stabilization policy a reconsideration i introduction in 1936 keynes s general theory explained how fiscal and monetary policy could be used to end depressions since that time no developed country has ever seen a downturn on the scale of the 1930s the general theory was not just a how to book on the avoidance of depressions it was an argument for stabilization policy itself the years since the general theory have seen a revolt against keynesian economics in a revisionist mode milton friedman argued that countercyclical policy cannot affect the average level of unemployment and output robert lucas and thomas sargent 1979 went further contending that it is not only impossible to increase average output it is also impossible to stabilize it more recently lucas 1987 2003 has argued that policies to stabilize output even if effective would yield negligible welfare gains thus stabilization policy should not be a macroeconomic priority lucas s conclusion notwithstanding stabilization policy has long been an explicit or implicit objective of monetary policy in most industrial countries even including those countries with inflation targets the volatility of output has in fact declined in most major industrial countries since the mid 1980s and monetary policy arguably deserves at least partial credit see bernanke 2004 mirroring practice monetary policy research commonly takes it as given that along with price stability stabilization policy the minimization of squared deviations of output around potential is an appropriate policy objective see for example clarida et al 1999 in this article we explore the economic rationale for stabilization as a policy goal concluding that it does in fact deserve high policy priority we survey a large body of literature that critiques the validity of key assumptions in lucas s argument we also offer suggestive evidence that stabilization policy can significantly reduce average levels of unemployment by providing stimulus to demand in circumstances where unemployment is high but underutilization of labor and capital does little to lower inflation a monetary policy that vigorously fights high unemployment should however also be complemented by a policy that equally vigorously fights inflation when it rises above a modest target level the federal reserve act thus wisely enunciated price stability and maximum employment as twin goals for monetary policy ii the case against stabilization policy macroeconomic analysis typically assumes that social welfare depends negatively on both inflation above a modest target level here assumed zero and unemployment above some minimum socially efficient level for example a standard social welfare function is the discounted sum of period losses l sub t of the form see among others barro and gordon 1983 pp 592 93 1 l sub t a u sub t 1 k u sup 2 b pi sup 2 sub t where u sub t and pi sub t are the unemployment and inflation rates in period t and u sup is the natural rate of unemployment the coefficient k is positive reflecting the desirability of unemployment below the natural rate because real economies deviate in many respects from perfect competition the natural rate of unemployment is likely to exceed the socially optimal unemployment rate for example with monopolistic competition goods are underproduced because they are priced above marginal cost so potential output is inefficiently low and equilibrium unemployment is too high standard macroeconomic analysis additionally assumes that inflation is determined by an expectations augmented accelerationist phillips curve of the form 2 pi sub t pi sup e sub t f u sub t u sup epsilon sub t where pi sup e sub t is the expected inflation rate at time t with expectations formed at t 1 and epsilon sub t captures supply shocks to the phillips curve at t

consumer demand for food diversity evidence for germany abstract whereas a large number of empirical studies have been devoted to analysing consumer demand for specific products much less attention has been paid to the household s demand for product variety the number of different products consumed in a specific time period this paper analyses consumer demand for food variety in germany the econometric analysis of 4632 households suggests that variety significantly increases with income and the number of children aged between 7 and 17 years and is significantly higher if the family lives in larger cities in east germany and the housekeeping person is not additionally working full time a single male household consumes a significantly smaller number of different food products the significant and positive impact of household income on food variety is in line with the hypothesis that consumption evolves along a hierarchical order as income increases

unemployment hysteresis and the natural rate hypothesis i introduction rod cross et al university of st andrews ii reflections on hysteresis and the natural rate 1 the irrelevance of the natural rate lawrence summers harvard university 2 on the history of hysteresis rod cross university of st andrews iii the characteristics of the unemployed 1 unemployment vacancies and the long term unemployed peter smith l b s paul levine south bank polytechnic alan budd l b s 2 characteristics of the long term unemployed evidence from the labour force survey stephen creigh department of employment 3 is unemployment irreversible peter r hughes department of employment gillian hutchinson queen mary college london iv analysis of hysteresis effects 1 union activity and wage employment movements assar lindbeck institute for international studies university of stockholm and dennis snower birkbeck college london 2 a simple model of imperfect competition with walrasian features huw dixon birkbeck college london 3 unemployment and worker quality simon price university of bristol 4 screening in labour markets with heterogeneous workers inge schnell university of bonn and l s e iv hysteresis effects and the explanation of aggregate unemployment 1 testing for multiple natural rates of unemployment in the british economy alan carruth university of kent and andrew oswald centre for labour economics l s e 2 why is wage inflation in britain so high stephen nickell university of oxford 3 phillips curve estimates incorporating a natural rate with hysteresis effects david coe o e c d 4 hysteresis and european unemployment olivier blanchard m i t and lawrence summers harvard university 5 the natural rate empirical fact or theoretical straitjacket tim jenkinson merton college oxford iv panel discussion the implications of hysteresis effects for unemployment policy 1 david stanton employment market research unit department of employment 2 charles adams i m f 3 marcus miller university of warwick 4 peter mcgregor fraser of allander institute university of strathclyde

estimation of current quarter gross national product by pooling preliminary labor market data two methods of using labor market data as indicators of contemporaneous gross national product gnp are developed the establishment survey data are used by inverting a partial adjustment equation for hours a second gnp forecast can be extracted from the household survey by using okun s law using preliminary rather than final data adds about 2 to 4 percentage point to the expected value of the root mean squared errors and changes the weights that the pooling procedure assigns to the two forecasts the use of preliminary rather than final data results in a procedure that assigns more importance to the okun s law forecast

nutritional status during an economic crisis evidence from russia between 1996 and 1998 russia experienced a spectacular decline in economic activity which was followed by a dramatic rebound between 1998 and 2000 we use panel data to examine the impact of variation in household resources on six dimensions of nutritional status distinguishing longer run from short term fluctuations in resources nutritional status is very resilient to short term variation in household resources gross energy intake adult weight and child stature change very little as expenditure deviates from its long run average longer run resources have a substantively large positive and significant effect on energy intake diet quality adult weight and child stature the evidence indicates that individuals and households are able to weather short term fluctuations in economic resources at least in terms of maintaining body mass and energy intake increased globalisation has resulted in many less developed countries becoming more integrated into world markets this integration carries both benefits and costs for the populations of those countries an oft cited cost is elevated risk of exposure to economic fluctuations which has been manifest in several spectacular economic crises across the globe in the last few decades there is however little evidence on the extent to which individuals and families are able to mitigate deleterious effects of these economic upheavals on their well being in spite of its importance for understanding the consequences of globalisation this article provides new evidence on this issue specifically we examine the relationship between several dimensions of nutritional well being and variation in household resources during the russian economic crisis in the late 1990s the economies of the former soviet bloc have been especially volatile since the transition to market based economies which began in the early 1990s nowhere has this been more true than in russia where in the last half of 1998 real gdp collapsed by around 30 and then rapid growth brought the economy back to its pre crisis level by 2000 the time path of changes in gdp is closely mimicked by changes in the incomes and expenditures of russian households using extremely rich longitudinal household survey data from the russian longitudinal monitoring survey rlms we examine the impact of these large fluctuations in household resources on nutrient intake and on anthropometric markers of nutritional status at the individual level in so doing we address an important issue in the literature regarding the extent to which households in low income settings are able

are monetary policy reaction functions asymmetric the role of nonlinearity in the phillips curve abstract this paper investigates the implications of a nonlinear phillips curve for the derivation of optimal monetary policy rules combined with a quadratic loss function the optimal policy is also nonlinear with the policy maker increasing interest rates by a larger amount when inflation or output are above target than the amount it will reduce them when they are below target specifically the main prediction of our model is that such a source of nonlinearity leads to the inclusion of the interaction between expected inflation and the output gap in an otherwise linear taylor rule we find empirical support for this type of asymmetries in the interest rate setting behaviour of four european central banks but none for the us fed

studying optimal paternalism illustrated by a model of sin taxes the classical economic approach to policy analysis assumes that people always respond optimally to the costs and benefits of their available choices a great deal of evidence suggests however that in some contexts people make errors that lead them not to behave in their own best interests economic policy prescriptions might change once we recognize that humans are humanly rational rather than superhumanly rational and in particular it may be fruitful for economists to study the possible advantages of paternalistic policies that help people make better choices we propose an approach for studying optimal paternalism that follows naturally from standard assumptions and methods of economic theory write down assumptions about the distribution of rational and irrational types of agents about the available policy instruments and about the government s information about agents and then investigate which policies achieve the most efficient outcomes in other words economists ought to treat the analysis of optimal paternalism as a mechanism design problem when some agents might be boundedly rational this approach has many advantages first and foremost by explicitly addressing when and how people do and don t pursue their own best interests economists will be better able to contribute to policy debates to contribute to debates over regulating private financial decisions we must study whether financial decisions are based on fallacious statistical reasoning and whether self control problems lead people to borrow too heavily to contribute to debates over teenage smoking we must study whether teenagers become smokers against their long run best interest economists will and should be ignored if we continue to insist that it is axiomatic that constantly trading stocks or accumulating consumer debt or becoming a heroin addict must be optimal for the people doing these things merely because they have chosen to do it a second advantage of our approach is that it forces us to look for the best feasible policy our

an evaluation of alternative monetary policy rules in a model with capacity constraints a small model of the u s output inflation nexus is used to examine the implications of two policy rules one where the interest rate responds to contemporaneous inflation and one where the response is a forecast of future inflation the model is asymmetric in that positive deviations of aggregate demand from potential are more inflationary than negative deviations are disinflationary with asymmetry following a myopic rule and allowing the economy to overheat requires deep or protracted recessions to control inflation whereas following a forward looking rule not only reduces volatility but also raises the equilibrium level of output shifts in the stance of monetary policy influence the economy and financial markets with a considerable lag as long as a year or more the challenge of monetary policy is to interpret current data on the economy and financial markets with an eye to anticipating future inflationary forces and to countering them by taking action in advance alan greenspan 1994 p 609

poverty food consumption and nutrition during the transition to the market economy in eastern historically average reported levels of food intake in eastern europe have been considerably higher than in most middleincome countries according to food balance sheet data average calories proteins and fats in terms of availability per capita rose continuously over the 1961 1988 period and generally exceeded the intake requirements established by the world health organization who food and agriculture organization 1991 while it may rightly be argued that these data offer little information about the effective control over food by consumers in different income groups in the case of pre reform eastern europe full employment low income inequality and low food prices generally ensured a minimal level of food intake even for those in the bottom deciles of the income distribution while undernutrition did not generally represent a problem considerable imbalances affected the diet of most people in the region particularly in urban areas and among low income groups food intake was characterized by a high consumption of cholesterol rich products such as eggs and animal fats sugar salt bread and alcohol and a low intake of good quality meat fruit and vegetables and vegetable oils the data in table 1 clearly illustrate this situation for russia and can be taken as representative of the entire region low income families consumed less food per capita while their diet was characterized by greater intake both in relative and absolute terms of bread and fats and a lower consumption of more nutritious and healthy foods the dietary imbalances implicit in this consumption pattern caused an abnormally high incidence of nutritionally related health problems including a high prevalence of overweight people cardiovascular diseases micronutrient deficiencies and anemia in addition a fairly high prevalence of low birth weight lbw and low breastfeeding rates were common in the region inadequate breastfeeding represented a critical nutritional problem for young children as milk substitutes and baby foods were generally in short supply

inflation targeting with nairu uncertainty and endogenous policy credibility abstract stochastic simulations are employed to compare performances of monetary policy rules in linear and nonlinear variants of a small macro model with nairu uncertainty under different assumptions about the way inflation expectations are formed cases in which policy credibility is ignored or treated as exogenous are distinguished from cases in which credibility and inflation expectations respond endogenously to the monetary authorities track record in delivering low inflation it is shown that endogenous policy credibility strengthens the case for forward looking inflation forecast based rules relative to backward looking taylor rules

the time varying nairu and its implications for economic policy the nairu the unemployment rate consistent with a constant rate of inflation is estimated in this paper as a parameter allowed to vary over time value is determined in an econometric model where the inflation rate depends on its past values demand and supply shocks the nairu estimated for the gdp deflator varies over the past forty years within 5 4 to 6 5 percent its estimated value for the most recent quarter 1996 q2 is 5 6 percent the nairu has declined in recent years in response to global competition immigration other factors weakening labor s bargaining position and the rapidly declining prices of computers and other electronics

evaluating alternative monetary policy rules abstract this paper examines monetary policy from an optimal control perspective five loss functions are minimized for each of five models and the results are compared the basic true loss function targets inflation and unemployment the other loss functions target respectively inflation alone unemployment alone nominal growth alone and real growth alone the five models are two small structural models two var models and a large structural model a numerical procedure is presented that can handle a variety of loss functions and models

loss aversion and the asymmetric transmission of monetary policy there is widespread evidence that monetary policy exerts asymmetric effects on output over contractions and expansions in economic activity while price responses display no sizeable asymmetry to rationalize these facts we develop a dynamic general equilibrium model where households utility depends on consumption deviations from a reference level below which loss aversion is displayed state dependent degrees of real rigidity and elasticity of intertemporal substitution in consumption generate competing effects on output and inflation contractions face the central bank with higher responsiveness of output to interest rate changes as well as a flatter aggregate supply schedule

expected social welfare under a convex phillips curve and asymmetric policy preferences this paper evaluates the expected social welfare implications of monetary policy with a convex phillips curve under a symmetric loss function and an asymmetric loss function corresponding to the opportunistic approach to disinflation the convex asymmetric specification yields an inaction range of inflation shocks for which the optimal monetary policy setting does not adjust for parameter estimates relevant to the united states numerical simulations show that the symmetric loss function dominates the asymmetric alternative in expected social welfare terms asymmetric policy preferences enhance social welfare only under extreme parameter values this result is robust to sensitivity analysis with respect to inflation variability and the degrees of phillips curve convexity and preference asymmetry thereby supporting arguments for a tough anti inflationary stance by the federal reserve regardless of the true social loss function

the modern view of macroeconomics some critical reflections david romer has proposed a new basic macroeconomic framework the is mp ia model its proponents claim that it represents the modern view of macroeconomics we show that the new framework remains closely attached to the neoclassical synthesis and in addition does not take account of i the empirical evidence on the output inflation trade off ii the evidence on the interdependence of aggregate demand and supply iii the institutional limits of monetary policy and iv the implications for macroeconomic policy of i ii and iii once these aspects have been incorporated short run stabilisation policy is not neutral in the long run the notion of a natural rate of interest becomes untenable and aggregate demand turns into the crucial exogenous variable copyright 2005 oxford university press

non adherence to a low fat diet an economic perspective abstract despite bearing increased risk of suffering a heart attack failure to adhere to a low fat dietary regimen is wide spread the paper applies an expected utility maximization model to inquire into the individual s decision to deviate from a prescribed low fat diet offering an economic explanation for excess high fat consumption the implications of self protection against the risk of dying from an attack are further examined the analysis reveals that self protection and dietary adherence can be complements suggesting that public health policy may help reduce both the risk of an attack and the risk of dying from an attack through providing incentives for self protection

one for some or one for all taylor rules and interregional heterogeneity we document a novel empirical phenomenon the u s federal reserve appears to set interest rates partly in response to regional economic disparities this result is robust even after controlling for factors such as the central bank s forecasts and a battery of explanatory variables we argue that this likely does not reflect an explicit concern about regional differences by policymakers but instead can be explained by a model with nonlinear regional phillips curves consistent with the predictions of this model we find that the federal reserve responds disproportionately to fluctuations in low unemployment states alternative explanations cannot account for this finding

is the inflation output nexus asymmetric in the euro area abstract this paper challenges the assumption that the inflation process within the euro area is well described by a linear accelerationist phillips curve and investigates a nonparametric framework how inflation is sensitive output an asymmetric output inflation trade off is pointed out in the euro area at both aggregated and individual country levels

did the junk food tax make the hungarians eat healthier i analyse whether the introduction of the unhealthy food tax lead to significant improvements in the dietary habits of the hungarian population i focus on the consumption of processed and unprocessed food before and after the tax was levied on a range of food high in salt and sugar using data from a large scale household panel data set i estimate the consumed quantities of processed food to decrease by 3 4 due to the unhealthy food tax while the consumed quantities of unprocessed food increased by 1 1 the lowest income groups were the most responsive to the introduction of the tax despite data limitations the results indicate moderate improvement in population diet that is likely to be attributable to the tax

inflation forecast targeting implementing and monitoring inflation targets abstract inflation targeting is shown to imply inflation forecast targeting the central bank s inflation forecast becomes an explicit intermediate target inflation forecast targeting simplifies both implementation and monitoring of monetary policy the weight on output stabilization determines how quickly the inflation forecast is adjusted towards the inflation target money growth or exchange rate targeting is generally inferior than inflation targeting and leads to higher inflation variability commitment to target rules may be better than commitment to instrument rules

the economic causes of obesity a survey abstract obesity rates have increased dramatically over the last 30 years rising obesity has developed into a considerable worldwide public health problem with significant economic and social consequences accordingly obesity has become a subject of economic research this paper provides a broad survey of the recent and growing economic literature on the causes of obesity the literature both theoretical and empirical overall aims to explain the rising obesity trend and to identify the factors that contribute to obesity also surveyed are non economic causes and consequences of obesity and the interconnection with economic influences an understanding of the causes of obesity allows policies to be considered that might stem the global increase in obesity

the quest for prosperity without inflation abstract in recent years activist monetary policy rules responding to inflation and the level of economic activity have been advanced as a means of achieving effective output stabilization without inflation advocates of such policies suggest that their flexibility may yield substantial stabilization benefits while avoiding the excesses of overzealous discretionary fine tuning such as is thought to characterize the experience of the 1960s and 1970s in this study i present evidence suggesting that these conclusions are misguided using an estimated model i show that when informational limitations are properly accounted for activist policies would not have averted the great inflation but instead would have resulted in worse macroeconomic performance than the actual historical experience the problem can be attributed in large part to the counterproductive reliance of these policies on the output gap the analysis suggests that the dismal economic outcomes of the great inflation may have resulted from an unfortunate pursuit of activist policies in the face of bad measurement specifically overoptimistic assessments of the output gap associated with the productivity slowdown of the late 1960s and early 1970s

are preliminary announcements of the money stock rational forecasts abstract we develop a theoretical framework of analyzing preliminary announcements of economic data and then apply this framework to the money stock we find that preliminary announcements of the money stock are best characterized as measured with classical errors in variables that is the revision is not correlated with the true value of the series the revision is however forecastable using information available at the time of the preliminary announcement our ability to forecast the revision implies that preliminary announcements are not rational estimates of the true money stock

monetary policy rules based on real time data this paper examines the magnitude of informational problems associated with the implementation and interpretation of simple monetary policy rules using taylor s rule as an example i demonstrate that real time policy recommendations differ considerably from those obtained with ex post revised data further estimated policy reaction functions based on ex post revised data provide misleading descriptions of historical policy and obscure the behavior suggested by information available to the federal reserve in real time these results indicate that reliance on the information actually available to policy makers in real time is essential for the analysis of monetary policy rules

credit growth monetary policy and economic activity in a three regime tvar model we employ a threshold vector autoregression tvar methodology in order to examine the nonlinear nature of the interactions among credit market conditions monetary policy and economic activity we depart from the existing literature on the subject along two dimensions first we focus on a model in which the relevant threshold variable describes the state of economic activity rather than credit market conditions second in contrast to the existing tvar literature which concentrates exclusively on single threshold models we allow for the presence of a second threshold which is overwhelmingly supported by all relevant statistical tests our results indicate that the dynamics of the interactions among credit market conditions monetary policy and economic activity change considerably as the economy moves from one phase of the business cycle to another and that single threshold tvar models are too restrictive to fully capture the nonlinear nature of those interactions the impact of most shocks tends to be largest during periods of sub par economic growth and smallest during times of moderate economic activity by contrast credit risk shocks have the largest impact when output growth is considerably above it long term trend

on the microeconomics of food and malnutrition under endogenous discounting abstract this paper explores the microeconomics and dynamics of food and nutrition it examines the linkages between malnutrition and the incentive to invest and accumulate capital the analysis focuses on a dynamic model where preferences about the future depend on nutrition and health situations of malnutrition cover both ends of the spectrum from nutrient deficiency to obesity the model involves preferences that are not time additive and exhibit endogenous discounting this provides a framework to investigate the factors affecting consumption and investment behavior the adverse investment incentives of malnutrition are examined

the u s phillips curve the case for asymmetry abstract recent statistical rejections of convexity in the phillips curve have been uninformative because researchers have employed measures of business cycle gaps that are inconsistent with the implications of convexity the paper shows that identifying convexity in the phillips curve will become even more difficult if policymakers are successful in avoiding large boom and bust cycles to the extent that convexity in the phillips curve is used as a rationale for stabilization policy our findings present an interesting conundrum because successful policymakers will further weaken the empirical evidence on which such policies are based

estimating potential output as a latent variable this article proposes a new method for estimating potential output in which potential real gross domestic product gdp is modeled as an unobserved stochastic trend and deviations of gdp from potential affect inflation through an aggregate supply relationship the output and inflation equations together form a bivariate unobserved components model which is estimated via maximum likelihood through the use of the kalman filter algorithm the procedure yields a measure of potential output and its standard error and an estimate of the quantitative response of inflation to real growth and the output gap

the stability of the turkish phillips curve and alternative regime shifting models this article presents empirical evidence supporting instability of the phillips curve in turkey we employ the multiple structural break models and the markov switching models and then evaluate the performance of the two models the data pertain to the monthly inflation rate in turkey for the period of 1987 to 2004 the results show that the turkish phillips curve is not linear there exists no evidence on the asymmetry in the inflation response to output gap the persistence of inflation is found to be much lower than in linear models after 2001 slight decline in persistence of inflation is observed there exits weaker support for the phillips curve for the periods where the policymakers attempt to take the advantage of the tradeoff between output and inflation relationship

monetary policy trade offs and the correlation between nominal interest rates and real output the authors present a structural model of the u s economy that combines their price contracting specification with a term structure relationship an aggregate demand curve and a monetary policy reaction function the model matches important features of postwar data well and provides a structural explanation of the correlation between real output and the short term nominal rate of interest the authors perform a battery of monetary policy experiments that show that as viewed through the lens of this model monetary policy has struck a good balance recently among competing monetary policy objectives copyright 1995 by american economic association

we are what we eat obesity income and social comparisons abstract the empirical evidence of a non monotone relation between income and obesity is not well explained we build a theoretical model combining income inequality and social comparisons to explain the link between income and obesity and study tax policy implications for fighting obesity we assume that differences in food consumption patterns between poor and wealthy households partly reflect positionality which is the concern for social status our key assumption is that positionality for low calorie food consumption is positively related to a country s wealth in this framework body weight outcomes reflect competing income and positionality effects yielding the following results we explain the link between average obesity rates and standards of living and suggest the existence of a kuznets curve for obesity in accordance with empirical evidence for cross sections of the population we explain the observed correlation between income and obesity which is positive in poor countries and negative in rich countries we find that increasing the relative cost of high calorie food is less effective at decreasing the relative weight of poor individuals in rich countries than in poor countries

earmarking and the political support of fat taxes a fat and a healthy good provide immediate gratification and cause health costs or benefits in the long run which are misperceived additionally the fat good healthy good increases decreases health care costs by increasing decreasing the probability of suffering from a chronic disease in the future individuals differ in income and in their degree of misperceptions concerning the health effects of the consumption of fat and of healthy goods the level of the fat tax is determined through majority voting individuals vote according to their misperceived utility function consequently excessive fat consumption is not due to a self control problem but due to information deficiencies or cognitive inability to process information a fraction of the fat tax proceeds is earmarked to reduce health insurance premiums while the remaining fraction finances a subsidy on the healthy good this earmarking rule is determined at a constitutional stage to maximize utilitarian or rawlsian welfare anticipating the induced political equilibrium we show that the fat tax in the political equilibrium is always lower than the utilitarian fat tax this is no longer necessarily true with a rawlsian objective the determination of the optimal earmarking rule is quite complex even in the utilitarian case it is not just used to boost political support for the fat tax instead it may involve a tradeoff between the fat tax and the healthy good subsidy

inflation zone targeting abstract we study optimal monetary policy design in a simple model that deviates from the linear quadratic paradigm and provides a rationale for the practice of inflation zone targeting we show that the presence of either zone quadratic preferences or a zone linear relationship between inflation and economic activity provides strong incentives to deviate from conventional linear policies we calibrate the model based on parameters for the united states and the euro area and employ a numerical dynamic programming algorithm to derive the optimal policies with this algorithm we examine the role of uncertainty model structure and relative preference towards economic stability in determining the width of the implied targeted inflation zone

demand for food variety in an emerging market economy using food intake survey data collected in bulgaria in 1997 this study identified socioeconomic and demographic factors affecting demand for varied diet as measured by the count of food items and entropy index consumer preference for food variety exhibited different patterns depending on the length of time allowed for consumption estimated correlation coefficients indicated that daily variety deviated from that measured weekly and monthly regression analysis showed that regional effects differed across the three periods of time illustrating that the length of time allowed for consumption is an important element in measuring the demand for food variety

nonlinearity in the fed s monetary policy rule this paper investigates the nature of nonlinearities in the monetary policy rule of the us fed using the flexible approach of hamilton 2001a we find that while there is significant evidence of nonlinearity for the period to 1979 there is little such evidence for the subsequent period possible asymmetries in the fed s reactions to inflation deviations from target and the output gap in the 1960s and 70s may tell part of the story but do not capture the entire nature of the nonlinearity the inclusion of the interaction between inflation deviations and the output gap as recently proposed appears to characterize the nonlinear policy rule more adequately

production inflexibilities and the cost channel of monetary policy this article shows how the existence of production inflexibilities in the form of capacity utilization constraints conditions the magnitude of the response of macroeconomic variables to a money supply stimulus capacity is modeled under explicit microfoundations where the existence of idiosyncratic demand uncertainty generates variable utilization rates across firms in this context money has real effects due to non fisherian effects stemming from limitations in households access to the financial market firms capacity constraints generate a convex aggregate supply curve which is a feature of the economy that has important implications for the conduct of monetary policy

the causal link between financial incentives and weight loss an evidence based survey of the literature obesity and overweight are linked to diseases that cost society a significant amount of resources while behavior modification can reduce the problem instigating such lifestyle changes is an uneasy task one potential way to reduce the problem is through the use of financial incentives in this survey we review the available evidence properly emphasizing studies that credibly yield meaningful estimates of the effect of financial incentives on weight loss we find that the scientific literature on the subject has not yet satisfactorily settled whether such a mechanism is effective at eliciting the desired behavioral and health outcomes we therefore advocate a rigorous large scale randomized experiment to provide reliable estimates of the effect

welfare enhancing technological change and the growth of obesity the theory explores how technological change can produce obesity as an unintended consequence of economic development which reduces food prices and the strenuousness of work the empirical analysis presents a specific example of how food price declines can improve health and well being even in a developed country

asymmetric monetary policy rules in australia abstractin this study the hypothesis that the reserve bank of australia rba implements an asymmetric monetary policy rule is tested we estimate both linear and asymmetric monetary policy reaction functions for the period before inflation targeting was adopted for the period when inflation targeting was explicitly adopted and for the full sample period the results of the linear monetary policy rules are consistent with the estimates reported from other studies that estimate linear monetary policy rules for australia on the other hand the results of estimating the asymmetric monetary policy rules for the pre inflation targeting period shows that the rba had reacted symmetrically suggesting that it had acted with the same aggressiveness towards both inflation and output gaps of the same magnitude over both phases of the business cycle however for the inflation targeting period the results show that the rba had reacted asymmetrically in its policy response to the inflation gap output gap or both

junk food home cooking physical activity and obesity the effect of the fat tax and the thin subsidy abstract in an effort to reduce the growing prevalence of obesity a tax on junk foods known as fat tax has been proposed the revenue from which could be used to finance a thin subsidy for healthy foods or exercising equipment the present paper addresses the fat tax and thin subsidy within a food intake rational choice model assuming that healthy meals are cooked at home with purchased ingredients and time input the paper examines the effects on obesity of a tax on junk food meals and a subsidy to cooking ingredients distinguishing between a weight conscious and a non weight conscious individual and between a weight conscious individual who is physically active and physically inactive the results show that for a non weight conscious individual a fat tax will unambiguously reduce obesity whereas a thin subsidy may increase obesity however for a weight conscious individual particularly one who is physically active even a fat tax may increase obesity as it may reduce not just the consumption of junk food but also the time devoted to physical activity the paper explores conditions under which obesity will rise fall or remain intact following the introduction of a fat tax or a thin subsidy