Endogenous Cycles in Optimal Monetary Policy with a Nonlinear Phillips Curve

There is by now a large consensus in modern monetary policy. This consensus has been built upon a dynamic general equilibrium model of optimal monetary policy with sticky prices a la Calvo and forward looking behavior. In this paper we extend this standard model by introducing nonlinearity into the Phillips curve. As the linear Phillips curve may be questioned on theoretical grounds and seems not to be favoured by empirical evidence, a similar procedure has already been undertaken in a series papers over the last few years, e.g., Schaling (1999), Semmler and Zhang (2004), Nobay and Peel (2000), Tambakis (1999), and Dolado et al. (2004). However, these papers were mainly concerned with the analysis of the problem of inflation bias, by deriving an interest rate rule which is nonlinear, leaving the issues of stability and the possible existence of endogenous cycles in such a framework mostly overlooked. Under the specific form of nonlinearity proposed in our paper (which allows for both convexity and concavity and secures closed form solutions), we show that the introduction of a nonlinear Phillips curve into a fully deterministic structure of the standard model produces significant changes to the major conclusions regarding stability and the efficiency of monetary policy in the standard model. We should emphasize the following main results: (i) instead of a unique fixed point we end up with multiple equilibria; (ii) instead of saddle--path stability, for different sets of parameter values we may have saddle stability, totally unstable and chaotic fixed points (endogenous cycles); (iii) for certain degrees of convexity and/or concavity of the Phillips curve, where endogenous fluctuations arise, one is able to encounter various results that seem interesting. Firstly, when the Central Bank pays attention essentially to inflation targeting, the inflation rate may have a lower mean and is certainly less volatile; secondly, for changes in the degree of price stickiness the results are not are clear cut as in the previous case, however, we can also observe that when such stickiness is high the inflation rate tends to display a somewhat larger mean and also higher volatility; and thirdly, it shows that the target values for inflation and the output gap (π^,x^), both crucially affect the dynamics of the economy in terms of average values and volatility of the endogenous variables --- e.g., the higher the target value of the output gap chosen by the Central Bank, the higher is the inflation rate and its volatility --- while in the linear case only the π^ does so (obviously, only affecting in this case the level of the endogenous variables). Moreover, the existence of endogenous cycles due to chaotic motion may raise serious questions about whether the old dictum of monetary policy (that the Central Bank should conduct policy with discretion instead of commitment) is not still very much in the business of monetary policy.Optimal monetary policy, Interest Rate Rules, Nonlinear Phillips Curve, Endogenous Fluctuations and Stabilization

Chaotic Dynamics in Optimal Monetary Policy

There is by now a large consensus in modern monetary policy. This consensus has been built upon a dynamic general equilibrium model of optimal monetary policy as developed by, e.g., Goodfriend and King (1997), Clarida et al. (1999), Svensson (1999) and Woodford (2003). In this paper we extend the standard optimal monetary policy model by introducing nonlinearity into the Phillips curve. Under the specific form of nonlinearity proposed in our paper (which allows for convexity and concavity and secures closed form solutions), we show that the introduction of a nonlinear Phillips curve into the structure of the standard model in a discrete time and deterministic framework produces radical changes to the major conclusions regarding stability and the efficiency of monetary policy. We emphasize the following main results: (i) instead of a unique fixed point we end up with multiple equilibria; (ii) instead of saddle--path stability, for different sets of parameter values we may have saddle stability, totally unstable equilibria and chaotic attractors; (iii) for certain degrees of convexity and/or concavity of the Phillips curve, where endogenous fluctuations arise, one is able to encounter various results that seem intuitively correct. Firstly, when the Central Bank pays attention essentially to inflation targeting, the inflation rate has a lower mean and is less volatile; secondly, when the degree of price stickiness is high, the inflation rate displays a larger mean and higher volatility (but this is sensitive to the values given to the parameters of the model); and thirdly, the higher the target value of the output gap chosen by the Central Bank, the higher is the inflation rate and its volatility.Comment: 11 page

Spin-to-charge conversion and interface-induced spin Hall magnetoresistance in yttrium iron garnet/metallic bilayers

We report the investigation of spin-to-charge current interconversion process in hybrid structures of yttrium iron garnet (YIG)/metallic bilayers by means of two different experimental techniques: spin pumping effect (SPE) and spin Hall magnetoresistance (SMR). We demonstrate the evidence of a correlation between spin-to-charge conversion and SMR in bilayers of YIG/Pd, YIG/Pt, and YIG/IrMn. The correlation was verified directly in the spin Hall angles and the amplitudes of the voltage signals measured by the SPE and SMR techniques. The detection of SMR was carried out using the modulated magnetoresistance technique and lock-in amplifier detection. For these measurements, we present a simple model for the interpretation of the results. The results allow us to conclude that indeed the interface in the YIG/metallic bilayers has a dominant role in the spin-to-charge current conversion and SMR

The relationship between depression and violence risk predictors on Elderly

The purpose of this study was to understand the correlation between the elderly with depressive symptomatology and the predictors of the risk of violence against them. The method used was a quantitative approach using the Statistical Package program for Social Sciences. There was a participation of 237 elderly people aged 65-96 years, of the project “Aging in Safety in Alentejo - Understanding to Act”, at the University of Évora. The Geriatric Depression Scale and the Predictors of Risk of Violence (an adaptation of the Elder Abuse and Neglect-Risk Assessment Tool and Vulnerability to Abuse Screening Scale) were applied. About the results, 50 elderly (21.1%) had mild depressive symptomatology, and 14 (5.9%) had severe depressive symptomatology. Of the 64 elderly individuals who presented depressive symptomatology 55 were female. In the relationship between the severity of depressive symptomatology and predictors of risk of violence, significant results were found in three dimensions: current supports and relationships, family context and cognitive / emotional difficulties. The main conclusion of the study is that factors like no social support networks, complex family context and cognitive and emotional changes, contribute to greater physical and mental vulnerability of the elderly, resulting in cases of anxiety and stress, which present a depressive symptomatology and the risk of violence

Diluted antiferromagnet in a ferromagnetic enviroment

The question of robustness of a network under random ``attacks'' is treated in the framework of critical phenomena. The persistence of spontaneous magnetization of a ferromagnetic system to the random inclusion of antiferromagnetic interactions is investigated. After examing the static properties of the quenched version (in respect to the random antiferromagnetic interactions) of the model, the persistence of the magnetization is analysed also in the annealed approximation, and the difference in the results are discussed

Dirac-Surface-State-Dominated Spin to Charge Current Conversion in the Topological Insulator (Bi0.22Sb0.78)2Te3(Bi_{0.22}Sb_{0.78})_2Te_3 Films at Room Temperature

We report the spin to charge current conversation in an intrinsic topological insulator (TI) $(Bi_{0.22}Sb_{0.78})_2Te_3$ film at room temperature. The spin currents are generated in a thin layer of permalloy (Py) by two different processes, spin pumping (SPE) and spin Seebeck effects (SSE). In the first we use microwave-driven ferromagnetic resonance of the Py film to generate a SPE spin current that is injected into the TI $(Bi_{0.22}Sb_{0.78})_2Te_3$ layer in direct contact with Py. In the second we use the SSE in the longitudinal configuration in Py without contamination by the Nernst effect made possible with a thin NiO layer between the Py and $(Bi_{0.22}Sb_{0.78})_2Te_3$ layers. The spin-to-charge current conversion is attributed to the inverse Edelstein effect (IEE) made possible by the spin-momentum locking in the electron Fermi contours due to the Rashba field. The measurements by the two techniques yield very similar values for the IEE parameter, which are larger than the reported values in the previous studies on topological insulators.Comment: 18 pages and 7 figure

Aerodynamic study of a drag reduction system and its actuation system for a formula student competition car

This work presents a computational fluid dynamic (CFD) analysis of a drag reduction system (DRS) used in a Formula Student competition vehicle, focusing on the interaction between the triple wing elements, as well as on the electrical actuators used to provide movement to the upper two flaps. The S1123 wing profile was chosen, and a 2D analysis of the wing profile was made. The trailing edge was rounded off to conform to Formula Student competition safety rules, resulting in around a 4% decrease in the lift coefficient and around a 12% increase in the drag coefficient for an angle of attack of 12°, compared to the original wing profile. The multi-element profile characteristics are: wing main plate with 4°, first flap 28°, and second flap 60°. To evaluate the wing operation, end plates and electrical linear actuators were added, generating a maximum lift coefficient of 1.160 and drag coefficient of 0.397, which provides around a 10% reduction in lift and a 9% increase in drag compared to the absence of the linear actuators. When activating the DRS, the flap rotation generates about a 78% decrease in the aerodynamic drag coefficient and 53% in the lift coefficient for the minimum aerodynamic drag setting.info:eu-repo/semantics/publishedVersio