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Policy Parameters (policy + parameter)
Selected AbstractsEstimating unobservable valuation parameters for illiquid assetsACCOUNTING & FINANCE, Issue 3 2009Glenn Boyle G12; R33 Abstract A problem that often arises in applied finance is one where decision-makers need to choose a value for some parameter that will affect the cash flows between two parties involved in the operation of an illiquid asset. Because the values of the cash flows also depend on various unobservable parameters, identifying the value of the policy parameter that achieves the desired allocation between the parties is no simple task, often resulting in disputes and the invocation of ad hoc approaches. We show how this problem can be solved using an extension of the well-known ,implied volatility' technique from option pricing, and apply it to the determination of equilibrium rental rates on ground leases of commercial land. [source] Fiscal Transfers and Distributive Conflict in a Simple Endogenous Growth Model with UnemploymentGERMAN ECONOMIC REVIEW, Issue 1 2007Luigi Bonatti Capital,labor conflict; endogenous growth; politico-economic models; tax burden; welfare reforms Abstract. In the simplified formal treatment proposed in this paper, a decrease in a policy parameter , the ratio of total tax revenues to GDP , can monotonically increase long-term growth rate and may lead to a higher employment level. This notwithstanding, the paper shows that the redistributive implications of such a decrease may induce the wage earners to oppose it. As a consequence, policy-makers reflecting social preferences may undertake redistributive transfers generating persistent unemployment and lowering growth even if commitment technologies allowing them to follow preannounced tax policies were feasible. [source] An Evaluation of Flexible Workday Policies in Job Shops,DECISION SCIENCES, Issue 2 2002Kum-Khiong Yang ABSTRACT Job shops have long faced pressures for improvement in a challenging and volatile environment. Today's trends of global competition and shortening of product life cycles suggest that both the challenges and the intensity of market volatility will only increase. Consequently, the study of tactics for maximizing the flexibility and responsiveness of a job shop is important. Indeed, there is a significant body of literature that has produced guidelines on when and how to deploy tactics such as alternate routings for jobs and transfers of cross-trained workers between machines. In this paper we consider a different tactic by adjusting the length of workdays. Hours in excess of a 40-hour week are exchanged for compensatory time off at time and a half, and the total amount of accrued compensatory time is limited to no more than 160 hours in accordance with pending legislation. We propose several simple flexible workday policies that are based on an input/output control approach and investigate their performance in a simulated job shop. We find significant gains in performance over a fixed schedule of eight hours per day. Our results also provide insights into the selection of policy parameters. [source] Optimal Monetary Policy with Price and Wage RigiditiesECONOMIC NOTES, Issue 1 2006Massimiliano Marzo In this paper, I search for an optimal configuration of parameters for variants of the Taylor rule by using an accurate second-order welfare-based method within a fully microfounded dynamic stochastic model, with price and wage rigidities, without capital accumulation. A version of the model with distortionary taxation is also explicitly tested. The model is solved up to second-order solution. Optimal rules are obtained by maximizing a conditional welfare measure, differently from what has been done in the current literature. Optimal monetary policy functions turn out to be characterized by inflation targeting parameter lower than in empirical studies. In general, the optimal values for monetary policy parameters depend on the degree of nominal rigidities and on the role of fiscal policy. When nominal rigidities are higher, optimal monetary policy becomes more aggressive to inflation. With a tighter fiscal policy, optimal monetary policy turns out to be less aggressive to inflation. Impulse-response functions based on second-order model solution show a non-affine pattern when the economy is hit by shocks of different magnitude. [source] Supply-Side Economics of Germany's Year 2000 Tax Reform: A Quantitative AssessmentGERMAN ECONOMIC REVIEW, Issue 2 2003Holger Strulik Tax reform; corporate finance; investment; growth; welfare; Germany Abstract. The paper provides an assessment of supply-side economics following Germany's year 2000 tax reform. Investigated are a corporate tax cut, deteriorating depreciation allowances and imputation rules, and a private income tax cut. For this purpose, a neoclassical growth model is augmented by various fiscal policy parameters and endogenous corporate finance and calibrated with German data. The model is used to evaluate consequences of Germany's tax reform on production, firm finance and leverage, investment, consumption and welfare of a representative household. [source] Rehires and Unemployment Duration in the Swedish Labour Market , New Evidence of Temporary LayoffsLABOUR, Issue 2 2002Fredrik JanssonArticle first published online: 7 JAN 200 The paper investigates temporary layoffs in the Swedish labour market. Previous reports of few temporary layoffs are rejected. About 45 percent of unemployed people who found a job returned to a previous employer. As a stock measure, 10 percent of the unemployed are on temporary layoff. Using new job and recall as distinct exits in a competing risks model, one cannot reject a horizontal duration dependence for new jobs, while the recall hazard shows a strong, negative duration dependence. Clearer predictions of the effect of education on job probabilities are also found. Further, the results probably have implications for the interpretation of several policy parameters, including labour market programme outcomes. [source] Capacity expansion under a service-level constraint for uncertain demand with lead timesNAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 3 2009Rahul R. Marathe Abstract For a service provider facing stochastic demand growth, expansion lead times and economies of scale complicate the expansion timing and sizing decisions. We formulate a model to minimize the infinite horizon expected discounted expansion cost under a service-level constraint. The service level is defined as the proportion of demand over an expansion cycle that is satisfied by available capacity. For demand that follows a geometric Brownian motion process, we impose a stationary policy under which expansions are triggered by a fixed ratio of demand to the capacity position, i.e., the capacity that will be available when any current expansion project is completed, and each expansion increases capacity by the same proportion. The risk of capacity shortage during a cycle is estimated analytically using the value of an up-and-out partial barrier call option. A cutting plane procedure identifies the optimal values of the two expansion policy parameters simultaneously. Numerical instances illustrate that if demand grows slowly with low volatility and the expansion lead times are short, then it is optimal to delay the start of expansion beyond when demand exceeds the capacity position. Delays in initiating expansions are coupled with larger expansion sizes. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2009 [source] Flexible enforcement and fine adjustmentREGULATION & GOVERNANCE, Issue 4 2007Christopher S. Decker Abstract This paper considers the level of, and changes in, optimal noncompliance penalties under the following conditions: (i) where the regulator responsible for setting policy parameters, such as a penalty, is different from (and thus may have a different objective from) the regulator responsible for enforcing existing regulations; and (ii) where enforcement behavior changes from one in which enforcers are unresponsive to overtures on the part of firms to increase compliance to one in which enforcers are responsive to such overtures. The model developed shows that when enforcers "switch" from unresponsive to responsive enforcement, the optimal penalties for noncompliance need to be reduced. The analysis also gives insights as to what variables dictate the degree of penalty reduction. [source] Bank Capital Forbearance and Valuation of Deposit InsuranceCANADIAN JOURNAL OF ADMINISTRATIVE SCIENCES, Issue 3 2005Shih-Cheng Lee Abstract The authors set up a deposit insurance pricing model that treats forbearance as an option to delay the resolution of undercapitalized financial institutions and, subsequently, derive a closed-form solution for the deposit insurance put. The put is decomposed into a capital component and a time component. They then evaluate how the critical policy parameters relate to the cost of deposit insurance, and examine how moral hazard behaviour and the accompanying risk-taking behaviour affect deposit insurance premiums. Résumé Les auteurs de l'article qui suit mettent au point un modèle de fixation des prix de l'assurance-dépôts qui considère l'abstention comme un moyen visant à reporter la résolution des institutions financières sous-capitalisée. Ils en déduisent une solution analytique pour l'option de vente de l'assurance-depôts. Cette dernière comprend une composante de capital et une composante temporelle. Les auteurs de l'article évaluent lafaçon dont les paramètres de politique critique sont reliés au coût de l'assurance-dépôts. Ils examinent aussi la manière dont l'aléa de moralité et le comportement à risque qui l'accompagne influencent les primes d'assurance-dépôts. [source] | ||||||||||