Macroeconomic implications of changes in micro volatility

We review evidence on the Great Moderation in conjunction with evidence about volatility trends at the micro level. We combine the two types of evidence to develop a tentative story for important components of the aggregate volatility decline and its consequences. The key ingredients of the story are declines in firm-level volatility and aggregate volatility – most dramatically in the durable goods sector – but the absence of a decline in the volatility of household consumption and individual earnings. Our explanation for volatility reduction stresses improved supply chain management, particularly in the durable goods sector, and a shift in production and employment from goods to services. We also provide some evidence for a specific mechanism, namely shorter lead times for materials orders. The tentative conclusion we draw is that, although better supply chain management involves potentially large efficiency gains with first-order effects on welfare, it does not imply (nor is there much evidence for) a reduction in uncertainty faced by individuals.

Interpreting the Great Moderation: Changes in the Volatility of Economic Activity at the Macro and Micro Levels

We review evidence on the Great Moderation in conjunction with evidence about volatility trends at the micro level. We combine the two types of evidence to develop a tentative story for important components of the aggregate volatility decline and its consequences. The key ingredients are declines in firm-level volatility and aggregate volatility -- most dramatically in the durable goods sector -- but the absence of a decline in household consumption volatility and individual earnings uncertainty. Our explanation for the aggregate volatility decline stresses improved supply-chain management, particularly in the durable goods sector, and, less important, a shift in production and employment from goods to services. We provide evidence that better inventory control made a substantial contribution to declines in firm-level and aggregate volatility. Consistent with this view, if we look past the turbulent 1970s and early 1980s much of the moderation reflects a decline in high frequency (short-term) fluctuations. While these developments represent efficiency gains, they do not imply (nor is there evidence for) a reduction in economic uncertainty faced by individuals and households.

High-Resolution X-Ray Spectroscopy of the Accretion Disk Corona Source 4U 1822-37

We present a preliminary analysis of the X-ray spectrum of the accretion disk corona source, 4U 1822-37, obtained with the High Energy Transmission Grating Spectrometer onboard the Chandra X-ray Observatory. We detect discrete emission lines from photoionized iron, silicon, magnesium, neon, and oxygen, as well as a bright iron fluorescence line. Phase-resolved spectroscopy suggests that the recombination emission comes from an X-ray illuminated bulge located at the predicted point of impact between the disk and the accretion stream. The fluorescence emission originates in an extended region on the disk that is illuminated by light scattered from the corona.Comment: 12 pages, 6 figures; Accepted for publication in ApJ Letter

Evidence for the importance of resonance scattering in X-ray emission line profiles of the O star ζ\zeta Puppis

We fit the Doppler profiles of the He-like triplet complexes of \ion{O}{7} and \ion{N}{6} in the X-ray spectrum of the O star $\zeta$ Puppis, using XMM-Newton RGS data collected over $\sim 400$ ks of exposure. We find that they cannot be well fit if the resonance and intercombination lines are constrained to have the same profile shape. However, a significantly better fit is achieved with a model incorporating the effects of resonance scattering, which causes the resonance line to become more symmetric than the intercombination line for a given characteristic continuum optical depth $\tau_*$. We discuss the plausibility of this hypothesis, as well as its significance for our understanding of Doppler profiles of X-ray emission lines in O stars.Comment: 29 pages, 8 figures, revised version accepted by Ap

On the Putative Detection of z>0 X-ray Absorption Features in the Spectrum of Markarian 421

In a series of papers, Nicastro et al. have reported the detection of z>0 OVII absorption features in the spectrum of Mrk421 obtained with the Chandra Low Energy Transmission Grating Spectrometer (LETGS). We evaluate this result in the context of a high quality spectrum of the same source obtained with the Reflection Grating Spectrometer (RGS) on XMM-Newton. The data comprise over 955ks of usable exposure time and more than 26000 counts per 50 milliAngstrom at 21.6 Angstroms. We concentrate on the spectrally clean region (21.3 < lambda < 22.5 Angstroms) where sharp features due to the astrophysically abundant OVII may reveal an intervening, warm--hot intergalactic medium (WHIM). We do not confirm detection of any of the intervening systems claimed to date. Rather, we detect only three unsurprising, astrophysically expected features down to the Log(N_i)~14.6 (3 sigma) sensitivity level. Each of the two purported WHIM features is rejected with a statistical confidence that exceeds that reported for its initial detection. While we can not rule out the existence of fainter, WHIM related features in these spectra, we suggest that previous discovery claims were premature. A more recent paper by Williams et al. claims to have demonstrated that the RGS data we analyze here do not have the resolution or statistical quality required to confirm or deny the LETGS detections. We show that our careful analysis resolves the issues encountered by Williams et al. and recovers the full resolution and statistical quality of the RGS data. We highlight the differences between our analysis and those published by Williams et al. as this may explain our disparate conclusions.Comment: 19 pages/7 figures/4 tables. 060424 submitted to ApJ 060522 re-submitted following ApJ reques

Resolving the Effects of Resonant X-ray Line Scattering in Cen X-3 with Chandra

The massive X-ray binary Cen X-3 was observed over approximately one quarter of the system's 2.08 day orbit, beginning before eclipse and ending slightly after eclipse center with the Chandra X-ray Observatory using its High-Energy Transmission Grating Spectrometer. The spectra show K shell emission lines from hydrogen- and helium-like ions of magnesium, silicon, sulfur, and iron as well as a K-alpha fluorescence emission feature from near-neutral iron. The helium-like n=2->1 triplet of silicon is fully resolved and the analogous triplet of iron is partially resolved. The helium-like triplet component flux ratios outside of eclipse are consistent with emission from recombination and subsequent cascades (recombination radiation) from a photoionized plasma. In eclipse, however, the w (resonance) lines of silicon and iron are stronger than that expected for recombination radiation, and are consistent with emission from a collisionally ionized plasma. The triplet line flux ratios at both phases can be explained more naturally, however, as emission from a photoionized plasma if the effects of resonant line scattering are included in addition to recombination radiation. We show that the emissivity due to resonant scattering depends sensitively on the line optical depth and, in the case of winds in X-ray binaries, this allows constraints on the wind velocity even when Doppler shifts cannot be resolved.Comment: 31 pages, 8 figures, ApJ accepted, abridged in accord with referee's Comment