Plant-Level Nonconvexities and the Monetary Transmission Mechanism

Micro-level empirical evidence suggests that plant managers adjust production by utilizing capital along nonconvex margins. Existing models of the monetary transmission mechanism (MTM), however, assume that production units adjust output smoothly. The objective of this paper is to determine whether such plant-level nonconvexities affect the MTM in a quantitatively significant way. To this end we replace the smooth production function in a prototypical model of the MTM with heterogeneous plants that adjust output along three nonconvex margins: intermittent production, shiftwork, and weekend work. We calibrate the model such that steady-state utilization of these margins is in line with U.S. data. We find that the nonconvexities dampen the responses of aggregate economic activity and prices to monetary policy shocks by about 50 percent relative to the standard model, thereby significantly reducing the effectiveness of the MTM. Due to heterogeneity and discrete choices at the plant level, monetary policy affects the output decisions of only 'marginal' plants - those close to being indifferent between alternative production plans. In equilibrium the measure of such plants is rather small. In addition, contrary to popular belief, the quantitative effects of monetary policy shocks on aggregate output do not significantly change with the degree of capacity utilization over the business cycle. The effects on inflation, however, do change substantially over the business cycle when monetary policy shocks are persistent.Asymmetries, heterogenous plants, monetary transmission mechanism, nonconvexities, nonlinear approximation.

The High Cross-Country Correlations of Prices and Interest Rates

We document that, at business cycle frequencies, fluctuations in nominal variables, such as aggregate price levels and nominal interest rates, are substantially more synchronized across countries than fluctuations in real output. To the extent that domestic nominal variables are determined by domestic monetary policy, and central banks generally attempt to keep the domestic nominal environment stable, this might seem surprising. We ask if a parsimonious international business cycle model can account for this aspect of cross-country aggregate fluctuations. It can. Due to spillovers of technology shocks across countries, expected future responses of national central banks to fluctuations in domestic output and inflation generate movements in current prices and interest rates that are synchronized across countries even when output is not. Even modest spillovers produce cross-country correlations such as those in the data.International business cycles, prices, interest rates

The High Cross-Country Correlations of Prices and Interest Rates

We introduce financial frictions in a two sector model of international trade with heterogeneous agents. The level of specialization in the economy (economic development) depends on the quality of financial institutions. Underdeveloped financial markets prohibit an economy to specialize in sectors where finance is important. Capital flows and international trade are complements when countries differ in the degree of development of their financial sectors. Capital flows to countries with more robust financial institutions which in turn allow their economies to develop sectors that are financially dependent.trade flows, capital flows, financial frictions, economic development.

Evaluation of Depression Screening Implementation in the Adult Inpatient Heart Failure Population: A Process Outcomes Evaluation

BACKGROUND: Extensive study has found depression in heart failure (HF) patients to be a significant risk factor which has been associated with poor outcomes and increased medical cost for this population. It is highly recommended to screen HF patients for depression to identify this important risk factor. The PHQ-9 depression screening instrument (sensitivity 70% specificity 92%) has been identified as a valid measure to detect depression in the HF population. Implementing a depression screening protocol in an inpatient environment requires education of providers to establish awareness of best practice and foster confidence in their application of the screening instrument. OBJECTIVE: To determine if a correlation exists between provider knowledge of depression screening in the HF population, and adherence to a depression screening protocol. METHODS: A literature review was conducted to determine appropriate depression screening instruments for use in the HF population. Results were utilized to develop an education plan with pre-posttest, and depression screening protocol for implementation. A pilot study was conducted in the critical care unit of Norton Brownsboro Hospital (NBH) from September 27, 2017 through October 30, 2017. RESULTS: Adherence to the screening protocol was 40.6 percent. Pre-post assessment of provider knowledge following provider education was correct and unchanged for three out of four knowledge items. Significant (P \u3c .05) increase of knowledge (P= .002) for the remaining item. Perceptions of the burden of untreated/undetected depression in the HF population increased significantly (P= .001, P= .04, P= .09). CONCLUSIONS: No association between knowledge and adherence to a depression screening protocol was found. Provider knowledge showed significant increase after an education intervention. These results indicate that more is required beyond effective education of providers to achieve the goal of depression screening in the inpatient HF population

Monetary Aggregates and the Business Cycle

In the U.S. business cycle, a monetary aggregate consisting predominantly of sight deposits strongly leads output, time deposits strongly lag output, and a monetary aggregate consisting of both types of deposits tends to be coincident with the cycle. Such movements are observed both before and after the 1979 monetary policy change. Similar dynamics are obtained in a model with multi-stage production and purchase-size heterogeneity when agents optimally choose their mix of cash, checkable, and time deposits used in transactions. The causality in the model runs from real activity to money, rather than the other way around.Monetary aggregates; business cycle; general equilibrium

Nonconvex Margins of Output Adjustment and Aggregate Fluctuations

In most manufacturing industries output is adjusted in a lumpy way along three margins: shiftwork, weekend work, and closing a plant temporarily down. We incorporate such decisions into a dynamic general equilibrium model and study: (i) if such micro-level nonconvexities magnify business cycles; and (ii) if the aggregate effects of changes in firms' borrowing costs due to monetary policy shocks vary over the cycle. Calibrated to industrial observations, the model implies that aggregate output is in fact 25% less volatile than in an economy without such features, and monetary policy shocks have similar effects on output in recessions as in expansions.Nonconvexities, business cycles, capacity utilization, monetary policy, asymmetries

Court decisions in wrongful birth cases as possible discrimination against the child

Abstract: The term wrongful birth denotes a claim brought by the parents of an unwanted child who was conceived or born due to medical negligence. The claims are often dismissed as contradictory to good morals or public order. However, there remains a neglected question whether the court decision to award or dismiss damages could constitute discrimination against the child concerned. While the child is not a party to the litigation, it is nevertheless unacceptable for the court not to take into account the effects of its decision on the child. In the case of award of damages, the court publicly affirms the legitimacy of the parentsꞌ need for compensation, that is the fact that the childꞌs birth represents recoverable harm to them. The court decision therefore means a different treatment in respect to other children whose benefits for the family are generally recognized and praised by the society. That might have serious psychological consequences for the child, depriving her or him of the full enjoyment of the right to dignity. This fact constitutes discrimination on the grounds of birth, which can be justified only by very weighty reasons. Such reasons may be arguably given in the case of a child incapable of understanding the meaning of wrongful birth litigation, whose special needs are extremely burdensome on the family. On the other hand, the dismissal of the claim cannot represent a negative discrimination against the child.Keywords: Discrimination. Wrongful birth. International human rights law. Human rights of the child. Convention on the Rights of the Child

RIGHT TO HEALTHCARE: SUSTAINABILITY OF THE INSURANCE SYSTEM AND THE SITUATION IN THE CZECH REPUBLIC / DIREITO À SAÚDE: SUSTENTABILIDADE DO SISTEMA PÚBLICO DE SEGUROSAÚDE E A SITUAÇÃO NA REPÚBLICA TCHECA

The article deals with the question of right to healthcare as it is set by the Charter of Fundamental Rights and Freedoms of the Czech Republic and at the same time with the question of rationing in healthcare. Rationing in healthcare generally means a process realized by providing different levels of healthcare. In the Czech Republic, rationing in healthcare is rather based on a limitation of a treatment’s payment from public health insurance which, however, does not fit the common definitions of rationing. By describing and explaining these crucial questions the article discusses the possibility to limit the constitutional right to healthcare covered by public health insurance in the Czech Republic and shows these possibilities which are based on provisions of the Act No. 48/1997 Sb., on public health insurance. More widely it questions whether the system of public health insurance in the Czech Republic is sustainable at all.Keywords: Healthcare. Rationing. Public health insurance

Nonconvex Margins of Output Adjustment and Aggregate Fluctuations

In most manufacturing industries output is adjusted in a lumpy way along three margins: shiftwork, weekend work, and closing a plant temporarily down. We incorporate such decisions into a dynamic general equilibrium model and study: (i) if such micro-level nonconvexities magnify business cycles; and (ii) if the aggregate effects of changes in firms' borrowing costs due to monetary policy shocks vary over the cycle. Calibrated to industrial observations, the model implies that aggregate output is in fact 25% less volatile than in an economy without such features, and monetary policy shocks have similar effects on output in recessions as in expansions

Globally Correlated Nominal Fluctuations

Cyclical fluctuations in nominal variables—aggregate price levels and nominal interest rates—are documented to be substantially more synchronized across countries than cyclical fluctuations in real output. A transparent mechanism that can account for this striking feature of the nominal environment is highlighted. It is based on (small) cross-country spillovers of shocks and an interaction between Taylor rules and no-arbitrage conditions. The mechanism is quantitatively important for a wide range of plausible parameterizations and is found to be robust to modifications of the economic environment that help account for other important features of domestic and international aggregate fluctuations.