The Inverted Fisher Hypothesis: Inflation Forecastability and Asset Substitution

This paper examines the implications of inflation persistence for the inverted Fisher hypothesis that nominal interest rates do not adjust to inflation because of a high degree of substitutability between money and bonds. It is emphasized that the substitutability between nominal assets and capital renders the hypothesis inconsistent with the data when inflation persistence is high. Using a switching regression model, the analysis allows the reflection of inflation in interest rates to vary according to the degree of inflation persistence or forecastability. The hypothesis is supported by U.S. data only when inflation forecastability is below a certain threshold. Copyright 2002, International Monetary Fund

Measuring interest rates as determined by thrift and productivity

This paper investigates the behavior of short-term real and nominal rates of interest by combining consumption-based and production-based models into a single general equilibrium framework. Based on the theoretical nonlinear relationships that link interest rates to both the marginal rates of substitution and transformation in a monetary production economy, we develop an estimation and simulation procedure to generate historical time series of interest rates. We find that the predictions of interest rates based on a general equilibrium theory are partially consistent with US data.Interest rates

Dissecting Taylor rules in a structural VAR

This paper uncovers Taylor rules from estimated monetary policy reactions using a structural VAR on U.S. data from 1959 to 2009. These Taylor rules reveal the dynamic nature of policy responses to different structural shocks. We find that U.S. monetary policy has been far more responsive over time to demand shocks than to supply shocks, and more aggressive toward inflation than output growth. Our estimated dynamic policy coefficients characterize the style of policy as a "bang-bang" control for the pre-1979 period and as a gradual control for the post 1979 period.Taylor's rule ; Monetary policy

Asymmetric Effects of Government Spending: Does the Level of Real Interest Rates Matter?

This paper empirically explores how fiscal policy (represented by increases in government spending) has asymmetric effects on economic activity across different levels of real interest rates. It suggests that the effect of fiscal policy depends on the level of real rates because the Ricardian effect is smaller at lower financin costs of fiscal policy. Using threshold vector autoregression models on U.S. data, the paper provides new evidence that expansionary government spending is more conducive to short-term growth when real rates are low. It also finds asymmetric effects on interest rates and inflation and threshold effects associated with substitution between financing methods. Copyright 2006, International Monetary Fund

The Progressive Failure Analysis of Cut Slope in Anisotropic Strain Softening Soils

The failure phenomena in earth structures such as slopes and embankments on clay foundations are a consequence of the formation of failure surfaces. A finite difference computer code, FLAC (Itasca Consulting Group, 1993), with the isotropic Mohr-Coulomb plasticity model, is used to analyze the undrained progressive failure of a strain softening soil during a slope excavation process. The focus of the study is on the short-term stability of slopes. In the first series of analyses, which are aimed at the evaluation of anisotropic strength effect on slope stability, the isotropic Mohr-Coulomb plasticity model is slightly modified to implement the anisotropic nature of undrained strength. In the second series of analyses, which are aimed at the evaluation of progressive failure effect on slope stability, the stress-strain-strength relations determined based on existing laboratory data from the literature are closely curve-fitted as a function of the plastic shear strain. In order to define the stress-strain-strength relations for the entire elements with varying i angles, the typical laboratory soil testings are considered as variations of a testing method in which i angles at the incipient failure differ. In addition, the resulting stress-strain-strength relations are assumed to systematically vary in their patterns. Consequently, for a given i angle distribution in the slope, individual element has its own unique stress-strain-strength relations such that the relative pattern of stress-strain relations for varying stress paths are explicitly implemented to evaluate the progressive failure effect. Since the first series of analyses are focused on the anisotropic nature of undrained strength alone, while the second ones are concerned about the anisotropic stress-strain-strength relations, the difference in their results is attributed to the effect of progressive failure. It was explicitly shown that the anisotropic stress-strain-strength relations are always accompanied by the sequential mobilization of peak strengths of the elements along the failure surface. Consequently, it was confirmed that the summation of the peak strengths mobilized along the failure surface is significantly less than that of the isotropic compression strengths. However, the strength reduction due to the anisotropic stress-strain relations (progressive failure) was found to be not as critical as that caused by the anisotropic undrained strength. In addition, several anisotropic strength variations along with varying degree of strain softenings are parametrically implemented. It was found that the effect of strength anisotropy is more critical than that of strain softening. Based on this research, the strain compatibility technique in the slope stability analysis proposed by Koutsoftas and Ladd (1985) is critically reassessed

Experimental and Analytical Investigation Based on 1/2 Scale Model for a Cleanroom Unit Module Consisting of Steel Section and Reinforced Concrete

The rapid advances in high tech industries and the increased demand for high precision and reliability of their production environments call for larger structures and higher vertical vibration performance for high technology facilities. Therefore, there is an urgent demand for structural design and vertical vibration evaluation technologies for high tech facility structures. For estimating the microvibration performance for a cleanroom unit module in high technology facilities, this study performs the scale modeling experiment and analytical validation. First, the 1/2 scale model (width 7500 mm, depth 7500 mm, and height 7250 mm) for a cleanroom unit module is manufactured based on a mass-based similitude law which does not require additional mass. The dynamic test using an impact hammer is conducted to obtain the transfer function of 1/2 scale model. The transfer function derived from the test is compared with the analytical results to calibrate the analytical model. It is found that, unlike for static analyses, the stiffness of embedded reinforcement must be considered for estimating microvibration responses. Finally, the similitude law used in this study is validated by comparing the full-scale analytical model and 1/2 scale analytical model for a cleanroom unit module

Bound entangled states with nonzero distillable key rate

In this paper, we present sufficient conditions for states to have positive distillable key rate. Exploiting the conditions, we show that the bound entangled states given by Horodecki et al. [Phys. Rev. Lett. 94, 160502 (2005), quant-ph/0506203] have nonzero distillable key rate, and finally exhibit a new class of bound entangled states with positive distillable key rate, but with negative Devetak-Winter lower bound of distillable key rate for the ccq states of their privacy squeezed versions.Comment: 7 pages, 1 figure, typos corrected, accepted for publication in PR