Beginning with the Reserve Bank of New Zealand Act of 1989, central banking reforms have focused on assigning clear goals for which monetary policy authorities can be held accountable. Inflation targeting regimes provide examples of such goal-based policy frameworks. An alternative approach, recently argued for by John Taylor (2012, 2014), relies on a rule-based framework in which the policy au...

Monetary policy rule is an approach to avoid time inconsistency problem as regarded by new classical economist to choose a time plan for policy making in order to maximize households’ well-being. The foundation of time inconsistency problem is not coincidence of expectations as an ex-ante variable, which is expected variable, with actual variable as an ex-post variable. Expectations in Finn K...

We study optimal monetary policy in a NewMonetarist framework with banking, private liquidity, and credit frictions.We show that whenever part of the decentralized transactions are allowed to use deposit claims backed by interest-bearing assets, the optimal policy is a non-Friedman-rule liquidity trap. In contrast, the Friedman rule is optimal if there are no credit frictions, or if the economy...

Economic lot size scheduling problem (ELSP) for a multi-product single machine system is a classical problem. This paper considers ELSP with budgetary constraint as an important aspect of such systems. In the real world situations the available funds for investment in inventory is limited. By adopting the common cycle time approach to ELSP, we obtain the optimal common cycle which minimizes the...

This paper is concerned with a finite-horizon optimal selling rule problem when the underlying stock price movements are modeled by a Markov switching Lévy process. Assuming that the transaction fee of the selling operation is a function of the underlying stock price, the optimal selling rule can be obtained by solving an optimal stopping problem. The corresponding value function is shown to be...

Let (Sn)n≥0 be a correlated random walk on the integers, let M0 ≥ S0 be an arbitrary integer, and let Mn = max{M0, S1, . . . , Sn}. An optimal stopping rule is derived for the sequence Mn − nc, where c > 0 is a fixed cost. The optimal rule is shown to be of threshold type: stop the first time that Mn−Sn ≥ ∆, where ∆ is a certain nonnegative integer. An explicit expression for this optimal thres...

Let X1,X2, . . . ,Xn be i.i.d. random variables with a known continuous distribution function. Robbins’ problem is to find a sequential stopping rule without recall which minimizes the expected rank of the selected observation. An upper bound (obtained by memoryless threshold rules) and a procedure to obtain lower bounds of the value are known, but the essence of the problem is still unsolved. ...

In practical biometric verification applications, we expect to observe a large variability of biometric data. Single classifiers have insufficient accuracy in such cases. Fusion of multiple classifiers is proposed to improve accuracy. Typically, classifier decisions are fused using a decision fusion rule. Usually, research is done on finding the best decision fusion rule, given the set of class...

Obtaining the “exact” solution to the consumption-under-uncertainty problem can be an extraordinarily difficult mathematical problem. Allen and Carroll (2001), however, show that a simple linear approximation to the optimal policy rule can yield utility trivially close to that of the exact solution. Furthermore, Allen and Carroll show that consumers can consistently find the near-optimal approx...

In this paper, we present a statistical approach to edge detection in ultrasound speckle, and use actual noise statistics to derive an expression for an optimal detection rule. We compute the optimal detector for the special case of uncor-related speckle, and an approximation to the optimal detector for the case when signal-to-noise ratio (SNR) is high. We also discuss a simple sub-optimal dete...