efficiency of catch and effort quotas in the presence of risk abstract a general bioeconomic model is constructed to analyze the efficiency of different methods of fisheries management when there are some risks involved the model includes the biological dynamics of the fish stock and allows that environmental factors cause stochastic variations in the growth of the fish stock and in the cpue the paper develops a method for comparing the efficiency of control variables in stochastic dynamic programming problems and applies it to the case of management of fisheries with catch and effort quotas sufficient conditions are derived for the superiority of each of the two management methods these conditions are used to decide the relative efficiency of these two management methods in simple models it is shown that the relative efficiency of the two management methods depends on the importance of the stochastic variations in the growth of the fish stock relative to that in the cpue and on the elasticity of demand it also matters if the objective of the management is to maximize profits or maximize welfare

a retrospective look at a behavioral theory of the firm abstract the papers in this special issue focus on ideas associated with a book published 45 years ago a behavioral theory of the firm cyert r m march j g 1963 a behavioral theory of the firm endlewood cliffs prentice hall nj the book proposed the introduction of a few more realistic behavioral assumptions into the economic theory of the firm the papers presented here examine some aspects of the history of the ideas found in the book extend and elaborate the ideas in the context of current research and indicate possible directions for future research in the behavioral tradition we will not attempt to summarize the papers but will try to locate them gently in their historical and intellectual context

pulse fishing and stock uncertainty large variation in stock dynamics affects the accuracy of stock estimates which fisheries managers rely on when determining quotas and other regulations the purpose of this paper is to investigate the implications of uncertainty on pulse fishing we show that as the variance of the random natural fluctuations increases the optimal pulse length decreases and converge toward a constant escapement policy hence in fisheries with large natural variability a constant escapement policy is a good approximation of the optimal policy

accounting for a shift in term structure behavior with no arbitrage and macro finance models this paper examines a shift in the dynamics of the term structure of interest rates in the u s during the mid 1980s we document this shift using standard interest rate regressions and using dynamic a ne no arbitrage models estimated for the pre and post shift subsamples the term structure shift largely appears to be the result of changes in the pricing of risk associated with a level factor using a macro nance model we suggest a link between this shift in term structure behavior and changes in the dynamics and risk pricing of the federal reserve s in ation target as perceived by investors

assessing monetary policies in the eurozone u s u k and japan new evidence from the post crisis period abstractthe global financial crisis of 2007 changed the way central banks implement monetary policies this article examines the transmission of both conventional and unconventional monetary polici

central bank announcements of asset purchases and the impact on global financial and commodity markets abstract we present evidence on the effects of large scale asset purchases by the federal reserve and the bank of england since 2008 we show that announcements about these purchases led to lower long term interest rates and depreciations of the u s dollar and the british pound on announcement days while commodity prices generally declined despite this more stimulative financial environment we suggest that lsap announcements likely involved signaling effects about future growth that led investors to downgrade their u s growth forecasts lowering long term us yields depreciating the value of the u s dollar and triggering a decline in commodity prices moreover our analysis illustrates the importance of controlling for market expectations when assessing these effects we find that positive u s monetary surprises led to declines in commodity prices even as long term interest rates fell and the u s dollar depreciated in contrast on days of negative u s monetary surprises i e when markets evidently believed that monetary policy was less stimulatory than expected long term yields the value of the dollar and commodity prices all tended to increase

evolutionary theorizing in economics modern economic analysis oriented toward understanding the workings of economies that make extensive use of markets came into existence with three guiding questions all central in adam smith s 1776 1937 the wealth of nations one question concerned order without any central authority guiding and commanding action how is economic activity coordinated the second question was the challenge of explaining the prevailing constellation of prices inputs and outputs what explains the price of labor and the rent of land the third question addressed the processes of economic progress or development smith and other early economists clearly were impressed by the inventiveness the energy and the growing productivity generated by the evolving market economy how to understand its dynamics the first two questions have defined continuing central concerns of the discipline of economics since they first were posed over two centuries ago when not posed in the context of an economy that is understood as in the process of developing they seem to pull the focus of theorizing toward equilibrium conditions the third question concerned with the processes driving economic progress pulls the theorizing toward an evolutionary orientation the question of economic development has waxed and waned in centrality to the discipline as has the importance of evolutionary theorizing during the first several decades of the twentieth century evolutionary thinking and language was widespread in economics but as one contrasts the economic

theoretical analysis regarding a zero lower bound on nominal interest rates this paper explores several issues concerning a possible zero lower bound zlb including its theoretical rationale the magnitude of effects of low sustained inflation on real interest rates the validity of analyzing monetary policy in models with no monetary variables and the dynamic stabilizing properties of taylor rules in a zlb context the most important argument however is that if the short nominal rate is immobilized at zero there nevertheless exists a route for monetary stabilization policy to be effective via the foreign exchange market its quantitative importance is examined in a calibrated optimizing open economy model

team theory garbage cans and real organizations some history and prospects of economic research on decision making in organizations this essay attempts to articulate and advance a long term agenda for organizational economics the essay begins with a general discussion of four specific items on this agenda and then moves to a more specific discussion of decision making in organizations beginning with two polar opposite conceptions team theory and garbage cans and then describing several recent economic models part of the rationale for writing this essay is that this agenda has both substantive and methodological commonalities with the work of james march copyright 2003 oxford university press

ideas and work of richard m cyert abstract richard m cyert s seminal contribution to economics is the development of behavioral theory of the firm this theory has become an important plank in the bridge from economics to management his other contributions include applications of bayesian theory to economics statistical sampling in accounting experimental economics and developing an economic theory of stragetic management

cost structure and capacity utilisation in multi product industries an application to the basque trawl industry to empirically study production structure and the capacity level at which vessels are harvesting a short run translog cost function is estimated from the estimated parameters two capacity utilisation measures are calculated ray returns to scale and a dual capacity utilisation measure both capacity utilisation measures suggest that there is excess capacity in the basque trawler fleet these measures are also estimated annually and they indicate the same conclusion the basque trawler fleet can therefore gain from increased production levels

embodied and disembodied technical change in fisheries an analysis of the sete trawl fishery 1985 1999 overfishing and excess capacity in mostfisheries around the world have generated considerableand increasing concern about their biological and economic performance ramifications theseproblems in part stem from substantialinvestment in technical improvements to boats andequipment in fishing fleets which exacerbatesexcess fishing capacity and low returns tofishing effort and investment given regulatoryand biological constraints however little attempt hasbeen made to quantify the extent or effects oftechnical change in fisheries in this paper we usedetailed data on innovation patterns for 19vessels in the sete trawl fleet of southernfrance to evaluate the contributions oftechnical change to catch rates we find thatembodied technical change enhanced productivity by approximately one percent per year between 1985 and 1999 but that external disembodied events counteractedthis trend causing a net output decline ofabout three percent per year

endogenous fishery management in a stochastic model why do fishery agencies use tacs along with fishing periods this paper seeks to explain the circumstances under which using total allowable catch tac as an instrument to manage a fishery along with fishing periods may be of interest from a regulatory point of view the deterministic analysis by homans and wilen j environ econ manag 32 1 21 1997 and anderson ann oper res 94 231 257 2000 is thus extended to a stochastic scenario where the resource cannot be measured accurately the resulting model is solved numerically to find the optimal control rules in the iberian sardine stock three relevant conclusions can be highlighted from simulations first the greater the uncertainty regarding the state of the stock the lower the probability of the fishery being closed before the end of the fishing period second the use of tacs as a management instrument in fisheries that are already regulated by fishing periods leads to i an increase in the optimal season length and harvests especially for medium and high numbers of licences ii improved biological and economic variables when the fleet is large and iii extinction risk for the resource being eliminated third the regulator would rather select the number of licences than restrict the season length

the macroeconomic effects of large scale asset purchase programmes the effects of asset purchase programs on macroeconomic variables are likely to be moderate we reach this conclusion after simulating the impact of the federal reserve s second large scale asset purchase program lsap ii in a dsge model enriched with a preferred habitat framework and estimated on u s data our simulations suggest that such a program increases gdp growth by less than half a percentage point although the effect on the level of gdp is very persistent the program s marginal contribution to infl ation is very small one key reason for our fi ndings is that we estimate a small degree of fi nancial market segmentation if we enrich the set of observables with a measure of long term debt the semi elasticity of the risk premium to the amount of debt in privatesector hands is substantially smaller than that reported in the recent empirical literature in this case our baseline estimates of the effects of lsap ii on the macroeconomy decrease by at least a factor of two throughout the analysis a commitment to an extended period at the zero lower bound for nominal interest rates increases the effects of asset purchase programs on gdp growth and infl ation

tobin s imperfect asset substitution in optimizing general equilibrium in this paper we present a dynamic optimizing model that allows explicitly for imperfect substitutability between different financial assets this is specified in a manner which captures tobin s 1969 view that an expansion of one asset s supply affects both the yield on that asset and the spread or risk premium between returns on that asset and alternative assets our estimates of this model on u s data confirm that some of the observed deviations of long term rates from the expectations theory of the term structure can be traced to movements in the relative stocks of financial assets the richer aggregate demand and asset specifications imply that there exists an additional channel of monetary policy our results suggest that central bank operations exercise a modest influence on the relative prices of alternative financial securities and so exert an extra effect on long term yields and aggregate demand separate from their effect on the expected path of short term rates

the zero interest rate bound and the role of the exchange rate for monetary policy in japan in this paper we study the role of the exchange rate in conducting monetary policy in an economy with near zero nominal interest rates as experienced in japan since the mid 1990s our analysis is based on an estimated model of japan the united states and the euro area with rational expectations and nominal rigidities first we provide a quantitative analysis of the impact of the zero bound on the effectiveness of interest rate policy in japan in terms of stabilizing output and inflation then we evaluate three concrete proposals that focus on depreciation of the currency as a way to ameliorate the effect of the zero bound and evade a potential liquidity trap finally we investigate the international consequences of these proposals

effects of the bank of japan s current quantitative and qualitative easing abstract this paper examines how the bank of japan s current quantitative and qualitative easing affects the japanese economy by using a markov switching vector autoregression model on daily economic data during january 2012 august 2014 the results reveal that quantitative easing by expanding the monetary base significantly lowers short term interest rates and raises inflation rates in addition the lowered interest rates positively affect inflation rates qualitative easing through purchases of long term government bonds and exchange traded funds increases economic activity purchases of exchange traded funds stimulate the stock and foreign exchange markets in japan while purchases of japan real estate investment trusts do not have any effect

optimal monetary and fiscal policy with a zero bound on nominal interest rates i characterize optimal monetary and fiscal policy in a stochastic new keynesian model when nominal interest rates may occasionally hit the zero lower bound the benevolent policymaker controls the short term nominal interest rate and the level of government spending under discretionary policy accounting for fiscal stabilization policy eliminates to a large extent the welfare losses associated with the presence of the zero bound under commitment the gains associated with the use of the fiscal policy tool remain modest even though fiscal stabilization policy is part of the optimal policy mix

assessing the economy wide effects of quantitative easing this article examines the macroeconomic impact of the first round of quantitative easing qe by the bank of england we attempt to quantify the effects of these purchases by focusing on the impact of lower long term interest rates on the wider economy we use three different models to estimate the impact of qe on output and inflation a large bayesian vector autoregression var a change point structural var and a time varying parameter var our estimates suggest that qe may have had a peak effect on the level of real gdp of around and a peak effect on annual cpi inflation of about points

optimal monetary policy under commitment with a zero bound on nominal interest rates we determine optimal monetary policy under commitment in a forwardlooking new keynesian model when nominal interest rates are bounded below by zero the lower bound represents an occasionally binding constraint that causes the model and optimal policy to be nonlinear a calibration to the u s economy suggests that policy should reduce nominal interest rates more aggressively than suggested by a model without lower bound rational agents anticipate the possibility of reaching the lower bound in the future and this amplifies the effects of adverse shocks well before the bound is reached while the empirical magnitude of u s mark up shocks seems too small to entail zero nominal interest rates shocks affecting the natural real interest rate plausibly lead to a binding lower bound under optimal policy however this occurs quite infrequently and does not imply positive average inflation rates in equilibrium interestingly the presence of binding real rate shocks alters the policy response to non binding markup shocks

facts and challenges from the great recession for forecasting and macroeconomic modeling this paper provides a survey of business cycle facts updated to take account of recent data emphasis is given to the great recession which was unlike most other postwar recessions in the united states in being driven by deleveraging and financial market factors we document how recessions with financial market origins are different from those driven by supply or monetary policy shocks this helps explain why economic models and predictors that work well at some times do poorly at other times we discuss challenges for forecasters and empirical researchers in light of the updated business cycle facts

on uncertain renewable resource stocks optimal harvest policies and the value of stock surveys abstract annual harvest quotas are commonly employed in the management of renewable resource stocks commercial fisheries being a prime example such resource stocks often undergo quite significant natural fluctuations to which quotas must be adapted a further complication arises from the fact that estimates of stock abundance are often highly uncertain in this paper a bayesian approach is used to model optimal quota decisions for an uncertain fluctuating renewable resource stock

monetary policy in exceptional times this paper describes the way in which the european central bank ecb the federal reserve and the bank of england conducted monetary policy since the beginning of the financial crisis in august 2007 we argue that both quantitative easing and the other non standard measures introduced by central banks that changed the composition of the asset side of their balance sheets so called qualitative easing acted mainly through their effects on interest rates and in particular on money market spreads rather than solely through quantity effects in terms of the money supply we perform a quantitative exercise on the euro area which estimates the effect of the reduction of these spreads to the broader economy michele lenza huw pill and lucrezia reichlin

liquidity traps learning and stagnation we examine global economic dynamics under learning in a new keynesian model in which the interest rate rule is subject to the zero lower bound under normal monetary and fiscal policy the intended steady state is locally but not globally stable large pessimistic shocks to expectations can lead to deflationary spirals with falling prices and falling output to avoid this outcome we recommend augmenting normal policies with aggressive monetary and fiscal policy that guarantee a lower bound on inflation in contrast policies geared toward ensuring an output lower bound are insufficient for avoiding deflationary spirals

fishery management under multiple uncertainty abstract among others who point to environmental variability and managerial uncertainty as causes of fishery collapse roughgarden and smith proc natl acad sci 93 1996 5078 argue that three sources of uncertainty are important for fisheries management variability in fish dynamics inaccurate stock size estimates and inaccurate implementation of harvest quotas we develop a bioeconomic model with these three sources of uncertainty and solve for optimal escapement based on measurements of fish stock in a discrete time model among other results we find 1 when uncertainties are high we generally reject the constant escapement rule advocated in much of the existing literature 2 inaccurate stock estimation affects policy in a fundamentally different way than the other sources of uncertainty and 3 the optimal policy leads to significantly higher commercial profits and lower extinction risk than the optimal constant escapement policy by 42 and 56 respectively

investment shocks and business cycles abstract the origins of business cycles are still controversial among macroeconomists this paper contributes to this debate by studying the driving forces of fluctuations in an estimated new neoclassical synthesis model of the u s economy in this model most of the variability of output and hours at business cycle frequencies is due to shocks to the marginal efficiency of investment imperfect competition and to a lesser extent technological frictions are the key to their transmission although labor supply shocks explain a large fraction of the fluctuations in hours at very low frequencies they are irrelevant over the business cycle this finding is important because the microfoundations of these disturbances are widely regarded as unappealing

international management strategies for a straddling fish stock a bio economic simulation model of the norwegian spring spawning herring fishery in this paper a three country dynamic bio economic simulation model is presented for the spring spawning herring fishery the international spring spawning herring fishery based on potentially one of the most valuable fish stocks in the world is currently recovering from a severe depletion of the stock and subsequent harvesting moratorium management of the herring fishery is complicated by its multi nation exploitation due to the highly migratory behaviour of the species moving between several coastal state zones exclusive economic zones eez s and the high seas ocean loop based on extensive work invested on analysing both the biology of the herring stock and the fisheries economics around its exploitation we study here the profiles of different multi agent management schemes simulating catch levels stock size and profit potentials of alternative management strategies the stock dynamics are described by a linear discrete time age structured population model and the economics are presented by a rent maximising model with constant price of herring catch and different costs of harvesting and efficiency levels for the different national fleets the simulations carried out over several decades show that the benefits of international co operation far exceed the returns of a competitive open access fishery

conducting monetary policy at very low short term interest rates can monetary policy committees accustomed to describing their plans and actions in terms of the level of a short term nominal interest rate find effective means of conducting and communicating their policies when that rate is zero or close to zero the very low levels of interest rates in japan switzerland and the united states in recent years have stimulated much interesting research on this question and have led some central banks to make changes in their operating procedures and communications strategies in this paper we will give a brief overview of current thinking on the conduct of monetary policy when short term interest rates are very low or even zero monetary policy works for the most part by influencing the prices and yields of financial assets which in turn affect economic decisions and thus the evolution of the economy when the short term policy rate is at or near zero the conventional means of effecting monetary ease lowering the target for the policy rate is no longer feasible however it would be a mistake to think that monetary policy was impotent we discuss three strategies for stimulating the economy at an unchanged level of the policy rate these involve i providing assurance to investors that short rates will be kept lower in the future than they currently expect ii changing the relative supplies of securities in the marketplace by altering the composition of the central bank s balance sheet and iii increasing the size of the central bank s balance sheet beyond the level needed to set the short term policy rate at zero quantitative easing we also discuss the costs and benefits of very low interest rates an issue that bears on the question of whether the central bank should take the policy rate all the way to zero before undertaking alternative policies

the response of interest rates to us and uk quantitative easing we analyse declines in government bond yields following announcements by the federal reserve and the bank of england of plans to buy longer term debt using dynamic term structure models we decompose us and uk yields into expectations about future short term interest rates and term premiums we find that declines in us yields mainly reflected lower expectations of future short term interest rates while declines in uk yields appeared to reflect reduced term premiums thus the relative importance of the signalling and portfolio balance channels of quantitative easing may depend on market institutional structures and central bank communication policies

the perils of taylor rules abstract since john taylor s 1993 carnegie rochester conf ser publ policy39 195 214 seminal paper a large literature has argued that active interest rate feedback rules that is rules that respond to increases in inflation with a more than one for one increase in the nominal interest rate are stabilizing in this paper we argue that once the zero bound on nominal interest rates is taken into account active interest rate feedback rules can easily lead to unexpected consequences specifically we show that even if the steady state at which monetary policy is active is locally the unique equilibrium typically there exist an infinite number of equilibrium trajectories originating arbitrarily close to that steady state that converge to a liquidity trap that is a steady state in which the nominal interest rate is near zero and inflation is possibly negative journal of economic literature classification numbers e52 e31 e63

the ties that bind monetary policy and government debt management the financial crisis and subsequent economic recession led to a rapid increase in the issuance of public debt but large scale purchases of bonds by the federal reserve and other major central banks have significantly reduced the scale and maturity of public debt that would otherwise have been held by the private sector we present new evidence that tilting the maturity structure of private sector holdings significantly influences term premia even outside crisis times our framework helps explain both the bond yield conundrum and the effectiveness of quantitative easing we suggest that these findings raise two important policy questions one is should a central bank contrary to recent orthodoxy use its balance sheet as an additional complementary instrument of monetary policy to influence as part of the monetary transmission mechanism the long term interest rate the second is how should central banks and governments ensure that debt management properly takes account of the implications for both monetary and financial stability

a model of regulated open access resource use abstract this paper develops a model of regulated open access resource exploitation the regulatory model assumes that regulators are goal oriented choosing target harvest levels according to a safe stock concept these harvest quotas are implemented by setting season lengths conditioned on the industry fishing capacity the industry enters until rents are dissipated conditioned on season length regulations harvest levels fishing capacity season length and biomass are determined jointly using parameter estimates from the long regulated north pacific halibut fishery predictions of these variables from the regulated open access model are compared to predictions that arise from the gordon model

the impact of housing market disturbances on the us financial system a pre crisis analysis abstracta common critique of the federal reserve over the past crisis is that it should have better anticipated the impact of the run up in home mortgage debt and the subsequent housing market crash on the financial system as a result the federal reserve should have moved much more quickly to shore up financial markets our article tests the hypothesis that the impact of the housing market crash on the financial system could have been anticipated using a var model along with impulse response functions and variance decompositions we examine the link between housing market mortgage debt shocks and the financial intermediaries credit market behaviour we find important connections between key macroeconomic variables and the credit behaviour of these financial institutions however using the pre crisis data we find that housing market debt shocks fail to have an impact on the credit markets accessed by these firms these results support the notion that the impact of this crisis on the financial system

regulation of the iberoatlantic sardine fishery the basic aim of this paper is to use a case study to illustrate the way in which controls can achieve an optimum exploitation of marine resources the specific fishery under study is the iberoatlanti sardine fishery a bioeconomic deterministic model for this fish resource is developed and applied the most relevant results and estimates are showed finally we present some economic policy recommendations for the fishery as well as considerations for the application of the regulatory measures

a comparison of forecast performance between federal reserve staff forecasts simple reduced form models and a dsge model this paper considers the forecast performance of the federal reserve staff five atheoretical reduced form models and an estimated dynamic stochastic general equilibrium dsge model focusing on the late 1990s through 2001 our analysis finds that the dsge model and atheoretical models forecast real gdp growth better than the federal reserve staff during this period by an economically significant margin we find smaller differences across each method in the quality of inflation forecasts over this period these results provide some support to the notion that richly specified dsge models such the one used in this paper belong in the forecasting toolbox of a central bank rochelle m edge rochelle m edge frb gov michael t kiley michael t kiley frb gov and jeanphilippe laforte jean philippe laforte frb gov are affiliated with the macroeconomic and quantitative studies section at the board of governors of the federal reserve system this paper represents ongoing work in the section on developing dge models that can be useful for policy analysis nevertheless any views expressed in this paper remain solely those of the authors and do not necessarily reflect those of the board of governors of the federal reserve system or it staff all errors are our own

changing macroeconomic dynamics at the zero lower bound this article develops a change point var model that isolates four major macroeconomic regimes in the us since the 1960s the model identifies shocks to demand supply monetary policy and spread yield using restrictions from a general equilibrium model the analysis discloses important changes to the statistical properties of key macroeconomic variables and their responses to the identified shocks during the crisis period spread shocks became more important for movements in unemployment and inflation a counterfactual exercise evaluates the importance of lower bond yield spread during the crises and suggests that the fed s large scale asset purchases helped lower the unemployment rate by about 0 6 percentage points while boosting inflation by about 1 percentage point

an adjustment restriction on fish quota resource rents overcapacity and recovery of fish stock management objectives of the european union for north sea fish stocks are shifting towards considering both biological sustainability and economic benefits as part of multiannual management plans an adjustment restriction on fish quota has been introduced its objective is to obtain an efficient fish stock and to reduce overcapacity for the fishing industry we develop and apply a bi level stochastic dynamic programming model to study the effect of a quota adjustment restriction on the net present value of resource rents overcapacity and fish stock when the system is recovering from a downward environmental shock at level one a policy maker sets the quota considering fishermen behavior stochastic fish stock dynamics capital stock dynamics and a quota adjustment restriction at level two fishermen harvest myopically and make long term investment decisions assuming that fish stock and quota do not change over time the two levels are linked by the quota which is optimized by the policy maker at level one and becomes a restriction for myopic harvest and long term investment decisions of fishermen at level two our analysis suggests that in the long run overcapacity can be reduced by 54 at modest costs namely at a 1 reduction in the net present value of resource rents long and short run sustainability of the fish stock is not affected

transaction cost economics and the carnegie connection abstract this paper tracks my remarks at the september 1993 conference honoring richard m cyert it begins with some recollections of my years as a graduate student at gsia in the early 1960s i then shift to transaction cost economics and how this project relates to what i learned from dick cyert and others at carnegie

is there a fiscal free lunch in a liquidity trap this paper uses a dsge model to examine the eects of an expansion in government spending in a liquidity trap the spending multiplier can be much larger than in the normal situation if the liquidity trap is very persistent and scal stimulus can be rapidly implemented moreover the budgetary costs may be minimal as the large response of output boosts tax revenues allowing for something close to a scal free lunch however we caution that the multiplier may be much smaller under plausible implementation lags for many types of public spending and or if the liquidity trap lasts less than two years in addition because the marginal impact of scal expansion decreases in the scale of the outlay it is crucial to distinguish between average and marginal multipliers

the effectiveness of alternative monetary policy tools in a zero lower bound environment this paper reviews alternative options for monetary policy when the shortterm interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates we use a model of risk averse arbitrageurs to develop measures of how the maturity structure of debt held by the public might affect the pricing of level slope and curvature term structure risk we find that these treasury factors historically were quite helpful for predicting both yields and excess returns over 1990 2007 the historical correlations are consistent with the claim that if in december 2006 the fed were to have sold off all its treasury holdings of less than 1 year maturity about 400 billion and use the proceeds to retire treasury debt from the long end this might have resulted in a 14 basis point drop in the 10 year rate and an 11 basis point increase in the 6 month rate we also develop a description of how the dynamic behavior of the term structure of interest rates changed after hitting the zero lower bound in 2009 our estimates imply that at the zero lower bound such a maturity swap would have the same effects as buying 400 billion in long term maturities outright with newly created reserves and could reduce the 10 year rate by 13 basis points without raising short term yields

fisheries instrument choice under uncertainty this paper uses data from an actual fishery to construct a tractable dynamic model to compare expected profit and its variance optimal stock size optimal harvest rate and optimal fishing effort under different management regimes under uncertainty the results provide a comparison of instrument choice between a total harvest control and a total effort control under uncertainty an original method to evaluate the tradeoffs between profits and other criteria in a dynamic context and insights regarding the relative merits of catch and effort controls in fisheries management

on the theory of international currency portfolios abstract the paper develops a general equilibrium theory of the optimal currency composition of international bond portfolios like the partial equilibrium portfolio balance literature of the 1980s the theory emphasizes the critical roles of government debt and government balance sheet operations in the determination of portfolios prices and allocations consistent with empirical findings optimal foreign currency positions are found to be small with their size decreasing with exchange rate volatility while optimal domestic currency positions are large and increasing with domestic interest rates a large open market purchase of domestic currency bonds from private households lowers domestic interest rates

landing fees vs harvest quotas with uncertain fish stocks a revised version of this paper was published in the journal of environmental economics and management volume 43 issue 2 march 2002 pages 325 338

the impact of unconventional monetary policy on the market for collateral the case of the french bond market we consider the channel consisting in transferring the credit risk associated with refinancing operations between financial institutions to market participants in particular we analyze liquidity and volatility premia on the french government debt securities market since these assets are used as collateral both in the open market operations of the ecb and on the interbank market in our time varying transition probability markov switching tvtp ms model we highlight the existence of two regimes in one of them which we refer to as the conventional regime monetary policy neutrality is verified in the other which we dub the unconventional regime monetary policy operations lead to volatility and liquidity premia on the collateral market the existence of these conventional and unconventional regimes highlights some asymmetries in the conduct of monetary policy

the effect of reducing quantitative easing on emerging markets on 22 may and 19 june 2013 the us federal reserve fed announced a reduction in the asset purchase programme of its quantitative easing policy this article investigates the impact of this news on the currencies of emerging markets using event study methodology our results report a global significant depreciation in the currencies of all emerging markets in our sample but with different depreciation sizes from one market to another to test whether the depreciation in currencies is driven by capital flow components a regression analysis is performed inward fdi as well as outward fdi appear to have more explanatory power than inward and outward portfolio investment in explaining the impact with the slowdown in asset purchases by the fed emerging countries have incurred large capital outflows from their markets to the us market resulting in a drop in their currencies

quantitative easing and unconventional monetary policy an introduction this article assesses the impact of quantitative easing and other unconventional monetary policies followed by central banks in the wake of the financial crisis that began in 2007 we consider the implications of theoretical models for the effectiveness of asset purchases and look at the evidence from a range of empirical studies we also provide an overview of the contributions of the other articles in this feature

how to set catch quotas constant effort or constant catch abstract this paper considers whether the total allowable catch from a fish stock should be a fixed annual quantity or based on constant fishing effort it consists of two parts a theoretical part and an empirical part based on data from the arcto norwegian cod stock in the theoretical part it is shown that realistic cost and revenue functions have opposite effects on whether a constant quota or a constant effort yields the highest expected profit a concave revenue function implies that a constant quota will be preferable while a stock dependent unit cost of landed fish has the opposite implication the empirical part investigates how large the difference between the average profit yielded by the two strategies is likely to be on the basis of some stylized facts about the arcto norwegian cod stock the size of this stock fluctuates considerably over time due mainly to fluctuations in the size of year classes spectral analysis indicates cyclical movements and so a sine curve was used to generate recruitment cycles the difference in average profit yielded by the two harvest strategies is very small in most cases or of the order of 1 2 this result is relatively robust with respect to alternative specifications of the cost and the revenue functions but a maximum difference of 20 was produced by a non stock dependent unit cost of fish and a kinked revenue function where catches exceeding a certain quantity are worthless

have we underestimated the likelihood and severity of zero lower bound events prior to the financial crisis most economists probably did not view the zero lower bound zlb as a major problem for central banks using a range of structural and statistical models we find that previous research understated the zlb threat by ignoring uncertainty about model parameters and latent variables focusing too much on the great moderation experience and relying on structural models whose dynamics cannot generate sustained zlb episodes our analysis also suggests that the federal reserve s asset purchases while materially improving macroeconomic conditions did not prevent the zlb constraint from having first order adverse effects on real activity and inflation