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Testing Real Business Cycle Models in an Emerging Economy

One of the most dynamic areas of macroeconomic research in the last decades is that of Real Business Cycle (RBC) models. Since the seminal work by Kydland and Prescott (1982), a number of papers have tested the abilities of neoclassical general equilibrium models to account for economic fluctuations. The original framework of Kydland and Prescott has been extended to included labor market rigidities (Hansen, 1985), taxes and government expenditures (McGrattan, 1994a), money and inflation (Cooley and Hansen, 1995), open economies (Backus et al, 1995), and increasing returns to scale in production (Weber, 2000). Each of these extensions has been successful in solving the limitations of calibrated models to replicate particularities of the data and can provide richer explanations of business cycles, although at the cost of increasing complexity.

Emerging Market Business Cycles: The Role of Labor Market Frictions

Recent evidence emphasizes the role of labor markets in understanding macroeconomic dynamics speciflcto emerging markets including recovery from financial crises and business cycles. The class of emerging market business cycle models, however, has largely remained silent about the impact of labor market dynamics on those of consumption and the current account.

Monetary Policy Rules, Macroeconomic Stability and Inflation: A View from the Trenches

The performance of the U.S. economy during the past two decades has been impressive. From the early 1980s to the end of the 1990s, the economy steadily expanded (with buta brief interruption in 1990), while inflation remained fairly stable and subdued. The 1980s marked what was the longest peacetime expansion on record, only to be followed by the longest expansion ever.

Learning about Monetary Policy Rules when Long-Horizon Expectations Matter

Over the past decade, monetary policy theory and central banking practice have underscored various desiderata for judicious policy. It is often argued that social welfare can be improved by arranging for the central bank to conduct monetary policy according to a suitably chosen instrument rule, dictating how interest rates should be adjusted in response to particular disturbances to the economy.

Dyspepsia and Gastro-oesophageal Reflux

Dyspepsia, which has multiple causes, is either organic or functional. Organic dyspepsia refers to conditions caused by diseases of the upper gastrointestinal tract - particularly peptic ulcers, as well as oesophageal and gastric cancer - that can be detected during an examination. Functional dyspepsia is the default diagnosis when a thorough clinical investigation does not point to an organic cause or demonstrably impaired gastrointestinal function. Gastro-oesophageal reflux disease (GERD) involves the backflow of stomach contents through the lower oesophageal sphincter into the oesophagus, typically causing the symptoms of heartburn and acid regurgitation or waterbrash (bitter regurgitation). Oeso- phagitis can sometimes be detected by an OGD.

Ulcerative Lesions of The Oral Cavity Ulcerative Lesions

The oral cavity consists of the lips, teeth, gums, oral mucous membranes, palate, tongue and oral lymphoid system. The oral cavity plays essentialroles in many key bodily functions, including nutrition (mastication and swallowing), respiration and communication. Various specialistsmay be called upon to diagnose and treat diseases of the oral cavity, including general practitioners, nurse practitioners, dentists, oral surgeons, otolaryngologists, rheumatologists, dermatologist and others. The most important diagnostic tools for the examination of the mouth are the examiner's eyes, aided by a source of illumination, a tongue depressor, and the use of palpation by the examiner's glove-covered fingers.

Frictional Wage Dispersion in Search Models: A Quantitative Assessment

The economic success of individuals is largely determined by their labor market experience. For centuries, economists have been interested in studying the determinants of earnings dispersion among workers. The standard theories of wage differentials in competitive environments are three. Human capital theory suggests that aset of individual characteristics (e.g., individual ability, education, labor market experience, and job tenure) are related towages because they correlate with productive skills, either innate or cumulated in schools or on the job.

Occupational Mobility and Wage Inequality

Despite an active search for the reasons behind the large increase in (within-group) wage inequality in the United States over the last 30 years, identifying the culprit has proved elusive. In this paper we suggest that the increase in the variability of productivity shocks to occupations, coupled with the endogenous response of workers to this change, can account for most of the increase in within-group wage inequality.

Asset Prices and the Conduct of Monetary Policy

Since the seminal work by Taylor (1993), the analysis of monetary policy rules has received considerable attention in the theoretical and empirical literature. In simple backward-looking structural models of the economy (see e.g. Svenssson, 1997, Rudebusch and Svensson, 1998), the optimal interest rate rule relates the policy rate to current and past inflation rates and current and past output gaps. Such a policy rule is optimal, because current and lagged inflation rates and output gaps are sufficient statistics for future inflation rates and output gaps, which are targeted by the central bank.

A Macro-Finance Model of the Term Structure, Monetary Policy, and the Economy

Bonds of various maturities all trade simultaneously in a well-organized market that appears to preclude opportunities for financial arbitrage. Indeed, the assumption of no arbitrage is central to an enormous literature that is devoted to the empirical analysis of bond pricing and the yield curve. This research has found that almost all movements in the yield curve can be captured in a no-arbitrage framework in which yields are linear functions of a few unobservable or latent factors (e.g., Duffieand Kan 1996, Litterman and Scheinkman 1991, and Dai and Singleton 2000).

Secrets of a Low Carb Diet

Congratulations! If you are reading this book, you are taking your first step toward healthier living. There are many ways you can improve your health and fitness. You can exercise, you can meditate, you can diet or you can combine all three and then some.

Dietary Interventions for Rheumatoid Arthritis

Rheumatoid arthritis is a disease in which the body'simmunesystem attacks the lining of the joints. Usually, the joints of the hands and feet are affected first. Joints will become swollen, stiff and painful. There is no cure for RA at present, so treatments aim to relieve pain and stiffness, and improve the ability to move.

Monetary Policy and Portfolio Choice in an Open Economy Macro Model

Over the last decade, a large body of work in open economy macroeconomics has developed sticky price dynamic general equilibrium models that are useful for the analysis of monetary policy. Many papers have explored the determination of optimal monetary policy indifferent environments regarding price setting, asset market completeness, and the number of currencies assumed to exist. In some of these papers, it has been shown that a policy of strict domestic price stability represents an optimal monetary policy.

Monetary Policy Rules for an Open Economy

The literature on simple rules for monetary policy is vast. It contains theoretical research comparing rules that respond to alternative intermediate and final targets, backward and forward-looking rules, and finally, rules which include or exclude interest rate smoothing terms. It also contains work on historical estimates of monetary policy rules for various countries.

Financing Frictions and the Substitution Between Internal and External Funds

Corporate managers in the US and Europe claim that maintaining "financial flexibility" is the primary objective of their firms' financial policies (see Graham and Harvey (2001) and Banceland Mittoo (2002)). Their stated policies are consistent with the goal of ensuring funding for present and future investment undertakings in a world where financing frictions force fir ms to pas sup profitable opportunities. In spite of those assertions, empirical work on capital structure often ignores much of the interplay between corporate investment and financing decisions.

Credit Traps and Credit Cycles

The recent literature on macroeconomics of credit market imperfections, following the seminal work of Bernanke and Gertler (1989), emphasizes the credit multiplier (or financial accelerator) mechanism, which introduces persistence in the dynamics of the aggregate investment and borrower net worth. As the argument goes, a rise (a fall) in borrower net worth eases (aggravates) the borrowing constraint, thereby stimulating (discouraging) investment, which leads to further rise (fall) in borrower net worth.

The Modern Diet

This is your guide to the most popular diet programs and weight loss eating styles you see in today's marketplace. The first four eating programs all have some mass appeal and many people have tried them with varying degrees of success. The diet that is right for you largely depends on where you are in your current dieting journey as well as your lifestyle preferences. We'll get to the point in a quick and dirty fashion so you can decide which one is right for you. These four programs all have had enough influence and success to merit a good look.

Physical Fitness and Law Enforcement

This paper will examine the importance of physical fitness in the realm of law enforcement. It will look at the problems associated with unhealthiness and in particular how this affects the job performance of police officers. It will consider what different states and agencies, such as the FBI, require for their officers. Finally, it will make recommendations for implementing a continuing fitness program for officers during their career. The primary purpose was to present ideas on how to implement a program that would continuously require officers to maintain their health and fitness. This purpose was accomplished primarily by Internet research. Various standards of different states and agencies were compared.

Collateral Constraints in a Monetary Economy

The extent and mechanism through which monetary policy affects real economic activity over the business cycles has been along-standing question in macroeconomics. Different mechanisms that explain the propagation of money shocks have been proposed. These include sticky prices, wage contracting, monetary misperceptions, and limited participation. Another mechanism that has received special attention in recent years is credit market imperfections.

Good and Bad Investment: An Inquiry into the Causes of Credit Cycles

This paper presents models of endogenous business cycles based on the following idea. Some investments are good, while others are bad. Good investments are like those in the business sector, which create jobs and purchase inputs, thereby generating much aggregate demand spillovers. On the other hand, some investments, like trading and speculation in the commodity and real estate markets, generate little aggregate demand spillovers, even though they may be highly profitable. Furthermore, some of these investments are relatively difficult to finance, because their default risk is high. During the recession, the agents are not rich enough to finance these investments.

Multi-Factor Models in Managed Futures, Hedge Fund and Mutual Fund Return Estimation

The past five years have witnessed a dramatic increase in managed futures products whose managers (commodity trading advisors) trade primarily in futures and options markets and which are available to the retail public as well as hedge funds whose managers invest in both cash and futures markets simultaneously and which are structured primarily for pool investment and not for public sale. Despite this growth, funds invested in managed futures and hedge fund products are estimated to be less than 1% of the over 3 trillion dollar mutual fund industry.

Implied Migration Rates from Credit Barrier Models

Credit classes such as Moody's and Standard and Poor's identify the credit-worthiness of sovereign borrowers and corporations. The rating agencies also provide migration and default rates based on historical data. Pricing of interest rate derivatives such as basket default swaps, collateralized bond obligations and others, require accurate pricing models which are consistent with empirical credit migration and default rates, which capture the relevant components of the price of credit risk and which lend itself to modelling correlations between credit spreads and default arrival times in a natural way.

Estimating the Term Structure of Yield Spreads from Callable Corporate Bond Price Data

This paper presentsa methodology for extracting credit pricing information from the prices of callable corporate debt. Until recently, empirical research on corporate bond pricing has avoidedadirect treatment of callable corporate bonds. In practice, however, callable debt is popular. As of April 2003, the Fixed Investment Securities Database (FISD (2002)) contained a total of about 23,950 fixed-rate U.S. corporate debentures, of which roughly 60%in number and 42%in offering amount were callable. In order to extract credit-quality information from yield spreads, one must treat the simultaneous effects of credit risk and optionality.

Measuring the Timing Ability of Fixed Income Mutual Funds

The relative share of academic work on bond funds is dwarfed by the share and importance of these funds and assets in the economy. Elton, Gruber and Blake (1993, 1995) and Ferson, Henry and Kisgen (2006) study US bond mutual fund performance, concentrating on the funds' risk-adjusted returns, or alphas. These studies find that the typical average performance after costs is negative and on the same order of magnitude as the funds expenses. However, the total performance may be decomposed into components, such as timing and selectivity ability.

Financial Crisis, Effective Policy Rules and Bounded Rationality in a New Keynesian Framework

In this era of increased financial flows to emerging economies, the adoption of inflation targeting (IT) constitutes a vital component of what Taylor (2000) calls the trinity concept, namely a flexible exchange rate, an inflation target and a monetary policy rule. Inflation targeting as a monetary framework is quickly replacing that of an exchange rate based regime in many emerging market economies and comes as these countries find it increasingly difficult to harness the benefits of global capital under a pegged exchange rate system. For some, such as Chile, the move to IT has occurred through a concerted policy effort, while for others, such as Thailand and Brazil, it has been precipitated by financial crisis.

Monetary Policy in Russia and Effects of the Financial Crisis

The starting point for this paper has been Russian monetary policy. The Russian macro economy is to a large degree influenced by Russian exports of natural resources, oil in particular. Over the last years oil exports have caused the trade balance and consequently current account to grow significantly, allowing an expansionist fiscal policy. This has lead to Dutch disease pressures. In addition, financial markets limited development affect monetary authorities scope of action. Understanding how monetary policy has accommodated these challenges is therefore key to understanding the interaction between energy export revenues and overall Russian economic performance.

Management of Coronary Heart Disease

The lack of robust information on the resources required and associated costs is one of the biggest difficulties in developing plans to implement clinical guidelines1. The CHD Steering Group requested that this report be developed to provide such information, with the objective of facilitating more rapid implementation of the key recommendations in the CHD guidelines. It contains estimates of the resources required and associated costs of implementing key recommendations in the SIGN Coronary Heart Disease (CHD) guidelines, together with estimates of the resulting clinical benefits.

Marketing obesity? Junk food, advertising and kids

The World Health Organization (WHO) has labelled childhood obesity as one of the most serious public health challenges of the 21st century. In 2010, according to WHO, there are an estimated 42 million children under five years old who are overweight, and this figure is increasing at an alarming rate. In Australia, in 2007-08, around eight per cent of children were estimated to be obese and 17 per cent overweight.

Fiscal Policy, Monetary Policy, and the Stock Market

There is an overwhelming empirical literature on the issue of monetary policy and stock market behaviorfor the US and other countries (see, for instance, Bordo and Wheelock, 2004; and Laopodis, 2006, and the references therein) for obvious reasons. For example, assume a change in one of the monetary policy instruments like the money supply or the federal funds rate. Such a change leads to changes in market interest rates which force investors to revalue their equity holdings. In other words, the value of their wealth, given by the sum of the discounted future cash flows (and/or dividends), is affected by an easing or tightening of monetary policy through either the discount rate or expected earnings (or both).

The Credit Channel of Monetary Policy: Evidence from the Housing Market

Since Bernanke and Blinder (1988), the literature has shown a renewed interest in the credit channel of monetary policy. According to this view, widespread imperfections in the credit market, such as asymmetric information or imperfect contract enforceability, result for consumers and firms in a wedge between the opportunity cost of internal funds and the cost of external funds. In turn, this external finance premium depends on monetary policy. Tight monetary policy not only raises market rates of interest but also the external finance premium, thus discouraging investment and consumption.

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