Taylor rules, central bank preferences and inflation targeting

The objective of this paper is to infer the policy preferences of three inflation targeting central banks, Australia, Canada and New Zealand, using an estimated New Keynesian small open economy model. While I assume that the monetary authorities optimise, I depart from previous research by assuming that monetary policy is implemented via simple Taylor-type rules, as suggested by most of the empirical literature. I then derive the weights in the objective function that make the resulting optimal interest rate rule coincide with its estimated counterpart. Therefore, from the central bank’s point of view, actual policy is optimal

On the unimportance of commitment for monetary policy

In a New Keynesian model where the trade-off between stabilising the aggregate inflation rate and the output gap arises from sectoral asymmetries, the gains from commitment are either zero or negligible. Thus, to the extent that economic fluctuations are caused by sectoral shocks, policies designed to overcome the stabilisation bias are aiming to correct an unimportant problem

Commodity price shocks and macroeconomic dynamics

We analyse the transmission mechanism of commodity price shocks in emerging economies. Using a panel vector autoregression, we find that the shock leads to a real exchange rate appreciation, increases in output, inflation the nominal interest rate and the trade balance, and a fall in the unemployment rate. The transmission mechanism can be understood using a dynamic stochastic general equilibrium model of a small commodity-exporting open economy with nominal as well as search and matching frictions. We find that the conduct of monetary policy is key to both the variables’ dynamics as well as to the magnitude of Dutch disease effects

Fiscal policy shocks and international spillovers

The domestic and international transmission mechanism of fiscal policy shocks are analysed in large developed economies. Using a Bayesian VAR approach, we find that fiscal expansions are associated with increases in output, private consumption and, in many cases, with an in- crease in private investment. The terms of trade, which affect the international transmission of fiscal policy shocks, are found to depreciate in response to a fiscal expansion, thus transferring some of the increased domestic purchasing power abroad. A US government spending shock is expansionary for all non-US G7 members. A German government spending shock is expansion- ary for most, but not all European economies, both within and outside the Euro Area. The dynamics of the BVAR are rationalised using a dynamics stochastic general equilibrium model where heterogeneous households and firms face borrowing constraints

Psychosocial impact of undergoing prostate cancer screening for men with BRCA1 or BRCA2 mutations.

OBJECTIVES: To report the baseline results of a longitudinal psychosocial study that forms part of the IMPACT study, a multi-national investigation of targeted prostate cancer (PCa) screening among men with a known pathogenic germline mutation in the BRCA1 or BRCA2 genes. PARTICPANTS AND METHODS: Men enrolled in the IMPACT study were invited to complete a questionnaire at collaborating sites prior to each annual screening visit. The questionnaire included sociodemographic characteristics and the following measures: the Hospital Anxiety and Depression Scale (HADS), Impact of Event Scale (IES), 36-item short-form health survey (SF-36), Memorial Anxiety Scale for Prostate Cancer, Cancer Worry Scale-Revised, risk perception and knowledge. The results of the baseline questionnaire are presented. RESULTS: A total of 432 men completed questionnaires: 98 and 160 had mutations in BRCA1 and BRCA2 genes, respectively, and 174 were controls (familial mutation negative). Participants' perception of PCa risk was influenced by genetic status. Knowledge levels were high and unrelated to genetic status. Mean scores for the HADS and SF-36 were within reported general population norms and mean IES scores were within normal range. IES mean intrusion and avoidance scores were significantly higher in BRCA1/BRCA2 carriers than in controls and were higher in men with increased PCa risk perception. At the multivariate level, risk perception contributed more significantly to variance in IES scores than genetic status. CONCLUSION: This is the first study to report the psychosocial profile of men with BRCA1/BRCA2 mutations undergoing PCa screening. No clinically concerning levels of general or cancer-specific distress or poor quality of life were detected in the cohort as a whole. A small subset of participants reported higher levels of distress, suggesting the need for healthcare professionals offering PCa screening to identify these risk factors and offer additional information and support to men seeking PCa screening

Robust estimation of bacterial cell count from optical density

Optical density (OD) is widely used to estimate the density of cells in liquid culture, but cannot be compared between instruments without a standardized calibration protocol and is challenging to relate to actual cell count. We address this with an interlaboratory study comparing three simple, low-cost, and highly accessible OD calibration protocols across 244 laboratories, applied to eight strains of constitutive GFP-expressing E. coli. Based on our results, we recommend calibrating OD to estimated cell count using serial dilution of silica microspheres, which produces highly precise calibration (95.5% of residuals <1.2-fold), is easily assessed for quality control, also assesses instrument effective linear range, and can be combined with fluorescence calibration to obtain units of Molecules of Equivalent Fluorescein (MEFL) per cell, allowing direct comparison and data fusion with flow cytometry measurements: in our study, fluorescence per cell measurements showed only a 1.07-fold mean difference between plate reader and flow cytometry data

Commodity price shocks, labour market dynamics and monetary policy in small open economies

We analyse the transmission mechanism of commodity price shocks in inflation targeting emerging economies. Using a panel vector autoregression, we find that for a commodity exporter, the shock causes a real exchange rate appreciation, increases in output, inflation, the nominal interest rate and the trade balance, and a fall in the unemployment rate. The mechanism underlying the dynamics driving the VAR can be understood using a dynamic stochastic general equilibrium model. Search and matching frictions in the labour market and the conduct of monetary policy are key for the model to match the data

Monetary policy rules in theory and in practice: evidence from the UK and the US

Given the large amount of interaction between research on monetary policy and its practice, this article examines whether some simple monetary policy rules that have been proposed in the academic literature, part of which has originated from within central banks, provide a reasonable characterization of actual policy in the United Kingdom and the United States. The article finds the simple rule that describes best the actual US monetary policy is a speed limit rule with dynamics, whilst for the UK it is a forward-looking rule. The simpler dynamics in the UK's monetary policy rule are reflective of the lower persistence of inflation as a result of its policy of inflation targeting.