Cryptographic hash function

Secure Hash Algorithms
Concepts
hash functions · SHA · DSA
Main standards
SHA-0 · SHA-1 · SHA-2 · SHA-3

A cryptographic hash function (specifically SHA-1) at work. A small change in the input (in the word “over”) drastically changes the output (digest). This is the so-called avalanche effect. Continue reading “Cryptographic hash function”

Why use Python for Data Science?

You can use several different languages for data science, but Python is one of the most popular. Nearly any language is capable of analyzing data, but some languages and libraries are designed with certain expectations; for instance, the NumPy library provides tools for processing matrices so that you don’t have to write a matrix library on your own.

Python, as a language, has a few advantages over many others. First, it is famous for being relatively easy to read. While Python code may not make sense to someone completely unfamiliar with computer programming, it tends to be easier to parse than, say C or C++. That means Python is easier for other people to reuse, because they can read your code and understand what it claims to do, and they may even be able to add to it. Furthermore, Python has several strong purpose-built libraries geared specifically toward data science. Because existing Python data science libraries already provide many of the things data scientists often need to do, Python has earned a rightful place as a leading language in the field.

All other benefits of Python apply, such as the convenience of the pip package manager, the robust venv virtual environment interface, an interactive shell, and so on.

Continue reading “Why use Python for Data Science?”

Data science

Data science is an interdisciplinary field that uses scientific methods, processes, algorithms and systems to extract knowledge and insights from structured and unstructured data,[1][2] and apply knowledge and actionable insights from data across a broad range of application domains. Data science is related to data mining, machine learning and big data.Data science is a “concept to unify statistics, data analysis, informatics, and their related methods” in order to “understand and analyze actual phenomena” with data.[3] It uses techniques and theories drawn from many fields within the context of mathematics, statistics, computer science, information science, and domain knowledge. Turing Award winner Jim Gray imagined data science as a “fourth paradigm” of science (empirical, theoretical, computational, and now data-driven) and asserted that “everything about science is changing because of the impact of information technology” and the data deluge.[4][5] Continue reading “Data science”

Floating interest rate (Ofer Abarbanel online library)

A floating interest rate, also known as a variable or adjustable rate, refers to any type of debt instrument, such as a loan, bond, mortgage, or credit, that does not have a fixed rate of interest over the life of the instrument.[1]

Floating interest rates typically change based on a reference rate (a benchmark of any financial factor, such as the Consumer Price Index).[1] One of the most common reference rates to use as the basis for applying floating interest rates is the London Inter-bank Offered Rate, or LIBOR (the rates at which large banks lend to each other).[2] Continue reading “Floating interest rate (Ofer Abarbanel online library)”

Federal funds rate (Ofer Abarbanel online library)

Federal Funds Rate compared to U.S. Treasury interest rates

2 to 10 year treasury yield spread

Inflation (blue) compared to federal funds rate (red)

Quarterly gross domestic product compared to Federal Funds Rate.

Federal Funds Rate and Treasury interest rates from 2002-2019

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions’ reserve requirements. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets.[1][2] Continue reading “Federal funds rate (Ofer Abarbanel online library)”

All-in Rate (Ofer Abarbanel online library)

All-in rate

The term All-in rate is used in both Construction and the Financial sector. It essentially just means “full costs charged for a service”.

Financial Definition

In general finance terminology, an all-in rate is the rate that a financial institution uses in charging customers for accepting bankers’ acceptances, consisting of the bankers’ acceptance rate (here considered as actually an amount of money, not an amount of money per unit of time, although it may happen to coincide with a rate per unit of time if the time to maturity happens to equal the unit of time used to calculate the rate) plus the commission.[1] Continue reading “All-in Rate (Ofer Abarbanel online library)”

Interest Rate Conundrums in the 21st Century – hosted by the Ofer Abarbanel online library (text)

Interest Rate Conundrums in the 21st Century∗
SAMUEL G. HANSON
Harvard Business School

DAVID O. LUCCA
Federal Reserve Bank of New York

JONATHAN H. WRIGHT
Johns Hopkins University
June 13, 2018

Abstract
A large literature argues that long-term nominal interest rates react far more to high-frequency (daily or monthly) movements in short-term rates than is predicted by the standard expectations hypothesis. We find that, since 2000, this high-frequency sensitivity has grown even stronger in U.S. data. By contrast, the association between low-frequency changes (at 6- or 12-month horizons) in short- and long-term rates, which was equally strong before 2000, has weakened substantially. As a result, “conundrums”—defined as 6- or 12-month periods in Continue reading “Interest Rate Conundrums in the 21st Century – hosted by the Ofer Abarbanel online library (text)”

Interest Rate Pass-Through Mortgage Rates – Ofer Abarbanel online library (text)

American Economic Review 2017, 107(11): 3550–3588 https://doi.org/10.1257/aer.20141313

Interest Rate Pass-Through: Mortgage Rates, Household Consumption, and Voluntary Deleveraging†
By Marco Di Maggio, Amir Kermani, Benjamin J. Keys, Tomasz Piskorski, Rodney Ramcharan, Amit Seru, and Vincent Yao*

Exploiting variation in the timing of resets of adjustable-rate mortgages ARMs , we find that a sizable decline in mortgage payments up to 50 percent induces a significant increase in car purchases up to 35 percent . This effect is attenuated by voluntary deleveraging. Borrowers with lower incomes and housing wealth have significantly higher marginal propensity to consume. Areas with a larger share of ARMs were more responsive to lower interest rates and saw a relative decline in defaults and an increase in house prices, car pur- chases, and employment. Household balance sheets and mortgage contract rigidity are important for monetary policy pass-through. Continue reading “Interest Rate Pass-Through Mortgage Rates – Ofer Abarbanel online library (text)”

The Natural Rate of Interest is Zero – hosted by the Ofer Abarbanel online library (text)

The Natural Rate of Interest is Zero

by Warren Mosler*
and Mathew Forstater**
Working Paper No. 37 December 2004
*University of Cambridge **University of Missouri – Kansas City

THE NATURAL RATE OF INTEREST IS ZERO
Warren Mosler, Cambridge University, and Mathew Forstater, UMKC

The notion of “natural” (or “normal”) values and magnitudes is a recurring theme in the history of economics. It was central to the Classical Political Economy of Adam Smith and David Ricardo, and survived the transition to neoclassical economics in the work of authors such as Wicksell and Marshall. In modern economics, it has its most familiar usage in the notion of a natural rate of unemployment, but has been applied also to the analysis of economic growth rates and interest rates, among others. And while many economists reject the very notion of “natural” itself, this paper argues that in general there are significant instances in which natural magnitudes do apply to the economic system, and, specifically, that the natural, nominal, risk free rate of interest is zero under relevant contemporary institutional arrangements. Continue reading “The Natural Rate of Interest is Zero – hosted by the Ofer Abarbanel online library (text)”