102 research outputs found
In Tandem: the case for coordinated economic policymaking
No full textThe daunting array of economic problems facing Britain – low growth, inadequate investment, stagnant productivity, accelerating climate change and suppressed wages – are closely connected. Yet since 1997, the institutions most responsible for addressing them, the Treasury and the Bank of England, have been kept quite separate, operating in distinct, deliberately constructed siloes. In this pamphlet, Michael Jacobs, Robert Calvert Jump, Jo Michell and Frank van Lerven scrutinise the so-called ‘consensus assignment’, which specifies a hard division of labour between the government and the central bank. With informal coordination happening anyway, especially during the pandemic years, the authors argue that new, more transparent arrangements are needed. Analysing the wider array of institutions now involved in economic policymaking, they propose a new Economic Policy Coordinating Committee to help achieve the multiple objectives towards which governments today must aim
Rev. William B. McClain, Dr. Cole, Alhaji Hassan Adamu, and Dr. Calvert Smith at Convocation, circa 1985
No full textRev. William B. McClain, Dr. Cole, Alhaji Hassan Adamu, and Dr. Calvert Smith pose at convocation.The Atlanta University Center Robert W. Woodruff Library acknowledges the generous support of the Council on Library and Information Resources (CLIR) in supporting the processing and digitization of a number of historic collections as part of the project: Our Story: Digitizing Publications and Photographs of the Historically Black Atlanta University Center Institutions.</em
Inequality and aggregate demand in the IS-LM and IS-MP models
No full textThis paper presents an extension to the textbook IS‐LM and IS‐MP models that allows the short run effects of an increase in household income inequality to be studied in a simple manner. The income distribution is assumed to be log‐normal, and the coefficient of variation of income is assumed to be exogenous. The latter is used as the measure of income inequality, and enters otherwise standard IS and LM curves in a straightforward manner. While the models are highly stylised, they can easily be extended to more complicated variants
"The Contributions of Professors Fischer Black, Robert Merton, and Myron Scholes to the Financial Services Industry"
No full textThis paper is written as a tribute to Professors Robert Merton and Myron Scholes, winners of the 1997 Nobel Prize in economics, as well as to their collaborator, the late Professor Fischer Black. We first provide a brief and very selective review of their seminal work in contingent claims pricing. We then provide an overview of some of the recent research on stock price dynamics as it relates to contingent claim pricing. The continuing intensity of this research, some 25 years after the publication of the original Black-Scholes paper, must surely be regarded as the ultimate tribute to their work. We discuss jump-diffusion and stochastic volatility models, subordinated models, fractal models, and generalized binomial tree models, for stock price dynamics and option pricing. We also address questions as to whether derivatives trading poses a systemic risk in the context of models in which stock price movements are endogenized, and give our views on the "LTCM crisis" and liquidity risk.
Behavioural new Keynesian models
No full textThis paper provides a bird’s eye view of the behavioural New Keynesian literature. We discuss three key empirical regularities in macroeconomic data which are not accounted for by the standard New Keynesian model, namely, excess kurtosis, stochastic volatility, and departures from rational expectations. We then present a simple behavioural New Keynesian model that accounts for these empirical regularities in a straightforward manner. We discuss elaborations and extensions of the basic model, and suggest areas for future research
Inside the black box: The public finances after coronavirus
No full textThe global Covid-19 pandemic has required unprecedented government action at an unprecedented pace. It is vital that policymakers act to slow the spread of the virus, protect people's livelihoods and ensure the economic recovery delivers both prosperity and justice for the long term. This discussion paper has been commissioned to provide rapid analysis and expertise to the UK government with this goal in mind and will be followed by further analysis and recommendations from IPPR
Building blocks of a heterodox business cycle theory
No full textA key characteristic of heterodox theories of the business cycle is their focus on endogenous business cycle mechanisms. This paper provides an overview and comparison of four models in heterodox business cycle theory: multiplier-accelerator models, Goodwin models, Minskyan debt-cycle models, and momentum trader models. A representative model from each theory is formulated as a two-dimensional predator-prey system in continuous time, which allows us to identify the different stabilising and destabilising mechanisms. We argue that the theories are substantially competing, as they posit different mechanisms that explain cycles, but we also argue that these mechanisms are not mutually exclusive. We suggest that heterodox economists work towards a synthesis
Estimating nonlinear business cycle mechanisms with linear vector autoregressions: a Monte Carlo study
No full textThe paper investigates how well linear vector autoregressions (VARs) identify endogenous cycle mechanisms and cycle frequencies when the underlying process is a nonlinear limit cycle. We conduct Monte Carlo simulations with five nonlinear models in which cycles are driven by the interaction of two state variables. We find that while linear VARs quantitatively underestimate the strength of the interaction mechanism, they successfully identify the qualitative presence of a cycle mechanism in most cases (55%-100%). Our results further suggest that linear VARs are surprisingly successful at estimating cycle frequencies of nonlinear processes
Tractable Bayesian inference for an unidentified simple linear regression model
No full textIn this paper, I propose a tractable approach to Bayesian inference in a simple linear regression model for which the standard exogeneity assumption does not hold. By specifying a beta prior for the squared correlation between an error term and regressor, I demonstrate that the implied prior for a bias parameter is t-distributed. If the posterior distribution for the identified regression coefficient is normal, this implies that the posterior distribution for the unidentified treatment effect is the convolution of a normal distribution and a t-distribution. This result is closely related to the literatures on unidentified regression models, imperfect instrumental variables, and sensitivity analysis
Tractable Bayesian Inference For An Unidentified Simple Linear Regression Model
No full textIn this article, I propose a tractable approach to Bayesian inference in a simple linear regression model for which the standard exogeneity assumption does not hold. By specifying a beta prior for the squared correlation between an error term and regressor, I demonstrate that the implied prior for a bias parameter is t-distributed. If the posterior distribution for the identified regression coefficient is normal, this implies that the posterior distribution for the unidentified treatment effect is the convolution of a normal distribution and a t-distribution. This result is closely related to the literatures on unidentified regression models, imperfect instrumental variables, and sensitivity analysis.</p
- …
