Taylor Rules and Interest Rate Smoothing in the US and EMU

In this paper we estimate simple Taylor rules paying a particular attention to interest rate smoothing. Following English, Nelson, and Sack (2002), we employ a model in first differences to gain some insights on the presence and significance of the degree of partial ad- justment. Moreover, we estimate a nested model to take both interest rate smoothing and serially correlated deviations from various Taylor rate prescriptions into account. Our findings suggest that the lagged interest rate enters the Taylor rule in its own right, and may very well coexist with a serially correlated policy shock. Asymmetric preferences on the output gap level and financial indicators turn out to be impor- tant factors to understand Greenspan’s policy conduct. By contrast, our findings support standard regressors for the ’European’ Taylor rule.Taylor rules omitted variables serial correlation interest rate smoothing

Testing the structural interpretation of the price puzzle with a cost channel model

We estimate a new-Keynesian DSGE model with the cost channel to assess its ability to replicate the price puzzle ie the inflationary impact of a monetary policy shock typically arising in VAR analysis. In order to correctly identify the monetary policy shock, we distinguish between a standard policy rate shifter and a shock to trend inflation ie the time-varying inflation target set by the Fed. While offering some statistical support to the cost channel, our estimated model clearly implies a negative inflation reaction to a tightening of monetary policy. We offer a discussion of the possible sources of mismatch between the VAR evidence and our own.cost channel; inflation dynamics; price puzzle; trend inflation

Regime Shifts and the Stability of Backward Looking Phillips Curves in Open Economies

In this paper we assess the stability of open economy backward-looking Phillips curves estimated over two different exchange rate regimes. The pseudo-data employed in our econometric exercise come from the simulation of a New-Keynesian hybrid model suited for performing monetary policy analysis. Two main results arise: i) in most of the simulated scenarios the estimated reduced-form Phillips curves turn out to be unstable. However, if the structural new-keynesian model is predominantly - even if not fully - backward-looking, the estimated reduced-form parameters are stable; ii) the Chow-breakpoint test tends to underestimate the importance of regime-shifts in small samples.Lucas Critique, forwardness, backward looking Phillips curves, exchange rates, Chow test.

Taylor rules, omitted variables, and interest rate smoothing in the US

We test for the presence of interest rate smoothing in forward looking Taylor rules in first differences. We also consider financial and asymmetric preferences indicators. We find that interest rate smoothing is not induced by an omitted variable bias.Taylor rules; Interest rate smoothing; Serial correlation; Observational equivalence; Omitted variables

Monetary Policy Switch, the Taylor Curve, and the Great Moderation

This paper employs a standard new Keynesian model to compute the inflation/output volatility frontier, i.e. the "Taylor curve". The computation is performed both under equilibrium uniqueness and under indeterminacy. While under uniqueness the Taylor curve looks like expected - i.e. a monotonically decreasing curve in the ($\sigma x$, $\sigma \Pi$) diagram -, under indeterminacy a new result arises. We find that the tighter is the monetary policy, the higher is the inflation/output gap volatility. This is due to impact of systematic monetary policy on inflation and output persistence. In fact, under indeterminacy a more aggressive monetary policy causes an increase in inflation persistence, and augments its volatility. The effects on output tend to be of opposite sign. This finding is robust to different parameterization of the DSGE new-Keynesian monetary model employed. This result i) offers support the move from "passive" to "active" monetary policy as one of the possible rationales for the Great Moderation, ii) underlines the need of a deeper understanding of the link between systematic monetary policy and macroeconomic persistence, and iii) warns against sub-samples pooling when performing macroeconometric analysis.Taylor principle, Taylor curve, new Keynesian model, indeterminacy, persistence

Getting better acquainted with Auditory Voice Hallucinations (AVHs): A need for clinical and social change

The phenomenon of hearing voices (AVHs) is very much a subject of current scientific interest, both clinically1 and socially. For a long time, auditory hallucinations—perceiving sounds without external stimuli (David, 2004)—were considered an obvious sign of schizophrenic or psychotic psychopathology (Goodwin et al., 1971; Larøi et al., 2012), but these days such an association is no longer taken for granted. Various recent studies in the areas of psychology, psychiatry, and neuroscience have brought a renewal of interest in AVHs. First of all, the move beyond Kraepelinian logic (van Os, 2009; Fusar-Poli et al., 2014) has led us to see AVHs as a phenomenon in their own right, and not just a characteristic of schizophrenia (Fernyhough, 2004). Furthermore, a number of studies in imaging techniques have allowed us to study the phenomenon live, as it occurs, collecting various new data (Shergill et al., 2000). On the other hand, psychological studies with attempts at modeling, have boosted the idea that AVHs are linked to the linguistic and verbal qualities of the subject, thus reducing the association between voice hallucinations and signs of pathology (Johns and van Os, 2001; Pearson et al., 2001; Stanghellini and Cutting, 2003). Other researchers have theorized that hearing voices is a different manifestation of self-awareness (Salvini and Bottini, 2011; Salvini and Quarato, 2011). Even DSM-5 has modified the importance it attaches to hallucinations, in fact although the 4th edition diagnosed “schizophrenia” simply on the basis of the symptom “hallucinations,” in the new edition hallucinations on their own are not considered a sufficient symptom to diagnose the specter of schizophrenia” (American Psychiatric Association, 2013). Many of those suffering from this condition are not under treatment and are not diagnosable in psychopathological terms, which asks ever more questions of health professionals (Iudici, 2015), and which brings with it the risk that the phenomenon of hearing voices may be considered pathological because of a lack of understanding of the problem. One direct implication of this risk concerns non-psychotic and non-schizophrenic hearers of voices who are afraid of being considered mad or disturbed, who very often live in fear for years without talking about it with anyone, although realizing that hearing voices causes no general maladjustment in their lives (Andrew et al., 2008). In the long term this can lead to feelings of alarm in some of them, and when such situations result in a visit to a clinic or a psychiatrist, there are often “suffering and conflicted confessions” about such experiences, especially by people who have never had psychiatric experience (Iudici and Gagliardo Corsi, 2017). These people consequently do not have appropriate information to help them understand their experiences (Faccio et al., 2013). This fact raises further doubts about the direct juxtaposition of auditory hallucinations and diagnoses of mental disturbance, and consequently our interest is in sensitizing clinicians to a broader interpretation of the phenomenon than the traditional view, highlighting the importance of considering more perspectives

Regime Shifts and the Stability of Backward Looking Phillips Curves in Open Economies

In this paper we assess the stability of open economy backward looking Phillips curves estimated across two different exchange rate regimes. The time series we deal with come from the simulation of a New-Keynesian hybrid model suited for performing monetary policy analysis. The statistical assessment we undertake is based on a standard Chow (1960) test. Our results confirm Lindè (2001)'s finding on the low power of the Chow test in small samples. However, we do not find strong statistical support for the quantitative relevance of the Lucas critique when the 'true' model of the economy is featured by low/intermediate degrees of forwardness.Lucas Critique, forwardness, backward looking Phillips curves, exchange rates, Chow test

What works for promoting health at school: Improving programs against the substance abuse

The school is one of the most important contexts for carrying out health promotion programs related to the abuse of substances. Over the years, methods and intervention models have changed a great deal, both in relation to the evolution of health goals and to the role played by experts, students, parents, and teachers. We would like to offer a different perspective on health promotion at school by discussing the weaknesses and strengths of the most used methods, in order to identify the appropriate methodology, based on recent evidence research findings. We used Scopus as database for reviewing existing literature. The evolution in the methodology of health promotion programs can be synthesized through a sequence of three phases, from the 1960s to the present day

Infraorbital nerve transposition to expand the endoscopic transnasal maxillectomy

Background: The infraorbital nerve (ION) is a terminal branch of the maxillary nerve (V2) providing sensory innervation to the malar skin. It is sometimes necessary to sacrifice the ION and its branches to obtain adequate maxillary sinus exposure for radical resection of sinonasal tumors. Consequently, patients suffer temporary or permanent paresthesia, hypoestesthia, and neuralgia of the face. We describe an innovative technique used for preservation of the ION while removing the anterior, superior, and lateral walls of the maxillary sinus through a medial endoscopic transnasal maxillectomy. Methods: All patients who underwent transnasal endoscopic maxillectomy with ION transposition in our institute were retrospectively reviewed. Results: Two patients were identified who had been treated for sinonasal cancers using this approach. No major complications were observed. Transient loss of ION function was observed with complete recovery of skin sensory perception within 6 months of surgery. One patient referred to a mild permanent anesthesia of the upper incisors. No diplopia or enophthalmos were encountered in any of the patients. Conclusion: The ION transposition is useful for selected cases of benign and malignant sinonasal tumors that do not infiltrate the ION itself but involve the surrounding portion of the maxillary sinus. Anatomic preservation of the ION seems to be beneficial to the postoperative quality of life of such patients

The Price Puzzle: Fact or Artefact?

This paper re-examines the empirical evidence on the price puzzle and proposes a new theoretical interpretation. Using structural VARs and two different identification strategies based on zero restrictions and sign restrictions, we find that the positive response of prices to a monetary policy shock is historically limited to the subsamples associated with a weak central bank response to inflation. These subsamples correspond to the pre-Volcker period for the United States and the period prior to the introduction of the inflation targeting framework for the United Kingdom. Using a micro-founded New-Keynesian monetary policy model for the US economy, we then show that the structural VARs are capable of reproducing the price puzzle from artificial data only when monetary policy is passive and hence multiple equilibria arise. In contrast, this model never generates on impact a positive inflation response to a policy shock. The omission in the VARs of a variable capturing the high persistence of expected inflation under indeterminacy is found to account for the price puzzle observed in actual data.Price puzzle, New-Keynesian Model, Taylor principle, Indeterminacy, SVAR.