Daily Papers

We study how a central bank should dynamically set short-term nominal interest rates to stabilize inflation and unemployment when macroeconomic relationships are uncertain and time-varying. We model monetary policy as a sequential decision-making problem where the central bank observes macroeconomic conditions quarterly and chooses interest rate adjustments. Using publically accessible historical Federal Reserve Economic Data (FRED), we construct a linear-Gaussian transition model and implement a discrete-action Markov Decision Process with a quadratic loss reward function. We chose to compare nine different reinforcement learning style approaches against Taylor Rule and naive baselines, including tabular Q-learning variants, SARSA, Actor-Critic, Deep Q-Networks, Bayesian Q-learning with uncertainty quantification, and POMDP formulations with partial observability. Surprisingly, standard tabular Q-learning achieved the best performance (-615.13 +- 309.58 mean return), outperforming both enhanced RL methods and traditional policy rules. Our results suggest that while sophisticated RL techniques show promise for monetary policy applications, simpler approaches may be more robust in this domain, highlighting important challenges in applying modern RL to macroeconomic policy.

Reinforcement learning (RL) has gained increasing interest since the demonstration it was able to reach human performance on video game benchmarks using deep Q-learning (DQN). The current consensus for training neural networks on such complex environments is to rely on gradient-based optimization. Although alternative Bayesian deep learning methods exist, most of them still rely on gradient-based optimization, and they typically do not scale on benchmarks such as the Atari game environment. Moreover none of these approaches allow performing the analytical inference for the weights and biases defining the neural network. In this paper, we present how we can adapt the temporal difference Q-learning framework to make it compatible with the tractable approximate Gaussian inference (TAGI), which allows learning the parameters of a neural network using a closed-form analytical method. Throughout the experiments with on- and off-policy reinforcement learning approaches, we demonstrate that TAGI can reach a performance comparable to backpropagation-trained networks while using fewer hyperparameters, and without relying on gradient-based optimization.

Quantum error mitigation (QEM) is critical in reducing the impact of noise in the pre-fault-tolerant era, and is expected to complement error correction in fault-tolerant quantum computing (FTQC). In this paper, we propose a novel QEM approach, Q-Cluster, that uses unsupervised learning (clustering) to reshape the measured bit-string distribution. Our approach starts with a simplified bit-flip noise model. It first performs clustering on noisy measurement results, i.e., bit-strings, based on the Hamming distance. The centroid of each cluster is calculated using a qubit-wise majority vote. Next, the noisy distribution is adjusted with the clustering outcomes and the bit-flip error rates using Bayesian inference. Our simulation results show that Q-Cluster can mitigate high noise rates (up to 40% per qubit) with the simple bit-flip noise model. However, real quantum computers do not fit such a simple noise model. To address the problem, we (a) apply Pauli twirling to tailor the complex noise channels to Pauli errors, and (b) employ a machine learning model, ExtraTrees regressor, to estimate an effective bit-flip error rate using a feature vector consisting of machine calibration data (gate & measurement error rates), circuit features (number of qubits, numbers of different types of gates, etc.) and the shape of the noisy distribution (entropy). Our experimental results show that our proposed Q-Cluster scheme improves the fidelity by a factor of 1.46x, on average, compared to the unmitigated output distribution, for a set of low-entropy benchmarks on five different IBM quantum machines. Our approach outperforms the state-of-art QEM approaches M3 [24], Hammer [35], and QBEEP [33] by 1.29x, 1.47x, and 2.65x, respectively.