Relating commodity prices to underlying inflation: the role of expectations

Temporary supply factors may boost some commodity prices—a drought in the Midwest can jolt food costs, or a conflict in the Middle East might propel oil higher. These, in turn, can increase the overall consumer price index (CPI) and the headline inflation rate. ; Because central bank anti-inflation measures sometimes take a long time to affect prices, policymakers don’t necessarily react to short-term fluctuations in headline inflation (an overall rate that’s not seasonally adjusted). In fact, the mandate of many inflation-targeting central banks is to aim to keep headline inflation at a certain target or within a certain range “over the medium term,” widely recognized as a few years. Thus, even a strict inflation-targeting central bank doesn’t aim to contain short-run headline inflation fluctuations.Supply and demand ; Consumer price indexes ; Banks and banking, Central

Dynamics of warped accretion discs

Accretion discs are present around both stellar-mass black holes in X-ray binaries and supermassive black holes in active galactic nuclei. A wide variety of circumstantial evidence implies that many of these discs are warped. The standard Bardeen--Petterson model attributes the shape of the warp to the competition between Lense--Thirring torque from the central black hole and viscous angular-momentum transport within the disc. We show that this description is incomplete, and that torques from the companion star (for X-ray binaries) or the self-gravity of the disc (for active galactic nuclei) can play a major role in determining the properties of the warped disc. Including these effects leads to a rich set of new phenomena. For example, (i) when a companion star is present and the warp arises from a misalignment between the companion's orbital axis and the black hole's spin axis, there is no steady-state solution of the Pringle--Ogilvie equations for a thin warped disc when the viscosity falls below a critical value; (ii) in AGN accretion discs, the warp can excite short-wavelength bending waves that propagate inward with growing amplitude until they are damped by the disc viscosity. We show that both phenomena can occur for plausible values of the black hole and disc parameters, and briefly discuss their observational implications.Comment: 28 pages, 11 figure

Classroom 4.0

Artificial intelligence, once the stuff of futuristic books and films, is finding its way onto college campuses. How is American higher education adapting to the digital age

Veterans’ Benefits: Pension Benefit Programs

[Excerpt] The Department of Veterans Affairs (VA) administers pension programs for certain low-income veterans and their surviving spouses and dependent children. This report discusses the Improved Disability Pension, which makes payments to certain low-income veterans, and the Improved Death Pension, which makes payments to certain low-income surviving spouses and dependent children of deceased veterans. To qualify for either program, individuals must have become eligible for payments on or after January 1, 1979. Both pension programs were created by P.L. 95-588, the Veterans and Survivors Pension Improvement Act of 1978. In addition, this report discusses a special pension program for Medal of Honor recipients. This report does not discuss several other pension programs that are administered by the VA, such as the Old Law Disability Pension and the Section 306 Disability Pension, which make payments to low-income veterans, and the Old Law Death Pension and the Section 306 Death Pension, which make payments to low-income surviving spouses and dependent children of veterans; these programs apply only to veterans and their survivors who became entitled to such benefits before 1979. This report also does not discuss pension programs for veterans of specific periods of war before World War I, such as the Civil War, the Indian Wars, and the Spanish-American War. Finally, this report does not address the military retirement system. For information on that system, see CRS Report RL34751, Military Retirement: Background and Recent Developments, by Kristy N. Kamarck

International real business cycles with endogenous markup variability

The aggregate impact of decisions made at the level of the individual firm has recently attracted a lot of attention in both the macro and trade literatures. We adapt the benchmark international real business cycle model to a game-theoretic environment to add a channel for the strategic interaction among domestic and foreign firms. We show how the sum of strategic pricing decisions made at the level of the individual firm can have significant effects on the volatility and cross country co-movement of GDP and its components. Specifically we show that the addition of this one channel for strategic interaction leads to a significant increase in the cross-country co-movement of production and investment, as well as a significant decrease in the volatility of investment and the trade balance over the benchmark IRBC model.Industrial organization (Economic theory) ; Business cycles - Econometric models ; International finance ; International trade - Econometric models ; Gross domestic product

Optimal monetary policy under financial sector risk

We consider whether or not a central bank should respond directly to financial market conditions when setting monetary policy. Specifically, should a central bank put weight on interbank lending spreads in its Taylor rule policy function? ; Using a model with risk and balance sheet effects in both the real and financial sectors (Davis, "The Adverse Feedback Loop and the Effects of Risk in the both the Real and Financial Sectors" Federal Reserve Bank of Dallas, Globalization and Monetary Policy Institute Working Paper No. 66, November 2010) we find that when the conventional parameters in the Taylor rule (the coefficients on the lagged interest rate, inflation, and the output gap) are optimally chosen, the central bank should not put any weight on endogenous fluctuations in the interbank lending spread. ; However, the central bank should adjust the risk free rate in response to fluctuations in the spread that occur because of exogenous financial shocks, but we find that the central bank should not be too aggressive in its easing policy. Optimal policy calls for a two-thirds of a percentage point cut in the risk free rate in response to a financial shock that causes a one percentage point increase in interbank lending spreads.Business cycles ; Financial markets ; Monetary policy

Sacred barriers to conflict resolution

Resolution of quarrels arising from conflicting sacred values, as in the Middle East, may require concessions that acknowledge the opposition's core concerns.

Debris/ice/TPS assessment and photographic analysis of shuttle mission STS-48

A Debris/Ice/TPS assessment and photographic analysis was conducted for Space Shuttle Mission STS-48. Debris inspection of the flight elements and launch pad were performed before and after launch. Ice/frost conditions on the External Tank were assessed by the use of computer programs, nomographs, and infrared scanner data during cryogenic loading of the vehicle followed by on-pad visual inspection. High speed photography was analyzed after launch to identify ice/debris sources and evaluate potential vehicle damage and/or in-flight anomalies. The debris/ice/TPS conditions and photographic analysis of Mission STS-48 are documented, along with their overall effect on the Space Shuttle Program

Debris/Ice/TPS Assessment and Photographic Analysis for Shuttle Mission STS-41

A Debris/Ice/Thermal Protection System (TPS) assessment and photographic analysis was conducted for Space Shuttle Mission STS-41. Debris inspections of the flight elements and launch pad were performed before and after launch. Ice/frost conditions on the External Tank were assessed by the use of computer programs, nomographs, and infrared scanner data during cryogenic loading of the vehicle followed by on-pad visual inspection. High speed photography was analyzed after launch to identify ice/debris sources and evaluate potential vehicle damage and/or in-flight anomalies. Documented here are the debris/ice/TPS conditions and photographic analysis of Mission STS-41, and their overall effect on the Space Shuttle Program