Monetary policy, inflation expectations and the price puzzle

This paper re-examines the VAR evidence on the price puzzle and proposes a new theoretical interpretation. Using actual data and two identification strategies based on zero restrictions and model-consistent sign restrictions, we find that the positive response of prices to a monetary policy shock is historically limited to the sub-samples that are typically associated with a weak interest rate response to inflation. Using pseudo data generated by a sticky price model of the US economy, we then show that the structural VARs are capable of reproducing the price puzzle only when monetary policy is passive. The omission in the VARs of a variable capturing expected inflation is found to account for the price puzzle observed in simulated and actual data.SVARs; price puzzle; sticky price model; Taylor principle; passive policy

Why are Federal Funds Rates so Smooth?

US monetary policy is characterized by a substantial degree of inertia. While in principle this may well be the outcome of an optimizing central bank behaviour, the ability of any derived policy rule to match the data relies on so large weights for interest rate smoothing into policy makers' preferences as to be theoretically flawed. In this paper we investigate whether such a puzzle can be interpreted as resulting from the concern of monetary authorities for potential misspecifications of the macroeconomic dynamics. Accordingly, we use a novel thick modeling approach to incorporate model uncertainty into the identification of central bank's preferences. The robust thick policy rule shows the kind of smoothness observed in the data without resorting to implausible values for the preference parameters.Model uncertainty, interest rate smoothing, Fed policy preferences, robust optimal monetary policy

The Price Puzzle and Indeterminacy

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 price to a monetary policy shock is historically limited to the sub-samples associated with a weak central bank response to inflation. These sub-samples correspond to the pre-Volcker period for the US and the pre-inflation targeting regime for the UK. Using a micro-founded DSGE sticky price model of the US economy, we then show that the structural VARs are capable of reproducing the price puzzle on artificial data only when monetary policy is passive and hence multiple equilibria arise. In contrast, the DSGE 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 on actual data.Price puzzle, DSGE model, Taylor principle, Indeterminacy, SVARs

"Push-Pull Technique" for the Management of a Selected Superomedial Intraorbital Lesion

Orbital lesions are traditionally managed through external approaches when laterally located, and through a transnasal approach or other external approaches when medially located. However, when the lesion is superomedially located, it may determine a technical challenge. In this study, we present the case of a patient with a superomedial intraconal venous malformation of the left eye. We addressed the mass through a combined approach, using the transnasal route as the main approach, and the superior eyelid approach to push down the lesion to facilitate the excision. We have called this approach "push-pull technique." We achieved a complete resection of the lesion and did not observe any intraoperative or postoperative complications. The last follow-up at 6 months postoperatively showed no recurrence, and the patient was satisfied and completely recovered. According to our experience, the "push-pull" technique seems to be a safe procedure and might be considered a valid alternative to address selected superomedial intraconal lesions

Palatovaginal (pharyngeal) artery: clinical implication and surgical experience

The palatovaginal or pharyngeal artery is a small branch of the internal maxillary artery supplying the nasopharynx. Bleeding from this artery is exceptional and only one case of traumatic epistaxis from this artery has been reported previously. We report a case of a 66-year-old male presenting with right recurrent posterior epistaxis. Endoscopic dissection of the pterygopalatine fossa and direct visualization of the palatosphenoidal canal permitted to identify the origin of bleeding, and coagulation of the pharyngeal artery solved the epistaxis. Although rare, intractable posterior epistaxis may arise from the pharyngeal artery. The anatomical knowledge of this artery and of the palatosphenoidal canal is of outmost importance in endoscopic transpterygoid and nasopharyngeal procedures, to identify the vidian canal, evaluate nasopharyngeal cancer spread in the pterygopalatine fossa, reduce bleeding during surgery of the nasopharynx, and harvest adequately the pedicle of the nasoseptal flap

Endoscopic Endonasal Odontoidectomy Preserving Atlantoaxial Stability: a Pediatric Case

Abstract Objectives We illustrate endoscopic endonasal odontoidectomy for the Chiari-I malformation respecting craniovertebral junction (CVJ) stability. Design Case report of a 12-year-old girl affected by the Chiari-I malformation. Magnetic resonance imaging (MRI) showed tonsillar herniation, basilar invagination, and dental retroversion, causing angulation and compression of the bulbomedullary junction. Patient underwent endoscopic third ventriculostomy (ETV) with reduction of ventricular size and resolution of gait disturbances, but she complained the Valsalva-induced headaches, hiccup, and dysesthesias in the lower limbs. Endoscopic endonasal odontoidectomy was chosen to decompress the cervicomedullary junction. Setting The research was conducted at University Hospital "Ospedale di Circolo," Department of Neurosurgery at Varese in Italy. Participants Patients were from neurosurgical and ENT (ear, nose, and throat) skull base team. Main Outcome Measures A bilateral paraseptal approach was performed, using a four-hand technique. After resection of posterior edge of the nasal septum, the choana is entered and a rhinopharynx muscle–mucosal flap is dissected subperiosteal and transposed in oral cavity. The CVJ is exposed and, using neuronavigation and neuromonitoring, odontoidectomy is fulfilled until dura is reached, preserving the anterior arch of C1. Reconstruction is obtained suturing the flap previously harvested. Results Postoperative course was unremarkable and the patient experienced improvement of symptoms. Postoperative MRI documented the appearance of tight cerebrospinal fluid (CSF) film anterior to bulbomedullary junction and in retrotonsillar spaces, opening of the bulbomedullary angle, and slight tonsils reduction. No CVJ instability was occurred with any need of posterior fixation. Conclusion Endoscopic endonasal odontoidectomy is a feasible approach for CVJ malformation. In this case, bulbar decompression was achieved preserving CVJ stability and avoiding posterior fixation.The link to the video can be found at: https://youtu.be/VIobocHfCuc