Sharing the burden: monetary and fiscal responses to a world liquidity trap

With integrated trade and financial markets, a collapse in aggregate demand in a large country can cause "natural real interest rates" to fall below zero in all countries, giving rise to a global "liquidity trap." This paper explores the optimal policy response to this type of shock, when governments cooperate on both fiscal and monetary policy. Adjusting to a large negative demand shock requires raising world aggregate demand, as well as redirecting demand towards the source (home) country. ; The key feature of demand shocks in a liquidity trap is that relative prices respond perversely. A negative shock causes an appreciation of the home terms of trade, exacerbating the slump in the home country. At the zero bound, the home country cannot counter this shock. Because of this, it may be optimal for the foreign policymaker to raise interest rates. ; Strikingly, the foreign country may choose to have a positive policy interest rate, even though its natural real interest rate is below zero. A combination of relatively tight monetary policy in the foreign country combined with substantial fiscal expansion in the home country achieves the desired mix in terms of the level and composition of world expenditure. Thus, in response to conditions generating a global liquidity trap, there is a critical mutual interaction between monetary and fiscal policy.Monetary policy ; Fiscal policy ; Interest rates

INCORPORATING SUBSISTENCE INTO A PROBIT ANALYSIS OF HOUSEHOLD NUTRITION LEVELS

Previous nutrient demand and consumption analyses show that several economic and sociodemographic variables are often associated with intakes. However, most of the literature does not account for differences among individuals within households. This study reviewed possible definitions of nutrient differences with respect to nutritional needs. Nutrient levels defined by the Thrifty Food Plan were used as subsistence levels for households in the 1977-78 Nationwide Food Consumption Survey. Probit analysis showed that the usual variables found related to nutrient intakes did not differentiate among subsistence groups. Household life cycle and working female heads influenced whether the household was under its requirement level.Food Consumption/Nutrition/Food Safety,

Cognitive consequences of clumsy automation on high workload, high consequence human performance

The growth of computational power has fueled attempts to automate more of the human role in complex problem solving domains, especially those where system faults have high consequences and where periods of high workload may saturate the performance capacity of human operators. Examples of these domains include flightdecks, space stations, air traffic control, nuclear power operation, ground satellite control rooms, and surgical operating rooms. Automation efforts may have unanticipated effects on human performance, particularly if they increase the workload at peak workload times or change the practitioners' strategies for coping with workload. Smooth and effective changes in automation requires detailed understanding of the congnitive tasks confronting the user: it has been called user centered automation. The introduction of a new computerized technology in a group of hospital operating rooms used for heart surgery was observed. The study revealed how automation, especially 'clumsy automation', effects practitioner work patterns and suggest that clumsy automation constrains users in specific and significant ways. Users tailor both the new system and their tasks in order to accommodate the needs of process and production. The study of this tailoring may prove a powerful tool for exposing previously hidden patterns of user data processing, integration, and decision making which may, in turn, be useful in the design of more effective human-machine systems

Sharing the Burden: Monetary and Fiscal Responses to a World Liquidity Trap

With integrated trade and financial markets, a collapse in aggregate demand in a large country can cause ‘natural real interest rates’ to fall below zero in all countries, giving rise to a global ‘liquidity trap’. This paper explores the policy choices that maximize the joint welfare of all countries following such a shock, when governments cooperate on both fiscal and monetary policy. Adjusting to a large negative demand shock requires raising world aggregate demand, as well as redirecting demand towards the source (home) country. The key feature of demand shocks in a liquidity trap is that relative prices respond perversely. A negative shock causes an appreciation of the home terms of trade, exacerbating the slump in the home country. At the zero bound, the home country cannot counter this shock. Because of this, it may be optimal for the foreign policy-maker to raise interest rates. Strikingly, the foreign country may choose to have a positive policy interest rate, even though its ‘natural real interest rate’ is below zero. A combination of relatively tight monetary policy in the foreign country combined with substantial fiscal expansion in the home country achieves the level and composition of world expenditure that maximizes the joint welfare of the home and foreign country. Thus, in response to conditions generating a global liquidity trap, there is a critical mutual interaction between monetary and fiscal policy.

The Impact of Spatial Variation in Land Use Patterns and Aquifer Characteristics on the Agricultural Cost of Groundwater Conservation for the Southern Ogallala Aquifer

Land Economics/Use,

Comparison of Rotary Valve and Blowtank Feed Rate Capacities

Rotary valves and blowtanks are widely used in industry for the pneumatic conveying of products, each having their pros and cons depending on the required application. This paper aims to show the differing results that can be obtained when conveying a product through a common pipeline using either a drop-through rotary valve or a bottom discharge blowtank. The rotary valve system has a number of issues, the main one being air leakage effects, whereas the blowtank system does not as it is an enclosed unit. The results of these experiments showed dramatic differences in product tonnage

Maintenance Assessment Program (MAP) development and implementation

The South Carolina Department of Transportation's mission is to build and maintain roads and bridges as well as provide mass transit services to the citizens of the state. In order to find a process improvement that would affect the most customers, the author is concentrating on the Maintenance Division of SCDOT

The Physical Preparation of Players for the Rugby World Cup

The quadrennial showcase of rugby is the Rugby World Cup (RWC), with the 10th Cup being held in France in September and October 2023. The RWC is the third most popular global sporting event after the soccer World Cup and the summer Olympic games. The 2022 Women’s RWC final drew a record crowd of 45,000 in New Zealand. World Rugby has the vision of a global sport for all; it can be played by individuals of all sizes, genders, and abilities. The heart of the game centers on possession of the ball, the expression of free running, and the physicality of tackling and contact

Modifying the Einstein Equations off the Constraint Hypersuface

A new technique is presented for modifying the Einstein evolution equations off the constraint hypersurface. With this approach the evolution equations for the constraints can be specified freely. The equations of motion for the gravitational field variables are modified by the addition of terms that are linear and nonlocal in the constraints. These terms are obtained from solutions of the linearized Einstein constraints.Comment: 4 pages, 1 figure, uses REVTe