Is there a need for additional monetary stimulus? Insights from the original Taylor Rule. CEPS Policy Brief No. 342, April 2016

Central banks in the developed world are being misled into fighting the perceived dangers of a ‘deflationary spiral’ because they are looking at only one indicator: consumer prices. This Policy Brief finds that while consumer prices are flat, broader price indices do not show any sign of impending deflation: the GDP deflator is increasing in the US, Japan and the euro area by about 1.2-1.5%. Nor is the real economy sending any deflationary signals either: unemployment is at record lows in the US and Japan, and is declining in the euro area while GDP growth is at, or above potential. Thus, the overall macroeconomic situation does not give any indication of an imminent deflationary spiral. In today’s high-debt environment, the authors argue that central banks should be looking at the GDP deflator and the growth of nominal GDP, instead of CPI inflation. Nominal GDP growth, as forecasted by the major official institutions, remains robust and is in excess of nominal interest rates. They conclude that if the ECB were to set the interest rate according to the standard rules of thumb for monetary policy, which take into account both the real economy and price developments of broader price indicators, it would start normalising its policy now, instead of pondering over additional measures to fight deflation, which does not exist. In short, economic conditions are slowly normalising; so should monetary policy.

Stable oxygen, hydrogene and chlorine isotopes of mid-Atlantic abyssal peridotites

Serpentinized abyssal peridotites sampled by the Ocean Drilling Program Leg 209 along the mid-Atlantic Ridge near the 15°20'N Fracture Zone have been analyzed for oxygen, hydrogen, and chlorine isotope compositions in order to determine isotopic behavior under a wide range of serpentinization conditions and place constraints on fluid history. Oxygen and hydrogen thermometry suggests peak serpentinization temperatures of 300-500°C. Serpentine separates have low deltaD values possibly due to a magmatic fluid component or low-temperature exchange during seafloor weathering. Chlorine geochemistry focused on three holes: 1274A and 1272A (serpentinized peridotites) and 1268A (serpentinite locally altered to talc). Concentrations of both, water-soluble chloride (WSC) and structurally bound chloride (SBC) are significantly lower at Hole 1268A compared to Holes 1274A and 1272A. The delta37Cl values for WSC and SBC of serpentinites in Holes 1274A and 1272A are slightly positive (avg. WSC = 0.20 per mil, n = 22 and avg. SBC = 0.35 per mil, n = 22), representing typical seawater-hydration conditions commonly determined for abyssal peridotite. The SBC of serpentinites from Hole 1268A are also positive (avg. = 0.63 per mil); whereas, the SBC in talc-dominated samples is negative (avg. = -1.22 per mil). The WSC of both talc- and serpentine-dominated samples are also negative (avg. = -0.15 per mil). We interpret the chlorine isotope data to preserve a record of multiple fluid events. As seawater hydrated the peridotite, 37Cl was preferentially incorporated into the forming serpentine and water-soluble salts, yielding similar delta37Cl values on a regional scale as sampled by Holes 1268A, 1274A and 1272A. The resultant pore fluid was left depleted in 37Cl. Locally (Hole 1268A), this evolved fluid was remobilized possibly due to the initiation of hydrothermal circulation in response to emplacement of a mafic magma body. The low delta37Cl pore fluids attained elevated SiO2 and sulfur concentrations due to interaction with the gabbroic intrusion and, when ascending through the surrounding serpentinite, caused formation of isotopically negative talc. This secondary fluid also flushed the preserved serpentinite of its previously formed salts, resulting in negative delta37Cl WSC values. The delta37Cl SBC values of the serpentinite samples remained unmodified by reaction with the secondary fluid.

Taylor's Bayou drainage and flood control, Jefferson County : environmental impact statement.

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