Optimal Monetary Policy, Commitment, and Imperfect Credibility

In the conventional optimal monetary policy framework, two key assumptions underline the full commitment solution : Monetary authority is perfectly credible, and can commit for an infinite number of periods. Using a baseline forward-looking model, this study explores the implications of relaxing these assumptions in turn. First, finite lasting commitments are introduced using a stochastic exogenous process that generates policy reoptimizations. As a consequence, monetary policy is characterized with a continuum from pure discretion to full commitment. Second, we solve the optimal and robust targeting rules when the central bank confronts imperfect and/or uncertain credibility. Imperfect credibility is defined as a situation in which the private sector expects the commitment regime to end sooner than that is intended by the policy maker. The results indicate that, under imperfect credibility, optimal policy becomes observationally closer to the discretionary solution, the more being so as the degree of uncertainty rises. These findings may be insightful for explaining the observed near-discretionary behavior of the central banks, which indeed operate under imperfect credibility.Optimal Monetary Policy, Stabilization Bias, Imperfect Credibility, Discretion, Commitment

Turkish Experience With Implicit Inflation Targeting

This paper describes the challenges faced during the implementation of implicit inflation targeting in Turkey and evaluates the transition process to full-fledged inflation targeting. Using this background, the paper draws lessons for similar countries considering inflation targeting as a monetary policy regime. We argue that, the strategy of starting inflation targeting with an "implicit" version and gradually converging to full-fledged targeting can be a viable option when certain set of conditions is not satisfied. We conjecture, however, that implementing a "light" version?namely implicit inflation targeting?does not necessarily mean that the system would be exempt from all the prerequisites. In the Turkish case, for example, institutional independence and political support seem to have been the fundamental conditions for initiating the process of inflation targeting.Implicit inflation targeting, Price stability, Turkey

Multimodal person recognition for human-vehicle interaction

Next-generation vehicles will undoubtedly feature biometric person recognition as part of an effort to improve the driving experience. Today's technology prevents such systems from operating satisfactorily under adverse conditions. A proposed framework for achieving person recognition successfully combines different biometric modalities, borne out in two case studies

The quantum optical Josephson interferometer

The interplay between coherent tunnel coupling and on-site interactions in dissipation-free bosonic systems has lead to many spectacular observations, ranging from the demonstration of number-phase uncertainty relation to quantum phase transitions. To explore the effect of dissipation and coherent drive on tunnel coupled interacting bosonic systems, we propose a device that is the quantum optical analog of a Josephson interferometer. It consists of two coherently driven linear optical cavities connected via a central cavity with a single-photon nonlinearity. The Josephson-like oscillations in the light emitted from the central cavity as a function of the phase difference between two pumping fields can be suppressed by increasing the strength of the nonlinear coupling. Remarkably, we find that in the limit of ultra-strong interactions in the center-cavity, the coupled system maps on to an effective Jaynes-Cummings system with a nonlinearity determined by the tunnel coupling strength. In the limit of a single nonlinear cavity coupled to two linear waveguides, the degree of photon antibunching from the nonlinear cavity provides an excellent measure of the transition to the nonlinear regime where Josephson oscillations are suppressed.Comment: 9 pages, 7 figure

The quantum optical Josephson interferometer

The interplay between coherent tunnel coupling and on-site interactions in dissipation-free bosonic systems has lead to many spectacular observations, ranging from the demonstration of number-phase uncertainty relation to quantum phase transitions. To explore the effect of dissipation and coherent drive on tunnel coupled interacting bosonic systems, we propose a device that is the quantum optical analog of a Josephson interferometer. It consists of two coherently driven linear optical cavities connected via a central cavity with a single-photon nonlinearity. The Josephson-like oscillations in the light emitted from the central cavity as a function of the phase difference between two pumping fields can be suppressed by increasing the strength of the nonlinear coupling. Remarkably, we find that in the limit of ultra-strong interactions in the center-cavity, the coupled system maps on to an effective Jaynes-Cummings system with a nonlinearity determined by the tunnel coupling strength. In the limit of a single nonlinear cavity coupled to two linear waveguides, the degree of photon antibunching from the nonlinear cavity provides an excellent measure of the transition to the nonlinear regime where Josephson oscillations are suppressed.Comment: 9 pages, 7 figure