M2 growth in 1995: a return to normalcy?

A discussion of M2's demise as a reliable indicator of financial conditions in the economy, and a look at recent evidence suggesting that even though the aggregate has been behaving more normally over the past year or so, it is unlikely to regain its status as a key policy guide any time soon.Economic indicators ; Money supply

How robust are popular models of nominal frictions?

This paper analyzes three popular models of nominal price and wage frictions to determine which best fits post-war U.S. data. We construct a dynamic stochastic general equilibrium (DSGE) model and use maximum likelihood to estimate each model's parameters. Because previous research finds that the conduct of monetary policy and the behavior of inflation changed in the early 1980s, we examine two distinct sample periods. Using a Bayesian, pseudo-odds measure as a means for comparison, a sticky price and wage model with dynamic indexation best fits the data in the early-sample period, whereas either a sticky price and wage model with static indexation or a sticky information model best fits the data in the late-sample period. Our results suggest that price- and wage-setting behavior may be sensitive to changes in the monetary policy regime. If true, the evaluation of alternative monetary policy rules may be even more complicated than previously believed.Econometric models - Evaluation ; Business cycles - Econometric models ; Monetary policy ; Price levels ; Wages

Monetary policy and natural disasters in a DSGE model: how should the Fed have responded to Hurricane Katrina?

In the immediate aftermath of Hurricane Katrina, speculation arose that the Federal Reserve might respond by easing monetary policy. This paper uses a dynamic stochastic general equilibrium (DSGE) model to investigate the appropriate monetary policy response to a natural disaster. We show that the standard Taylor (1993) rule response in models with and without nominal rigidities is to increase the nominal interest rate. That finding is unchanged when we consider the optimal policy response to a disaster. A nominal interest rate increase following a disaster mitigates both temporary inflation effects and output distortions that are attributable to nominal rigidities.Monetary policy - United States ; Natural disasters - Economic aspects

How does age affect baseline screening mammography performance measures? A decision model

Background: In order to promote consumer-oriented informed medical decision-making regarding screening mammography, we created a decision model to predict the age dependence of the cancer detection rate, the recall rate and the secondary performance measures (positive predictive values, total intervention rate, and positive biopsy fraction) for a baseline mammogram. Methods: We constructed a decision tree to model the possible outcomes of a baseline screening mammogram in women ages 35 to 65. We compared the single baseline screening mammogram decision with the no screening alternative. We used the Surveillance Epidemiology and End Results national cancer database as the primary input to estimate cancer prevalence. For other probabilities, the model used population-based estimates for screening mammography accuracy and diagnostic mammography outcomes specific to baseline exams. We varied radiologist performance for screening accuracy. Results: The cancer detection rate increases from 1.9/1000 at age 40 to 7.2/1000 at age 50 to 15.1/ 1000 at age 60. The recall rate remains relatively stable at 142–157/1000, which varies from 73– 236/1000 at age 50 depending on radiologist performance. The positive predictive value of a screening mammogram increases from 1.3% at age 40 to 9.8% at age 60, while the positive predictive value of a diagnostic mammogram varies from 2.9% at age 40 to 19.2% at age 60. The model predicts the total intervention rate = 0.013*AGE2 - 0.67*AGE + 40, or 34/1000 at age 40 to 47/1000 at age 60. Therefore, the positive biopsy (intervention) fraction varies from 6% at age 40 to 32% at age 60. Conclusion: Breast cancer prevalence, the cancer detection rate, and all secondary screening mammography performance measures increase substantially with age

Taylor-type rules and total factor productivity

This paper examines the impact of a persistent shock to the growth rate of total factor productivity in a New Keynesian model in which the central bank does not observe the shock. The authors then investigate the performance of alternative policy rules in such an incomplete information environment. While some rules perform better than others, the authors demonstrate that inflation is more stable after a persistent productivity shock when monetary policy targets the output growth rate (not the output gap) or the price-level path (not the inflation rate). Both the output growth and price-level path rules generate less volatility in output and inflation following a persistent productivity shock compared with the Taylor rule.Taylor's rule ; Productivity ; Industrial productivity

Inflation risk and optimal monetary policy

This paper shows that the optimal monetary policies recommended by New Keynesian models still imply a large amount of inflation risk. We calculate the term structure of inflation uncertainty in New Keynesian models when the monetary authority adopts the optimal policy. When the monetary policy rules are modified to include some weight on a price path, the economy achieves equilibria with substantially lower long-run inflation risk. With either sticky prices or sticky wages, a price path target reduces the variance of inflation by an order of magnitude more than it increases the variability of the output gap.Monetary policy ; Inflation (Finance)

A Conceptual Framework for B2B Electronic Contracting

Electronic contracting aims at improving existing business relationship paradigms and at enabling new forms of contractual relationships. To successfully realize these objectives, an integral understanding of the contracting field must be established. In this paper, we propose a conceptual framework for business-to-business contracting support. The framework provides a complete view over the contracting field. It allows positioning research efforts in the domain, analysing them, placing their goals into perspective, and overseeing future research topics and issues. It is the basis for drawing conclusions about basic requirements to contracting systems

The Public Papers of Governor Keen Johnson, 1939-1943

Keen Johnson was governor of Kentucky from 1939 to 1943—years that spanned the end of the Depression and the initial involvement of this country in the Second World War. The account of Johnson’s administration is chronicled here through a collection of his public papers. The material, organized by subject and arranged chronologically within each area, presents a rather clear picture of Governor Johnson’s plans and concerns for Kentucky and of the actions he took as chief executive on behalf of the state. In contrast to contemporary procedures concerning the preservation of governors’ papers in university and state archives, many of the Johnson papers were difficult to locate and, apart from a few complete speech manuscripts, were reconstructed in large part from cards containing outlines and notes for speeches, along with many state and local newspaper accounts of speeches he made and of events in which he participated. Many speeches have been extensively footnoted by the editor to provide the reader with supplementary information. Also included in this volume is a perceptive evaluation of the Johnson administration by H. Clyde Reeves, who served in it as a commissioner of revenue. The appendix offers as complete a listing as was possible to reconstruct of the speeches delivered by Governor Johnson during his term of office. Frederic D. Ogden is former dean of the College of Arts and Sciences and associate vice-president for planning at Eastern Kentucky University. A model for historical researchers faced with the problem of reconstructing the past from incomplete and unorganized source materials. —The Register of the Kentucky Historical Societyhttps://uknowledge.uky.edu/upk_political_science_papers/1006/thumbnail.jp

Results of a study of the stability of cointegrating relations comprised of broad monetary aggregates

There is strong evidence of a stable “money demand” relationship for MZM and M2 through the 1990s. Though the M2 relationship breaks down somewhere around 1990, evidence has been accumulating that the disturbance is well characterized as a permanent upward shift in M2 velocity that began around 1990 and was largely over by 1994. This paper’s results support the hypothesis that households permanently reallocated a portion of their wealth from time deposits to mutual funds. This reallocation may have been induced by depository restructuring, but it could also be explained by appropriately measured opportunity cost.Demand for money