The Welfare Implications of Inflation versus Price-Level Targeting in a Two-Sector, Small Open Economy

The authors analyze the welfare implications of simple monetary policy rules in the context of an estimated model of a small open economy for Canada with traded and non-traded goods, and with sticky prices and wages. They find statistically significant heterogeneity in the degree of price rigidity across sectors. They also find welfare gains in targeting only the non-traded-goods inflation, since prices are found to be more sticky in this production sector, but those gains come at the cost of substantially increased aggregate volatility. The authors look for the welfare-maximizing specification of an interest rate reaction function that allows for a specific price-level target. They find, however, that, overall, the higher welfare is achieved, given the estimated model for the Canadian economy, with a strict inflation-targeting rule where the central bank reacts to the next period's expected deviation from the inflation target and does not target the output gap.Economic models; Exchange rates; Inflation targets

Similarities and convergence in G-7 cycles

This paper examines the properties of G-7 cycles using a multicountry Bayesian panel VAR model with time variations, unit specific dynamics and cross country interdependences. We demonstrate the presence of a significant world cycle and show that country specific indicators play a much smaller role. We detect di?erences across business cycle phases but, apart from an increase in synchronicity in the late 1990s, find little evidence of major structural changes. We also find no evidence of the existence of an Euro area specific cycle or of its emergence in the 1990s. JEL Classification: C11, C33, E32Bayesian methods, business cycle, indicators, panel data

Do institutional changes affect business cycles? Evidence from Europe

We study the effects that the Maastricht treaty, the creation of the ECB, and the Euro changeover had on the dynamics of European business cycles using a panel VAR and data from ten European countries - seven from the Euro area and three outside of it. There are changes in the features of European business cycles and in the transmission of shocks. They precede the three events of interest and are more linked to a general process of European convergence and synchronization.Business cycles, European Monetary Union, Panel VAR, Structural changes.

Do institutional changes affect business cycles?

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Persistent inflation differentials in Europe

This paper studies the recent empirical evidence available on the evolution of the real exchange rates within the main European economies in order to understand the possible main determinants of future inflation differentials within the EMU. The real exchange rate is decomposed into that of the traded sector and the differential across countries of the relative price of the non traded sector. Persistent deviations from PPP are found, also in the traded sector. It is also found that the main factor behind the annual bilateral real appreciation with respect to Germany since 1995 has been the differential growth of relative non traded prices across countries. In the case of France, that differential was mainly explained by a different growth of relative labor productivities in the two economies, while in the case of Spain and Italy it was mainly due to the different growth of relative non-traded markups and wages, respectively

Cyclical characteristics of the Spanish economy in the period 1980-2005

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Station-keeping for lattice-preserving Flower Constellations

2D-Lattice Flower Constellations present interesting dynamical features that al- low us to explore a wide range of potential applications. Their particular initial distribution (lattice) and their symmetries disappear when some perturbations are considered, such as the J2 effect. The new lattice-preserving Flower Constella- tions maintain over long periods of time the initial distribution and its symmetries under the J2 perturbation, which is known as relative station-keeping. This paper deals with the study of the required velocity change that must be applied to the satellites of the constellation to have an absolute station-keeping

Enhancing family quality-of-life outcomes: The NEUROQUALYFAM project

Background: Neurodegenerative diseases (ND) have a great impact on both patients and their relatives, since the latter play an essential role in the care process. Consequently, the families require support to perform this function with higher levels of wellbeing. The objective of the NEUROQUALYFAM project (Interreg V‐A Spain‐Portugal, POCTEP) is to analyze the quality of life of families of people with ND, to identify their needs and to plan family‐centered support resources in order to offer high‐quality social health services for people with ND and their families. Method: The study sample will consist of 300 families from the Spanish‐Portuguese cross‐border area. The Family Quality of Life Survey ‐ Dementia (FQoLS) will be translated, adapted and validated (DiZazzo‐Miller & Samuel, 2011) to assess their quality of life. Focus groups with families and professionals from health, social services and the third sector will be conducted to identify needs and support resources. The “section 2‐Support and Services” of the validated Spanish version of the Beach Center Family Quality of Life Scale (Verdugo, Rodríguez and Sainz, 2012) will be adapted for families of people with ND to identify the types of support needed and to what extent they are provided. A confirmatory factor analysis will be conducted to examine the validity of the construct FQoLS‐ ND. A top‐down content analysis will be undertaken for qualitative data. Result: The project will provide: (a) a procedure to evaluate the quality of life of families of people with ND; (b) the identification and mapping of unmet support needs regarding the health and social system; (c) the planning of a family‐centered support system for the improvement of health and wellbeing outcomes, and (d) the design of a comprehensive ICT platform of support resources that enhances training, information exchange and collaborative networks between and among families and professionals. Conclusion: The project NEUROQUALYFAM provides a research and intervention model that might be applied in other regions and countries. It strengthens cooperation between the institutions (health and social services, third sector) to improve the quality of family life and optimize support resources for family caregivers

Testing calibrated general equilibrium models

This paper illustrates the philosophy which forms the basis of calibration exercises in general equilibrium macroeconomic models and the details of the procedure, the advantages and the disadvantages of the approach, with particular reference to the issue of testing ``false'' economic models. We provide an overview of the most recent simulation--based approaches to the testing problem and compare them to standard econometric methods used to test the fit of non--linear dynamic general equilibrium models. We illustrate how simulation--based techniques can be used to formally evaluate the fit of a calibrated model to the data and obtain ideas on how to improve the model design using a standard problem in the international real business cycle literature, i.e. whether a model with complete financial markets and no restrictions to capital mobility is able to reproduce the second order properties of aggregate saving and aggregate investment in an open economy.Calibration, simulation, evaluation, saving and investment correlations