The Macroeconomic Effects of Oil Shocks: Why are the 2000s So Different from the 1970s?

We characterize the macroeconomic performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labor markets, and (d) improvements in monetary policy. We conclude that all four have played an important role.

The Science of Monetary Policy: A New Keynesian Perspective

MONETARY POLICY; STABILIZATION; CREDIBILITY.

Rule-of-Thumb Consumers and the Design of Interest Rate Rules

We introduce rule-of-thumb consumers in an otherwise standard dynamic sticky price model, and show how their presence can change dramatically the properties of widely used interest rate rules. In particular, the existence of a unique equilibrium is no longer guaranteed by an interest rate rule that satisfies the so called Taylor principle. Our findings call for caution when using estimates of interest rate rules in order to assess the merits of monetary policy in specific historical periods.

Markups, Gaps, and the Welfare Costs of Business Fluctuations

In this paper we present a simple, theory-based measure of the variations in aggregate economic efficiency associated with business fluctuations. We decompose this indicator, which we refer to as 'the gap', into two constituent parts: a price markup and a wage markup, and show that the latter accounts for the bulk of the fluctuations in our gap measure. Finally, we derive a measure of the welfare costs of business cycles that is directly related to our gap variable, and which takes into account explicitly the existence of a varying aggregate inefficiency. When applied to postwar U.S. data, for plausible parametrizations, our measure suggests welfare losses of fluctuations that are of a higher order of magnitude than those derived by Lucas (1987). It also suggests that the major postwar recessions involved substantial efficiency costs.

Technology Shocks and Monetary Policy: Assessing the Fed's Performance

The purpose of the present paper is twofold. First, we characterize the Fed's systematic response to technology shocks and its implications for U.S. output, hours and inflation. Second, we evaluate the extent to which those responses can be accounted for by a simple monetary policy rule (including the optimal one) in the context of a standard business cycle model with sticky prices. Our main results can be described as follows: First, we detect significant differences across periods in the response of the economy (as well as the Fed's) to a technology shock. Second, the Fed's response to a technology shock in the Volcker-Greenspan period is consistent with an optimal monetary policy rule. Third, in the pre-Volcker period the Fed's policy tended to over stabilize output at the cost of generating excessive inflation volatility. Our evidence reinforces recent results in the literature suggesting an improvement in the Fed's performance.

Dark states of single NV centers in diamond unraveled by single shot NMR

The nitrogen-vacancy (NV) center in diamond is supposed to be a building block for quantum computing and nanometer scale metrology at ambient conditions. Therefore, precise knowledge of its quantum states is crucial. Here, we experimentally show that under usual operating conditions the NV exists in an equilibrium of two charge states (70% in the expected negative (NV-) and 30% in the neutral one (NV0)). Projective quantum non-demolition measurement of the nitrogen nuclear spin enables the detection even of the additional, optically inactive state. The nuclear spin can be coherently driven also in NV0 (T1 ~ 90 ms and T2 ~ 6 micro-s).Comment: 4 pages, 3 figure

A Monetary Business Cycle Model for India

A New Keynesian monetary business cycle model is constructed to study why monetary transmission in India is weak. Our models feature banking and financial sector frictions as well as an informal sector. The predominant channel of monetary transmission is a credit channel. Our main finding is that base money shocks have a larger and more persistent effect on output than an interest rate shock, as in the data. The presence of an informal sector hinders monetary transmission. Contrary to the consensus view, financial repression in the form of a statutory liquidity ratio and administered interest rates, does not weaken monetary transmission

Characterization of the nitrogen split interstitial defect in wurtzite aluminum nitride using density functional theory

We carried out Heyd-Scuseria-Ernzerhof hybrid density functional theory plane wave supercell calculations in wurtzite aluminum nitride in order to characterize the geometry, formation energies, transition levels and hyperfine tensors of the nitrogen split interstitial defect. The calculated hyperfine tensors may provide useful fingerprint of this defect for electron paramagnetic resonance measurement.Comment: 5 pages, 3 figure

Monetary Policy Rules and Macroeconomic Stability: Evidence and some Theory

We estimate a forward-looking monetary policy reaction function for the postwar U.S. economy, pre- and post-October 1979. Our results point to substantial differences in the estimated rule across periods. In particular, interest rate policy in the Volcker-Greenspan period appears to have been much mors sensitive to changes in expected inflation than in the pre-Volcker period.BUSINESS CYCLES ; MONETARY POLICY