Volume 2 Issue 4

Authors: Usha A. Kumar; Mukta Paliwal

Abstract: Neural network models seem to have potential for prediction purposes and this has led to a number of studies comparing the performance of neural networks and regression analysis. Regression technique is based on certain basic assumptions and validity of these assumptions is critical to its performance. This issue does not appear to have been considered in most of the comparative studies. In the present study, we intend to focus on this aspect by comparing the performance of both the techniques using simulation when all the assumptions of regression are met. This study reveals that the performance of regression analysis and neural network are comparable for large and medium sample sizes and suggests the need for careful implementation of neural network when the sample size is small.

Keywords: Assumption Validity; Evaluation Criterion; Levenberg-Marquardt Training Algorithm; Prediction Intervals; Simulation


Authors: Mahdi Shahrazi; Saeed Rasekhi

Abstract: Econophysics is a rapidly growing field which applies the idea of physics especially statistical physics into economics especially financial economics. This paper first reviews the history, concepts, applications, and challenges of econophysics and then ends with an empirical investigation. Based on present paper, economists were who firstly introduced interaction between economics and physics (that we call it old econophysics), but the majority of the efforts in new Econophysics is made by physicists and the role of economists is small in this case. Physicists are not always aware of the true nature of economic theories and sometimes introduce models without any real economic theory at all. The greater degree of collaboration between economists and physicists can promote the analytical content of econophysics and improve the average quality of scientific endeavor in this newly established field. As an application of economphysic, we’ve applied detrended fluctuation analysis (DFA) to Iranian foreign exchange market. By employing Iranian Rial/US Dollar daily Forex exchange rate data from 14:03:2009 to 18:04:2010, our results suggest the exchange rate time series has long memory implying that it should be possible for speculators to extract risk-free profits by studying past Rial/Dollar series.

Keywords: Econophysics; Statistical Physics; Financial Economics; Detrended Fluctuation Analysis; Scaling Theory, Random Walk; Long Memory; Forex Market; Iran


Authors: Mohsen Mohammadi Khyareh; Ahmad Jafari Samimi

Abstract: An autoregressive Distributed Lag (ARDL) cointegration framework during 1970-2009 is used to examine the short-run and long-run role of agricultural value added in economic growth of Iran. Results show that the empirical evidence strongly suggests that agriculture makes a significant contribution to economic growth in the long-run. The long-run and short-run elasticities of agricultural value added are estimated to be 0.27 and 0.39 respectively. A statistically significant error correction term implies that long-run causality exists such that past equilibrium errors play a significant role in determining current outcomes. The adjustment parameter is 0.78 which implies that around 0.78 of growth adjustment taking place in any year, in other words around 99% of the growth adjustment occurring after three periods. Also, performing multivariate Granger causality tests based on the ARDL-ECM estimates show that, agriculture cause real GDP per capita in the both short-run and long-run, but real GDP per capita cause agriculture only in the short-run.

Keywords: Agriculture; Economic Growth; ARDL; Iran


Authors: Anthony J. Spurgin; David W. Stupples

Abstract: This paper applies the Beer Viable Systems Model (VSM) approach to the study of nuclear accidents. It relates how organizational structures and rules are affected by accidents in the attempt to improve safety and reduce risk. The paper illustrates this process with reference to a number of accidents. The dynamic cybernetic aspect of the VSM approach to organizations yields a better understanding of the need for good decision-making to minimize risk and how organizations really operate.

Keywords: Utilities; Organization; Safety; Risk; Accidents and VSM


Authors: Tamas Lengyel

Abstract: In a typical inventory planning problem with a life cycle of only one planning period, we incur the cost of production per unit produced, profit per unit sold, loss per unit not sold, and lost revenue per unit ordered but not matched due to the lack of availability. The goal is to find the inventory level that maximizes the expected net profit. Textbooks often use the newsboy problem to illustrate the inventory management paradigm. The derivation of the formulas for the optimal level is usually done on an ad hoc basis, by dull and rote mathematical manipulations, for each modification of the simple basic model. The only purpose of this note is to give a simple transparent proof of the fact that quite surprisingly the lost revenue can be combined with the profit by reducing the general problem to a well known simplified case with no lost revenue. The reduction uses an airline analogy and thus, with some tweaking, it places the proof into a classical revenue management paradigm. We also provide an alternative derivation of the optimal solution for the discrete case which integrates the problem into a much broader class of optimization problems.

Keywords: Newsboy Problem; Inventory and Revenue Management; Optimization


Authors: Gan Jingyi; Mei Guoping

Abstract: In this paper, we use the construction of infrastructure investment of the central region as the background, from the perspective of theoretical analysis and empirical research to demonstrate the role of economic growth and infrastructure investment, and discuss its mechanism of action for economic growth from the means of infrastructure investment amount, general volume of capital and human capital, we conclude that the infrastructure development has been effective in promoting social total output. In the final, with the characteristics of central region’s development, we proposed the policy recommendations.

Keywords: Infrastructure; Economic Growth; OLS Correction Model