The Political Economy of Supranational Institutions: Two Recent Contrary Standpoints

Book reviewed in this article: Inge Kaul, Isabelle Grunberg and Marc A. Stern, Global Public Goods: International Cooperation in the 21^st Century Lloyd Gruber, Ruling the World: Power Politics and the Rise of Supranational Institutions     

Multivariate Calibration — Direct and Indirect Regression Methodology

This paper tries first to introduce and motivate the methodology of multivariate calibration. Next a review is given, mostly avoiding technicalities, of the somewhat messy theory of the subject. Two approaches are distinguished: the estimation approach (controlled calibration) and the prediction approach (natural calibration). Among problems discussed are the choice of estimator, the choice of confidence region, methodology for handling situations with more variables than observations, near-collinearities (with counter-measures like ridge type regression, principal components regression, partial least squares regression and continuum regression), pretreatment of data, and cross-validation vs true prediction. Examples discussed in detail concern estimation of the age of a rhinoceros from its horn lengths (low-dimensional), and nitrate prediction in waste-water from high-dimensional spectroscopic measurements.     

Risk of Extreme Events Under Nonstationary Conditions

The concept of the return period is widely used in the analysis of the risk of extreme events and in engineering design. For example, a levee can be designed to protect against the 100-year flood, the flood which on average occurs once in 100 years. Use of the return period typically assumes that the probability of occurrence of an extreme event in the current or any future year is the same. However, there is evidence that potential climate change may affect the probabilities of some extreme events such as floods and droughts. In turn, this would affect the level of protection provided by the current infrastructure. For an engineering project, the risk of an extreme event in a future year could greatly exceed the average annual risk over the design life of the project. An equivalent definition of the return period under stationary conditions is the expected waiting time before failure. This paper examines how this definition can be adapted to nonstationary conditions. Designers of flood control projects should be aware that alternative definitions of the return period imply different risk under nonstationary conditions. The statistics of extremes and extreme value distributions are useful to examine extreme event risk. This paper uses a Gumbel Type I distribution to model the probability of failure under nonstationary conditions. The probability of an extreme event under nonstationary conditions depends on the rate of change of the parameters of the underlying distribution.     

Das Tabu brechen: Gemeinsam über Geld sprechen Ein Werkstatt-Bericht

The paper shows work in progress. Several years ago I started forming groups of men and women who want to reflect about their different money styles. I assume that the special way a person deals with money reflects its personality, especially the conflicts he or she has with him or herself and with others. The conventional economic view ignores such symbolism. It fails to provide an adequate understanding about the big influence of emotions, norms and values on what people think about money and how they use it in different social situations. But people seldom make rational decisions. In most cases they only rationalize their irrational desires. It is therefore necessary to develop a financial competence which is based on the insight in ones own psychic structure. The groups I report about here offers sheltered spaces where such insights can be gained.