Endogenous Financing and the Long Run Impact of Money Growth on Output and Prices

Most monetary models make use of the quantity theory of money along with a Phillips curve. This implies a strong correlation between money growth and output in the short run (with little or no correlation between money and prices) and a strong long run correlation between money growth and inflation and inflation (with little or no correlation between money growth and output). The empirical evidence between money and inflation is very robust, but the long run money/output relationship is ambiguous at best. This paper attempts to explain this by looking at the impact of money growth on firm financing.

Comparing Input- and Output-Oriented Measures of Technical Efficiency to Determine Local Returns to Scale in DEA Models

This paper shows how one can infer the nature of local returns to scale at the input- or output-oriented efficient projection of a technically inefficient input-output bundle, when the input- and output-oriented measures of efficiency differ.

The Relationship between Large Fiscal Adjustments and Short-Term Output Growth Under Alternative Fiscal Policy Regimes

A small, but growing, body of literature searches for evidence of non-Keynesian effects of fiscal contractions. That is, some evidence exists that large fiscal contractions stimulate short-run economic activity. Our paper continues this research effort by systematically examining the effects, if any, of unusual fiscal events - either non-Keynesian results within a Keynesian model or Keynesian results within a neoclassical model -- on short-run economic activity. We examine this issue within three separate models -- a St. Louis equation, a Hall-type consumption equation, and a growth accounting equation. Our empirical findings are mixed, and do not provide strong systematic support for the view that unusually large fiscal contractions/expansions reverse the effects of normal fiscal events. Moreover, we find only limited evidence that trigger points are empirically important.

Measuring Potential Output and Output Gap and Macroeconomic Policy: The Case of Kenya

Measuring the level of an economy.s potential output and output gap are essential in identifying a sustainable non-inflationary growth and assessing appropriate macroeconomic policies. The estimation of potential output helps to determine the pace of sustainable growth while output gap estimates provide a key benchmark against which to assess inflationary or disinflationary pressures suggesting when to tighten or ease monetary policies. These measures also help to provide a gauge in the determining the structural fiscal position of the government. This paper attempts to measure Kenya.s potential output and output gap using alternative statistical techniques and structural methods. Estimation of potential output and output gap using these techniques shows varied results. The estimated potential output growth using different methods gave a range of .2.9 to 2.4 percent for 2000 and a range of .0.8 to 4.6 for 2001. Although various methods produce varied results, they however provided a broad consensus on the over-all trend and performance of the Kenyan economy. This study found that firstly, potential output growth is declining over the recent time and secondly, the Kenyan economy is contracting in the recent years.

Inflation Targeting and Output Growth: Evidence from Aggregate European Data

This paper evaluates inflation targeting and assesses its merits by comparing alternative targets in a macroeconomic model. We use European aggregate data to evaluate the performance of alternative policy rules under alternative inflation targets in terms of output losses. We employ two major alternative policy rules, forward-looking and spontaneous adjustment, and three alternative inflation targets, zero percent, two percent, and four percent inflation rates. The simulation findings suggest that forward-looking rules contributed to macroeconomic stability and increase monetary policy credibility. The superiority of a positive inflation target, in terms of output losses, emerges for the aggregate data. The same methodology, when applied to individual countries, however, suggests that country-specific flexible inflation targeting can improve employment prospects in Europe.

Cross-Country Evidence on Output Growth Volatility: Nonstationary Variance and GARCH Models

This paper revisits the issue of conditional volatility in real GDP growth rates for Canada, Japan, the United Kingdom, and the United States. Previous studies find high persistence in the volatility. This paper shows that this finding largely reflects a nonstationary variance. Output growth in the four countries became noticeably less volatile over the past few decades. In this paper, we employ the modified ICSS algorithm to detect structural change in the unconditional variance of output growth. One structural break exists in each of the four countries. We then use generalized autoregressive conditional heteroskedasticity (GARCH) specifications modeling output growth and its volatility with and without the break in volatility. The evidence shows that the time-varying variance falls sharply in Canada, Japan, and the U.K. and disappears in the U.S., excess kurtosis vanishes in Canada, Japan, and the U.S. and drops substantially in the U.K., once we incorporate the break in the variance equation of output for the four countries. That is, the integrated GARCH (IGARCH) effect proves spurious and the GARCH model demonstrates misspecification, if researchers neglect a nonstationary unconditional variance.

The Effects of Trade Orientation and Human Capital on Total Factor Productivity

We study the effects of trade orientation and human capital on total factor productivity for a pooled cross-section, time-series sample of developed and developing countries. We first estimate total factor productivity from a parsimonious specification of the aggregate production function involving output per worker, capital per worker, and the labor force, both with and without the stock of human capital. Then we consider a number of potential determinants of total factor productivity growth including several measures of trade orientation as well as a measure of human capital. We find that a high degree of openness benefits total factor productivity and that human capital contributes to total factor productivity only after our measure of openness passes some threshold level. Before that threshold, increases in human capital actually depress total factor productivity. Finally, we also consider the issue of convergence of real GDP per worker and total factor productivity, finding more evidence of convergence for the latter than for the former.

Biogenic and terrigeneous components in ODP Leg 108 holes

Five Ocean Drilling Program sites (657-661), which form a north-south transect off the western periphery of the Sahara, were selected to measure the long-term history of Saharan/Sahelian dust flux and fluvial sediment discharge and the fluxes of marine CaCO3 and opal over the last 8 m.y. Sites 658 and 659 served for high-resolution studies, and Sites 657, 660, and 661 for insights into the spatial patterns of dust flux. The nearshore mean flux of opal off Cap Blanc (21 °N) showed an abrupt increase about 3 Ma that appears to reflect the main onset of coastal upwelling fertility and enhanced trade winds. At the same time, the input of river-borne clay strongly decreased, suggesting a dry up of the central Saharan rivers. Later, marked short-lived spikes of clay and opal may indicate ongoing ephemeral pulses of fluvial runoff linked to peak interglacial stages. Given the zonal dust discharge centered near 18 °N at Site 659, the aridification of the south Sahara and Sahel increased in several steps: at 4.6, 4.3, and especially at 4.0, 3.6, and 2.1 Ma, and again, at 0.8 Ma. The late Miocene and earliest Pliocene were humid. Although the central and north Saharan climate appears to be linked to the glaciation history of the Northern Hemisphere, the long-term aridification further south followed a different schedule. The spatial distribution of quartz accumulation suggests that the dust outbreaks linked to the Intertropical Convergence Zone during summer did not shift in latitude back to 4.0 Ma, at least. The short-term variations of dust output over the last 0.5 m.y. followed orbital scale pulses with a strong precessional signal, showing a link of Sahelian humidity changes to the variation of sea-surface temperature and evaporation in the tropical Atlantic.

Lagrangian back-tracing results for Kohnen station; output of time dependent numerical experiment with a 3D nested Antarctic ice sheet model

A nested ice flow model was developed for eastern Dronning Maud Land to assist with the dating and interpretation of the EDML deep ice core. The model consists of a high-resolution higher-order ice dynamic flow model that was nested into a comprehensive 3-D thermomechanical model of the whole Antarctic ice sheet. As the drill site is on a flank position the calculations specifically take into account the effects of horizontal advection as deeper ice in the core originated from higher inland. First the regional velocity field and ice sheet geometry is obtained from a forward experiment over the last 8 glacial cycles. The result is subsequently employed in a Lagrangian backtracing algorithm to provide particle paths back to their time and place of deposition. The procedure directly yields the depth-age distribution, surface conditions at particle origin, and a suite of relevant parameters such as initial annual layer thickness. This paper discusses the method and the main results of the experiment, including the ice core chronology, the non-climatic corrections needed to extract the climatic part of the signal, and the thinning function. The focus is on the upper 89% of the ice core (appr. 170 kyears) as the dating below that is increasingly less robust owing to the unknown value of the geothermal heat flux. It is found that the temperature biases resulting from variations of surface elevation are up to half of the magnitude of the climatic changes themselves.

Barnacle recurit density, biomass, and reproductive output measured in rocky intertidal habitats in Glasgow Head, on the Atlantic coast of Nova Scotia, Canada

Through a field experiment, we show that a predator has negative nonconsumptive effects (NCEs) on different life-history stages of the same prey species. Shortly before the recruitment season of the barnacle Semibalanus balanoides (May-June), we established experimental cages in rocky intertidal habitats in Nova Scotia, Canada. The cages were used to manipulate the presence and absence of dogwhelks, Nucella lapillus, the main predators of barnacles. At the centre of each cage, we installed a tile where barnacle pelagic larvae could settle and the resulting recruits grow. Mesh prevented caged dogwhelks from accessing the tiles, but allowed waterborne dogwhelk cues to reach the tiles. Results in May indicated that barnacle larvae settled preferentially on tiles from cages without dogwhelks. In November, at the end of the dogwhelk activity period and once the barnacle recruits had grown to adult size, barnacle body mass was lower in the presence of dogwhelks. This limitation may have resulted from a lower barnacle feeding activity with nearby dogwhelks, as found by a previous study. The observed larval and adult responses in barnacles are consistent with attempts to decrease predation risk. November data also indicated that dogwhelk cues limited barnacle reproductive output, a possible consequence of the limited growth of barnacles. Overall, this study suggests that a predator species might influence trait evolution in a prey species through NCEs on different life-history stages.

Planimetric ice-flow convergence and flow-orthonormal strain rate across the Antarctic Ice Sheet, with links to model result files

Fast-flowing ice streams discharge most of the ice from the interior of the Antarctic Ice Sheet coastward. Understanding how their tributary organisation is governed and evolves is essential for developing reliable models of the ice sheet's response to climate change. Despite much research on ice-stream mechanics, this problem is unsolved, because the complexity of flow within and across the tributary networks has hardly been interrogated. Here I present the first map of planimetric flow convergence across the ice sheet, calculated from satellite measurements of ice surface velocity, and use it to explore this complexity. The convergence map of Antarctica elucidates how ice-stream tributaries draw ice from the interior. It also reveals curvilinear zones of convergence along lateral shear margins of streaming, and abundant convergence ripples associated with nonlinear ice rheology and changes in bed topography and friction. Flow convergence on ice-stream tributaries and their feeding zones is markedly uneven, and interspersed with divergence at distances of the order of kilometres. For individual drainage basins as well as the ice sheet as a whole, the range of convergence and divergence decreases systematically with flow speed, implying that fast flow cannot converge or diverge as much as slow flow. I therefore deduce that flow in ice-stream networks is subject to mechanical regulation that limits flow-orthonormal strain rates. These properties and the gridded data of convergence and flow-orthonormal strain rate in this archive provide targets for ice- sheet simulations and motivate more research into the origin and dynamics of tributarization.