Fortune or Virtue: Time-Variant Volatilities Versus Parameter Drifting in U.S. Data

This paper compares the role of stochastic volatility versus changes in monetary policy rules in accounting for the time-varying volatility of U.S. aggregate data. Of special interest to us is understanding the sources of the great moderation of business cycle fluctuations that the U.S. economy experienced between 1984 and 2007. To explore this issue, we build a medium-scale dynamic stochastic general equilibrium (DSGE) model with both stochastic volatility and parameter drifting in the Taylor rule and we estimate it non-linearly using U.S. data and Bayesian methods. Methodologically, we show how to confront such a rich model with the data by exploiting the structure of the high-order approximation to the decision rules that characterize the equilibrium of the economy. Our main empirical findings are: 1) even after controlling for stochastic volatility (and there is a fair amount of it), there is overwhelming evidence of changes in monetary policy during the analyzed period; 2) however, these changes in monetary policy mattered little for the great moderation; 3) most of the great performance of the U.S. economy during the 1990s was a result of good shocks; and 4) the response of monetary policy to inflation under Burns, Miller, and Greenspan was similar, while it was much higher under Volcker.DSGE models, Stochastic volatility, Parameter drifting, Bayesian methods

Fortune or virtue: time-variant volatilities versus parameter drifting

This paper compares the role of stochastic volatility versus changes in monetary policy rules in accounting for the time-varying volatility of U.S. aggregate data. Of special interest to the authors is understanding the sources of the great moderation of business cycle fluctuations that the U.S. economy experienced between 1984 and 2007. To explore this issue, the authors build a medium-scale dynamic stochastic general equilibrium (DSGE) model with both stochastic volatility and parameter drifting in the Taylor rule and they estimate it non-linearly using U.S. data and Bayesian methods. Methodologically, the authors show how to confront such a rich model with the data by exploiting the structure of the high-order approximation to the decision rules that characterize the equilibrium of the economy. Their main empirical findings are: 1) even after controlling for stochastic volatility (and there is a fair amount of it), there is overwhelming evidence of changes in monetary policy during the analyzed period; 2) however, these changes in monetary policy mattered little for the great moderation; 3) most of the great performance of the U.S. economy during the 1990s was a result of good shocks; and 4) the response of monetary policy to inflation under Burns, Miller, and Greenspan was similar, while it was much higher under Volcker.Monetary policy ; Business cycles ; Board of Governors of the Federal Reserve System (U.S.) ; Econometric models

Supply-side policies and the zero lower bound

This paper examines how supply-side policies may play a role in fighting a low aggregate demand that traps an economy at the zero lower bound (ZLB) of nominal interest rates. Future increases in productivity or reductions in mark-ups triggered by supply-side policies generate a wealth effect that pulls current consumption and output up. Since the economy is at the ZLB, increases in the interest rates do not undo this wealth effect, as we will have in the case outside the ZLB. The authors illustrate this mechanism with a simple two-period New Keynesian model. They discuss possible objections to this set of policies and the relation of supply-side policies with more conventional monetary and fiscal policies.Supply-side economics ; Keynesian economics

Reading the recent monetary history of the United States, 1959-2007

In this paper the authors report the results of the estimation of a rich dynamic stochastic general equilibrium (DSGE) model of the U.S. economy with both stochastic volatility and parameter drifting in the Taylor rule. They use the results of this estimation to examine the recent monetary history of the United States and to interpret, through this lens, the sources of the rise and fall of the Great Inflation from the late 1960s to the early 1980s and of the Great Moderation of business cycle fluctuations between 1984 and 2007. Their main findings are that, while there is strong evidence of changes in monetary policy during Chairman Paul Volcker's tenure at the Federal Reserve, those changes contributed little to the Great Moderation. Instead, changes in the volatility of structural shocks account for most of it. Also, although the authors find that monetary policy was different under Volcker, they do not find much evidence of a big difference in monetary policy among the tenures of Chairmen Arthur Burns, G. William Miller, and Alan Greenspan. The difference in aggregate outcomes across these periods is attributed to the time-varying volatility of shocks. The history for inflation is more nuanced, as a more vigorous stand against it would have reduced inflation in the 1970s, but not completely eliminated it. In addition, they find that volatile shocks (especially those related to aggregate demand) were important contributors to the Great Inflation.Monetary policy - United States ; Economic conditions - United States

Reading the Recent Monetary History of the U.S., 1959-2007

In this paper we report the results of the estimation of a rich dynamic stochastic general equilibrium (DSGE) model of the U.S. economy with both stochastic volatility and parameter drifting in the Taylor rule. We use the results of this estimation to examine the recent monetary history of the U.S. and to interpret, through this lens, the sources of the rise and fall of the great American inflation from the late 1960s to the early 1980s and of the great moderation of business cycle fluctuations between 1984 and 2007. Our main findings are that while there is strong evidence of changes in monetary policy during Volcker’s tenure at the Fed, those changes contributed little to the great moderation. Instead, changes in the volatility of structural shocks account for most of it. Also, while we find that monetary policy was different under Volcker, we do not find much evidence of a big difference in monetary policy among Burns, Miller, and Greenspan. The difference in aggregate outcomes across these periods is attributed to the time-varying volatility of shocks. The history for inflation is more nuanced, as a more vigorous stand against it would have reduced inflation in the 1970s, but not completely eliminated it. In addition, we find that volatile shocks (especially those related to aggregate demand) were important contributors to the great American inflation.DSGE models, Stochastic volatility, Parameter drifting, Bayesian methods.

Reading the recent monetary history of the U.S., 1959-2007

The authors report the results of the estimation of a rich dynamic stochastic general equilibrium model of the U.S. economy with both stochastic volatility and parameter drifting in the Taylor rule. They use the results of this estimation to examine the recent monetary history of the U.S. and to interpret, through this lens, the sources of the rise and fall of the great American inflation from the late 1960s to the early 1980s and of the great moderation of business cycle fluctuations between 1984 and 2007.Economic conditions - United States ; Business cycles - Econometric models ; Econometric models ; Monetary policy - United States

Evolution, function and roles in drug sensitivity of trypanosome aquaglyceroporins

Aquaglyceroporins (AQPs) are membrane proteins that function in osmoregulation and the uptake of low molecular weight solutes, in particular glycerol and urea. The AQP family is highly conserved, with two major subfamilies having arisen very early in prokaryote evolution and retained by eukaryotes. A complex evolutionary history indicates multiple lineage-specific expansions, losses and not uncommonly a complete loss. Consequently, the AQP family is highly evolvable and has been associated with significant events in life on Earth. In the African trypanosomes, a role for the AQP2 paralogue, in sensitivity to two chemotherapeutic agents, pentamidine and melarsoprol, is well established, albeit with the mechanisms for cell entry and resistance unclear until very recently. Here, we discuss AQP evolution, structure and mechanisms by which AQPs impact drug sensitivity, suggesting that AQP2 stability is highly sensitive to mutation while serving as the major uptake pathway for pentamidine

1020 steel coated with Ti/TiN by Cathodic Arc and Ion Implantation

TiN coatings have been widely studied in order to improve mechanical properties of steels. In this work, thin Ti/TiN films were prepared by plasma based immersion ion implantation and deposition (PBII&D) with a cathodic arc on AISI 1020 steel substrates. Substrates were exposed to the discharge during 1 min in vacuum for the deposition of a Tiunderlayer with the aim of improving the adhesion to the substrate. Then, a TiN layer was deposited during 6 min in a nitrogen environment at a pressure of 3xl0-4 mbar. Samples were obtained at room temperature and at 300 °C, and with or without ion implantation in order to analyze differences between the effects of each treatment on the tribological properties. The mechanical and tribological properties of the films were characterized. The coatings deposited by PBII&D at 300 °C presented the highest hardness and young modulus, the best wear resistance and corrosion performance.Fil: Bermeo, Diego Fernando. Universidad Santiago de Cali; ColombiaFil: Quintana, Juan Pablo. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Ciudad Universitaria. Instituto de Física del Plasma. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales. Instituto de Física del Plasma; ArgentinaFil: Kleiman, Ariel Javier. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Ciudad Universitaria. Instituto de Física del Plasma. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales. Instituto de Física del Plasma; ArgentinaFil: Sequeda, F.. Universidad del Valle; ColombiaFil: Márquez, A.. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Ciudad Universitaria. Instituto de Física del Plasma. Universidad de Buenos Aires. Facultad de Ciencias Exactas y Naturales. Instituto de Física del Plasma; Argentin

Evolving differentiation in African trypanosomes

Differentiation is a central aspect of the parasite life cycle and encompasses adaptation to both host and environment. If we accept that evolution cannot anticipate an organism’s needs as it enters a new environment, how do parasite differentiation pathways arise? The transition between vertebrate and insect stage African trypanosomes is probably one of the better studied and involves a cell-cycle arrested or ‘stumpy’ form that activates metabolic pathways advantageous to the parasite in the insect host. However, a range of stimuli and stress conditions can trigger similar changes, leading to formation of stumpy-like cellular states. We propose that the origin and optimisation of this differentiation program represents repurposing of a generic stress response to gain considerable gain-of-fitness associated with parasite transmission