Asset Market Structures and Monetary Policy in a Small Open Economy

This paper sets up a canonical new Keynesian small open economy model with nominal price rigidities to explore the impact of habit persistence and exchange rate pass-through on the welfare ranking of alternative monetary policy rules. It identifies three factors that can affect the welfare ranking: the degree of habit persistence, the degree of exchange rate pass-through, and labor supply elasticity. In contrast to the findings of De Paoli (2009a, 2009b), the analysis reveals a reversal in the welfare ranking of alternative monetary policy rules for unitary intertemporal and intratemporal elasticities of substitution, depending on the asset market structures of small open economies with external habit. The paper also finds that exchange rate pegging outperforms domestic producer price index inflation targeting at high degrees of intratemporal elasticity of substitution and external habit, regardless of asset market structures. Finally, the paper finds that exchange rate pegging outperforms domestic or consumer price index inflation targeting if the exchange rate is misaligned.asset market structures; exchange rate peg; monetary policy rules

Monetary policy shocks, inventory dynamics, and price-setting behavior

In this paper, we estimate a VAR model to present an empirical finding that an unexpected rise in the federal funds rate decreases the ratio of sales to stocks available for sales, while it increases finished goods inventories. In addition, dynamic responses of these variables reach their peaks several quarters after a monetary shock. In order to understand the observed relationship between monetary policy and finished goods inventories, we allow for the accumulation of finished goods inventories in an optimizing sticky price model, where prices are set in a staggered fashion. In our model, holding finished inventories helps firms to generate more sales at given their prices. We then show that the model can generate the observed relationship between monetary shocks and finished goods inventories. Furthermore, we find that allowing for inventory holdings leads to a Phillips curve equation, which makes the inflation rate depend on the expected present-value of future marginal cost as well as the current periodicals marginal cost and the expected rate of future inflation.Business cycles ; Monetary policy ; Phillips curve

Staggered Price Settings, Exchange Rates, and Monetary Policy

This paper examines the effects of monetary policy in an optimizing two-country model in which monopolistically competitive firms set their prices in advance, so that the prices are sticky. The main findings of this paper are that there occurs an instantaneous depreciation of the exchange rates through a countercyclical response of a markup when there is a positive home monetary shock. The paper shows that the sticky price model cannot resolve the forward premium puzzle. The degree of depreciation depends on the degree of price stickiness as real variables become more volatile with stronger price stickiness. Finally, the nominal exchange and real exchange rates move very closely as in data when there is a substantial degree of price rigidity

Macroprudential and Monetary Policies: Implications for House Prices and Household Debt

This study examines the effect of the interaction between timevarying macroprudential policy and credit growth or house price growth on dampening the excess volatility of household debt in the standard DSGE model. The study also discusses the effect of introducing the debt-to-income ratio, aside from the loan-to-value ratio, on cooling down large household debt swings. Moreover, this study shows that the reaction of macroprudential policy to credit growth is more effective than its reaction to house price growth in moderating household debt swings to exogenous shocks

Production of monoclonal antibodies against serum immunoglobulins of black rockfish (Sebastes schlegeli Higendorf)

The present study was undertaken to produce monoclonal antibodies (MAbs) against immunoglobulin (Ig) purified from black rockfish (Sebastes schlegeli Higendorf) serum using protein A, mannan binding protein, and goat IgG affinity columns. These three different ligands were found to possess high affinity for black rockfish serum Ig. All of the Igs purified eluted at only 0.46 M NaCl concentration in anion exchange column chromatography and consisted of two bands at 70 kDa and 25 kDa in SDS-PAGE; they also had similar antigenicity for MAbs to Ig heavy chain in immunoblot assays. Therefore, black rockfish Ig is believed to exist as a single isotype within serum. The MAbs produced against Ig heavy chain reacted specifically with spots distributed over the pI range from 4.8 to 5.6 with a molecular weight of 70 kDa on two dimensional gel electrophoresis immunoblot profiles

The Term Structure of Interest Rates and The Real Activity in a Sticky Price Model

This paper sets up a sticky price model in which money is used to reduce the transaction costs. It shows that the contemporaneous correlations between interest rates and output of the sticky price model match well the data. It also shows that a flexible price model fails to generate interest rates as inverted leading predictors of real economic activity, while a sticky price model partly has a limited success. This paper also shows that the term spread of a sticky price model partly matches the data when there is a modest nominal rigidity

By Force of Habit Formations and Exchange Rate Movements

This paper sets up a habit persistence monetary model in line with Campbell and Cochrane (1995) with transaction costs in consumption. It discusses the behavior of exchange rates and consumption as well as other variables to various shocks. This paper shows that the habit persistence model fails to explain the exchange rate fluctuations and the movement of consumption due to a locally large value of relative risk aversion