In recent years, much attention and many papers have been devoted to general heuristics techniques, known as metaheuristics, that are applicable, in particular, to solve hard combinatorial optimization problems. There are a huge amount of combinatorial optimization problems in all sectors of...

Publicly managed social security agencies providing old-age insurance through intergenerational transfers face ever growing losses in many countries as the natural aging of population over time increases old-age dependency ratios. In addition to raises in old-age insurance premiums and/or...

Two fundamental sources of output growth are production capital and technological knowledge. We consider technological knowledge in the form of total-factor productivity (henceforth, "productivity") in a constant-elasticity-of-substitution (CES) production function. But capital and productivity...

Nonlinear modeling with neural networks offers a promising approach for studying the prediction of a chaotic time series. In this paper, we propose a stochastic neural net based on Extended Kalman Filter to examine the nonlinear dynamic proprieties of some financial time series in order to...

That there are foundational problems involved in simulation approaches to economics can hardly come as a surprise to the reader. Some of these problems are inherited from economics but are exposed anew when a simulation approach is chosen, and computability required. These are problems as...

In this paper we demonstrate that a standard loss function of a central bank may generate multiple equilibria which can contribute to hysteresis effects on the labor market. Multiple equilibria are feasible if the objective function of the central bank is non-quadratic. Such preferences may...

Macroeconomists pursuing microfoundations for aggregate consumption have generally adopted one of two approaches: either to model microeconomic consumption behavior carefully and then to aggregate, or to thoroughly understand the behavior of a `representative consumer' in general equilibrium,...

We investigate the welfare implications of eliminating a proportional capital income tax for a model economy in which heterogeneous households face labor income risk and trade only one asset. Labor taxes rises at the time of the reform to maintain long run budget balance. Our stochastic process...

The classical option valuation models assume that the option payoff can be replicated by continuously adjusting a portfolio consisting of the underlying asset and a risk-free bond. This strategy implies a constant volatility for the underlying asset and perfect markets. However, the existence of...