The FOMC's balance-of-risks statement and market expectations of policy actions

In January 2000, the Federal Open Market Committee (FOMC) instituted the practice of issuing a “balance of risks” statement along with their policy decision immediately following each FOMC meeting. Robert H. Rasche and Daniel L. Thornton evaluate the use of the balance-of-risks statement and the market’s interpretation of it. They find that the balance-of-risks statement is one of the factors that market participants use to determine the likelihood that the FOMC will adjust its target for the federal funds rate at their next meeting. Moreover, they find that, on some occasions, the FOMC behaved in such a way as to encourage the use of the balance-of-risks statement for this purpose. The clarifying statements that sometimes accompany these balance-of-risks statements, as well as general remarks made by the Chairman and other FOMC members, often provide additional useful information.Federal Open Market Committee ; Federal funds rate ; Monetary policy

Greenspan's unconventional view of the long-run inflation/output trade-off

Greenspan, Alan ; Inflation (Finance)

The monetary/fiscal policy debate: a controlled experiment

Fiscal policy - Japan ; Monetary policy - Japan

Market anticipations of monetary policy actions

Monetary policy ; Federal funds rate

A vector error correction forecasting model of the U.S. economy

Any research or policy analysis in economics must be consistent with the time-series properties of observed macroeconomic data. Numerous previous studies of such time series reinforce the need to specify correctly a model's multivariate stochastic structure. This paper discusses in detail the speciation of a vector error correction forecasting model that is anchored by long-run equilibrium relationships suggested by economic theory. The model includes six variables - the CPI, the implicit price deflator for GDP, real money balances (MI), the federal funds rate, the yield on long-term (10-year) government bonds, and real GDP - and four cointegrating vectors. Model forecasts during the 1990's are compared to those made by the Federal Reserve and by private forecasters.Forecasting ; Econometric models

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

The effect of vacuum polarisation on muon-proton scattering at small energies and angles

We give a compact expression for the unpolarised differential cross section for muon-proton scattering in the one photon exchange approximation. The effect of adding the vacuum polarisation amplitude to the no-spin-flip amplitude for one photon exchange is calculated at small energies and scattering angles and is found to be negligible for present experiments.Comment: 6 pages, one figur

Hadronic Atoms and Effective Interactions

We examine the problem of hadronic atom energy shifts using the technique of effective interactions and demonstrate equivalence with the conventional quantum mechanical approach.Comment: 22 page latex file with 2 figure