2,090 research outputs found

    Financial Frictions and Credit Spreads

    Get PDF
    This paper uses the credit-friction model developed by Curdia and Woodford, in a series of papers, as the basis for attempting to mimic the behavior of credit spreads in moderate as well as crisis times. We are able to generate movements in representative credit spreads that are, at times, both sharp and volatile. We then study the impact of quantitative easing and credit easing. Credit easing is found to reduce spreads, unlike quantitative easing, which has opposite effects. The relative advantage of credit easing becomes even clearer when we allow borrowers to default on their loans. Since increases in default offset the beneficial effects of credit easing on spreads, the policy implication is that, in times of financial stress, the central bank should be aggressive when applying credit easing policies.Credit easing, credit spread, financial friction, quantitative easing.

    Global current account adjustment: a decomposition

    Get PDF
    The rising current account deficit in the USA has attracted considerable attention in recent years. We use the “business cycle accounting” methodology to identify the principal distortions that have affected the external accounts of the US. In particular, we measure distortions in the optimality conditions of a simple two-country general equilibrium model using data from the US and the other G7 countries. We then feed these measured distortions into the model individually and use the simulated counterfactual paths of the current account to determine the contribution of each of these “wedges” to the overall external imbalance of the USA. We find that no single wedge in isolation can account closely for the observed current account. However, a combination of productivity differences and deviations from risk-sharing between the US and the rest of the G7 does the best job in accounting for most of the measured movement of the US current account.

    Global current account adjustment: a decomposition

    Get PDF
    The rising current account deficit in the USA has attracted considerable attention in recent years. We use the "business cycle accounting" methodology to identify the principal distortions that have affected the external accounts of the US. In particular, we measure distortions in the optimality conditions of a simple two-country general equilibrium model using data from the US and the other G7 countries. We then feed these measured distortions into the model individually and use the simulated counterfactual paths of the current account to determine the contribution of each of these "wedges" to the overall external imbalance of the USA. We find that no single wedge in isolation can account closely for the observed current account. However, a combination of productivity differences and deviations from risk-sharing between the US and the rest of the G7 does the best job in accounting for most of the measured movement of the US current account.

    Eigenvalue analysis and estimation on dynamic quality of mechanical assembly

    Get PDF
    As an important manufacturing process, mechanical assembly affects directly product quality. Conventional quality inspections and estimations of mechanical assembly are primarily concentrated in “static quality”, such as size coordination, shaping and positioning tolerances, etc. However, mechanical assembly actually has its own dynamic quality, which contributes to that of whole product. Inspecting only static quality is thus incomplete for quality estimation of the assembly. On the basis of substructuring method, this paper at first applies eigenvalue analysis to investigate the effects of assembling process on the dynamic transfer-functions, expressed by spectral-based frequency response functions (FRFs), of substructural components involved in the process. Eigenvalue modules of FRF-matrix-ratios of FRF before assembling to that after assembling are analyzed to quantify the effects, which are consequently indicated by the mean module. Then, according to the explicit definition of “dynamic quality of mechanical assembly” introduced in this paper, dynamic quality matrix of mechanical assembly and its mean eigenvalue module are worked out and chosen to be the right quantitative measure and indicator for dynamic quality estimation of assembly system. Meanwhile, a lumped-parameter model and its experimental counterpart are employed to validate effectiveness of the analytical outcomes obtained and the quality estimation method established in the study
    corecore