Being Outsider inside the Outside

The Inside-Outside Algorithm

This note describes the inside-outside algorithm. The inside-outside algorithm has very important applications to statistical models based on context-free grammars. In particular, it is used in EM estimation of probabilistic context-free grammars, and it is used in estimation of discriminative models for context-free parsing. As we will see, the inside-outside algorithm has many similarities to...

Carolene, Conflicts, and the Fate of the Inside-Outsider

Outside Versus Inside Bonds

When agents are liquidity constrained, two options exist — borrow or sell assets. We compare the welfare properties of these options in two economies: in one, agents can borrow (issue inside bonds) and in the other they can sell government bonds (outside bonds). All transactions are voluntary, implying no taxation or forced redemption of private debt. We show that any allocation in the economy ...

Outside and Inside Liquidity∗

We consider a model of liquidity demand arising from a possible maturity mismatch between asset revenues and consumption. This liquidity demand can be met with either cash reserves (inside liquidity) or via asset sales for cash (outside liquidity). The question we address is, what determines the mix of inside and outside liquidity in equilibrium? An important source of inefficiency in our model...

Inside and Outside Liquidity∗

We consider a model of liquidity demand arising from a possible maturity mismatch between asset revenues and consumption. This liquidity demand can be met with either cash reserves (inside liquidity) or via asset sales for cash (outside liquidity). The questions we address are: (a) what determines the mix of inside and outside liquidity in equilibrium? (b) does the market provide an efficient m...