Globalization and Inflation Dynamics: the Impact of Increased Competition

This paper analyzes the potential effect of global market competition on inflation dynamics. It does so through the lens of the Calvo model of staggered price-setting, which implies that inflation depends on expected future inflation and a measure of marginal costs. I modify the assumption of a constant elasticity of demand, standard in this model, to provide a channel through which an increase in the number of traded goods may affect the degree of strategic complementarity in price setting, and hence alter the dynamic response of inflation to marginal costs. I first discuss the behavior of the variables that drive the impact of trade openness on this response, and then I evaluate whether an increase in the variety of traded goods of the size observed in the US in the `90s might have a sizable quantitative impact. I find that it is difficult to argue that such an increase in trade should have generated an increase in US market competition leading to a decline in the slope of the inflation-marginal cost relation.

A Search for a Structural Phillips Curve*

The foundation of the New Keynesian Phillips curve is a model of price setting with nominal rigidities which implies that the dynamics of inflation are well explained by the evolution of real marginal costs. The objective of this paper is to analyze whether this is a structurally-invariant relationship. To assess this, we first estimate an unrestricted time-series model for inflation, unit labor costs, and other variables, and present evidence that their joint dynamics are well represented by a vector autoregression with drifting coefficients and volatilities, as in Cogley and Sargent (2004). Then, following Sbordone (2002, 2003), we apply a two-step minimum distance estimator to estimate deep parameters. Taking as given estimates of the unrestricted VAR, we estimate parameters of the NKPC by minimizing a quadratic function of the restrictions that the theoretical model imposes on the reduced form. Our results suggest that it is possible to reconcile a constant-parameter NKPC with the drifting-parameter VAR, and therefore we argue that the price-setting model is structurally invariant.Inflation; Phillips curve; time-varying VAR.

Sources of New York employment fluctuations

The authors analyze employment growth in the metropolitan region and its relationship to employment in the United States as a whole. They identify a strong cyclical link between the region and the nation, punctuated by occasional, persistent shifts in the region's underlying growth rate. Some shifts are found to be related to industry factors, such as the restructuring of financial services in the late 1980s. However, the authors attribute a large and increasing share of New York employment fluctuations to region-specific factors.Employment (Economic theory) ; New York (N.Y.) ; Federal Reserve District, 2nd

Policy analysis using DSGE models: an introduction

Many central banks have come to rely on dynamic stochastic general equilibrium, or DSGE, models to inform their economic outlook and to help formulate their policy strategies. But while their use is familiar to policymakers and academics, these models are typically not well known outside these circles. This article introduces the basic structure, logic, and application of the DSGE framework to a broader public by providing an example of its use in monetary policy analysis. The authors present and estimate a simple New Keynesian DSGE model, highlighting the core features that this basic specification shares with more elaborate versions. They then apply the estimated model to study the sources of the sudden increase in inflation that occurred in the first half of 2004. One important lesson derived from this exercise is that the management of expectations can be a more effective tool for stabilizing inflation than actual movements in the policy rate. This result is consistent with the increasing focus on the pronouncements of central bankers regarding their future actions.Econometric models ; Stochastic analysis ; Keynesian economics ; Inflation (Finance) ; Monetary policy ; Banks and banking, Central

The low Sr/Ba ratio on some extremely metal-poor stars

It has been noted that, in classical extremely metal-poor (EMP) stars, the abundance ratio of Sr and Ba, is always higher than [Sr/Ba] = -0.5, the value of the solar r-only process; however, a handful of EMP stars have recently been found with a very low Sr/Ba ratio. We try to understand the origin of this anomaly by comparing the abundance pattern of the elements in these stars and in the classical EMP stars. Four stars with very low Sr/Ba ratios were observed and analyzed within LTE approximation through 1D (hydrostatic) model atmosphere, providing homogeneous abundances of nine neutron-capture elements. In CS 22950-173, the only turnoff star of the sample, the Sr/Ba ratio is, in fact, found to be higher than the r-only solar ratio, so the star is discarded. The remaining stars (CS 29493-090, CS 30322-023, HE 305-4520) are cool evolved giants. They do not present a clear carbon enrichment. The abundance patterns of the neutron-capture elements in the three stars are strikingly similar to a theoretical s-process pattern. This pattern could at first be attributed to pollution by a nearby AGB, but none of the stars presents a clear variation in the radial velocity indicating the presence of a companion. The stellar parameters seem to exclude any internal pollution in a TP-AGB phase for at least two of these stars. The possibility that the stars are early-AGB stars polluted during the core He flash does not seem compatible with the theory.Comment: Accepted for publication in Astronomy and Astrophysic

Energy and economic analysis of a residential Solar Organic Rankine plant

To answer the actual energy, water, economic, social and environmental challenges, renewable, distributed power plants need to be developed. Among renewables, solar tri-generative power plants can be a solution where there is big low temperature heating/cooling demand and small electricity demand, like many residential and industrial utilities. In this case, solar thermal plants can produce thermal energy with low cost and high efficiency. The higher temperature heat not needed by the user can be exploited via Organic Rankine Cycle to produce electrical energy and desalinized water via reverse osmosis. The present paper analyses, via TRNSYS simulation, a system composed of 50 m2 of CPC solar thermal collectors, 3 m3 of thermal storage, a synthetic heat transfer fluid, 3 kWe ORC, 8 kWth absorber, 200 l/h direct reverse osmosis desalination device. The system is able to produce power, heating/cooling and fresh water needs for a residential house. Although system’s components are well known technologies, the integration to a efficient and economic working system is still a challenge. Global energy and economic analyses have been performed. Low temperature heating/cooling terminals allow to increase not only the use of thermal energy but also the ORCand absorber efficiency. ORC-Absorber configuration and relative fluids and temperatures are central. Government support and/or cost reduction of 30% are necessary to have positive NPV and acceptable PBT and IR

The Galactic evolution of phosphorus

As a galaxy evolves, its chemical composition changes and the abundance ratios of different elements are powerful probes of the underlying evolutionary processes. Phosphorous is an element whose evolution has remained quite elusive until now, because it is difficult to detect in cool stars. The infrared weak P I lines of the multiplet 1, at 1050-1082 nm, are the most reliable indicators of the presence of phosphorus. The availability of CRIRES at VLT has permitted access to this wavelength range in stellar spectra.We attempt to measure the phosphorus abundance of twenty cool stars in the Galactic disk. The spectra are analysed with one-dimensional model-atmospheres computed in Local Thermodynamic Equilibrium (LTE). The line formation computations are performed assuming LTE. The ratio of phosphorus to iron behaves similarly to sulphur, increasing towards lower metallicity stars. Its ratio with respect to sulphur is roughly constant and slightly larger than solar, [P/S]=0.10+- 0.10. We succeed in taking an important step towards the understanding of the chemical evolution of phosphorus in the Galaxy. However, the observed rise in the P/Fe abundance ratio is steeper than predicted by Galactic chemical evolution model model developed by Kobayashi and collaborators. Phosphorus appears to evolve differently from the light odd-Z elements sodium and aluminium. The constant value of [P/S] with metallicity implies that P production is insensitive to the neutron excess, thus processes other than neutron captures operate. We suggest that proton captures on 30Si and alpha captures on $27Al are possibilities to investigate. We see no clear distinction between our results for stars with planets and stars without any detected planet.Comment: To be published on A&

Experimental tests to recover the photovoltaic power by battery system

The uncertainty and variability of the Renewable Energy Sources (RES) power plants within the power grid is an open issue. The present study focuses on the use of batteries to overcome the limitations associated with the photovoltaic inverter operation, trying to maximize the global energy produced. A set of switches, was placed between a few photovoltaic modules and a commercial inverter, capable to change configuration of the plant dynamically. Such system stores the power that the inverter is not able to let into the grid inside batteries. At the base of this optimization, there is the achievement of two main configurations in which the batteries and the photovoltaic modules are electrically connected in an appropriate manner as a function of inverter efficiency and thus solar radiation. A control board and the relative program, to change the configuration, was designed and implemented, based on the value of the measured radiation, current, batteries voltage, and calculated inverter efficiency. Finally from the cost and impact analysis we can say that, today the technology of lithium batteries, for this application, is still too expensive in comparison with lead-acid batteries