Measuring the equilibrium real interest rate

The equilibrium real interest rate represents the real rate of return required to keep the economy’s output equal to potential output. This article discusses how to measure the equilibrium real interest rate, using an empirical structural model of the economy.Interest rates ; Monetary policy

The Time Varying Volatility of Macroeconomic Fluctuations

In this paper we investigate the sources of the important shifts in the volatility of U.S. macroeconomic variables in the postwar period. To this end, we propose the estimation of DSGE models allowing for time variation in the volatility of the structural innovations. We apply our estimation strategy to a large-scale model of the business cycle and find that investment specific technology shocks account for most of the sharp decline in volatility of the last two decades.

Heterogeneous life-cycle profiles, income risk and consumption inequality

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in income explain all of the increase in inequality in the 1980s and 90s. Second, we reconcile this finding with the fact that consumption inequality did not increase much over this period. Our results support the view that many permanent changes in income are predictable for consumers, even if they look unpredictable to the econometrician, consistent with models of heterogeneous income profiles.Consumption, inequality, risk, incomplete markets, heterogeneity

Investment shocks and business cycles

Shocks to the marginal efficiency of investment are the most important drivers of business cycle fluctuations in US output and hours. Moreover, these disturbances drive prices higher in expansions, like a textbook demand shock. We reach these conclusions by estimating a DSGE model with several shocks and frictions. We also find that neutral technology shocks are not negligible, but their share in the variance of output is only around 25 percent, and even lower for hours. Labor supply shocks explain a large fraction of the variation of hours at very low frequencies, but not over the business cycle. Finally, we show that imperfect competition and, to a lesser extent, technological frictions are the key to the transmission of investment shocks in the model.Investments ; Business cycles

Federal Reserve Bank of New York Staff Reports Household

This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in this paper are those of the authors and are not necessarily reflective of views at the Federal Reserve Bank of Chicago, the Federal Reserve Bank of New York, or the Federal Reserve System. Any errors or omissions are the responsibility of the authors. Household Leveraging and Deleveragin

Is there a trade-off between inflation and output stabilization?

Not in an estimated DSGE model of the US economy, once we account for the fact that most of the high-frequency volatility in wages appears to be due to noise, rather than to variation in workers' preferences or market power.

Investment shocks and the relative price of investment

Abstract. We estimate a New-Neoclassical Synthesis business cycle model with two investment shocks. The …rst, an investment-speci…c technology shock, a¤ects the transformation of consumption into investment goods and is identi…ed with the relative price of investment. The second shock a¤ects the production of installed capital from investment goods or, more broadly, the transformation of savings into the future capital input. We …nd that this shock is the most important driver of U.S. business cycle ‡uctuations in the post-war period and that it is likely to proxy for more fundamental disturbances to the functioning of the …nan-cial sector. To corroborate this interpretation, we show that it is closely related to interest rate spreads and that it played a particularly important role in the recession of 2008-09

Patients' perceptions of quality of care delivery by urology residents: A nationwide study

Objective To present the results of a nationwide survey among urological patients to evaluate their perception of the quality of care provided by residents. Methods An anonymous survey was distributed to patients who were referred to 22 Italian academic institutions. The survey aimed to investigate the professional figure of the urology resident as perceived by the patient. Results A total of 2587 patients were enrolled in this study. In all, 51.6% of patients were able to correctly identify a urology resident; however, almost 40% of respondents discriminated residents from fully trained urologists based exclusively on their young age. Overall, 98.2% patients rated the service provided by the resident as at least sufficient. Urology trainees were considered by more than 50% of the patients interviewed to have good communication skills, expertise and willingness. Overall, patients showed an excellent willingness to be managed by urology residents. The percentage of patients not available for this purpose showed an increasing trend that directly correlated with the difficulty of the procedure. Approximately 5-10% of patients were not willing to be managed by residents for simple procedures such as clinical visits, cystoscopy or sonography, and up to a third of patients were not prepared to undergo any surgical procedure performed by residents during steps in major surgery, even if the residents were adequately tutored. Conclusions Our data showed that patients have a good willingness to be managed by residents during their training, especially for medium- to low-difficulty procedures. Furthermore, the majority of patients interviewed rated the residents' care delivery as sufficient. Urology trainees were considered to have good communication skills, expertise and willingness