Rethinking the Liquidity Puzzle: Application of a New Measure of the Economic Money Stock

Historically, attempts to solve the liquidity puzzle have focused on narrowly defined monetary aggregates, such as non-borrowed reserves, the monetary base, or M1. Many of these efforts have failed to find a short-term negative correlation between interest rates and monetary policy innovations. More recent research uses sophisticated macroeconomic and econometric modeling. However, little research has investigated the role measurement error plays in the liquidity puzzle, since in nearly every case, work investigating the liquidity puzzle has used one of the official monetary aggregates, which have been shown to exhibit significant measurement error. This paper examines the role that measurement error plays in the liquidity puzzle by (i) providing a theoretical framework explaining how the official simple-sum methodology can lead to a liquidity puzzle, and (ii) testing for the liquidity effect by estimating an unrestricted VAR.Liquidity Puzzle, Monetary Policy, Monetary Aggregation, Money Stock, Divisia Index Numbers

Rethinking the Liquidity Puzzle: Application of a New Measure of the Economic Money Stock

Historically, attempts to solve the liquidity puzzle have focused on narrowly defined monetary aggregates, such as non-borrowed reserves, the monetary base, or M1. Many of these efforts have failed to find a short-term negative correlation between interest rates and monetary policy innovations. More recent research uses sophisticated macroeconomic and econometric modeling. However, little research has investigated the role measurement error plays in the liquidity puzzle, since in nearly every case, work investigating the liquidity puzzle has used one of the official monetary aggregates, which have been shown to exhibit significant measurement error. This paper examines the role that measurement error plays in the liquidity puzzle by (i) providing a theoretical framework explaining how the official simple-sum methodology can lead to a liquidity puzzle, and (ii) testing for the liquidity effect by estimating an unrestricted VAR.North-South, growth model, innovation assimilation

Toward a Bias Corrected Currency Equivalent Index

Measuring the economic stock of money, defined to be the present value of current and future monetary service flows, is a difficult asset pricing problem, because most monetary assets yield interest. Thus, an interest yielding monetary asset is a joint product: a durable good providing a monetary service flow and a financial asset yielding a return. The currency equilivant index provides an elegant solution, but it does so by making strong assumptions about expectations of future monetary service flows. These assumptions cause the currency equivalent index to exhibit significant downward bias. In this paper, we propose an extension to the currency equivalent index that will correct for a significant amount of this bias.Currency Equilivant Index, Monetary Aggregation, Money Stock

Rethinking the liquidity puzzle: application of a new measure of the economic money stock

Historically, attempts to solve the liquidity puzzle have focused on narrowly defined monetary aggregates, such as non-borrowed reserves, the monetary base, or M1. Many of these efforts have failed to find a short-term negative correlation between interest rates and monetary policy innovations. More recent research uses sophisticated macroeconomic and econometric modeling. However, little research has investigated the role measurement error plays in the liquidity puzzle, since in nearly every case, work investigating the liquidity puzzle has used one of the official monetary aggregates, which have been shown to exhibit significant measurement error. This paper examines the role that measurement error plays in the liquidity puzzle by (i) providing a theoretical framework explaining how the official simple-sum methodology can lead to a liquidity puzzle, and (ii) testing for the liquidity effect by estimating an unrestricted VAR.Liquidity Puzzle, Monetary Policy, Monetary Aggregation, Money Stock, Divisia Index Numbers

An investigation into the effects and implications of gamma radiation on organic matter, crude oil, and hydrocarbon generation

Master of ScienceDepartment of GeologySambhudas Chaudhuri and Matthew TottenThe current model of hydrocarbon generation involves the thermogenic maturation of organic material as a consequence of burial. This process only considers energy generated from temperature increase due to burial. The majority of organic rich source beds contain high concentrations of radioactive elements, hence the energy produced from radioactive decay of these elements should be evaluated as well. Previous experiments show that α-particle bombardment can result in the generation of hydrocarbons from oleic acid. This study investigates the effects of γ-rays in a natural petroleum generating system. In order to determine the effects of γ-rays, experiments were conducted using cesium-137 as the γ-ray source at the KSU nuclear facilities to irradiate crude oil and organic material commonly found in petroleum systems. The samples were then analyzed using Fourier Transform Infrared Spectroscopy (FTIR) and Rock-Eval pyrolysis to determine changes in the samples. The FTIR results demonstrated that γ-radiation can cause the lengthening and/or shortening of hydrocarbon chains in crude oils, the dissociation of brine (H2O (aq)), the production of free radicals, and the production of various gases. These changes that come from γ-radiation hold the possibilities to distort the configuration of organic molecules, dissociate molecular bonds, and trigger oxidation-reduction reactions, all of which could provide an important step to the onset of dissociation necessary to create hydrocarbons in petroleum systems. Further understanding the effects of γ-radiation in hydrocarbons systems could lead to more information about the radiolytic processes that take place. This could eventually lead to further understanding of oil generation in organic-rich source beds

Open Rigging Through XML: Character Setup Utilizing Metadata and Node Based Editing

Modular rigging systems exist to automate many of the labor intensive tasks associated with setting up character motion and control systems for 3D animation production. In this paper, a modular rigging system is described that encodes rig definitions in extensible markup language (XML). This method provides for version control along with the construct of a metadata node network facilitating easy propagation of changes to existing rigs. A node based interface is also provided for easily authoring rig definition files. The interface presented to the user is sufficiently simple that a user with minimal knowledge of rigging can construct a variety of complex rigs. By providing a node-based interface and rig definition format that utilizes version control, this method makes available capabilities that are currently not present in other open rigging systems

Toward a Bias Corrected Currency Equivalent Index

Measuring the economic stock of money, defined to be the present value of current and future monetary service flows, is a difficult asset pricing problem, because most monetary assets yield interest. Thus, an interest yielding monetary asset is a joint product: a durable good providing a monetary service flow and a financial asset yielding a return. The currency equivalent index provides an elegant solution, but it does so by making strong assumptions about expectations of future monetary service flows. These assumptions cause the currency equivalent index to exhibit significant downward bias. In this paper, we propose an extension to the currency equivalent index that will correct for a significant amount of this bias.Currency equivalent index, monetary aggregation, money stock

The Quantity Theory Revisited: A New Structural Approach

While the long run relation between money and inflation is well established, empirical evidence on the adjustment to the long run equilibrium is very heterogeneous. In this paper we show, that the development of US consumer price inflation between 1960Q1 and 2005Q4 is strongly driven by money overhang. To this end, we use a multivariate state space framework that substantially expands the traditional vector error correction approach. This approach allows us to estimate the persistent components of velocity and GDP. A sign restriction approach is subsequently used to identify the structural shocks to the signal equations of the state space model, that explain money growth, inflation and GDP growth. We also account for the possibility that measurement error exhibited by simple-sum monetary aggregates causes the consequences of monetary shocks to be improperly identified by using a Divisia monetary aggregate. Our findings suggest that when the money is measured using a reputable index number, the quantity theory holds for the United States.Divisia money, state space decomposition, sign restrictions

Creating Choices Before Making Choices: One Family Foundation’s Journey to Finding a Strategic Focus

Rooted in business principles, philanthropic study, and reflective practice, this article examines the journey of the Marion I. & Henry J. Knott Foundation, a small family foundation established in 1977, toward a strategic grantmaking focus. This article examines a foundation’s first step toward building a grantmaking strategy – finding an issue or problem to address – alongside a three-part model for creating choices that reflect donor intent, organizational talents and resources, and broader community needs. The study adds to the body of knowledge about the value, process, and challenges of finding a strategic grantmaking focus, whether that focus is for all or simply one portion of a foundation’s giving portfolio. It might be of significant benefit to foundations that are programmatically broad, those trying to clarify or formalize the intent of their original donors, those with large multigenerational boards, and those questioning why, where, or how to begin

Influence of Grassland Heterogeneity on Land-Atmosphere Coupling

Land surface processes and interactions with the atmosphere have been identified as a weak point in our understanding of the Earth's climate system and contribute to uncertainty in projections of future climate. This weakness is due, in part, to the inherent complexity of land-atmosphere (LA) interactions and the highly heterogeneous nature of land cover across a variety of spatial and temporal scales. The research included in this dissertation looks at the significance of these issues over a central US grassland. Influence of spatiotemporal variability is investigated through comparison between two proximate grassland sites with differing land cover. High-frequency observations from eddy covariance towers over a study period covering a range of environmental forcings, including two strong droughts and woody encroachment at one site provides a unique opportunity for study. First, changes in the water, energy, and carbon budgets are studied, with focus on the influence of woody encroachment on carbon sequestration, water-use efficiency, and drought response. How these changes manifest in the nature of turbulent fluxes, including at which spatial and temporal scales, are invested through deviations from similarity theory, quadrant analysis, and wavelet decomposition. Second, the nature of coupling between the land surface and atmosphere is studied by utilizing a variety of LA feedback metrics and analysis tools that allow for investigation of several steps in the LA feedback chain. This research includes the first use of some of these tools (self-organizing maps and mixing diagrams) in an study of this nature. Results indicate that woody encroachment increases resilience to drought due to changes in canopy structure and root access to soil moisture, and highlight the need to carefully consider scale and objective when selecting a metric of LA coupling