How to control a chaotic economy?

An economic system which exhibits chaotic behaviour has been stabilized on various periodic orbits by use of the Ott-Grebogi-Yorke method. This procedure has been recently applied to controlling chaotic phenomena in physical, chemical and biological systems. We adopt this method successfully for Feichtinger's generic model of two competing firms with asymmetrical investment strategies. We show that the application of this control method to the particular economic process considered brings a substantial advantage: one can easily switch from a chaotic trajectory to a regular periodic orbit and simultaneously improve the system's economic properties. Numerical simulations are presented in order to illustrate the effectiveness of the whole procedure.The work was supported by the Alexander von Humboldt-Stiftung and by the Polish National Council (KBN) Grant No 2 P302 038 04.     

Asymptotic confidence bands for the estimated autocovariance and autocorrelation functions of vector autoregressive models

This paper provides closed-form formulae for computing the asymptotic covariance matrices of the estimated autocovariance and autocorrelation functions of stable VAR models by means of the delta method. These covariance matrices can be used to construct asymptotic confidence bands for the estimated autocovariance and autocorrelation functions to assess the underlying estimation uncertainty. The usefulness of the formulae for empirical work is illustrated by an application to inflation and output gap data for the U.S. economy indicating the existence of a significant short-run Phillips-curve tradeoff.First version received: November 2002/Final version received: September 2003     

Environmental problems in Belarus

Résumé By far the most pressing problbem facing Belarus is the radioactive contamination resulting from the accident at the Chernobyl nuclear power station and the on-going threat to the environment posed by the destroyed reactor and those blocks which continue to produce electricity. The country is clearly not in a position to cope with the repercussions of the disaster. Western aid is required here, particularly to provide medical care for the population, decontaminate polluted areas, provide reliable measuring equipment and to analyse the level of contamination in food supplies. Air pollution, although worrying in some cities, is not as dramatic as in most of the polluted industrial centres of Russia and the Ukraine. Water pollution, too, is less serious than in most of the successor states to the Soviet Union. A serious problem is, however, posed by salification of the water supply by the potash industry. Recently environmental charges were introduced with the aim of improving environmental protection. Yet given rapid inflation and the persistence of soft budget constraints for enterprises, such charges are unlikely to have so far provided a significant incentive to more ecologically sustainable production in Belarus.     

Zwischen Vertragstreue und Vorteilsstreben

In the context of this article the author states that the present law situation is quite sufficient, in order to fight frauds within the insurance range effectively. In his personal view it is missing however at general consciousness that such frauds represent criminal injustice. In all other respects the author demands the attitude of the insurance industry to bring already detected criminal offences also to criminal pursuit.     

Zur Nachhaltigkeit der Generationenverträge: Eine Diagnose der Kranken- und Pflegeversicherung

Employing the generational accounting approach, this paper analyses the stance of fiscal policy in Germany. We find that fiscal policy is presently not sustainable, which is mainly due to pay-as-you-go financed social insurance systems. In order to illustrate the relative impact, we isolate the Public Health Insurance and the Public Long Term Care Insurance. Our findings suggest that without radical reforms the implicit debt burden for future generations might reach a magnitude of more than two times the annual GDP and contribution rates to both schemes will explode during the next three decades.