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This paper proposes Entity-Netted Notionals (ENNs) as a metric of interest rate risk transfer in the interest rate swap (IRS) market. Unlike the ubiquitous metric of notional amount, ENNs normalize for risk and account for the netting of longs and shorts within counter party relationships. Using regulatory data for U.S.-reporting entities, the size of the market measured by notional amount is $231 trillion, but, measured by ENNs, is only $13.9 trillion 5-year swap equivalents, which is the same order of magnitude as other large U.S. fixed income markets. This paper also quantifies the size and direction of IRS positions across and within various business sectors. Among the empirical findings are that 92% of entities using IRS are exclusively long or exclusively short. Hence, the vast majority of market participants are prototypical end users, and the extensive amount of netting in the market is attributable to the activity of relatively few, larger entities. Finally, some sector-specific empirical findings are inconsistent with widespread, prior beliefs. For example, pension funds and insurance companies are typically thought to be long IRS to hedge their long-term liabilities, and these sectors are indeed net long, but approximately 50% of individual entities in these sectors are actually net short.

Recently, efforts to model and assess a system's resilience to disruptions due to environmental and adversarial threats have increased substantially. Researchers have investigated resilience in many disciplines, including sociology, psychology, computer networks, and engineering systems, to name a few. When assessing engineering system resilience, the resilience assessment typically considers a single performance measure, a disruption, a loss of performance, the time required to recover, or a combination of these elements. We define and use a resilient engineered system definition that separates system resilience into platform and mission resilience. Most complex systems have multiple performance measures; this research proposes using multiple objective decision analysis to assess system resilience for systems with multiple performance measures using two distinct methods. The first method quantifies platform resilience and includes resilience and other "ilities" directly in the value hierarchy, while the second method quantifies mission resilience and uses the "ilities" in the calculation of the expected mission performance for every performance measure in the value hierarchy. We illustrate the mission resilience method using a transportation systems-of-systems network with varying levels of resilience due to the level of connectivity and autonomy of the vehicles and platform resilience by using a notional military example. Our analysis found that it is necessary to quantify performance in context with specific mission(s) and scenario(s) under specific threat(s) and then use modeling and simulation to help determine the resilience of a system for a given set of conditions. The example demonstrates how incorporating system mission resilience can improve performance for some performance measures while negatively affecting others.

This paper uses a calibrated dynamic life-cycle model to quantify the long-run distributional impact of two opposite Social Security reforms: modifying the parameters of a defined benefit (DB) plan (such as in France with Ayrault’s reform) or switching to a notional defined contribution (NDC) plan (such as in Italy). Both reforms yield an inequal distribution of welfare losses. Low-skilled workers are the main losers of the reforms. This is so for different reasons in each reform. In the case of Ayrault’s reform, low-skilled individuals delay retirement by 2 years, up to age 62. In switching to a NDC scheme, low-skilled workers’pensions fall substantially. In NDC schemes, inequalities along the working-life are directly translated into inequalities in pension levels. The switch from a DB plan to the Italian reform yields substantial welfare losses, pensions drastically fall, and individuals save more. Since low-skilled workers do not save as much as middle or high-skilled workers, the switch to NDC schemes leads to a more unequal society in terms of asset distribution.

We present a self-organizing approach to sentence processing that sheds new light on notional plurality effects in agreement attraction, using pseudopartitive subject noun phrases (e.g., a bottle of pills). We first show that notional plurality ratings (numerosity judgments for subject noun phrases) predict verb agreement choices in pseudopartitives, in line with the "Marking" component of the Marking and Morphing theory of agreement processing. However, no account to date has derived notional plurality values from independently needed principles of language processing. We argue on the basis of new experimental evidence and a dynamical systems model that the theoretical black box of notional plurality can be unpacked into objectively measurable semantic features. With these semantic features driving structure formation (and hence agreement choice), our model reproduces the human verb production patterns as a byproduct of normal processing. Finally, we discuss how the self-organizing approach might be extended to other agreement attraction phenomena.

This paper shows that the U.S. Old‐Age Insurance (OAI) does not eliminate all the regressive redistribution characterizing earnings‐related schemes. The benchmark against which OAI is tested is the one‐to‐one contribution‐benefit rule of the Notional Defined Contribution (NDC) scheme. The paper suggests that by redesigning OAI according to the NDC scheme workers would perceive the higher contributions needed to finance current obligations not as a tax but as an increase in mandatory savings rewarded with the pay‐as‐you‐go interest rate and a stream of pension annuities more generous than that it would be possible to pay at the current contribution rate. (JEL H55, J26)

This paper proposes a theoretical framework for analyzing the properties of pay-as-you-go notional defined contributions (NDCs) systems within the context of aging. Different from the defined-benefit scheme, where aging harms the financial sustainability of the social security system, the NDC determines pension benefits while taking into account life expectancy and demographic trends, turning the issue of financial sustainability into one of pension adequacy. This paper explores the balance sheet effects when life expectancy, retirement thresholds and entry age in the labor market vary by cohorts. The study suggests some solutions for practical issues concerning aging in NDC systems, such as (a) the bias related to the forecasts of survival rates, (b) the indexation of pension benefits and (c) the setup of tenure and age requirements for retirement.

There are important synergies between the trust of blockchain and that of trusts law. This article critically examines the intersection between law and blockchain technology through an exploration of the notional impacts upon orthodox practices and principles of trusts law made by blockchain and other “disruptive” technologies, including smart property and the Internet of Things.

This article proposes a “Swedish” type actuarial balance sheet (ABS) for a notional defined contribution (NDC) scheme with disability and minimum pension benefits. The proposed ABS splits the pension system in two parts: the pure NDC part and the redistributive part, which includes the assets and liabilities originating from non-contributory rights. The article contains a numerical example that sheds light on the real applicability of our proposal. The model has practical implications that could be of interest to policy-makers, given that it integrates actuarial and social aspects of public pensions and discloses the real cost of redistribution through minimum pensions.

This paper contributes to the debate on the design of a centralised fiscal tool absorbing country-specific negative shocks in the euro area. Based on theoretical insights, it identifies the broad characteristics that a shock absorber based on unemployment should have in order to be incentive-compatible and politically feasible. It then derives empirically the combination of activation thresholds, experience rating, eligibility criteria, and benefit generosity which define the systems offering the highest stabilisation for given levels of redistribution, accounting for the large variation in benefit take-up rates across European countries. The analysis suggests that the shock absorber should: i) give rise to macro cross-national transfers, mimicking those that would be generated by a notional euro-wide unemployment benefit scheme of minimal coverage and generosity; ii) be activated by a trigger; and iii) feature partial experience rating. The simulation results, confirmed by robustness checks, show that even systems that do not redistribute resources between countries can have a non-negligible stabilisation impact in the medium run. Low benefit take-up rates in Southern Europe substantially reduce the stabilisation properties and the size of the scheme. (This abstract was borrowed from another version of this item.)

Several countries have recently introduced reforms that aim to increase the neutrality of their pension system by introducing an incentives-disincentives mechanism or by replacing their traditional defined-benefit system with a Notional Defined Contribution method. This paper evaluates the financial effects of an increase in the minimum retirement age in countries where a Notional Defined Contribution system exists. We show that such a reform produces a positive effect on the financial situation of the pension system (by generating surpluses or by reducing deficits) in the short and in the medium run, but it becomes completely ineffective in the long run. This result implies that in countries where the pension system is sufficiently neutral such a reform is not appropriate to solve the problem of population ageing which is a long-run problem.

The Domestic Nuclear Detection Office DNDO of the Department of Homeland Security was created to increase the United States' ability to detect radiological and nuclear RN material that could be obtained and then used by terrorists. The office coordinates the Global Nuclear Detection Architecture GNDA, an international and interagency strategy for detecting, analyzing, and reporting of RN materials outside of regulatory control. In 2012, the Government Accountability Office expressed concern about the prioritization of GNDA resources as well as the documentation of GNDA improvements over time. As a result, the DNDO asked the National Research Council NRC for advice on how to develop performance measures and metrics to quantitatively assess the GNDA's effectiveness. The result of the NRC study was a report titled "Performance Metrics for the Global Nuclear Detection Architecture." In the report, the committee created a notional strategic planning framework for evaluating the performance of the GNDA. Using the data from the public report, multiobjective decision analysis techniques, and notional data from our research, this paper expands the NRC framework to a complete value model and demonstrates that it is possible to evaluate the potential performance of the GNDA over time and use the model to evaluate the cost effectiveness of potential improvements.

This paper presents Version 0.5 of the proposed INCOSE Systems Engineering (SE) Competency Framework. This paper also presents the newly developed competency framework tables along with notional examples and provides a working example of a framework derived competency model for Systems Security Engineering. The competency framework is being developed as an evolution of the current INCOSE United Kingdom (UK) SE Competencies Framework (INCOSE, 2010). The INCOSE Competency Working Group (CWG) is conducting this project in collaboration with the National Defense Industrial Association (NDIA), SE Division, Education and Training Committee in order to develop a common approach to the definition of an SE Competency Framework.

This paper provides an investigation into an anomaly called a short squeeze, in the CBOT T‐Bonds Futures Market, for the period spanning January 1985 to December 2014. A short squeeze occurs when market manipulations cause the cheapest‐to‐deliver bond to be in short supply, resulting in significant price distortions. The incentive for market manipulation, or squeeze potential, is evaluated over the last 30 years and is related to documented episodes of the CBOT futures market. It is observed that conditions are presently very favorable to the occurrence of short squeezes, and that shortages would imply large losses for short traders. We also find that the incentive for market manipulation would be significantly reduced by lowering the notional underlying security coupon rate. © 2015 Wiley Periodicals, Inc. Jrl Fut Mark 36:647–670, 2016

Natural disasters cause disastrous losses of life and property in China. The most serious losses come from floods which represent more than 1% of the notional gross domestic product. Currently, there is no effective compensation mechanism to counteract the impact of floods. The existing mechanism mainly relies on guidance from the national government with cooperation from local governments. The value of compensation from government is less than 10% of the value of lost property. Worldwide, the two main mechanisms to compensate for losses caused by flood are government allocations and commercial markets, and insurance is the most popular commercial instrument to deal with flood losses. In this paper, we explore whether China could adopt a commercial approach to compensation. Three provinces are used as an example to demonstrate that China could rely on commercial mechanisms to compensate for flood losses.

The authors propose a definition of infrastructure resilience that is tied to the operation (or function) of an infrastructure as a system of interacting components and that can be objectively evaluated using quantitative models. Specifically, for any particular system, the authors use quantitative models of system operation to represent the decisions of an infrastructure operator who guides the behavior of the system as a whole, even in the presence of disruptions. Modeling infrastructure operation in this way makes it possible to systematically evaluate the consequences associated with the loss of infrastructure components, and leads to a precise notion of “operational resilience” that facilitates model verification, validation, and reproducible results. Using a simple example of a notional infrastructure, the authors demonstrate how to use these models for (1) assessing the operational resilience of an infrastructure system, (2) identifying critical vulnerabilities that threaten its continued function, and (3) advising policymakers on investments to improve resilience.

Credit Default Swaps (CDSs) are considered as one of the most versatile financial innovations of the 21st century. Since its inception, the credit derivatives market has grown to a peak of $64 trillion in 2008 in terms of gross notional values (Cont, 2010). However, after the onset of the GFC, this market has decreased to a large extent. While there is evidence that promotes the risk reduction properties of CDSs, there is a growing body of research post GFC that identifies destabilising effects of these instruments. In this paper, I review the relevant scholarly literature and provide evidence of how the views on CDSs have changed post GFC due a deeper investigation of issues such as systemic risk, regulatory arbitrage, information asymmetry and risk-taking, among others, in the banking industry. This paper provides a survey of the literature of views ‘for’ and ‘against’ the use of CDSs during pre and post GFC periods and finally concludes that in comparison to the pre GFC period, post GFC there is a significant increase in the literature that highlights the detrimental nature of CDSs.

This technical contribution explores the process capability implications of the requirements of ISO/IEC 20000-1. The foundation of the methodology that is used to determine the linkages between each requirement and the notional process capability attribute that is supported is considered. The results of analyses are then presented of the implied clause process capability profile from the perspective of all the clauses, on one hand, and from individual clauses, on the other hand. The implications of these process capability insights to the design of an organizational maturity model applicable to ISO/IEC 20000-1 are then considered. Copyright © 2014 John Wiley & Sons, Ltd.

Digital technology enables us to prospect, generate, assemble and share eclectic materials, creating virtual journeys, stories or exhibitions through the internet, viewed on computer but also on location via mobile devices. How does the ability to create and curate in this way enhance or transform our access to and understanding of art, as well as our experience of place? What kind of meanings are we making for ourselves and others? And how are the creative responses of audiences viewed and valued in relation to the museum's curated collection? This article explores these questions through the development of Art Maps, a web and mobile application that enables people to locatively and creatively explore the relationship between art and place. Through participant research we are examining possibilities for a more open approach to interpreting Tate's digitised collection of art, testing the notional democratic shift from the museum as keeper of knowledge to co-creator with the audience.

This article develops defender-attacker network interdiction models with deception. Here, deception refers to a preemptive and intelligent use of concealed interdiction assets and decoys by the defender, in addition to transparent assets commonly employed in modeling defender-attacker problems. These models can help security planners to locate a limited number of checkpoints and sensors of various types to, for example, detect the smuggling of illegal products. The problem is complex, in part, because the objective functions of the defender and the attacker are different, and because the latter (which represents the attacker's behavior) is difficult to predict by the defender. First, we use duality theory and a generalized network flow model to devise an equivalent mixed-integer programming formulation, and develop its Benders decomposition. We extend this formulation with a multiobjective approach to account for several behaviors simultaneously. The computational effort to solve these models is considerable, as exemplified by our testing on a variety of cases for a medium-sized, notional network. Published 2011 Wiley Periodicals, Inc. NETWORKS, 2012 (This article is a U.S. Government work and is in the public domain in the USA.)

Reuse has been gaining ever increasing focus in all stages of the system development process as the prospects of leveraging prior investments to save costs, shorten delivery schedule, and possibly improve product quality are appealing to system developers. However, the concept of reuse at the system level is often poorly understood and the practice has not been effectively documented and practiced, particularly from the systems engineering point of view. This paper conceptualizes a generalized reuse framework for system development using an activity-based modelling approach. It examines reuse from both the producer's and consumer's points of view and links the essential reuse activities for the production and consumption processes through reusable resources. A classification schema is proposed to evaluate reuse from the two perspectives, i.e., development with reuse and development for reuse. The interface between the two strategies is discussed and notional scenarios to apply this framework are also presented. The framework proposed lays down a foundation for quantitative evaluation of the effect of reuse in an on-going effort assessing such an impact through parametric modelling.

Aim: To quantify and ascribe a dollar value to University of the Third Age (U3A) volunteerism in Australia and New Zealand (NZ). Methods: Retired researchers and U3A leaders from both countries cooperated via the Internet to devise and manage a comprehensive survey of U3A activities in 2008. Results: In total, 164 of 265 independent U3As in Australasia provided detailed counts of all activities carried out by their volunteers. In 2008, Australian U3As were supported by 871 000 volunteer hours and NZ U3As were supported by 69 000 volunteer hours. A notional value of $20 per volunteer hour is rationalised. It values U3A volunteerism at $21 million for Australia and $1.9 million for NZ. Conclusion: Expert retirees who are engaged in meaningful voluntary activities in their U3As provide valuable in-kind contributions to the well-being of members and to the national economy.

We investigate the impact of the elimination of import tariffs and nontariff policy barriers (NTPBs) on agricultural trade in a notional East Asian Free Trade Agreement using a Global Trade Analysis Project (GTAP)-based computable general equilibrium model. The investigation is divided into two parts. We first measure the NTPBs by employing a widely used method derived from the literature on border effects. Then, by adding into the GTAP database our estimates on the NTPBs, which the original GTAP database by its nature does incorporate, we compute the impact of the entire elimination of policy barriers (the complete reduction of import tariffs and NTPBs) on GDP. The result shows that there are remarkable differences between the effect of abolition of import tariffs and that of entire elimination of all import barriers.

Finding a quiet, state-of-the-art conventional submarine in a large area is a challenging task and the potential impacts of the threat of such a submarine can delay operations and consume large numbers of military assets. At the theater level, a technological impact assessment of the operational characteristics of a notional air independent propulsion (AIP) system submarine design is performed using a mission simulation context. This paper refreshes the topic of conventional submarine design, provides examples of analyses that demonstrate the assessment of the performance characteristics of current technology, and provides aids for decision makers in determining the impacts of future designs and possible threats. At the theater level, a technological impact assessment of the operational characteristics of a notional AIP system submarine design is performed using a mission simulation context. This study investigates potential improvements by varying systems within the same hull form. The results demonstrate the probability of detections possible with AIP propulsion systems.

Around the time the Bretton Woods exchange rate system was breaking down in global markets, interest rates in many local markets became much less predictable, leaving businesses and investors exposed to far more interest rate risk than they were familiar with. The financial community began looking for ways to hedge and speculate this risk. To address this need to hedge interest rate risk, the futures exchanges in Chicago and London (and other financial centers) began offering interest rate contracts in addition to their historically traded commodity futures. In 1981, IBM and the World Bank entered into the first interest rate swap, soon followed by a foreign exchange swap. As the Black-Scholes model and other options pricing models became generally accepted, options on interest rates became widely traded in deep, liquid markets. Decades later, the interest rate derivatives markets, both exchange traded and over the counter (OTC), have grown into a huge global marketplace (notional amounts in billions of U.S. dollars equivalent). (See Exhibit 10.1.) These so-called plain vanilla interest rate derivatives totaled almost U.S. $355 trillion at the end of 2006, and there are many other interest rate derivatives that the Bank for International Settlements (BIS) does not report statistics on. At first glance, the BIS total appears to be roughly 10 times global gross domestic product. However, some OTC derivatives are double counted (e.g., each side of the same risk may be on the books of two banks; in practice this is difficult to net). A significant percentage of the total (exchange traded plus OTC) is a hedge against other interest rate risk but does not get netted in the statistics just cited. Most important, the numbers shown reflect notional amounts (i.e., the amounts used to as a benchmark for determining the dollar value of interest rate payments). The market value of these instruments is much smaller. Whole books have been written on each type of interest rate derivative, but the next section provides a sampling of the common types of interest rate derivatives you are likely to see on a broker-dealer fixed income trading floor.

Ship design criteria and practices used by European NATO navies differ significantly from those of the United States; in general, by American standards, the European ships reflect the use of smaller margins, volumetrically tighter designs and different manning and habitability standards. This article discusses the effect of these differences in design practices on the size and total ship investment cost of a notional anti-submarine warfare frigate.

Long/short ratios like 130/30 are an increasingly common way for the investment management industry to describe portfolios that are released from the long-only constraint. The ratio of a portfolio's long and short positions to net notional value is often the primary description of the strategy, replacing more traditional measures such as active risk. Unfortunately, managers and their clients may not understand the underlying parameters associated with the value of the long/short ratio, beyond the general recognition that the size of the extensions (e.g., 30 percent) and active risk are positively related. We develop a mathematical model to identify the factors that determine the size of the long/short extension, and illustrate the relationships using historical data on the S&P 500 benchmark, as well as current data on a variety of domestic and international equity benchmarks. The model confirms the basic intuition that the size of the long/short extension increases with the active risk target chosen by the manager, and decreases with the estimated costs of shorting. In addition, the model shows that the expected short extension for an unconstrained portfolio depends on average security risk, average pair-wise security correlation, the security weight concentration of the benchmark, the number of investable securities, and the assumed accuracy of security return forecasts. The model provides important perspectives on long/short strategies as the investment management industry continues to move away from more traditional long-only portfolios.

Several developed and developing countries have recently adopted a notional defined contribution (NDC) approach to old-age pension reform. The NDC is essentially a non-pre-funded defined contribution retirement system, in which contributions are credited with a “rate of return” related to aggregate payroll growth, and individual account accruals are maintained in a book-keeping system. Payouts are annuitized based on the expected mortality of each succeeding retiring cohort. NDC plans may be identified with appropriately calibrated Pay-As-You-Go plans in demographic equilibrium, but the two paradigms diverge when demographic shift is introduced. This paper investigates the key actuarial and economic implications of alternative NDC rules, with a particular focus on Japan, the world's most rapidly ageing economy. We examine the potential role for pension reserves in transitioning to an NDC system, and we show these can be used to smooth the impact of demographic transition to an older society. Finally, we show that countries such as Japan could elect to use pension reserves accumulated in the past to facilitate the transition to an NDC system.

In this article we focus on the dual identities of relatively young Trinidadians who have decided to return to the island of their birth, or of their parents, while still in their thirties and forties. Highly-educated professional transnational migrants mostly make tip our sample of 36; 26 possess dual citizenship. We focus on our informants' narratives about their transnational experiences, self-appraisals of their dual identities and how they value dual citizenship. More generally, we ask does transnationalism supplant nationalism among our returning informants? Unsurprisingly, the diverse responses we document do not support the commonly held explanatory relationship between return adaptations, 'national belonging' and the expected dominance of 'transnational belonging'. Family, relations intervene significantly, both to encourage transnationalism and to strengthen nationalism. Feelings of notional belonging often accompany transnationalism. Notably, we view dual citizenship strategically and pragmatically as advantageous to the continuation of transnational practices.

This study revisits concept exploration for DDG-51 using reconstructed 1978-1979 DDX and 1979-1980 DDGX requirements and options, and 2005 tools. The goal of this study is to assess and highlight the benefits of current tools and processes for concept exploration by comparison with a well-known design that did not use these tools. This case study was completed in a summer and fall ship design project at Virginia Tech. In 1979, the acquisition and design process did not begin with a Mission Need Statement, Analysis of Alternatives or Integrated Capabilities Document as is required today. It began with studies, Tentative Operational Requirements, and Draft Top Level Requirements. In this study, we revisit the 1978-1980 DDG-51 (DDX/DDGX) concept exploration based on the guidance, goals, and constraints of the DDX and DDGX studies, using a notional mission statement, concept of operations, and list of required capabilities. The design space is defined to include many of the same design alternatives that were considered in the DDX and DDGX studies. A multiple-objective genetic optimization (MOGO) based on military effectiveness, cost, and risk is used to search the design space and perform trade-offs. A simple ship synthesis model is used to balance the designs, assess feasibility, and calculate cost, risk, and effectiveness. Alternative designs are ranked by cost, risk, and effectiveness, and presented in a series of non-dominated frontiers. Concepts for further study and development are chosen from this frontier and a comparison with DDG-51 is made based on these results.

The aim of this article is twofold: to demonstrate the actuarial imbalance in the Spanish pension system in its current form; and to measure the degree of aggregate economic risk to which pensioners are exposed when applying formulas for the calculation of retirement pensions based on notional accounts. The model used generates scenarios for various periods encompassing some 10,000 different permutations of the macroeconomic indices needed to calculate such parameters as initial pension, earnings replacement rate, or internal rate of return and value at risk. The findings are analysed both objectively and subjectively. The main conclusions are that if the projections for the macroeconomic indices used bear only a minimal resemblance to reality, the pension system will accumulate further financial imbalance in the future that will force it either to reduce initial pensions considerably or to make some radical adjustments to the parameters. In terms of risk, for beneficiaries with high risk aversion the preferred formulas would be those based on future variations in wages with a constant pension amount in real terms; on the other hand, those less averse to risk would prefer formulas that generate a smaller initial pension but one which grows in real terms with subsequent changes in wage levels.

In order to meet its obligations for prompt and sustained combat at sea, the US Navy relies on sailors to perform relentlessly while underway in highly stressful combat environments. The Navy currently uses an afloat staffing policy that is calculated using a 70-hour workweek per sailor metric. However, this construct fails to factor in an individual sailor's capacity to sustain performance and is based instead on a notional Navy standard workweek. Part of the inadequacy of the current staffing policy results from its failure to consider an inviolable and basic physiological requirement for adequate sleep and rest for sailors. Research indicates a strong causal relationship between sleep and performance. When deprived of sleep, either chronically or acutely, human performance suffers in a dramatic and predictable manner. These performance decrements have even been equated to the effects of alcohol. If the US Navy is to deliver the combat capability demanded by our government and stated in Navy governing documents, sleep and rest requirements must be accounted for in staffing methodologies. To achieve full combat capability, the Navy must change its culture and adopt programs that promote crew endurance. Human system integration can provide a means to accomplish this goal.

The US Navy has been studying the technical and cost impacts associated with the availability and cost of fossil fuel contrasted with nuclear energy alternatives for surface combatants and amphibious warfare ships. Over the past 2 years these efforts have grown in maturity to examine the tactical and strategic implications of our Navy's dependence on fossil fuels from technical, economic, and military perspectives. This paper will present three major topics: ▪ Background research on alternative energy sources. ▪ A survey discussion of current and future power and propulsion system technologies. ▪ An overview of principal Naval Sea Systems Command studies on the integration of alternative power and propulsion system technologies into notional surface combatants, submarines, and amphibious warfare ships. Given the US Navy's dependence on fossil fuels and the expected increase in cost and reduced availability of fossil fuel, propulsion system investment decisions made today will have a profound impact on the future tactical and strategic roles of the US Navy surface fleet. This paper lays the foundation for providing robust and flexible technology decision opportunities for the Navy's future.

People often become confused, mistaking one thing for another, or taking two things to be the same. How should we assign semantic values to confused statements? Recently, philosophers have taken a pessimistic view of confusion, arguing that understanding confused belief demands significant departure from our normal interpretive practice. I argue for optimism. Our semantic treatment of confusion can be a lot like our semantic treatment of empty names. Surprisingly, perhaps, the resulting semantics lets us keep in place more of our everyday interpretive practices in the face of confused belief.

This study extends the BGM (A. Brace, D. Gatarek, & M. Musiela, 1997) interest rate model (the London Interbank Offered Rate [LIBOR] market model) by incorporating the stock price dynamics under the martingale measure. As compared with traditional interest rate models, the extended BGM model is both appropriate for pricing equity swaps and easy to calibrate. The general framework for pricing equity swaps is proposed and applied to the pricing of floating-for-equity swaps with either constant or variable notional principals. The calibration procedure and the practical implementation are also discussed. © 2007 Wiley Periodicals, Inc. Jrl Fut Mark 27:893–920, 2007

Housing allowances aim to make rental housing affordable for the recipients. Whether affordability for tenants is achieved in an economically efficient way is the question that is discussed in this essay. Three aspects of efficiency are focused on: disincentives to work, over-consumption of housing and horizontal inefficiency. These topics are tackled through a discussion that focuses mainly on the principles, but also on some of the outcomes, of the means-tested housing allowance systems in six Western countries: Belgium, Germany, the Netherlands, the United Kingdom, the United States and Sweden. Conclusions concern the apparent unimportance of the poverty trap or the unemployment trap specifically for rental housing, the concept of notional rent used to tackle over-consumption, and the frequent existence of some form of horizontal inefficiency.

One of the innovations that we have recently introduced in our reviews section is to include reviews of books that were published some time ago. The aim of the ‘classics’ reviews is to indicate how far these older works are still relevant to current thinking, how far we have or have not moved on, and generally to serve as an occasion for a critical reappraisal. The intention is to publish these reviews on a significant anniversary of the original publication, and as 2006 is the 30th anniversary of David Wilkins's Notional Syllabuses, we have asked Keith Johnson to launch the series with a review of this book.

The present paper reviews the social security pilot in Jilin and Hei Longjiang that was carried out between 2004 and 2005. The pilot in the two provinces has basically achieved its main objectives, but there are still some unsolved problems, the most severe being lack of effective investment of the funds accumulated by individual accounts. During periods of high economic growth and high growth in average wages, this problem might undermine the partially-funded security system. To this end, the paper makes some suggestions, one of which is to introduce the notional defined contribution system. (Edited by Zhinan Zhang)

This article aims to quantify the aggregate subjective economic risk to which beneficiaries would be exposed if a retirement pension system based on notional account philosophy were introduced. We use scenario generation techniques to make projections of the factors that determine the real expected internal rate of return (IRR) and the expected replacement rate (RR) for the beneficiary according to six retirement formulae based on the most widely accepted rates or indices. We then apply the model to the case of Spain. Our projections are based on Herce and Alonso's macroeconomic scenario 2000-2050 (2000) and include information about the past performance of the indices and the time period the forecast is to cover. The results of the IRR calculation-average value, standard deviation, and value-at-risk (VaR)-are analyzed both in objective terms and for different degrees of participants' risk aversion. INTRODUCTION According to Hoskins (2003), we are indeed living in a "pension reform era," and there is no evidence that the pension reform debate is diminishing. On the contrary, it is only just beginning to heat up in certain parts of the world, for example the Caribbean, the Gulf States, and parts of Asia and Africa. The race to reform pension systems in many countries over the last few years has been such that, as Valdes-Prieto (2002) points out, the problems of pension reform have begun to dominate economic policy. The main pension reforms1 proposed and applied can be summarized as parametric reforms of the pay-as-you-go (PAYG) system, changes to other (mainly capitalization) systems, and systems combining capitalization and PAYG, as proposed chiefly by the World Bank. Reform trends championed by the main international organizations can be found in articles by Gillion (2000), Holzmann (2000), and Queisser (2000). One of the most important recent innovations in public pension reform has been the introduction of so-called notional defined contribution accounts (NDCs) in some countries, namely Brazil2 (1999), Italy (1995), Latvia (1996), Mongolia (2000), the Kyrgyz Republic (1997),3 Poland (1999), and Sweden (1999). Other countries such as China, Russia, Austria, and the Czech Republic are also seriously thinking about introducing them. This type of retirement formulation is considered suitable for those countries where, due to special demographic or political conditions, it is difficult to introduce an at least partial accumulation of funds. The system establishes an analogy between the PAYG and capitalization systems by incorporating into the PAYG system actuarial and financial instruments used in the capitalization system. According to Valdes-Prieto (2000), this strengthens the long-term financial solvency of the PAYG system but increases the uncertainty surrounding the pension to be received by the beneficiary.4 This article will concern itself with estimating the aggregate subjective economic risk the beneficiary would be exposed to if a retirement pension system based on NDCs were to be introduced. We will not be measuring the political risk of NDCs, and although the demographic risk will not be analyzed directly either, it is taken into account implicitly when considering a number of indices used to calculate the formula for obtaining the retirement pension. The estimated aggregate subjective economic risk to the beneficiary is applied to the case of Spain, though the model put forward is equally valid for any country. The European Union, the World Bank, and the OECD along with various researchers5 have all strongly recommended an in-depth revision of the Spanish public pension system. All are agreed that, at least in the long term, the financial sustainability of the system is seriously at risk. One valid possibility could be the introduction of notional accounts, as suggested by Vidal-Melia and Dominguez-Febian (2006) and DevesaCarpio and Vidal-Melia (2004). The latter have studied the effect that the introduction of various notional retirement formulae similar to those actually applied in some countries would have had in Spain. …

The aim of this article is to uncover the aggregate monetary policy preferences in the euro area. This is pursued under the assumption of optimizing policy behaviour subject to a simple model of the macroeconomic structure, following a procedure proposed recently in the literature in which GMM estimation stems from the optimal control solution to the optimization problem. Instead of waiting for more quarterly data of ECB policy-making, the sample goes as far back as possible into the pre-EMU years. Through a combined analysis of facts, data and literature on European integration, 1995 is identified as the start date of a euro area notional policy regime, sustained later by the ECB. The policy preferences are estimated as a loss function with strict inflation targeting at 1.6 per cent and interest-rate smoothing, in the period 1995–2002.

A theoretical fault-slip model has been developed for predicting the notional peak displacement demand (PDD) of earthquakes based on a limiting natural period of 5 s, for application in stable continental regions (SCRs). The developed theoretical expression is simple and robust. Importantly, it envelops predictions arising from a number of existing empirical and seismological (stochastic) models included in the comparison. The notional PDD prediction has been made initially for hard rock crustal conditions and at a reference source-site distance of 30 km. Factors have accordingly been introduced to correct for different distances and geological conditions in completing the PDD prediction model. Assuming displacement-controlled behaviour, the predicted notional PDD may be compared with the displacement capacity of a structure, or component, for purposes of seismic stability assessment.

This article tries to establish whether the statutory system of pensions based on the pay-as-you-go principle is financially defensible in the context of an ageing population. Our study uses the case of Tunisia. The hypothesis that the population is ageing has been confirmed by a prospective study of the Tunisian population to 2050. A simulation of the pension schemes reveals a deficit which is growing at an exponential rate and which must inevitably jeopardize the financial viability of the schemes. Pension reform is thus unavoidable. After studying a number of experiences from other countries, which we describe, we propose a switch to notional defined-contribution schemes and/or organized in tiers.

Parimutuel principles are widely used as an alternative to fixed odds gambling in which a bookmaker acts as a dealer by quoting fixed rates of return on specified wagers. A parimutuel game is conducted as a call auction in which odds are allowed to fluctuate during the betting period until the betting period is closed or the auction ‘called’. The prices or odds of wagers are set based upon the relative amounts wagered on each risky outcome. In financial microstructure terms, trading under parimutuel principles is characterised by (1) call auction, non-continuous trading; (2) riskless funding of claim payouts using the amounts paid for all of the claims during the auction; (3) special equilibrium pricing conditions requiring the relative prices of contingent claims equal the relative aggregate amounts wagered on such claims; (4) endogenous determination of unique state prices; and (5) higher efficiency. Recently, a number of large investment banks have adopted a parimutuel mechanism for offering contingent claims on various economic indices, such as the US Nonfarm payroll report and Eurozone Harmonised inflation. Our paper shows how the market microstructure incorporating parimutuel principles for contingent claims which allows for notional transactions, limit orders, and bundling of claims across states is constructed. We prove the existence of a unique price equilibrium for such a market and suggest an algorithm for computing the equilibrium. We also suggest that for a broad class of contingent claims, that the parimutuel microstructure recently deployed offers many advantages over the dominant dealer and exchange continuous time mechanisms.

The impact of accounting standards on acquisitions has significant implications for the purchaser's reported financial position, reported profits and ability to pay dividends reported profits and ability to pay dividends. Two major problems arise with respect to the bases used in assessing the fair value of offer consideration – the size of the control premium and the notional placement discount. These problems are exacerbated by the little-noticed, but significant, change in measurement date (from offer date to acquisition date) in AASB 1015. Hence, further differences arise if the share price moves significantly between the offer date and the acquisition date. Current international accounting standards are being harmonised. However, they are inconsistent in their requirements as to whether takeover consideration should be assessed at acquisition date rather than offer date.

As some of the limitations of the traditional pay-as-you-go defined benefit public pension model have become more evident in recent years, pension experts have begun searching for alternative models. The notional defined contribution model, also financed on a pay-as-you-go basis, has emerged as one of the major new approaches. Drawing on evidence from schemes in six countries (Sweden, Italy, Poland, Latvia, Kyrgystan and Mongolia), this article aims to describe the notional defined contribution model and to review its strengths and limitations relative to the major alternatives, the pay-as-you-go defined benefit model and the funded defined contribution model. A four-pillar pension model is proposed.

In Central–Eastern Europe and the Former Soviet Union, the process of economic transformation has put great strain on the existing retirement systems. Interestingly, the paradigm choices made in post-socialist pension reform reflect considerable diversity. Observable reform choices include parametric reforms of the existing public schemes, the introduction of notional defined contribution schemes, and the establishment of fully funded schemes on a voluntary or mandatory basis. The number of transition countries that have introduced far-reaching systemic and parametric reforms is significant, when compared with the difficulties facing more modest pension reform attempts in Western industrialized countries. Yet some of the radical reforms recently enacted in post-socialist countries still suffer from significant implementation problems. More significantly, a closer look reveals that by embarking on radical reform, the transition countries did not necessarily tackle the most pressing issues facing their pre-reform pension schemes.

To learn to program, a novice programmer must understand the dynamic, runtime aspect of program code, a so-called notional machine. Understanding the machine can be easier when it is represented graphically, and tools have been developed to this end. However, these tools typically support only one programming language and do not work in a web browser. In this article, we present the functionality and technical implementation of the two visualization tools. First, the language-agnostic and extensible Jsvee library helps educators visualize notional machines and create expression-level program animations for online course materials. Second, the Kelmu toolkit can be used by ebook authors to augment automatically generated animations, for instance by adding annotations such as textual explanations and arrows. Both of these libraries have been used in introductory programming courses, and there is preliminary evidence that students find the animations useful.

Objective This paper describes the development of the tests of competence used as part of the General Medical Council’s assessment of potentially seriously deficient doctors. It is illustrated by reference to tests of knowledge and clinical and practical skills created for general practice. Subjects and tests A notional sample of 30 volunteers in ‘good standing’ in the specialty (reference group), 27 practitioners referred to the procedures and four practitioners not referred but who were the focus of concern over their performance. Tests were constructed using available guidelines and a specially convened working group in the specialty. Methods Standards were set using Angoff, modified contrasting group and global judgement methods, as appropriate. Results Tests performed highly reliably, showed evidence of construct validity, intercorrelated at appropriate levels and, at the standards employed, demonstrated good separation of reference and referred groups. Likelihood ratios for above and below standard performance based on competence were large for each test. Seven of 27 doctors referred were shown not to be deficient in both phases of the performance assessment.

Summary. The ratio of the length to width of a marching camp is called the aspect ratio. Ninety out of 93 camps had aspect ratios of whole numbers where the larger number was one digit greater than the smaller,On=na 1U. The commonest was 2/3, which is near to thegolden section, a proportion of some mystic significance to the ancients. By using then=Ona 1U series the aspect ratio was kept between the 2/3 ratio and the square, another figure of mystic significance. The 2/3 ratio occurs in many aspects of Roman military organisation and was probably due to Pythagorean influences. The acreage of the camp within its ramparts approximates the number ofnotional cohorts encamped, that is in terms of multiples of a standard legionary cohort. In Scotland, Roman armies often operated in groups of eight notional cohorts and multiples thereof. The area-frequency distribution of camps in England indicated that a standard Roman army comprised32O8 4U notional cohorts. Such a force made a camp of 100 actus quadrati area with a one actus intervallum. Roman texts suggest it was centred on a legion with typically, though not invariably, an order of battle of 12 legionary, 10 auxiliary infantry and 10 auxiliary cavalry (80 turmae) notional cohorts. This grouping was both sub-divided and amalgamated into forces that were deployed in the field where they made their own appropriately sized camps. A 32 notional cohort force was intended to hold the Hadrianiclimes in Britain, probably as a separate command from the legions and auxiliaries in reserve.

The Affordability Through Commonality Office (PMS 512) of PEO Surface Strike, in order to promote and enable the implementation of Open Systems Architecture (OSA) for Navy systems, established the Total Ship Open Systems Architecture (TOSA) Industry/Navy Integrated Product Team (IPT). TOSA has developed a notional open C4I template which incorporates an OSA. The application of OSA to C4I spaces will increase flexibility, upgradability, scalability, and adaptability and decrease total ownership cost over the lifecycle of the ship. Open systems concepts are well established in the commercial information technology (IT) field as a means to increase competition among vendors (broaden the market applicability and reduce costs). While the benefits of OSA are easily discernable for IT systems, the use of OSA for HM&E ship systems inter-faces represents a new and unproven application. An important feature of the adaptable ship concept is the Functional Element (FE) zone, which represents physical divisions of a ship with managed functions, configurations, interfaces, and characteristics. This paper describes how the OSA process was applied to develop an example FE Zone template for a specific space, a notional Combat Information Center (CIC) zone. The resulting concept may be used to develop a family of templates to open the remaining Command, Control, Communications, Computing and Intelligence (C4I) zones on a ship.