Monetary Policy, Determinancy and Learnability in the Open Economy

We study how determinacy and learnability of global rational expectations equilibrium may be affected by monetary policy in a simple, two country, New Keynesian framework.The two blocks may be viewed as the U.S. and Europe, or as regions within the euro zone.We seek to understand how monetary policy choices may interact across borders to help or hinder the creation of a unique rational expectations equilibrium worldwide which can be learned by market participants. We study cases in which optimal policies are being pursued country by country as well as some forms of cooperation.We find that open economy considerations may alter conditions for determinacy and learnability relative to closed economy analyses, and that new concerns can arise in the analysis of classic topics such as the desirability of exchange rate targeting and monetary policy cooperation. Keywords: Indeterminacy, learning, monetary policy rules, new open economy macroeconomics, exchange rate regimes, second generation policy coordination.learning;monetairy policy;open economy;macroeconomics;exchange rate;indeterminacy;second generation policy coordination

New Economy - New Policy Rules?

The U.S. economy appears to have experienced a pronounced shift toward higher productivity over the last five years or so. We wish to understand the implications of such shifts for the structure of optimal monetary policy rules in simple dynamic economies. Accordingly, we begin with a standard economy in which a version of the Taylor rule constitutes the optimal monetary policy for a given inflation target and a given level of productivity. We augment this model with regime switching in productivity, and calculate the optimal monetary policy rule in the altered environment. We find that in the altered environment, a rule that incorporates leading indicators about regimes significantly outperforms the Taylor rule. We use this result to comment on the "new economy" events of the 1990s and the "stagflation" events of the 1970s from the perspective of our model.inflation targets;strutural change;monetary policy rules;new economy;regime switching

Field support, data analysis and associated research for the acoustic grenade sounding program

Temperature and horizontal winds in the 30 to 90 km altitude range of the upper atmosphere, were determined by acoustic grenade soundings conducted at Wallops Island, Virginia and Kourou, French Guiana. Field support provided at these locations included deployment of the large area microphone system, supervision, maintenance and operation of sound ranging stations; and coordination of activities. Data analysis efforts included the analysis of field data to determine upper atmospheric meteorological parameters. Profiles for upper atmospheric temperature, wind and density are provided in plots and tables for each of the acoustic grenade soundings conducted during the contract period. Research efforts were directed toward a systematic comparison of temperature data from acoustic grenade with other meteorological sensor probes in the upper atmosphere

Complex eigenvalues and trend-reverting fluctuations

Autoregressions of quarterly or annual aggregate time series provide evidence of trend-reverting output growth and of short-term dynamic adjustment that appears to be governed by complex eigenvalues. This finding is at odds with the predictions of reasonably parameterized, convex one-sector growth models, most of which have positive real characteristic roots. We study a class of one-sector economies, overlapping generations with finite life spans of L greater than or equal to 3, in which aggregate saving depends nontrivially on the distribution of wealth among cohorts. If consumption goods are weak gross substitutes near the steady state price vector, we prove that the unique equilibrium of a life cycle exchange economy converges to the unique steady state via damped oscillations. We also conjecture that this form of trend reversion extends to production economies with a relatively flat factor-price frontier, and we test this conjecture in several plausible parameterizations of 55-period life cycle economies.Time-series analysis ; Econometric models ; Regression analysis

Nonequilibrium steady states of driven magnetic flux lines in disordered type-II superconductors

We investigate driven magnetic flux lines in layered type-II superconductors subject to various configurations of strong point or columnar pinning centers by means of a three-dimensional elastic line model and Metropolis Monte Carlo simulations. We characterize the resulting nonequilibrium steady states by means of the force-velocity / current-voltage curve, static structure factor, mean vortex radius of gyration, number of double-kink and half-loop excitations, and velocity / voltage noise spectrum. We compare the results for the above observables for randomly distributed point and columnar defects, and demonstrate that the three-dimensional flux line structures and their fluctuations lead to a remarkable variety of complex phenomena in the steady-state transport properties of bulk superconductors.Comment: 23 pages, IOP style, 18 figures include

Comments on Martin Lybecker\u27s Enhanced Corporate Governance

Martin Lybecker’s article, Enhanced Governance for Mutual Funds: A Flawed Concept that Deserves Serious Reconsideration, raises significant issues regarding the Securities and Exchange Commission’s (“Commission” or “SEC”) exercise of its exemptive authority. Under that authority, the Commission amended a number of exemptive rules under the Investment Company Act of 1940 (“’40 Act”) to require that mutual funds relying on those rules conform to enumerated governance practices (“fund governance reforms”). Lybecker argues that the fund governance reforms deserve serious reconsideration primarily because, in his opinion, they (1) were unauthorized, (2) were not adequately justified, and (3) will be of “questionable efficacy.” To the contrary, the Commission has ample authority to adopt the fund governance reforms, and the recent mutual fund scandal provided more than adequate justification for them. The Commission has broad exemptive authority under the ’40 Act, and the incorporation ofgovernance conditions into rules adopted under that authority mirrors the way in which Congress has used governance requirements in the Act. Both Congress and the Commission have long used governance requirements to protect investors, generally for the purpose of monitoring and managing conflicts of interest between funds and their sponsors. The recent mutual fund scandal confirmed the risks to shareholders presented by these conflicts of interest and accordingly provided more than adequate justification for strengthening the governance conditions in the exemptive rules. Whereas Lybecker is unpersuasive regarding the lack of authority and justification for the fund governance reforms, he may be correct that their efficacy is questionable. He essentially argues that the reforms will fail because independent directors lack the ability to serve in the watchdog capacity that the exemptive rules assign to them. It is hard to know the answer to the efficacy question, however, not only because it is inherently predictive, but also because the Commission has never explained exactly what it expects independent directors to do in the context of the exemptive rules. Indeed, Lybecker’s argument is partly that the Commission has failed to make the case as to its authority or the justification or efficacy of the reforms. The relevant proposing and adopting releases appear to base the fund governance reforms more on a general disagreement with Congress’s decisions—for example, not to require an independent fund chairman and to require only a forty percent independent board—than on the view that the reforms are necessary to protect investors specifically in the context of the exemptive rules into which the reforms have been incorporated. There is no evidence that the Commission knows whether the independent directors have been effective in the context of the operation of the exemptive rules in the past, or that it has any way of measuring their effectiveness in the future. The problem may be more serious, as there also is no evidence that the Commission knows if the exemptive rules themselves have been effective in protecting investors. Perhaps it is not the fund governance reforms alone that deserve serious reconsideration, but also the authority

Integrated flight/propulsion control system design based on a centralized approach

An integrated flight/propulsion control system design is presented for the piloted longitudinal landing task with a modern, statically unstable, fighter aircraft. A centralized compensator based on the Linear Quadratic Gaussian/Loop Transfer Recovery methodology is first obtained to satisfy the feedback loop performance and robustness specificiations. This high-order centralized compensator is then partitioned into airframe and engine sub-controllers based on modal controllability/observability for the compensator modes. The order of the sub-controllers is then reduced using internally-balanced realization techniques and the sub-controllers are simplified by neglecting the insignificant feedbacks. These sub-controllers have the advantage that they can be implemented as separate controllers on the airframe and the engine while still retaining the important performance and stability characteristics of the full-order centralized compensator. Command prefilters are then designed for the closed-loop system with the simplified sub-controllers to obtain the desired system response to airframe and engine command inputs, and the overall system performance evaluation results are presented

Adjusting Discount Rates for Income Taxes and Inflation: A Three-Step Proces

Income taxes and inflation must be correctly accounted for in forest valuation and investment analysis. In a specific analysis, the discount rate and all costs and revenues should be either before or after taxes, and they should include or exclude inflation consistently. We summarize eight formulas for adjusting discount rates for income taxes and inflation in a simple three-step process. A one-page figure is presented that can be used as a stand-alone tool for correctly adjusting discount rates. South. J. Appl. For. 24(4):193-195

Observations on the Steadiness of the Hand and on Static Equilibrium

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