Money and Inflation: The Role of Persistent Velocity Movements

While the long run relation between money and inflation is well established, empirical evidence on the adjustment to the long run equilibrium is very heterogeneous. In the present paper we use a multivariate state space framework, that substantially expands the traditional vector error correction approach, to analyze the short run impact of money on prices. We contribute to the literature in three ways: First, we distinguish changes in velocity of money that are due to institutional developments and thus do not induce inflationary pressure, and changes that reflect transitory movements in money demand. This is achieved with a newly developed multivariate unobserved components decomposition. Second, we analyze whether the high volatility of the transmission from monetary pressure to inflation follows some structure, i.e., if the parameter regime can assumed to be constant. Finally, we use our model to illustrate the consequences of the monetary policy of the Fed that has been employed to mitigate the impact of the financial crisis, simulating different exit strategy scenarios.velocity, multivariate state space model, inflation, money

A First Look on the New Halle Economic Projection Model

In this paper we develop a small open economy model explaining the joint determination of output, inflation, interest rates, unemployment and the exchange rate in a multi-country framework. Our model – the Halle Economic Projection Model (HEPM) – is closely related to studies recently published by the International Monetary Fund (global projection model). Our main contribution is that we model the Euro area countries separately. In this version we consider Germany and France, which represent together about 50 percent of Euro area GDP. The model allows for country specific heterogeneity in the sense that we capture different adjustment patterns to economic shocks. The model is estimated using Bayesian techniques. Out-of-sample and pseudo out-of-sample forecasts are presented.multi-country model, forecasting, bayesian estimation

The Quantity Theory Revisited: A New Structural Approach

While the long run relation between money and inflation is well established, empirical evidence on the adjustment to the long run equilibrium is very heterogeneous. In this paper we show, that the development of US consumer price inflation between 1960Q1 and 2005Q4 is strongly driven by money overhang. To this end, we use a multivariate state space framework that substantially expands the traditional vector error correction approach. This approach allows us to estimate the persistent components of velocity and GDP. A sign restriction approach is subsequently used to identify the structural shocks to the signal equations of the state space model, that explain money growth, inflation and GDP growth. We also account for the possibility that measurement error exhibited by simple-sum monetary aggregates causes the consequences of monetary shocks to be improperly identified by using a Divisia monetary aggregate. Our findings suggest that when the money is measured using a reputable index number, the quantity theory holds for the United States.Divisia money, state space decomposition, sign restrictions

The quantity theory revisited: A new structural approach

Abstract While the long run relation between money and inflation is well established, empirical evidence on the adjustment to the long run equilibrium is very heterogeneous. In this paper, we show that the development of US consumer price inflation between 1960Q1 and 2005Q4 is strongly driven by money overhang. To this end, we use a multivariate state space framework that substantially expands the traditional vector error correction approach. This approach allows us to estimate the persistent components of velocity and GDP. A sign restriction approach is subsequently used to identify the structural shocks to the signal equations of the state space model that explain money growth, inflation, and GDP growth. We also account for the possibility that measurement error exhibited by simple-sum monetary aggregates causes the consequences of monetary shocks to be improperly identified by using a Divisia monetary aggregate. Our findings suggest that when the money is measured using a reputable index number, the quantity theory holds for the United States

Outperforming IMF forecasts by the use of leading indicators

Abstract This study analyzes the performance of the IMF World Economic Outlook forecasts for world output and the aggregates of both the advanced economies and the emerging and developing economies. With a focus on the forecast for the current and the next year, we examine whether IMF forecasts can be improved by using leading indicators with monthly updates. Using a real-time dataset for GDP and for the indicators we find that some simple single-indicator forecasts on the basis of data that are available at higher frequency can significantly outperform the IMF forecasts if the publication of the Outlook is only a few months old

Roles of fire history and rewetting in peatland restoration and vegetation recovery on the Merang peat dome, South Sumatra, Indonesia

In the restoration of drained and degraded tropical peat swamp forest (PSF) it is not well understood whether fire suppression on its own is sufficient to facilitate regeneration, or if rewetting plays a key role. We attempt to answer this question in the Merang area, a 23,000-ha peatland located in South Sumatra province, Indonesia. As with more than 90 % of PSF in Southeast Asia, the area has been largely degraded by logging and drainage canals, along with multiple fires. It has been designated and managed as an ecosystem restoration area since 2016, by which time only a single 254 ha patch of original PSF habitat remained. However, scattered remnant PSF trees ( 4 fires), while Macaranga pruinosa, Melicope glabra and Melicope lunu-ankenda dominate in regenerating areas that have experienced 12 fires. While fire suppression is essential to prevent further loss of vegetation, effective rewetting is required before woody vegetation can recover

Comprehensive genomic analysis of refractory multiple myeloma reveals a complex mutational landscape associated with drug resistance and novel therapeutic vulnerabilities

The outcomes of patients with multiple myeloma (MM) refractory to immunomodulatory agents (IMiDs) and proteasome inhibitors (PIs) remain poor. In this study, we performed whole genome and transcriptome sequencing of 39 heavily pretreated relapsed/refractory MM (RRMM) patients to identify mechanisms of resistance and potential therapeutic targets. We observed a high mutational load and indications of increased genomic instability. Recurrently mutated genes in RRMM, which had not been previously reported or only observed at a lower frequency in newly diagnosed MM, included NRAS, BRAF, TP53, SLC4A7, MLLT4, EWSR1, HCFC2, and COPS3. We found multiple genomic regions with bi-allelic events affecting tumor suppressor genes and demonstrated a significant adverse impact of bi-allelic TP53 alterations on survival. With regard to potentially resistance conferring mutations, recurrently mutated gene networks included genes with relevance for PI and IMiD activity; the latter particularly affecting members of the Cereblon and the COP9 signalosome complex. We observed a major impact of signatures associated with exposure to melphalan or impaired DNA double-strand break homologous recombination repair in RRMM. The latter coincided with mutations in genes associated with PARP inhibitor sensitivity in 49% of RRMM patients; a finding with potential therapeutic implications. In conclusion, this comprehensive genomic characterization revealed a complex mutational and structural landscape in RRMM and highlights potential implications for therapeutic strategies

Copernicus Ocean State Report, issue 6

The 6th issue of the Copernicus OSR incorporates a large range of topics for the blue, white and green ocean for all European regional seas, and the global ocean over 1993–2020 with a special focus on 2020