Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations

Using data for the G7 countries, I estimate conditional correlations of employment and productivity, based on a decomposition of the two series into technology and non-technology components. The picture that emerges is hard to reconcile with the predictions of the standard Real Business Cycle model. For a majority of countries the following results stand out: (a) technology shocks appear to induce a negative comovement between productivity and employment, counterbalanced by a positive comovement generated by demand shocks, (b) the impulse responses show a persistent decline of employment in response to a positive technology shock, and (c) measured productivity increases temporarily in response to a positive demand shock. More generally, the pattern of economic fluctuations attributed to technology shocks seems to be largely unrelated to major postwar cyclical episodes. A simple model with monopolistic competition, sticky prices, and variable effort is shown to be able to account for the empirical findings.

Recurrent approach to effective material properties with application to anisotropic binarized random fields

Building on the foundation work of Brown, Milton and Torquato, we present a tractable approach to analyse the effective permittivity of anisotropic two-phase structures. This methodology accounts for successive dipolar interactions, providing a recurrent series expansion of the effective permittivity to arbitrary order. Within this framework, we also demonstrate a progressive method to determine tight bounds that converge towards the exact solution. We illustrate the utility of these methods by using ensemble averaging to determine the micro-structural parameters of anisotropic level-cut Gaussian fields. We find that the depolarization factor of these structures is equivalent to that of an isolated ellipse with the same stretchingratio, and discuss the contribution of the fourth order term to the exact anisotropy

An \emph{ab initio} study on split silicon-vacancy defect in diamond: electronic structure and related properties

The split silicon-vacancy defect (SiV) in diamond is an electrically and optically active color center. Recently, it has been shown that this color center is bright and can be detected at the single defect level. In addition, the SiV defect shows a non-zero electronic spin ground state that potentially makes this defect an alternative candidate for quantum optics and metrology applications beside the well-known nitrogen-vacancy color center in diamond. However, the electronic structure of the defect, the nature of optical excitations and other related properties are not well-understood. Here we present advanced \emph{ab initio} study on SiV defect in diamond. We determine the formation energies, charge transition levels and the nature of excitations of the defect. Our study unravel the origin of the dark or shelving state for the negatively charged SiV defect associated with the 1.68-eV photoluminescence center.Comment: 8 pages, 5 figures, 1 tabl

Real Wage Rigidities and the New Keynesian Model

Most central banks perceive a trade-off between stabilizing inflation and stabilizing the gap between output and desired output. However, the standard new Keynesian framework implies no such trade-off. In that framework, stabilizing inflation is equivalent to stabilizing the welfare-relevant output gap. In this paper, we argue that this property of the new Keynesian framework, which we call the "divine coincidence", is due to a special feature of the model: the absence of non trivial real imperfections. We focus on one such real imperfection, namely, real wage rigidities. When the baseline new Keynesian model is extended to allow for real wage rigidities, the divine coincidence disappears, and central banks indeed face a trade-off between stabilizing inflation and stabilizing the welfare-relevant output gap. We show that not only does the extended model have more realistic normative implications, but it also has appealing positive properties. In particular, it provides a natural interpretation for the dynamic inflation--unemployment relation found in the data.

Monetary Policy and Exchange Rate Volatility in a Small Open Economy

We lay out a small open economy version of the Calvo sticky price model, and show how the equilibrium dynamics can be reduced to a tractable canonical system in domestic inflation and the output gap. We employ this framework to analyze the macroeconomic implications of three alternative monetary policy regimes for the small open economy: domestic inflation targeting, CPI targeting and an exchange rate peg. We show that a key difference among these regimes lies in the relative amount of exchange rate volatility that they entail. We also discuss a special case for which domestic inflation targeting constitutes the optimal policy, and where a simple second order approximation to the utility of the representative consumer can be derived and used to evaluate the welfare losses associated with suboptimal regimes.