Credit effects in the monetary mechanism : commentary

Paper for a conference sponsored by the Federal Reserve Bank of New York entitled Financial Innovation and Monetary TransmissionCredit ; Monetary policy

Spatial correlations in panel data

In many empirical applications involving combined time-series and cross-sectional data, the residuals from different cross-sectional units are likely to be correlated with one another. This is the case in applications in macroeconomics and international economics where the cross-sectional units may be countries, states, or regions observed over time. Spatial correlations among such cross-sections may arise for a number of reasons, ranging from observed common shocks such as terms of trade oil shocks, to unobserved contagion or neighborhood effects which propagate across countries in complex ways. The authors observe that presence of such spatial correlations in residuals complicates standard inference procedures that combine time-series and cross-sectional data since these techniques typically require the assumption that the cross-sectional units are independent. When this assumption is violated, estimates of standard errors are inconsistent, and hence are not useful for inference. And standard correction for spatial correlations will be valid only if spatial correlations are of particular restrictive forms. The authors propose a correlation for spatial correlations that does not require strong assumptions concerning their form and how show it is superior to a number of commonly used alternatives.Sanitation and Sewerage,Statistical&Mathematical Sciences,Scientific Research&Science Parks,Information Technology,Environmental Economics&Policies,Statistical&Mathematical Sciences,Scientific Research&Science Parks,Science Education,Econometrics,Information Technology

A Note on Inflation Persistence

Macroeconomists have for some time been aware that the New Keynesian Phillips curve, though highly popular in the literature, cannot explain the persistence observed in actual inflation. We argue that two of the more prominent alternative formulations, the Fuhrer and Moore (1995) relative contracting model and the Blanchard and Katz (1999) reservation wage conjecture, are highly problematic. Fuhrer and Moore (1995)'s formulation generates inflation persistence, but this is a consequence of their assuming that workers care about the past real wages of other workers. Making the more reasonable assumption that workers care about the current real wages of other workers, one obtains the standard formulation with no inflation persistence. The Blanchard and Katz conjecture turns out to imply that inflation depends negatively on itself lagged, i.e. the opposite of the empirical regularity.

Coordination, Fair Treatment and Inflation Persistence

Most wage-contracting models with rational expectations fail to replicate the persistence in inflation observed in the data. We argue that coordination problems and multiple equilibria are the keys to explaining inflation persistence. We develop a wage-contracting model in which workers are concerned about being treated fairly. This model generates a continuum of equilibria (consistent with a range for the rate of unemployment), where workers want to match the wage set by other workers. If workers' expectations are based on the past behavior of wage growth, these beliefs will be self-fulfilling and thus rational. Based on quarterly U.S. data over the period 1955-2000, we find evidence that inflation is more persistent between unemployment rates of 4.7 and 6.5 percent, than outside these bounds, as predicted by our model.

The Aporias of De Anima Γ 4, 429b22-430a9.

Aristotle introduces the assumption that mind is, as described by Anaxagoras, \u27without mixture,\u27 later restating it in his own terms as the view that mind is simple and ἀπαθές and without anything in common with anything else. This leads to two aporias: how, Aristotle asks, will thinking be possible under the assumptions stated, and how can mind itself be an object of thought? He then states two theses of his own: while mind is its objects potentially it is nothing in actuality until thinking occurs, and in the case of things without matter what thinks is the same as what is thought. But what is the fate of the Anaxagorean assumption in the resolution? That is the topic of this paper

How do private firms use credit lines?

The authors find that firms that face higher upfront commitment fees, risk premium spreads or usage fees have smaller credit lines, while those with higher overdraft fees have larger ones. Firms with greater profit growth in the past have larger credit lines, while those with more internal funds or higher volatility in profit growth have smaller credit lines. The results for line utilization are quite similar.Corporations - Finance ; Credit ; Loans

Administrative Regulations - Medically Indigent Must be Eliminated From Medi-Cal Before Health and Welfare Agency May Reduce Minimum Services To Recipients of Public Assistance; Before Omitting any Medical Service, Regulations Must Make Proportionate Reductions in all Services. Morris v. Williams (Cal. 1967).

This recent case discusses Morris v. Williams (Cal. 1967)

Workmen\u27s Compensation - Employee, When Paid a Substantial Travel Allowance, Is Covered by Workmen’s Compensation While Traveling Outside Control of Employer to a Distant Job Site. Zenith National Ins. Co. v. Workmen’s Compensation Appeals Board (Cal. 1967).

This recent case discusses Zenith National Ins. Co. v. Workmen\u27s Compensation Appeals Board (Cal. 1967)