Ordering Policy Rules with an Unconditional Welfare Measure

The unconditional expectation of social welfare is often used to assess alternative macroeconomic policy rules in applied quantitative research. It is shown that it is generally possible to derive a linear - quadratic problem that approximates the exact non-linear problem where the unconditional expectation of the objective is maximised and the steady-state is distorted. Thus, the measure of pol icy performance is a linear combinat ion of second moments of economic variables which is relatively easy to compute numerically, and can be used to rank alternative policy rules. The approach is applied to a simple Calvo-type model under various monetary policy rules.

Temper and Temperature: The Missing Link of Climate on Armed Conflicts

We investigate the causes of a conflict by adding ambient climate factors to the existing bundle of most significant variables. It turns out that – controlling for possible associations – temperature could actually induce a conflict. We emphasise that temperature could not be a dominant reason in starting a conflict; however, it could escalate the chances when other factors are present. This paper references some of the related psychological studies to support this claim. We also show that grievance factors could actually be rightfully effective in starting an internal conflict alongside greed based reasons. In the end, we believe that it could be informative to study ambient factors more often in economics.