Phd thesis on inflation targeting
In this situation the assumption of random admission leads to spurious inference about hospital quality. Our estimation provides empirical support for temptation preferences. Further, declining pure profits can reconcile the constant or rising labor shares in revenue in the NIEs with theories of international trade that predict falling labor shares in cost. We introduce boundedly-rational expectations into a standard asset-pricing model of the exchange rate, where cross-country interest rate differentials are governed by Taylor-type rules. This paper develops new econometric methods to infer hospital quality in a model with discrete dependent variables and non-random selection. We find statistical evidence that a policy regime shift occurred with Volcker's appointment to Federal Reserve chairman. Consequently a conventional probit model leads to inferences about quality markedly different than those in this study’s selection model. However, hospital admission is not random and some hospitals may attract patients with greater unobserved severity of illness than others. This pairwise effect could be attributed to mitigated currency risk stemming from monetary integration, but may also indicate that monetary union integration increases borrowing capacity. Consequently, prices may be misleading in characterizing these phenomena since they encode a pessimistic perspective of the data-generating process. 0% and find that policymakers were willing to allow the real interest rate to change in order to keep overall changes in the nominal interest rate relatively small. We show that a calibrated three-sector model with a suitably chosen distribution of price stickiness can closely approximate the dynamic properties of New Keynesian models with a much larger number of sectors. Depending on how the robust Stackelberg problem is formulated, this paper shows that the Hansen-Sargent approximating equilibrium can be dynamically unstable and that robustness can be irrelevant, i. To identify the presence of temptation, we exploit an implication of the theory that a more tempted individual should be more likely to hold commitment assets such as IRA or 401(k) accounts. This paper examines the channels through which monetary union increased financial integration, using international panel data on bilateral international commercial bank claims from 1998-2006. 9%, and we find that policy makers were much more prepared to tolerate changes in the nominal interest rate than they were changes in the real interest rate. As information aggregates in the market, these errors amplify and crowd out the information content of stock prices. We study optimal monetary policy in a dynamic stochastic general equilibrium (DSGE) model that incorporates these “Chinese characteristics. Thus, measuring risk aversion correctly—taking into account the household’s labor margin—is necessary for risk aversion to correspond to asset prices in the model. The sensitivity of inflation compensation to macroeconomic data surprises is substantial, and it explains a sizable share of the macro response of nominal rates. Analyzing robust monetary policy in two New Keynesian business cycle models, the paper demonstrates that a robust central bank should primarily fear that the supply side of its approximating model is misspecified and that attenuation characterizes robust policymaking. Measures of risk aversion commonly used in the literature—including traditional, fixed-labor measures and Cobb-Douglas composite-good measures—show no stable relationship to the equity premium in a standard macroeconomic model, while the closed-form expressions derived in this paper match the equity premium closely. Bayesian inference in this model is feasible using a Markov chain Monte Carlo posterior simulator, and attaches posterior probabilities to quality comparisons between individual hospitals and groups of hospitals. The same DSGE framework allows us to evaluate the welfare implications of alternative liberalization policies. We then discuss implications for broader disputes about Asian development. We provide empirical support for the quantitative importance of profits and heterogeneous user costs, describe the two-sector dynamics, and derive measures of technology growth, corrected for the imperfections that we quantify. I decompose the data into a series of difference-in-differences specifications to isolate these three channels and find that the pairwise effect is the primary source of increased financial integration. It finds the smallest and largest hospitals to be of the highest quality. There is strong evidence of dependence between the unobserved severity of illness and the assignment of patients to hospitals, whereby patients with a high unobserved severity of illness are disproportionately admitted to high quality hospitals. The newly industrialized economies (NIEs) of Asia are the fastest-growing economies in the world since 1960. Based on our estimates, we explore some quantitative implications high quality paper writing order of this class of preferences for capital accumulation in a neoclassical growth model and the welfare cost of the business cycle. Using household-level debt data over 2000-2012 and local variation in inequality, we show that low-income households in high-inequality regions (zip-codes, counties, states) accumulated less debt (relative to their income) than low-income households in lower-inequality regions, contrary to the prevailing view. Does it translate quickly into higher employment and economic activity or does it impact the economy only slowly over time? We propose a lending model to illustrate the mechanism. A clear understanding of their rapid development remains elusive, with continuing disputes over the roles of technology growth, capital accumulation, and international trade and investment. This result is robust to a number of sensitivity exercises used to address concerns frequently associated with difference-in-differences specifications, such as serial correlation and issues associated with the timing of the intervention. Furthermore, the price of credit is higher and access to credit is harder for low-income households in high-inequality versus low-inequality regions. A flexible labor margin allows households how to write a final year dissertation to absorb shocks to asset values with changes in hours worked as well as changes in consumption. The study uses data on 74,848 Medicare patients admitted to 114 hospitals in Los Angeles County from 1989 through 1992 with a diagnosis of pneumonia. This study controls for phd thesis on inflation targeting hospital selection using a model in which distance between the patient’s residence and alternative hospitals are key exogenous variables. In contrast, for the Burns-Miller period the inflation target is estimated to be 5. Lower quantities combined with higher prices suggest that the debt accumulation pattern by household income across areas with different inequality is a result of credit supply rather than credit demand. Capital account and exchange rate liberalization would have phd thesis on inflation targeting allowed the Chinese central bank to better stabilize the external shocks experienced during the global financial crisis. The parameters of the approximate three-sector distribution are such that both the approximate and the original distributions share the same (i) average frequency of price changes, (ii) cross-sectional average of durations of price spells, (iii) cross-sectional standard deviation of durations of price spells, (iv) the cross-sectional skewness of durations of price spells, and (v) cross-sectional kurtosis of durations of price spells. Consequently, over this period policymakers tended to accommodate movements in inflation. E. This paper examines the Hansen and Sargent (2003) formulation of the robust Stackelberg problem and shows that their method of constructing the approximating equilibrium, which is central to any robust control exercise, is generally invalid. The present paper extends that analysis to the case of generalized recursive preferences, as in Epstein and Zin (1989) and Weil (1989), including multiplier preferences, as in Hansen and Sargent (2001). In the presence of temptation, a wealth-consumption ratio, in addition to consumption growth, becomes a determinant of the asset-pricing kernel, and the importance of this additional pricing factor depends on the strength of temptation. Understanding risk aversion for these preferences is especially important because they are the primary mechanism being used to bring macroeconomic models into closer agreement with asset pricing facts. Daily changes in inflation compensation and changes in long-term nominal rates generally display a close statistical relationship. This paper uses a small data-consistent model of the United States to identify and estimate the Federal Reserve's policy preferences. Regressions performed on model-generated data can deliver the well-documented forward premium anomaly. This ability to absorb shocks along both margins greatly alters phd thesis on inflation targeting the household’s attitudes toward risk, as shown by Swanson (2012). These results provide the tools for a growing literature that tries to estimate empirically-relevant multisector models with much reduced computational costs. A number of studies have recently noted that monetary integration in the European Monetary Union (EMU) has been accompanied by increased financial integration. This paper reviews the empirical findings in the literature for the United States and other developed economies and compares the effects of transportation spending to those of other types of phd thesis on inflation targeting government spending. China’s external policies, including capital controls, managed exchange rates, and sterilized interventions, constrain its monetary policy options for maintaining macroeconomic stability following external shocks. Agents augment a lagged-information random walk forecast with a term that captures doctoral thesis by ulrich franke cranfield university news about Taylor-rule fundamentals. For instance, in Singapore, growth-accounting studies using quantities (the primal approach) find rising capital-output ratios and a constant labor share; but studies using real factor prices (the dual approach) find a constant user cost. We solve a macroeconomic model in which information about fundamentals is dispersed and households make small, correlated errors when forming expectations about future productivity. Transportation spending often plays a prominent role in government efforts to stimulate the economy during downturns. The model generates volatility and persistence that is remarkably similar to that observed in monthly exchange rate data for Canada, Japan, and the U. When prices reflect less information, the conditional variance of stock returns rises, causing an increase in uncertainty and costly distortions in consumption, capital accumulation, and labor supply. ” The model highlights a monetary policy tradeoff between domestic price stability and costly sterilization. Mortality rates in patient discharge records are widely used to infer hospital quality. Using the information in TIPS breakeven rates and inflation swap rates, I document that movements in inflation compensation are important for explaining variation in long-term nominal interest rates, both unconditionally as well as conditionally on macroeconomic data surprises. This paper studies the empirical relevance of temptation and self-control using household-level data from the Consumer Expenditure Survey. how to write a good application essay video Two notable examples are the Long-Run Risk and rare disaster how to write a strong college application essay frameworks. Over the Volcker-Greenspan period we estimate the inflation target to be 2. We provide evidence that "favored" firms reaped economic profits and received preferential tax treatment, subsidies, and access to capital--market imperfections that are difficult to capture when implementing the dual approach. Yet, despite the frequent use of transportation spending as a form of fiscal stimulus, there is little known about its short- or medium-run effectiveness. We construct an infinite-horizon consumption-savings model that allows, but does not require, temptation and self-control in preferences. Acknowledging that both phenomena are naturally subject to ambiguity, we show that an ambiguity-averse agent may behave as if Long-Run Risk and disasters exist even if they do not or exaggerate them if they do. Such models are difficult to characterize from consumption data alone. The paper then turns to the Hansen and Sargent (2007) treatment, which, responding to the problems raised in this paper, changes subtly, but importantly, how the robust Stackelberg problem is formulated. The paper also documents that survey expectations of inflation exhibit significant comovement with variation in nominal interest rates, as well as significant responses to macroeconomic news. I decompose the relative increase in bilateral commercial bank claims among union members following monetary integration into three possible channels: A "borrower effect," as a country's EMU membership may leave its borrowers more creditworthy in the eyes of foreign lenders; a "creditor effect," as membership in a monetary union may increase the attractiveness of a nation's commercial banks as intermediaries, perhaps through increased scale economies enjoyed by commercial banks themselves or through an improved regulatory environment after the advent of monetary union; and a "pairwise effect," as joint membership in a monetary union increases the quality of intermediation between borrowers buy college application essays 2013 and creditors when both are in the same union. We show that the stock market may fail to aggregate information even if it appears to be efficient, and that the resulting decrease in the information content of prices may drastically reduce welfare. Accordingly, concerns have been raised regarding their specification. The coefficient on fundamental news is pinned down using the moments of observable data such that the resulting forecast errors are close to white noise. , that the robust policy can coincide with the rational expectations policy. This paper proves, first, that their method for obtaining the approximating equilibrium is now equivalent to the one phd thesis on inflation targeting developed in this paper, and, second, that the worst-case specification errors are not subject to a time-inconsistency problem. This paper provides new evidence on the importance of inflation expectations for variation in nominal interest rates, based on buy a term paper now both market-based and survey-based measures of inflation expectations. We reconcile seemingly contradictory explanations by accounting for imperfections in output and capital markets. K. We find critical differences between the policy regimes in operation during the Burns-Miller and Volcker-Greenspan periods. Consumption-based asset-pricing models phd thesis on inflation targeting have experienced success in recent years by augmenting the consumption process in ‘exotic’ ways.