Iterated reflection principles over full disquotational truth

Iterated reflection principles have been employed extensively to unfold epistemic commitments that are incurred by accepting a mathematical theory. Recently this has been applied to theories of truth. The idea is to start with a collection of Tarski-biconditionals and arrive by finitely iterated reflection at strong compositional truth theories. In the context of classical logic it is incoherent to adopt an initial truth theory in which A and 'A is true' are inter-derivable. In this article we show how in the context of a weaker logic, which we call Basic De Morgan Logic, we can coherently start with such a fully disquotational truth theory and arrive at a strong compositional truth theory by applying a natural uniform reflection principle a finite number of times

Theory and Test on the Corporate Governance of Financial Cooperative Systems: Merger vs. Networks

This paper presents a study of the economic organization of systems of financial cooperatives (FC). The first part presents a theoretical framework rooted in principles of transaction cost economics (TCE) that seeks to explain empirical regularities observable in systems of FC worldwide. The second part is an empirical study that compares X-efficiency between members of the Quebec Desjardins movement (DM) and the United States Credit Union system (USCU), the first organized as a tight network of institutions and the second composed largely by independent institutions with few ties. The fundamental proposition is that networks, are a superior form of governance mechanism (over markets and mergers) for relatively wide and relevant ranges of contractual hazard and size of the institutions. Further, that networks provide substitute, hierarchy based, control mechanisms when size of the institution dilutes internal governance mechanisms, discouraging subgoal pursuits and expense preferences by agents, both occurring in large FC. The theory allows us to generate a set of testable hypothesis of which we highlight three: i) For small FC, differences in efficiency will be relatively small, if any. ii) Large institutions should display systematically lower efficiency than similar sized FC members of strategic networks. iii) Networks should display lower variance in the size as well as in performance indicators. Throughout, empirical results are consistent with our central theoretical proposition.Transaction cost economics, financial cooperatives, credit unions, networks, corporate governance, technical efficiency, X-efficiency

A methodology for neural spatial interaction modelling

This paper presents a methodology for neural spatial interaction modelling. Particular emphasis is laid on design, estimation and performance issues in both cases, unconstrained and singly constrained spatial interaction. Families of classical neural network models, but also less classical ones such as product unit neural network models are considered. Some novel classes of product unit and summation unit models are presented for the case of origin or destination constrained spatial interaction flows. The models are based on a modular connectionist architecture that may be viewed as a linked collection of functionally independent neural modules with identical feedforward topologies, operating under supervised learning algorithms. Parameter estimation is viewed as Maximum Likelihood (ML) learning. The nonconvex nature of the loss function makes the Alopex procedure, a global search procedure, an attractive and appropriate optimising scheme for ML learning. A benchmark comparison against the classical gravity models illustrates the superiority of both, the unconstrained and the origin constrained, neural network model versions in terms of generalization performance measured by Kullback and Leibler`s information criterion. Hereby, the authors make use of the bootstrapping pairs approach to overcome the largely neglected problem of sensitivity to the specific splitting of the data into training, internal validation and testing data sets, and to get a better statistical picture of prediction variability of the models. Keywords: Neural spatial interaction models, origin constrained or destination constrained spatial interaction, product unit network, Alopex procedure, boostrapping, benchmark performance tests.

Financial Liberalization Causes Banking System Fragility

This paper explores theoretically and empirically the link between Financial Liberalization (FL) and the banking crisis that often follow. We also investigate the proposition, classical in development economics, that FL should result in an increase in supply of funds to the real sector. To accomplish this we first develop a theoretical model of a banking firm that operates under financial repression and is then subject to FL. The model yields the result that following FL there is an unambiguous increase in risk to the banking firm which implies a higher probability of a banking crisis following FL. Less formally, we also conclude that the presence of a explicit or implict deposit insurance scheme is likely to accentuate the incentives to engage in risk and the risk structure of the banking system. Moral hazard plays an important role in this increase in risk to the banking sector. This questions the ''innocence'' of the bank owners in the crisis that have often followed FL and that had been attributed to either macroeconomic policy, concomitant structural changes in the economy or left-over distortions from the financial repression period. The sign of the change in supply of credit to the real sector, however, is ambiguous. Then we test empirically the propositions resulting from this model using data of 73 banks (some of which may have become technically insolvent) from Greece, Malaysia, Mexico, Taiwan and Thailand. The tests tend to support the conclusions of the theoretical model, i.e. unambiguous increase in risk and, for the sample used, an unambiguous fall in loan supply as a proportion of funds available. Finally we draw policy implication with respect to bank supervision, forbearance and bank failure resolution procedures during the transition period, and about the so-called ''liberalization sequencing.''Financial liberalization, Deregulation, Commercial banking, Systemic risk

TEST: A Tropic, Embodied, and Situated Theory of Cognition

TEST is a novel taxonomy of knowledge representations based on three distinct hierarchically organized representational features: Tropism, Embodiment, and Situatedness. Tropic representational features reflect constraints of the physical world on the agent’s ability to form, reactivate, and enrich embodied (i.e., resulting from the agent’s bodily constraints) conceptual representations embedded in situated contexts. The proposed hierarchy entails that representations can, in principle, have tropic features without necessarily having situated and/or embodied features. On the other hand, representations that are situated and/or embodied are likely to be simultaneously tropic. Hence while we propose tropism as the most general term, the hierarchical relationship between embodiment and situatedness is more on a par, such that the dominance of one component over the other relies on the distinction between offline storage vs. online generation as well as on representation-specific properties

101 Proposals to reform the Stability and Growth Pact. Why so many? A Survey

The failure of key EU Member States to respect the requirements of the Stability and Growth Pact (SGP) a few years after its inception triggered a heated debate on how to reform the framework of fiscal policy coordination in the Economic and Monetary Union (EMU). This paper systematically analyzes 101 reform proposals presented by professional academic and non-academic economists prior to March 2005, when the Council of the European Union adopted a revised version of the SGP. Each proposal is characterized by a set of variables reflecting features such as the degree of modification of the SGP, the background of its author(s), the main aim attached to fiscal policy coordination in the EMU, the timing of the proposal and the type of proposal made. Using multivariate statistical analysis, roughly four different schools of thought concerning the reform of the SGP are identified. In line with the main findings of the political economy literature, all four schools of thought share the view that in the absence of specific rules fiscal policy would lead to excessive deficits and hence affect the conduct of the common monetary policy. However, beyond this common denominator, there is no consensus on how best to co-ordinate fiscal policy.Several explanations for the multitude of proposals are presented, the most important being the present lack of a consensus in the economics profession concerning the role of fiscal policy.Monetary union, euro, fiscal policy, Stability and Growth Pact, international policy coordination, EMU, European Union, Europe, Fischer, Jonung, Larch