Dynamic Gains Research Articles

Adaptive output feedback regulation for a class of uncertain nonlinear systems

Summary In this paper, the problem of global state regulation by output feedback is investigated for a class of uncertain nonlinear systems satisfying some relaxed upper-triangular-type condition. Using a linear dynamic gain observer with two dynamic gains and introducing two appropriate change of coordinates, we give a constructive design procedure for the linear-like output feedback stabilizing controller. It is proved that the proposed controller globally regulates all the states of the uncertain system and maintains global boundedness of the closed-loop system. An example is provided to demonstrate the effectiveness of the proposed design scheme. Copyright © 2014 John Wiley & Sons, Ltd.

Comment

Comment

Excessive Entry and Social Inefficiencies: A Policy Experiment on Dynamic Efficiency Gains

This paper evaluates how different lengths of entry protection impact market structure and market performance. We formulate a dynamic oligopoly model in the tradition of Ericson and Pakes (1995) and allow entry costs to vary over time. Firms decide when to enter a market, followed by production and exit decisions. Using a detailed dataset on quarterly firm-level data on the static random access memory industry from 1974 to 2003, we find that entry costs decline by more than 90% within the first three years. We perform a policy experiment in which a social planner can control the protection length of the first entrant. Our policy experiment assesses to what extent ”excessive entry” causes social inefficiencies. We especially focus on dynamic economies of scale, time variant entry costs and dynamic efficiency gains for assessing the impact on consumer and producerwelfare. Our policy experiments provide evidence that the duration of entry protection has a negative impact on consumer surplus. We also find that entry protection increases social welfare if the protection duration is either sufficiently short or sufficiently long. If entry prot ection duration is short, the increase in monopolist’s profits and entry cost saving dominate the reduction in consumer welfare, which affects total welfare positively. If the protection period is long, dynamic efficiency gains, i.e., the delay of subsequent entry and savings on entry costs impact total welfare positively.

Dynamic Gains and Market Access Insurance: Another Look at the Australia–US Free Trade Agreement

Abstract We revisit the benefits of the Australia–US Free Trade Agreement (AUSFTA) and, in particular, evaluate the insurance value of this agreement in the face of regional and global trade wars. The insurance benefits are quantified by comparing the AUSFTA against alternative scenarios where some or all regions raise tariffs by 10 percentage points. Issues regarding expectations and the timing of potential trade wars are considered by using a dynamic model. The potential gains relative to these alternative trade war status quo scenarios are found to be as much as four times larger than the traditional efficiency gains.

The Dynamic Efficiency Gains from Introducing Capacity Payments in the National Electricity Market

Abstract Australia's National Electricity Market (NEM) has been a beacon for governments around the world considering power industry reform. However, while the energy‐only NEM has served Australia well since 1998, deep structural supply‐side faults exist. Competitive energy‐only markets do not have a stable equilibrium solution unless reliability constraints are violated, market power is exercised, or scarcity pricing operates unabated. But the political economy of electricity means none of this is likely. This research finds that by reducing the NEM price cap and introducing a ‘capacity payments pool’, a tractable and politically acceptable equilibrium can be established to facilitate timely plant entry.

North-South Technological Diffusion and Dynamic Gains from Trade

This paper studies the transitional dynamics in a quality ladder model of endogenous growth in which North-South trade leads to technological diffusion through reverse engineering of intermediate goods. The concept of learning-to-learn is incorporated into both imitative and innovative processes, which in turn drive domestic technological progress. International trade with imitation leads to feedback effects between Southern imitators and Northern innovators who compete for the world market. Consequently, both regions face transition paths dependent on their relative technologies. We solve the model numerically to illustrate the transition paths and welfare effects of Southern trade liberalization. While particular welfare results depend on parameter choices, we demonstrate that focusing solely on steady-state results can lead to incorrect welfare interpretations.

Implications of Intellectual Property Rights for Dynamic Gains from Trade

A simple intellectual property rights (IPRs) framework is introduced into a dynamic quality ladder model of technological diffusion between innovating firms in one country and imitating firms in another country. The presence of technological spillovers and feedback effects between firms in the two countries demonstrates that, even when steady state growth increases, transition costs sometimes dominate steady state welfare gains. Most existing models of international IPRs find that high intellectual property enforcement in the imitating country leads to welfare gains in the innovating country at the expense of the imitating country. In contrast, we find IPR regimes that, even after accounting for transition costs, positively affect welfare in both countries. Preferred IPR regimes maintain competition from imitative activity but enforce some remuneration to innovators for the spillovers they generate. Well-designed IPR regimes imposed at the time of trade liberalization will be welfare enhancing for both regions relative to trade liberalization without IPR enforcement.

Implications of Intellectual Property Rights for Dynamic Gains from Trade

A simple intellectual property rights (IPRs) framework is introduced into a dynamic quality ladder model of technological diffusion between innovating firms in one country and imitating firms in another country. The presence of technological spillovers and feedback effects between firms in the two countries demonstrates that preferred IPR regimes are ones that positively affect world growth and hence welfare in both countries. Most existing models of international IPRs, however, generally find that high intellectual property enforcement in the imitating country leads to welfare gains in the innovating country at the expense of the imitating country. An well-designed IPR regime imposed at the time of trade liberalization will be welfare enhancing for both regions relative to trade liberalization without IPR enforcement. Moreover, the preferred IPR regime will be one that maintains competition from imitative activity but enforces some remuneration to innovators for the spillovers they generate.

North-South Technological Diffusion and Dynamic Gains from Trade

This paper revisits the question of gains from trade in a dynamic setting from the perspective of an R&D based growth model of technological diffusion. The transition paths, as well as steady-state growth paths, are analyzed for a developed and a developing nation trading in intermediate and final goods. Static computable general equilibrium (CGE) models have yielded only small welfare gain estimates (.5-1%) for trade liberalization. Dynamic models have increased these estimates (up to 10%), but often ignore feedback effects caused by technological diffusion and generally consider only steady-state welfare effects. These feedback effects are especially important due to the long transition paths they induce for both countries. This paper studies the transitional dynamics in a quality ladder model of endogenous growth in which North-South trade leads to technological diffusion through reverse engineering of intermediate goods. The concept of learning-to-learn is incorporated into both imitative and innovative processes, which in turn drive domestic technological progress. International trade with imitation leads to feedback effects between Southern imitators and Northern innovators who compete for the world market. Consequently, both regions face transition paths dependent on their relative technologies. When the South liberalizes its trade, world growth increases, leading to welfare gains of 5% for the South. While the North also experiences steady-state welfare gains, the transition costs borne by the North during the long transition lead to an overall loss in Northern welfare. Still, this loss is attributable to the lack of intellectual property rights (IPRs) rather than trade per se. Interestingly, imposition of IPRs not only leads to an overall welfare gain for the North, but also further boosts Southern welfare gains up to 16%, again because of the feedback effects in technology.

Implications of Intellectual Property Rights for Dynamic Gains from Trade

Implications of Intellectual Property Rights for Dynamic Gains from Trade by Michelle Connolly and Diego Valderrama. Published in volume 95, issue 2, pages 318-322 of American Economic Review, May 2005

Measuring the Dynamic Gains from Trade

This article investigates the links between trade policy and economic growth in a panel of 57 countries between 1970 and 1989. It develops a new measure of trade policy openness based on the policy component of trade shares, using it in a simultaneous equations system to identify the effect of trade policy on several determinants of growth. The result suggests a positive impact of openness on economic growth, with the accelerated accumulation of physical capital accounting for more than half the total effect; for smaller effects. This decomposition is robust with respect to alternative specifications and time periods. The article also successfully tests whether the model exhaustively captures the effects of trade policy on growth.

Dynamic Gains from International Trade with Imperfect Competition and Market Power

This paper revisits the gains from trade under imperfect competition by explicitly modeling strategic competition and entry. The papers highlights a welfare cost of imperfect competition, due to inefficiently high entry. Through increasing competition, international trade lowers price–cost markups and reduces excessive entry. This adds on a “competitive” channel for gains from trade to the well‐known “product diversity” channel from previous literature. Both channels will increase the return to investment and raise the steady‐state capital stock. An alternative case is possible, however, where there is inefficiently low entry. In that case, trade tends to be “anticompetitive,” raising price–cost markups and encouraging increased entry.

Dynamic Gains from Trade: Evidence from South Africa

This paper examines the empirical relationship between trade and total factor productivity (TFP) in South Africa. Using data on actual trade protection across different manufacturing sectors, it is shown that trade liberalization had a positive impact on TFP growth during the 1990s. In addition, time-series evidence on macro data supports a positive long-run relationship between TFP and openness.

Dynamic Gains from Trade: Evidence from South Africa

Dynamic Gains from Trade: Evidence from South Africa

Dynamic Gains From Trade: Evidence From South Africa

This paper examines the empirical relationship between trade and total factor productivity (TFP) in South Africa. It uses (i) a time series approach where trade is defined in terms of aggregate outcomes, i.e., as the share of imports plus exports in GDP, and (ii) a cross sectional approach, where trade is defined in terms of trade policy, i.e., as actual trade protection across different manufacturing sectors. The results indicate that there is a significant positive relationship between trade and TFP growth both over time and across sectors.

Using Neural Networks for Engine Modelling and Sensor Failure Diagnosis

This paper presents the procedure of using neural networks for nonlinear dynamic modelling of the manifold pressure process in automotive engines. An external recurrent neural network is used for dynamic mapping. The dynamic LevenbergMarquardt algorithm is then applied to the weight-estimation. Based on the obtained neural models, a new method called dynamic gain matrix technique is proposed to isolate the sources of sensor failures. Comparing the dynamic gains of the system model in both normal and abnormal cases, it can easily locate the sources of failures.The experimental results show that the neural network based dynamic model is better than the first principles based dynamic model. Moreover, the proposed method of dynamic gain matrix technique can effectively isolate the sensor failures.

North-South Technological Diffusion: A New Case for Dynamic Gains from Trade

The transitional dynamics for both a developed and a less developed country are derived when North-South trade leads to technological diffusion through reverse engineering of intermediate goods in a quality ladder model of endogenous growth. Domestic technological progress occurs via innovation or imitation, while growth is driven by technological advances in the quality of domestically available inputs, regardless of country of origin. The concept of learning-to-learn is incorporated into both imitative and innovative processes. International trade with imitation leads to feedback effects between Southern imitators and Northern innovators who compete for the world market. Hence, both countries face transition paths dependent on the relative technologies in the two countries. For reasonable parameter values, the rates of innovation and imitation are both falling in transition to steady-state and yet remain above that under autarky. Increased interaction between the North and the South, through increased openness to imports of Northern intermediate goods, leads to higher world growth, demonstrating dynamic benefits to the South of increased trade with a more developed country. The transition to steady-state in which the rate of innovation in the developed country falls as the developing country reduces the technology gap between the two countries may explain the apparent recent slowdown of total factor productivity growth in OECD countries over the last 30 years.

Dynamic Gains and Losses from Trade Reform: An Intertemporal General Equilibrium Model of the United States and MERCOSUR

An intertemporal general equilibrium model of the United States and MERCOSUR is created to analyze the dynamic adjustments in both regions' commodity and capital markets after trade liberalization. Simulation results show that tariff reductions initiated by MERCOSUR have small positive effects on the U.S. production, trade, consumption and investment, and stimulates MERCOSUR's growth, and improves its current account. If tariffs are eliminated by both regions, both regions are better off from points of intertemporal social welfare, international trade, domestic investment, and growth. Agriculture benefits more from trade reform, which implies that rural-agricultural sector might have been a victim of trade protection policies.

Austria in the European Union: Dynamic Gains from Integration and Distributional Implications

Austria in the European Union Dynamic gains from integration and distributional implications This article proposes to measure the welfare effects of Austria's membership of the EU. In addition to the traditional sectoral reallocation effects of open trade, our computations take into account a number of effects not usually measured: expected capital accumulation, saving, and income redistribution across generations. EU membership involves trade integration (lower trade costs, a common external tariff), adopting the common agricultural policy, and membership contributions to the EU. The gains from trade integration and the adoption of the common agricultural policy are partly offset by the burden of contribution payments. The net welfare gain, measured in terms of an equivalent permanent income stream, is 1.24% of GDP. This aggregate figure masks sizeable distribution effects. As expected, agriculture is particularly hard hit. Moreover, membership has a tendency to favour the old as well as future generations at the expense of those entering economic life at the time of accession. We conclude that the ultimate gains from EU membership will depend on how these distribution issues are solved and how the budgetary cost is financed. —Christian Keuschnigg and Wilhelm Kohler

Assessing the Dynamic Efficiency Gains of Tax Reform when Human Capital is Endogenous

This paper develops a life-cycle growth model with endogenous human capital accumulation and variable leisure, which is employed to simulate dynamic equal-yield changes from an income tax to a consumption tax. Although endogenizing human capital investment decisions raises partial-equilibrium estimates of the efficiency costs of capital income taxation, general-equilibrium welfare impacts of unanticipated tax changes are little affected by the inclusion of endogenous human capital. This finding cannot be fully explained by the presence of general-equilibrium adjustments in factor prices and can be attributed in part to the existence of transitional rigidities in capital stocks. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.