Unhealthy situation : nursing shortage threatens health care

Employment (Economic theory) ; Wages ; Hospitals - Economic aspects ; Federal Reserve District, 5th

First flight centennial

Aeronautics, Commercial ; Airlines ; Federal Reserve District, 5th

Jargon alert : Rational expectations

Economics

A menu of options : a Richmond Fed economist says that giving financial institutions limited choice about how they are regulated may produce a more stable and efficient banking system

Bank loans ; Banks and banking ; Contracts

Legislative update : Dividend tax cuts

Tax reform ; Taxation ; Capital market

Federal Reserve : After Greenspan : choosing the next Chairman of the Federal Reserve

Federal Reserve System ; Executives

Research spotlight : An economist considers the causes of terrorism

Terrorism

Financial crises, unconventional monetary policy exit strategies, and agents' expectations

This paper considers a model with financial frictions and studies the role of expectations and unconventional monetary policy response to financial crises. During a financial crisis, the financial sector has reduced ability to provide credit to productive firms, and the central bank may help lessen the magnitude of the downturn by using unconventional monetary policy to inject liquidity into credit markets. The model allows parameters to change according to a Markov process, which gives agents in the economy expectation about the probability of the central bank intervening in response to a crises, as well as expectations about the central bank's exit strategy post-crises. Using this Markov regime switching specification, the paper addresses three issues. First, it considers the effects of different exit strategies, and shows that, after a crisis, if the central bank sells off its accumulated assets too quickly, the economy can experience a double-dip recession. Second, it analyzes the effects of expectations of intervention policy on pre-crises behavior. In particular, if the central bank increases the probability of intervening during crises, this increase leads to a loss of output in pre-crisis times. Finally, the paper considers the welfare implications of guaranteeing intervention during crises, and shows that providing a guarantee can raise or lower welfare depending upon the exit strategy used, and that committing before a crisis can be welfare decreasing but then welfare increasing once a crisis occurs.

Are we working too hard or should we be working harder? A simple model of career concerns

Productivity ; Employment

Bayesian Analysis, Endogenous Data,and Convergence of Beliefs

Problems in statistical analysis, economics, and many other disciplines often involve a trade-off between rewards and additional information that could yield higher future rewards. This thesis investigates such a trade-off, using a class of problems known as bandit problems. In these problems, a reward-seeking agent makes decisions based upon his beliefs about a parameter that controls rewards. While some choices may generate higher short-term rewards, other choices may provide information that allows the agent to learn about the parameter, thereby potentially increasing future rewards. Learning occurs if the agent\u27s subjective beliefs about the parameter converge over time to the parameter\u27s true value. However, depending upon the environment, learning may or may not be optimal, as in the end, the agent cares about maximizing rewards and not necessarily learning the true value of the underlying parameter