Time-Varying Uncertainty and the Credit Channel

We extend the Carlstrom and Fuerst (1997) agency cost model of business cycles by including time varying uncertainty in the technology shocks that affect capital production. We first demonstrate that standard linearization methods can be used to solve the model yet second moment effects still influence equilibrium characteristics. The effects of the persistence of uncertainty are then analyzed. Our primary findings fall into four categories. First, it is demonstrated that uncertainty affects the level of the steady-state of the economy so that welfare analyses of uncertainty that focus entirely on the variability of output(or consumption) will understate the true costs of uncertainty. A second key result is that time varying uncertainty results in countercyclical bankruptcy rates - a finding which is consistent with the data and opposite the result in Carlstrom and Fuerst. Third, we show that persistence of uncertainty affects both quantitatively and qualitatively the behavior of the economy. Finally, we demonstrate that the magnitude of changes in uncertainty affecting the economy could be quite large; the implicationagency costs, credit channel, time-varying uncertainty

Agency Costs and Investment Behaviour. ENEPRI Working Paper, No. 47, 3 February 2007

How do differences in the credit channel affect investment behavior in the U.S. and the Euro area? To analyze this question, we calibrate an agency cost model of business cycles. We focus on two key components of the lending channel, the default premium associated with bank loans and bankruptcy rates, to identify the differences in the U.S. and European financial sectors. Our results indicate that the differences in financial structures affect quantitatively the cyclical behavior in the two areas: the magnitude of the credit channel effects is amplified by the differences in the financial structures. We further demonstrate that the effects of minor differences in the credit market translate into large, persistent and asymmetric fluctuations in price of capital, bankruptcy rate and risk premium. The effects imply that the Euro Area's supply elasticities for capital are less elastic than the U.S

Risk Shocks and Housing Markets

This paper analyzes the role of uncertainty in a multi-sector housing model with financial frictions. We include time varying uncertainty (i.e. risk shocks) in the technology shocks that affect housing production. The analysis demonstrates that risk shocks to the housing production sector are a quantitatively important impulse mechanism for the business cycle. Also, we demonstrate that bankruptcy costs act as an endogenous markup factor in housing prices; as a consequence, the volatility of housing prices is greater than that of output, as observed in the data. The model can also account for the observed countercyclical behavior of risk premia on loans to the housing sector.Agency costs, credit channel, time-varying uncertainty, residential investment, housing production, calibration

Agency Costs and Investment Behavior

How do differences in the credit channel affect investment behavior in the U.S. and the Euro area? To analyze this question, we calibrate an agency cost model of business cycles. We focus on two key components of the lending channel, the default premium associated with bank loans and bankruptcy rates, to identify the differences in the U.S. and European financial sectors. Our results indicate that the differences in financial structures affect quantitatively the cyclical behavior in the two areas: the magnitude of the credit channel effects is amplified by the differences in the financial structures. We further demonstrate that the effects of minor differences in the credit market translate into large, persistent and asymmetric fluctuations in price of capital, bankruptcy rate and risk premium. The effects imply that the Euro Area's supply elasticities for capital are less elastic than the U.S.Agency costs, Credit channel, Investment behavior, E.U. Area

Time-Varying Uncertainty and the Credit Channel

We extend the Carlstrom and Fuerst (1997) agency cost model of business cycles by including time varying uncertainty in the technology shocks that affect capital production. We first demonstrate that standard linearization methods can be used to solve the model yet second moment effects still influence equilibrium characteristics. The effects of the persistence of uncertainty are then analyzed. Our primary findings fall into three broad categories. First, it is demonstrated that uncertainty affects the level of the steady-state of the economy so that welfare analyses of uncertainty that focus entirely on the variability of output (consumption) will understate the true costs of uncertainty. A second key result is that time varying uncertainty results in countercyclical bankruptcy rates – a finding which is consistent with the data and opposite the result in Carlstrom and Fuerst. Third, we show that persistence of uncertainty affects both quantitatively and qualitatively the behavior of the economy.Agency costs, Credit channel, Time-varying uncertainty

Trispectrum versus Bispectrum in Single-Field Inflation

In the standard slow-roll inflationary cosmology, quantum fluctuations in a single field, the inflaton, generate approximately Gaussian primordial density perturbations. At present, the bispectrum and trispectrum of the density perturbations have not been observed and the probability distribution for these perturbations is consistent with Gaussianity. However, Planck satellite data will bring a new level of precision to bear on this issue, and it is possible that evidence for non-Gaussian effects in the primordial distribution will be discovered. One possibility is that a trispectrum will be observed without evidence for a non-zero bispectrum. It is not difficult for this to occur in inflationary models where quantum fluctuations in a field other than the inflaton contribute to the density perturbations. A natural question to ask is whether such an observation would rule out the standard scenarios. We explore this issue and find that it is possible to construct single-field models in which inflaton-generated primordial density perturbations have an observable trispectrum, but a bispectrum that is too small to be observed by the Planck satellite. However, an awkward fine tuning seems to be unavoidable.Comment: 15 pages, 3 figures; journal versio

Large-Scale Transit Signal Priority Implementation

In 2016, the District Department of Transportation (DDOT) deployed Transit Signal Priority (TSP) at 195 intersections in highly urbanized areas of Washington, DC. In collaboration with a broader regional implementation, and in partnership with the Washington Metropolitan Area Transit Authority (WMATA), DDOT set out to apply a systems engineering–driven process to identify, design, test, and accept a large-scale TSP system. This presentation will highlight project successes and lessons learned

Synthetic control of a fitness tradeoff in yeast nitrogen metabolism

Background: Microbial communities are involved in many processes relevant to industrial and medical biotechnology, such as the formation of biofilms, lignocellulosic degradation, and hydrogen production. The manipulation of synthetic and natural microbial communities and their underlying ecological parameters, such as fitness, evolvability, and variation, is an increasingly important area of research for synthetic biology. Results: Here, we explored how synthetic control of an endogenous circuit can be used to regulate a tradeoff between fitness in resource abundant and resource limited environments in a population of Saccharomyces cerevisiae. We found that noise in the expression of a key enzyme in ammonia assimilation, Gdh1p, mediated a tradeoff between growth in low nitrogen environments and stress resistance in high ammonia environments. We implemented synthetic control of an endogenous Gdh1p regulatory network to construct an engineered strain in which the fitness of the population was tunable in response to an exogenously-added small molecule across a range of ammonia environments. Conclusion: The ability to tune fitness and biological tradeoffs will be important components of future efforts to engineer microbial communities

Conservation status of New Zealand freshwater invertebrates, 2013

The conservation status of 644 freshwater invertebrate taxa, across five Phyla, 28 Orders and 75 Families, was assessed using the New Zealand Threat Classification System (NZTCS) criteria. Forty-six species were ranked Nationally Critical, 11 Nationally Endangered and 16 Nationally Vulnerable. One hundred and seventy-two taxa were listed as Data Deficient. A full list is presented, along with summaries and brief notes on the most important changes. This list replaces all previous NZTCS lists for freshwater invertebrates

Assessing saccades and pursuits in children with attention deficit disorder using the DEM and Groffman

It has been suggested that the presence of Attention Deficit Disorder (ADD) does not appear to influence children\u27s performance on eye movement tasks. In this study children between the ages of eight to twelve, diagnosed with ADD, were each administered two eye movement tests and a test of verbal intelligence. The three test used were the Developmental Eye Movement test, Groffman Visual Tracing Test, and the Peabody Picture Vocabulary Test. All subjects in this experiment except one were on medication to control their ADD. Trends pointed towards higher then average scores on verbal intelligence, below average scores for saccadic eye movement ability and visual-verbal response time. The test used to analyze pursuits was indecisive, no trend was evident on pursuit eye movement performance with these ADD subjects