The dynamics of recoveries

Business cycles ; Inventories

Recessions and recoveries in real business cycle models: do real business cycle models generate cyclical behavior?

Business cycles ; Recessions

The relative price effects of monetary shocks

We document the response of the individual components of the Producer Price Index (PPI) to commonly used measures of monetary shocks, and show that these responses are at variance with many widely-used “macro” models of monetary non-neutrality. Monetary shocks are shown to have large relative price effects, resulting in an increase in the dispersion of the cross-section distribution of prices. Furthermore, in response to a contractionary (expansionary) monetary shock, a substantial number of prices tend to rise (fall). Most of the existing models of monetary nonneutrality are not capable of replicating these types of relative price responses.

Are deep recessions followed by strong recoveries? Results for the G-7 countries

Group of Seven countries ; Recessions

An equilibrium analysis of relative price changes and aggregate inflation

Inflation (Finance) ; Prices

Are deep recessions followed by strong recoveries?

Business cycles ; Monetary theory ; Recessions

Recessions and recoveries

The U.S. recession that began in July 1990 may have ended in April or May 1991. The pace of the subsequent recovery has been so sluggish as to be indistinguishable, in the eyes of many, from continued recession. One explanation for the sluggish pace of the recovery is that the recession itself was not particularly severe, at least when compared with others. ; In this article, Mark Wynne and Nathan Balke use monthly data on industrial production to examine the hypothesis that the severity of a recession determines the pace of the subsequent recovery. They show that, historically, the relationship between growth in the first twelve months of a recovery and the decline in industrial activity from peak to trough is statistically significant. However, there is no relationship between the length of a recession and the strength of the recovery. Consistent with their finding of a bounce-back effect for industrial production, the recovery from the 1990-91 recession is the weakest in the period covered by the Federal Reserve Board's industrial production index, just as the decline in industrial production over the course of that recession is the mildest on record.Production (Economic theory) ; Recessions

Deepwater Drilling: Law, Policy, and Economics of Firm Organization and Safety

Although the causes of the Deepwater Horizon spill are not yet conclusively identified, significant attention has focused on the safety-related policies and practices—often referred to as the safety culture—of BP and other firms involved in drilling the well. This paper defines and characterizes the economic and policy forces that affect safety culture and identifies reasons why those forces may or may not be adequate or effective from the public’s perspective. Two potential justifications for policy intervention are that: a) not all of the social costs of a spill may be internalized by a firm; and b) there may be principal-agency problems within the firm, which could be reduced by external monitoring. The paper discusses five policies that could increase safety culture and monitoring: liability, financial responsibility (a requirement that a firm’s assets exceed a threshold), government oversight, mandatory private insurance, and risk-based drilling fees. We find that although each policy has a positive effect on safety culture, there are important differences and interactions that must be considered. In particular, the latter three provide external monitoring. Furthermore, raising liability caps without mandating insurance or raising financial responsibility requirements could have a small effect on the safety culture of small firms that would declare bankruptcy in the event of a large spill. The paper concludes with policy recommendations for promoting stronger safety culture in offshore drilling; our preferred approach would be to set a liability cap for each well equal to the worst-case social costs of a spill, and to require insurance up to the cap.Deepwater Horizon, BP oil spill, safety culture, government policy, liability caps, financial responsibility, insurance

Identification and Control of a Soft-Robotic Bladder Towards Impedance-Style Haptic Terrain Display

This paper evaluates the capabilities of a soft robotic pneumatic actuator derived from the terrain display haptic device, "The Smart Shoe." The bladder design of the Smart Shoe is upgraded to include a pressure supply and greater output flow capabilities. A bench top setup is created to rigorously test this new type of actuator. The bandwidth and stiffness capability of this new actuator are evaluated relative to forces and displacements encountered during human gait. Four force vs. displacement profiles relevant to haptic terrain display are proposed and tested using sliding-mode tracking control. It was found that the actuator could sustain a stiffness similar to a soft-soled shoe on concrete, as well as other terrain (sand, dirt, etc.), while the bandwidth of 7.3 Hz fell short of the goal bandwidth of 10 Hz. Compressions of the bladder done at 20 mm/s, which is similar to the speed of human gait, showed promising results in tracking a desired force trajectory. The results in this paper show this actuator is capable of displaying haptic terrain trajectories, providing a basis for futurep wearable haptic terrain display devices

Organizational Design for Spill Containment in Deepwater Drilling Operations in the Gulf of Mexico: Assessment of the Marine Well Containment Company (MWCC)

The Deepwater Horizon oil spill in the Gulf of Mexico in April 2010 led to the deaths of 11 workers, a six-month moratorium on deepwater drilling in the Gulf, and nearly three months of massive engineering and logistics efforts to stop the spill. The series of failures before the well was finally capped and the spill contained revealed an inability to deal effectively with a well in deepwater and ultradeepwater. Ensuring that containment capabilities are adequate for drilling operations at these depths is therefore a salient challenge for government and industry. In this paper we assess the Marine Well Containment Company (MWCC), a consortium aimed at designing and building a system capable of containing future deepwater spills in the Gulf. We also consider alternatives for long-term readiness for deepwater spill containment. We focus on the roles of liability and regulation as determinants of readiness and the adequacy of incentives for technological innovation in oil spill containment technology to keep pace with advances in deepwater drilling capability. Liability and regulation can significantly influence the strength of these incentives. In addition, we discuss appropriate governance structure as a major determinant of the effectiveness of MWCC.oil spill, containment, industry R&D, liability, regulation, governance, innovation