Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making

We report the results of an experimental analysis of monetary policy decision making under uncertainty. A large sample of economics students played a simple monetary policy game, both as individuals and in committees of five players. Our findings - that groups make better decisions than individuals - accord with previous work by Blinder and Morgan. We also attempt to establish why this is so. Some of the improvement is related to the ability of committees to strip out the effect of bad play, but there is a significant additional improvement, which we associate with players learning from each other’s interest rate decisions.Monetary policy; experimental economics; central banking; uncertainty

Houses as collateral: has the link between house prices and consumption in the U.K. changed?

Paper for a conference sponsored by the Federal Reserve Bank of New York entitled Financial Innovation and Monetary TransmissionHousing - Finance ; Housing - Great Britain ; Consumption (Economics) - Great Britain

House prices, consumption, and monetary policy: a financial accelerator approach

We consider a general equilibrium model where asymmetric information problems create frictions in credit markets used by households. In our economy, houses serve as collateral to lower the agency costs related to borrowing. We show that this amplifies the effect of monetary policy shocks on housing investment, house prices and consumption. We consider the effect of a structural change in credit markets that lowers the transaction costs of additional borrowing against housing equity. We show that such a change would increase the effect of monetary policy shocks on consumption, but would decrease the effect on house prices and housing investment.house prices, credit frictions, monetary policy, financial accelerator, consumption

The changing treatment of arthritis

Reproduced with permission from Australian Prescriber The document attached has been archived with permission from the publisher/copyright holder.Leslie G. Cleland, Susanna M. Proudman, Michael J. James and Peter Penglis

Fish oil: what the prescriber needs to know

There is a general belief among doctors, in part grounded in experience, that patients with arthritis need nonsteroidal anti-inflammatory drugs (NSAIDs). Implicit in this view is that these patients require the symptomatic relief provided by inhibiting synthesis of nociceptive prostaglandin E(2), a downstream product of the enzyme cyclo-oxygenase (COX), which is inhibited by NSAIDs. However, the concept of 'safe' NSAIDs has collapsed following a multiplicity of observations establishing increased risk for cardiovascular events associated with NSAID use, especially but not uniquely with the new COX-2-selective NSAIDs. This mandates greater parsimony in the use of these agents. Fish oils contain a natural inhibitor of COX, reduce reliance on NSAIDs, and reduce cardiovascular risk through multiple mechanisms. Fish oil thus warrants consideration as a component of therapy for arthritis, especially rheumatoid arthritis, in which its symptomatic benefits are well established. A major barrier to the therapeutic use of fish oil in inflammatory diseases is ignorance of its mechanism, range of beneficial effects, safety profile, availability of suitable products, effective dose, latency of effects and instructions for administration. This review provides an evidence-based resource for doctors and patients who may choose to prescribe or take fish oil

Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making

We report the results of an experimental analysis of monetary policy decision making under uncertainty. A large sample of economics students played a simple monetary policy game, both as individuals and in committees of five players. Our findings - that groups make better decisions than individuals - accord with previous work by Blinder and Morgan. We also attempt to establish why this is so. Some of the improvement is related to the ability of committees to strip out the effect of bad play, but there is a significant additional improvement, which we associate with players learning from each other’s interest rate decisions

Evolving patterns of international trade

Theoretical models of growth and trade suggest that patterns of international specialization are dynamic and evolve endogenously over time. Initial comparative advantages are either reinforced or gradually unwound with the passage of time. This paper puts forward an empirical framework for modeling international trade dynamics that uses techniques widely employed in the cross-country literature on income convergence. On applying this framework to industry-level data, evidence is found for significant differences in international trade dynamics among the G-5 economies