Policy Regimes, Policy Shifts, and U.S. Business Cycles

Session - Monetary EconomicsUsing an estimated DSGE model that features monetary and fiscal policy interactions and allows for equilibrium indeterminacy, we find that a passive monetary and passive fiscal policy regime prevailed in the pre-Volcker period while an active monetary and passive fiscal policy regime prevailed post-Volcker. Since both monetary and fiscal policies were passive pre-Volcker, there was equilibrium indeterminacy that gave rise to self-fulfilling beliefs and resulted in substantially different transmission mechanisms of policy as compared to conventional models: unanticipated increases in interest rates increased inflation and output while unanticipated increases in lump-sum taxes decreased inflation and output. Unanticipated shifts in monetary and fiscal policies however, played no substantial role in explaining the variation of inflation and output at any horizon in either of the time periods. Pre-Volcker, in sharp contrast to post-Volcker, we find that a time-varying inflation target does not explain low-frequency movements in inflation. A combination of shocks account for the dynamics of output, inflation, and government debt, with the relative importance of a particular shock quite different in the two time-periods due to changes in the systematic responses of policy. Finally, in a counterfactual exercise, we show that had the monetary policy regime of the post-Volcker era been in place pre-Volcker, inflation volatility would have been lower by 34% and the rise of inflation in the 1970s would not have occurred.postprin

Inflation dynamics: the role of public debt and policy regimes

Session III-7: Macroeconomics IV - Policy Regimes and DSGE ModelsWe investigate the impact of a time-varying inflation target and changing monetary and fiscal policy stances on the dynamics of inflation in a DSGE model. Under an active monetary and passive fiscal policy regime, inflation closely follows the path of the inflation target and a stronger reaction of monetary policy to inflation decreases the equilibrium response of inflation to non-policy shocks. In sharp contrast, under an active fiscal and passive monetary policy regime, inflation moves in an opposite direction from the inflation target and a stronger reaction of monetary policy to inflation increases the equilibrium response of inflation to non-policy shocks. Moreover, a weaker response of fiscal policy to debt decreases the response of inflation to non-policy shocks. These results are due to variation in the value of public debt that lead to wealth effects on households. Finally, under a passive monetary and passive fiscal policy regime, because of equilibrium indeterminacy, theory provides no clear answer on the behavior of inflation. We characterize these results analytically in a simple model and numerically in a richer quantitative model.postprin

Optimal Monetary Policy in a Currency Union with Interest Rate Spreads

The Conference papers' website is located at http://dev3.cepr.org/meets/wkcn/1/1806/papers/default.htmPoster Session 1A Euro Area Business Cycle Network (EABCN) ConferenceWe study optimal monetary policy in a two-country currency union model with nominal and financial frictions. In addition to, and independent from, the standard transmission mechanism associated with sticky prices, financial frictions combined with asymmetric asset positions introduce a wealth redistribution role for monetary policy in our model. Financial frictions also lead to a spread between the deposit and borrowing interest rate and variation in the spread affects both aggregate variables, by affecting total spending, and relative (cross-country) variables, by redistributing wealth across countries. Moreover, the interactions between nominal and financial frictions amplify the effects of monetary policy; imply that a strict inflation targeting policy of setting union-wide inflation to zero is never optimal and that optimal policy never attains efficiency; and lead to a novel policy trade-o¤ for the central bank in stabilizing relative consumption versus the relative price gap (the deviation of relative prices from their efficient level). Finally, under optimal monetary policy, in response to an aggregate purely financial shock that causes an increase in the interest rate spread, the central bank strongly decreases the deposit rate, which reduces aggregate and distributional inefficiencies by mitigating the drop in output and inflation and the rise in relative consumption and prices. We also show that while a traditional Taylor rule approximates optimal policy imperfectly, especially in response to the financial shock, a spread-adjusted Taylor rule performs better as it helps the real interest rate track the efficient rate of interest.postprin

Improving the energy efficiency of room air conditioners in China: Costs and benefits

China is the world's largest consumer of room air conditioners, and it contributes about a quarter of global space cooling CO2 emissions. We model the costs and benefits of recently proposed new room air conditioner minimum energy performance standards (MEPS) in China. Our results suggest that newly proposed MEPS brings accumulative CO2 emissions reductions of 12.8% between 2019 and 2050, and accumulative bill saving of 2620 billion RMB to China's consumers. The benefits of the proposed MEPS decrease with longer MEPS revision intervals and increase with shorter intervals—indicating that the intervals should be balanced to maximize benefits while accommodating constraints due to air conditioner manufacturer design cycles. We also model potential nationwide benefits from higher MEPS. Across two increasingly aggressive MEPS scenarios, China's room air conditioner electricity consumption and CO2 emissions in 2050 are both reduced by 15–53% compared to the proposed MEPS. The highest-efficiency scenario (reaching MEPS of annual performance factor 5.4 in 2025) provides the largest long-term national benefits. These results could inform development of a Chinese regulatory regime that effectively updates room air conditioner MEPS. Because China is the world's largest manufacturer of room air conditioners, the economic, energy, and emissions benefits resulting from higher Chinese MEPS could also have a global reach

Association analysis of polymorphism in KIAA1717, HUMMLC2B, DECR1 and FTO genes with meat quality traits of the Berkshire breed

Single nucleotide polymorphisms (SNPs) in KIAA1717, HUMMLC2B, DECR1, and FTO genes have been found to be associated with some pork meat quality traits. In this study, we discovered that, in addition to meat quality traits reported previously, SNPs in these genes also are significantly associated with other meat quality traits in the Berkshire breed. A total of 323 Berkshire pigs bred under the same conditions were used for meat quality evaluation and polymerase chain reaction-amplified genes with restriction endonucleases (PCR-RFLP) genotyping analyses. The association analysis of RFLP genotyping with meat quality traits revealed that the SNPs in these 4 genes have novel associations with multiple meat quality traits (p < 0.01 or p < 0.05); a SNP in KIAA1717 was associated with meat color (CIE L), backfat thickness, drip loss, water-holding capacity, and pH24hr; a SNP in HUMMLC2B was associated with chemical composition (collagen), drip loss, shear force, and pH24hr; a SNP in DECR1 was associated with meat color (CIE a and b) and backfat thickness; and a SNP in FTO was associated with meat color (CIE L, a and b), protein content, drip loss, and water-holding capacity. Taken collectively, our results suggest that these 4 SNPs may be used for marker-assisted selection as a genetic marker for meat quality traits in Berkshire pigs.Key words: Berkshire, genetic markers, meat quality, SN

Towards the “ultimate earthquake-proof” building: Development of an integrated low-damage system

The 2010–2011 Canterbury earthquake sequence has highlighted the severe mismatch between societal expectations over the reality of seismic performance of modern buildings. A paradigm shift in performance-based design criteria and objectives towards damage-control or low-damage design philosophy and technologies is urgently required. The increased awareness by the general public, tenants, building owners, territorial authorities as well as (re)insurers, of the severe socio-economic impacts of moderate-strong earthquakes in terms of damage/dollars/ downtime, has indeed stimulated and facilitated the wider acceptance and implementation of cost-efficient damage-control (or low-damage) technologies. The ‘bar’ has been raised significantly with the request to fast-track the development of what the wider general public would hope, and somehow expect, to live in, i.e. an “earthquake-proof” building system, capable of sustaining the shaking of a severe earthquake basically unscathed. The paper provides an overview of recent advances through extensive research, carried out at the University of Canterbury in the past decade towards the development of a low-damage building system as a whole, within an integrated performance-based framework, including the skeleton of the superstructure, the non-structural components and the interaction with the soil/foundation system. Examples of real on site-applications of such technology in New Zealand, using concrete, timber (engineered wood), steel or a combination of these materials, and featuring some of the latest innovative technical solutions developed in the laboratory are presented as examples of successful transfer of performance-based seismic design approach and advanced technology from theory to practice

Osteosarcoma of the rib

This case describes the radiological-surgical correlation of a rare case of osteosarcoma of the rib in a 15-year-old boy. Successful repair of his chest wall defect using a wire mesh following extensive surgical resection of the tumour is highlighted, such a procedure being the first instituted at our centre

Signal Transduction Pathways in the Pentameric Ligand-Gated Ion Channels

The mechanisms of allosteric action within pentameric ligand-gated ion channels (pLGICs) remain to be determined. Using crystallography, site-directed mutagenesis, and two-electrode voltage clamp measurements, we identified two functionally relevant sites in the extracellular (EC) domain of the bacterial pLGIC from Gloeobacter violaceus (GLIC). One site is at the C-loop region, where the NQN mutation (D91N, E177Q, and D178N) eliminated inter-subunit salt bridges in the open-channel GLIC structure and thereby shifted the channel activation to a higher agonist concentration. The other site is below the C-loop, where binding of the anesthetic ketamine inhibited GLIC currents in a concentration dependent manner. To understand how a perturbation signal in the EC domain, either resulting from the NQN mutation or ketamine binding, is transduced to the channel gate, we have used the Perturbation-based Markovian Transmission (PMT) model to determine dynamic responses of the GLIC channel and signaling pathways upon initial perturbations in the EC domain of GLIC. Despite the existence of many possible routes for the initial perturbation signal to reach the channel gate, the PMT model in combination with Yen's algorithm revealed that perturbation signals with the highest probability flow travel either via the β1-β2 loop or through pre-TM1. The β1-β2 loop occurs in either intra- or inter-subunit pathways, while pre-TM1 occurs exclusively in inter-subunit pathways. Residues involved in both types of pathways are well supported by previous experimental data on nAChR. The direct coupling between pre-TM1 and TM2 of the adjacent subunit adds new insight into the allosteric signaling mechanism in pLGICs. © 2013 Mowrey et al

Transgenic expression of the dicotyledonous pattern recognition receptor EFR in rice leads to ligand-dependent activation of defense responses

Plant plasma membrane localized pattern recognition receptors (PRRs) detect extracellular pathogen-associated molecules. PRRs such as Arabidopsis EFR and rice XA21 are taxonomically restricted and are absent from most plant genomes. Here we show that rice plants expressing EFR or the chimeric receptor EFR::XA21, containing the EFR ectodomain and the XA21 intracellular domain, sense both Escherichia coli- and Xanthomonas oryzae pv. oryzae (Xoo)-derived elf18 peptides at sub-nanomolar concentrations. Treatment of EFR and EFR::XA21 rice leaf tissue with elf18 leads to MAP kinase activation, reactive oxygen production and defense gene expression. Although expression of EFR does not lead to robust enhanced resistance to fully virulent Xoo isolates, it does lead to quantitatively enhanced resistance to weakly virulent Xoo isolates. EFR interacts with OsSERK2 and the XA21 binding protein 24 (XB24), two key components of the rice XA21-mediated immune response. Rice-EFR plants silenced for OsSERK2, or overexpressing rice XB24 are compromised in elf18-induced reactive oxygen production and defense gene expression indicating that these proteins are also important for EFR-mediated signaling in transgenic rice. Taken together, our results demonstrate the potential feasibility of enhancing disease resistance in rice and possibly other monocotyledonous crop species by expression of dicotyledonous PRRs. Our results also suggest that Arabidopsis EFR utilizes at least a subset of the known endogenous rice XA21 signaling components

The phylogenetically-related pattern recognition receptors EFR and XA21 recruit similar immune signaling components in monocots and dicots

During plant immunity, surface-localized pattern recognition receptors (PRRs) recognize pathogen-associated molecular patterns (PAMPs). The transfer of PRRs between plant species is a promising strategy for engineering broad-spectrum disease resistance. Thus, there is a great interest in understanding the mechanisms of PRR-mediated resistance across different plant species. Two well-characterized plant PRRs are the leucine-rich repeat receptor kinases (LRR-RKs) EFR and XA21 from Arabidopsis thaliana (Arabidopsis) and rice, respectively. Interestingly, despite being evolutionary distant, EFR and XA21 are phylogenetically closely related and are both members of the sub-family XII of LRR-RKs that contains numerous potential PRRs. Here, we compared the ability of these related PRRs to engage immune signaling across the monocots-dicots taxonomic divide. Using chimera between Arabidopsis EFR and rice XA21, we show that the kinase domain of the rice XA21 is functional in triggering elf18-induced signaling and quantitative immunity to the bacteria Pseudomonas syringae pv. tomato (Pto) DC3000 and Agrobacterium tumefaciens in Arabidopsis. Furthermore, the EFR:XA21 chimera associates dynamically in a ligand-dependent manner with known components of the EFR complex. Conversely, EFR associates with Arabidopsis orthologues of rice XA21-interacting proteins, which appear to be involved in EFR-mediated signaling and immunity in Arabidopsis. Our work indicates the overall functional conservation of immune components acting downstream of distinct LRR-RK-type PRRs between monocots and dicots