Inflation Targeting in Financially Stable Economies: Has it been Flexible Enough?

The events surrounding the financial crisis and recession of 2008-2009 required significant policy responses by central banks. For formal inflation targeters (IT) a natural question arises about whether IT frameworks were flexible enough to address this unprecedented policy environment. In this paper we tackle this question by assessing the policy responses to the crisis of nine IT central banks that did not face systemic problems in their banking or financial systems. We first document substantial deviations of actual policy responses from prescriptions of conventional monetary policy reaction functions, beginning in the second half of 2008. Although several explanations for the deviations are offered, highlighting the extreme challenges at the time, we can more easily reconcile the findings with a decline in the persistence of monetary policy, again, in all cases. Second, we document the banks’ non-monetary-policy measures adopted at the time, and estimate their impact on local money markets (both in local currency and US dollars) and on exchange rates. While these measures helped broadly to normalize markets, firm conclusions on the effectiveness of specific measures are elusive, owing to the difficulty in comparing the different mix of measures adopted across countries and the significant heterogeneity in specific economies’ responses to these non-monetary policy measures.

New Frontiers for Monetary Policy in Chile

This paper assesses the efficiency of the current Inflation Targeting (IT) scheme in place at the Central Bank of Chile. Using a small macroeconomic model of the Chilean economy, our main results are as follows: (i) an efficient monetary policy requires a bias towards output stabilization around its long run trend; (ii) the switch to forecast-targeting, implicit in the current IT scheme in Chile, results in an efficiency gain; (iii) targeting core inflation is not efficient; (iv) ceteris paribus, efficiency could be enhanced if monetary policy leans against the wind when facing shocks to the cost of international finance.

On the nature of the Mott transition in multiorbital systems

We analyze the nature of Mott metal-insulator transition in multiorbital systems using dynamical mean-field theory (DMFT). The auxiliary multiorbital quantum impurity problem is solved using continuous time quantum Monte Carlo (CTQMC) and the rotationally invariant slave-boson (RISB) mean field approximation. We focus our analysis on the Kanamori Hamiltonian and find that there are two markedly different regimes determined by the nature of the lowest energy excitations of the atomic Hamiltonian. The RISB results at $T\to0$ suggest the following rule of thumb for the order of the transition at zero temperature: a second order transition is to be expected if the lowest lying excitations of the atomic Hamiltonian are charge excitations, while the transition tends to be first order if the lowest lying excitations are in the same charge sector as the atomic ground state. At finite temperatures the transition is first order and its strength, as measured e.g. by the jump in the quasiparticle weight at the transition, is stronger in the parameter regime where the RISB method predicts a first order transition at zero temperature. Interestingly, these results seem to apply to a wide variety of models and parameter regimes.Comment: Accepted for publication in Physical Review

State-of-the-art techniques for calculating spectral functions in models for correlated materials

The dynamical mean field theory (DMFT) has become a standard technique for the study of strongly correlated models and materials overcoming some of the limitations of density functional approaches based on local approximations. An important step in this method involves the calculation of response functions of a multiorbital impurity problem which is related to the original model. Recently there has been considerable progress in the development of techniques based on the density matrix renormalization group (DMRG) and related matrix product states (MPS) implying a substantial improvement to previous methods. In this article we review some of the standard algorithms and compare them to the newly developed techniques, showing examples for the particular case of the half-filled two-band Hubbard model.Comment: 8 pages, 4 figures, to be published in EPL Perspective

Juncus emmanuelis

This species is endemic to a small area in the southwestern Iberian Peninsula, with subpopulations scattered in approximately 16 localities. It is assessed as Endangered (EN B2ab(ii,iii,iv)) because it has an Area of Occupancy (AOO) of less than 500 km2 and shows signs of severe fragmentation due to the ongoing transformation of its specific habitat of sandy soils with an impermeable underlayer in temporary pools, as a result of several ongoing major threats associated with intensive agricultural activities. Based on this information, a continuing decline in the AOO, habitat quality and number of subpopulations has been inferred. Additional research and conservation action is needed for this species

Money and Inflation in an Inflation-Tageting Regime

This work describes the role of money in the current inflation-targeting framework in Chile, in particular given the large recent annual increase in M1A. From a conceptual standpoint, it analyzes the relationship between money growth and inflation, as well as the interpretation of movements in monetary aggregates. Empirically, the article evaluates the informational content of money as an indicator of inflationary pressures in Chile, and examines whether the recent evolution of M1A is consistent with money demand fundamentals. The evidence indicates that the recent trajectory of money does not represent a material risk to the achievement of the inflation target.

Dinero e Inflación en el Marco de Metas de Inflación

This work describes the role of money in the current inflation-targeting framework in Chile, in particular given the large recent annual increase of M1A. From a conceptual point of view, we analyze the relationship between money growth and inflation, as well as the interpretation of the movements in monetary aggregates. Empirically, we evaluate the informational content of money as an indicator of inflationary pressures in Chile, as well as whether the recent evolution of M1A is consistent with money demand fundamentals. The evidence indicates that the recent trajectory of money does not represent a relevant risk to the achievement of the inflation target.

Zannichellia contorta

This species is native to southern, central and eastern Spain, with an old record from the Atlas Mountains in northern Morocco requiring confirmation. The species is very sensitive to eutrophication and deterioration of water quality. The Area of Occupancy (AOO) has been estimated to be less than 500 km2 based on confirmed records and knowledge that its habitat is in continuous decline and at least 40% of the known localities have disappeared, especially in southern Spain. Moreover, an ongoing continuing decline in AOO, habitat quality and number of subpopulations of this species due to the increase in nutrients concentration from waters of the streams where it lives, which stops its growth, has been observed. The same process of habitat deterioration is happening in central and eastern Spain. The population of this species is severely fragmented with more than half of its subpopulations being isolated with no exchange possibilities and suspected to have reached no viable levels. It therefore qualifies to be listed in the category Endangered (EN B2ab(ii,iii,iv)) in the Mediterranean region. Resource and habitat protection and site management are needed. Other recommended conservation measures are ex situ conservation, population and distribution research, and habitat and population monitoring