A Long-Run, Short-Run and Politico-Economic Analysis of the Welfare Costs of Inflation

This paper assesses the long-run and short-run (i.e. along the transition path) welfare implications of permanent changes in inflation in an environment with essential money and perfectly competitive markets. The model delivers a monetary distribution that matches moments of the distribution seen in the US data. Although there is potential for wealth redistribution to deliver welfare gains from inflation, the (total) costs of 10 percent inflation relative to zero is over 7 percent of consumption. While these results suggest a dominating real-balance effect of inflation, a politico-economic analysis concludes that the prevailing (majority rule) inflation rate is above the Friedman Rule.Inflation; Welfare; Transitions; Voting

Money Holdings, Inflation, and Welfare in a Competitive Market

This paper examines an environment where money is essential and agents exchange in perfectly-competitive, Walrasian markets. Agents consume and produce a homogeneous good, but hold money to purchase consumption in the event of a relatively low productivity shock. A Walrasian market delivers a non-degenerate distribution of money holdings across agents and avoids some of the computational difficulties associated with the market and pricing assumptions of bilateral matching and bargaining common to search-theoretic environments. The model is calibrated to long-run US velocity, and the welfare costs of inflation are assessed for variable buyer-seller ratios and persistent states of buying and selling.Monetary Policy, Inflation, Welfare, Walrasian Markets

The Bank Lending Channel: a FAVAR Analysis

We examine the role of commercial banks in monetary transmission in a factor-augmented vector autoregression (FAVAR). A FAVAR exploits a large number of macroeconomic indicators to identify monetary policy shocks, and we add commonly used lending aggregates and lending data at the bank level. While our results suggest that the bank lending channel (BLC) is stronger than previously thought, this feature is not robust. In addition, our results indicate a diffuse response to monetary innovations when individual banks are grouped according to asset sizes and loan components. This suggests that other bank characteristics could improve the identification of the BLC.Bank Lending Channel, FAVAR, Monetary Policy

Economies of scale in banking, confidence shocks, and business cycles

This paper quantitatively investigates equilibrium indeterminacy due to economies of scale (ES) in financial intermediation. Financial intermediation provides deposits (inside money) which can substitute with currency to purchase consumption, and depositing decisions are susceptible to non-fundamental confidence (sunspot) shocks. With the intermediation sector calibrated to match US data: (i) indeterminacy arises for small degrees of ES; (ii) sunspot shocks qualitatively resemble monetary shocks; and (iii) monetary policies can stabilize the real impact of sunspot shocks, but only under complete information. The analysis also assesses the removal of these shocks on the volatility decline observed during the US Great Moderation.Financial Intermediation, Inside Money, Indeterminacy, Business Cycles

Economies of scale in banking, confidence shocks, and business cycles

This paper quantitatively investigates equilibrium indeterminacy due to economies of scale (ES) in financial intermediation. Financial intermediation provides deposits (inside money) which can substitute with currency to purchase consumption, and depositing decisions are susceptible to non-fundamental confidence (sunspot) shocks. With the intermediation sector calibrated to match US data: (i) indeterminacy arises for small degrees of ES; (ii) sunspot shocks qualitatively resemble monetary shocks; and (iii) monetary policies can stabilize the real impact of sunspot shocks, but only under complete information. The analysis also assesses the removal of these shocks on the volatility decline observed during the US Great Moderation

Clastic Breccias at the Slates Islands Complex Impact Structure, Northern Lake Superior

About 150 impact craters are known on Earth and each year several structures are added to this number. The general geology of the Slate Islands archipelago has been described by Sage (1991) and a short summary based on Sage's work is given in Dressler et al. (1995). The reader is referred to these publications for information on the bedrock geology of the island group. Early studies on the Slate Islands impact structure include: Halls and Grieve (1976), Grieve and Robertson (1976) and Stesky and Halls (1983). In this report, we provide a summary of the impact process as presently understood. We also present some of the results of our laboratory investigations conducted in 1995 and 1996. We describe in some detail the various clastic breccias encountered on the islands during our 1994 and 1995 field work and relate them to the various phases of the impact process. A more encompassing treatise on the breccias has been submitted for publication. (Dressler and Sharpton 1996)

New Observations at the Slate Islands Impact Structure, Lake Superior

Slate Islands, a group of 2 large and several small islands, is located in northern Lake Superior, approximately 10 km south of Terrace Bay. Shatter cones, breccias and shock metamorphic features provide evidence that the Slate Islands Structure was formed as a result of asteroid or comet impact. Most of the island group is believed to represent the central uplift of a complex impact crater. The structure possibly has a diameter of about 32 km. For Sage (1978, 1991) shock metamorphic features, shatter cones and pervasive rock brecciation are the results of diatreme activity. The present investigations represent the second year of a co-operative study of the Lunar and Planetary Institute, Houston, Texas and the Field Services Section (Northwest) of the Ontario Geological Survey. The objective of this investigation is to come to a better understanding of the formation of mid-size impact structures on Earth and the planets of the solar system. Impact processes played a fundamental role in the formation of the planets and the evolution of life on Earth. Meteorite and comet impacts are not a phenomenon of the past. Last year, more than 20 pieces of the Shoemaker-Levy 9 impacted on Jupiter and the Tunguska comet impacted in Siberia in the early years of this century. The study of impact processes is a relatively young part of geoscience and much is still to be learnt by detailed field and laboratory investigations. The State Islands Structure has been selected for the present detailed investigations because of the excellent shoreline outcrops of rock units related to the impact. The structure is a complex impact crater that has been eroded so that important lithological and structural elements are exposed. We know of no other mid-size terrestrial impact structure with equal or better exposures. In this publication we present preliminary results of our 1994 and 1995 field and laboratory investigations. We have tentatively identified a few impact melt and a considerable number of suevite occurrences

The Deepest Hubble Space Telescope Color-Magnitude Diagram of M32:Evidence for Intermediate-age Populations

We present the deepest optical color-magnitude diagram (CMD) to date of the local elliptical galaxy M32. We have obtained F435W and F555W photometries based on Hubble Space Telescope (HST) Advanced Camera for Surveys/High-Resolution Channel images for a region 110 '' from the center of M32 (F1) and a background field (F2) about 320 '' away from M32 center. Due to the high resolution of our Nyquist-sampled images, the small photometric errors, and the depth of our data (the CMD of M32 goes as deep as F435W similar to 28.5 at 50% completeness level), we obtain the most detailed resolved photometric study of M32 yet. Deconvolution of HST images proves to be superior than other standard methods to derive stellar photometry on extremely crowded HST images, as its photometric errors are similar to 2x smaller than other methods tried. The location of the strong red clump in the CMD suggests a mean age between 8 and 10 Gyr for [Fe/H] = -0.2 dex in M32. We detect for the first time a red giant branch bump and an asymptotic giant branch (AGB) bump in M32 which, together with the red clump, allow us to constrain the age and metallicity of the dominant population in this region of M32. These features indicate that the mean age of M32's population at similar to 2' from its center is between 5 and 10 Gyr. We see evidence of an intermediate-age population in M32 mainly due to the presence of AGB stars rising to M-F555W similar to -2.0. Our detection of a blue component of stars (blue plume) may indicate for the first time the presence of a young stellar population, with ages of the order of 0.5 Gyr, in our M32 field. However, it is likely that the brighter stars of this blue plume belong to the disk of M31 rather than to M32. The fainter stars populating the blue plume indicate the presence of stars not younger than 1 Gyr and/or BSSs in M32. The CMD of M32 displays a wide color distribution of red giant branch stars indicating an intrinsic spread in metallicity with a peak at [Fe/H] similar to -0.2. There is not a noticeable presence of blue horizontal branch stars, suggesting that an ancient population with [Fe/H] <-1.3 does not significantly contribute to the light or mass of M32 in our observed fields. M32's dominant population of 8-10 Gyr implies a formation redshift of 1 less than or similar to z(f) less than or similar to 2, precisely when observations of the specific star formation rates and models of "downsizing" imply galaxies of M32's mass ought to be forming their stars. Our CMD therefore provides a "ground truth" of downsizing scenarios at z = 0. Our background field data represent the deepest optical observations yet of the inner disk and bulge of M31. Its CMD exhibits a broad color spread of red giant stars indicative of its metallicity range with a peak at [Fe/H] similar to -0.4 dex, slightly more metal-poor than M32 in our fields. The observed blue plume consists of stars as young as 0.3 Gyr, in agreement with previous works on the disk of M31. The detection of bright AGB stars reveals the presence of intermediate-age population in M31, which is, however, less significant than that in M32 at our field's location

High-resolution state-selected ion-molecule reaction studies using pulsed field ionization photoelectron-secondary ion coincidence method

We have developed an octopole-quadrupole photoionization apparatus at the Advanced Light Source for absolute integral cross-section measurements of rovibrational-state-selected ion-molecule reactions. This apparatus consists of a high-resolution photoionization ion source, a wired ion gate lens, a dual radio-frequency (rf) octopole ion guide reaction gas cell, and a quadrupole mass spectrometer for reactant and product ion detection. The unique feature of this apparatus is the implementation of the high-resolution pulsed field ionization-photoelectron (PFI-PE)-photoion coincidence (PFI-PEPICO) technique, which has allowed the rotational-state selection of diatomic ions for ion-molecule reaction studies. The novel application of the wired ion gate lens for the rejection of false coincidence background ions is described. This application, along with the differential-ion-gate scheme, has made possible the measurements of rovibrational-state-selected absolute integral reaction cross sections for ion-molecule collisions using the PFI-PE-secondary ion coincidence PFI-PESICO method. The successful measurement of absolute state-selected cross sections for H2 + (X,v+,N+)+Ar(Ne) with v+ up to 17 [the third to the last vibrational state of H2+(X)] demonstrates the high sensitivity of this differential-ion-gate PFI-PESICO method. In order to gain a detailed understanding and to obtain optimal performance of the wired ion gate lens for PFI-PESICO measurements, we have carried out ion trajectory calculations of reactant ions between the photoionization region and the rf-octopole ion guide. On the basis of these calculations, possible future improvements for the application of this differential-ion-gate PFI-PESICO scheme are discussed

The Demography of Massive Dark Objects in Galaxy Centres

We construct dynamical models for a sample of 36 nearby galaxies with Hubble Space Telescope photometry and ground-based kinematics. The models assume that each galaxy is axisymmetric, with a two-integral distribution function, arbitrary inclination angle, a position-independent stellar mass-to-light ratio Upsilon, and a central massive dark object (MDO) of arbitrary mass M_bh. They provide acceptable fits to 32 of the galaxies for some value of M_bh and Upsilon; the four galaxies that cannot be fit have kinematically decoupled cores. The mass-to-light ratios inferred for the 32 well-fit galaxies are consistent with the fundamental plane correlation Upsilon \propto L^0.2, where L is galaxy luminosity. In all but six galaxies the models require at the 95% confidence level an MDO of mass M_bh ~ 0.006 M_bulge = 0.006 Upsilon L. Five of the six galaxies consistent with M_bh=0 are also consistent with this correlation. The other (NGC 7332) has a much stronger upper limit on M_bh. We consider various parameterizations for the probability distribution describing the correlation of the masses of these MDOs with other galaxy properties. One of the best models can be summarized thus: a fraction f ~0.97 of galaxies have MDOs, whose masses are well described by a Gaussian distribution in log (M_bh/M_bulge) of mean -2.27 and width ~0.07.Comment: 28 pages including 13 figures and 4 tables. Submitted to A