Money Growth Monitoring and the Taylor Rule

Using a series of examples, we review the various ways in which a monetary policy characterized by the Taylor rule can inject volatility into the economy. In the examples, a particular modification to the Taylor rule can reduce or even entirely eliminate the problems. Under the modified policy, the central bank monitors the money growth rate and commits to abandoning the Taylor rule in favor of a money growth rule in case money growth passes outside a particular monitoring range.

A new approach to the design of wide-band multiprobe reflectometers

A new design approach for low-cost multiprobe reflectometers is presented. While traditional circuits adopt equally-spaced probes, the presented solution provide a method to greatly enhance the bandwidth of the measuring system by a proper choice of each probe position. As example, a five-probe 0.6-16 GHz system has been designed

The Great Depression and the Friedman-Schwartz hypothesis

We evaluate the Friedman-Schwartz hypothesis that a more accommodative monetary policy could have greatly reduced the severity of the Great Depression. To do this, we first estimate a dynamic, general equilibrium model using data from the 1920s and 1930s. Although the model includes eight shocks, the story it tells about the Great Depression turns out to be a simple and familiar one. The contraction phase was primarily a consequence of a shock that induced a shift away from privately intermediated liabilities, such as demand deposits and liabilities that resemble equity, and towards currency. The slowness of the recovery from the Depression was due to a shock that increased the market power of workers. We identify a monetary base rule which responds only to the money demand shocks in the model. We solve the model with this counterfactual monetary policy rule. We then simulate the dynamic response of this model to all the estimated shocks. Based on the model analysis, we conclude that if the counterfactual policy rule had been in place in the 1930s, the Great Depression would have been relatively mild. JEL Classification: E31, E40, E51, E52, E58, N12deflation, General Equilibrium, lower bound, shocks

Two Reasons Why Money and Credit May be Useful in Monetary Policy

We describe two examples which illustrate in different ways how money and credit may be useful in the conduct of monetary policy. Our first example shows how monitoring money and credit can help anchor private sector expectations about inflation. Our second example shows that a monetary policy that focuses too narrowly on inflation may inadvertently contribute to welfare-reducing boom-bust cycles in real and financial variables. The example is of some interest because it is based on a monetary policy rule fit to aggregate data. We show that a policy of monetary tightening when credit growth is strong can mitigate the problems identified in our second example.

Soil erosion as affected by shrub encroachment in northeastern Patagonia

La erosion de los suelos es la causa principal de las perdidas irreversibles del potencial productivo de los suelos en la mayoria de los pastizales naturales. En el nordeste de Patagonia, el aumento de la erosion de los suelos ha estado estrechamente asociado al aumento de la cobertura de arbustos en las estepas herbaceas o arbustivas-herbaceas. Nosotros empleamos lluvia simulada para determinar la tasa de infiltracion y la produccion de sedimentos en parches de estepas herbaceas, arbustivas-herbaceas y arbustivas del sitio ecologico Punta Ninfas. Las coberturas de suelo desnudo y de gravas fueron mayores y la cobertura de mantillo menor en la estepa arbustiva respecto a las estepas arbustiva- herbacea y herbacea. En los espacios entre arbustos de la estepa arbustiva, la densidad aparente fue mayor y la macroporosidad y la materia organica fueron menores (P 0.05) que en los monticulos debajo de los arbustos y en las estepas arbustivaherbacea y herbacea. La tasa de infiltration fue un 60 y un 65% mas baja en la estepa arbustiva que en las estepas herbacea y arbustiva-herbacea, respectivamente. Por el contrario, la produccion total y la concentracion de sedimentos fueron mas altas (P s 0.05) en la estepa arbustiva comparado con las estepas herbacea y arbustiva-herbacea. La cobertura de gravas fue la variable que mejor predijo la tasa de infiltracion y la produccion de sedimentos. El contenido de materia organica de los sedimentos, mayormente mantillo, fue similar en la estepa arbustiva y la arbustiva-herbacea y en ambas mayores (P 0.05) que en la estepa herbacea. La remocion de mantillo por el escurrimiento superficial posiblemente represente uno de los procesos que provocan la transicion de la estepa arbustiva-herbacea a la estepa arbustiva. Las altas tasas de remocion de sedimentos, principalmente mantillo, de los espacios entre arbustos de la estepa arbustiva pueden limitar la recuperacion natural de las propiedades fisicas a hidrologicas de los suelos. Estos parches degradados no pueden captar las lluvias incidentes, limitando asi las posibilidades de recuperacion de los pastos perennes y favoreciendo la dominancia de los arbustos.Soil erosion is the primary cause of irreversible loss of soil productivity on most rangelands. In northeastern Patagonia, the increase in soil erosion has been closely associated with the increase in shrub cover in the grass or shrub-grass steppes. We used rainfall simulation to compare infiltration and sediment production from patches of grass, shrub-grass, and shrub steppes of the Punta Ninfas range site. Bare soil and gravel covers were higher and litter cover was lower in the shrub steppe than in the shrub-grass and the grass steppes. In the shrub inter-spaces of the shrub steppe, bulk density was greater and macroporosity and soil organic matter were lower (P less than or equal to 0.05) than in the mounds beneath shrubs and in the grass and shrub-grass areas. Infiltration rate was 60 to 65% lower in the shrub steppe than in the grass and shrub-grass steppes, respectively. On the contrary, total sediment production and concentration were higher (P less than or equal to 0.05) in the shrub steppe as compared to the grass and the shrub-grass areas. Gravel cover was the variable that best predicted infiltration and sediment production. The organic matter content of the sediment, mostly litter, in the shrub and the shrub-grass steppes were similar and greater (P less than or equal to 0.05) than in the grass steppe. Runoff litter removal may represent one of the processes that drive the transition from shrub-grass to shrub steppes. High rates of sediment removal, mainly litter, from the shrub interspaces of the shrub steppe may limit the natural recovery of the soil physical and hydrological properties. These degraded patches fail to capture incident rainfall and restrict the possibilities for the recovery of perennial grasses favoring the dominance of shrubs.Fil: Parizek, B.. Universidad Nacional de la Patagonia "San Juan Bosco"; ArgentinaFil: Rostagno, Cesar Mario. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Centro Nacional Patagónico; ArgentinaFil: Sottini, Roberto Raul. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto Nacional de Limnología. Universidad Nacional del Litoral. Instituto Nacional de Limnología; Argentin

Shocks, structures or monetary policies? The euro area and US after 2001

The US Federal Reserve cut interest rates more vigorously in the recent recession than the European Central Bank did. By comparison with the Fed, the ECB followed a more measured course of action. We use an estimated dynamic general equilibrium model with financial frictions to show that comparisons based on such simple metrics as the variance of policy rates are misleading. We find that - because there is greater inertia in the ECB’s policy rule - the ECB’s policy actions actually had a greater stabilizing effect than did those of the Fed. As a consequence, a potentially severe recession turned out to be only a slowdown, and inflation never departed from levels consistent with the ECB’s quantitative definition of price stability. Other factors that account for the different economic outcomes in the Euro Area and US include differences in shocks and differences in the degree of wage and price flexibility. JEL Classification: C51, E52, E58DSGE model, Policy activism, policy inertia, shocks

Redistribution Through Public Employment: The Case of Italy

This paper examines the regional distribution of public employment in Italy. It documents two facts. The first is that public employment is used as a subsidy from the North to the less wealthy South. About half of the wage bill in the South of Italy can be identified as a subsidy. Both the size of public employment and the level of wages are used as a redistributive device. The second fact concerns the effects of subsidized public employment on individuals' attitudes toward job search, education, "risk taking" activities, and so on. Public employment discourages the development of market activities in the South. Copyright 2002, International Monetary Fund

Financial factors in economic fluctuations

We augment a standard monetary DSGE model to include a banking sector and financial markets. We fit the model to Euro Area and US data. We find that agency problems in financial contracts, liquidity constraints facing banks and shocks that alter the perception of market risk and hit financial intermediation — ‘financial factors’ in short — are prime determinants of economic fluctuations. They have been critical triggers and propagators in the recent financial crisis. Financial intermediation turns an otherwise diversifiable source of idiosyncratic economic uncertainty, the ‘risk shock’, into a systemic force. JEL Classification: E3, E22, E44, E51, E52, E58, C11, G1, G21, G3Bayesian estimation, DSGE model, Financial Frictions, Financial shocks, Funding channel, Lending channel

Debt reduction and automatic stabilisation

This paper presents an optimal fiscal policy response to address the basic trade-off between the automatic stabilisation properties of budgets and the long run fiscal positions. The framework is an overlapping generations model la Weil (1989), extended to account for stochastic endowments and borrowing constrained households. A benign government chooses over the optimal degree of responsiveness of net taxes to individual incomes, an optimal measure of long-run public debt, or both, in order to smooth households' consumption across states of nature. In the presence of a deficit constraint for the government, the results unambiguously point to the desire for lower debt levels than those currently prevailing in order to enable a more effective hedging of personal income uncertainty by means of more active fiscal stabilisers. Citizens in economies exhibiting more pronounced cycles will favour less automatic stabilisation combined with a more aggressive policy of debt reduction. JEL Classification: H31, H63, E63Automatic stabilisation, Borrowing constraints, Consumption, public debt

Verdi e Dante : alcune nuove riflessioni

Viene ripercorso il rapporto di Giuseppe Verdi con alcuni testi a vario titolo collegati a Dante, dalla vicenda della sua prima opera, Oberto conte di S.Bonifacio dove appare Cunizza da Romano, attraverso altre composizioni da concerto, fino alle Laudi alla Vergine Maria sulla preghiuera di San Bernardo, da Paradiso XXXIII. Viengono portate alcune nuove docuimentazioni e proposte alcune nuove interpretazioni.The relationship of Giuseppe Verdi with several texts by Dante is well known, from the history of his first opera, Oberto conte di S. Bonifacio in which Cunizza da Romano appears, to other concert compositions, above all Laudi alla Vergine Maria, San Bernardo's prayer in Paradise XXXIII. This paper contributes with new documents and proposals for a new interpretation