...policy responses to these causes. This paper can be seen as a test to discriminate between two views of the American economy. The first is expressed in a characteristically vivid statement by Dornbusch, who proclaimed recently: “None of the U.S. expansions of the past 40 years died in bed of old age; every one was murdered by the Federal Reserve” (Dornbusch 1997). This stark view can be contrasted with its opposite in the recent literature: “[N]one of the popular candidates for observable shocks robustly accounts for the bulk of business-cycle fluctuations in output” (Cochrane 1994, p. 358). I expand the time period to consider the past century, but it is easy to distinguish the past 40 years, that is, the period since World War II. A survey of business cycle causes over an entire century runs into several problems, of which three seem noteworthy. First, it is not at all clear what “cause” means in this context. Second, the Great Depression was such a large cycle that it cannot be seen as just another data point. Third, the survey relies on the existing literature on business cycles, which is why I have entitled it an essay in economic historiography. The paper proceeds by discussing each of these problems in turn, then turning to the data, and finally drawing some conclusions from the preceding efforts. *Elisha Gray II Professor of Economics, Massachusetts Institute of Technology. The author would like to thank Caroline Richards for research assistance. All errors remain the author’s...
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...MP A R Munich Personal RePEc Archive Optimal choice of an exchange rate regime: a critical literature review Mariam Ouchen Cadi Ayyad University, Faculty of Economics Marrakesh Morocco, University of Basel 17. January 2013 Online at http://mpra.ub.uni-muenchen.de/43907/ MPRA Paper No. 43907, posted 21. January 2013 12:56 UTC Optimal Choice of an Exchange Rate Regime: A Critical Literature Review 1 Mariam OUCHEN Laboratory of innovation, responsibility and sustainable development Cadi Ayyad University, Faculty of Economics Marrakesh Morocco Center of Macroeconomics and economic theory University of Basel Abstract :This paper set out to review the main theories and empirical methods employed in selecting an appropriate exchange rate regime.In order to achieve this, the paper is organized as follows : Section 2 introduces the distinct classifications of exchange regimes(de jure exchange rate regimes versus the facto exchange rate regimes), and the different theoretical approaches which illustrate how an optimal exchange rate regime is determined . Despite their initial popularity, the theoretical considerations have not escaped criticism.Section 3 reviews the criticism of these theories.A conclusion is provided in Section 4. Keywords : Exchange rate regime, the structural approach, credibility, flexibility, the bipolar view. 1 - Introduction The literature on the selection of exchange rate regimes can be divided into three main groups : the structural approach, the trade-off...
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...Through the evaluation of early literatures by Oberg (1958) and Pedersen (1995) culture shock was only looked on as a personal construct rather than a reaction developed as a response to an unfamiliar culture.They both identified it as a way to understand how individuals feel when unaccustomed to a new environment or culture and how they cope successfully with it. However in much clearer research by(Murdoch & Kaciak,2011),it was defined as abandoning the guidance of normal social cues and finding oneself in unexplainable signs of denial of the host country and celebratory of the home country which they called “regression”.However, nothing about how an individual can adapt to the culture or environment and find a way to steer a way out of it was given. Culture Shock and Effects (Adler, 1975) from examining foreign students was able to note the fact that culture shock subjective symptoms differs from one person to another in terms of severity and span but still this research can be floored due to disparity in the methodology of this research.There are instances where sojourners lose all their former pre-existing signs of social normality and have to adapt to the new environment eventually causing anxiety and depression, for example smiling is seen in different countries as being friendly or happy but in most Asian countries smiling is viewed as a sign of weakness (Ferraro, 2006).However (Eschbach, 2001) stressed the effects on only stress and anxiety...
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...Udini already have an account? Log In Sign Up JOIN UDINI - manage your research in the cloud for free and buy articles in the Udini store. Learn more Academic research, news, and trade news from authoritative publications - See what's in stock Free tools keep your work in one place, with beautiful reading and notes - Learn more No subscription required - pay per article, project or month - Get started for free Full Version unlimited access with print and download $ 37 00 Trial Access read full document, no print or download, expires after 72 hours $ 4 99 More infoBuy Share Share with Twitter Share with Facebook Share with LinkedIn Search 150 million articles from 12,000 publications Social Sciences > Economics Essays on monetary policy and currency unions: The case of the East African Community ProQuest Dissertations and Theses, 2011 Dissertation Author: John M. M Ssozi Abstract: Efficient conduct of monetary policy in a currency union demands that partner states have similar business cycles, inflation convergence and strong economic ties. The first essay investigates inflation convergence, which is important for a number of reasons: avoiding inflation bias and is an indicator of structural similarities. The essay goes beyond the traditional pairwise unit root tests and applies an unobserved dynamic factor model to test asymmetry in inflation variation. Convergence is measured by the percentage of variation in inflation that is common across countries....
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...Economic Modelling journal homepage: www.elsevier.com/locate/ecmod The effects of fiscal spending shocks on the performance of simple monetary policy rules Ali K. Malik ⁎ Karachi School for Business and Leadership (KSBL), Bahadurabad, National Stadium Road, Karachi 74800, Pakistan a r t i c l e i n f o Article history: Accepted 26 August 2012 JEL classification: E50 E52 E58 Keywords: Fiscal policy Monetary policy Inflation targeting Impulse response analysis Macroeconomic variables 1. Introduction a b s t r a c t We examine the effects of fiscal shocks on the performance of alternative monetary policy rules in a small dynamic general equilibrium framework. We explicitly consider the interaction between fiscal and monetary policy rules which may be present in the real world. We use a simple specification for the fiscal policy rule and various specifications for the (simple) monetary policy rule. Our analysis suggests that some form of flex- ible inflation targeting regime would perform well in response to fiscal shocks compared to other forms of policy regimes. © 2012 Elsevier B.V. All rights reserved. monetary policy has developed largely in isolation. The terminology ‘fiscal theory of the price level’ does however correspond to some ear- Monetary policy rules have come under extensive examination in the literature on monetary policy in the recent years. Simple mone- tary policy rules appear to be more robust across a...
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...This fact is used to shed light on the importance of country-specific shocks for small open economies using a simple real business cycle model. While it has been previously found that country-specific shocks are more significant source of business cycle fluctuations than worldwide shocks for Australia before the 1990s, this article suggests that the country-specific shocks may have become an important driver of output growth only in the early 1990s for Australia. Keywords: worldwide shocks; country-specific shocks; international business cycle; half-life JEL Classification: E32; C32; F43 I. Introduction There has been a growing literature that seeks to extend standard closed economy Real Business Cycle (RBC) models to the open economy with the objective of explaining key features of international business cycles (Mendoza, 1991; Backus and Kehoe, 1992; Backus et al., 1992, 1995; Baxter and Crucini, 1993, 1995; Ravn, 1997). These authors have achieved some success in accounting for a number of anomalies that closed economy models fail to elucidate. Subsequent studies in this literature have emerged and brought interesting findings on international business cycle. One such discovery was on a variety of factors that affect the dynamics of business cycle fluctuations. For instance, multiple previous studies have attempted to address the issue of relative importance of worldwide shocks versus countryspecific shocks (Gregory et al., 1997; Canova and Marrinan, 1998; Hoffmaister et...
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...Chapter 8 The Policy Trilemma in Open Economies Chapters 6 and 7 discussed the choice of an exchange rate regime as a monetary policy instrument, and examined the advantages and disadvantages of pursuing fixed versus floating exchange rate regimes under perfect capital mobility. Under each regime, we considered the effectiveness of fiscal policy, effectiveness of conventional monetary policy (ability to influence domestic short term interest rates), and exchange rate stability. We found that, although only a credible fixed exchange rate regime achieves bilateral exchange rate stability, no single exchange rate regime entirely dominates the other in terms of the effectiveness of monetary and fiscal policies. These findings suggest that the choice of an exchange rate regime presents genuine tradeoffs for policy makers, and it is time to discuss several factors that would guide such a choice in practice. In reality, hard pegs and floats represent the two idealized extremes of a spectrum of exchange rate regimes. Within that spectrum, there is a variety of options available to policy makers, but these options require additional policy instruments. One such policy instrument is capital controls, which affect the incentives underlying international capital mobility. So, in this chapter we discuss the form and consequences of these capital controls as a policy instrument. Given that capital controls constitute a third policy instrument, it is useful conceptualize policy choices using three intermediate...
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....................................................6 (iv) Key findings .........................................................................................6 (a) The performance of the mobile phone services market..........6 (b) Switching behaviour and savings achieved.............................7 (c) Consumer satisfaction with mobile carriers .............................7 (d) Major reasons for switching carriers.........................................7 (e) Switching costs..........................................................................8 (f) The role of inertia in limiting switching......................................8 (g) The reasons for not switching...................................................8 (h) Bill shock....................................................................................9 (v) Conclusions ..........................................................................................9 1 Introduction ...............................................................................................10 2 Research Methodology..............................................................................11 2.1 Introduction...
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...The term post- traumatic stress disorder come around the 1970’s, so the term shell shock was created to express the psychological or physical injuries for the soldier and veterans. Most people believed post-traumatic stress disorder was only temporary; however, post-traumatic stress disorder does not just disappear overnight, and in most cases, shell shock can be permeant, especially in Septimus’ case. Septimus; pain and suffering leaded him to commit suicide, so he could escape his horror. The critic Bruce Dohrenwend exposed the psychological risks of the people, who was in the war. Some of the soldiers got post-traumatic stress disorder right after war, but studies show post-traumatic stress disorder can develop elven or twelve years after...
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...THE SUBPRIME CREDIT CRISIS AND CONTAGION IN FINANCIAL MARKETS Francis A. Longstaff∗ Abstract. We conduct an empirical investigation into the pricing of subprime assetbacked CDOs and the resulting contagion effects on other markets. Using data for the ABX indexes of subprime CDO prices, we find strong evidence of contagion effects. In particular, we find that contagion effects spread first from lower-rated ABX indexes to higher-rated ABX indexes, and then from the subprime markets to the Treasury bond and stock markets. ABX index returns forecast stock and Treasury bond returns as much as three weeks ahead during the crisis. Furthermore, ABX index shocks are significantly related to contractions in the size of the short-term credit markets and increases in the trading activity of financial stocks over the next several weeks. These results provide support for the hypothesis that financial contagion was spread through liquidity and risk-premium channels. Current version: August 2008. UCLA Anderson School and NBER. I am very grateful for helpful discussions with Joshua Anderson, Vineer Bhansali, Bruce Carlin, Richard Clarida, Rajna Gibson, Rob- ert Gingrich, Hanno Lustig, Alfred Murata, Steve Schulist, and Jiang Wang, and for the comments of seminar participants at New York University, Pimco, and UCLA. All errors are my responsibility. ∗ 1. INTRODUCTION During the past year, financial markets have suffered catastrophic losses from the ongoing credit crisis. This crisis was initially...
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...The aim of the essay is to analyse the care of a septic patient. While discussing the relevant physiological changes and the rationale for the treatment the patient received, concentrating on fluid intervention. I recognise there are other elements to the Surviving Sepsis Bundles, however due to word limitation; the focus will be on fluid intervention. The essay will be written as a Case Study format. To maintain patient confidentiality any identifying features have been removed in keeping with the Nursing and Midwifery Council (NMC) Code of Professional Conduct (NMC, 2008) the patient will be referred to as Mr X. Mr X was an 80-year-old male admitted to ITU, from the Medical Assessment Unit, with increasing respiratory failure. His initial clinical observations were: Systolic Blood Pressure: 100mmHg MAP: 58mmHg Heart Rate: 120 beats per minute Lactate: 3.2mmol/l Temperature: 38.6* These clinical observations indicated that the patient was experiencing a systemic inflammatory response syndrome (SIRS) as the patient had a pyrexia above 38*C and a heart rate above 90 beats per minute. The results of the blood cultures and chest radiograph indicated pneumonia. The patient’s condition was now treated as sepsis. Sepsis is characterized by SIRS, which is complicated by a severe infection (Neveire, Parsons and Wilson 2008). The pathophysiology of systemic inflammatory response, experienced by Mr X is portrayed in Table 1: Table 1 Morton et al 2005 Mediator | Source...
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...University Institute June 8, 2009 1. Introduction Financial crises have been pervasive phenomena throughout history. Bordo et al. (2001) find that their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the Great Depression. Nevertheless, the financial crisis that started in the summer of 2007 came as a great surprise to most people. What initially was seen as difficulties in the US subprime mortgage market, rapidly escalated and spilled over to financial markets all over the world. The crisis has changed the financial landscape worldwide and its costs are yet to be evaluated. The purpose of this paper is to concisely survey the literature on financial crises. Despite its severity and its ample effects, the current crisis is similar to past crises in many dimensions. In a recent series of papers, Reinhart and Rogoff (2008a, 2008b, 2009) document the effects of banking crises using an extensive data set of high and middle-to-low income countries. They find that systemic banking crises are typically preceded by credit booms and asset price bubbles. This is consistent with Herring and Wachter (2003) who show that many financial crises are the result of bubbles in real estate markets. In addition, Reinhart and Rogoff find that crises result, on average, in a 35% real drop in housing prices spread over a period of 6 years. Equity prices fall 55% over 3 ½ years. Output...
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...order fulfillment forecast accuracy. Such improvement can lead to lower safety stock and better service. According to recent theoretical work, the value of information sharing is zero under a large spectrum of parameters. Based on the data collected from a CPG company, however, we empirically show that if the company includes the downstream demand data to forecast orders, the mean squared error percentage improvement ranges from 7.1% to 81.1% in out-of-sample tests. Thus, there is a discrepancy between the empirical results and existing literature: the empirical value of information sharing is positive even when the literature predicts zero value. While the literature assumes that the decision maker strictly adheres to a given inventory policy, our model allows him to deviate, accounting for private information held by the decision maker, yet unobservable to the econometrician. This turns out to reconcile our empirical findings with the literature. These “decision deviations” lead to information losses in the order process, resulting in strictly positive value of downstream information sharing. We prove that this result holds for any forecast lead time and for more general policies. We also systematically map the product characteristics to the value of information sharing. Key words : supply chain, information sharing, information distortion, decision deviation, time series, forecast accuracy, empirical forecasting, ARIMA process. 1....
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...www.ccsenet.org/ijef International Journal of Economics and Finance Vol. 4, No. 1; January 2012 The Monetary Transmission Mechanism in Nigeria: A Sectoral Output Analysis Philip Ifeakachukwu, NWOSA (Correspondence author) Department of Economics, Accounting and Finance Bells University of Technology, Ota, Ogun State, Nigeria Tel: 234-082-470-7555 E-mail: nwosaphilip@yahoo.com Muibi Olufemi, SAIBU Dept of Economics, Obafemi Awolowo University Ile-Ife, Osun State, Nigeria Tel: 234-085-338-1914 Received: May 31, 2011 doi:10.5539/ijef.v4n1p204 Abstract E-mail: omosaibu@yahoo.com Published: January 1, 2012 Accepted: July 5, 2011 URL: http://dx.doi.org/10.5539/ijef.v4n1p204 The study investigated the transmission channels of monetary policy impulses on sectoral output growth in Nigeria for the period 1986 to 2009. Secondary quarterly data were used for the study while granger causality and Vector Auto-regressive Method of analysis were utilized. The results showed that interest rate channel was most effective in transmitting monetary policy to Agriculture and Manufacturing sectors while exchange rate channel was most effective for transmitting monetary policy to Building/Construction, Mining, Service and Wholesale/Retail sectors. The study concluded that interest rate and exchange rate policies were the most effective monetary policy measures in stimulating sectoral output growth in Nigeria. Keywords: Sectoral output, Monetary transmission channels, Granger...
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...in strengthening fiscal policy framework. This paper analyzes the implementation of fiscal policy in Eurozone with the SGP as the guideline and found out that despite effectively maintain the budgetary balances of Eurozone countries, the SGP failed to deliver overall fiscal stability. Therefore, a more coordinated form of fiscal policy is required in order to achieve the goal of fiscal stability in Eurozone. 1 I. Introduction The formation of European Monetary Union and the adoption of Euro as the single currency have the consequence that member countries are losing their monetary policy independence at the national scope. Therefore, one possible solution is to use fiscal policy in order to mitigate the asymmetric shocks, as fiscal policy is still on the hand of the national government of each member countries. However, from the Monetary Union point of view it is not desirable to leave fiscal policy absolutely on the hand of the national governments as it has the potential to create negative spillovers within the Union. One example of the negative spillovers is when the national governments perform an excessive budgetary deficit and gives an extra inflationary pressure to the ECB. Other negative spillover is the inflationary debt bailout1, this can happen when excessive...
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