Understanding the term structure of interest rates: the expectations theory

Interest rates

The U.S. currency system: a historical perspective

Money ; Banks and banking - History

Ecology and the Common Good: Sustainability and Catholic Social Teaching

In recent years official Roman Catholic documents have addressed the ecological crisis from the perspective of Catholic social teaching. This expansion of Catholic social thought addresses the social and ecological question. This paper links environmental and human ecology with the concept of sustainability and proposes an interpretation of the common good and a definition of sustainability within Catholic social teaching. Our treatment of sustainability and Catholic social teaching includes: an analysis of the ecological processes that sustain nature; insights from human ecology, and an examination of models of sustainability as a foundation for re-structuring society to promote the common good. The paper provides a summary of the historical expansion of the common good within modern Catholic social thought, and concludes with an ecological interpretation of the common good and a definition of sustainability within the Catholic understanding of justice

A Rayleigh-Ritz analysis methodology for cutouts in composite structures

A new Rayleigh-Ritz stress analysis methodology that was developed for composite panels containing cutouts is described. The procedure, which makes use of a general assumed displacement field, accommodates circular and elliptical cutouts in biaxially loaded rectangular composite panels. Symmetric integral padups around the cutout can be included in the analysis. Benchmark results are presented to demonstrate the accuracy of the technique. Strength predictions based on the average stress criterion are generated and compared with experimental data. Finally, the stress analysis methodology is integrated into a design procedure for sizing integral padups around circular cutouts, and a sample problem is solved to illustrate its use

The inflationary effects of the use of reserve ratio reductions, or open market purchases, to reduce market interest rates: a theoretical comparison

Interest rates ; Monetary policy

How costly is sustained low inflation for the U.S. economy?

We study the welfare cost of inflation in a general equilibrium life cycle model with growth, costly financial intermediation, and taxes on nominal quantities. We find a stationary equilibrium of the model matches a wide variety of facts about the postwar U.S. economy. We then calculate that the inflation policy of the monetary authority has welfare consequences for agents that are an order of magnitude larger than existing estimates in the literature. These effects are large even at very low inflation rates. The bulk of the welfare cost of inflation can be attributed to the fact that inflation increases the effective tax rate on capital income.Economic conditions - United States ; Inflation (Finance)

How costly is sustained low inflation for the U.S. economy?

The authors study the welfare cost of inflation in a general equilibrium life-cycle model that includes households that live for many periods, production and capital, simple monetary and financial sectors, and a fairly elaborate government sector. The government’s taxation of capital income is not indexed for inflation. They find that a plausibly calibrated version of this model has a steady state that matches a variety of facts about the postwar U.S. economy. They use the model to estimate the welfare cost of permanent, policy-induced changes in the inflation rate and find that most of the costs of inflation are direct and indirect consequences of the fact that inflation increases the effective tax rate on capital income. The cost estimates are an order of magnitude larger than other estimates in the literature.Economic conditions - United States ; Inflation (Finance)

Stability of steady states in a model of pleasant monetarist arithmetic

In this paper the authors study the stability properties of the alternative steady-state equilibria that arise in a neoclassical production model that delivers pleasant monetarist arithmetic. They show that if the government’s monetary policy rule involves a fixed money supply growth rate, then “pleasant arithmetic” steady states—steady states from which a permanent increase in the money growth and inflation rates is associated with a permanent decrease in the real interest rate and a permanent increase in the level of output—are dynamically stable.Econometric models ; Monetary policy

A public finance analysis of multiple reserve requirements

This paper analyzes multiple reserve requirements of the type that have been imposed by a number of developing countries. We show that previous theoretical work on this topic has not succeeded in providing a social welfare rationale for the existence of multiple reserve requirements. We go on to present a model in which it is possible for a multiple reserves regime to improve social welfare relative to simpler regimes involving reserve requirements and/or deposit taxes. We demonstrate the empirical plausibility of our approach by providing a case study of Mexico, a country with extensive historical experience with multiple reserve requirements.Finance, Public ; Developing countries ; Mexico ; Bank reserves

A public finance analysis of multiple reserve requirements

This paper analyzes multiple reserve requirements of the type that have been imposed by a number of developing countries. We show that previous theoretical work on this topic has not succeeded in providing a social welfare rationale for the existence of multiple reserve requirements: in the basic reserve requirements model, any allocation that can be supported by a multiple-reserves regime can also be supported by a single-bond reserve requirement. We go on to present extended versions of the model in which it is possible for a multiple-reserves regime to improve social welfare relative to any single-reserve (currency or bond) and/or deposit-tax regime. We demonstrate the empirical plausibility of our approach by providing a case study of Mexico, a country with extensive historical experience with multiple reserve requirementsDeveloping countries ; Finance, Public