The inefficiency of seigniorage from required reserves

Bank reserves ; Banks and banking - Taxation

Underdevelopment and the enforcement of laws and contracts

Developing countries ; Contracts ; Economic development

Money and output: correlation or causality?

The correlation between changes in the nation's total supply of money and subsequent changes in real output has led some people to infer that policymakers, by changing the money supply, can stimulate or moderate the nation's real output. ; Scott Freeman argues that this conclusion may be inappropriate. Freeman distinguishes inside money, the money created by banks through their lending, from outside money, the money the Federal Reserve prints. He shows that anticipatory increases in bank lending may account for the rise in the money supply that often precedes an expansion in real output. Under this interpretation, increases in the money supply that are due to Federal Reserve action result in higher prices, with no increase in real output. Thus, the existence of a correlation between money and output does not necessarily imply that Fed-engineered increases in the money supply have real effects.Monetary theory ; Money supply

Monetary aggregates and output

This paper offers a general equilibrium model that explains how the observed correlations of money and output fluctuations may come about through endogenously determined fluctuations in the money multiplier. The model is calibrated to meet long-run (including monetary) features of the U.S. economy; it is then subjected to shocks to the Solow residual following a random process similar to that observed in U.S. data.Money supply

On the optimality of interest-bearing reserves in economies of overlapping generations

Econometrics

Should bank reserves earn interest?

This article examines the effects and desirability of paying interest on required reserves. Scott Freeman and Joseph Haslag demonstrate that a policy of paying interest on reserves can make everyone better off, even if the interest must be financed by a tax on capital. An essential part of this policy is an open market operation that offsets any changes in the value of money.Bank reserves

Monetary aggregates and output

This paper offers a general equilibrium model that explains how the observed correlations of money and output fluctuations may come about through endogenously determined fluctuations in the money multiplier. The model is calibrated to meet long run features of the U.S. economy (including monetary features) and then subjected to shocks to the Solow residual following a random process like that observed in U.S. data. The model's predicted business-cycle frequency correlations, of both real and nominal variables, share the following features with U.S. data: i) M1 is positively correlated with real output; ii) the money multiplier and deposit-to-currency ratio are positively correlated with real output; iii) the price level is negatively correlated with output [in spite of (i) and (ii)]; iv) the correlation of M1 with contemporaneous prices is substantially weaker than the correlation of M1 with real output; v) correlations among real variables are essentially unchanged under different monetary policy regimes; and vi) real money balances are smoother than money demand equations would predict. Although features (i) and (iv) may have been considered support for a causal influence of money on output, the paper demonstrates that they are consistent with an economy in which money has no such causal influence.Money supply

Influence of mollusk species on marine DELTA R determinations

Radiocarbon ages were measured on replicate samples of burnt grain and 5 mollusk species collected from a single sealed layer at an archaeological site (Hornish Point) on the west coast of South Uist, Scotland. The aim was to examine the impact of using different mollusk species on ΔR determinations that are calculated using the paired terrestrial/marine sample approach. The mollusk species examined inhabit a range of environments and utilize a variety of food sources within the intertidal zone. Several authors have suggested that these factors may be responsible for observed variations in the 14C activity of mollusk shells that were contemporaneous in a single location. This study found no significant variation in the <sup>14</sup>C ages of the mollusk species, and consequently, no significant variation in calculated values of ΔR. The implication is that in an area where there are no carboniferous rocks or significant local inputs of freshwater to the surface ocean, any of a range of marine mollusk species can be used in combination with short-lived terrestrial material from the same secure archaeological context to accurately determine a ΔR value for a particular geographic location and period in time

The maintenance, evolution, and impacts of inducible morphological defenses in Mytilus edulis: Responses to multiple and invasive predators

The burgeoning field of phenotypic plasticity and inducible defenses has documented a wide variety of predator-induced defenses. I this dissertation I have explored induced defenses in the marine mussel Mytilus edulis as they are affected by (a) shared evolutionary history with invasive crab predators, (b) specificity of responses to multiple predators (singly and combined) with different foraging strategies, and (c) spatial and temporal variation in the expression of predator specific induced defenses in situ. Mytilus from southern New England expressed induced shell thickening when exposed to waterborne cues from the crab Hemigrapsus , but naive northern mussel populations do not respond. Yet, both populations thicken their shells in response to a long-established crab, Carcinus. These results are consistent with the rapid evolution of an induced response to the recent invader Hemigrapsus. Mytilus developed significantly heavier shells only in the presence of waterborne cues from Carcinus, thicker shells in response to Carcinus, the seastar Asterias, and the whelk Nucella, and heavier adductor muscles in response to cues from Nucella and Asterias. These induced defenses subsequently protected mussels from Carcinus, but only Asterias exposed mussel were defended from Asterias. However, mussels exposed to the combined cues from Asterias and Carcinus expressed neither inducible defense nor deterred foraging by the sea star or crab. Furthermore, Mytilus did not thicken shells in response to cues from the native crab Cancer irroratus or the combined cues from Carcinus and Cancer, yet mussels did increase adductor muscle in response to combined cues from Asterias and Cancer. Thus, multiple predator assemblages can disrupt predator specific induced defenses (resulting in risk enhancement for mussels), but these effects cannot be reliably predicted from the predator\u27s functional grouping. Finally, in field experiments, I found that mussels expressed predator specific responses to Carcinus in mid-intertidal cages (but not Asterias) and mussels in low intertidal cages increased adductor muscle only in response to Asterias, and only during a year with high tissue growth. Together these results suggest that inducible defenses can be influenced by shared evolutionary history with predators and the functional diversity of predator assemblages