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Grid Super-Computable General Equilibrium Models

Copyright © 2012. 62 pages.
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DOI: 10.4018/978-1-61350-162-7.ch009
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MLA

Kelley, Joe. "Grid Super-Computable General Equilibrium Models." Information Systems for Global Financial Markets: Emerging Developments and Effects. IGI Global, 2012. 177-238. Web. 24 Apr. 2014. doi:10.4018/978-1-61350-162-7.ch009

APA

Kelley, J. (2012). Grid Super-Computable General Equilibrium Models. In A. Yap (Ed.), Information Systems for Global Financial Markets: Emerging Developments and Effects (pp. 177-238). Hershey, PA: Business Science Reference. doi:10.4018/978-1-61350-162-7.ch009

Chicago

Kelley, Joe. "Grid Super-Computable General Equilibrium Models." In Information Systems for Global Financial Markets: Emerging Developments and Effects, ed. Alexander Y. Yap, 177-238 (2012), accessed April 24, 2014. doi:10.4018/978-1-61350-162-7.ch009

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Abstract

We sketch a large-scale computable general equilibrium model of the macroeconomy that includes modern features such as financial derivatives. This model can be used to examine proposed new economic policies that involve large structural changes in the economy. To simulate and study the model, considerable computational power is required for extensive Monte Carlo simulations. We propose using a grid supercomputer to do these Monte Carlo simulations so that the results can be obtained in a reasonable amount of time. To evaluate the new policy, the supercomputer will run two sets of Monte Carlo simulations: (1) Baseline (2) Supercharged. Both sets contain trillions of stochastic simulations. After running both the baseline and supercharged simulations, the social welfare in the two possible scenarios can be compared to see if economic welfare was improved by the proposed supercharged economic policy.
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Grid Supercomputing

Today grids enable the masses to participate in supercomputing. In the past the printing press helped spread reading to the masses. More recently the Kelso ESOP and 401K helped spread capital ownership to the masses. This paper shows how to use the grid supercomputing to help study an economic policy aimed at more capital ownership by people who have been excluded from the capital markets. So the new freedom of grid supercomputing can expand the freedom to own some of the capital that makes grid supercomputing possible. The disruptive grid supercomputer technology can study a disruptive Kelso supercharged economic policy that supporters claim is Pareto optimal—i.e. will increase the welfare of all humans in the economy.

Grid computing is a proven success. Low cost grid supercomputing has allowed more scientific problems to be studied. Folding@Home® runs on 350,000 computers around the world using 7 operating systems reaching speeds of 5 PFLOPS to study protein folding for scientists researching numerous diseases. Seti@Home® was released to the public in 1999 and by 2009 ran on 2.4 million computers in 234 countries in its search for extraterrestrials. MilkyWay@Home® has 44,900 users in 170 countries with average computing power of 1.38 PFLOPS. These compare favorably to supercomputers although grid computers cannot run LINPACK on the large problem that is the benchmark by which supercomputers are measured. The fastest supercomputer in the world is the Cray® Jaguar® at 1.759 petaflops at Oak Ridge National Laboratories Tennessee USA. The second fastest supercomputer in the world is the Dawning® TC3600 Blade® at the National Supercomputing Center in Shenzhen China (Top500.org, June 2010).

Grids link together separate computers to make a virtual super-computer. The separate computers may be widely dispersed geographically but are linked together by conventional network interfaces such as internet or ethernet. The separate computers are usually complete computers and may run different operating systems. This distinguishes grid computing from cluster computing, concurrent computing, parallel computing, distributed computing, and traditional supercomputing. These have more standardized compute nodes and often faster networks linking the nodes. Sometimes the compute nodes are specialized for particular applications and thus can be much faster than grid computers for those applications. Dedicated supercomputers may have field-programmable gate array (FPGA) chips on compute nodes that are specially designed for particular financial algorithms (Mackin, 2009) that can achieve a tenfold speed increase while cutting electrical power consumption in half (Mackin, 2008). Reconfigurable computing is the use of a FPGA as a coprocessor to a more general-purpose computer (Kelley, 2011). In a similar manner grid computing can benefit from the graphics cards in many distributed complete computers which are also powerful processors. General purpose computing on graphics processing units (GP-GPU) use fact that GPUs have been heavily optimized for computer graphics processing which is dominated by the parallel operations of rendering pixels independently and extensive linear algebra manipulations.

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Complete Chapter List

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Table of Contents
Preface
Alexander Y. Yap
Chapter 1
Donald Crooks, John Slayton, John Burbridge
Much has been written about information technology and its role in reinventing financial markets. Today’s markets are truly global, and the... Sample PDF
Information Technology and Financial Markets: Risk, Volatility and the Quants
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Chapter 2
Alexander Y. Yap
Trading anytime anywhere ubiquitously is rapidly becoming a popular trading practice in the financial marketspace. When highly volatile financial... Sample PDF
Trading Anytime Anywhere with Ubiquitous Financial Information Systems
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Chapter 3
Michael Kampouridis, Shu-Heng Chen, Edward Tsang
In a previous work, inspired by observations made in many agent-based financial models, we formulated and presented the Market Fraction Hypothesis... Sample PDF
The Market Fraction Hypothesis under Different Genetic Programming Algorithms
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Chapter 4
Xiaotie Deng, Feng Wang, Keren Dong
Algorithmic trading strategy making is a very important research issue which attracts more and more people’s interests. This chapter will introduce... Sample PDF
Algorithmic Trading Strategy Making: Algorithms and Applications
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Chapter 5
Alexander Y. Yap, Wonhi Synn
This chapter focuses on the theme of service innovation in the electronic brokerage sector. The discussion will cover the theories of “technology... Sample PDF
Technology Bundling: Innovation for Online Brokerage Services
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Chapter 6
Robert P. Schumaker, Hsinchun Chen
However, using computational approaches to predict stock prices using financial data is not unique. In recent years, interest has increased in... Sample PDF
Predicting Stock Price Movement from Financial News Articles
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Chapter 7
Joe Kelley
Virtual reality offers the promise that finally, most of the capabilities of the human mind and senses can be harnessed to improve global financial... Sample PDF
Virtual Reality Support for Trading
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Chapter 8
M. Kersch, G. Schmidt
Trading decisions in financial markets can be supported by the use of trading algorithms. To evaluate trading algorithms and to generate orders to... Sample PDF
Survey of Trading Systems for Individual Investors
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Chapter 9
Joe Kelley
We sketch a large-scale computable general equilibrium model of the macroeconomy that includes modern features such as financial derivatives. This... Sample PDF
Grid Super-Computable General Equilibrium Models
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Chapter 10
Seán O’Riain, Andreas Harth, Edward Curry
With increased dependence on efficient use and inclusion of diverse corporate and Web based data sources for business information analysis... Sample PDF
Linked Data Driven Information Systems as an Enabler for Integrating Financial Data
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Chapter 11
Roger F.A. van Daalen
The move towards electronic trading was believed by some to narrow the scope of information available to traders, due to the difference between the... Sample PDF
The Persisting Human Element of the Electronic Trading Habit
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Chapter 12
Joe Kelley
We present an extensive dynamic financial model that encompasses most models used today in finance and economics. We show that this model is a good... Sample PDF
DSP Acceleration for Dynamic Financial Models
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Chapter 13
Joe Kelley
We propose to use FPGA (Field Programmable Gate Arrays) to solve the nearly insurmountable computational challenges of Financial Network Models.... Sample PDF
FPGA Speedup for Financial Network Models
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Chapter 14
Alma Lilia Garcia Almanza, Serafín Martínez Jaramillo, Biliana Alexandrova-Kabadjova, Edward Tsang
The main advantage of creating understandable rules is that users are able to interpret and identify the events that may trigger bankruptcy. By... Sample PDF
Using Genetic Programming Systems as Early Warning to Prevent Bank Failure
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