Money in monetary policy design: monetary cross-checking in the New-Keynesian model

In the New-Keynesian model, optimal interest rate policy under uncertainty is formulated without reference to monetary aggregates as long as certain standard assumptions on the distributions of unobservables are satisfied. The model has been criticized for failing to explain common trends in money growth and inflation, and that therefore money should be used as a cross-check in policy formulation (see Lucas (2007)). We show that the New-Keynesian model can explain such trends if one allows for the possibility of persistent central bank misperceptions. Such misperceptions motivate the search for policies that include additional robustness checks. In earlier work, we proposed an interest rate rule that is near-optimal in normal times but includes a cross-check with monetary information. In case of unusual monetary trends, interest rates are adjusted. In this paper, we show in detail how to derive the appropriate magnitude of the interest rate adjustment following a significant cross-check with monetary information, when the New-Keynesian model is the central bank’s preferred model. The cross-check is shown to be effective in offsetting persistent deviations of inflation due to central bank misperceptions. Keywords: Monetary Policy, New-Keynesian Model, Money, Quantity Theory, European Central Bank, Policy Under Uncertaint

Optimal simple rules and the lower bound on the nominal interest rate in the Christiano–Eichenbaum–Evans model of the US business cycle

Schmitt-Grohé and Uribe (NBER wp 10724, 2004b) analyzes the optimal, simple and implementable monetary policy rules in a medium-scale macromodel, as the one proposed by Christiano et al. (J Polit Econ 113:1–45, 2005). In doing so, they use a sensible, but somewhat arbitrary constraint to account for the lower bound condition on the nominal interest rate. In this work, we check the robustness of their main results to such a criteria. We find that the optimal policies are actually absolutely robust to the easing of this criterion for all the diff erent cases considered.info:eu-repo/semantics/publishedVersio

Evaluation of a DSGE Model of Energy in the United Kingdom Using Stationary Data

I examine the impact of energy price shock (oil prices shock and gas prices shock) on the economic activities in the United Kingdom using a dynamic stochastic general equilibrium model with a New Keynesian Philips Curve. I decomposed the changes in output caused by all of the stationary structural shocks. I found that the fall in output during the financial crisis period is driven by domestic demand shock, energy prices shock and world demand shock. I found the energy prices shock’s contribution to fall in output is temporary. Such that, the UK can borrow against such a temporary fall. This estimated model can create additional input to the policymaker’s choice of models

Search for the standard model Higgs boson in the H to ZZ to 2l 2nu channel in pp collisions at sqrt(s) = 7 TeV

A search for the standard model Higgs boson in the H to ZZ to 2l 2nu decay channel, where l = e or mu, in pp collisions at a center-of-mass energy of 7 TeV is presented. The data were collected at the LHC, with the CMS detector, and correspond to an integrated luminosity of 4.6 inverse femtobarns. No significant excess is observed above the background expectation, and upper limits are set on the Higgs boson production cross section. The presence of the standard model Higgs boson with a mass in the 270-440 GeV range is excluded at 95% confidence level.Comment: Submitted to JHE

Search for anomalous t t-bar production in the highly-boosted all-hadronic final state

A search is presented for a massive particle, generically referred to as a Z', decaying into a t t-bar pair. The search focuses on Z' resonances that are sufficiently massive to produce highly Lorentz-boosted top quarks, which yield collimated decay products that are partially or fully merged into single jets. The analysis uses new methods to analyze jet substructure, providing suppression of the non-top multijet backgrounds. The analysis is based on a data sample of proton-proton collisions at a center-of-mass energy of 7 TeV, corresponding to an integrated luminosity of 5 inverse femtobarns. Upper limits in the range of 1 pb are set on the product of the production cross section and branching fraction for a topcolor Z' modeled for several widths, as well as for a Randall--Sundrum Kaluza--Klein gluon. In addition, the results constrain any enhancement in t t-bar production beyond expectations of the standard model for t t-bar invariant masses larger than 1 TeV.Comment: Submitted to the Journal of High Energy Physics; this version includes a minor typo correction that will be submitted as an erratu

Search for New Physics with Jets and Missing Transverse Momentum in pp collisions at sqrt(s) = 7 TeV

A search for new physics is presented based on an event signature of at least three jets accompanied by large missing transverse momentum, using a data sample corresponding to an integrated luminosity of 36 inverse picobarns collected in proton--proton collisions at sqrt(s)=7 TeV with the CMS detector at the LHC. No excess of events is observed above the expected standard model backgrounds, which are all estimated from the data. Exclusion limits are presented for the constrained minimal supersymmetric extension of the standard model. Cross section limits are also presented using simplified models with new particles decaying to an undetected particle and one or two jets