Related papers: Fiscal Stimulus of Last Resort
Stable matching is a fundamental area with many practical applications, such as centralised clearinghouses for school choice or job markets. Recent work has introduced the paradigm of near-feasibility in capacitated matching settings, where…
When people choose routes minimizing their individual delay, the aggregate congestion can be much higher compared to that experienced by a centrally-imposed routing. Yet centralized routing is incompatible with the presence of…
This paper studies dynamic mechanism design in a quasilinear Markovian environment and analyzes a direct mechanism model of a principal-agent framework in which the agent is allowed to exit at any period. We consider that the agent's…
Recent studies highlight economic complexity's role in mitigating fiscal crises, often measured via an economy's trade structure. Trade, however, is just one facet of an economy's structure and omits critical innovative activities like…
As systems trend toward superintelligence, a natural modeling premise is that agents can self-improve along every facet of their own design. We formalize this with a five-axis decomposition and a decision layer, separating incentives from…
This paper proposes a portfolio construction framework designed to remain robust under estimation error, non-stationarity, and realistic trading constraints. The methodology combines dynamic asset eligibility, deterministic rebalancing, and…
We discuss the nonlinear phenomena of irreversible tipping for non-autonomous systems where time-varying inputs correspond to a smooth "parameter shift" from one asymptotic value to another. We express tipping in terms of pullback…
This article proposes a fundamental methodological shift in the modelling of policy interventions for sustainability transitions in order to account for complexity (e.g. self-reinforcing mechanism arising from multi-agent interactions) and…
Tracking the build-up of financial vulnerabilities is a key component of financial stability policy. Due to the complexity of the financial system, this task is daunting, and there have been several proposals on how to manage this goal. One…
One attractive approach to market dynamics is the level $k$ model in which a level $0$ player adopts a very simple response to current conditions, a level $1$ player best-responds to a model in which others take level $0$ actions, and so…
Excessive leverage, i.e. the abuse of debt financing, is considered one of the primary factors in the default of financial institutions. Systemic risk results from correlations between individual default probabilities that cannot be…
In dynamic programming and reinforcement learning, the policy for the sequential decision making of an agent in a stochastic environment is usually determined by expressing the goal as a scalar reward function and seeking a policy that…
Agent-based models provide a constructive approach to studying emergent dynamics in life-like systems composed of interacting, adaptive agents. Financial markets serve as a canonical example of such systems, where collective price dynamics…
This paper investigates the identification, the determinacy and the stability of ad hoc, "quasi-optimal" and optimal policy rules augmented with financial stability indicators (such as asset prices deviations from their fundamental values)…
We introduce a framework to study the effective objectives at different time scales of financial market microstructure. The financial market can be regarded as a complex adaptive system, where purposeful agents collectively and…
The breaching of planetary boundaries and the potentially catastrophic consequences of climate change are leading researchers to question the endless pursuit of economic growth. Several macroeconomic modelling studies have now examined…
The purpose of this paper is to provide further understanding into the structure of the sequential allocation ("stochastic multi-armed bandit", or MAB) problem by establishing probability one finite horizon bounds and convergence rates for…
We consider an optimal investment-consumption problem for a utility-maximizing investor who has access to assets with different liquidity and whose consumption rate as well as terminal wealth are subject to lower-bound constraints. Assuming…
We study the problem of allocating bailouts (stimulus, subsidy allocations) to people participating in a financial network subject to income shocks. We build on the financial clearing framework of Eisenberg and Noe that allows the…
Imitation is widely observed in populations of decision-making agents. Using our recent convergence results for asynchronous imitation dynamics on networks, we consider how such networks can be efficiently driven to a desired equilibrium…