Global inflation

This paper shows that inflation in industrialized countries is largely a global phenomenon. First, inflations of (22) OECD countries have a common factor that alone account for nearly 70% of their variance. This large variance share that is associated to Global Inflation is not only due to the trend components of inflation (up from 1960 to 1980 and down thereafter) but also to fluctuations at business cycle frequencies. Second, Global Inflation is, consistently with standard models of inflation, a function of real developments at short horizons and monetary developments at longer horizons. Third, there is a very robust "error correction mechanism" that brings national inflation rates back to Global Inflation. This model consistently beats the previous benchmarks used to forecast inflation 1 to 8 quarters ahead across samples and ountries. JEL Classification: E31, E37, F42common factor, inflation, international business cycle, OECD countries

A VAR description of the effects of monetary policy in the individual countries of the euro area

This paper presents a complete set of results describing the effects of monetary policy in 10 countries of the euro area for the pre-EMU period. For each country, we impose one of three identification schemes depending on its monetary integration with Germany, the nominal anchor of the ERM. The first identification scheme applies to Germany, the second to countries of the core EMS (Austria, Belgium and the Netherlands) and the third to all the other countries. An unexpected rise in the short-term interest rate leads to a decrease in GDP, (with investment and exports falling more than consumption) and a gradual decrease in prices for all countries. We also show that, given the width of the error bands around the estimate, we cannot reject that the effects of monetary policy on GDP and on prices are broadly similar in the individual countries of the euro area JEL Classification: E52Euro area countries, monetary policy, VARs

Are inflation targets good inflation forecasts?

The authors show that quantified inflation objectives, which have been adopted by many industrialized countries, can be used as rule-of-thumb forecasting devices. Remarkably, they yield smaller forecast errors than widely used forecasting models and the forecasts of professional experts.Inflation (Finance)

Forecasting the central bank’s inflation objective is a good rule of thumb

This paper first shows that the forecast error incurred when assuming that future inflation will be equal to the inflation target announced by the central bank is typically at least as small and often smaller than forecast errors of model-based and published inflation forecasts. It then shows that there are substantial benefits in having rule-of-thumb agents who simply trust that the central bank will deliver its pre-announced inflation objective. JEL Classification: E5credibility, inflation forecast, inflation targeting, monetary policy

Investment and monetary policy in the euro area

This paper analyses the effects of a change in monetary policy on firms' investment in Germany, France, Italy and Spain using a data set which provides aggregated balance sheet and profit and loss account data for 17 different industries and 3 different size classes. The main findings are twofold. First, in each of the four countries a change in the user cost of capital, which in turn is affected by interest rates, has both statistically and economically significant effects on investment. Second, while the average interest rate on debt is generally higher for small firms than for large firms, there is little evidence that the effects of monetary policy on small firms are larger JEL Classification: E52

Minimally invasive strabismus surgery (MISS) for inferior obliquus recession

Purpose: To present a novel, minimally invasive strabismus surgery (MISS) technique for inferior obliquus recessions. Methods: Graded MISS inferior obliquus recessions were performed in 20 eyes of 15 patients by applying two small conjunctival cuts, one at the insertion of inferior obliquus and another where the scleral anchoring of the muscle occurred. Results: The amount of recession was 12.2 ± 2.3mm (range 6 to 14mm). The vertical deviation, which was measured in 25° of adduction, decreased from preoperatively 12.8° ± 5.6° to 2.7° ± 2.2° (p  0.1). In one eye (2.5%) the two cuts had to be joined because of excessive bleeding. Binocular vision improved in eight patients, remained unchanged in six patients, and decreased from 30 to 60 arcsec in one patient (p > 0.1). Conjunctival and lid swelling were hardly visible on the first postoperative day in primary gaze position in 10/20 (50%) of eyes. Five of the eyes (25%) had mild and five (25%) moderate visibility of surgery. One patient out of 15 (7%) needed repeat surgery because of insufficient reduction of the sursoadduction within the first 6months. The dose-effect relationship 6months postoperatively for an accommodative near target at 25° adduction was 0.83° ± 0.43° per mm of recession. Conclusions: This study demonstrates that small-incision, minimal dissection inferior obliquus graded recessions are feasible and effective to improve ocular alignment in patients with strabismus sursoadductoriu