Cultural identity and academic achievement among Māori undergraduate university students

Cultural identity and academic achievement were investigated among a nonrandom sample of 72 undergraduate Māori university students studying at Massey University. Student problems were examined to identify the types of difficulties most prevalent among this population. The degree to which cultural identity moderates the relationship between student problems and academic achievement was then examined. Major findings were that (a) there is a consistent negative relationship between student problems and academic achievement; and (b) cultural identity moderates the effect of student problems on academic achievement, in that: a high degree of problems were associated with decreases in grade point average among respondents with low cultural identity; while among respondents with high cultural identity, high levels of student problems had little negative effect on grade point average. Despite the study having limitations, the findings have important implications for Māori students, deliverers of tertiary education, tertiary education providers, and those involved in the development and implementation of tertiary education policy

Monetary policy and the term structure of interest rates

Monetary policy ; Interest rates

On "Real" and "Sticky-Price" Theories of the Business Cycle

This paper begins by identifying the distinguishing characteristic of the "real business cycle" (RBC) class of macroeconomic models. It then scruitinizes existing evidence, presented in support of the RBC approach, of three types: calibrated general equilibrium models with no monetary sector, vector-autoregression variance decomposition results, and univariate measurements of trend and cyclical components. It is argued that, in fact, these types of evidence have so far provided little support for the RBC hypothesis. Finally, with regard to an important alternative hypothesis concerning macroeconomic fluctuations, the paper proposes a partial rationalization for the stickiness of nominal product prices.

Some Issues Concerning Interest Rate Pegging, Price Level Determinacy, and the Real Bills Doctrine

In a recent paper, Canzoneri, Henderson, and Rogoff have shown that it is possible for the monetary authority to peg the nominal interest rate without creating price level indeterminacy in a simplified version of the 1975 Sargent-Wallace model. The present paper begins by reviewing that result, which involves a limiting case of a money supply rule that depicts the authority as responding to current values of the interest rate. Then it shows that there exists an alternative rule that will peg the nominal rate without creating indeterminacy, but that this rule induces a different pattern of price level fluctuations. Next the paper considers whether indeterminacy will prevail if the authority tries to effect a peg in a third way: by simply standing ready to buy and sell securities at the desired rate. Finally, the implication of the foregoing results are drawn for arguments concerning the real bills doctrine and some critical comments are directed at the recent attempted rehabilitation of that doctrine by Sargent and Wallace.

Monetarist Rules in the Light of Recent Experience

Recent experience does not include a "monetarist experiment," as some have argued, but may slightly reinforce preexisting reasons for doubting that the best way of formulating monetarist policy prescriptions is in the form of a constant growth rule for the money stock.A more desirable rule would pertain to the monetary base, which is much more directly under Fed control. While a constant base growth rule might provide good macroeconomic performance, better results should be obtainable from a rule that at regular intervals adjusts the base growth rate upward or downward depending on whether nominal GNP is below or above a target path that specifies constant, non-inflationary growth for that variable. This type of rule is activist, to an extent, but is non-discretionary.The implied absence of policy-making flexibility is desirable for reasons explained in the literature on dynamic inconsistency.

What Is the Proper Perspective for Monetary Policy Optimality?

In forward-looking models for monetary policy analysis, the conditions for full conditional optimality are not time invariant, and as a consequence imply an incentive each period for the central bank to depart from its previous optimized plan. The conditional "commitment" plan is therefore strategically incoherent. Discretionary optimality does not have this problem, but yields inferior performance. A "timeless perspective" policy rule proposed by Woodford (1999, 2003) is intended to overcome the incoherence and noncredibility of the commitment plan while yielding performance superior to that of discretionary policy behavior; this rule has received much attention. A fourth "fully timeless" alternative differs slightly from the timeless perspective rule; it is unambiguously superior from an unconditional perspective but does not dominate from the conditional perspective. The paper discusses comparisons at some length and briefly considers the sustainability of these policy strategies.

The Liquidity Trap and the Pigou Effect: A Dynamic Analysis with Rational Expectations

A Keynesian idea of considerable historical importance is that, in the presence of a liquidity trap, a competitive economy may lack--despite price flexibility--automatic market mechanisms that tend to eliminate excess supplies of labor. The standard classical counterargument, which relies upon the Pigou effect, has typically been conducted in a comparative-static framework. But, as James Tobin has recently emphasized, the more relevant issue concerns the dynamic response (in "real time") of an economy that has been shocked away from full employment. The present paper develops a dynamic analysis, in a rather standard model, under the assumption that expectations are formed rationally. The analysis permits examination of Tobin's suggestion that, because of expectational effects, such an economy could be unstable. Also considered is Martin J. Bailey's conjecture that, in the absence of a stock Pigou effect, Keynesian problems could be eliminated by expectational influences on disposable income.

Credibility and Monetary Policy

The purpose of this paper is to describe and evaluate the most important existing ideas concerning credibility of monetary policy, with special emphasis given to matters pertaining to the U.S. economy and the practices and procedures of the Fed. The main discussion begins with Fellner's hypothesis that the costs of a disinflationary episode will be smaller when the public believes that the disinflation will in fact be carried out. This hypothesis has been challenged recently by several writers; an evaluation of their evidence is attempted and some new results presented. Next, the discussion turns to positive analyses of the monetary policy-making process. Models developed by Barro and Gordon and others are examined, the object being to develop an understanding of why certain features of monetary policy tend to prevail. The main implications of this analysis are then used to consider various strategies for obtaining a type of policy behavior that might produce better macroeconomic results--less inflation with no more unemployment--than the U.S. has experienced in the recent past. Particular proposals touched upon include the adoption of a commodity-money standard, a balanced-budget amendment, a legislated monetary rule, a nominal GNP target, and the absorption of the Fed into the Treasury.

Alternative monetary policy rules : a comparison with historical settings for the United States, the United Kingdom, and Japan

Monetary policy