Designing instrument rules for monetary stability: the optimality of interest-rate smoothing

A key issue in monetary policy is that on the importance of following systematic behaviours. The paper revisits the classic debate on rules versus discretion focusing on the design of instrument rules in a manner that push discretionary policy choices in the direction of the commitment equilibrium. It is shown that an instrument rule with an optimal degree of monetary inertia may render negligible the inflationary bias associated with discretion without necessarily implying a trade-off between flexibility and commitment. The rationale for this surprising finding is found in the disciplining effect played by interest-rate smoothing on the incentive to create surprise inflation by reducing suddenly the interest rate within the time horizon of existing nominal contracts. If the degree of gradualism is high it may enhance the credibility of optimal monetary policy as it contrasts the incentive to fool private sector

Time consistent monetary policy reconsidered: may we have a deflationary bias too?

The celebrated inflationary bias of time consistent monetary policy is re-examined. To this end we consider an extended version of the simple Barro and Gordon framework featuring important aspects of actual policy making such as imperfect instrument control, overlapping wage contracts, policy lags and interest rate control. The model developed provides a counterexample to the standard theory as it yields the result that a deflationary bias may be possible as well. The rationale for this surprising result is found in the distortion caused by instrument uncertainty in the trade-off between the costs and benefits associated with surprisingly lower interest rates faced at the margin by the policy maker. If the size of uncertainty is relatively large the distortion created may imply an optimal choice for the instrument which trades off the marginal benefit of lower deflation against the marginal cost of higher than optimal output. The implications of imprecise instrument control for welfare are discussed too. Keywords; monetary policy, time inconsistency, instrument uncertainty, overlapping wage contracts, lags JEL classification: E52, E58

Credibility of optimal monetary delegation: do we really need prohibitive reappointment costs?

The paper examines the current debate on the real effectiveness of delegation in overcoming the problem of time inconsistency that afflicts discretionary monetary policy. An important contribution by Jensen has shown that, when the government is unable to credibly carry out optimal policy and delegates monetary policy to a central banker with an announced incentive scheme, optimal policy can be credible only if reappointment costs are prohibitive. This finding is questioned in the present analysis. In particular we show that, when delegation is not considered as an alternative, but rather as supplementary, to reputation and is conducive to reputation building for the central banker, the circumstances under which optimal delegation can be credible need not be so extreme. This different result is based on the constraint that the central banker's reputation for low inflation imposes on the government's temptation to deviate from its announcements and on the role played by incentive schemes in strengthening the central banker's reputation. Keywords; delegation, reappointment, in‡ationary bias

Designing instrument rules for monetary stability: the optimality of interest-rate smoothing

A key issue in monetary policy is that on the importance of following systematic behaviours. The paper revisits the classic debate on rules versus discretion focusing on the design of instrument rules in a manner that push discretionary policy choices in the direction of the commitment equilibrium. It is shown that an instrument rule with an optimal degree of monetary inertia may render negligible the inflationary bias associated with discretion without necessarily implying a trade-off between flexibility and commitment. The rationale for this surprising finding is found in the disciplining effect played by interest-rate smoothing on the incentive to create surprise inflation by reducing suddenly the interest rate within the time horizon of existing nominal contracts. If the degree of gradualism is high it may enhance the credibility of optimal monetary policy as it contrasts the incentive to fool private sector. Keywords; monetary policy, instrument rules, commitment, discretion, interest-rate smoothing, delegation JEL classification: E52, E58

Unweighted regression models perform better than weighted regression techniques for respondent-driven sampling data: results from a simulation study

Background: It is unclear whether weighted or unweighted regression is preferred in the analysis of data derived from respondent driven sampling. Our objective was to evaluate the validity of various regression models, with and without weights and with various controls for clustering in the estimation of the risk of group membership from data collected using respondent-driven sampling (RDS). Methods: Twelve networked populations, with varying levels of homophily and prevalence, based on a known distribution of a continuous predictor were simulated using 1000 RDS samples from each population. Weighted and unweighted binomial and Poisson general linear models, with and without various clustering controls and standard error adjustments were modelled for each sample and evaluated with respect to validity, bias and coverage rate. Population prevalence was also estimated. Results: In the regression analysis, the unweighted log-link (Poisson) models maintained the nominal type-I error rate across all populations. Bias was substantial and type-I error rates unacceptably high for weighted binomial regression. Coverage rates for the estimation of prevalence were highest using RDS-weighted logistic regression, except at low prevalence (10%) where unweighted models are recommended. Conclusions: Caution is warranted when undertaking regression analysis of RDS data. Even when reported degree is accurate, low reported degree can unduly influence regression estimates. Unweighted Poisson regression is therefore recommended.York University Librarie

Inertia in Taylor Rules

The inertia found in econometric estimates of interest rate rules is a continuing puzzle. Many reasons for it have been offered, though unsatisfactorily, and the issue remains open. In the empirical literature on interest rate rules, inertia in setting interest rates is typically modeled by specifying a Taylor rule with the lagged policy rate on the right hand side. We argue that inertia in the policy rule may simply reflect the inertia in the economy itself, since optimal rules typically inherit the inertia present in the model of the economy. Our hypothesis receives some support from US data. Hence we agree with Rudebusch (2002) that monetary inertia is, at least partly, an illusion, but for different reasons.Monetary Policy, Interest Rate Rules, Taylor rule, Interest Rate Smoothing, Monetary Policy Inertia, Predictability of Interest Rates, Term Structure, Expectations Hypothesis

Do Firm-Bank `Odd Couples' Exacerbate Credit Rationing?

We start considering an optimal matching of opaque (transparent) borrowing firrms with relational (transactional) lending main banks. Next we contemplate the possibility that firm-bank "odd couples" materialize where opaque (transparent) firrms end up matched with transactional (re- lational) main banks. We conjecture the "odd couples" emerge either since the bank's lending technology is not perfectly observable to the rm or because riskier firrms - even though opaque - strategically select transac- tional banks in the hope of being classified as lower risks. Our econometric results show the probability of rationing is larger when firrms and banks match in "odd couples".Relationship Banking, Credit Rationing and Asymmetric Information

Democratización y ciudadanía en centros de estudiantes secundarios

Fil: Rotondi, Gabriela. Universidad Nacional de Córdob

Development of novel inhibitors targeting the tumour-related carbonic anhydrase isoforms and of small molecule ligands targeting the human tyrosinase and tyrosinase related protein 1

This Thesis is focused on the development of novel inhibitors targeting the tumour-related carbonic anhydrase isoforms and on the development of small molecule ligands targeting the human tyrosinase and tyrosinase related protein 1. The carbonic anhydrases (CAs) are a superfamily of metalloenzymes that catalyse the reversible hydration of carbon dioxide (CO2) into bicarbonate (HCO3-) and protons (H+). The human CAs (hCAs), belonging to the α family, are involved in several functions and pathological conditions. Particularly, hCA IX and hCA XII, known as tumour-related isoforms, are selectively upregulated in solid tumours. Though a large number of inhibitors have been developed to date, only two of them are currently in clinical trials highlighting the urgent need of novel and selective inhibitors targeting hCA IX and hCA XII. Thus, the aim of the project was the design, synthesis and SAR analysis of two libraries of compounds based on the 2-(benzylsulfinyl)benzoic acid scaffold and on the saccharin and acesulfame nucleus. Considering the first library of compounds, the chemical modifications attempted on the 2-(benzylthio)benzamide, obtained after a lead optimization of the 2-(benzylsulfinyl)benzoic acid , led to 15 derivatives that appeared to be effective exclusively against hCA IX, though less active than their lead compound. Considering the second library of compounds, the different strategies applied on the saccharin and acesulfame scaffold led to 60 derivatives that exhibited different inhibitory profile mostly related to the presence of moieties of conformational freedom. The molecular modelling studies proposed as inhibition mechanism the anchoring to zinc-bound water molecule. Human tyrosinase (hTYR) and tyrosinase-related protein 1 (TYRP1) are closely related proteins involved in the synthesis of melanin and selectively upregulated in melanoma. Thus, the aim of the project was to develop and evaluate small molecule ligands specific to hTYR and TYRP1 using previously collected data elaborated from the DNA encoded chemical libraries (DELs) and the multivalent approach applied to an alkyne derivative of Thiamidol™. The ligands identified from the DELs after a screening performed on hTYR and TYRP1 resulted active in the micromolar range. The multimerization of an alkyne derivative of Thiamidol™ led to multimeric structures of different valence. among them the tetrameric structure showed the best binding profile though worse than the one of the TA99, a murine antibody targeting TYRP1