Optimal Central Banker Contracts and Common Agency

This paper considers the contacting approach to central banking in the context of a simple common agency model. The recent literature on optimal contracts suggests that the political principal of the central bank can design the appropriate incentive schemes that remedy for time-inconsistency problems in monetary policy. The effectiveness of such contracts, however, requires a central banker that attaches a positive weight to the incentive scheme. As a result, delegating monetary policy under such circumstances gives rise to the possibility that the central banker may respond to incentive schemes offered by other potential principals. We introduce common agency considerations in the design of optimal central banker contracts. We introduce two principals - society (government) and an interest group, whose objectives conflict with society's and we examine under what circumstances the government-offered or the interest-group-offered contract dominates. Our results largely depend on the type of bias that the interest group contract incorporates. In particular, when the interest group contract incorporates an inflationary bias the outcome depends on the principals' relative concern of the incentive schemes' costs. When the interest group contract incorporates an expansionary bias, however, it always dominates the government contract. A corollary of our results is that central banker contracts aiming to remove the expansionary bias of policymakers should be written explicitly in terms of the perceived bias.

A Prudent Central Banker

This paper studies monetary policy in an economy where the central banker's preferences are asymmetric around optimal inflation. In particular, positive deviations from the optimum can be weighted more, or less, severely than negative deviations in the policy maker's loss function. It is shown that under asymmetric preferences, uncertainty can induce a prudent behavior on the part of the central banker. Since the prudence motive can be large enough to override the inflation bias, optimal monetary policy could be implemented even in the absence of rules, reputation, or contractual mechanisms. For certain parameter values, a deflationary bias can arise in equilibrium.

Raúl Prebisch, central banker

Includes bibliography

The Inflation Bias When the Central Bank Targets, the Natural Rate of Unemployment

This paper studies the proposition that an inflation bias can arise in a setup where a central banker with asymmetric preferences targets the natural unemployment rate. Preferences are asymmetric in the sense that positive unemployment deviations from the natural rate are weighted more (or less) severely than negative deviations in the central banker's loss function. The bias is proportional to the conditional variance of unemployment. The time-series predictions of the model are evaluated using data from G7 countries. Econometric estimates support the prediction that the conditional variance of unemployment and the rate of inflation are positively related.

Time Variation in an Optimal Asymmetric Preference Monetary Policy Model

This paper considers a time varying parameter extension of the Ruge-Murcia (2003, 2004) model to explore whether some of the variation in parameter estimates seen in the literature could arise from this source. A time varying value for the unemployment volatility parameter can be motivated through several means including variation in the slope of the Phillips curve or variation in the preferences of the monetary authority.We show that allowing time variation for the coefficient on the unemployment volatility parameter improves the model fit and it helps to provide an explanation of inflation bias based on asymmetric central banker preferences, which is consistent across subsamples.

Inflation Targeting Under Asymmetric Preferences

This paper develops and estimates a game-theoretical model of inflation targeting where the central banker's preferences are asymmetric around the targeted rate. In particular, positive deviations from the target can be weighted more, or less, severely than negative ones in the central banker's loss function. It is shown that some of the previous results derived under the assumption of symmetry are not robust to the generalization of preferences. Estimates of the central banker's preference parameters for Canada, Sweden, and the United Kingdom are statistically different from the ones implied by the commonly used quadratic loss function. Econometric results are robust to different forecasting models for the rate of unemployment but not to the use of measures of inflation broader than the one targeted.

Monetary Policy When Wages Are Downwardly Rigid: Friedman Meets Tobin

In a monetary economy with downwardly rigid wages, the central banker should target a low, but strictly positive, inflation rate.

Monetary Policy Delegation, Contract Costs, and Contract Targets

We reconsider the optimal central banker contract derived in Walsh (1995). We show that if the government's objective function places weight (value) on the cost of the contract, then the optimal inflation contract does not completely neutralize the inflation bias. That is, a fraction of the inflation bias emerges in the resulting inflation rate after the central banker's monetary policy decision. Furthermore, the more concerned the government is about the cost of the contract or the less selfish (more benevolent) is the central banker, the smaller is the share of the inflation bias eliminated by the contract. No matter how concerned the government is about the cost of the contract or how unselfish (benevolent) the central banker is, the contract always reduces the inflationary bias by at least half. Finally, a central banker contract written in terms of output (i.e., incorporating an output target) can completely eradicate the inflationary bias, regardless of concerns about contract costs.

Expectations, and Credibility in a Model of Monetary Policy

Recent monetary history has been characterized by monetary authorities which have been, alternatively hard and soft on inflation. In a vintage capital framework, investment decisions are not easily reversed. Therefore, expectations of policy as well as current policy are important to the investment decision. Here, a vintage capital model is used to assess the value of central bank credibility for a policy change. Policy in this model is assumed to be private information of the central banker. Agents learn about that policy which to study the ensuing transitional dynamics following a change in monetary policy regime.

Essays in International Finance and Macroeconomics

Thesis (Ph.D.)--University of Washington, 2016-08

O trabalho na Central de Material e Esterilização e as repercussões para a saúde dos trabalhadores de enfermagem

O objeto do presente estudo trata das repercussões do trabalho na Central de Material e Esterilização (CME) para o processo saúde-doença dos trabalhadores de enfermagem, na perspectiva desse coletivo profissional. Através de conversas informais com os profissionais da CME e de minhas observações, identifiquei que os trabalhadores de enfermagem queixavam-se das sobrecargas física e mental, da inadequação dos recursos materiais, além do estresse advindo das exigências do posto de trabalho. Considerando a natureza do objeto de estudo e as questões norteadoras, pretende-se, como objetivo geral: discutir a situação de saúde dos trabalhadores de enfermagem em uma CME de um Hospital Geral, correlacionando com a organização do trabalho e processo laboral desses trabalhadores. Os objetivos específicos foram: descrever a organização e o processo de trabalho dos trabalhadores de enfermagem da CME de um Hospital Geral; analisar a configuração da organização e do processo de trabalho na CME, na perspectiva de interferência no processo saúde-doençados trabalhadores de enfermagem; e propor estratégias para melhorar a saúde e a segurança dos trabalhadores de enfermagem da CME. Para a realização desta pesquisa, optou-se pela abordagem qualitativa, de caráter descritivo e exploratório. O cenário do estudo foi CME de um hospital geral, de grande porte, do serviço público, situado no município do Rio de Janeiro. Os sujeitos foram 34 trabalhadores de enfermagem (vinte e cinco técnicos de enfermagem e nove enfermeiras). Utilizou-se a entrevista do tipo semiestruturada, associada à observação não participante no setor, sendo os dados obtidos nos meses de março a maio de 2013.Para o tratamento e a análise dos dados coletados recorreu-se à análise temática de conteúdo.O estudo foi aprovado pelo Comitê de Ética em Pesquisa da Instituição e protocoladocom o n 081.3.2012. Na primeira categoria evidenciou-se que, em função de uma obra iniciada há cerca de dois anos, houve prejuízos para a condução do processo de trabalho nesta unidade, gerando improvisações na estrutura organizacional e no modo operatório do processo laboral. Outrasquestõesrelatadas foram a insuficiência de recursos materiais, a precariedade dos vínculos de trabalho e a escassez de recursos humanos.Na segunda categoria constatou-se queos trabalhadores salientaram a sobrecarga físicadecorrente da forma como está configurado a organização e o processo laboral, destacando-se a repetitividade das tarefas. Na terceira categoria, os sujeitos relataram que a CME é um excelente cenário para aprendizado, que sentem orgulho em trabalhar em um local imprescindível para a instituição, porém destacaram que sofrem por não terem o reconhecimento desejado. Por fim, na quarta categoria, os depoentes propuseram a retomada e a finalização das obras, além da regulamentação dos contratos precários de trabalho e a necessidade da realização de novos concursos públicos. Recomenda-se que se ampliem os espaços de discussão sobre Saúde do Trabalhador e sobre CME na formação de enfermagem, buscando-se a participação efetiva dos trabalhadores nas lutas políticas que envolvem a classe e a área da saúde, destacando-se a conquista por condições dignas de trabalho.

Contratación atípica en el sector central de la administración pública colombiana (ministerios y departamentos administrativos)

El Estatuto General de Contratación colombiano (Ley 80 de 1993 y normas que lo aclaran, complementan y desarrollan), como desarrollo de los artículos 4 y 209 de la Constitución Política y como ejemplo de la implantación de nuevas maneras de entender el derecho administrativo, habilita a las entidades estatales sujetas al estatuto general de contratación, en aras de alcanzar sus fines constitucionales y legales, para acudir a contratos del derecho privado, plasmados en normas especiales y aquellos derivados del ejercicio de la autonomía de la voluntad, sin que ello se oponga al principio de legalidad, piedra angular del derecho público. No obstante esta autorización legal expresa, el uso de contratos atípicos es muy limitado.

Los principios de interpretación de la Convención de las Naciones Unidas sobre los contratos de compraventa internacional de mercaderías (Tema Central)

Si bien los redactores de la Convención de las Naciones Unidas sobre los Contratos de Compraventa Internacional de Mercaderías no establecieron de manera expresa los métodos para adelantar la operación hermenéutica de este instrumento, sí previeron algunos principios que, en líneas generales, configuran un “sistema autónomo de interpretación” –acorde con las exigencias de su naturaleza internacional–, que se traduce en una operación de lógica jurídica que tiene por objeto determinar el alcance y sentido de los términos utilizados por la Convención y de los contratos que suscriban las partes. Este trabajo procura examinar el carácter internacional de la Convención, la necesidad de promover la uniformidad en su aplicación, y la de asegurar la observancia de la buena fe en el comercio internacional. En la segunda parte se analizan los criterios previstos en la Convención para la interpretación específica de las declaraciones y los actos realizados por las partes.

Los asociaciones público-privadas (APP): una opción para contratación administrativa en Latinoamérica (Tema Central)

Las APP son una opción frente a modalidades de contratación administrativa más agresivas como aquellas típicas de la época de las privatizaciones. Las APP conjugan la indispensable colaboración entre el sector público y el privado.

The insurance function of contracts

One of the central problems in contract law is to define the frontier between legal and illegal breaches of promises. The distinction between good and bad faith is perhaps the conceptual tool most commonly used to tell one from the other. Lawyers spend a lot of energy trying to frame better definitions of the concepts of good and bad faith based on principles of ethics or justice, but often pay much less attention to theories dealing with the incentives that can engender good faith behavior in contractual relationships. By describing the economics of what Stiglitz defined as “explicit” and “implicit” insurance, I highlight the “insurance function” hidden in any promise with basically no mathematical notation. My aim is to render the subject intelligible and useful to lawyers with little familiarity with economics.