Investment-Specific and Multifactor Productivity in Multi-Sector Open Economies:Data and Analysis

In the last half of the 1990s, labor productivity growth rose in the U.S. and fell almost everywhere in Europe. We document changes in both capital deepening and multifactor productivity (MFP) growth in both the information and communication technology (ICT) and non-ICT sectors. We view MFP growth in the ICT sector as investment-specific productivity (ISP) growth. We perform simulations suggested by the data using a two-country DGE model with traded and nontraded goods. For ISP, we consider level increases and persistent growth rate increases that are symmetric across countries and allow for costs of adjusting capital-labor ratios that are higher in one country because of structural differences. ISP increases generate investment booms unless adjustment costs are too high. For MFP, we consider persistent growth rate shocks that are asymmetric. When such MFP shocks affect only traded goods (as often assumed), movements in `international' variables are qualitatively similar to those in the data. However, when they also affect nontraded goods (as suggested by the data), movements in some of the variables are not. To obtain plausible results for the growth rate shocks, it is necessary to assume slow recognitionTechnology Shocks, DGE Models, Learning

Can Long-Run Restrictions Identify Technology Shocks?

Gali's innovative approach of imposing long-run restrictions on a vector autoregression (VAR) to identify the effects of a technology shock has become widely utilized. In this paper, we investigate its reliability through Monte Carlo simulations of several relatively standard business cycle models. We find it encouraging that the impulse responses derived from applying the Gali methodology to the artificial data generally have the same sign and qualitative pattern as the true responses. However, we highlight the importance of small-sample bias in the estimated impulse responses and show that the magnitude and sign of this bias depend on the model structure. Accordingly, we caution against interpreting responses derived from this approach as ``model-independent'' stylized facts. Moreover, we find considerable estimation uncertainty about the quantitative impact of a technology shock on macroeconomic variables, and a corresponding level of uncertainty about the contribution of technology shocks to the business cycletechnology shocks, vector autoregressions, real business cycles

Social Distancing and Supply Disruptions in a Pandemic

Drastic public health measures such as social distancing or lockdowns can reduce the loss of human life by keeping the number of infected individuals from exceeding the capacity of the health care system but are often criticized because of the social and the economic cost they entail. We question this view by combining an epidemiological model, calibrated to capture the spread of the COVID-19 virus, with a multisector model, designed to capture key characteristics of the U.S. Input Output Tables. Our two-sector model features a core sector that produces intermediate inputs not easily replaced by inputs from the other sector, subject to minimum-scale requirements. We show that, by affecting workers in this core sector, the high peak of an infection not mitigated by social distancing may cause very large upfront economic costs in terms of output, consumption and investment. Social distancing measures can reduce these costs, especially if skewed towards non-core industries and occupations with tasks that can be performed from home, helping to smooth the surge in infections among workers in the core sector.</jats:p

Standardization of a Call-By-Value Lambda-Calculus

We study an extension of Plotkin\u27s call-by-value lambda-calculus by means of two commutation rules (sigma-reductions). Recently, it has been proved that this extended calculus provides elegant characterizations of many semantic properties, as for example solvability. We prove a standardization theorem for this calculus by generalizing Takahashi\u27s approach of parallel reductions. The standardization property allows us to prove that our calculus is conservative with respect to the Plotkin\u27s one. In particular, we show that the notion of solvability for this calculus coincides with that for Plotkin\u27s call-by-value lambda-calculus

On the application of automatic differentiation to the likelihood function for dynamic general equilibrium models

Summary. A key application of automatic differentiation (AD) is to facilitate numerical optimization problems. Such problems are at the core of many estimation techniques, including maximum likelihood. As one of the first applications of AD in the field of economics, we used Tapenade to construct derivatives for the likelihood function of any linear or linearized general equilibrium model solved under the assumption of rational expectations. We view our main contribution as providing an important check on finite-difference (FD) numerical derivatives. We also construct Monte Carlo experiments to compare maximum-likelihood estimates obtained with and without the aid of automatic derivatives. We find that the convergence rate of our optimization algorithm can increase substantially when we use AD derivatives

The elusive gains from nationally oriented monetary policy

The gains from monetary policy cooperation depend on real and financial distortions in the economy and evolve dynamically with prevailing economic conditions. We show that, with international trade in assets, these gains are driven by asymmetric cross-border developments in productivity and savings, and can reach multiples of the cost of economic fluctuations. When financial flows are restricted to non-state-contingent bonds, the gains from cooperation grow with the size of global imbalances, i.e., net-foreign-asset positions

Analysis of hydrogeological risk in Italy: landscape-environment as cultural heritage

This paper results from work performed over the past twnty years in the field of hydrogeological risk analysis, herewith assessed from both epistemological and practical perpectives. Focusing on the Italian territory, technical and strategic approaches for the mitigation of hydrogeological risk in terms of economic cost and of environmental safety, including procedures for the protection of infrastructures with relevant environmental impact, are described. Landscape protection procedures to be adopted during the development of structural works are also discussed

A multi-sensor approach for volcanic ash cloud retrieval and eruption characterization: the 23 November 2013 Etna lava fountain

Volcanic activity is observed worldwide with a variety of ground and space-based remote sensing instruments, each with advantages and drawbacks. No single system can give a comprehensive description of eruptive activity, and so, a multi-sensor approach is required. This work integrates infrared and microwave volcanic ash retrievals obtained from the geostationary Meteosat Second Generation (MSG)-Spinning Enhanced Visible and Infrared Imager (SEVIRI), the polar-orbiting Aqua-MODIS and ground-based weather radar. The expected outcomes are improvements in satellite volcanic ash cloud retrieval (altitude, mass, aerosol optical depth and effective radius), the generation of new satellite products (ash concentration and particle number density in the thermal infrared) and better characterization of volcanic eruptions (plume altitude, total ash mass erupted and particle number density from thermal infrared to microwave). This approach is the core of the multi-platform volcanic ash cloud estimation procedure being developed within the European FP7-APhoRISM project. The Mt. Etna (Sicily, Italy) volcano lava fountaining event of 23 November 2013 was considered as a test case. The results of the integration show the presence of two volcanic cloud layers at different altitudes. The improvement of the volcanic ash cloud altitude leads to a mean difference between the SEVIRI ash mass estimations, before and after the integration, of about the 30%. Moreover, the percentage of the airborne “fine” ash retrieved from the satellite is estimated to be about 1%–2% of the total ash emitted during the eruption. Finally, all of the estimated parameters (volcanic ash cloud altitude, thickness and total mass) were also validated with ground-based visible camera measurements, HYSPLIT forward trajectories, Infrared Atmospheric Sounding Interferometer (IASI) satellite data and tephra deposits