Purchasing Power Parity and the Real Exchange Rate in Bangladesh: A Nonlinear Analysis

The long-run purchasing power parity (PPP) hypothesis is examined using data for Bangladesh and its major trading partners - the US, Euro area, Japan and India - during the period 1994 to 2002. We apply recently developed nonlinear econometric techniques and provide strong evidence for highly nonlinear meanreversion of real bilateral Bangladesh taka exchange rates toward a stable long-run equilibrium. Our findings imply strong support for the validity of long-run PPP as well as for the theoretical models which predict nonlinear adjustment in real exchange rates.real exchange rate; purchasing power parity; nonlinearity

Federal Reserve Policy viewed through a Money Supply Lens

This paper examines whether the U.S. Federal Reserve has adjusted high-powered money supply in response to macroeconomic indicators. Applying ex-post and real-time data for the postwar period, we provide evidence that nonborrowed reserves responded to expected inflation and the output-gap. While the output-gap feedback has always been negative, the response of money supply to changes in inflation varies considerably across time. The inflation feedback is negative in the post-1979 period and positive, albeit smaller than one, in the pre-1979 period. Applying a standard macroeconomic model, these roperties are shown to be consistent with a welfare maximizing policy, and to ensure equilibrium determinacy. Viewed through the money supply lens, the Fed has thus never allowed for endogenous fluctuations, which contrasts conclusions drawn from federal funds rate analyses.Nonborrowed reserves, monetary policy reaction functions, real-time data, determinacy

Assessing Money Supply Rules

We provide evidence that Federal Reserve’s money supply can be characterized by a simple rule, whereby the growth rate of nonborrowed reserves depends on expected in‡ation. The Volcker-Greenspan era is found to be associated with a negative in‡ation elasticity, whereas our estimates indicate that the Federal Reserve in the pre-1980 era supplied money in an accommodating way. While these results appear to be consistent with empirical evidence on interest rate rules, our theoretical analysis gives rise to novel insights. Applying a New Keynesian model, money supply rules are shown to ensure saddle path stabil-ity, indicating that they do not allow for self-fulling expectations. Further, optimal monetary policy canbeimplementedby a money supplyrule witha negative in‡ation elasticity, implying that the pre-1980 regime was less e¢cient in dampening macroeconomic ‡uctuations. On the transmission of money sup-ply shocks, we show that a negative in‡ation elasticity raises the likelihood of a liquidity e¤ect and lowers the persistence of the output response.

Inflation Dynamics and the Cost Channel of Monetary Transmission

Evidence from vector autoregressions indicates that the impact of interest rate shocks on macroeconomic aggregates can substantially be affected by the so-called cost channel of monetary transmission. In this paper we apply a structural approach to examine the relevance of the cost channel for inflation dynamics in G7 countries. We augment the so-called hybrid New Keynesian Philips curve by letting firms’ costs for external funds rise with the short-run nominal interest rate. Our estimates reveal that the magnitude of this cost channel strongly varies between countries, including member countries of the EMU, in accordance with differences in their financial systems. Simulations of a New Keynesian model further show that the presence of the cost channel substantially affects the transmission of monetary policy shocks, in particular, the inflation response.

Asymmetric Dynamics in the Current Account: Evidence from Long-Horizon Data

This letter investigates the presence of asymmetric dynamics in the behaviour of the current account as emphasized in recent theoretical contributions. We estimate a Markov switching model for long-horizon current account to GDP data for six countries and find substantial asymmetries in the behaviour of current account dynamics.Current account dynamics and sustainability; Markovswitching

Federal Reserve Policy viewed through a Money Supply Loss

Federal Reserve nonborrowed reserve supply systematically responded to changes in inflation and in the output gap over the period 1969-2000. While the feedback from output gap is always negative, the response of money supply to changes in inflation varies considerably across time. Nonborrowed reserves decreased with inflation in the post-1979 period and increased in the pre-1979 period. Applying a standard macro-model, the estimated reaction functions are shown to ensure equilibrium determinacy. Viewed through the money supply lens, Federal Reserve policy substantially changed over time, but has never allowed for endogenous fluctuations, which contrasts conclusions drawn from federal funds rate analyses

Hybrid Plasmonic Waveguide Fed Broadband Nano-antenna for Nanophotonic Applications

In this paper, we propose a novel hybrid plasmonic waveguide fed broadband optical patch nano-antenna for nanophotonic applications. Through full wave electromagnetic simulation, we demonstrated our proposed antenna to radiate and receive signal at all optical communication windows (e.g. $\lambda$ = 850nm, 1310nm & 1550nm) with around 86% bandwidth within the operational domain. Moreover numerical results demonstrate that the proposed nano-antenna has directional radiation pattern with satisfactory gain over all three communication bands. Additionally, we evaluated the antenna performances with two different array arrangements (e.g. one dimensional and square array). The proposed broadband antenna can be used for prominent nanophotonic applications such as optical wireless communication in inter and intra-chip devices, optical sensing and optical energy harvesting etc.Comment: 4 Page, 7 figure