Maintaining Low Inflation: Money, Interest Rates, and Policy Stance

This paper examines the usefulness of considering monetary aggregates when assessing monetary policy stance, and contrasts monetary analysis to the current mainstream monetary policy analysis. Monetary developments, unlike interest rate stance measures, are shown to provide quantitative information on subsequent price levels. Moreover, ignoring money and focusing on interest rates and real activity measures neglects crucial information as short-term velocity movements are fully part of the monetary policy transmission process. The analysis also sheds light on the recent change in inflation volatility and persistence as well as on the Phillips curve flattening. The empirical analysis is based on US data since the 1960s as well as euro area and Swiss data since the 1970s.Monetary policy, Monetary aggregates, Inflation, Output, Taylor rule, Equilibrium interest rate

Curable polyphosphazenes

Class of polyphosphazene polymers can be cured at moderate temperatures by action of moisture. In addition, polymers maintain flexibility when exposed to low temperatures

Optimal Cyclical Monetary Policy: Does Steady-State Inflation Matter?

In general equilibrium models, optimal cyclical monetary policy is usually derived around an optimal steady-state inflation level, which in most cases is zero or equal to the negative of the real interest rate. This paper examines whether and how different steady-state inflation levels and other steady-state distortions affect the optimal monetary policy response to shocks. This issue is first discussed in general terms. Then, a simple example is presented, where optimal policy can be procyclical or countercyclical depending on the steady-state inflation level. This paper suggests that both issues of the choice of inflation target and optimal cyclical monetary policy should be addressed simultaneously, as steady-state distortions influence the optimal reaction of monetary policy to shocks. More generally, the paper shows that assumptions about steady-state distortions affect the derived optimal cyclical policy.

What Drives the Swiss Franc?

This paper analyzes the behavior of the Swiss franc (CHF) over the past 35 years. It relates the evolution of the CHF exchange rates to economic fundamentals like the relative competitiveness of the Swiss export sector, accumulated current accounts, interest rate differentials and oil prices. Some factors like the introduction of the euro, a relative increase in Swiss domestic productivity and higher oil prices seem to have modified the CHF behavior in the last decade, but more data will be needed to draw definitive conclusions. The paper relies on different data sources and assesses potential exchange rate determinants under different angles. Overall, measurement and econometric issues would make it difficult to determine a unique econometric specification or specific values for equilibrium exchange rates.Swiss franc, exchange rates, fundamentals

Thermal expansion of mantle minerals at high pressures - A theoretical study

Recent experimental work has shown that the pressure dependence of the thermal expansion coefficient can be expressed as: ( α / α 0 ) = ( ρ / ρ 0 ( - δ T   ( 1 ) where δ_{T}, the Anderson‐Gruneisen parameter, is assumed to be independent of pressure, and for the materials studied has a value that lies between 4 and 6. Calculation of δ_{T} from seismic data, however, appears to suggest a contradictory value of between 2 and 3 for mantle‐forming phases. Using an atomistic model based on our previously successful many‐body interatomic potential set (THBl), we have performed calculations to obtain values of δ_{T} for four major mantle‐forming minerals. Our model results are in excellent agreement with experimental data, yielding values of between 4 and 6 for forsterite and MgO, and values in the same range for MgSiO_{3-}perovskite and γ‐Mg_{2}SiO_{4}. Moreover, the calculations confirm that δ_{T} is indeed constant with pressure up to the core‐mantle boundary. The apparent conflict between the values of δ_{T} predicted from seismic data and those obtained from experiment, and now from theory, is discussed

Optimal Cyclical Monetary Policy: Does Steady-State Inflation Matter?

In general equilibrium models, optimal cyclical monetary policy is usually derived around an optimal steady-state inflation level, which in most cases is zero or equal to the negative of the real interest rate. This paper examines whether and how different steady-state inflation levels and other steady-state distortions affect the optimal monetary policy response to shocks. This issue is first discussed in general terms. Then, a simple example is presented, where optimal policy can be procyclical or countercyclical depending on the steady-state inflation level. This paper suggests that both issues of the choice of inflation target and optimal cyclical monetary policy should be addressed simultaneously, as steady-state distortions influence the optimal reaction of monetary policy to shocks. More generally, the paper shows that assumptions about steady-state distortions affect the derived optimal cyclical policy