Nominal Stabilization Research Articles

Milton Friedman and nominal income targeting

AbstractFor much of his career, Milton Friedman advocated a constant monetary growth rule to limit central bank discretion and to achieve long‐term price stability. By contrast, Friedman wrote little on nominal income stabilization as an alternative goal for monetary policy. Nevertheless, a careful examination of Friedman's work shows that in his view the desirability of a constant monetary growth rule depended on its ability to stabilize nominal income. Friedman's preference for simple rules, requiring minimal knowledge on the part of central banks, would have given him strong reason to support nominal income targeting over central banks' standard practice of inflation targeting. Several strategies for achieving a nominal income target are considered, including a modified Taylor rule and several monetary base rules.

Mismatched disturbance compensation enhanced robust H∞ control for systems with nonvanishing uncertainties/disturbances

AbstractThis article proposes a robust control method based on disturbance observer techniques for systems subject to mismatched uncertainties/disturbances. In the existing composite robust control methods with disturbance compensation, only matched uncertainties/disturbances, that is, the uncertainties/disturbances acting on the same channels as the control inputs, are feedforward compensated, while the mismatched ones are only attenuated in a conservative manner. It should be highlighted that if the mismatched uncertainties/disturbances are nonvanishing, the controller generally requires excessive control energy to suppress the effects of uncertainties/disturbances, where the control gains must be designed to ensure robust properties at the expense of sacrificing nominal tracking and/or stabilization performances. To address this problem, this article further introduces the compensation of mismatched uncertainties/disturbances into the robust control. Moreover, to attenuate the effects of observation errors, sufficient conditions for the asymptotic and robust stability of error systems are established. Finally, the proposed controller is applied to a DC–DC buck converter system feeding constant power load. Experimental results confirm its feasibility and efficiency.

DYNAMICS OF OPTIMUM MONETARY POLICY IN A SMALL OPEN-ECONOMY: A NEW-KEYNESIAN DSGE MODEL FOR TURKISH ECONOMY

The purpose of this paper is to investigate the sources of business cycle fluctuations in a small open economy (SOE) using dynamic stochastic general equilibrium (DSGE) models and to assess the path of optimal policy decisions taken by the Central Bank of the Republic of Turkey (CBRT). To that purpose, the SOE-DSGE model is estimated using the Bayesian technique with Turkish data spanning the quarters 2003Q2–2020Q1. Based on the estimated model, the study finds that the explanatory power of the SOE-DSGE model for household, firm and central bank behavior decreases when consumer habit formation, price indexation and exchange rate sensitivity are included. Furthermore, technology, preferences, and risk premium shocks all have a significant impact on the Turkish economy. The CBRT, on the other hand, was principally concerned with price stabilization, interest rate smoothing, output and output growth stabilization, and nominal exchange rate stabilization, respectively. More importantly, the optimal monetary policy function implies that output growth should be better stabilized if exchange rate sensitivity target is ignored.

Design and Simulation of a controller for Double Fed Induction Generator turbine Utilized Solar Up Draft Tower

This paper introduces a complete design and simulation of a controller for the double fed induction generator (DFIG) turbine. The work also included the solar updraft tower (SUT) design to supply Al-Mahmoudia hospital in Baghdad/Iraq. The design includes the daily average load estimation, annual solar irradiance and, temperature monitoring, and logging.
 According to the data obtained from the Ministry of Science and Technology, Baghdad has low wind speed. Therefore, the (SUT) has been designed to generate electrical power depending on the difference between the external and internal air temperature. The temperature difference will generate a suitable airspeed to drive the wind turbine, connected to the proposed (DFIG) generators that generate the appropriate electrical power required. The proposed controller of the DFIG is based on (vector control) by using PI control to feed the power of the rotor circuit parts. The (DFIG) consists of two back-to-back PWM inverters connected between the stator and the rotor. This paper's main goal is to design and simulate a controller for two (DFIG's) under various operating conditions driven by a wind turbine, which is rotated by the warm wind effect inside the solar updraft tower. This is to generate maximum power with constant magnitude and frequency of the output voltage. The proposed controller's performance is verified by using a simulation model built using the MATLAB/Simulink software. The simulation results confirm that the proposed controller (Vector Control), using PI controller maintains both the magnitude and frequency of the output voltage stays constant at the nominal values and stabilization irrespective of the wind speed variations and extract maximum output power. In addition, the controller provides (MPPT) to the turbine to generate the maximum power according to the available wind speed. The torque will give the rotor quadrature current (Iqr), which causes speed change according to the working conditions. The results also showed the steady-state and discussed the two different methods (Vector Control, MPPT) of the control strategy (DFIG). MATLAB and Simulink software used for modeling one of DFIG's modules to supply the hospital load of 276 KW. Besides, simulation results show that the controller demonstrates significant improvements in terms of better stability and faster response.

Parameterized fuzzy-logic controllers for the attitude control of nanosatellites in low earth orbits. A comparative studio with PID controllers

The pointing requirements for a satellite (e.g. for its payload or for its subsystems) determine the different attitude control system operational modes that are necessary along its mission. Two examples are: a low cost mode for nominal attitude stabilization; and a faster mode for antenna pointing during communication phases. In this work, an attitude control algorithm based on fuzzy logic is presented to achieve an optimal performance of the controller for different operational requirements of the satellite mission. After analysing the design process and the response of previous fuzzy controllers, several improvements have been implemented concerning the number of membership functions, their shape, and the contents of the fuzzy rules, obtaining a parameterized final fuzzy inference system whose performance depends on eighteen parameters, six per each of the three control axes. The design proposed in this work will be tested soon on board the European Space Agency OPS-SAT mission and it is easily extensible to most nanosatellite missions in Low Earth Orbits.Different sets of the eighteen tuning parameters have been used to analyse the design and the performance of this new fuzzy controller. The values have been selected through multi-objective genetic optimizations to deal with two conflicting objectives: low cost and accuracy. A numerical performance comparison shows that the new design provides more efficient controllers than those used in previous works. In addition, the performance of the new fuzzy controller has been evaluated against traditional Proportional Integrative Derivative (PID) controllers for different satellite operational requirements. The values of the PID gains have also been selected through the same multi-objective genetic optimization. The comparisons show that the new fuzzy design provides great advantages over the PID strategy in most of the operational modes considered, and how the PID strategy has difficulties to produce a low cost control law profile. Furthermore, the new fuzzy design is able to improve the Pareto front to optimal points that are unreachable with the PID schema. These results open new possibilities for the application of intelligent controllers in the space industry.

Admittance parameterization in linear networked bilateral teleoperation control

In this paper we study linear control of delayed and/or sampled bilateral teleoperation with LTI master and slave devices. A complete parameterization of admittance operators achievable with nominally stabilizing control laws is derived. The potential of this parameterization for controller synthesis is illustrated with a numerical example. In addition, a generic structure of nominally stabilizing controllers is revealed and its properties are discussed. It is shown that delay-independent nominal stabilization in linear networked bilateral teleoperation control does not imply limitations on performance and coupled stability.

Output gap, monetary policy trade-offs, and financial frictions

This paper investigates how the presence of pervasive financial frictions and large financial shocks changes the optimal monetary policy prescriptions and the estimated dynamics in a New Keynesian model. We find that financial factors affect the optimal policy only to some extent. A policy of nominal stabilization (with a particular focus on targeting wage inflation) is still the optimal policy, although the central bank is now unable to fully stabilize economic activity around its potential level. In contrast, the presence of financial frictions and financial shocks crucially changes the size and shape of the estimated output gap and the relative importance of different shocks in driving economic fluctuations, with financial shocks absorbing explanatory power from labor supply shocks.

Slow Post-Financial Crisis Recovery and Monetary Policy

Post-financial crisis recoveries tend to be slow and be accompanied by slowdowns in TFP and permanent losses in GDP. To prevent them, how should monetary policy be conducted? We address this issue by developing a model with endogenous TFP growth in which an adverse financial shock can induce a slow recovery. In the model, a welfare-maximizing monetary policy rule features a strong response to output, and the welfare gain from output stabilization is much larger than when TFP expands exogenously. Moreover, inflation stabilization results in a sizable welfare loss, while nominal GDP stabilization works well, albeit causing high interest-rate volatility.

Slow Post-financial Crisis Recovery and Monetary Policy

Post-financial crisis recoveries tend to be slow and accompanied by slowdowns in total factor productivity (TFP) and permanent losses in GDP. To prevent them, how should monetary policy be conducted? We address this issue by developing a model with endogenous TFP growth in which an adverse financial shock can induce a slow recovery. In the model, a welfare-maximizing monetary policy rule features a strong response to output, and the welfare gain from output stabilization is much larger than when TFP expands exogenously. Moreover, inflation stabilization results in a sizable welfare loss, while nominal GDP stabilization works well, albeit causing high interest rate volatility. (JEL E12, E23, E32, E43, E44, E52, G01)

Output Gap, Monetary Policy Trade-Offs and Financial Frictions

This paper investigates how the presence of pervasive financial frictions and large financial shocks changes the optimal monetary policy prescriptions and the estimated dynamics in a New Keynesian model. We find that financial factors affect the optimal policy only to some extent. A policy of nominal stabilization (with a particular focus on targeting wage inflation) is still the optimal policy, although the central bank is now unable to fully stabilize economic activity around its potential level. In contrast, the presence of financial frictions and financial shocks crucially changes the size and shape of the estimated output gap and the relative importance of different shocks in driving economic fluctuations, with financial shocks absorbing explanatory power from labor supply shocks.

POLÍTICA MACRO E INDUSTRIAL PARA UN CAMBIO ESTRUCTURAL Y CRECIMIENTO: GRAN PENDIENTE DE LA ECONOMÍA MEXICANA

This article describes the central features of an industrial policy to transform the productive and growth structure of the Mexican economy, which is large, open, and semi-industrialized, and has undergone a series of neoliberal reforms. The results indicate that progress has been made in key elements of nominal stabilization and in the export orientation, but that the overall economy is still not on a path to robust and sustained growth. The article concludes by arguing for the need to implement a new industrial policy to advance towards development with equality.

Control of a legged robot

AbstractThis paper deals with the control of hopping and running systems that interact intermittently with the environment. The control, based on a nonlinear energy reference model, has the main task of conferring to the system, a periodic stable behavior. This approach may be used for gait generation, nominal stance stabilization, energy shaping, and optimization.

Output Gap in Presence of Financial Frictions and Monetary Policy Trade-offs

The recent global financial crisis illustrates that financial frictions are a significant source of volatility in the economy. This paper investigates monetary policy stabilization in an environment where financial frictions are a relevant source of macroeconomic fluctuation. We derive a measure of output gap that accounts for frictions in financial market. Furthermore we illustrate that, in the presence of financial frictions, a benevolent central bank faces a substantial trade-off between nominal and real stabilization; optimal monetary policy significantly reduces fluctuations in price and wage inflations but fails to alleviate the output gap volatility. This suggests a role for macroprudential policies.

Output Gap in Presence of Financial Frictions and Monetary Policy Trade-Offs

The recent global financial crisis illustrates that financial frictions are a significant source of volatility in the economy. This paper investigates monetary policy stabilization in an environment where financial frictions are a relevant source of macroeconomic fluctuation. We derive a measure of output gap that accounts for frictions in financial market. Furthermore we illustrate that, in the presence of financial frictions, a benevolent central bank faces a substantial trade-off between nominal and real stabilization; optimal monetary policy significantly reduces fluctuations in price and wage inflations but fails to alleviate the output gap volatility. This suggests a role for macroprudential policies.

Inventories and optimal monetary policy in a small open economy

We study how inventory investment affects the design of optimal monetary policy in a New Keynesian small open economy model. We find that under producer currency pricing, when the intratemporal elasticity of substitution is smaller than 1, optimal monetary policy in our model with inventories is similar to a standard model without inventories. However, when the intratemporal elasticity of substitution is larger than 1, inventory investment increases the importance of nominal exchange rate stabilization relative to a standard model without inventories. The importance of nominal exchange rate stabilization increases with the intratemporal elasticity of substitution.

The Role of the Chinese Dollar Peg for Macroeconomic Stability in China and the World Economy

During the 1997/98 Asian crisis and the 2007-2010 world financial and economic crisis, China has proved to be a stabilizer for East Asia and the world. The paper stresses the crucial role of the dollar peg for macroeconomic stability in China. The paper explores the current role of China’s nominal exchange rate stabilization as stabilizing factor for China, East Asia and the world economy. Distortions originating in real exchange rate stabilization are identified and are argued to be a risk for global growth perspectives. To prevent further economic and financial turmoil the paper recommends policy coordination between China and the US. The exit from unconventional low interest rate policies in the US combined with the end of real (but not nominal) exchange rate stabilization in China is seen as necessary to stabilize long-term growth in China, East Asia and the US.

Nominal debt and inflation stabilization

The “fiscal theory of currency crises” (Daniel 2001; Corsetti and Mackowiak 2005, 2006) claims that with long-term nominal debt, a government can delay the timing of an inevitable currency crisis that results from a fiscal shock. The present paper shows that, in contrast, long-term nominal debt might have destabilizing effects when a government introduces an inflation stabilization policy. It is shown that a stabilization policy that is successful in the absence of long-term nominal debt can cause a crisis when long-term nominal debt exists. The model implies that a government with a large stock of long-term nominal debt must overcome a high fiscal hurdle for a successful stabilization policy. This difficulty is avoidable if long-term debt is indexed to inflation.

The Portuguese Disinflation Process: Analysis of Some Costs and Benefits

This study aims to analyse the Portuguese economic policy of disinflation through a nominal stabilization policy of the Portuguese escudo. We study the pegging of the Portuguese escudo to the deutschmark knowing the reputation of the Bundesbank for its anti-inflationary record. The acceptance of German monetary policy allowed the Portuguese economy to achieve its primary goal of price stability. The nominal stability policy of the escudo may serve as an example for other small economies that may be presently involved in the European integration process such as the Czech Republic, Estonia, Hungary, Poland and Slovenia.

Rapid Initial Detumbling Strategy for Micro/Nanosatellites Using a Pitch Bias Momentum System

When a satellite separates from the launch vehicle, an initial high angular rate or a tip-off rate is generated. B-dot logic is generally used for controlling the initial tip-off rate. However, it has the disadvantage of taking a relatively long time to control the initial tip-off rate. To solve this problem, this paper suggests a new detumbling control method that can be adapted to micro/nanosatellites using a pitch bias momentum system, and presents simulation results. The proposed detumbling method was able to control the angular rate within 20 min, which is a significant reduction compared to conventional methods. In addition, the momentum wheel initial start-up must be done under stable conditions, and a conventional pitch spin-stabilized initial wheel start-up method is commonly used. Since the conventional wheel start-up method cannot be used if the detumbling controller proposed by this paper is used, a method is also proposed for bringing up the momentum wheel speed to nominal rpm while maintaining stability. The performance of the method is compared and verified through simulation. The overall results show a much faster control time compared to the conventional methods, and achievement of nominal wheel speed and 3-axis stabilization while maintaining stability.

피치 바이어스 모멘텀 방식을 사용하는 초소형 위성의 초기 자세획득 방안 연구

위성이 발사체로부터 분리될 때 초기 각속도가 발생한다. B-dot 로직은 일반적으로 위성의 초기각속도 제어에 사용되나, 상대적으로 제어시간이 많이 소요된다는 단점이 있다. 이런 문제를 해결하기 위해 본 논문에서는 피치 바이어스 모멘텀 방식을 사용하는 초소형 위성에 적용 가능한 디텀블링(detumbling) 방식을 새롭게 제안하였다. 제안된 디텀블링 방식은 제어시간이 약 20분 이내로 기존의 방식에 비해 상당한 시간을 줄일 수 있다. 본 논문에서 제안한 디텀블링 방식을 사용할 경우 기존의 모멘텀 휠 초기구동 방식을 사용할 수 없다. 따라서 휠의 속도를 안정적으로 공칭 속도까지 증가시키는 방식을 제안하고 시뮬레이션을 통해 비교, 검증하였다. 시뮬레이션 결과 기존의 방식과 비교했을 때 제어시간을 단축할 수 있었으며 휠의 공칭 속도와 3축 안정화를 이룰 수 있었다. When a satellite separates from the launch vehicle, an initial high angular rate or a tip-off rate is generated. B-dot logic is generally used for controlling the initial tip-off rate. However, it has the disadvantage of taking a relatively long time to control the initial tip-off rate. To solve this problem, this paper suggests a new detumbling control method to be able to adapt to micro/nanosatellite with the pitch bias momentum system. Proposed detumbling method was able to control the angular rate within 20 minutes which is significantly reduced compared to conventional methods. Since the previous wheel start-up method cannot be used if the detumbling controller proposed by this paper is used, a method is also proposed for bringing up the momentum wheel speed to nominal rpm while maintaining stability in this paper. The performance of the method is compared and verified through simulation. The overall result shows much faster control time compared to the conventional methods, and achievement of the nominal wheel speed and 3-axes stabilization while maintaining stability.