The Performance of Forecast-Based Monetary Policy Rules under Model Uncertainty

We investigate the performance of forecast-based monetary policy rules using five macroeconomic models that reflect a wide range of views on aggregate dynamics. We identify the key characteristics of rules that are robust to model uncertainty: such rules respond to the one-year-ahead inflation forecast and to the current output gap and incorporate a substantial degree of policy inertia. In contrast, rules with longer forecast horizons are less robust and are prone to generating indeterminacy. Finally, we identify a robust benchmark rule that performs very well in all five models over a wide range of policy preferences.Inflation forecast targeting, optimal monetary policy

The performance of forecast-based monetary policy rules under model uncertainty

We investigate the performance of forecast-based monetary policy rules using five macroeconomic models that reflect a wide range of views on aggregate dynamics. We identify the key characteristics of rules that are robust to model uncertainty: such rules respond to the one-year ahead inflation forecast and to the current output gap, and incorporate a substantial degree of policy inertia. In contrast, rules with longer forecast horizons are less robust and are prone to generating indeterminacy. In light of these results, we identify a robust benchmark rule that performs very well in all five models over a wide range of policy preferences JEL Classification: E31, E52, E58, E61

Letter from E. C. Wieland to Senator Langer Regarding the North Dakota Farmers Union, April 19, 1955

This letter dated April 19, 1955 from E. C. Wieland to United States Senator William Langer encloses a resolution from the North Dakota Farmers Union (NDFU) resolution concerning the Garrison Dam. The NDFU states they would like more research surrounding the energy produced from the pool level height at the Garrison Dam. They admit that the energy produced would be beneficial to local farmers but more concrete details must be surveyed first. The letter has a small hand-written note on it. The resolution is enclosed with this document. See also: Letter from Senator Langer to E. C. Wieland Regarding His Resolution, April 26, 1955https://commons.und.edu/langer-papers/1464/thumbnail.jp

Air Traffic Simulation Technology for High-Population Metroplexes

IAI's MetroSim optimizes air traffic by simulating departures, arrivals, and activity in air and onthe ground in busy metroplexes, where flights impact each other at a single airport and among traffic at nearby airports. MetroSim evolved out of several NASA SBIR/STTR Awards and has since been used by NASA for flight simulation analysis. MetroSim has also been integrated with FAA and DOT technology, has produced studies for the Port Authority of New York and New Jersey, and is under development to support the Nav

Market dynamics associated with credit ratings: a literature review.

Credit ratings produced by the major credit rating agencies (CRAs) aim to measure the creditworthiness, or more specifically the relative creditworthiness of companies, i.e. their ability to meet their debt servicing obligations. In principle, the rating process focuses on the fundamental long-term credit strength of a company. It is typically based on both public and private information, except for unsolicited ratings, which focus only on public information. The basic rationale for using ratings is to achieve information economies of scale and solve principal-agent problems. Partly for the same reasons, the role of credit ratings has expanded significantly over time. Regulators, banks and bondholders, pension fund trustees and other fiduciary agents have increasingly used ratings-based criteria to constrain behaviour. As a result, the influence of the opinions of CRAs on markets appears to have grown considerably in recent years. One aspect of this development is its potential impact on market dynamics (i.e. the timing and path of asset price adjustments, credit spreads, etc.), either directly, as a consequence of the information content of ratings themselves, or indirectly, as a consequence of the “hardwiring” of ratings into regulatory rules, fund management mandates, bond covenants, etc. When considering the impact of ratings and rating changes, two conclusions are worth highlighting. – First, ratings correlate moderately well with observed credit spreads, and rating changes with changes in spreads. However, other factors, such as liquidity, taxation and historical volatility clearly also enter into the determination of spreads. Recent research suggests that reactions to rating changes may also extend beyond the immediately-affected company to its peers, and from bond to equity prices. Furthermore, this price reaction to rating changes seems to be asymmetrical, i.e. more pronounced for downgrades than for upgrades, and may be more significant for equity prices than for bond prices. – Second, the hardwiring of regulatory and market rules, bond covenants, investment guidelines, etc., to ratings may influence market dynamics, and potentially lead to or magnify threshold effects. The more that different market participants adopt identical ratings-linked rules, or are subject to similar ratings-linked regulations, the more “spiky” the reaction to a credit event is likely to be. This reaction may include, in some cases, the emergence of severe liquidity pressures. Efforts have recently been made, notably with support from the rating agencies themselves, to encourage a more systematic disclosure of rating triggers and to renegotiate and smooth the possibly more destabilising forms of rating triggers. However, the lack of a clear disclosure regime makes it difficult to assess how far this process has evolved. Questions also remain as to the extent to which ratings-based criteria introduce a fundamentally new element into market behaviour, or, conversely, the extent to which they are simply a va riant of more traditional contractual covenants. Rating agencies strive to provide credit assessments that remain broadly stable through the course of the business cycle (rating “through the cycle”). Agencies and other analysts frequently contrast the fundamental credit analysis on which ratings are based with market sentiment — measured for example by bond spreads — which is arguably subject to more short-term influences. Agencies are adamant that they do not directly incorporate market sentiment into ratings (although they may use market prices as a diagnostic tool). On the contrary, they make every effort to exclude transient market sentiment. However, as reliance on ratings grows, CRAs are being increasingly expected to satisfy a widening range of constituencies, with different, and even sometimes conflicting, interests: issuers and “traditional” asset managers will look for more than a simple statement of near-term probability of loss, and will stress the need for ratings to exhibit some degree of stability over time. On the other hand, mark-to-market traders, active investors and risk managers may seek more frequent indications of credit changes. Hence, in the wake of major bankruptcies with heightened credit stress, rating agencies have been under considerable pressure to provide higher-frequency readings of credit status, without loss of quality. So far, they have responded to this challenge largely by adding more products to their traditional range, but also through modifications in the rating process. The rating process and the range of products offered by rating agencies have thus evolved over time, with, for instance, an increasing emphasis on the analysis of liquidity risks, a new focus on the hidden liabilities of companies and an increased use of market-based tools. It is too early, however, to judge whether these changes should simply be regarded as a refinement of the agencies’ traditional methodology or whether they suggest a more fundamental shift in the approach to credit risk measurement. For the same reason, it is not possible to draw any firm conclusions about changes in the effects of credit ratings on market dynamics.

Architecture of coatomer: Molecular characterization of delta-COP and protein interactions within the complex

Copyright © 2011 by The Rockefeller University Press.Coatomer is a cytosolic protein complex that forms the coat of COP I-coated transport vesicles. In our attempt to analyze the physical and functional interactions between its seven subunits (coat proteins, [COPs] alpha-zeta), we engaged in a program to clone and characterize the individual coatomer subunits. We have now cloned, sequenced, and overexpressed bovine alpha-COP, the 135-kD subunit of coatomer as well as delta-COP, the 57-kD subunit and have identified a yeast homolog of delta-COP by cDNA sequence comparison and by NH2-terminal peptide sequencing. delta-COP shows homologies to subunits of the clathrin adaptor complexes AP1 and AP2. We show that in Golgi-enriched membrane fractions, the protein is predominantly found in COP I-coated transport vesicles and in the budding regions of the Golgi membranes. A knock-out of the delta-COP gene in yeast is lethal. Immunoprecipitation, as well as analysis exploiting the two-hybrid system in a complete COP screen, showed physical interactions between alpha- and epsilon-COPs and between beta- and delta-COPs. Moreover, the two-hybrid system indicates interactions between gamma- and zeta-COPs as well as between alpha- and beta' COPs. We propose that these interactions reflect in vivo associations of those subunits and thus play a functional role in the assembly of coatomer and/or serve to maintain the molecular architecture of the complex.This work was supported by The Deutsche Forschungsgemeinschaft (SFB 352), the Human Frontier Science Program, and the Swiss National Science Foundation No. 31-43366.95

Microbiological Characterization and Concerns of the International Space Station Internal Active Thermal Control System

Since January 1999, the chemical the International Space Station Thermal Control System (IATCS) and microbial state of (ISS) Internal Active fluid has been monitored by analysis of samples returned to Earth. Key chemical parameters have changed over time, including a drop in pH from the specified 9.5 +/- 0.5 ta = 58.4, an increase in the level of total inorganic carbon (TIC), total organic carbon (TOC) and dissolved nickel (Ni) in the fluid, and a decrease in the phosphate (PO,) level. In addition, silver (AS) ion levels in the fluid decreased rapidly as Ag deposited on internal metallic surfaces of the system. The lack of available Ag ions coupled with changes in the fluid chemistry has resulted in a favorable environment for microbial growth. Counts of heterotrophic bacteria have increased from less than 10 colony-forming units (CFUs)/l00 mL to l0(exp 6) to l0(exp 7) CFUs/100 mL. The increase of the microbial population is of concern because uncontrolled microbiological growth in the IATCS can contribute to deterioration in the performance of critical components within the system and potentially impact human health if opportunistic pathogens become established and escape into the cabin atmosphere. Micro-organisms can potentially degrade the coolant chemistry; attach to surfaces and form biofilms; lead to biofouling of filters, tubing, and pumps; decrease flow rates; reduce heat transfer; initiate and accelerate corrosion; and enhance mineral scale formation. The micro- biological data from the ISS IATCS fluid, and approaches to addressing the concerns, are summarized in this paper