Imperfection Information, Optimal Monetary Policy and Informational Consistency

This paper examines the implications of imperfect information (II) for optimal monetary policy with a consistent set of informational assumptions for the modeller and the private sector an assumption we term the informational consistency. We use an estimated simple NK model from Levine et al. (2012), where the assumption of symmetric II significantly improves the fit of the model to US data to assess the welfare costs of II under commitment, discretion and simple Taylor-type rules. Our main results are: first, common to all information sets we find significant welfare gains from commitment only with a zero-lower bound constraint on the interest rate. Second, optimized rules take the form of a price level rule, or something very close across all information cases. Third, the combination of limited information and a lack of commitment can be particularly serious for welfare. At the same time we find that II with lags introduces a ‘tying ones hands’ effect on the policymaker that may improve welfare under discretion. Finally, the impulse response functions under our most extreme imperfect information assumption (output and inflation observed with a two-quarter delay) exhibit hump-shaped behaviour and the fiscal multiplier is significantly enhanced in this case

Force chain splitting in granular materials: a mechanism for large scale pseudo-elastic behaviour

We investigate both numerically and analytically the effect of strong disorder on the large scale properties of the hyperbolic equations for stresses proposed in \protect\cite{bcc,wcc}. The physical mechanism that we model is the local splitting of the force chains (the characteristics of the hyperbolic equation) by packing defects. In analogy with the theory of light diffusion in a turbid medium, we propose a Boltzmann-like equation to describe these processes. We show that, for isotropic packings, the resulting large scale effective equations for the stresses have exactly the same structure as those of an elastic body, despite the fact that no displacement field needs to be introduced at all. Correspondingly, the response function evolves from a two peak structure at short scales to a broad hump at large scales. We find, however, that the Poisson ratio is anomalously large and incompatible with classical elasticity theory that requires the reference state to be thermodynamically stable.Comment: 7 pages, 6 figures, An incorrect definition of the Poisson ratio in dimensions not equal to 3 was amended. The conclusions are unchange

An empirical analysis of the welfare magnet debate using the NLSY

This paper examines the extent to which differences in welfare generosity across states lead to interstate migration. Using microdata from the National Longitudinal Survey of Youth between 1979 and 1992, we employ a quasi-experimental design that utilizes the categorical eligibility of the welfare system. The "treatment" group consists of all those in the survey who appear eligible to participate in Aid to Families with Dependent Children. The "control" group contains those who are poor but ineligible for other reasons. The pattern of cross-state moves among poor single women with children who are likely to be eligible for benefits (treatment-group members) is compared to the pattern among other poor households. We find little evidence indicating that welfare-induced migration is a widespread phenomenon.

The intergenerational correlation in AFDC participation: Welfare trap or poverty trap?

Several recent studies have shown that daughters whose mothers have participated in the welfare program Aid to Families with Dependent Children (AFDC), are themselves more likely to participate in AFDC when they head their own household. Other studies have shown that the earnings of parents and their children are highly correlated across generations. This suggests that any variable correlated with income such as AFDC participation will also be correlated across generations. This paper uses data from the original and youth cohorts of the National Longitudinal Surveys to investigate the question of whether the link in mother-daughter welfare participation is a causal relationship, or whether it can be explained by the expected intergenerational correlation in earnings. Several reduced-form probit equations are estimated, and attention is directed to the potential endogeneity of key explanatory variables. The empirical findings suggest that much of the observed correlation in AFDC participation across generations can be explained by the intergenerational correlation of income and other family characteristics.

A search for biogenic trace gases in the atmosphere of Mars

The detection of certain trace gases in the atmosphere of Mars may serve as a possible indicator of microbial life on the surface of Mars. Candidate biogenic gases include methane CH4, ammonia NH3, nitrous oxide N2O, and several reduced sulfur species. Chemical thermodynamic equilibrium and photochemical calculations preclude the presence of these gases in any measurable concentrations in the atmosphere of Mars in the absence of biogenic production. A search for these gases utilizing either high resolution (spectral and spatial) spectroscopy from a Mars orbiter, such as the Observer, and or in situ measurements from a Mars lander or rover, is proposed

Information, VARs and DSGE Models

How informative is a time series representation of a given vector of observables about the structural shocks and impulse response functions in a DSGE model? In this paper we refer to this econometrician’s problem as “E-invertibility” and consider the corresponding information problem of the agents in the assumed DGP, the DSGE model, which we refer to as “A-invertibility” We consider how the general nature of the agents’ signal extraction problem under imperfect information impacts on the econometrician’s problem of attempting to infer the nature of structural shocks and associated impulse responses from the data. We also examine a weaker condition of recoverability. A general conclusion is that validating a DSGE model by comparing its impulse response functions with those of a data VAR is more problematic when we drop the common assumption in the literature that agents have perfect information as an endowment. We develop measures of approximate fundamentalness for both perfect and imperfect information cases and illustrate our results using analytical and numerical examples

Performance of coated columbium and tantalum alloys in plasma arc reentry simulation tests

The evaluation of coated refractory metals screened in stagnation model plasma arc tests is reported. Columbium alloys FS-85, C-129Y, and Cb-752 coated with Si-20Cr-20Fe (R512E) were tested at 1390 C. Three silicide coatings on Ta-10W were tested at 1470 C. Half-hour cycles and a 6500 N/sqm stagnation pressure were used. The best R512E coated columbium alloy was FS-85 with first local coating breakdowns occurring in 12 to 50 cycles. At coating defects, low metal recession rates (0.005 mm/min) were generally observed on coated columbium alloys while high rates (0.15 mm/min) were observed on coated Ta-10W. Coated columbium suffered large emittance losses (to below 0.7) due to surface refractory metal pentoxide formation

Numerical nonlinear inelastic analysis of stiffened shells of revolution. Volume 3: Engineer's program manual for STARS-2P digital computer program

Engineering programming information is presented for the STARS-2P (shell theory automated for rotational structures-2P (plasticity)) digital computer program, and FORTRAN 4 was used in writing the various subroutines. The execution of this program requires the use of thirteen temporary storage units. The program was initially written and debugged on the IBM 370-165 computer and converted to the UNIVAC 1108 computer, where it utilizes approximately 60,000 words of core. Only basic FORTRAN library routines are required by the program: sine, cosine, absolute value, and square root