DSGE models and the Lucas critique

Los modelos DSGE modernos están microfundamentados, y sus parámetros son estructurales, así que en principio deberían ser invariantes ante cambios de política económica y no estar sujetos a la crítica de Lucas. Pero la literatura ha encontrado que problemas de especificación generan inestabilidad en los parámetros tras cambios de política económica también en modelos DSGE. Este artículo estudia las implicaciones de estos cambios en los parámetros para la evaluación de políticas económicas, tratando de comprobar si las conclusiones obtenidas utilizando un modelo DSGE habrían sido fundamentalmente diferentes de las que los policymakers de la década de 1970 derivaron de sus curvas de Phillips de forma reducida. Los resultados muestran inestabilidad en la mayoría de parámetros del modelo, incluyendo aquellos que son supuestamente estructurales (como el peso del capital en la función de producción, los hábitos en el consumo, o la elasticidad de la oferta de trabajo al salario real), y cambios muy importantes en las funciones de impulso respuesta derivadas de una estimación en tiempo real del modelo. La conclusión es que, tras la expansión monetaria de principios de los años setenta, un modelo DSGE estándar se habría comportado de forma muy similar a una curva de Phillips de forma reducida, con importantes cambios en los valores de los parámetros estimados y en las funciones de impulso respuestaModern DSGE models are microfounded and have deep parameters that should be invariant to changes in economic policy, so in principle they are not subject to the Lucas critique. But the literature has already established that misspecification issues also cause parameter instability after policy changes in DSGE models. This paper will look at the implications of parameter shifts for econometric policy evaluation, to see whether policy advice derived from DSGE models would have differed fundamentally from that which the policymakers of the 1970s derived from their reduced-form Phillips curves. The results show drift in most parameters, including those that are supposedly structural (such as the share of capital in production, habits or the elasticity of labor supply to the real wage), and major shifts in the impulse response functions derived from the real-time estimation of the model. After the expansionary monetary shocks of the early 1970s, a standard DSGE model would have behaved very similarly to an old-style Phillips curve, with marked shifts in parameter values and impulse response function

Electron Microprobe Chemical Dating of Uraninite as a Reconnaissance Tool for Leucogranite Geochronology

We suggest that electron microprobe techniques may be employed to date Tertiary samples of uraninite (UO~2~), which can contain very high concentrations of radiogenic Pb after only a few million of years of U and Th decay. Although uraninite is regarded as a rare accessory mineral, it is relatively abundant in leucogranitic rocks such as those found in the Himalayan orogen. We apply the U-Th-total Pb electron microprobe chemical dating method to a uraninite crystal from a ca. 18.3 Ma dike of the Mugu granite from the Upper Mustang region of central Nepal. With this technique, we calculate a mean chemical date that is consistent with isotope-dilution thermal ionization mass spectrometry (ID-TIMS) U-Pb dates obtained from seven other uraninite grains and a monazite crystal from the same sample. Electron microprobe chemical dating yields results that typically will be an order of magnitude less precise than conventional dates: in the specific case of the Mugu granite, single point chemical dates each have ca. 1.5 Ma 2[sigma] (95%) confidence level uncertainties. However, the mean chemical date of 15 point analyses of the crystal we study has a 2SE (2 standard error) uncertainty of ca. 400 ka, comparable to uncertainties obtained with ID-TIMS. These results show that electron microprobe chemical dating of uraninite has substantial promise as a reconnaissance tool for the geochronology of young granitic rocks. The electron microprobe work also reveals substantial chemical complexity within uraninite that must be taken into account. The analyzed crystal displays a texturally and chemically distinctive core and rim that suggests episodic growth. Concentration gradients in U, Th, and Y across the boundary imply diffusive modification. We estimate the diffusivity of U, Th, and Y in uraninite at ca. 700 °C to be > 10-7 cm2 s-1. In contrast, Pb shows no distinctive concentration gradient across the core-rim boundary, implying that Pb has a much higher diffusivity in uraninite than U, Th, or Y. We estimate that Pb loss of as much as ca. 8.9% has occurred in the uraninite grains we analyzed by ID-TIMS

Economic effects of a possible prolonged deterioration in the general health of the Spanish population

Rationale The last year has seen growing demand for healthcare services, but the causes of this increase, and how persistent it will be, are as yet uncertain. Should these dynamics prove to be long-lasting and associated with a prolonged deterioration in the general health of the Spanish population, they could have a significant economic impact. Takeaways •The latest waves of the Centro de Investigaciones Sociológicas healthcare barometer show an increase in demand for healthcare services in Spain. The number of workers losing work days as a result of illness, temporary disability or injury has also risen. •There is considerable uncertainty as to the causes and potential persistence of these developments, although some dynamics appear to be in line with the predictions made in the literature studying COVID-19 sequelae among a widely vaccinated population. •If these developments prove to be long-lasting and associated with a prolonged deterioration in the general health of the Spanish population, they may require a structural increase in healthcare expenditure that is as yet difficult to estimate, as well as having an adverse, but highly uncertain, impact on potential output

Carbon tax sectoral (CATS) model: a sectoral model for energy transition stress test scenarios

Este artículo presenta un modelo de equilibrio general diseñado para producir escenarios macroeconómicos que incorporen los riesgos de transición asociados a las políticas adoptadas para evitar el proceso de cambio climático (no los riesgos físicos asociados al coste del cambio climático a largo plazo). El modelo está calibrado para la economía española, y puede simular el impacto de shocks en el precio y la cobertura de derechos de emisión de gases efecto invernadero, con particular atención a las asimetrías sectoriales provenientes de i) la intensidad de uso de la energía; ii) la fuente de dicha energía, y iii) las interdependencias entre industrias. Mostramos que, tras un incremento en el precio de los derechos de emisión similar al observado en los últimos años (de aproximadamente 25 € por tonelada de CO2 en 2019 a casi 100 € por tonelada en 2022), el modelo predice una caída acumulada del PIB después de tres años del 0,37 %. La pérdida de valor añadido es muy heterogénea entre distintas industrias, con valores que van de pérdidas del 4 % en las industrias más afectadas a un impacto prácticamente nulo en los sectores menos afectados. En relación con el uso del modelo para pruebas de estrés, esta heterogeneidad apunta a la existencia de riesgos potenciales para la estabilidad financiera, y a la importancia de una correcta diversificación bancaria para disminuir su exposición a los riesgos de transición.This paper presents a general equilibrium sectoral model designed to produce macroeconomic scenarios that incorporate transition risks associated with policies to curb climate change (but not physical risks associated with the long-term costs of climate change). The model is calibrated to the Spanish economy, and can simulate the impact of shocks to the price and coverage of greenhouse gas emission allowances, with particular attention to sectoral asymmetries arising from (i) the energy intensity of each industry, (ii) the source of that energy, and (iii) the interdependencies with other industries. We show that for an increase in the price of emission allowances similar to that observed in recent years (from approximately €25 per tonne of CO2 in 2019 to almost €100 per tonne in 2022) the model predicts a cumulative decline in Spanish GDP after three years of 0.37%. The loss in value added is very heterogeneous across industries, ranging from 4% in the most severely affected industries to virtually no impact in the least affected industries. In terms of the use of the model for stress testing, this heterogeneity points to potential risks for financial stability and the importance of the right diversification for banks to diminish their exposure to transition risks

The design of macroeconomic scenarios for climate change stress tests

The challenges of climate change affect all aspects of the economy, including financial stability, which may be affected both by the physical risks (associated with the climate change process itself) and the transition risks (associated with initiatives to curb the climate change process). This article presents a model designed to produce macroeconomic scenarios, chiefly related to transition risks, to serve as a basis for stress tests to verify that all the components of the financial system are prepared for possible adverse events of this type. In particular, these scenarios are based on a hypothetical rise in the price of CO2 emission allowances, over a 2-5 year horizon. The model simulates the impact of this shock on the Spanish economy, paying particular attention to sectoral asymmetries arising from the intensity with which different types of energy are used in each industry, the interdependencies summarised in the input-output tables for the Spanish economy and the general equilibrium effects in terms of relative price changes and sectoral reallocation

Ser creativo no es fácil

En un mercado en el cual, y como consecuencia del desarrollo tecnológico, los productos terminan siendo muy parecidos entre sí, la tarea del creativo consiste en introducir una diferencia allí donde no la hay, privilegiando la emocionalidad del público objetivo por encima de su racionalidad. La innovación y la creatividad son inseparables y los creativos deben enfrentar el temor al cambio de algunos clientes que prefieren ir a lo seguro, manteniendo las mismas fórmulas que han utilizado siempre y que les han dado buenos resultados. Como contrapartida, hay creativos que se conforman con imitar el ingenio de innovadores extranjeros

Evolución reciente y perspectivas de la población en España

Artículo de revistaAnalisis preliminar sobre la evolucion reciente de los determinantes demograficos en España asi como de su posible evolucion futura. Con este fin, el autor toma como base la revision de las proyecciones de la poblacion de España que ha presentado recientemente el Instituto Nacional de Estadistica (INE)expone los rasgos basicos de la estructura demografica en Españadescribe de forma breve las proyecciones demograficas disponiblesy, por ultimo, trata de evaluar el grado de sensibilidad de estas proyecciones a alteraciones en los supuestos sobre los determinantes demograficos. (ad

Assessing the sensitivity of inflation to economic activity

A number of academic studies suggest that from the mid-1990s onwards there were changes in the link between inflation and economic activity. However, it remains unclear the extent to which this phenomenon can be ascribed to a change in the structural relationship between inflation and output, as opposed to a change in the size and nature of the shocks hitting the economy. This paper uses a suite of models, such as time-varying VAR techniques, traditional macro models, as well as DSGE models, to investigate, for various European countries as well as for the euro area, the evolution of the link between inflation and resource utilization and its dependence on the nature and size of the shocks. Our analysis suggests that the relationship between inflation and activity has indeed been changing over time, while remaining positive, with the correlation peaking during recessions. Quantitatively, the link between output and inflation is found to be highly dependent on which type of shocks hit the economy: while, in general, all demand shocks to output imply a reaction of inflation of the same sign, the latter will be less pronounced when output fluctuations are driven by supply shocks. In addition, a sharp deceleration of activity, as opposed to a subdued but protracted slowdown, results in a swifter decline in inflation. Inflation exhibits a rather strong persistence, with a negative impact still visible three years after the initial shock. JEL Classification: E31, E32, E37demand shock, inflation response, Macro model, output growth, Phillips curve

Deciphering the Macroeconomic Effects of Internal Devaluations in a Monetary Union

We study the macroeconomic effects of internal devaluations undertaken by a periphery of countries belonging to a monetary union. We find that internal devaluations have large and positive output effects in the long run. Through an expectations channel, most of these effects carry over to the short run. Internal devaluations focused on goods markets reforms are generally more powerful in stimulating growth than reforms aimed at moderating wages, but the latter are less deflationary. For a monetary union with a periphery the size of the euro area's, the countries at the periphery benefit from internal devaluations even at the zero lower bound (ZLB) of the nominal interest rate. Nonetheless, when the ZLB binds, a sequencing of reforms that prioritizes labor policies over goods markets reforms might increase the present discounted value of output