The Optimal Degree of Discretion in Monetary Policy

How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society's desire to give the monetary authority discretion to react to its private information against society's need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap constrains policy and the smaller is the degree of discretion. As this problem becomes sufficiently severe, the optimal degree of discretion is none.

The optimal degree of discretion in monetary policy

How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society’s desire to give the monetary authority discretion to react to its private information against society’s need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem, the more tightly the cap constrains policy and the smaller is the degree of discretion. As this problem becomes sufficiently severe, the optimal degree of discretion is none. JEL Classification: E5, E6, E52, E58, E61inflation caps, inflation targets, optimal monetary policy, Rules vs discretion, time inconsistency

On the optimality of transparent monetary policy

We analyze the optimal design of monetary rules. We suppose there is an agreed upon social welfare function that depends on the randomly fluctuating state of the economy and that the monetary authority has private information about that state. We suppose the government can constrain the policies of the monetary authority by legislating a rule. In general, well-designed rules trade-off the need to constrain policymakers from the standard time consistency problem arising from the temptation for unexpected inflation with the desire to give them flexibility to react to their private information. Surprisingly, we show that for a wide variety of circumstances the optimal rule gives the monetary authority no flexibility. This rule can be interpreted as a strict inflation targeting rule where the target is a prespecified function of publicly observed data. In this sense, optimal monetary policy is transparent.Monetary policy

The optimal degree of discretion in monetary policy

How much discretion should the monetary authority have in setting its policy? This question is analyzed in an economy with an agreed-upon social welfare function that depends on the randomly fluctuating state of the economy. The monetary authority has private information about that state. In the model, well-designed rules trade off society’s desire to give the monetary authority discretion to react to its private information against society’s need to guard against the time inconsistency problem arising from the temptation to stimulate the economy with unexpected inflation. Although this dynamic mechanism design problem seems complex, society can implement the optimal policy simply by legislating an inflation cap that specifies the highest allowable inflation rate. The more severe the time inconsistency problem and the less important is private information, the smaller is the optimal degree of discretion. As either the time inconsistency problem becomes sufficiently severe or private information becomes sufficiently unimportant, the optimal degree of discretion is none.

A Community Foundation’s Experience Implementing and Evaluating General Operating Support

In 2013, the Hartford Foundation for Public Giving began to offer unrestricted general operating support grants in response to grantees’ expressed need. The foundation hired Technical Development Corp., a Boston consulting firm, to evaluate the process and implementation. This article shares early indicators of the impact of the new grantmaking approach on both grantees and the foundation. Grantee outcomes include enhanced infrastructure and financial health, continued progress on strategic plan goals, and more creative thinking about programs. Beyond the adoption of a new funding option, the decision led the foundation to modify its overall grantmaking process. The greatest challenge – which appears to be a factor across the sector – has been determining how best to capture the impact of the investment for grantees. Partnering from the outset provided data that helped both the foundation and TDC to assess the benefits of general operating support

M.A. in Historical Archives: A Library/Department of History Collaborative Teaching Project

Overview of Innovation: direct access to specialists and their facilities, multi-disciplinary approach, design and implementation of specifically tailored course module

Signalling pathways and mechanistic cues highlighted by transcriptomic analysis of primordial, primary, and secondary ovarian follicles in domestic cat

In vitro growth (IVG) of dormant primordial ovarian follicles aims to produce mature competent oocytes for assisted reproduction. Success is dependent on optimal in vitro conditions complemented with an understanding of oocyte and ovarian follicle development in vivo. Complete IVG has not been achieved in any other mammalian species besides mice. Furthermore, ovarian folliculogenesis remains sparsely understood overall. Here, gene expression patterns were characterised by RNA-sequencing in primordial (PrF), primary (PF), and secondary (SF) ovarian follicles from Felis catus (domestic cat) ovaries. Two major transitions were investigated: PrF-PF and PF-SF. Transcriptional analysis revealed a higher proportion in gene expression changes during the PrF-PF transition. Key influencing factors during this transition included the interaction between the extracellular matrix (ECM) and matrix metalloproteinase (MMPs) along with nuclear components such as, histone HIST1H1T (H1.6). Conserved signalling factors and expression patterns previously described during mammalian ovarian folliculogenesis were observed. Species-specific features during domestic cat ovarian folliculogenesis were also found. The signalling pathway terms "PI3K-Akt", "transforming growth factor-β receptor", "ErbB", and "HIF-1" from the functional annotation analysis were studied. Some results highlighted mechanistic cues potentially involved in PrF development in the domestic cat. Overall, this study provides an insight into regulatory factors and pathways during preantral ovarian folliculogenesis in domestic cat.Peer reviewe

Signalling pathways and mechanistic cues highlighted by transcriptomic analysis of primordial, primary, and secondary ovarian follicles in domestic cat

In vitro growth (IVG) of dormant primordial ovarian follicles aims to produce mature competent oocytes for assisted reproduction. Success is dependent on optimal in vitro conditions complemented with an understanding of oocyte and ovarian follicle development in vivo. Complete IVG has not been achieved in any other mammalian species besides mice. Furthermore, ovarian folliculogenesis remains sparsely understood overall. Here, gene expression patterns were characterised by RNA-sequencing in primordial (PrF), primary (PF), and secondary (SF) ovarian follicles from Felis catus (domestic cat) ovaries. Two major transitions were investigated: PrF-PF and PF-SF. Transcriptional analysis revealed a higher proportion in gene expression changes during the PrF-PF transition. Key influencing factors during this transition included the interaction between the extracellular matrix (ECM) and matrix metalloproteinase (MMPs) along with nuclear components such as, histone HIST1H1T (H1.6). Conserved signalling factors and expression patterns previously described during mammalian ovarian folliculogenesis were observed. Species-specific features during domestic cat ovarian folliculogenesis were also found. The signalling pathway terms "PI3K-Akt", "transforming growth factor-beta receptor", "ErbB", and "HIF-1" from the functional annotation analysis were studied. Some results highlighted mechanistic cues potentially involved in PrF development in the domestic cat. Overall, this study provides an insight into regulatory factors and pathways during preantral ovarian folliculogenesis in domestic cat