This paper provides a theory of external and internal finance where entrepreneurs finance random investment opportunities with fiat money, bank liabilities, or trade credit. Loans are distributed in an over-the-counter credit market where the terms of the loan contract, including size, rate, and down payment, are negotiated in a decentralized fashion subject to pledgeability constraints. The model has implications for the cross-sectional distribution of corporate loan rates and loan sizes, interest rate pass-through, and the transmission of monetary policy (described either as money growth or open market operations) with or without liquidity requirements.
С. А. Корольков, Alexander G. Losev, Vasily V. Tarakanov
This publication belongs to case category. The main task of the research is to formulate methods and algorithms of financial analysis and teaching process management at the university. It suggests designing financial mathematical model of budget financing for university structural units on the basis of teaching and financial plans of teaching programs. This model is based on per capita financing of educational institutions acting upon state order. The authors of the article have already designed and presented practical implementation of original algorithms for forming salary funds for lecturers from the chairs. The article presents the main principles of the model analyzing main outcomes of its implementation and formulates possible challenges and ways of solving then. There has been a significant economic effect of introducing the model, absence of legal limitations for its implementation, perspectives of its development in the field of prognosticating university structural units’ financial position, implementing effective contracts, network form of training and individual educational trajectories. Developed method of budgeting for structural units can be used at any university on the basis of curricula analysis and making teaching and financial plans. Its implementation eliminates discrepancies between principles of business support of educational activities in general and its individual structures (chairs); creates an opportunity for calculating the costs of curriculum modules and components; improves efficacy of teaching process organization; formation of financial mechanism for implementing individual educational trajectories by the students and network forms of training, basic chairs functioning, decentralization of financial and economic management and creation of prerequisites for acknowledging a chair as the center of financial responsibility. The model is original and is in fact a natural continuation of per capita financing of university educational activities.
The article offers information on the industrial revolution which is coined by Davos founder Klaus Schwab for the deep digital transformation. It mentions that International Organisation for Standardisation received formal requests to set up a new field of technical activity. It also mentions that report from the National University of Ireland Maynooth showed that the total energy consumption of Bitcoin mining was comparable with Ireland's total electricity usage
In March 2015 the UK Government set out its approach to digital crypto-currencies. London has thereby taken a lead in this area, adopting a friendlier regulatory stance than its counterparts in New York or Frankfurt. The UK Chancellor, George Osborne, announced UK Government plans to regulate digital crypto-currencies and invest money not only into the ‘opportunities and challenges’ of digital crypto-currencies such as Bitcoin, but also into the potential future of leveraging ‘Blockchain technology’ to fundamentally change the financial world. Blockchain technology has now also attracted interest from Central Banks, financial institutions and technology firms, who are currently discussing and investigating the opportunities and challenges in using Blockchain technology. The financial industry is realising that Blockchain technology has enormous potential. This Blockchain technology could fundamentally change the way the whole financial industry operates and delivers the opportunity to completely reinvent the banking industry. In this paper the various initiatives and potential use cases of the Blockchain technology will be discussed. This technology could have serious consequences especially for the payments industry. The possibilities of the Blockchain technology will not only be limited to digital cash and payments systems. They also enable the issuance and trading shares on decentralised digital exchanges, allow new ways of communication without third-party providers, and enable users to draft and enforce digital contracts known as ‘smart contracts’.
Loss of control is a serious problem in aviation that primarily affects General Aviation. Technological advancements can help mitigate the problem, but the FAA certification process makes certain solutions economically unfeasible. This investigation presents the design of a generic adaptive autopilot that could potentially lead to a single certification for use in several makes and models of aircraft. The autopilot consists of a conventional controller connected in series with a robust direct adaptive model reference controller. In this architecture, the conventional controller is tuned once to provide outer-loop guidance and navigation to a reference model. The adaptive controller makes unknown aircraft behave like the reference model, allowing the conventional controller to successfully provide navigation without the need for retuning. A strong theoretical foundation is presented as an argument for the safety and stability of the controller. The stability proof of direct adaptive controllers require that the plant being controlled has no unstable transmission zeros and has a nonzero high frequency gain. Because most conventional aircraft do not readily meet these requirements, a process known as sensor blending was used. Sensor blending consists of using a linear combination of the plant’s outputs that has no unstable transmission zeros and has a nonzero high frequency gain to drive the adaptive controller. Although this method does not present a problem for regulators, it can lead to a steady state error in tracking applications. The sensor blending theory was expanded to take advantage of the system’s dynamics to allow for zero steady state error tracking. This method does not need knowledge of the specific system’s dynamics, but instead uses the structure of the A and B matrices to perform the blending for the general case. The generic adaptive autopilot was tested in two high-fidelity nonlinear simulators of two typical General Aviation aircraft. The results show that the autopilot was able to adapt appropriately to the different aircraft and was able to perform three-dimensional navigation and an ILS approach, without any modification to the controller. The autopilot was tested in moderate atmospheric turbulence, using consumer-grade sensors and actuators currently available in General Aviation aircraft. The generic adaptive autopilot was shown to be robust to atmospheric turbulence and sensor and actuator random noise. In both aircraft simulators, the autopilot adapted successfully to changes in airspeed, altitude, and configuration. This investigation proves the feasibility of a generic autopilot using direct adaptive controller. The autopilot does not need a priori information of the specific aircraft’s dynamics to maintain its safety and stability arguments. Real-time parameter estimation of the aircraft dynamics are not needed. Recommendations for future work are provided.
During the past two decades, decentralization as a silent revolution in public sector governance has generated a keen interest in a large number of countries including Poland. However, this notion is very difficult to define as it refers to a wide range of institutional arrangements on the political, economic and social levels. There are many good reasons why allocating fiscal resources and budget transfers among levels of government must come after a strict assignment of spending powers. The aim of this chapter is to point out the basic characteristics of financing system of local government in Poland. The chapter examines the structure of local revenues and the problem of financial autonomy. The research shows that the Polish public sector is already considerably decentralised, however the level of financial autonomy of local governments is low and the local revenues are unable to cover expenditures. Thus, the amounts of local public debt keep expanding. Though a system of equalizing grants was introduced to diminish horizontal fiscal imbalances, its' efficacy is still limited.
In this article the author analyses the process of decentralization and financial autonomy as a result of using the new methodology for drafting the local budgets based on formulas. The key element is researching the impact of the new financing system on changes occurring in the communities. The new financing system is a chance for the citizens of communities to have quality services and local public administration has new opportunities to increase the tax base, supplement their incomes and provide a higher level of living to citizens.
In this paper, we analyse the workings of commercial banks in a scenario where crypto-currencies are the mainstream bills of exchange. We start by explaining the concept of cryptocurrencies (also referred to as cryptocoins in this paper). Then we discuss the concept of Regulated and Sovereign Backed Cryptocurrencies (RSBCs). Later on, we envisage a scenario where cryptocoins are the main media of exchange. The banking aspects of Paper money, Bitcoins and RSBCs are then deliberated. We analyse the interplays between Banking and various currency formats. Finally, the paper concludes as to which currency is best suited to be the mainstream bill of exchange.
Information technology has become an indispensable part of the U.S. banking industry. The industries commitment to evolving advantageous technology is evident in the growing financial commitment to distributed ledger or "blockchain" technology. The advancing technology is transforming the configuration of the U.S. banking industry model established with the passing of the Federal Reserve Act in 1913. The present paper investigates the literature to provide an understanding of the transformation of the U.S. banking industry created by advancing technology.
Addition of automated components such as smart meters, embedded microprocessors, and the two-ways communication systems from customers to operators to the power grid makes the power grid “smart”. One enhancement that requires the power grid to be “smart” is dynamic pricing. Implementation of dynamic pricing in the smart grid will require frequent transfer of energy consumption data from the consumers to the utilities. Privacy and security issues in transferring this energy consumption data is a widely studied topic. However, almost all of the studies done so far rely on a trusted third party, such as an electrical utilities or a load aggregator, that will have access to all of consumer data. This thesis proposes a Bitcoin-like decentralized model as a solution for secure information transfer within the smart grid, eliminating the presence of a central entity. Hence, a significant portion of this thesis is describes working principles of the Bitcoin network. This thesis specifically focuses on securing bidirectional data transfer between the gateway devices and the electrical utilities. How the information contained in the data is used is left upto the discretion of the consumers. Along with a proposal for a decentralized model, a broad discussion on security and privacy issues in the smart grid as well as cryptographic protocols required for a decentralized smart grid is also presented; a semi-detailed discussion on cryptographic protocols elliptic curve cryptography (ECC) and zero knowledge proof is included. Code for some of the useful cryptographic tools for a decentralized smart grid can be found in the appendix. A novel Bitcoin-like model developed to address security and privacy concerns of consumer data in the smart grid is the contribution of this thesis
July 22, 2016. A Florida state court dismisses a three-count information against a sole defendant in "a Miami money-laundering case that is being closely watched around the world." The defendant, a dealer of the virtual currency bitcoin, is free to go. He is also free to continue engaging in the sale of bitcoin. This "victory for bitcoin users" was the first state court case to address Bitcoin in the context of the money services business and anti-money laundering statutes. And on every front, the court got it wrong — while the world was watching. Federal and state prosecutors, defense attorneys, judges, and the Bitcoin community paid careful attention to the case. And although the opinion is not binding, it must be given its "proper regard." The Little Case That Could has effectively become the Little Case That Shouldn't. Two avenues must be pursued to correct the problems with the Espinoza court's findings. First, a Florida appellate court must overturn the decision on appeal. Second, the legal and financial communities must, as the Southern District of New York already has, disregard the Espinoza court's ineffective reasoning as they continue to develop the law of Bitcoin. Because while this Florida state case awaits appeal, and is not binding on any court, it remains persuasive authority in an area of law where few cases have directly analyzed the character of Bitcoin. As the law is in a constant state of growth, a trial court order opining on this topic has the possibility to cause damage. What exactly did the court do — and decline to do — when it dismissed the charges against Espinoza? And why is this state court dismissal of these charges against a sole defendant so potentially troubling across the world? To answer these questions, we first must turn to the currency (or is it?) at the center of the case: bitcoin. Part I of this article seeks to explain in largely non-technical terms the design of the Bitcoin network. Part II explains the guidance and administrative rulings provided by the United States Department of the Treasury's Financial Crimes Enforcement Network in relation to the issues in the Espinoza case. Additionally, Part II surveys different approaches taken by state legislatures and regulators in seeking to address decentralized virtual currencies, including bitcoin. Careful attention is paid to how the terms "monetary value" and "virtual currency" are defined, and how those definitions have been interpreted. Part II further explores the differences in the way the respective laws and guidelines treat different members of the Bitcoin ecosystem. Part III analyzes the Espinoza case, taking a critical look at the reasoning behind the dismissal of the criminal information, and suggests that the court's holdings are analytically unsound. Finally, we argue that the Espinoza case must not be allowed to stand and needs to be reversed on appeal.
Blockchains and Byzantine Fault Tolerance form the basis of decentralized currencies and ledgers such as Bitcoin, Ripple, ZeroCash, and Ethereum. A large slate of literature has focused on the currency aspects (e.g. anonymity, independence from central banks, etc.). We argue that, as-far-as Distributed Payment Transactions Networks (PTNs) are concerned, there are other, possibly more interesting, properties. This paper provides a systematic review of both traditional PTNs and their analogues in decentralized ledgers and associates different technological features to the corresponding business and financial requirements. We provide a conceptual classification of the key properties (value creation, payment promise, transaction fulfillment, and value preservation). We map existing (distributed) PTNs into the classification showing different alternatives are possible. Furthermore, the ideas behind distributed ledgers can be extended beyond payments and contracts. We illustrate the idea of derivatives-contracts-as-programs that are marked to market (or an account that is margined) automatically by computations run on, and whose ownership transitions are recorded, in a distributed payment network.
In both query and communication complexity, we give separations between the class NISZK, containing those problems with non-interactive statistical zero knowledge proof systems, and the class UPP, containing those problems with randomized algorithms with unbounded error. These results significantly improve on earlier query separations of Vereschagin [Ver95] and Aaronson [Aar12] and earlier communication complexity separations of Klauck [Kla11] and Razborov and Sherstov [RS10]. In addition, our results imply an oracle relative to which the class NISZK is not contained in PP. This answers an open question of Watrous from 2002 [Aar]. The technical core of our result is a stronger hardness amplification theorem for approximate degree, which roughly says that composing the gapped-majority function with any function of high approximate degree yields a function with high threshold degree. Using our techniques, we also give oracles relative to which the following two separations hold: perfect zero knowledge (PZK) is not contained in its complement (coPZK), and SZK (indeed, even NISZK) is not contained in PZK (indeed, even HVPZK). Along the way, we show that HVPZK is contained in PP in a relativizing manner.
We prove a number of implications of these results, which may be of independent interest outside of structural complexity. Specifically, our oracle separation implies that certain parameters of the Polarization Lemma of Sahai and Vadhan [SV03] cannot be much improved in a black-box manner. Additionally, it implies new lower bounds for property testing algorithms with error probability arbitrarily close to 1/2. Finally, our results imply that two-message protocols in the streaming interactive proofs model of Cormode et al. [CTY11] are surprisingly powerful in the sense that, with just logarithmic cost, they can compute functions outside of UPP^CC.
Abstract The Naor–Yung paradigm [63] allows to generically boost security under chosen-plaintext attacks (CPA) to security against chosen-ciphertext attacks (CCA) for public-key encryption (PKE) schemes. The main idea is to encrypt the plaintext twice (under independent public keys), and to append a non-interactive zero-knowledge (NIZK) proof that the two ciphertexts indeed encrypt the same message. Later work by Camenisch, Chandran, and Shoup [32] and Naor and Segev [ 28 , 30 ] established that the very same technique can also be used in the settings of key-dependent message (KDM) and key-leakage attacks (respectively). In this paper we study the conditions under which the two ciphertexts in the Naor–Yung construction can share the same random coins. We find that this is possible, provided that the underlying PKE scheme meets an additional simple property. The motivation for re-using the same random coins is that this allows to design much more efficient NIZK proofs. We showcase such an improvement in the random oracle model, under standard complexity assumptions including Decisional Diffie–Hellman, Quadratic Residuosity, and Subset Sum. The length of the resulting ciphertexts is reduced by 50%, yielding truly efficient PKE schemes achieving CCA security under KDM and key-leakage attacks. As an additional contribution, we design the first PKE scheme whose CPA security under KDM attacks can be directly reduced to (low-density instances of) the Subset Sum assumption. Our PKE scheme supports key-dependent messages computed via any affine function of the secret key.
Oriane Blondel, Patrícia Gonçalves, Marielle Simon
In this paper we prove the convergence to the stochastic Burgers equation from one-dimensional interacting particle systems, whose dynamics allow the degeneracy of the jump rates. To this aim, we provide a new proof of the second order Boltzmann-Gibbs principle introduced in [7]. The main technical difficulty is that our models exhibit configurations that do not evolve under the dynamics - the blocked configurations - and are locally non-ergodic. Our proof does not impose any knowledge on the spectral gap for the microscopic models. Instead, it relies on the fact that, under the equilibrium measure, the probability to find a blocked configuration in a finite box is exponentially small in the size of the box. Then, a dynamical mechanism allows to exchange particles even when the jump rate for the direct exchange is zero.
As 1.3 billion people lack access to electricity globally, the challenge of ensuring universal electricity access in accordance with the Sustainable Energy for All initiative remains herculean. This chapter maps policy linkages, identifies the gaps in policies and recommends options for developing the enabling environment. The chapter suggests that the policy environment governing electricity access at present is weak and that improvements are required to deliver a sustainable outcome. Although grid extension remains the preferred mode of electrification in many countries, it is not the least-cost option in remote areas where decentralized off-grid solutions may be required. Successful promotion of off-grid solutions would require a clear regulatory environment, a non-discriminatory support mechanism for various stages of a project, financing options, policy co-ordination and linkage with other economic activities for rural development. The chapter concludes that capacity remains weak and non-transparent policy lobbying can distort the development of an enabling environment.