Unconventional Monetary Policy in Theory and in Practice

In this paper, after discussing the theoretical underpinnings of unconventional monetary policy measures, we review the existing empirical evidence on their effectiveness, focusing on those adopted by the European Central Bank and by the Federal Reserve. These measures operate in two ways: through the signalling channel and through the portfolio-balance channel. In the former, the central bank can use communication to steer interest rates and to restore confidence in the financial markets; the latter hinges on the hypothesis of imperfect substitutability of assets and liabilities in the balance sheet of the private sector and postulates that the central bank’s asset purchases and liquidity provision lower financial yields and improve funding conditions. The review of the empirical literature suggests that the unconventional measures were effective and that their impact on the economy was sizeable. However, a very large degree of uncertainty surrounds the precise quantification of these effects.Central bank, unconventional monetary policy, financial crisis, signalling channel, portfolio balance channel

3D numerical simulation of hydro-acoustic waves registered during the 2012 negros-cebu earthquake

The paper investigates on the hydro-acoustic waves propagation caused by the underwater earthquake, occurred on 6 February 2012, between the Negros and Cebu islands, in the Philippines. Hydro-acoustic waves are pressure waves that propagate at the sound celerity in water. These waves can be triggered by the sudden vertical sea-bed movement, due to underwater earthquakes. The results of three dimensional numerical simulations, which solve the wave equation in a weakly compressible sea water domain are presented. The hydro-acoustic signal is compared to an underwater acoustic signal recorded during the event by a scuba diver, who was about 12 km far from the earthquake epicenter

Firm entry, competitive pressures and the US inflation dynamics

This paper studies the effect of competitive pressures on inflation dynamics. To this end it derives and estimates a New Keynesian Phillips curve in a model with endogenous firm entry. The number of active firms is inversely related to their market power. By taking into account the number of competitors, the pass-through of real marginal cost on inflation is separately identifiable from the effect of endogenous desired markup fluctuations. Estimates with US data suggest that the effect of real marginal cost on inflation is stronger than that found in the empirical test of the standard model. The estimated elasticity of the desired markup with respect to the number of firms implies that an increase of 10% in the number of active firms would lower annual inflation by 1.4% in the short run.inflation dynamics, markups, firm entry

External trade and monetary policy in a currency area

For historical and geographical reasons, the member countries of the European Monetary Union (EMU) display different degrees of external trade openness. The paper lays out a model for a currency area composed of two regions. One region is more open to trade with a third country outside the area than the other. Using the utility-based loss function for the currency area, the optimal monetary policy is compared to the one for a homogeneous area. In the model with heterogeneity, the relative competitiveness across regions influences the extent to which shocks are transmitted to the area-wide inflation and output gap. Under a plausible calibration for the EMU, the optimal policy plan exhibits a stronger tendency towards currency area exchange rate stabilization than the one in the homogeneity case. Moreover, it is welfare-improving to forgo some area-wide inflation stabilization to dampen inflation differentials.Monetary union, optimal monetary policy, loss function

A NUMERICAL MODEL FOR THE EFFICIENT SIMULATION OF MULTIPLE LANDSLIDE-TSUNAMI SCENARIOS

Submarine landslides can pose serious tsunami hazard to coastal communities, occurring frequently near the coast itself. The properties of the tsunami and the consequent inundation depend on many factors, such as the geometry, the rheology and the kinematic of the landslide and the local bathymetry. However, when evaluating the risk related to landslide tsunamis, it is very difficult to accurately predict all of the above mentioned parameters. It is therefore useful to carry out many simulations of tsunami generation and propagation, with reference to different landslide scenarios, in order to deal with such uncertainties (see for example the probabilistic approach by Grilli et al. 2009). Accurate computations of landslide tsunami generation, propagation, and inundation, however, is computationally expensive, thus limiting the possible maximum number of scenarios. To partially overcome this difficulty, in the present research, a numerical model is proposed that can efficiently compute a large number of tsunami simulations triggered by different landslides. The main goal is to provide a numerical tool that can be used in a Monte Carlo approach framework. Following the study by Ward (2001), we propose a methodology taking advantage of the linear superposition of elementary tsunami solutions

Large-scale numerical modeling of hydro-acoustic waves generated by tsunamigenic earthquakes

Abstract. Tsunamigenic fast movements of the seabed generate pressure waves in weakly compressible seawater, namely hydro-acoustic waves, which travel at the sound celerity in water (about 1500 m s−1). These waves travel much faster than the counterpart long free-surface gravity waves and contain significant information on the source. Measurement of hydro-acoustic waves can therefore anticipate the tsunami arrival and significantly improve the capability of tsunami early warning systems. In this paper a novel numerical model for reproduction of hydro-acoustic waves is applied to analyze the generation and propagation in real bathymetry of these pressure perturbations for two historical catastrophic earthquake scenarios in Mediterranean Sea. The model is based on the solution of a depth-integrated equation, and therefore results are computationally efficient in reconstructing the hydro-acoustic waves propagation scenarios