Monetary policy: why money matters and interest rates don't

Monetary policy is now conducted by targeting a very short-term interest rate. The Fed and other central banks attempt to control the price level by manipulating aggregate demand by adjusting their interest rate target. At best, money's role is tertiary. Indeed, a few prominent and influential macroeconomists have suggested that money is not essential, or perhaps is irrelevant, for the determination of the price level. Against this backdrop, this paper argues that the essential feature of money is that it guarantees "final payment" and is essential for price determination. It also suggests that the ability of the central banks to control interest rates may be greatly exaggerated.Monetary policy

Truck, barter and exchange versus the endowment effect: virtual field experiments in an online game environment.

We examine the feasibility of using a massively multiplayer online role-playing game (MMORPG) to test economic theories. As a test vehicle we use the well-known hypothesis about the relationship between market experience and the endowment effect. Our results confirm earlier field experiments that individuals with more trading experience are less likely to exhibit status quo behaviour in trade. However, we also find evidence that highly experienced individuals are more likely to swap the item rather than keep it – i.e. there appears to be a propensity to ‘truck, barter and exchange’. A further experiments suggests that this feature is robust and is unlikely to be due to subject misperception or experimenter demand effects. We conclude that virtual economies may be a useful venue for field experiments.Endowment effect; virtual field experiment; Runescape; MMORPG

The foundations of money, payments and central banking: A review essay

The purpose of this paper is to understand the economics behind the evolution of payments where by payments I mean the ‘transfer of monetary value’ (in return for goods, services, or real or financial assets). It is clear from this definition of payments that, in order for there to be payments, there first needs to be money. So, the paper first discusses why money might evolve as a result of some frictions inherent in real-world economies. It then discusses the evolution of banks, arguing that banks developed in order to provide payment services (making ‘money’ work more efficiently). The paper then discusses how banks can save on the use of collateral to make payments – collateral that they can convert into loans to earn a return – by the development of ‘payment systems’. Such systems will involve some form of netting of payments (clearing) and final settlement in some asset. ‘Central banks’ fit into this picture by providing, in their liabilities, a settlement asset that the other banks are happy to use. In so doing, they are incentivised to worry about monetary and financial stabilityMoney, banks, payment systems, central banks

Microeconomic Aspects of Economic Growth in Eastern Europe and the Former Soviet Union, 1950-2000

The theme of this paper is the microeconomics of economic growth in Central and Eastern Europe (CEE) and the Newly Independent States (NIS) over the period 1950-2000. The key structural change in this region is the end of the socialist regime in 1989 and 1992, and the subsequent attempt at transition to a market economy. We begin the paper with an examination of the key legacies from the socialist period. We then examine the key microeconomic actors in transition economies: households, enterprises, and government officials. Although there are many common processes at work, differences in economic performance tend to coincide with the geographical divide. Legacies play an important part. We also argue that differences in openness also plays an important role in generating different outcomes. These factors, combined with defects in the political and legal system, have given rise to a vicious circle of resistance to reform in the NIS.http://deepblue.lib.umich.edu/bitstream/2027.42/39732/3/wp348.pd

Neutral winds above 200Km at high latitudes

Motion from multiple chemical releases between 200 and 300 km from 15 rockets launched from 4 high latitude locations are analyzed. The observations in the evening and midnight hours at magnetic altitudes or = 65 deg suggest that in these regions ion drag is the dominant force in driving neutral winds between 200 and 300 km. This conclusion is based on both the agreement between ion and neutral drift directions, and the fact that there are distinct changes in the wind associated with (a) the reversal in east-west ion drift at the Harang discontinuity, and (b) the transition from auroral belt, sunward ion drift and polar cap, anti-solar ion drift

Privatization and State Capacity in Postcommunist Society

Economists have used cross-national regression analysis to argue that postcommunist economic failure is the result of inadequate adherence liberal economic policies. Sociologists have relied on case study data to show that postcommunist economic failure is the outcome of too close adherence to liberal policy recommendations, which has led to an erosion of state effectiveness, and thus produced poor economic performance. The present paper advances a version of this statist theory based on a quantitative analysis of mass privatization programs in the postcommunist world. We argue that rapid large-scale privatization creates severe supply and demand shocks for enterprises, thereby inducing firm failure. The resulting erosion of tax revenues leads to a fiscal crisis for the state, and severely weakens its capacity and bureaucratic character. This, in turn, reacts back on the enterprise sector, as the state can no longer support the institutions necessary for the effective functioning of a modern economy, thus resulting in deindustrialization. Using cross-national regression techniques we find that the implementation of mass privatization programs negatively impacts measures of economic growth, state capacity and the security of property rights.http://deepblue.lib.umich.edu/bitstream/2027.42/40192/3/wp806.pd

The perception of registered nurses regarding the use of medication assistants in Wisconsin nursing homes

In response to the critical nursing shortage, nursing homes have been forced to find creative ways to fill vacancies, maintain quality care given to residents, and contain the cost of nursing personnel. One answer to the nursing shortage has been the addition of unlicensed assistive personnel (UAP). The purpose of this study was to examine the perceptions of registered nurses (RN) regarding the use of Medication Assistants in Wisconsin nursing homes. A quantitative descriptive research design was used to describe the perceptions of RNs. The convenience sample consisted of 71 RNs from eight nursing homes located in Manitowoc and Sheboygan counties. The results of this study indicate the majority of RNs perceived the Medication Assistants to be highly prepared (73 .2%, n=52) to administer non-sterile treatments. Almost half were very comfortable (49.3%, n=35) with having a Medication Assistant work under their RN license. The RNs reported that they had an increase in job satisfaction (54.9%, n=39) and had more time to perform professional nursing activities such as assessments, teaching and evaluation (83.1 %, n=59). Forty-three percent (n=31) of RNs did not receive any training regarding delegating or supervising Medication Assistants. RNs that did receive training reported that the training was adequate to effectively delegate and supervise Medication Assistants. Eighty-four percent (n=60) of RNs who responded to the questionnaire, supervised only one Medication Assistant at a time. Forty-nine percent (n=35) of RN participants perceived that excellent quality of care is delivered by a Medication Assistant. Finally, the majority of nurses (74.6%, n=53) responded they would highly recommend using Medication Assistants in the nursing home setting. Findings suggest that nurses\u27 perceive Medication Assistants to be a viable solution to the nursing shortage experienced by Wisconsin nursing homes

Efficiency and Nash Equilibria in a Scrip System for P2P Networks

A model of providing service in a P2P network is analyzed. It is shown that by adding a scrip system, a mechanism that admits a reasonable Nash equilibrium that reduces free riding can be obtained. The effect of varying the total amount of money (scrip) in the system on efficiency (i.e., social welfare) is analyzed, and it is shown that by maintaining the appropriate ratio between the total amount of money and the number of agents, efficiency is maximized. The work has implications for many online systems, not only P2P networks but also a wide variety of online forums for which scrip systems are popular, but formal analyses have been lacking

Illinois Virtual High School: Information Packet

The Illinois Virtual High School is being planned as an educational service managed by the Illinois State Board of Education to expand student access to challenging high school curricula aligned to the Illinois Learning Standards. Through the IVHS, Illinois school districts, non-publics and parents of home schooled students can provide students with access to a wider range of course offerings, with the opportunity to develop their capacities as independent learners, and with increased time and opportunity to achieve because learning on-line is neither time nor place dependent

Optimal Speed of Transition: Micro Evidence from the Czech Republic

We consider the growing theoretical literature on the optimum speed of transition (OST) and explore its validity using micro data from a transition economy. First, we ask whether the OST theories focus on the empirically most important job and worker reallocation flows. Second, we examine the relationship between these flows suggested by the theory. The empirical evidence from the Czech Republic appears to match the theory's prescriptions. It underscores the main policy implication of the Aghion and Blanchard (1994) model that early support for private job creation is the recipe for a successful transition.