the model predicts that the volatility of the real exchange rate relative to that of gdp increases with the extent of home bias this relation is supported by the data a second order accurate solution method is employed to find the optimal operational monetary policy rule our model suggests that the monetary authority should not seek to vigorously stabilize exchange rate fluctuations in particular when the central bank does not take a strong stance against the inflation rate exchange rate stabilization may induce substantial welfare loss the model does not detect welfare gain from international monetary cooperation which extends obstfeld and rogoff s obstfeld m rogoff k 2002 global implications of self oriented national monetary rules quarterly journal of economics may 503 535 findings to a dsge model

globalisation pass through and the optimal policy response to exchange rates abstract in this paper we examine how monetary policy should respond to nominal exchange rates in a new keynesian open economy model that allows for a non trivial role for sterilised intervention the paper develops the argument against the backdrop of the evolving policy making environment of asian economies sterilised intervention can be a potent tool that offers policymakers an additional degree of freedom in maximising global welfare we show that the gains to sterilised intervention are greater when goods market integration is low and exchange rate pass through is high however increased financial internationalisation reduces the effectiveness of sterilised intervention as the international policy trilemma becomes more relevant unsterilised intervention may also have a role to play although the potential welfare gains from this are generally smaller most central banks in asia have actively used sterilised foreign exchange intervention as a policy tool to smooth exchange rates but over time declining exchange rate pass through and the increasing international integration of financial and goods markets will tend to reduce the efficacy of sterilised intervention given the limited effectiveness of unsterilised intervention our model implies that the role of exchange rate movements in the optimal setting of monetary policy in asia is decreasing

monetary policy in the uk the authors argue that the institutional dimension of the bank of england monetary policy and the role the uk hm treasury assumes in this framework are both firmly based on the new consensus in macroeconomics ncm this is also the theoretical framework upon which the inflation targeting element of monetary policy is firmly based this paper discusses these aspects of uk monetary policy and then assesses the policy that has been pursued since 1997 with some reference made to the period between 1992 and 1997 when a version of the framework was introduced the strategy has been successful in terms of keeping uk inflation rates within the targets set by hm treasury however a number of problematic issues are highlighted and discussed

borders and nominal exchange rates in risk sharing models of risk sharing predict that relative consumption growth rates are positively related to changes in real exchange rates we investigate this hypothesis using a new multicountry and multiregional data set within countries we find evidence for risk sharing episodes of high relative regional consumption growth are associated with regional real exchange rate depreciation across countries however the association is reversed relative consumption and real exchange rates are negatively correlated we define this reversal as a border effect we find the border effect and show that it accounts for over half of the deviations from full risk sharing since cross border real exchange rates involve different currencies it is natural to ask how much of the border effect is accounted for by movements in exchange rates our measures indicate that a large part of the border effect comes from nominal exchange rate fluctuations we develop a simple open economy model that is consistent with the importance of nominal exchange rate variability in accounting for deviations from cross country risk sharing

monetary policy rules for an open economy the most popular simple rule for the interest rate due to taylor 1993a is meant to inform monetary policy in economies that are closed on the other hand its main open economy alternative i e ball s 1999 rule based on a monetary conditions index mci may perform poorly in the face of specific types of exchange rate shocks and thus cannot offer guidance for the day to day conduct of monetary policy in this paper we specify and evaluate a comprehensive set of simple monetary policy rules that are suitable for small open economies in general and for the united kingdom in particular we do so by examining the performance of a battery of simple rules including the familiar taylor rule and mci based rules a la ball this entails comparing the asymptotic properties of a two sector open economy dynamic stochastic general equilibrium model calibrated on united kingdom data under different rules we find that an inflation forecast based rule ifb i e a rule that reacts to deviations of expected inflation from target is a good simple rule in this respect when the horizon is adequately chosen adding a separate response to the level of the real exchange rate contemporaneous and lagged appears to reduce the difference in adjustment between output gaps in the two sectors of the economy but the improvement is only marginal importantly an ifb rule with or without exchange rate adjustment appears robust to different shocks in contrast to naive or ball s mci based rules

price delivery time guarantees and capacity selection this paper studies the impact of using delivery time guarantees as a competitive strategy in service industries where demands are sensitive to both price and delivery time we assume that delivery reliability is crucial and investment in capacity expansion is plausible in order to maintain a high probability of delivering the time guarantee a mathematical framework is proposed to understand the interrelations among pricing delivery time guarantee and capacity expansion decisions specifically an optimization model is developed to determine the joint optimal selection of these three important decision variables with an objective of maximizing the average net profit we characterize the optimal decisions and study their qualitative behaviors as various parameters change we further present a numerical example to illustrate how the results of our model can be used to provide useful managerial insights for selecting the best competing strategies for firms with different operating characteristics our model and results are also applicable to a make to order manufacturing environment

joint production and pricing decisions with setup costs and capacity constraints we consider the problem of setting prices and choosing production quantities for a single product over a finite horizon for a capacity constrained manufacturer facing price sensitive demands there is a fixed cost per production run and a variable cost per unit produced both of which may vary by period we characterize properties of the optimal solution considering cases with constant and time varying capacity and with and without speculative motive for holding inventory we show that counter to intuition optimal prices may increase as the capacity increases even when capacity is constant over the horizon we also show that increases in capacity do not always exhibit diminishing marginal returns our procedure produces solutions with much higher profits than can be obtained from a sophisticated sequential procedure in which a well informed and optimum seeking marketing department makes pricing decisions and the manufacturing department seeks to satisfy the resulting demands at minimum cost our results also suggest that firms with seasonal demand and tight capacity constraints should be more aggressive in setting prices to manage their demands than what is typically done in practice finally we discuss how a decision maker can use our procedure as an aid in solving multiproduct versions of the problem

do real balance effects invalidate the taylor principle in closed and open economies this paper examines the determinacy implications of forecast based monetary policy rules that set the interest rate in response to expected future inflation in a neo wicksellian model that incorporates real balance effects we show that the presence of such effects in closed economies restricts the ability of the taylor principle to prevent indeterminacy of the rational expectations equilibrium the problem is exacerbated in open economies particularly if the policy rule reacts to consumer price rather than domestic price inflation however determinacy can be restored in both closed and open economies with the addition of monetary policy inertia

a comparison of optimal policy rules prior to and during inflation targeting empirical evidence from bank of canada abstractwe examine policy rules that are consistent with inflation targeting it framework in a small macroeconomic model of the canadian economy we set up an optimal linear regulator problem and derive policy rules to compare the dynamics of pre it and it eras we find that while the optimal monetary policy rule in the pre it period is best described with a loss function that attaches equal weight to price stability financial stability and output stability the it era is dominated by the price stability objective followed by the financial stability and output stability consecutively moreover we do not find an explicit role for exchange rate stability in the objective function of the bank of canada for both monetary policy eras we then compare the properties of the derived optimal rules with those of an ad hoc taylor rule for the it period in response to inflationary shocks taylor rule brings down inflation rates more quickly compared to the derived policy rules but at the cost of a higher sac

why large scale bioenergy production on marginal land is unfeasible a conceptual partial equilibrium analysis a transparent and conceptual partial equilibrium model of global land use is used to explore long term effects of large scale introduction of bioenergy under different policy cases the transparency of the model and the consideration of clear cut policies provides a clear picture of how main mechanisms of land use competition work and how they influence the food and bioenergy systems the model is subjected to a detailed characterization in which parameters critical to the results and conclusions are detected and their impacts depicted a large scale introduction of bioenergy would raise food prices in all cases scenarios investigated and relative price increases of extensively produced crops would be at least twice as high as compared to intensively produced crops banning production of bioenergy from the most productive land limiting production to marginal land would reduce this price impact however we show that bioenergy is unlikely to ever be produced on any commercial scale only on land of low productivity the economic incentives would be strong for owners of more productive land to grow bioenergy anyway and out compete the more costly production on low yielding land large scale deforestation would become attractive in response to increased bioenergy demand especially for extensive production systems such as grazing

optimal pricing and production in an inventory model abstract this paper deals with the problem of simultaneously determining the optimal price policy and production rate over a given planning horizon for nonlinear demand functions and convex inventory and shortage cost functions the optimal solution paths are derived by using optimal control theory the treatment of linear nonsmooth cost functions requires the use of a generalized maximum principle the solution method is a phase portrait analysis providing insight into the optimal pricing and production policies as well as the resulting inventory paths moreover it is shown that in the case of nonsmooth piecewise linear cost functions the equilibrium is approached within finite time although the model is nonlinear in the control variables finally it is illustrated that exogenous fluctuations in the demand rate seasonal demand pattern amount to cyclical optimal solutions

monetary policy and exchange rate overshooting dornbusch was right after all abstract dornbusch s exchange rate overshooting hypothesis is a central building block in international macroeconomics yet empirical studies of monetary policy have typically found exchange rate effects that are inconsistent with overshooting this puzzling result has been viewed by some researchers as a stylized fact to be reckoned with in policy modelling however many of these studies in particular those using vector autoregressive vars approaches have disregarded the strong contemporaneous interaction between monetary policy and exchange rate movements by placing zero restrictions on them in contrast we achieve identification by imposing a long run neutrality restriction on the real exchange rate thereby allowing for contemporaneous interaction between the interest rate and the exchange rate in a study of four open economies we find that the puzzles disappear in particular a contractionary monetary policy shock has a strong effect on the exchange rate which appreciates on impact the maximum effect occurs within 1 2 quarters and the exchange rate thereafter gradually depreciates to baseline consistent with the dornbusch overshooting hypothesis and with few exceptions consistent with uncovered interest parity uip

the robustness and efficiency of monetary policy rules as guidelines for interest rate setting by the european central bank abstract this paper examines the implications of recent research on monetary policy rules for practical monetary policy making with special emphasis on strategies for setting interest rates by the european central bank ecb the paper draws on recent research and new simulations of a large open economy model to assess the efficiency of a simple benchmark rule in comparison with other proposed rules further it stresses new results on the robustness of monetary policy rules in which each rule that is optimal or good according to one model or researcher is tested for robustness by other researchers using different models because of the large increase in the number of economists focussing on econometric evaluation of monetary policy rules for the interest rate instrument and because of the parallel increase in the variety of models being developed for this purpose much more evidence is becoming available on the robustness of simple monetary policy rules for the interest rate than ever before

incomplete exchange rate pass through and simple monetary policy rules abstract this paper investigates the performance of various monetary policy rules in an open economy with incomplete exchange rate pass through implementing monetary policy through an exchange rate augmented policy rule does not improve social welfare compared to using an optimized taylor rule irrespective of the degree of pass through a direct exchange rate response improves welfare only if the other reaction coefficients on inflation and output are sub optimal however an indirect exchange rate response through a policy reaction to consumer price index cpi inflation rather than to domestic inflation is welfare enhancing this result is independent of whether society values domestic or cpi inflation stabilization

reinforcement learning for joint pricing lead time and scheduling decisions in make to order systems the paper investigates a problem faced by a make to order mto firm that has the ability to reject or accept orders and set prices and lead times to influence demands inventory holding costs for early completed orders tardiness costs for late delivery orders order rejection costs manufacturing variable costs and fixed costs are considered in order to maximize the expected profits in an infinite planning horizon with stochastic demands the firm needs to make decisions from the following aspects which orders to accept or reject the trade off between price and lead time and the potential for increased demand against capacity constraints we model the problem as a semi markov decision problem smdp and develop a reinforcement learning rl based q learning algorithm qla for the problem in addition we build a discrete event simulation model to validate the performance of the qla and compare the experimental results with two benchmark policies the first come first serve fcfs policy and a threshold heuristic policy it is shown that the qla outperforms the existing policies

the dependence structure between the canadian stock market and the usd cad exchange rate a copula approach this paper investigates the dependence structure between the real canadian stock returns and the real usd cad exchange rate returns using the symmetrized joe clayton sjc copula function we estimate the sjc copula with monthly data over the period 1995 1 to 2006 12 our results show significant asymmetric static and dynamic tail dependence between the real stock returns and the real exchange rate returns such that the two returns are more dependent in the left than in the right tail of their joint distribution we explain this asymmetric dependence in terms of an asymmetric interest rate policy by canadian monetary authorities in response to changes in the real exchange rate during sub periods of falling and rising commodity prices le texte analyse la structure de dependance entre les rendements reels sur les actions canadiennes en bourse et les taux de rendements reels sur le taux de change entre le canada et les etats unis en utilisant la fonction a copule symetrisee joe clayton sjc on calibre cette fonction a l aide de donnees mensuelles pour la periode allant de 1995 1 a 2006 12 les resultats montrent une dependance asymetrique statique et dynamique significative entre les rendements reels sur les actions et les taux de rendements reels sur le taux de change telle que les deux rendements reels sont davantage dependants l un de l autre a l extremite gauche qu a l extremite droite de leur distribution conjointe on explique cette dependance asymetrique en termes d une politique asymetrique du taux d interet par les autorites canadiennes en reponse aux changements dans le taux de change reel durant les sous periodes de prix croissants et decroissants des denrees

pricing and manufacturing decisions when demand is a function of prices in multiple periods in most deterministic manufacturing decision models demand is either known or induced by pricing decisions in the period that the demand is experienced however in more realistic market scenarios consumers make purchase decisions with respect to price not only in the current period but also in past and future periods we model a joint manufacturing pricing decision problem accounting for that portion of demand realized in each period that is induced by the interaction of pricing decisions in the current period and in previous periods we formulate a mathematical programming model and develop solution techniques we identify structural properties of our models and develop closed form solutions and effective heuristics for various special cases of our models finally we conduct extensive computational experiments to quantify the effectiveness of our heuristics and to develop managerial insights

perils of unconventional monetary policy abstract unconventional monetary policy by relaxing restrictions on the composition of the balance sheet of the central bank compromises control over the stochastic path of inflation or in open economies over the stochastic path of exchange rates if the composition of the balance sheet is unrestricted then the path of inflation is indeterminate this is the case under pure quantitative easing where the target is the size of real money balances in contrast credit easing policies restrict the composition of the portfolio by targeting a specific expansion in the maturity profile of bonds bought and thus can implement a determinate path of inflation the composition of the portfolios traded by monetary fiscal authorities also determines premia in asset and currency markets

interest rate rules and transitional dynamics in an endogenously growing open economy abstract this paper sets up an endogenous growth model of an open economy in which the monetary authority implements a gradualist interest rate rule with targets for both inflation and economic growth we show that under a passive rule a monetary equilibrium exists and is unique moreover the equilibrium is locally determinate by contrast an active rule implies either two equilibria one high growth and one low growth or none in the case of two equilibria the high growth equilibrium is locally determinate while the low growth equilibrium is a source besides the stabilization and growth effects of alternative target policies are also explored in this study moreover in departing from the existing literature we turn to focus on the analysis of transition with a particular emphasis on the case of imperfect credibility

asymmetric volatility connectedness on the forex market abstract we show how bad and good volatility propagate through the forex market i e we provide evidence for asymmetric volatility connectedness on the forex market using high frequency intra day data of the most actively traded currencies over 2007 2015 we document the dominating asymmetries in spillovers that are due to bad rather than good volatility we also show that negative spillovers are chiefly tied to the dragging sovereign debt crisis in europe while positive spillovers are correlated with the subprime crisis different monetary policies among key world central banks and developments on commodities markets it seems that a combination of monetary and real economy events is behind the positive asymmetries in volatility spillovers while fiscal factors are linked with negative spillovers

pricing and lead time decisions for make to order firms with contingent orders abstract make to order mto firms have few standard products and volatile difficult to predict demand a production order usually stems from a successful bid which presents the mto firm s terms including price and lead time to satisfy a prospective customer s stated requirements the customer may decide to accept reject or modify these terms until the customer decides the tendered bid is a contingent demand on the mto firm s future production capacity in the short run this capacity may be relatively fixed and if the customer awards the contract to another bidder it may simply go to waste to hedge against this possibility the mto firm can bid on other projects that require the same capacity however this strategy introduces a new source of lead time uncertainty if two or more booked orders must contend for the same resources some work will inevitably be bumped to later time periods thus a hedging strategy carries the risk of penalties for late deliveries in this paper we model this little discussed source of lead time uncertainty and introduce a technique that simultaneously optimizes pricing and lead time decisions for mto firms with contingent orders we illustrate the procedure with a simple numerical example

monetary policy rules in theory and in practice evidence from the uk and the us given the large amount of interaction between research on monetary policy and its practice this article examines whether some simple monetary policy rules that have been proposed in the academic literature part of which has originated from within central banks provide a reasonable characterization of actual policy in the united kingdom and the united states the article finds the simple rule that describes best the actual us monetary policy is a speed limit rule with dynamics whilst for the uk it is a forward looking rule the simpler dynamics in the uk s monetary policy rule are reflective of the lower persistence of inflation as a result of its policy of inflation targeting

does trade openness matter for aggregate instability abstract this paper presents a cash in advance model of a small open economy and shows that whether an inflation targeting interest rate rule introduces aggregate instability depends in general on the degree of openness to international trade this result emerges regardless of whether prices are sticky or flexible in a closed economy as the monetary authority responds to movements in inflation the resulting changes in interest rates affect aggregate consumption through an intertemporal substitution effect and an inflation tax effect in a small open economy this policy also induces changes in the terms of trade which depending on the degree of openness can generate counteracting effects on consumption as a consequence the implications of interest rate rules on macroeconomic stability in an open economy differ from those in a closed economy