Inflation persistence: how much can we explain?

Until recently most macroeconomic models in which monetary policy has real effects were based on the assumption that agents in the economy do not use all available information when making a decision. Critics of these models argue that this assumption implies that agents are not rational. ; In response to this criticism, a class of New Keynesian models has recently been proposed. These models combine "old" Keynesian elements with an environment in which agents form their expectations rationally. The simplest version of such models includes only one type of nominal rigidity, either sticky prices or sticky wages-that is, prices or wages that adjust only slowly to market shortages or surpluses. But these simple models have a drawback: They do not seem to be able to reproduce the persistence of inflation observed in the data. ; This article explores whether adding sticky wages to the baseline sticky-price model solves the persistence-of-inflation problem when plausible durations of price and wage contracts are assumed. ; The analysis confirms that the baseline sticky-price model cannot replicate the observed inflation persistence unless an implausible degree of either price stickiness or exogenous nominal interest rate persistence is assumed. The findings also show that a model with both sticky prices and sticky wages can replicate more closely the autocorrelation function of inflation, even with acceptable levels of both price and wage stickiness.Inflation (Finance) ; Econometric models

Nominal versus real wage rigidities: A Bayesian approach

This paper explores the capability of a dynamic stochastic general equilibrium model with staggered price setting and real wage rigidities to fit the data with reasonable average durations of price and wage contracts. The authors implement a Bayesian approach for parameter estimation and for model comparison with other models that only incorporate nominal rigidities. Their main results can be summarized as follows: First, the authors find that, on average, prices are fixed for three quarters, nominal wages are fixed for five quarters, and half of the wage setters follow a real wage indexing rule of thumb. Second, when the authors remove real wage rigidities and reestimate the model, the parameter on price duration increases. Hence, the lack of endogenous persistence due to real wage rigidities is substituted by a high degree of price stickiness. Third, the authors find little evidence of backward-looking behavior in price inflation. Finally, using the marginal likelihood as a comparison criterion, their model performs best.Wages ; Econometric models

Transparency, incentives and incumbent performance

An expected utility model is used to analyze the allocation decision of an incumbent politician in dividing public funds between expenditures on public goods and pure rents. Comparative statics analysis reveals that while the result for improvements in transparency is ambiguous in terms of simultaneously improving public goods provision and reducing rent-extraction, fixing the incentives scheme faced by the politician while in office yields unambiguously welfare-increasing outcomes. As in any contract under unobservable effort, it is not practicable to insist that the agent reveal his true effort level through increased transparency. Rather, the optimal contract must specify proper incentives and a minimum contractible level of information that accurately relates observed outcomes to the actual effort level exerted by the agent. The paper concludes with empirical results from a panel data set of 115 cities in the Philippines for the years 1996-2000 supporting the predictions of the theoretical model

Cointegrated TFP processes and international business cycles

A puzzle in international macroeconomics is that observed real exchange rates are highly volatile. Standard international real business cycle (IRBC) models cannot reproduce this fact. We show that total factor productivity processes for the United States and the rest of the world are characterized by a vector error correction model (VECM) and that adding cointegrated technology shocks to the standard IRBC model helps explaining the observed high real exchange rate volatility. Also, we show that the observed increase of the real exchange rate volatility with respect to output in the past twenty years can be explained by changes in the parameter of the VECM.

Investment-specific technology shocks and international business cycles: an empirical assessment

In this paper, we first introduce investment-specific technology (IST) shocks into an otherwise standard international real business cycle model and show that a thoughtful calibration of them along the lines of Raffo (2009) successfully addresses several of the existing puzzles in the literature. In particular, we obtain a negative correlation of relative consumption and the terms of trade (Backus-Smith puzzle), as well as a more volatile real exchange rate, and cross-country output correlations that are higher than consumption correlations (price and quantity puzzles). Then we use data from the Organisation for Economic Co-operation and Development for the relative price of investment to build and estimate these IST processes across the United States and a "rest of the world" aggregate, showing that they are cointegrated and well represented by a vector error–correction model. Finally, we demonstrate that, when we fit such estimated IST processes into the model, the shocks are actually powerless to explain any of the existing puzzles.

Nominal versus real wage rigidities: A Bayesian approach

This paper explores the capability of a dynamic stochastic general equilibrium model with staggered price setting and real wage rigidities to fit the data with reasonable average durations of price and wage contracts. The authors implement a Bayesian approach for parameter estimation and for model comparison with other models that only incorporate nominal rigidities. Their main results can be summarized as follows: First, the authors find that, on average, prices are fixed for three quarters, nominal wages are fixed for five quarters, and half of the wage setters follow a real wage indexing rule of thumb. Second, when the authors remove real wage rigidities and reestimate the model, the parameter on price duration increases. Hence, the lack of endogenous persistence due to real wage rigidities is substituted by a high degree of price stickiness. Third, the authors find little evidence of backward-looking behavior in price inflation. Finally, using the marginal likelihood as a comparison criterion, their model performs best

Síndrome hepatocutáneo : revisión bibliográfica y estudio retrospectivo de tres casos clínicos

El síndrome hepatocutáneo o dermatitis superficial necrolítica es una afección del perro que se manifiesta con lesiones costrosas y ulcerativas en la zona distal de las extremidades, en la cara y en los genitales externos. Estas lesiones cutáneas coinciden con lesiones hepáticas y con una disminución de los niveles de aminoácidos en sangre. En este trabajo se describen tres casos de perros afectados con este síndrome y se realiza un paralelismo con el eritema necrolítico migratorio descrito en medicina humana.The hepatocutaneous syndrome or superficial necrolytic dermatitis, is a dogs affection which is manifested with crusting and ulceration lesions in distal extremities on the face and the external genitals. These cutaneous lesions coincide together with hepatic lesions and decreased blood amino acid levels. In this article three cases of dogs with this syndrome are described. One comparison can be made with necrolytic migratory erythema described in human medecine

El principio procesal «iura novit curia» en la jurisprudencia del Tribunal Supremo

Després d'haver dut a terme l'observació empírica de l'ús real de les màximes llatines en les resolucions del Tribunal Suprem, s'ha comprovat que set presenten una notable freqüència d'aparició. L'aforisme iura novit curia elegit en aquesta ocasió –principi que no és romà, sinó medieval– pressuposa la facultat que tenen els tribunals per trobar el dret aplicable a la solució del cas, si bé aquesta qüestió s'ha d'extreure dels fets al·legats i provats, ha de vetllar per l’harmonia necessària amb la pretensió deduïda, amb el petitum i la causa petendi. S'estudia aquest principi processal des del punt de vista etimològic i gramatical i es recullen les interpretacions usuals i admissibles en dret en el període 2013-2014, a partir d'un corpus constituït per 306 documents, corresponents a les sales civil, penal, contenciosa administrativa i social del Tribunal Suprem.Having conducted empirical observation of the real use of the Latin maxims in the decisions of the Spanish Supreme Court, it was found that seven show a remarkable frequency of occurrence. The aphorism, iura novit curia, selected here (which is not Roman, but mediaeval) takes for granted the power of the courts to find the applicable law to solve the case, although this issue should be drawn from the alleged and shaped facts. It has to keep the necessary harmony with the deduced claim, comprising the petitum and causa petendi. This procedural principle is studied from an etymological and grammatical perspective. The customary and permissible interpretations of the law are collected in the period 2013-2014, from a corpus consisting of 306 documents, belonging to the Civil, Criminal, Administrative and Labor Divisions of the Spanish Supreme Court.Después de haber llevado a cabo la observación empírica del uso real de las máximas latinas en las resoluciones del Tribunal Supremo, se ha comprobado que siete presentan una notable frecuencia de aparición. El aforismo iura novit curia elegido en esta ocasión ―principio que no es romano, sino medieval― presupone la facultad que tienen los tribunales para encontrar el derecho aplicable a la solución del caso, si bien este cambio debe extraerse de los hechos alegados y probados, tiene que guardar la necesaria armonía con la pretensión deducida, con el petitum y la causa petendi. Se estudia este principio procesal desde el punto de vista etimológico y gramatical y se recogen las interpretaciones usuales y admisibles en derecho en el periodo 2013-2014, a partir de un corpus constituido por 306 documentos, correspondientes a las salas Civil, Penal, Contencioso-Administrativo y Social del Tribunal Supremo

The identity of Zachaenus roseus Cope, 1890 (Anura: species inquirenda)

Zachaenus roseus Cope, 1890, has puzzled systematists working in southern South America. A single individual, the holotype, has ever been collected and this specimen is in extremely poor preservation condition. Herein, the precise location of the type locality of Z. roseus is determined based on a historical review of the literature. Furthermore, following a careful comparison with all species that inhabit the southern austral forest, and that could potentially correspond to Zachaenus roseus, we conclude that this taxon is placed in the synonym of Eupsophus calcaratus (Günther, 1881).Fil: Lavilla, Esteban Orlando. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico - Tucumán. Unidad Ejecutora Lillo; Argentina. Fundación Miguel Lillo; ArgentinaFil: Nuñez, J. J.. Universidad Austral de Chile; ChileFil: Rabanal, F. E.. Universidad Austral de Chhile; ChileFil: Langone, José A.. Museo Nacional de Historia Natural; UruguayFil: de Sá, Rafael O.. University of Richmon; Estados Unido

The Identity of \u3cem\u3eZachaenus roseus\u3c/em\u3e Cope, 1890 (Anura: \u3cem\u3eSpecies Inquirenda\u3c/em\u3e)

Zachaenus roseus Cope, 1890, has puzzled systematists working in southern South America. A single individual, the holotype, has ever been collected and this specimen is in extremely poor preservation condition. Herein, the precise location of the type locality of Z. roseus is determined based on a historical review of the literature. Furthermore, following a careful comparison with all species that inhabit the southern austral forest, and that could potentially correspond to Zachaenus roseus, we conclude that this taxon is placed in the synonymy of Eupsophus calcaratus (Günther, 1881