Daily Papers

We revisit Tirole's classic paper "Asset Bubbles and Overlapping Generations" (1985, Econometrica) in the case of a dividend-paying asset. Recently, Pham and Toda (2026) constructed a counterexample to Proposition 1(c), showing that Tirole's equilibrium classification is incorrect as stated and that long-run outcomes can depend on initial capital. This paper characterizes the entire set of equilibrium initial asset prices under capital over-accumulation. Exactly one of three regimes occurs: (i) a unique bubbleless equilibrium with capital converging to zero (capital collapse), (ii) a unique asymptotically bubbly equilibrium converging to a positive steady state (bubble necessity), or (iii) a continuum of equilibria with different long-run bubble behavior (indeterminacy). We further derive a threshold for initial capital under the bubble necessity condition, establish preference-free sufficient conditions for capital collapse, and show that the continuum in the pure bubble model survives sufficiently small dividend perturbations. Closed-form examples illustrate the possible long-run outcomes.

Tirole (1985) studied an overlapping generations model with capital accumulation and showed that the emergence of asset bubbles solves the capital over-accumulation problem. His Proposition 1(c) claims that if the dividend growth rate is above the bubbleless interest rate (the steady-state interest rate in the economy without the asset) but below the population growth rate, then bubbles are necessary in the sense that there exists no bubbleless equilibrium but there exists a unique bubbly equilibrium. We show that this result (as stated) is incorrect by presenting an example economy that satisfies all assumptions of Proposition 1(c) but its unique equilibrium is bubbleless. We also restore Proposition 1(c) under the additional assumptions that initial capital is sufficiently large and dividends are sufficiently small. We show through examples that these conditions are essential.

A scuba diver holding constant depth balances on an unstable equilibrium: the gas carried in the suit and buoyancy compensator compresses with depth, so the buoyant force falls as the diver sinks and rises as the diver ascends. We represent the diver as a proportional-derivative controller that regulates this compressible-buoyancy saddle after a finite reaction delay, and we derive the governing delay differential equation from the vertical force balance and the isothermal gas law, reducing it to a damping ratio, two control gains, and a dimensionless delay. The characteristic spectrum, obtained by pseudospectral collocation of the semigroup generator and checked against a direct Newton solution of the characteristic equation, locates the Hopf boundary that separates stable hovering from sustained porpoising; for the baseline diver the critical reaction delay is 3.36 s and the onset period is 28.8 s. The bifurcation is supercritical, and because the saturating force is the quadratic hydrodynamic drag, the limit-cycle amplitude grows in proportion to the delay excess rather than as its square root. The safe-operating envelope shows that runaway ascent is triggered by saturation of the compensator, not by loss of linear stability, so a stable and an unstable diver can share the same escape threshold. As onset is approached, the lag-one autocorrelation and variance rise while the fitted recovery rate falls and matches the spectral abscissa, giving an eigenvalue-exact early warning of the transition.

Air lubrication regimes were studied using simultaneous drag force measurements and multi-plane imaging to characterize the regimes and identify the governing mechanisms of drag reduction. A bubbly, transitional, and air layer regime are identified over a large range of freestream velocities (U_{infty}), air flow rates (Q_{air}), and Froude-depth numbers (Fr_d). For the lowest U_{infty}, drag reduction lags significantly behind the non-wetted area coverage at all cases and no simple correlation exists. Within the bubbly regime, a drag increase is found for low U_{infty} with large, slow-moving bubbles forming a single layer over the plate height. For higher velocities, bubbles become smaller and disperse vertically, while the drag starts decreasing. For higher Q_{air}, irrespective of U_{infty}, air patches start to form (transitional regime) and drag monotonically decreases, with the onset of the air layer regime at 60\% drag reduction. A new scaling of the associated critical Q_{air} is proposed, combining the air exit velocity, the liquid velocity close to the air layer and Fr_d. For a further increase of Q_{air} and low U_{infty}, a thicker and smoother air layer is formed with even lower drag; for higher U_{infty}, marginal differences are observed. The air layer morphology is significantly altered however, depending on Fr_d: for Fr_d>0.7, it is unbounded, extending beyond the current test section length, and for subcritical conditions (deep water regime, Fr_d<0.61) a closure is formed and the air layer transitions to a cavity of a specific length.

A control technique is developed via Reinforcement Learning that allows arbitrary controlling of the position of an acoustic cavitation bubble in a dual-frequency standing acoustic wave field. The agent must choose the optimal pressure amplitude values to manipulate the bubble position in the range of x/lambda_0in[0.05, 0.25]. To train the agent an actor-critic off-policy algorithm (Deep Deterministic Policy Gradient) was used that supports continuous action space, which allows setting the pressure amplitude values continuously within 0 and 1, bar. A shaped reward function is formulated that minimizes the distance between the bubble and the target position and implicitly encourages the agent to perform the position control within the shortest amount of time. In some cases, the optimal control can be 7 times faster than the solution expected from the linear theory.

The paper sets forth comprehensive basics of Discrete Thermodynamics of Chemical Equilibria (DTD), developed by the author during the last decade and spread over series of publications. Based on the linear equations of irreversible thermodynamics, De Donder's definition of the thermodynamic force, and the Le Chatelier principle, DTD brings forward a notion of chemical equilibrium as a balance of internal and external thermodynamic forces, acting against a chemical system. The basic expression of DTD is a logistic map that ties together energetic characteristics of the chemical transformation in the system, its deviation from true thermodynamic equilibrium, and the sum of thermodynamic forces, causing that deviation. System deviation from thermodynamic equilibrium is the major variable of the theory. Solutions to the basic map define the chemical system domain of states comprising bifurcation diagrams with four areas, from true thermodynamic equilibrium to chaos, having specific distinctive meaning for chemical systems. The theory is derived from the currently recognized ideas of chemical thermodynamics and binds classical and contemporary thermodynamics of chemical equilibria into a unique concept. DTD opens new opportunities in understanding and analysis of equilibria in chemical systems. Some new results, included in the paper, have never been published before.

We introduce Equilibrium Propagation, a learning framework for energy-based models. It involves only one kind of neural computation, performed in both the first phase (when the prediction is made) and the second phase of training (after the target or prediction error is revealed). Although this algorithm computes the gradient of an objective function just like Backpropagation, it does not need a special computation or circuit for the second phase, where errors are implicitly propagated. Equilibrium Propagation shares similarities with Contrastive Hebbian Learning and Contrastive Divergence while solving the theoretical issues of both algorithms: our algorithm computes the gradient of a well defined objective function. Because the objective function is defined in terms of local perturbations, the second phase of Equilibrium Propagation corresponds to only nudging the prediction (fixed point, or stationary distribution) towards a configuration that reduces prediction error. In the case of a recurrent multi-layer supervised network, the output units are slightly nudged towards their target in the second phase, and the perturbation introduced at the output layer propagates backward in the hidden layers. We show that the signal 'back-propagated' during this second phase corresponds to the propagation of error derivatives and encodes the gradient of the objective function, when the synaptic update corresponds to a standard form of spike-timing dependent plasticity. This work makes it more plausible that a mechanism similar to Backpropagation could be implemented by brains, since leaky integrator neural computation performs both inference and error back-propagation in our model. The only local difference between the two phases is whether synaptic changes are allowed or not.