What Explains the Varying Monetary Response to Technology Shocks in G-7 Countries?

In a recent paper, Galí, López-Salido, and Vallées (2003) examined the Federal Reserve’s response to VAR-identified technology shocks. They found that during the Martin-Burns- Miller era, the Federal Reserve responded to technology shocks by overstabilizing output, while in the Volcker-Greenspan era, the Federal Reserve adopted an inflation-targeting rule. We extend their analysis to countries of the G-7; moreover, we consider the factors that may contribute to differing monetary responses across countries. Specifically, we find a relationship between the volatility of capital investment, the type of monetary policy rule, the responsiveness of the rule to output and inflation fluctuations, and the response to technology shocks.price setting; nominal rigidity; real rigidity; inflation persistence; survey data

What Explains the Varying Monetary Response to Technology SHocks in G7-Countries

Structural vector autoregressions (SVARs) have become a standard tool used to determine the roles of monetary policy shocks in generating cyclical fluctuations in the United States. Using both long- and short-run identifying restrictions, various authors have explored the empirical response of the economy to exogenous monetary innovations. While the majority of the studies of monetary policy have focused on the effect of exogenous money growth or interest rate shocks, recent research has begun to investigate the effect of endogenous monetary policy -- that is, the central bank's reaction to non-monetary shocks. One exogenous shock that many economists believe contributes to the business cycle fluctuations that feed into the Taylor rule is the technology shock. In an effort to identify the empirical effects of technology shocks, Gali (1999) estimated two models: a bivariate model of productivity and hours and a five-variable model adding money, inflation, and interest rates. His identification estimates a decomposition of productivity and hours into innovations to technology and non-technology components by assuming that only the former can have long-run effects on labor productivity. Empirical identification of the technology shock was a key first step in developing a unified reduced-form framework with which to examine the role that monetary policy has played in smoothing economic fluctuations. Along these lines, Gali, Lopez-Salido, and Valles (2003 -- henceforth GLV) examined the endogenous response of monetary policy to identified technology shocks in the United States. GLV examine a four-variable structural VAR for the United States with labor productivity, labor hours, the real interest rate, and inflation. Using the Gali (1999) identification, they find that during the Volcker-Greenspan (VG) era the Fed's response to the technology shock is to raise the nominal interest rate, while during the Martin-Burns-Miller (MBM) era the Fed lowers the nominal rate. Moreover, they find that the inflation and hours responses in the two periods differ in sign. Our goal is to expand the scope of GLV to an international context to determine whether the effect of technology shocks is consistent across the major industrialized countries. In particular, we are interested in how the different central banks respond to technology shocks. We investigate the possibility that technology shocks in different countries produce fundamentally different inflation and employment responses and to what extent those effects alter the monetary response. Using a theoretical model adapted from King and Wolman (1996), we find that the empirical responses can be matched with theoretical responses. Differences in these theoretical responses can be attributed to alternative policy rules and changes in the cost of capital adjustment. Further tests verify that these country characteristics could, indeed, have some explanatory power. Our results are by no means conclusive; however, they do suggest a number of theoretically consistent similarities across countries in each subgroup. While we believe more investigation into these cross-country comparisons is warranted, the initial indication is that the manner in which monetary policy is conducted and the degree of rigidity in capital markets may be determining factors in a country's response to technology shocks. Gali, Jordi (1999). "Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations?" American Economic Review, March 1999, 89(1), pp. 249-271. Gali, Jordi; Lopez-Salido, J. David; and Valles, Javier (2003). "Technology Shocks and Monetary Policy: Assessing the Fed's Performance." Journal of Monetary Economics, May 2003, 50(4), pp. 723-743. King, Robert G., and Wolman, Alexander L. (1996). "Inflation Targetting in a St. Louis Model of the 21st Century." Federal Reserve Bank of St. Louis Review, May/June 1996, 78(3), pp. 83-107.Technology, Productivity, Monetary Policy, Taylor Rule, Capital Adjustment Costs

FAIR, POSTFAIR, AND NOFAIR: A COMPARISON OF CROPPING ALTERNATIVES FOR THE SOUTHERN GREAT PLAINS

The Federal Agriculture Improvement and Reform Act of 1996 was promoted as legislation that would enable and encourage farmers to base planting decisions on market incentives rather than commodity programs. Data from a designed experiment are used to compare the economics of three cropping systems for alternative commodity programs.Crop Production/Industries,

Mars simulated exposure and the characteristic Raman biosignatures of amino acids and halophilic microbes

Though Raman bands of α-amino acids (AA) are well documented, often only the strongest intensity bands are quoted as identifiers (e.g. Jenkins et al., 2005; De Gelder et al., 2007; Zhu et al., 2011). Unknown regolith mixtures on Mars-sampling missions could obscure these bands. Here the case is made for determining, via a statistical method, sets of characteristic bands to be used as identifiers, independent of band intensity or number of bands (Rolfe et al., 2016). AA have upwards of 25 potentially identifying bands and this method defines sets of 10–19 bands per AA. Examination of AA-doped Mars-like basalt resulted in a maximum of eight bands being identified, as some characteristic bands were obscured by mineral bands, including the strongest intensity band in some cases. This proved the need for characteristic bands to be defined, enabling successful identification of AA. The ESA ExoMars Rover mission will crush and then pass the sample to the Raman Laser Spectrometer. We crushed a Mars-like basalt to a similar grain size expected to be created by the rover. Our samples were doped with 1 % (by weight) AA samples, resulting in no detection of AA, because of loss of original spatial context and spaces between the grains. We recommend that Raman spectroscopy on future missions should be conducted before the sample is crushed. Halite-entombed halophilic microbes, known to survive being entombed, were exposed to Mars-like surface (including temperature, pressure, atmospheric composition and UV) and freeze-thaw cycle (plus pressure and atmospheric composition) conditions. This test on the survival of the microbes showed that survival rates quickly deteriorated in surface conditions, but freeze-thaw cycle samples had well preserved Raman biosignatures, indicating that similar signatures could be detectable on Mars if similar life persists in evaporitic material or brines today

Measuring attitude toward theistic faith : assessing the Astley-Francis Scale among Christian, Muslim and secular youth in England

Empirical research within the social scientific study of religion in general and within the psychology of religion in particular remains very conscious of the complex nature of its subject matter. Empirical research in this field needs to take cognisance of the many forms in which religion is expressed (say, Buddhism, Christianity, Hinduism, Islam, Judaism, and Sikhism) and the many facets within the forms (say, beliefs, behaviours and affiliation). Working in the 1970s, Francis (1978a; 1978b) advanced the view that the attitudinal dimension of religion offered a particularly fruitful basis for coordinating empirical enquiry into the correlates, antecedents and consequences of religiosity across the life span

Strong to weak coupling transitions of SU(N) gauge theories in 2+1 dimensions

We investigate strong-to-weak coupling transitions in D=2+1 SU(N->oo) gauge theories, by simulating lattice theories with a Wilson plaquette action. We find that there is a strong-to-weak coupling cross-over in the lattice theory that appears to become a third-order phase transition at N=oo, in a manner that is essentially identical to the Gross-Witten transition in the D=1+1 SU(oo) lattice gauge theory. There is also evidence for a second order transition at N=oo at approximately the same coupling, which is connected with centre monopoles (instantons) and so analogues to the first order bulk transition that occurs in D=3+1 lattice gauge theories for N>4. We show that as the lattice spacing is reduced, the N=oo gauge theory on a finite 3-torus suffers a sequence of (apparently) first-order ZN symmetry breaking transitions associated with each of the tori (ordered by size). We discuss how these transitions can be understood in terms of a sequence of deconfining transitions on ever-more dimensionally reduced gauge theories.We investigate whether the trace of the Wilson loop has a non-analyticity in the coupling at some critical area, but find no evidence for this although, just as in D=1+1,the eigenvalue density of a Wilson loop forms a gap at N=oo for a critical trace. The physical implications of this are unclear.The gap formation is a special case of a remarkable similarity between the eigenvalue spectra of Wilson loops in D=1+1 and D=2+1 (and indeed D=3+1): for the same value of the trace, the eigenvalue spectra are nearly identical.This holds for finite as well as infinite N; irrespective of the Wilson loop size in lattice units; and for Polyakov as well as Wilson loops.Comment: 44 pages, 28 figures. Extensive changes and clarifications with new results on non-analyticities and eigenvalue spectra of Wilson loops. This version to be submitted for publicatio

The Williams Scale of Attitude toward Paganism: development and application among British Pagans

This article builds on the tradition of attitudinal measures of religiosity established by Leslie Francis and colleagues with the Francis Scale of Attitude toward Christianity (and reflected in the Sahin-Francis Scale of Attitude toward Islam, the Katz-Francis Scale of Attitude toward Judaism, and the Santosh-Francis Scale of Attitude toward Hinduism) by introducing a new measure to assess the attitudinal disposition of Pagans. A battery of items was completed by 75 members of a Pagan Summer Camp. These items were reduced to produce a 21-item scale that measured aspects of Paganism concerned with: the God/Goddess, worshipping, prayer, and coven. The scale recorded an alpha coefficient of 0.93. Construct validity of the Williams Scale of Attitude toward Paganism was demonstrated by the clear association with measures of participation in private rituals

Contacting the spirits of the dead: paranormal belief and the teenage worldview

A number of previous studies have examined both the overall level of belief expressed by young people in the paranormal and the major demographic predictors of such belief. Building on this research tradition, the present study examines how one specific paranormal belief concerning contact with the spirits of the dead integrates with the wider teenage worldview. Data provided by 33,982 pupils age 13 to 15 years throughout England and Wales demonstrated that almost one in three young people (31%) believed that it is possible to contact the spirits of the dead. Compared with young people who did not share this belief, the young people who believed in the possibility of contacting the spirits of the dead displayed lower psychological wellbeing, higher anxiety, greater isolation, greater alienation, less positive social attitudes, and less socially conforming lifestyles. Overall, paranormal beliefs seem to be associated with a less healthy worldview, in both personal and social terms