Intersectoral and spatial spill-overs of firms’ bankruptcy in Spain

This paper employs provincial data to study the spatial and intersectoral spill-overs in aggregate failure rates in Spain, by using an Integrated Nested Laplace Approximation. The analysis is based on NUTS3 data over the time span 2005Q1-2013Q4. By speculating on the effects of the Spanish financial crisis, we document empirical evidence of the presence of spatial spill-overs among neighboring counties. Furthermore, some intersectoral spill-overs are also detected: we observe that Industry and Agriculture exhibit a positive impact on the Service sector. These results can be useful to design proper policy rules to better manage the spread of bankruptcies over time and space.

The methodology for assessing interest-rate policy rules: some comments

This paper is critical of the conceptual foundations and methodology adopted by Smithin (2020) in his exploration of the impact of different interest-rate policy rules on inflation. His modelling framework is too narrow to adequately discriminate between different interest-rate rules in terms of their broader macroeconomic impacts.

The methodology for assessing interest-rate policy rules: a reply

This note is a brief reply to Watts (2021), who has been critical of the conceptual foundations and methodology in a discussion of the impact of different interest rate policy rules on inflation in Smithin (2020). The reply concludes that the case for a ‘zero real policy rate of interest’ (ZRPR), rather than a ‘zero interest rate policy’ (ZIRP), emerges unscathed.

Policy Options of Over-Pumping Control in the NCP

Starting in the 1990s, China has been issuing regulations and policy rules related to groundwater management and pumping control on both national and provincial levels. These policies include the requirement of permits for well drilling, a well spacing policy, pumping quota management, water resources fee collection, setting of irrigation water prices, a water rights system, water markets, and more.

In an Imperfect World Policy Rules Cannot be Perfect Either

It is striking that economists in particular firmly believe in the benefits of rule-binding, even though this belief runs counter to the standard assumption of economic theory that we humans are self-interested and therefore extremely resourceful when it comes to circumventing inconvenient government regulations, e.g. taxes. In Public Choice Theory, politicians are even assumed to have nothing but self-interest as their guiding motive for action. Why then, in this world of thought, should ultra-self-interested politicians of all people adhere to simple rules such as the debt brake instead of bypass them, if – as is also assumed in this model world all that matters to them is short-term electoral success, for which government debt can be helpful.

Evaluation of Stackelberg Leader-Follower Interaction Between Policymakers in Small Open Economies

The problem of coordination between policymakers seems to have created fundamental problems related to economic and social costs, targeted inflation, potential growth, and a high budget deficit. To resolve these problems in this framework, it is important to see the results of the interaction between policymakers and to propose an optimal policy strategy. In this study, the interactions between monetary and fiscal policymakers are examined game theoretically within the framework of the New Keynesian model. The strategic interaction between these policymakers is assessed using the DSGE (Dynamic Stochastic General Equilibrium) model for a small open economy. From this point of view, the interaction between policymakers is assessed within the framework of hypothetical scenarios. The optimal monetary and fiscal policies for a small open economy are derived from the leader-follower mechanism solution known as the Stackelberg solution. Optimal Stackelberg policy rules derived for a small open economy contribute to the literature of economics. The performance of the game theoretically derived optimal policy rules is evaluated through dynamic simulation within the framework of counterfactual experiments. The parameters developed for the model are calibrated for the Turkish economy. Dynamic simulation of the models, the impulse response functions, and the social loss analysis shows that the optimal policy mix for the Turkish economy is when the monetary policymaker is the leader, and the fiscal policymaker is the follower.

Optimizing network microsegmentation policy for cyber resilience

This paper describes an approach for improving cyber resilience through the synthesis of optimal microsegmentation policy for a network. By leveraging microsegmentation security architecture, we can reason about fine-grained policy rules that enforce access for given combinations of source address, destination address, destination port, and protocol. Our approach determines microsegmentation policy rules that limit adversarial movement within a network according to assumed attack scenarios and mission availability needs. For this problem, we formulate a novel optimization objective function that balances cyberattack risks against accessibility to critical network resources. Given the application of a particular set of policy rules as a candidate optimal solution, this objective function estimates the adversary effort for carrying out a particular attack scenario, which it balances against the extent to which the solution restricts access to mission-critical services. We then apply artificial intelligence techniques (evolutionary programming) to learn microsegmentation policy rules that optimize this objective function.