Price Stability and The ECB's Monetary Policy Strategy

This paper focuses on the price stability objective within the framework of the single monetary policy strategy. It starts by reviewing what this objective, which is common to all central banks, means. Secondly, this paper will focus exclusively on the anchoring of short- to medium-term inflation expectations (Part 2). Several measures show that this anchoring is effective. Modern New Keynesian theory is an appropriate framework for analysing the impact that this anchoring of expectations has on the determination of the short- to medium-term inflation rate. From this point of view, observed inflation in the euro area seems to be in line with the theory and the ECB's action seems to be very effective. Thirdly, we will focus on the other aspect of monetary stability: the degree of price-level uncertainty and the anchoring of inflation expectations in the medium to long term. Even though this assessment is more difficult than it is in the short to medium term, since we only have a track record covering five years, various indicators from the theoretical analysis paint a fairly reassuring picture of the effectiveness of the device used by the ECB.Monetary policy ; European Central Bank ; Inflation

Semiparametric estimation of a two-component mixture of linear regressions in which one component is known

A new estimation method for the two-component mixture model introduced in \cite{Van13} is proposed. This model consists of a two-component mixture of linear regressions in which one component is entirely known while the proportion, the slope, the intercept and the error distribution of the other component are unknown. In spite of good performance for datasets of reasonable size, the method proposed in \cite{Van13} suffers from a serious drawback when the sample size becomes large as it is based on the optimization of a contrast function whose pointwise computation requires O(n^2) operations. The range of applicability of the method derived in this work is substantially larger as it relies on a method-of-moments estimator free of tuning parameters whose computation requires O(n) operations. From a theoretical perspective, the asymptotic normality of both the estimator of the Euclidean parameter vector and of the semiparametric estimator of the c.d.f.\ of the error is proved under weak conditions not involving zero-symmetry assumptions. In addition, an approximate confidence band for the c.d.f.\ of the error can be computed using a weighted bootstrap whose asymptotic validity is proved. The finite-sample performance of the resulting estimation procedure is studied under various scenarios through Monte Carlo experiments. The proposed method is illustrated on three real datasets of size $n=150$, 51 and 176,343, respectively. Two extensions of the considered model are discussed in the final section: a model with an additional scale parameter for the first component, and a model with more than one explanatory variable.Comment: 43 pages, 4 figures, 5 table

Money and uncertainty in the Philippines: A Friedmanite Perspective

This paper aims to provide a unified theoretical framework of the two hypotheses proposed by Friedman: (i). increased variability of money supply results in the decline of income velocity of money and (ii) high inflation leads high variability of inflation which reduces potential output growth. This paper also provides empirical investigation to validate Friedman's hypotheses using Philippine data. The Philippine economy experienced persistently higher and more variable inflation rate and weaker macroeconomic performance relative to other Asian countries, and these characteristics provide ample opportunity to evaluate Friedman's proposals at work. Utilizing original methodologies (e.g. band‐pass filter), our findings validate both proposals.Friedman, GARCH, T‐GARCH, Bai‐and‐Perron technique, band pass filter

The art of central banking of the ECB and the separation principle.

This paper examines the art of central banking as practised by the European Central Bank (ECB) through the prism of Goodfriend's (2009) determination of the three policies that fall within the remit of a central bank: monetary policy, which consists in varying the size of the balance sheet, credit policy, which consists in modifying the credit structure, and interest rate policy, which consists in adjusting the interest rates of the marginal lending and deposit facilities. The theoretical literature emphasises the existence of a separation principle between the first policy, which seeks to ensure monetary stability and the other two policies, which are intended to ensure financial stability through the smooth functioning of the interbank money market. This paper shows in particular that a central bank not only has the capacity but indeed must strive to separate the conduct of its monetary policy, which must seek to ensure medium and long-term price stability, from that of its credit policy, which is driven by short-term imperatives and consists in supplying the banking system with liquidity in the event of temporary money demand shocks. During the first part of the crisis, the ECB acted in accordance with the separation principle. However, it became increasingly difficult to apply as interest rates approached the zero-lower-bound. In effect, the unconventional measures adopted by the ECB created interference between its monetary policy, its credit policy and its interest rate policy.Monetary Policy ; operational framework ; Eurosystem ; separation principle.

Sur le Regina Cœli: Paraphrase de l\u27antienne liturgique

A French arrangement for solo voice of the Regina Cœli, one of the Marian antiphons sung during night prayers (Compline). The music was composed by Charles Bordes and the lyrics are based on a poem by l\u27abbé Picard. Included as part of a supplement in the May 1911 issue of Mois Littéraire et Pittoresque, a monthly Catholic magazine published by the Maison de la Bonne Presse, which was run by the Augustine Fathers of the Assumption.https://ecommons.udayton.edu/imri_sheetmusic/1041/thumbnail.jp

N-String Vertices in String Field Theory

We give the general form of the vertex corresponding to the interaction of an arbitrary number of strings. The technique employed relies on the ``comma" representation of String Field Theory where string fields and interactions are represented as matrices and operations between them such as multiplication and trace. The general formulation presented here shows that the interaction vertex of N strings, for any arbitrary N, is given as a function of particular combinations of matrices corresponding to the change of representation between the full string and the half string degrees of freedom.Comment: 22 pages, A4-Latex (latex twice), FTUV IFI

Is there a structural break in equilibrium velocity in the euro area?

We investigate the stability of M3 income velocity in the euro area. We apply a set of breakpoint procedures to examine this issue and conclude that at least one structural change occurred around 2000-2001. We also find evidence of another structural break around 1992-1993. These two breaks seem to affect both the level and the slope of the income velocity of M3. We then estimate a model of equilibrium velocity that factors in the opportunity cost of M3, along the lines suggested by Orphanides and Porter (2000). Here again, we find some evidence of instability in equilibrium velocity. Given the importance of the assumption of stable velocity trends for both the derivation of the reference value and the two-pillar strategy of the Eurosystem, these findings question the relevance of some excess liquidity indicators directly computed from the reference value and may call for some adjustments in the conduct of the ECB's monetary policy.M3 velocity ; Breakpoint tests; ECB.

Computing in String Field Theory Using the Moyal Star Product

Using the Moyal star product, we define open bosonic string field theory carefully, with a cutoff, for any number of string oscillators and any oscillator frequencies. Through detailed computations, such as Neumann coefficients for all string vertices, we show that the Moyal star product is all that is needed to give a precise definition of string field theory. The formulation of the theory as well as the computation techniques are considerably simpler in the Moyal formulation. After identifying a monoid algebra as a fundamental mathematical structure in string field theory, we use it as a tool to compute with ease the field configurations for wedge, sliver, and generalized projectors, as well as all the string interaction vertices for perturbative as well as monoid-type nonperturbative states. Finally, in the context of VSFT we analyze the small fluctuations around any D-brane vacuum. We show quite generally that to obtain nontrivial mass and coupling, as well as a closed strings, there must be an associativity anomaly. We identify the detailed source of the anomaly, but leave its study for future work.Comment: 77 pages, LaTeX. v3: corrections of signs or factors (for a list of corrections see beginning of source file

ASSET : a dataset for tuning and evaluation of sentence simplification models with multiple rewriting transformations

In order to simplify a sentence, human editors perform multiple rewriting transformations: they split it into several shorter sentences, paraphrase words (i.e. replacing complex words or phrases by simpler synonyms), reorder components, and/or delete information deemed unnecessary. Despite these varied range of possible text alterations, current models for automatic sentence simplification are evaluated using datasets that are focused on a single transformation, such as lexical paraphrasing or splitting. This makes it impossible to understand the ability of simplification models in more realistic settings. To alleviate this limitation, this paper introduces ASSET, a new dataset for assessing sentence simplification in English. ASSET is a crowdsourced multi-reference corpus where each simplification was produced by executing several rewriting transformations. Through quantitative and qualitative experiments, we show that simplifications in ASSET are better at capturing characteristics of simplicity when compared to other standard evaluation datasets for the task. Furthermore, we motivate the need for developing better methods for automatic evaluation using ASSET, since we show that current popular metrics may not be suitable when multiple simplification transformations are performed

Mass Hierarchy, Mixing, CP-Violation and Higgs Decay---or Why Rotation is Good for Us

The idea of a rank-one rotating mass matrix (R2M2) is reviewed detailing how it leads to ready explanations both for the fermion mass hierarchy and for the distinctive mixing patterns between up and down fermion states, which can be and have been tested against experiment and shown to be fully consistent with existing data. Further, R2M2 is seen to offer, as by-products: (i) a new solution of the strong CP problem in QCD by linking the theta-angle there to the Kobayashi-Maskawa CP-violating phase in the CKM matrix, and (ii) some novel predictions of possible anomalies in Higgs decay observable in principle at the LHC. A special effort is made to answer some questions raised.Comment: 47 pages, 9 figure