Some Implications of the Zero Lower Bound on Interest Rates for the Term Structure and Monetary Policy

In an economy where cash can be stored costlessly (in nominal terms), the nominal interest rate is bounded below by zero. This paper derives the implications of this nonnegativity constraint for the term structure and shows that it induces a nonlinear and convex relation between short- and long-term interest rates. As a result, the long-term rate responds asymmetrically to changes in the short-term rate, and by less than predicted by a benchmark linear model. In particular, a decrease in the short-term rate leads to a decrease in the long-term rate that is smaller in magnitude than the increase in the long-term rate associated with an increase in the short-term rate of the same size. Up to the extent that monetary policy acts by affecting long-term rates through the term structure, its power is considerably reduced at low interest rates. The empirical predictions of the model are examined using data from Japan.

Durable Goods, Inter-Sectoral Linkages and Monetary Policy

Barsky, House and Kimball (2007) show that introducing durable goods into a sticky-price model leads to negative sectoral comovement of production following a monetary policy shock and, under certain conditions, to aggregate neutrality. These results appear to undermine sticky-price models. In this paper, we show that these results are not robust to two prominent and realistic features of the data, namely input-output interactions and limited mobility of productive inputs. When extended to allow for both features, the sticky-price model with durable goods delivers implications in line with VAR evidence on the effects of monetary policy shocks.

Saint-Domingue Refugees and their Enslaved Property : Abolition Societies and the Enforcement of Gradual Emancipation in Pennsylvania and New York

Ce mémoire porte sur le rôle des cercles abolitionnistes dans l’application des lois sur l’émancipation graduelle de l’esclavage dans le nord des États-Unis vers la fin du dix-huitième siècle, principalement à New York et en Pennsylvanie. Plus particulièrement, il met en lumière la façon dont ces cercles, dont les deux plus importants étaient la Pennsylvania Abolition So-ciety (PAS) et le New­York Manumission Society (NYMS), ont fait face aux centaines de réfugiés de Saint-Domingue qui sont arrivés avec leurs esclaves sur la côte est américaine pour fuir la révolution haïtienne dans les années 1790. Dans un premier temps, ce mémoire étudie l’abolition graduelle de l’esclavage dans le nord des États-Unis, débutant avec la Pennsylvanie en 1780, et la formation des cercles abolitionnistes dans les anciennes colonies anglaises. Il sera en outre question des stratégies des antiesclavagistes américains afin de promouvoir l’abolition graduelle de l’esclavage et d’empêcher le mouvement des esclaves et des noirs libres en dehors des frontières de leurs États respectifs. Il sera aussi question de leurs efforts pour resserrer davantage les clauses des lois existantes à ce sujet. Dans un second temps, dans le but de mettre en relief la contribution des cercles abolitionnistes, ce mémoire procède à une étude de cas sur la manière dont les réfugiés de Saint-Domingue ont interagi avec l’esclavage résiduel à New York et en Pennsylvanie et cherche à comprendre pourquoi leurs tentatives d’échapper aux lois sur l’émancipation graduelle se sont heurtées, à plusieurs reprises, aux stratégies des sociétés antiesclavagistes.

The Backing of Government Debt and the Price Level

This paper studies the interdependence between fiscal and monetary policies, and their joint role in the determination of the price level. The government is characterized by a long-run fiscal policy rule whereby a given fraction of the outstanding debt, say d, is backed by the present discounted value of current and future primary surpluses. The remaining debt is backed by seigniorage revenue. The parameter d characterizes the interdependence between fiscal and monetary authorities. It is shown that in a standard monetary economy, this policy rule implies that the price level depends not only on the money stock, but also on the proportion of debt that is backed with money. Empirical estimates of d are obtained for OECD countries using data on nominal consumption, monetary base, and debt. Results indicate that debt plays only a minor role in the determination of the price level in these economies. Estimates of d correlate well with institutional measures of central bank independence.