3,175 research outputs found

    Optimal Monetary Policy Response to Distortionary Tax Changes

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    We analyze the trade-offs faced by a monetary policy authority when a value added tax rate is increased. In the short run, such an increase acts as a cost push shock from the perspective of a central bank that is concerned with stabilizing the welfare relevant output gap. We develop a New Keynesian monetary model with real wage rigidity and consider the effects that obtain under a simple interest rate rule, on the one hand, and those that obtain under an optimal monetary policy from a timeless perspective (in the terminology of Woodford, 2003). The implications for the dynamic response of the economy differ in the presence of real wage rigidity. While under a rule inflation is higher for about eight quarters, the optimal policy involves an adjustment that is about half as long, and is followed by a slight deflation. The reason is that this policy can be shown to include a commitment to target a certain price-level, which helps contain inflation expectations. We treat the tax shock as permanent, so that the central bank does not fully revert the price level to its orginal level.Nominal and real rigidities, distortionary taxation, optimal monetary policy

    Does intra-firm bargaining matter for business cycle dynamics?

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    We analyse the implications of intra-firm bargaining for business cycle dynamics in models with large firms and search frictions. Intra-firm bargaining implies a feedback effect from the marginal revenue product to wage setting which leads firms to over-hire in order to reduce workers' bargaining position within the firm. The key to this effect are decreasing returns and/or downward-sloping demand. We show that equilibrium wages and employment are higher in steady state compared to a bargaining framework in which firms neglect this feedback. However, the effects of intra-firm bargaining on adjustment dynamics, volatility and comovement are negligible. --Strategic wage setting,search and matching frictions,business cycle propagation

    On-the-job search and the cyclical dynamics of the labor market

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    We show how on-the-job search and the propagation of shocks to the economy are intricately linked. Rising search by employed workers in a boom amplifies the incentives of firms to post vacancies. In turn, more vacancies induce more on-the-job search. By keeping job creation costs low for firms, on-the-job search greatly amplifies shocks. In our baseline calibration, this allows the model to generate fluctuations of unemployment, vacancies, and labor productivity whose magnitudes are close to the data, and leads output to be highly autocorrelated. --Search and matching,job-to-job mobility,worker flows,Beveridge curve,business cycle,propagation

    Optimal redundancy against disjoint vulnerabilities in networks

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    Redundancy is commonly used to guarantee continued functionality in networked systems. However, often many nodes are vulnerable to the same failure or adversary. A "backup" path is not sufficient if both paths depend on nodes which share a vulnerability.For example, if two nodes of the Internet cannot be connected without using routers belonging to a given untrusted entity, then all of their communication-regardless of the specific paths utilized-will be intercepted by the controlling entity.In this and many other cases, the vulnerabilities affecting the network are disjoint: each node has exactly one vulnerability but the same vulnerability can affect many nodes. To discover optimal redundancy in this scenario, we describe each vulnerability as a color and develop a "color-avoiding percolation" which uncovers a hidden color-avoiding connectivity. We present algorithms for color-avoiding percolation of general networks and an analytic theory for random graphs with uniformly distributed colors including critical phenomena. We demonstrate our theory by uncovering the hidden color-avoiding connectivity of the Internet. We find that less well-connected countries are more likely able to communicate securely through optimally redundant paths than highly connected countries like the US. Our results reveal a new layer of hidden structure in complex systems and can enhance security and robustness through optimal redundancy in a wide range of systems including biological, economic and communications networks.Comment: 15 page

    A Chlorine-Free Protocol for Processing Silicon, Germanium, and Tin

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    Replacing molecular chlorine and hydrochloric acid with less energy- and risk-intensive reagents would dramatically improve the environmental impact of metal manufacturing at a time when demand for metals is rapidly increasing. Germanium and tin are classified as “critical” elements based on growing demand for these elements in technological applications, lack of suitable substitutes, and, for germanium, high dispersion in the environment making extraction of the element process-intensive. This thesis describes a recyclable quinone / catechol redox platform that provides an innovative replacement for elemental chlorine and hydrochloric acid in the conversion of germanium metal or tin metal to element tetrachloride substitutes. The approach described in this thesis replaces the oxidizing capacity of chlorine with molecular oxygen, and replaces germanium tetrachloride and tin tetrachloride with air- and moisture-stable germanium or tin catecholate complexes that are kinetically competent for conversion to high-purity organogermanes and organostannanes. Also described in this thesis are the conversions of tetraethyl orthosilicate and germanium dioxide to air- and moisture-stable silicon and germanium catecholate complexes, thus replacing silicon tetrachloride and germanium tetrachloride as Group 14 precursors to organosilanes and organogermanes. The germanium catecholate complex developed in this thesis generates a pure stream of germane when reacted with hydride sources

    Looking beyond endotoxin: a comparative study of pyrogen retention by ultrafilters used for the preparation of sterile dialyis fluid

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    Sterile single-use ultrafilters are used in dialysis for the preparation of the substitution fluid given to patients undergoing dialysis treatments with high convective fluid removal. The retention of pyrogenic agents by the ultrafilters is crucial to avoiding inflammatory responses. The performance of a new single-use ultrafilter (NUF) with a positively charged flat sheet membrane of relatively small membrane area and large pore size was compared to a reference ultrafilter (RUF) with a hollow fiber membrane. Filter performance was tested with various pyrogen-contaminated dialysis fluids by direct pyrogen quantification and by measuring inflammatory responses in cell-based bioassays. The NUF completely retained oligodeoxynucleotides (ODN), whereas the RUF was fully permeable. Both filters tended to decrease biological activity of DNA in filtered bacterial lysates. The NUF reduced lipopolysaccharides (LPS) and LPS-induced biological activity by 100%, whereas the RUF produced filtrates with low but detectable levels of LPS in most cases. Peptidoglycans (PGN) were fully retained both by the NUF and the RUF. The new ultrafilter retained biologically active ODN, which has not yet been described for any other device used in dialysis, and it showed better or equal retention of LPS and PGN even with a smaller membrane surface and larger pore size